November 10, 2025 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian explore the hidden ways that wealth buys freedom—and where it absolutely doesn’t. From buying back your time to avoiding toxic environments, high-net-worth families are realizing the true value of their money isn’t just growth… it’s liberation. But what about the stress, mental clutter, and family drama that even millions can’t solve? Bob and Brian dig deep into why peace of mind takes more than a fat investment account. Plus, a $32 trillion shift toward alternative investments, and why the IRS might love your mutual fund more than you do. They’ll also tackle your toughest money questions on early retirement, Roth conversions, and how to find meaning after a business sale. And finally, are you planning better for your pet than your kids? The guys have thoughts.
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Episode Transcript
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Speaker 1 (00:05):
Tonight, the hidden ways that wealth buys freedom and where
it doesn't. You're listening to Simply Money, presented by all
Worth Financial on Bob spond Seller along with Brian James. Tonight,
we're talking about something that doesn't show up on your
account statements, but it might matter more than any number
ever could. Brian, and we're talking about freedom. A recent
(00:27):
survey show that more affluent Americans are rethinking what they
actually want to do with their money, not just see
it grow, but they wanted to free them from obligations
they don't enjoy. Imagine that things like freeing up time,
reducing mental clutter, and creating flexibility in their life. Brian,
I love this whole thought process. Let's dig into it
(00:49):
a little bit tonight.
Speaker 2 (00:51):
Yeah.
Speaker 3 (00:51):
So the questions they're asking, what am I really getting
with all this effort, all this investing.
Speaker 2 (00:55):
What's the point of all this?
Speaker 3 (00:56):
And they've probably done most of the heavy lifting already,
so not becomes a question of intentionality.
Speaker 2 (01:01):
Okay, I built something. I don't know what this machine
does that.
Speaker 3 (01:03):
I built, but I want to start thinking about it
now and taking advantage of it. So where does wealth
buy freedom? Well, the first most obvious one is time.
Money buys back hours that you're not spending working and
slaving away for somebody else so that they will pay
you and you can buy food and shelter and clothing
for your family. Maybe so this this sometimes translates into
retiring a little earlier than the crowd. Or maybe it's
(01:24):
outsourcing this stuff you hate. Pay somebody to do the
yard work, deal with your taxes. You know, you can
get grocery shopping done and all that kind of thing now,
and that frees you up to spend time on time
on things that matter. Another level of freedom, up decision
making power. Wealth gives you the luxury of walking away
from let's say, maybe a toxic work environment or a
bad business partnership, something that sucks out more energy that
(01:45):
gives you, or even just that daily nine to five
grind that no longer suits your values.
Speaker 1 (01:50):
Yeah, I want to jump in here for a minute.
I mean, we talk about time and freeing up time
and that is wonderful, But we talk about this all
the time. You know, Brian, and I know you and
I both run into this occasionally with our clients that
are about to retire. You better think through what you're
gonna do with all that time that you free up,
because some people are pretty shocked by all that extra
(02:12):
free time, and that can create some issues that they
need to work through, not only themselves but with their spouse.
Speaker 3 (02:19):
Absolutely, and that can you know, being around too much.
As the old saying goes, I think it's an old saying.
I've been saying it for.
Speaker 2 (02:24):
A long time. I can't miss you until you're gone.
Speaker 3 (02:27):
Therefore, if you're in the house all the time and
you've got nothing to do and you're constantly pasting me,
I'm probably gonna get a little bit annoyed. So yeah,
what you're talking about there is is that I always
kind of feel like there's a People look at money
as the big mountain they have to get over in
order to retire, but there's another one hiding behind that,
and that is that vacuum of time.
Speaker 2 (02:45):
What will I do with all of that free time?
Speaker 3 (02:47):
We mostly hide behind the money worry, worry, worry that
there's not enough, and then all of a sudden we
finally do get around to working with a financial advisor
and building a plan, and then all of a sudden
we realize maybe we could have retired two years ago.
Oh my gosh, I want to retire right now. But
what am I going to do?
Speaker 2 (03:01):
What? What do I get out of bed? And I
have nothing on the agenda?
Speaker 3 (03:04):
What does that actually mean when when I'm no longer
the important person in the meeting and in my world
has kind of shrunk? Is that really gonna you know?
Will the dog respect me as much as my employees do?
Am I ready for that?
Speaker 1 (03:16):
Well? The positive spin on this, we bring up a
third opportunity and we'll just call that opportunity freedom. You
get to say yes to that once in a lifetime
trip with your family, maybe invest in a business that
your kid wants to start, or support a cause both
financially and with your time acquired expertise, you know, through
(03:37):
charities or other endeavors that really lights your fire, you know,
really taps into passions that you've had building up inside
of you for years and have not been able to
tap into because of your job. That's the positive spin
on properly planning for you know, retirement so to speak.
Opportunity freedom.
Speaker 3 (03:57):
Yeah, and then of course there's also peace of mind
right just means that you've built a machine that can
cover emergencies, that can pay for health care, even fun
long term care, without derailing everything else. So that is huge,
right that that The ability to say, Okay, I got this,
I don't like this, I don't want to write the check,
but fortunately I can write this check might make me mad,
but it's not a matter of affecting where our next
(04:17):
meal is coming from. And that's something you can actually
feel and not just track on a spreadsheet because you
built it for yourself and your family. And uh again,
it's a it's a money machine. You got to turn
it on. But there's good ways to do it, bad
ways to do Let's pivot to to where where don't
we get freedom from this?
Speaker 2 (04:33):
Bob? Well, the first one is mental clutter.
Speaker 3 (04:35):
Just because you have more money and we've addressed all
those issues we just went through, that doesn't mean you
worry any less. In fact, it can actually increase the stress. Okay,
how do I invest this big pile of money? Who
do I trust? You know, my CPA, my attorney, my
investment advisor, my financial planner. I got all these people
talking to me, Am I doing enough for my kids?
Or even am I am I maybe doing too much for
my kids? It's it does You're not going to eliminate
(04:55):
those questions. You're going to introduce a whole bunch of
new ones. That's not a bad thing. But don't don't
be surprised by the fact that you are still worried
about something.
Speaker 2 (05:02):
It's just different than it used to be.
Speaker 1 (05:04):
Yeah, Brian, I run into this all the time with folks.
I mean, let's face it, we work with successful people
all day. They're used to running or managing something that's successful,
and they've got their nose in it for ten, twelve,
fifteen hours a day. They're used to managing every aspect
of it. They're used to winning, and they're used to
dotting the i's, crossing the t's, and diving into details.
(05:27):
And then when that's gone, you know, they need to
focus on something, and they tend to focus on their money,
and they tend to sometimes consume too much media, too
many ideas about how to invest, too much going on
in the world, you know, with political turmoil, and they
can get them, they can get themselves mentally, you know,
(05:47):
all bound up here because they're consuming too much and
thinking about too much and trying to manage that all themselves.
Can create a whole lot of stress. And then if
they're not careful, you know, by by pushing and pulling
levers they shouldn't be. They can take a big pile
of money and create some problems and watch some of
that money start to evaporate for sure.
Speaker 3 (06:09):
And again these are the things that sneak up on
us unless we're gonna sit down and uh and and
think about what have we built and what does this
all actually mean? So, you know, another concern here is
family dynamics. Wealth doesn't solve family conflict if there were
conflicts before a lot of times, it can make it
even worse. Sometimes you know, it's inheritance question. Who's in charge,
who's making the decisions on behalf of mom and dad?
(06:31):
Who gets what? That can erode the piece and not
build it. And so it's another and another good Once
you've got all this time, a good thing to start
thinking about is how is this gonna work in my family?
Do I need to have clear conversations now rather than
just putting it all down on a piece of paper
and letting them figure out what I meant before I
died when they don't have a chance to ask you
about it.
Speaker 1 (06:50):
Another another thing that you know does not get bought
with wealth that we got to watch out for, or
something we'll just call time traps. Brian, I'm curious. Do
you run across this from time to time? I know
I do. A lot of successful people they replace that
high powered job in the stress of work with and
(07:11):
they just immediately refill their schedule with a bunch of shoulds,
things like board commitments, managing real estate holdings, meeting with
five different investment professionals or attorneys or accountants to just
quote unquote manage their money. And all of a sudden,
they've got a full schedule of stuff to do, and
they're not really experiencing any joy out of their retirement.
(07:32):
You know, a wise older gentleman told me many years ago.
He said, Bob, you got to learn how to say
no to a lot of quote unquote good things. So
you have the freedom to say yes to the best things.
And sometimes the best things are just you know, taking
a hike with your wife in the woods on a
sunny fall day, things that you couldn't do, you know,
(07:56):
when you were working fifteen hours a day.
Speaker 3 (07:58):
Yeah, and that is a huge, huge mental shift, because
a lot of people who are at this level of
success got there by by doing that twenty four to
seven grind, always worried about something, always looking for that
next opportunity. And you can do that right until you've
got all your feet in the grave. And that's the
scary part, right. So I've had I have had a
lot of situations with clients, as I'm sure you have,
where we do the financial plan and they realize not
(08:19):
only can they retire, they could have retired five.
Speaker 2 (08:22):
Six, seven years ago. And that's not always a sigh
of relief.
Speaker 3 (08:25):
I've told this story a lot of times, but we
have a client that completely fell apart at the table
when we told her she could have retired five six,
seven years ago.
Speaker 2 (08:33):
That is normally signed somewhat happy.
Speaker 3 (08:35):
News, but she totally fell apart because she was thinking
not of the future and all the freedom. She was
thinking of the freedom she missed out on, which could
have been spent with her grandchildren who were now growing up.
She had always had the thought in her mind she
wanted to be involved in their lives on a more
day to day basis, but assumed she had to work.
She was wrong because she had never stepped back to
look at the forest for the trees, to understand exactly
(08:56):
what she had built for herself and when it could
take her to that freedom place.
Speaker 1 (09:00):
Yeah, exactly. If you're waiting until some future milestone to
enjoy the fruits of all your hard work and planning,
be careful not to wait too long, Brian. We see
this from time to time. People work too long, or
they just put off, or to your point, they haven't
done the planning and realizing the amount of space and
cushion they do have in their financial plan, and they
(09:22):
don't take that cruise, they don't spend the time, you know,
unique experiences with their grandchildren, and then lo and behold,
they get into their late seventies early eighties and health
concerns start to crop up, and they really missed out
on some wonderful life changing opportunities. And that's one of
the great benefits of having a financial plan and having
(09:42):
a good fiduciary advisor who can actually tell you, hey,
go spend some of that money, go do some things
that are really meaningful to you.
Speaker 2 (09:51):
Yeah, and I would. I would also throw out getting
hung up on a number.
Speaker 3 (09:53):
Right when we get near, especially when the market's at
a high, you know, we get close to that more
money than I've ever had my entire life, and I'm
sneaking up on a maybe it's not one million now
it's two, or it's been six for a long time,
it's about to be seven.
Speaker 2 (10:06):
I want to wait until I see that number.
Speaker 3 (10:08):
I want to see a piece of paper with my
name on it and that dollar amount so I know
that I won that game. Well, you know that doesn't
have anything to do you know a lot of times mathematically,
it's not going to have any impact on your financial
success and retirement.
Speaker 2 (10:20):
What number.
Speaker 3 (10:21):
That whole thing starts with. Figure out what you want
out of life, and then pull a trigger when the
machine can support it. Don't get hung up on a
dollar amount because the market can take it away just
as quickly, and that will lead to a lot of
frustration with somebody saying, you know what, I could have retired.
I was going to it, could have done it two
years ago, but I just chose not to because I
got obsessed with this number.
Speaker 1 (10:40):
All right, Hey, Brian, in the last couple of minutes
we have left for this segment, I know you've helped
hundreds of people retire and retire. Well, walk us through
a process that you'd recommend people followed to make sure
we check all these boxes and have the right conversations
so that you have a plan not just for your money,
but for your life, you know, heading into retirement.
Speaker 3 (11:03):
Bob, that's a great question and it's something everybody runs
into it. So if you want to really want freedom,
then then first of all, think it about. Think about
it as freedom from worrying about money.
Speaker 2 (11:11):
Start there. Most people go the other way.
Speaker 3 (11:13):
I'm going to have all this free time, so I'm
going to do nothing but worry about money, and those
people are don't end up happy. So reframe what freedom
means to you. Only you can do that, because only
you know yourself and what drives you. So start by
getting clear on that. Is it time with family, is
it's travel, volunteering, building something new again? Set the numbers aside.
Second step, build your plan financially backwards from those answers,
(11:34):
here's what I want to do?
Speaker 2 (11:36):
What would it cost me to get there?
Speaker 3 (11:37):
Now we're starting to talk about the numbers a little bit,
but it's not a pile of money. It's how do
I generate income out of it to support the things
I've identified? Not about hitting that number. It's what the
number allows you to do and then number three, simplify it.
If you have too many accounts, look under the hood.
You know a lot of people get obsessed with the
idea of well, if I put my money in a
bunch of different investment type of arrangements, then that is diversification.
Speaker 2 (11:57):
Well, not necessarily.
Speaker 3 (11:58):
You're going to realize that a lot of financial firms
you follow something called modern portfolio theory at its core,
so you're generally generally gonna see the same approaches. If
you see something that wanders too far off the reservation,
that might be a red flag. Anyhow, so, decide whether
it's worth having all this money spread out all over
the place, all the rental properties, all those different things.
And finally number four, talk about it. Talk with your spouse,
(12:20):
your advisor, your adult kids. The more alignment everybody has,
the more your wealth supports, not only your values, but
theirs as well, not just your net worth. It's not
about a pile of money, Bob.
Speaker 1 (12:30):
Here's the all worth advice. Wealth can certainly buy you
time and choices, but real freedom comes from using it
with purpose. A thirty two trillion dollar wave is coming,
and it's not in the stock market. What you need
to know before riding that wave. You're listening to Simply
Money presented by all Worth Financial on fifty five KRC
(12:51):
the talk station. You're listening to Simply Money, presented by
all Worth Financial on Bob's spot on seller. Along with
Brian James early retirement worries a business windfall in a
portfolio that no longer fits. We tackle your toughest money
questions straight ahead at six forty three. We've spoken about
(13:14):
alternatives before. Alts in quotes is short for alternative investments
assets outside of traditional stocks, bonds, or cash. These can
include things like private equity, hedge funds, real estate commodities,
and private credit, and they're often used for diversification and
potentially higher returns. Brian, people are pouring money into these things.
(13:38):
The numbers are absolutely staggering.
Speaker 3 (13:41):
Alternatives means just really something that's beyond the normal things
we've become accustomed to, such as the index funds, those
kinds of things. It does not mean those kids, for
those of you who grew up in the nineties, those
kids wearing the big baggy jeans and chains and hanging
out with the warehouse down and over the rite a
little bit different.
Speaker 2 (13:56):
We're talking about the investment world.
Speaker 3 (13:58):
So outside traditional stocks, bonds, this is private equity, hedge funds,
real estate commodities, private credit, things like that used for diversification.
Speaker 2 (14:06):
This is not the core of a portfolio.
Speaker 3 (14:08):
Yes, you can get potentially higher returns, but guess what
that comes along with little higher risk. And so there's
a lot of moving parts into these. But Bob, you
said it, there's people are pouring money into these. So
recent industry surveys indicating global assets under management in alternative
investments are forecast to hit about thirty two trillion dollars
by twenty thirty. That is only five really make it
(14:29):
four years from now, just about. So if most of
your portfolio has been public large cap equity stocks, think
the S and P five hundred, or maybe bond ladders,
meaning a bond that comes, you know, a pile of
bonds that comes due a little bit every year. Maybe
real estate alternatives might feel like stepping out of that
comfort zone. But if billions of dollars of institutional money
and moving that way, you may want to ask, maybe
my portfolio should be considering this.
Speaker 1 (14:52):
Maybe you should, Brian, I'm still confused. You know from
your prior comment. When you sit down with a client
and explain, you know, buffer ETFs or edge funds. Do
you really use the analogy of a kid walking around
on Fountain Square with his genes halfway down his rear
end and and his change hanging out? Is that is
that the analogy you used to describe these things.
Speaker 2 (15:13):
That's not where the warehouse was, Bob.
Speaker 3 (15:14):
It was up and over the rhine, and it was
this is back in the days when over the Rhine
wasn't quite what it is right now. But that's where
that's where all the alternative kids hung out.
Speaker 1 (15:23):
Thirty thirty, Now, I get it.
Speaker 2 (15:24):
You were Okay, you were. I'm gonna guess you were
a little more straight laced.
Speaker 3 (15:27):
You were.
Speaker 2 (15:28):
You were at the local McDonald's drinking coffee. I'm gonna
go out a living guess. Anyway, Why are we talking about?
Speaker 1 (15:34):
I behaved myself in high school, Brian. But hey, let's
talk about the pros and cons of alternative investments. Let's
get into some of the pros. The first one is diversification.
Benefit Alternatives do come, and it's why you build or
mix them in with a you know, a good diversified
investment strategy. The whole idea here is to get things
(15:56):
in your portfolio that have low correlation with the stock
and bond market. Think when one thing's zigging another one zagging.
Lower volatility can be a good thing, especially when you're
withdrawing money out of your portfolio during retirement. And then
along with that some of these things. You know, let's
face it, if you're going to take additional risk and
(16:17):
pay higher fees and all that, there is an enhanced
return potential in some of these things, you know, private equity,
private credit, infrastructure funds. Oftentimes they do and have good
track records of producing higher returns, especially over multi year
time horizons. But Brian, when you get into some of
these specialized investment vehicles, you know, this tends not to
(16:41):
be a do it yourself proposition. These things need to
be vetted with some folks that know how to kind
of pick through and separate the wheat from the chaffs,
so to speak.
Speaker 3 (16:52):
Yeah, So what we're talking about, probably the most common
example that people really can kind of comprehend is obviously
everyone's core portfolio probably owns index funds in it, right,
So you know your four oh and k, these more
simple investments, which which probably is focused on the S
and P five hundred, which is just the five hundred
largest publicly traded companies in the United States, No more,
no less than that. An alternative is also companies, but
(17:14):
they're not publicly traded. That's what hence the word private.
These are private equity type companies. You know, think of
little businesses you've seen, you know, I would think of
a veterinary clinics in HVAC shops. If you've noticed some
of these places that you know, you've known, have been
there forever, but all of a sudden, there's a shiny
new logo and a shiny new sign out front of
that little house that it's been operating out of for decades.
(17:34):
You can kind of rest assured that there's private equity
behind that. Good and bad comes with that. But the
whole point of it is that's an investment in a company,
a small company that might have a lot more upside
than just your normal publicly traded types of things. But
like Bob says, you need somebody who can really vet
these things. Somebody who can look into that vet clinic
and how it's going to combine with these other twelve
(17:55):
to make a profitable business. And is that worth investing in.
So nowadays the risk is still no matter what, but
you do have the ability to buy something that kind
of behaves a little like a mutual fund in a
roundabout way in terms of it's got a lot of
these different types of entities in it. None of them
are publicly traded, that's the point. But you're not going
after one little business at a time looking at balance sheets.
(18:15):
Someone else is doing that on your behalf. This didn't
exist twenty thirty years ago. But with the benefit of
technology and the way we can organize information, now smaller
investors can start to get involved in these things.
Speaker 1 (18:26):
Yeah, and some of the traditional you know, cons or
watchouts with these investments are slowly starting to go away.
Here's what I mean, you know, liquidity risk. Oftentimes your
money was tied up for years in these things. You know,
let's face it, When trillions of dollars start to pile
into these asset classes, that's good for investors. I mean,
think about, you know, buying a television from the local
(18:49):
hardware store versus buying it through Amazon or a big
back big box store. Volume tends to bring down prices
and increases options over time. The same thing is happening
now in this alternative investment space. That's a good thing.
The same thing applies to fees. A lot of people
(19:09):
are probably used to the old two and twenty term,
meaning the investment manager is going to take two percent
off the top and they're going to take twenty percent
of the upside. Well, that two and twenty stuff is
starting to go away as competition increases and the fees
are coming down. That's always a good thing for investors.
And then the access you've already mentioned it, accessum and
(19:32):
minimum investment amounts, those continue to come down as well,
So again, be careful about what you buy. But the
good thing is this landscape is opening up, and opening
up big time. It can be a huge opportunity. Here's
the all Worth advice. Big trends like a thirty two
trillion dollar alternatives boom deserve your attention, but only if
(19:54):
you match the attention with your liquidity needs, timeline fees
and your overall financeancial fit. Do you know how your
investments are taxed? We'll talk about the fine print that
matters coming up next. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC. The talk station.
(20:17):
You're listening to Simply Money Presided by all Worth Financial
on Bob Spondseller along with Brian James. When it comes
to investing, most people just focus on performance along with
diversification and risk, all good things to focus on, but
there's another key factor that quietly eats away or sometimes
saves you on the sidelines, and that's taxes. How and
(20:40):
when your investments or tax can significantly impact your real
return in your taxable investment accounts. And let's face it,
different types of investments come with very different tax treatments. Brian,
this is a good topic to get into, especially as
we get into the last couple months of the year
where some actual planning should probably be taking place right
(21:00):
now between now and the end of the year.
Speaker 3 (21:02):
Q four it is the fourth quarter of the year, Bob,
tis the season to be really mad at your mutual
fund for spitting out a capital gain.
Speaker 2 (21:09):
So why does that happen?
Speaker 3 (21:10):
Mutual funds can have what we kind of consider a
sneaky tax there, good for diversification, but they also come
with this twist that'll catch you off guard, and you
might have seen it even if you don't sell your
mutual fund shares, you can still owe taxes. Right, you
might have bought that fund this year, but perhaps it's
sold a position it has owned for twenty years. If
this is a mutual fund type arrangement, they're required by
(21:33):
law to distribute just about all of their income and
capital gains to shareholders every single year. So if the
fund manager sells something that it is held for twenty years,
you're going to have to pay tax on that gain
even though you only own the fund for about six months.
This is one of the reasons we are big fans
of exchange traded funds because they can get the same
job done with regard to diversification, but the way they
build those portfolios is much more efficient, and the holding
(21:56):
period of the assets that are underneath it are specific
to you and when you bought it, not when the
exchange train fund bought it, you know, decades ago. So
that's one of the things that can sneak up. And
this is it's usually December where you'll get a big,
fat distribution. And this is not a not really a
money making opportunity either, because what happens is the share
price drops by roughly the amount of the distribution itself,
(22:18):
so you end up with a net zero.
Speaker 2 (22:19):
Effect, but a big fat tax bill.
Speaker 3 (22:21):
Mutual funds are notorious for this, and that's something to
understand about it. If you're making choices, try to lean
towards the ETF side. If you can't. This is in
taxable accounts, not ir.
Speaker 1 (22:29):
Yeah, and it doesn't mean mutual funds are bad. I mean,
let's face it, folks have on them for decades and
done extremely well. What we're talking about here is just
the evolution of the industry to make things more tax
efficient for people that you know, have the know how
and get the proper advice to transition into a more
tax efficient environment moving forward. You know, let's talk about dividends.
(22:50):
People love dividends, Brian, and we got to differentiate between
ordinary dividends that are tax at regular income tax rates
and qualified dividends those paid by US companies and even
certain foreign companies. As long as those those you know,
those stocks are held for a specific period. The qualified
(23:11):
dividends are taxed at the much preferred lower long term
capital gains rates. And it's important to know how your
portfolio is structured and make sure you make adjustments accordingly,
especially if you're in a high tax bracket. Another good
thing to watch as you construct your your ongoing investment portfolio.
Speaker 3 (23:32):
Yeah, so let's say I briefly mentioned it, but then
then we move to ETFs. These are the tax efficient
cousins of mutual funds, kind of the same level of risk.
You know, based on if you're buying, you know, the
S and P five hundred mutual fund versus the S
and P five hundred ETF, you're basically going to get
the same investment results. But they don't trigger capital gains
when investors buy or sell shares necessarily. That's thanks to
(23:52):
a clever mechanism called in kind creation and redemption. Those
shares are built the day you buy them, not the
day that you know. You're again not dealing with twenty
years worth of capital gains there. So with enough beating
that to death, I also want to move on to
municipal bonds. And now that interest rates are off the
mat Bob, people are starting to pay attention to what
can I do with fixed income? What are there different
(24:15):
things out there that I could invest in. Municipal bonds
are commonly known as muni's. These are issued by state
local governments and they fund projects like schools, bridges, water systems,
those types of things, and the reason people are attracted
to them though, is a tax treatment. Interest off of
the municipal bond is a state in federal tax free,
usually not always, it depends on the state you live in.
There's different rules for everything, but that's the attraction to it,
(24:38):
and so a lot of people will say, well, great,
I'm just gonna dump all these CDs and all these
corporate bonds and I'll flip everything into municipal bonds and
it'll be tax free.
Speaker 2 (24:44):
You're still making a sacrifice.
Speaker 3 (24:46):
Municipal bonds because they are tax free, do not have
to pay as much as a taxable bond because the
demand will still be there. And if you're a taxpayer,
you probably appreciate the fact that you're not paying as
much interest in that different entity. But in a higher
bracket than a lower rate of income that comes to
you tax free can be better than a higher rate
(25:06):
that ends up getting taxed thirty five to forty percent.
Speaker 1 (25:09):
Yeah, and just to clarify here, the state tax exemption
usually only applies in your home state. So that's why
people in Ohio, for example, they buy Ohio munities and
so on. And so forth. There are some exemptions though
to these MUNI bonds some unis known known as private
activity bonds. They may be subject subject to the alternative
(25:30):
minimum tax. So another watch out there. That's why we
always like to coordinate all our planning with our clients
CPAs to make sure we don't run a foul of
that kind of stuff. Just another thing to watch out for.
All right, let's get into treasury bonds. We've used these
a lot in portfolios over the last few years. You know,
with with rates being high tax wise, treasury interest has
(25:51):
its own special carve out. It's exempt from state and
local income taxes. You pay taxes, you pay federal taxes
on what you earn, but you can avoid the state
and local tax So that's a benefit along with the
nice yield that people have gotten over the last few years,
that makes treasuries especially attractive to investors living in states
(26:13):
with very high tax rates New York. But like Muni's,
any capital gains from selling before maturity, well you're gonna
pay taxes at the federal level on that.
Speaker 2 (26:25):
Yeah. And one more side note here.
Speaker 3 (26:27):
If you run across something called a treasury bill, these
are things that are that come do within a year.
They won't spit out actual interest payments. Rather, you buy
it at a discount, and then it would when it
matures after.
Speaker 2 (26:37):
A few months.
Speaker 3 (26:38):
You might buy it at ninety eight percent of its value,
let's say, and it's gonna mature a one hundred percent.
That means you got a two percent gain on it.
That's the interest you're gonna pay taxes on that. You're
just not gonna see it like a traditional payment, so
it'll look a little bit different.
Speaker 2 (26:48):
All right.
Speaker 1 (26:49):
The thing, also, the big thing that we want to
make sure we cover is depending on the composition of
your portfolio, it might make sense to have certain things
owned in an IRA, in certain things own in a
taxable account. You know, if you've got a bunch of
bond holdings, you know an IRA is a great place
to have those, because, let's face it, everything coming out
of an IRA is going to be taxed at ordinary
(27:11):
income anyway, Brian. A lot of times we see people
have money in the wrong locations from a tax efficiency standpoint,
and that's a lot of good cleanup work that we
can do when we get involved with folks. Here's the
all Worth advice. Taxes might not make for exciting cocktail
party conversation, but they have a massive impact on your
(27:31):
real returns, because, after all, it's not what you make,
it's what you keep that matters. Coming up next, a
business sale, a tricky Roth conversion, and a mismatched portfolio.
We answer your real money questions with real advice. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk station. You're listening to Simply
(27:57):
Money presented by all Worth Financial on Bob's Bond Seller
along with Brian James. Do you have a financial question
you'd like for us to answer. There's a red button
you can click while you're listening to the show. If
you're listening from the iHeart app, simply record your question
and it will come straight to us. All right, We
lead things off tonight with Tom and Mason. He says,
we finally hit the point where we don't have to
(28:19):
worry about money on a day to day basis, but
I can't shake the fear of making one bad move.
How do you rebalance or balance confidence with caution once
we feel like we've won the game. This is a
common question.
Speaker 2 (28:35):
Brian, Yeah, it really is.
Speaker 3 (28:36):
And Tom You're not the only one to worry about this.
So I would say two things. First off, hopefully you
have it. You have a financial plan in the first place,
so if you've decided you did hit that point right,
so you must have figured out a way to identify that.
I'm guessing there's a plan in the mix because of
the way you phrase your question. So my first question
for you, Tom is have you stress tested that Take
that Take that point, whatever that dollar amount is that
(28:57):
you're sitting on right now, Knock off twenty twenty five percent.
Let's just pretend it's a two thousand and eight type scenario.
Take twenty five percent away. Does it still work? If
it does well, then great, You've built a heck of
a machine that's gonna support you. You may not be
happy if we go through that situation, but that's really
what you're trying to defend against. Nobody will be happy
going through it, but it doesn't necessarily mean you have
to change your expectations.
Speaker 2 (29:17):
And the scariest thing you can do in an environment
like that is.
Speaker 3 (29:19):
Actually try to protect yourself and sell it losses. Don't
do that, but run the numbers and make sure that
you can see what that impact actually would be. That's
just called stress testing your plan and the other thing
that's going to happen. Just be aware of now that
you know, once you do retire, you're gonna have a
lot more time.
Speaker 2 (29:34):
And I can tell already you're a worried, a little
bit of a warrior, and there's nothing wrong with that. That
has helped you get to this point to begin with.
Speaker 3 (29:39):
But that means when you come up with a lot
more time, you're gonna start paying attention to all these
headlines and you're gonna feel like all these stories are
happening just because you're retired. They've been happening all along,
you just didn't have time to pay attention to them.
Speaker 2 (29:52):
Don't lose sight of that fact. All right, Let's move
on to Rachel in Batavia.
Speaker 3 (29:56):
Rachel says her husband wants to retire early, but she's
worried about that healthcare gap before Medicare. Medicare kicks in
at sixty five. So, Bob, how do you run the
numbers without letting fear dictate that discussion.
Speaker 1 (30:07):
Well, first of all, Rachel, good for you for you
know knowing ahead of time that you're gonna have to
pay for some health insurance before you and your husband
get to medicare. Like a lot of things, you know,
fear tends to dissipate when you actually have a financial plan.
So my advice is, go shop for some medical insurance now.
(30:28):
I obviously not do not know what your health insurance
situation looks like right now. Through your employer. You know,
my guess is they pay for some of the coverage
and you kick in some of the premium as well.
Obviously that whole thing shifts when you retire and you're
on your own, so to speak, for those gap years.
So you know, look at whether you have cobrant coverage
(30:49):
available through your employer, what that might look like from
a cost standpoint, and then go out and shop some
individual healthcare plans now before you even need to buy them,
and run the numbers. Incorporate that into your financial plan.
That should hopefully confirm whether you can or cannot afford
to retire, and you know what you're spending, you know,
(31:10):
goals and needs and all that should be when you
actually pull the trigger, and that will hopefully eliminate some
of the fear before you make the ultimate retirement decision.
Hope that helps all right, Ron and Columbia. Tusculum says,
after years of growing our business selling it felt like
a relief until I realized I traded purpose for liquidity.
(31:32):
How do you turn a financial windfall into a fulfilling
next chapter of life? Wow? What a loaded question, but
a great one, Brian.
Speaker 3 (31:41):
It really is a great one. So yeah, congratulations, Ron.
Obviously things went well for you. It sounds like you
put a lot of blood, sweat and tears into that
and successfully exited that business when it was in good
shape and and made a bunch of money off it,
and that was kind of the point all along.
Speaker 2 (31:54):
So that's great.
Speaker 3 (31:55):
But I would say maybe the part you missed, And
this isn't necessarily a shot at you, but it sounds
like maybe you didn't spend a lot of time thinking
about what this would feel like. Right, So what happens
when a big windfall drops out of the sky and
all of a sudden, I don't have to get out
of bed, I don't have to have an agenda every day,
but maybe I kind of want that agenda?
Speaker 2 (32:11):
What do I actually do?
Speaker 3 (32:13):
So I would advise anybody out there, as we say,
all the time, spend it. You know, you spend an
awful lot of time worrying about the money. How are
the bills going to get paid after I retire? Well,
worry about your time budget some too. What am I
going to do with all this extra time that I have?
That can be volunteering. Perhaps it's you know, Ron, Maybe
you can step in and help out, you know, at
that business that you've sold. Sometimes that's good. Sometimes it
(32:34):
can cause problems, but that can be an alternative. And
maybe maybe, you know, look at something entirely different. I
always encourage people go on indeed dot com and search
for keywords. This is a job search site. Search for
keywords of anything you're interested in, and forget your career.
Don't think about your career. Just type in things, your hobbies,
things you're interested in. You know, you can often find
(32:54):
jobs you would never know have existed because you haven't
been paying attention at that level. But these are the
kind of jobs that don't come with fantastic salaries, they
don't come with benefit packages. But the cool thing is, Ron,
you don't need them. That was the point of selling.
So some things for you to chase. Hope that works
out for you. Tom in Florence is looking at roth conversions,
He says, he knows they make sense on paper. Right,
If I move from pre tax to tax free, yay,
(33:16):
everybody likes tax free. But I can't get comfortable writing
a six figure check to the irs.
Speaker 2 (33:20):
How do you decide? Neither can I?
Speaker 3 (33:22):
But how do you decide, Bob, when it's worth paying
taxes now in exchange for some flexibility in the future.
Speaker 1 (33:28):
Well, Tom, you have to have a plan, and you've
got to put some assumptions into this. You know, obviously
writing that check now comes with a cost. You are
parting with money, no question about it. But if you
have a well constructed plan with some responsible assumptions built
into to the plan that you're comfortable with, you know
(33:48):
you can see the hopefully multiple six figure benefit you
and your family are going to you know, have down
the road from writing a six figure check today. So
run the nine numbers, sit down with a good fiduciary
advisor who can run a bunch of different scenarios. And again,
like everything else we talk about, when people have a
(34:08):
plan and they can see the why behind some of
these decisions and the numbers actually do make sense and
line up, that can tend to reduce a lot of
the fear and give people confidence in making some decisions
that can really really benefit them down the road.
Speaker 3 (34:24):
Hey, Bob, I want to attack a quick thought onto
that too. I think this is something something to consider.
Here is the idea of priorities. Right, If your priority,
your number one priority is I want to poke the
irs ANDEI and pay as little taxes and I want
to celebrate having a zero percent tax bracket, that may
actually be a missed opportunity because you may very well
be backloading your taxes when you're in your late seventies
(34:45):
because of the way required minimum distributions are work. So
make sure you understand how it works and don't sacrifice
the opportunity to make some moves.
Speaker 1 (34:51):
Now, excellent point. All right, we love our pets, but
are we letting Fido's future outrank our own. We've got
got some interesting data to share with you.
Speaker 2 (35:02):
Next.
Speaker 1 (35:02):
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
Simply Money presented by all Worth Financial on Bob Sponseller
along with Brian James. Brian, listening to that music makes
me nervous already. All right, we know that Americans love
(35:24):
their pets. It is a gazillion dollar industry. But listen
to this. Trust and Will, an online service to create
estate planning documents and handle the State Administration, reports that
eighty three percent of Americans recognize the importance of estate planning,
yet only thirty one percent have a will. Despite widespread awareness,
(35:46):
the majority of Americans remain unprepared, with procrastinations and misconceptions
about wealth fueling inaction. Here's the staggering number to me,
Brian will. Trust and Will also reports that ninety four
four percent of its actual users make provisions for a
pet in case of their death, but only forty percent
(36:07):
name guardians for their own kids.
Speaker 3 (36:10):
I'm sorry, I'm not buying this one. I'm not because
we just because we find an article that has numbers
in it doesn't mean those numbers are ninety four percent
of people who use Trust and I. Bob, I've been
doing this for thirty years, and I cannot think of
a situation where someone actually said I want to make
sure Rover is cared for. Not that that shouldn't happen,
(36:30):
but that's not usually something people codify into a will.
And I'm simply not buying that ninety four percent of
people actually said something about that, you know, and so
But anyway.
Speaker 1 (36:39):
Well, that's what I was gonna ask you. I mean,
I'm an old man. You're one of these young, hip,
gen X gen y people. Is this a new thing
with young folks? Because I've been doing this thirty five years.
I have never had a client come in and when
we're doing estate planning even bring up pets. Not one time, ever, ever, ever.
Speaker 2 (36:58):
I want that.
Speaker 3 (36:59):
I would like our anographer to read back that Bob
Spondseller called me young and hip, and.
Speaker 2 (37:04):
I really appreciate that. You know, when I was when I.
Speaker 1 (37:06):
Was hearing that one. Yeah, probably we're the one talking about. Yeah,
you're the one talking about hanging out at the warehouse
with your jeans halfway down your rear end. That's that's
what i'd call him. That was an That's a whole
different world than the one I live in. But let's
get back to this story.
Speaker 2 (37:23):
Okay.
Speaker 3 (37:23):
So remember Leona Helmsley. This was the mean lady. She
owned a hotel, a bunch of hotels, famously left her
dog twelve million dollars when she died. Now she had relatives.
This is the lady by the way that said taxes
her for little people. She was a real charmer, but
obviously for her family as well. She gave her dog
twelve million dollars because you know, a dog, you know,
needs to make sure that ends meat at that time
(37:44):
of their lives. But a judge kind of came in
and said, well, you know what a dog can really.
Speaker 2 (37:48):
Make it with two million? Are we being honest?
Speaker 1 (37:50):
Here?
Speaker 2 (37:50):
Are we being honest?
Speaker 3 (37:51):
And the rest went to two of her grandchildren. So
this dog was a white Mouteese named Trouble I'm sure
was a charmer himself. Died at the age of twelve,
and then those remaining fund wound up in Helmsley's charitable
trust and who knows where they went after that. But
any anyway, these are the kinds of things should you
buy pat insurance? Maybe, I mean, if pets are family,
(38:11):
I'm not to hear to say this is not important stuff.
But at the end of the day, should you write
them into your will? I'm gonna say, at the end
of the day, they're not gonna remember. They don't know
what you did this morning.
Speaker 1 (38:22):
I think the great happy ending to this story is
that they fought over this twelve million dollars and it
all ended up going to charity anyway. That's great. That
just tells me God has a great sense of humor.
Thanks for listening tonight. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station
Tonight, the hidden ways that wealth buys freedom and where
it doesn't. You're listening to Simply Money, presented by all
Worth Financial on Bob spond Seller along with Brian James. Tonight,
we're talking about something that doesn't show up on your
account statements, but it might matter more than any number
ever could. Brian, and we're talking about freedom. A recent
(00:27):
survey show that more affluent Americans are rethinking what they
actually want to do with their money, not just see
it grow, but they wanted to free them from obligations
they don't enjoy. Imagine that things like freeing up time,
reducing mental clutter, and creating flexibility in their life. Brian,
I love this whole thought process. Let's dig into it
(00:49):
a little bit tonight.
Speaker 2 (00:51):
Yeah.
Speaker 3 (00:51):
So the questions they're asking, what am I really getting
with all this effort, all this investing.
Speaker 2 (00:55):
What's the point of all this?
Speaker 3 (00:56):
And they've probably done most of the heavy lifting already,
so not becomes a question of intentionality.
Speaker 2 (01:01):
Okay, I built something. I don't know what this machine
does that.
Speaker 3 (01:03):
I built, but I want to start thinking about it
now and taking advantage of it. So where does wealth
buy freedom? Well, the first most obvious one is time.
Money buys back hours that you're not spending working and
slaving away for somebody else so that they will pay
you and you can buy food and shelter and clothing
for your family. Maybe so this this sometimes translates into
retiring a little earlier than the crowd. Or maybe it's
(01:24):
outsourcing this stuff you hate. Pay somebody to do the
yard work, deal with your taxes. You know, you can
get grocery shopping done and all that kind of thing now,
and that frees you up to spend time on time
on things that matter. Another level of freedom, up decision
making power. Wealth gives you the luxury of walking away
from let's say, maybe a toxic work environment or a
bad business partnership, something that sucks out more energy that
(01:45):
gives you, or even just that daily nine to five
grind that no longer suits your values.
Speaker 1 (01:50):
Yeah, I want to jump in here for a minute.
I mean, we talk about time and freeing up time
and that is wonderful, But we talk about this all
the time. You know, Brian, and I know you and
I both run into this occasionally with our clients that
are about to retire. You better think through what you're
gonna do with all that time that you free up,
because some people are pretty shocked by all that extra
(02:12):
free time, and that can create some issues that they
need to work through, not only themselves but with their spouse.
Speaker 3 (02:19):
Absolutely, and that can you know, being around too much.
As the old saying goes, I think it's an old saying.
I've been saying it for.
Speaker 2 (02:24):
A long time. I can't miss you until you're gone.
Speaker 3 (02:27):
Therefore, if you're in the house all the time and
you've got nothing to do and you're constantly pasting me,
I'm probably gonna get a little bit annoyed. So yeah,
what you're talking about there is is that I always
kind of feel like there's a People look at money
as the big mountain they have to get over in
order to retire, but there's another one hiding behind that,
and that is that vacuum of time.
Speaker 2 (02:45):
What will I do with all of that free time?
Speaker 3 (02:47):
We mostly hide behind the money worry, worry, worry that
there's not enough, and then all of a sudden we
finally do get around to working with a financial advisor
and building a plan, and then all of a sudden
we realize maybe we could have retired two years ago.
Oh my gosh, I want to retire right now. But
what am I going to do?
Speaker 2 (03:01):
What? What do I get out of bed? And I
have nothing on the agenda?
Speaker 3 (03:04):
What does that actually mean when when I'm no longer
the important person in the meeting and in my world
has kind of shrunk? Is that really gonna you know?
Will the dog respect me as much as my employees do?
Am I ready for that?
Speaker 1 (03:16):
Well? The positive spin on this, we bring up a
third opportunity and we'll just call that opportunity freedom. You
get to say yes to that once in a lifetime
trip with your family, maybe invest in a business that
your kid wants to start, or support a cause both
financially and with your time acquired expertise, you know, through
(03:37):
charities or other endeavors that really lights your fire, you know,
really taps into passions that you've had building up inside
of you for years and have not been able to
tap into because of your job. That's the positive spin
on properly planning for you know, retirement so to speak.
Opportunity freedom.
Speaker 3 (03:57):
Yeah, and then of course there's also peace of mind
right just means that you've built a machine that can
cover emergencies, that can pay for health care, even fun
long term care, without derailing everything else. So that is huge,
right that that The ability to say, Okay, I got this,
I don't like this, I don't want to write the check,
but fortunately I can write this check might make me mad,
but it's not a matter of affecting where our next
(04:17):
meal is coming from. And that's something you can actually
feel and not just track on a spreadsheet because you
built it for yourself and your family. And uh again,
it's a it's a money machine. You got to turn
it on. But there's good ways to do it, bad
ways to do Let's pivot to to where where don't
we get freedom from this?
Speaker 2 (04:33):
Bob? Well, the first one is mental clutter.
Speaker 3 (04:35):
Just because you have more money and we've addressed all
those issues we just went through, that doesn't mean you
worry any less. In fact, it can actually increase the stress. Okay,
how do I invest this big pile of money? Who
do I trust? You know, my CPA, my attorney, my
investment advisor, my financial planner. I got all these people
talking to me, Am I doing enough for my kids?
Or even am I am I maybe doing too much for
my kids? It's it does You're not going to eliminate
(04:55):
those questions. You're going to introduce a whole bunch of
new ones. That's not a bad thing. But don't don't
be surprised by the fact that you are still worried
about something.
Speaker 2 (05:02):
It's just different than it used to be.
Speaker 1 (05:04):
Yeah, Brian, I run into this all the time with folks.
I mean, let's face it, we work with successful people
all day. They're used to running or managing something that's successful,
and they've got their nose in it for ten, twelve,
fifteen hours a day. They're used to managing every aspect
of it. They're used to winning, and they're used to
dotting the i's, crossing the t's, and diving into details.
(05:27):
And then when that's gone, you know, they need to
focus on something, and they tend to focus on their money,
and they tend to sometimes consume too much media, too
many ideas about how to invest, too much going on
in the world, you know, with political turmoil, and they
can get them, they can get themselves mentally, you know,
(05:47):
all bound up here because they're consuming too much and
thinking about too much and trying to manage that all themselves.
Can create a whole lot of stress. And then if
they're not careful, you know, by by pushing and pulling
levers they shouldn't be. They can take a big pile
of money and create some problems and watch some of
that money start to evaporate for sure.
Speaker 3 (06:09):
And again these are the things that sneak up on
us unless we're gonna sit down and uh and and
think about what have we built and what does this
all actually mean? So, you know, another concern here is
family dynamics. Wealth doesn't solve family conflict if there were
conflicts before a lot of times, it can make it
even worse. Sometimes you know, it's inheritance question. Who's in charge,
who's making the decisions on behalf of mom and dad?
(06:31):
Who gets what? That can erode the piece and not
build it. And so it's another and another good Once
you've got all this time, a good thing to start
thinking about is how is this gonna work in my family?
Do I need to have clear conversations now rather than
just putting it all down on a piece of paper
and letting them figure out what I meant before I
died when they don't have a chance to ask you
about it.
Speaker 1 (06:50):
Another another thing that you know does not get bought
with wealth that we got to watch out for, or
something we'll just call time traps. Brian, I'm curious. Do
you run across this from time to time? I know
I do. A lot of successful people they replace that
high powered job in the stress of work with and
(07:11):
they just immediately refill their schedule with a bunch of shoulds,
things like board commitments, managing real estate holdings, meeting with
five different investment professionals or attorneys or accountants to just
quote unquote manage their money. And all of a sudden,
they've got a full schedule of stuff to do, and
they're not really experiencing any joy out of their retirement.
(07:32):
You know, a wise older gentleman told me many years ago.
He said, Bob, you got to learn how to say
no to a lot of quote unquote good things. So
you have the freedom to say yes to the best things.
And sometimes the best things are just you know, taking
a hike with your wife in the woods on a
sunny fall day, things that you couldn't do, you know,
(07:56):
when you were working fifteen hours a day.
Speaker 3 (07:58):
Yeah, and that is a huge, huge mental shift, because
a lot of people who are at this level of
success got there by by doing that twenty four to
seven grind, always worried about something, always looking for that
next opportunity. And you can do that right until you've
got all your feet in the grave. And that's the
scary part, right. So I've had I have had a
lot of situations with clients, as I'm sure you have,
where we do the financial plan and they realize not
(08:19):
only can they retire, they could have retired five.
Speaker 2 (08:22):
Six, seven years ago. And that's not always a sigh
of relief.
Speaker 3 (08:25):
I've told this story a lot of times, but we
have a client that completely fell apart at the table
when we told her she could have retired five six,
seven years ago.
Speaker 2 (08:33):
That is normally signed somewhat happy.
Speaker 3 (08:35):
News, but she totally fell apart because she was thinking
not of the future and all the freedom. She was
thinking of the freedom she missed out on, which could
have been spent with her grandchildren who were now growing up.
She had always had the thought in her mind she
wanted to be involved in their lives on a more
day to day basis, but assumed she had to work.
She was wrong because she had never stepped back to
look at the forest for the trees, to understand exactly
(08:56):
what she had built for herself and when it could
take her to that freedom place.
Speaker 1 (09:00):
Yeah, exactly. If you're waiting until some future milestone to
enjoy the fruits of all your hard work and planning,
be careful not to wait too long, Brian. We see
this from time to time. People work too long, or
they just put off, or to your point, they haven't
done the planning and realizing the amount of space and
cushion they do have in their financial plan, and they
(09:22):
don't take that cruise, they don't spend the time, you know,
unique experiences with their grandchildren, and then lo and behold,
they get into their late seventies early eighties and health
concerns start to crop up, and they really missed out
on some wonderful life changing opportunities. And that's one of
the great benefits of having a financial plan and having
(09:42):
a good fiduciary advisor who can actually tell you, hey,
go spend some of that money, go do some things
that are really meaningful to you.
Speaker 2 (09:51):
Yeah, and I would. I would also throw out getting
hung up on a number.
Speaker 3 (09:53):
Right when we get near, especially when the market's at
a high, you know, we get close to that more
money than I've ever had my entire life, and I'm
sneaking up on a maybe it's not one million now
it's two, or it's been six for a long time,
it's about to be seven.
Speaker 2 (10:06):
I want to wait until I see that number.
Speaker 3 (10:08):
I want to see a piece of paper with my
name on it and that dollar amount so I know
that I won that game. Well, you know that doesn't
have anything to do you know a lot of times mathematically,
it's not going to have any impact on your financial
success and retirement.
Speaker 2 (10:20):
What number.
Speaker 3 (10:21):
That whole thing starts with. Figure out what you want
out of life, and then pull a trigger when the
machine can support it. Don't get hung up on a
dollar amount because the market can take it away just
as quickly, and that will lead to a lot of
frustration with somebody saying, you know what, I could have retired.
I was going to it, could have done it two
years ago, but I just chose not to because I
got obsessed with this number.
Speaker 1 (10:40):
All right, Hey, Brian, in the last couple of minutes
we have left for this segment, I know you've helped
hundreds of people retire and retire. Well, walk us through
a process that you'd recommend people followed to make sure
we check all these boxes and have the right conversations
so that you have a plan not just for your money,
but for your life, you know, heading into retirement.
Speaker 3 (11:03):
Bob, that's a great question and it's something everybody runs
into it. So if you want to really want freedom,
then then first of all, think it about. Think about
it as freedom from worrying about money.
Speaker 2 (11:11):
Start there. Most people go the other way.
Speaker 3 (11:13):
I'm going to have all this free time, so I'm
going to do nothing but worry about money, and those
people are don't end up happy. So reframe what freedom
means to you. Only you can do that, because only
you know yourself and what drives you. So start by
getting clear on that. Is it time with family, is
it's travel, volunteering, building something new again? Set the numbers aside.
Second step, build your plan financially backwards from those answers,
(11:34):
here's what I want to do?
Speaker 2 (11:36):
What would it cost me to get there?
Speaker 3 (11:37):
Now we're starting to talk about the numbers a little bit,
but it's not a pile of money. It's how do
I generate income out of it to support the things
I've identified? Not about hitting that number. It's what the
number allows you to do and then number three, simplify it.
If you have too many accounts, look under the hood.
You know a lot of people get obsessed with the
idea of well, if I put my money in a
bunch of different investment type of arrangements, then that is diversification.
Speaker 2 (11:57):
Well, not necessarily.
Speaker 3 (11:58):
You're going to realize that a lot of financial firms
you follow something called modern portfolio theory at its core,
so you're generally generally gonna see the same approaches. If
you see something that wanders too far off the reservation,
that might be a red flag. Anyhow, so, decide whether
it's worth having all this money spread out all over
the place, all the rental properties, all those different things.
And finally number four, talk about it. Talk with your spouse,
(12:20):
your advisor, your adult kids. The more alignment everybody has,
the more your wealth supports, not only your values, but
theirs as well, not just your net worth. It's not
about a pile of money, Bob.
Speaker 1 (12:30):
Here's the all worth advice. Wealth can certainly buy you
time and choices, but real freedom comes from using it
with purpose. A thirty two trillion dollar wave is coming,
and it's not in the stock market. What you need
to know before riding that wave. You're listening to Simply
Money presented by all Worth Financial on fifty five KRC
(12:51):
the talk station. You're listening to Simply Money, presented by
all Worth Financial on Bob's spot on seller. Along with
Brian James early retirement worries a business windfall in a
portfolio that no longer fits. We tackle your toughest money
questions straight ahead at six forty three. We've spoken about
(13:14):
alternatives before. Alts in quotes is short for alternative investments
assets outside of traditional stocks, bonds, or cash. These can
include things like private equity, hedge funds, real estate commodities,
and private credit, and they're often used for diversification and
potentially higher returns. Brian, people are pouring money into these things.
(13:38):
The numbers are absolutely staggering.
Speaker 3 (13:41):
Alternatives means just really something that's beyond the normal things
we've become accustomed to, such as the index funds, those
kinds of things. It does not mean those kids, for
those of you who grew up in the nineties, those
kids wearing the big baggy jeans and chains and hanging
out with the warehouse down and over the rite a
little bit different.
Speaker 2 (13:56):
We're talking about the investment world.
Speaker 3 (13:58):
So outside traditional stocks, bonds, this is private equity, hedge funds,
real estate commodities, private credit, things like that used for diversification.
Speaker 2 (14:06):
This is not the core of a portfolio.
Speaker 3 (14:08):
Yes, you can get potentially higher returns, but guess what
that comes along with little higher risk. And so there's
a lot of moving parts into these. But Bob, you
said it, there's people are pouring money into these. So
recent industry surveys indicating global assets under management in alternative
investments are forecast to hit about thirty two trillion dollars
by twenty thirty. That is only five really make it
(14:29):
four years from now, just about. So if most of
your portfolio has been public large cap equity stocks, think
the S and P five hundred, or maybe bond ladders,
meaning a bond that comes, you know, a pile of
bonds that comes due a little bit every year. Maybe
real estate alternatives might feel like stepping out of that
comfort zone. But if billions of dollars of institutional money
and moving that way, you may want to ask, maybe
my portfolio should be considering this.
Speaker 1 (14:52):
Maybe you should, Brian, I'm still confused. You know from
your prior comment. When you sit down with a client
and explain, you know, buffer ETFs or edge funds. Do
you really use the analogy of a kid walking around
on Fountain Square with his genes halfway down his rear
end and and his change hanging out? Is that is
that the analogy you used to describe these things.
Speaker 2 (15:13):
That's not where the warehouse was, Bob.
Speaker 3 (15:14):
It was up and over the rhine, and it was
this is back in the days when over the Rhine
wasn't quite what it is right now. But that's where
that's where all the alternative kids hung out.
Speaker 1 (15:23):
Thirty thirty, Now, I get it.
Speaker 2 (15:24):
You were Okay, you were. I'm gonna guess you were
a little more straight laced.
Speaker 3 (15:27):
You were.
Speaker 2 (15:28):
You were at the local McDonald's drinking coffee. I'm gonna
go out a living guess. Anyway, Why are we talking about?
Speaker 1 (15:34):
I behaved myself in high school, Brian. But hey, let's
talk about the pros and cons of alternative investments. Let's
get into some of the pros. The first one is diversification.
Benefit Alternatives do come, and it's why you build or
mix them in with a you know, a good diversified
investment strategy. The whole idea here is to get things
(15:56):
in your portfolio that have low correlation with the stock
and bond market. Think when one thing's zigging another one zagging.
Lower volatility can be a good thing, especially when you're
withdrawing money out of your portfolio during retirement. And then
along with that some of these things. You know, let's
face it, if you're going to take additional risk and
(16:17):
pay higher fees and all that, there is an enhanced
return potential in some of these things, you know, private equity,
private credit, infrastructure funds. Oftentimes they do and have good
track records of producing higher returns, especially over multi year
time horizons. But Brian, when you get into some of
these specialized investment vehicles, you know, this tends not to
(16:41):
be a do it yourself proposition. These things need to
be vetted with some folks that know how to kind
of pick through and separate the wheat from the chaffs,
so to speak.
Speaker 3 (16:52):
Yeah, So what we're talking about, probably the most common
example that people really can kind of comprehend is obviously
everyone's core portfolio probably owns index funds in it, right,
So you know your four oh and k, these more
simple investments, which which probably is focused on the S
and P five hundred, which is just the five hundred
largest publicly traded companies in the United States, No more,
no less than that. An alternative is also companies, but
(17:14):
they're not publicly traded. That's what hence the word private.
These are private equity type companies. You know, think of
little businesses you've seen, you know, I would think of
a veterinary clinics in HVAC shops. If you've noticed some
of these places that you know, you've known, have been
there forever, but all of a sudden, there's a shiny
new logo and a shiny new sign out front of
that little house that it's been operating out of for decades.
(17:34):
You can kind of rest assured that there's private equity
behind that. Good and bad comes with that. But the
whole point of it is that's an investment in a company,
a small company that might have a lot more upside
than just your normal publicly traded types of things. But
like Bob says, you need somebody who can really vet
these things. Somebody who can look into that vet clinic
and how it's going to combine with these other twelve
(17:55):
to make a profitable business. And is that worth investing in.
So nowadays the risk is still no matter what, but
you do have the ability to buy something that kind
of behaves a little like a mutual fund in a
roundabout way in terms of it's got a lot of
these different types of entities in it. None of them
are publicly traded, that's the point. But you're not going
after one little business at a time looking at balance sheets.
(18:15):
Someone else is doing that on your behalf. This didn't
exist twenty thirty years ago. But with the benefit of
technology and the way we can organize information, now smaller
investors can start to get involved in these things.
Speaker 1 (18:26):
Yeah, and some of the traditional you know, cons or
watchouts with these investments are slowly starting to go away.
Here's what I mean, you know, liquidity risk. Oftentimes your
money was tied up for years in these things. You know,
let's face it, When trillions of dollars start to pile
into these asset classes, that's good for investors. I mean,
think about, you know, buying a television from the local
(18:49):
hardware store versus buying it through Amazon or a big
back big box store. Volume tends to bring down prices
and increases options over time. The same thing is happening
now in this alternative investment space. That's a good thing.
The same thing applies to fees. A lot of people
(19:09):
are probably used to the old two and twenty term,
meaning the investment manager is going to take two percent
off the top and they're going to take twenty percent
of the upside. Well, that two and twenty stuff is
starting to go away as competition increases and the fees
are coming down. That's always a good thing for investors.
And then the access you've already mentioned it, accessum and
(19:32):
minimum investment amounts, those continue to come down as well,
So again, be careful about what you buy. But the
good thing is this landscape is opening up, and opening
up big time. It can be a huge opportunity. Here's
the all Worth advice. Big trends like a thirty two
trillion dollar alternatives boom deserve your attention, but only if
(19:54):
you match the attention with your liquidity needs, timeline fees
and your overall financeancial fit. Do you know how your
investments are taxed? We'll talk about the fine print that
matters coming up next. You're listening to Simply Money, presented
by all Worth Financial on fifty five KRC. The talk station.
(20:17):
You're listening to Simply Money Presided by all Worth Financial
on Bob Spondseller along with Brian James. When it comes
to investing, most people just focus on performance along with
diversification and risk, all good things to focus on, but
there's another key factor that quietly eats away or sometimes
saves you on the sidelines, and that's taxes. How and
(20:40):
when your investments or tax can significantly impact your real
return in your taxable investment accounts. And let's face it,
different types of investments come with very different tax treatments. Brian,
this is a good topic to get into, especially as
we get into the last couple months of the year
where some actual planning should probably be taking place right
(21:00):
now between now and the end of the year.
Speaker 3 (21:02):
Q four it is the fourth quarter of the year, Bob,
tis the season to be really mad at your mutual
fund for spitting out a capital gain.
Speaker 2 (21:09):
So why does that happen?
Speaker 3 (21:10):
Mutual funds can have what we kind of consider a
sneaky tax there, good for diversification, but they also come
with this twist that'll catch you off guard, and you
might have seen it even if you don't sell your
mutual fund shares, you can still owe taxes. Right, you
might have bought that fund this year, but perhaps it's
sold a position it has owned for twenty years. If
this is a mutual fund type arrangement, they're required by
(21:33):
law to distribute just about all of their income and
capital gains to shareholders every single year. So if the
fund manager sells something that it is held for twenty years,
you're going to have to pay tax on that gain
even though you only own the fund for about six months.
This is one of the reasons we are big fans
of exchange traded funds because they can get the same
job done with regard to diversification, but the way they
build those portfolios is much more efficient, and the holding
(21:56):
period of the assets that are underneath it are specific
to you and when you bought it, not when the
exchange train fund bought it, you know, decades ago. So
that's one of the things that can sneak up. And
this is it's usually December where you'll get a big,
fat distribution. And this is not a not really a
money making opportunity either, because what happens is the share
price drops by roughly the amount of the distribution itself,
(22:18):
so you end up with a net zero.
Speaker 2 (22:19):
Effect, but a big fat tax bill.
Speaker 3 (22:21):
Mutual funds are notorious for this, and that's something to
understand about it. If you're making choices, try to lean
towards the ETF side. If you can't. This is in
taxable accounts, not ir.
Speaker 1 (22:29):
Yeah, and it doesn't mean mutual funds are bad. I mean,
let's face it, folks have on them for decades and
done extremely well. What we're talking about here is just
the evolution of the industry to make things more tax
efficient for people that you know, have the know how
and get the proper advice to transition into a more
tax efficient environment moving forward. You know, let's talk about dividends.
(22:50):
People love dividends, Brian, and we got to differentiate between
ordinary dividends that are tax at regular income tax rates
and qualified dividends those paid by US companies and even
certain foreign companies. As long as those those you know,
those stocks are held for a specific period. The qualified
(23:11):
dividends are taxed at the much preferred lower long term
capital gains rates. And it's important to know how your
portfolio is structured and make sure you make adjustments accordingly,
especially if you're in a high tax bracket. Another good
thing to watch as you construct your your ongoing investment portfolio.
Speaker 3 (23:32):
Yeah, so let's say I briefly mentioned it, but then
then we move to ETFs. These are the tax efficient
cousins of mutual funds, kind of the same level of risk.
You know, based on if you're buying, you know, the
S and P five hundred mutual fund versus the S
and P five hundred ETF, you're basically going to get
the same investment results. But they don't trigger capital gains
when investors buy or sell shares necessarily. That's thanks to
(23:52):
a clever mechanism called in kind creation and redemption. Those
shares are built the day you buy them, not the
day that you know. You're again not dealing with twenty
years worth of capital gains there. So with enough beating
that to death, I also want to move on to
municipal bonds. And now that interest rates are off the
mat Bob, people are starting to pay attention to what
can I do with fixed income? What are there different
(24:15):
things out there that I could invest in. Municipal bonds
are commonly known as muni's. These are issued by state
local governments and they fund projects like schools, bridges, water systems,
those types of things, and the reason people are attracted
to them though, is a tax treatment. Interest off of
the municipal bond is a state in federal tax free,
usually not always, it depends on the state you live in.
There's different rules for everything, but that's the attraction to it,
(24:38):
and so a lot of people will say, well, great,
I'm just gonna dump all these CDs and all these
corporate bonds and I'll flip everything into municipal bonds and
it'll be tax free.
Speaker 2 (24:44):
You're still making a sacrifice.
Speaker 3 (24:46):
Municipal bonds because they are tax free, do not have
to pay as much as a taxable bond because the
demand will still be there. And if you're a taxpayer,
you probably appreciate the fact that you're not paying as
much interest in that different entity. But in a higher
bracket than a lower rate of income that comes to
you tax free can be better than a higher rate
(25:06):
that ends up getting taxed thirty five to forty percent.
Speaker 1 (25:09):
Yeah, and just to clarify here, the state tax exemption
usually only applies in your home state. So that's why
people in Ohio, for example, they buy Ohio munities and
so on. And so forth. There are some exemptions though
to these MUNI bonds some unis known known as private
activity bonds. They may be subject subject to the alternative
(25:30):
minimum tax. So another watch out there. That's why we
always like to coordinate all our planning with our clients
CPAs to make sure we don't run a foul of
that kind of stuff. Just another thing to watch out for.
All right, let's get into treasury bonds. We've used these
a lot in portfolios over the last few years. You know,
with with rates being high tax wise, treasury interest has
(25:51):
its own special carve out. It's exempt from state and
local income taxes. You pay taxes, you pay federal taxes
on what you earn, but you can avoid the state
and local tax So that's a benefit along with the
nice yield that people have gotten over the last few years,
that makes treasuries especially attractive to investors living in states
(26:13):
with very high tax rates New York. But like Muni's,
any capital gains from selling before maturity, well you're gonna
pay taxes at the federal level on that.
Speaker 2 (26:25):
Yeah. And one more side note here.
Speaker 3 (26:27):
If you run across something called a treasury bill, these
are things that are that come do within a year.
They won't spit out actual interest payments. Rather, you buy
it at a discount, and then it would when it
matures after.
Speaker 2 (26:37):
A few months.
Speaker 3 (26:38):
You might buy it at ninety eight percent of its value,
let's say, and it's gonna mature a one hundred percent.
That means you got a two percent gain on it.
That's the interest you're gonna pay taxes on that. You're
just not gonna see it like a traditional payment, so
it'll look a little bit different.
Speaker 2 (26:48):
All right.
Speaker 1 (26:49):
The thing, also, the big thing that we want to
make sure we cover is depending on the composition of
your portfolio, it might make sense to have certain things
owned in an IRA, in certain things own in a
taxable account. You know, if you've got a bunch of
bond holdings, you know an IRA is a great place
to have those, because, let's face it, everything coming out
of an IRA is going to be taxed at ordinary
(27:11):
income anyway, Brian. A lot of times we see people
have money in the wrong locations from a tax efficiency standpoint,
and that's a lot of good cleanup work that we
can do when we get involved with folks. Here's the
all Worth advice. Taxes might not make for exciting cocktail
party conversation, but they have a massive impact on your
(27:31):
real returns, because, after all, it's not what you make,
it's what you keep that matters. Coming up next, a
business sale, a tricky Roth conversion, and a mismatched portfolio.
We answer your real money questions with real advice. You're
listening to Simply Money, presented by all Worth Financial on
fifty five KRC, the talk station. You're listening to Simply
(27:57):
Money presented by all Worth Financial on Bob's Bond Seller
along with Brian James. Do you have a financial question
you'd like for us to answer. There's a red button
you can click while you're listening to the show. If
you're listening from the iHeart app, simply record your question
and it will come straight to us. All right, We
lead things off tonight with Tom and Mason. He says,
we finally hit the point where we don't have to
(28:19):
worry about money on a day to day basis, but
I can't shake the fear of making one bad move.
How do you rebalance or balance confidence with caution once
we feel like we've won the game. This is a
common question.
Speaker 2 (28:35):
Brian, Yeah, it really is.
Speaker 3 (28:36):
And Tom You're not the only one to worry about this.
So I would say two things. First off, hopefully you
have it. You have a financial plan in the first place,
so if you've decided you did hit that point right,
so you must have figured out a way to identify that.
I'm guessing there's a plan in the mix because of
the way you phrase your question. So my first question
for you, Tom is have you stress tested that Take
that Take that point, whatever that dollar amount is that
(28:57):
you're sitting on right now, Knock off twenty twenty five percent.
Let's just pretend it's a two thousand and eight type scenario.
Take twenty five percent away. Does it still work? If
it does well, then great, You've built a heck of
a machine that's gonna support you. You may not be
happy if we go through that situation, but that's really
what you're trying to defend against. Nobody will be happy
going through it, but it doesn't necessarily mean you have
to change your expectations.
Speaker 2 (29:17):
And the scariest thing you can do in an environment
like that is.
Speaker 3 (29:19):
Actually try to protect yourself and sell it losses. Don't
do that, but run the numbers and make sure that
you can see what that impact actually would be. That's
just called stress testing your plan and the other thing
that's going to happen. Just be aware of now that
you know, once you do retire, you're gonna have a
lot more time.
Speaker 2 (29:34):
And I can tell already you're a worried, a little
bit of a warrior, and there's nothing wrong with that. That
has helped you get to this point to begin with.
Speaker 3 (29:39):
But that means when you come up with a lot
more time, you're gonna start paying attention to all these
headlines and you're gonna feel like all these stories are
happening just because you're retired. They've been happening all along,
you just didn't have time to pay attention to them.
Speaker 2 (29:52):
Don't lose sight of that fact. All right, Let's move
on to Rachel in Batavia.
Speaker 3 (29:56):
Rachel says her husband wants to retire early, but she's
worried about that healthcare gap before Medicare. Medicare kicks in
at sixty five. So, Bob, how do you run the
numbers without letting fear dictate that discussion.
Speaker 1 (30:07):
Well, first of all, Rachel, good for you for you
know knowing ahead of time that you're gonna have to
pay for some health insurance before you and your husband
get to medicare. Like a lot of things, you know,
fear tends to dissipate when you actually have a financial plan.
So my advice is, go shop for some medical insurance now.
(30:28):
I obviously not do not know what your health insurance
situation looks like right now. Through your employer. You know,
my guess is they pay for some of the coverage
and you kick in some of the premium as well.
Obviously that whole thing shifts when you retire and you're
on your own, so to speak, for those gap years.
So you know, look at whether you have cobrant coverage
(30:49):
available through your employer, what that might look like from
a cost standpoint, and then go out and shop some
individual healthcare plans now before you even need to buy them,
and run the numbers. Incorporate that into your financial plan.
That should hopefully confirm whether you can or cannot afford
to retire, and you know what you're spending, you know,
(31:10):
goals and needs and all that should be when you
actually pull the trigger, and that will hopefully eliminate some
of the fear before you make the ultimate retirement decision.
Hope that helps all right, Ron and Columbia. Tusculum says,
after years of growing our business selling it felt like
a relief until I realized I traded purpose for liquidity.
(31:32):
How do you turn a financial windfall into a fulfilling
next chapter of life? Wow? What a loaded question, but
a great one, Brian.
Speaker 3 (31:41):
It really is a great one. So yeah, congratulations, Ron.
Obviously things went well for you. It sounds like you
put a lot of blood, sweat and tears into that
and successfully exited that business when it was in good
shape and and made a bunch of money off it,
and that was kind of the point all along.
Speaker 2 (31:54):
So that's great.
Speaker 3 (31:55):
But I would say maybe the part you missed, And
this isn't necessarily a shot at you, but it sounds
like maybe you didn't spend a lot of time thinking
about what this would feel like. Right, So what happens
when a big windfall drops out of the sky and
all of a sudden, I don't have to get out
of bed, I don't have to have an agenda every day,
but maybe I kind of want that agenda?
Speaker 2 (32:11):
What do I actually do?
Speaker 3 (32:13):
So I would advise anybody out there, as we say,
all the time, spend it. You know, you spend an
awful lot of time worrying about the money. How are
the bills going to get paid after I retire? Well,
worry about your time budget some too. What am I
going to do with all this extra time that I have?
That can be volunteering. Perhaps it's you know, Ron, Maybe
you can step in and help out, you know, at
that business that you've sold. Sometimes that's good. Sometimes it
(32:34):
can cause problems, but that can be an alternative. And
maybe maybe, you know, look at something entirely different. I
always encourage people go on indeed dot com and search
for keywords. This is a job search site. Search for
keywords of anything you're interested in, and forget your career.
Don't think about your career. Just type in things, your hobbies,
things you're interested in. You know, you can often find
(32:54):
jobs you would never know have existed because you haven't
been paying attention at that level. But these are the
kind of jobs that don't come with fantastic salaries, they
don't come with benefit packages. But the cool thing is, Ron,
you don't need them. That was the point of selling.
So some things for you to chase. Hope that works
out for you. Tom in Florence is looking at roth conversions,
He says, he knows they make sense on paper. Right,
If I move from pre tax to tax free, yay,
(33:16):
everybody likes tax free. But I can't get comfortable writing
a six figure check to the irs.
Speaker 2 (33:20):
How do you decide? Neither can I?
Speaker 3 (33:22):
But how do you decide, Bob, when it's worth paying
taxes now in exchange for some flexibility in the future.
Speaker 1 (33:28):
Well, Tom, you have to have a plan, and you've
got to put some assumptions into this. You know, obviously
writing that check now comes with a cost. You are
parting with money, no question about it. But if you
have a well constructed plan with some responsible assumptions built
into to the plan that you're comfortable with, you know
(33:48):
you can see the hopefully multiple six figure benefit you
and your family are going to you know, have down
the road from writing a six figure check today. So
run the nine numbers, sit down with a good fiduciary
advisor who can run a bunch of different scenarios. And again,
like everything else we talk about, when people have a
(34:08):
plan and they can see the why behind some of
these decisions and the numbers actually do make sense and
line up, that can tend to reduce a lot of
the fear and give people confidence in making some decisions
that can really really benefit them down the road.
Speaker 3 (34:24):
Hey, Bob, I want to attack a quick thought onto
that too. I think this is something something to consider.
Here is the idea of priorities. Right, If your priority,
your number one priority is I want to poke the
irs ANDEI and pay as little taxes and I want
to celebrate having a zero percent tax bracket, that may
actually be a missed opportunity because you may very well
be backloading your taxes when you're in your late seventies
(34:45):
because of the way required minimum distributions are work. So
make sure you understand how it works and don't sacrifice
the opportunity to make some moves.
Speaker 1 (34:51):
Now, excellent point. All right, we love our pets, but
are we letting Fido's future outrank our own. We've got
got some interesting data to share with you.
Speaker 2 (35:02):
Next.
Speaker 1 (35:02):
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
Simply Money presented by all Worth Financial on Bob Sponseller
along with Brian James. Brian, listening to that music makes
me nervous already. All right, we know that Americans love
(35:24):
their pets. It is a gazillion dollar industry. But listen
to this. Trust and Will, an online service to create
estate planning documents and handle the State Administration, reports that
eighty three percent of Americans recognize the importance of estate planning,
yet only thirty one percent have a will. Despite widespread awareness,
(35:46):
the majority of Americans remain unprepared, with procrastinations and misconceptions
about wealth fueling inaction. Here's the staggering number to me,
Brian will. Trust and Will also reports that ninety four
four percent of its actual users make provisions for a
pet in case of their death, but only forty percent
(36:07):
name guardians for their own kids.
Speaker 3 (36:10):
I'm sorry, I'm not buying this one. I'm not because
we just because we find an article that has numbers
in it doesn't mean those numbers are ninety four percent
of people who use Trust and I. Bob, I've been
doing this for thirty years, and I cannot think of
a situation where someone actually said I want to make
sure Rover is cared for. Not that that shouldn't happen,
(36:30):
but that's not usually something people codify into a will.
And I'm simply not buying that ninety four percent of
people actually said something about that, you know, and so
But anyway.
Speaker 1 (36:39):
Well, that's what I was gonna ask you. I mean,
I'm an old man. You're one of these young, hip,
gen X gen y people. Is this a new thing
with young folks? Because I've been doing this thirty five years.
I have never had a client come in and when
we're doing estate planning even bring up pets. Not one time, ever, ever, ever.
Speaker 2 (36:58):
I want that.
Speaker 3 (36:59):
I would like our anographer to read back that Bob
Spondseller called me young and hip, and.
Speaker 2 (37:04):
I really appreciate that. You know, when I was when I.
Speaker 1 (37:06):
Was hearing that one. Yeah, probably we're the one talking about. Yeah,
you're the one talking about hanging out at the warehouse
with your jeans halfway down your rear end. That's that's
what i'd call him. That was an That's a whole
different world than the one I live in. But let's
get back to this story.
Speaker 2 (37:23):
Okay.
Speaker 3 (37:23):
So remember Leona Helmsley. This was the mean lady. She
owned a hotel, a bunch of hotels, famously left her
dog twelve million dollars when she died. Now she had relatives.
This is the lady by the way that said taxes
her for little people. She was a real charmer, but
obviously for her family as well. She gave her dog
twelve million dollars because you know, a dog, you know,
needs to make sure that ends meat at that time
(37:44):
of their lives. But a judge kind of came in
and said, well, you know what a dog can really.
Speaker 2 (37:48):
Make it with two million? Are we being honest?
Speaker 1 (37:50):
Here?
Speaker 2 (37:50):
Are we being honest?
Speaker 3 (37:51):
And the rest went to two of her grandchildren. So
this dog was a white Mouteese named Trouble I'm sure
was a charmer himself. Died at the age of twelve,
and then those remaining fund wound up in Helmsley's charitable
trust and who knows where they went after that. But
any anyway, these are the kinds of things should you
buy pat insurance? Maybe, I mean, if pets are family,
(38:11):
I'm not to hear to say this is not important stuff.
But at the end of the day, should you write
them into your will? I'm gonna say, at the end
of the day, they're not gonna remember. They don't know
what you did this morning.
Speaker 1 (38:22):
I think the great happy ending to this story is
that they fought over this twelve million dollars and it
all ended up going to charity anyway. That's great. That
just tells me God has a great sense of humor.
Thanks for listening tonight. You've been listening to Simply Money,
presented by all Worth Financial on fifty five KRC, the
talk station
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