December 12, 2025 • 39 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian explain why the smartest money on Wall Street is bracing for volatility in 2026 — and why you should be too. With midterm elections looming, sticky inflation, and unpredictable earnings, investors with millions in the market need to prepare for a rockier road ahead. They outline what a “happy but exposed” growth investor should be doing right now to manage risk (especially if you're tech-heavy), and why “underperforming diversifiers” shouldn’t panic — but might need to rethink their strategy. From buffered ETFs to rebalancing to international exposure, hear what tweaks can help your portfolio thrive, not just survive. Plus, the surprising mindset trap that could leave you vulnerable next year — and the one guarantee Brian is willing to make about the markets.
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Episode Transcript
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Speaker 1 (00:05):
Tonight. Are you ready for a market that ziggs when
it should zag? Why volatility could be the name of
the game in twenty twenty six, and how to position
your portfolio so it not only survives but thrives. You're
listening to Simply Money, presented by all Worth Financial and
Bob Sponseller, along with Brian James, Hedge funds, institutional investors,
(00:28):
and even some of the biggest state backed funds around
the globe. They're all making one big assumption about twenty
twenty six. There will be volatility not just in the market,
but across economies, policy, and geopolitical events. Obviously, we're heading
into mid term elections in twenty twenty six. Walk us
(00:50):
through some of this, Brian.
Speaker 2 (00:52):
Well, why is this happening? Bib Well, first, it's the economy.
Let's talk about that. We're in this kind of strange
environment where the economy, yes, it is still expanding, but
corporate earnings are coming across okay, but they're not predictable.
That doesn't bother you too much. They're never all that predictable.
But then we got this inflation situation that.
Speaker 3 (01:08):
Just won't go away.
Speaker 2 (01:09):
It's not quite high, but it's not down where we
want it, and it's been stuck for a long time.
We would very much prefer to be to be down
closer to the lower twos, but we're kind of stuck
in the threes right now, and the FED is walking
a tightrope. We haven't talked about this soft landing in
a long time. Sometimes I think like when a successful
soft landing is when we just stop talking about it.
We're not going to declare, you know, victory over it.
It just hasn't been a headline in a while. And
(01:30):
our soft landing has survived a lot of crazy with
tariffs and all these kinds of things. So though that
itself and brings in questions, So throw in some geopolitical
tension speaking of tariffs and even things like energy prices
or extreme weather.
Speaker 3 (01:42):
Of course, bird flew all this other crazy stuff.
Speaker 2 (01:45):
You've got a recipe for these daily markets wings that
tend to make people panic about their money.
Speaker 1 (01:50):
Yeah, Brian. Rather than try to worry about or predict
what's going to cause volatility, I want to share a
little bit of data that I actually heard this morning.
Listen to an interview from a pretty well respected money manager,
and he just threw out data He wasn't sharing predictions
or political thoughts or anything. He just said, Hey, if
you look back over time, regardless of whether the Republics
(02:11):
or Democrats are in control or what have you, Historically,
in non midterm years, the average downside movement, you know,
intra year in the stock market is about twelve percent.
During years where we have midterm elections, that number spikes
up to nineteen percent. And I think that's really the
message here, you know, rather than trying to predict what's
(02:32):
going to cause the volatility, that's a fool's game and
no one's very good at doing that. I think it's
just you know, putting the data out there, making people
aware of how this generally works. As we head into
twenty twenty six. So with that being said, how should
investors be thinking a little differently or planning ahead for
potential volatility just given what's happened historically to the markets
(02:55):
in midterm election years.
Speaker 2 (02:57):
Well, because we've always got chaos. The market doesn't care
who is in control. It just wants to know which
flavor is it right. The market basically has a blue
playbook and a red playbook. Companies will make decisions on
who they support based on whoever will bring home the
most profits that year. That's not great for a democratic
society because it does drive a lot of decisions that
maybe aren't necessarily the best that is, they could be
(03:19):
for the society as a whole.
Speaker 3 (03:20):
But at the same time, that is how it works.
Speaker 2 (03:22):
And as long as you understand that and are comfortable
with it, then we don't have to worry too much
about how the politics are going to affect things as
long as the companies themselves are able to or are
able to make a profit. And again I'm limiting to
this to what do I do about my portfolio if
X happens in the political realm, The answer is usually nothing.
Just understand what to expect based on one outcome versus
(03:43):
the other, because they're really just I don't have a
whole lot of concern that either political party is going
to make decisions that are going to permanently ruin the
stock market and sink four in case, because that's a
sure way to not get reelected for those people who
are making those types of decisions.
Speaker 1 (03:57):
All right, well, let's talk about a couple of hypothetical examples.
We'll call number one the what we'll call the happy
but exposed growth investor. You know, say you got a
few million bucks and it's been a great year because
you were overweight in big tech. You're winning. You can
go to your holiday parties and talk about the performance
in your Navidia stock or your growth ETF performance. Maybe
(04:20):
you added AI stocks last year and you're killing it
this year. You stayed invested, You're not doing anything to
make any changes because you're up and you're feeling great.
But now your portfolio, whether you realize it or not,
is more concentrated than ever. Forty percent of your net
worth if you're just in the s and P five
hundred is writing on just about six stocks. That's a
(04:44):
lot of risk tied to a handful of earnings calls.
And if that AI bubble cools at all, even a little,
those gains can disappear fast. And Brian, you and I
have been talking about this, it seems like every night
for weeks and weeks. Now, well, you know, consider, just
consider a little bit of rebalancing in a tax efficient way.
(05:06):
Maybe harvest some gains, shift some risk towards some non
correlated asset classes, something to mitigate the risks so you
don't end up being shocked if and when, And I
always say this, it's not a matter of if, it's
when we get a correction in the market. You just
don't want to be caught off guard here just because
everything has just been going swimmingly for the last couple
(05:30):
of years now without a whole lot of volatility.
Speaker 2 (05:33):
Yeah, any any investor with any amount of experience knows
that when we've had, you know, these these three years
of really strong growth, especially following a really scary twenty two,
that you know something is coming.
Speaker 3 (05:44):
We don't know when.
Speaker 2 (05:45):
And I'm not remotely saying you should rush out and
do something today, but be ready because something's gonna happen.
Speaker 3 (05:49):
So the right thing to do.
Speaker 2 (05:50):
You know, maybe you're looking at harvesting gains and that
might mean yeah, pulling trigger and paying some taxes. But
if things have gotten out of whack from a balance standpoint,
that might be something you're going to want to look into,
making that sacrific tax wise to go ahead and get
your portfolio back to where it should be from a
balance standpoint. You might look at alternative income, infrastructure, some
other types of things that are a little less correlated.
Speaker 3 (06:09):
So right, Brian.
Speaker 1 (06:10):
Walk through another investor, somebody we're going to call the
underperforming diversifier, right.
Speaker 2 (06:16):
So this is this is a situation where let's say
we've got two and a half million dollars and then
try to be diversified, so we've got small caps, international,
maybe some value in there.
Speaker 3 (06:24):
Didn't really chase AI stocks.
Speaker 2 (06:26):
Only up five percent of the for the year, you know,
in a year where the market is up double digits
for the for the third year in a row, and
you're wondering, did I miss something? What am I doing wrong?
That maybe my portfolio is not keeping up with things.
So the answer is, you know, not necessarily up is up.
We always like up better than down, but you might
need to rethink how you're diversifying that portfolio. Some diversification
hasn't worked this year, but other strategies could help smooth
(06:49):
the right ahead. And I would throw out here, you know,
more recently, if you're somebody who abandoned bonds or international
stocks over the past couple of decades when it was
nothing but the S and P five hundred, that's part
of your problem because those two asset classes have rotated
back around into too being more in favor than they
used to be. Matter of fact, international stocks are leading
or have been leading the pack all year long. Really
(07:09):
since we started goof around in this country with tariffs,
international companies kind of rose to the forefront for investors.
So if you don't have any international exposure, that is
currently costing you.
Speaker 3 (07:19):
So what's the solution here.
Speaker 2 (07:20):
Bob, Well, we'll add some assets that behave Differently, you
might look at private credit, maybe bufferdtfs to help kind
of help us smooth things out.
Speaker 3 (07:28):
Real estate tactically manage funds.
Speaker 2 (07:29):
Don't just diversify only by geography or size, diversify also
by the return behavior that those underlying investments have.
Speaker 1 (07:37):
Yeah, and I think this is a good time to
call out, you know, for the person out there that
has under you know, underperformed quote unquote underperformed because they
didn't have a whole ton of exposure to AI stocks. Uh,
you know. Eventually, and again like you, Brian, I'm not predicting,
you know, the sky's gonna fall here, but you know,
we are going to have to see some actual revenue
(07:59):
and earning growth from these companies that have invested so
heavily into AI, and valuations can get out of whack
on these stocks and sooner or later. You know, there's
a lot of sets in the economy where the if
you look at the price earnings ratio, you know there's
just some boring stuff like healthcare and bank stocks and
(08:19):
you know, some other things that haven't been flying high
this year. You know, even if you're feeling like you're
underperforming this year, we do get sector rotations into more
value oriented stocks. Money is always going to look for
a home where it's treated best. So don't give up
on what you've been doing. Just make make sure you
(08:41):
are fully diversified, You've got all sectors covered, and just
ride this thing out and don't get overweighted to any
one sector. That'd be my advice because things do and
often change quickly, and you don't want to chase yesterday's returns.
Just assuming you know, using that recency bias, that what
(09:02):
worked in twenty three, twenty four, and twenty five is
just going to continue to pound its way higher on
steroids in twenty twenty six, it's not likely to happen.
Speaker 3 (09:11):
Yeah, let's talk about another emotion.
Speaker 2 (09:14):
I don't know if this is an emotion or what,
but a more of a mental state, and that can
be complacency. This is a trap, and we want to
help a lot of people avoid because a lot of
people will come to the conclusion that, you know, kind
of like Bob, what you just said, not necessarily with
regard to specific investments, just but just the overall idea
that the market was good last year. So I don't
have to pay attention anymore because we've had three good
years in a row. Maybe we're out of the craziness,
(09:35):
and I can promise, and this is one of the
few guarantees I get to give. We're never out of
the crazy. It's gonna come out of left field. It
always does. So let's make sure you know we were
not assuming that the storm has passed simply because it's
quiet right now. We might just be in the eye
of it. All signs point to continued choppiness in twenty
twenty six. That means this year's leaders could become next
year's laggers. But that was true a year ago, so
(09:56):
don't confuse a good year with a calm year.
Speaker 3 (09:58):
They're not the same thing.
Speaker 2 (10:00):
The best portfolios always built for what's next, not just
what worked last quarter.
Speaker 1 (10:04):
On Yeah, and regardless of what sectors of this economy,
you're in love with just good famental financial planning is
make darn sure that emergency fund or short term liquidity needs,
either for cash flow or for a major purchase, make
sure you carve out those assets and have that in
for lack of a better term, just a safe bucket,
(10:26):
and that'll give you the cash flow and the liquidity
you need and also give you time to ride out
whatever volatility might be coming down the pike in twenty
twenty six. Here's the all Worth advice. Don't let a
good year lull you into complacency, because thriving in twenty
twenty six will take more than just riding last year's winners.
(10:48):
Coming up next, the best places to retire right now,
plus a powerful look at what retirement can and should
look like thanks to help from Total Strangers. You're listening
to Simply Money, presented by Allworth Financial on fifty five
k R see the talk station. You're listening to Simply
(11:11):
Money presented by Allworth Financial on Bob Spondseller along with
Brian James. Are you falling for costly money myths? We'll
play some financial planning fact or fiction straight ahead at
six forty three. A new list of retirement destinations is out, Brian. Unsurprisingly,
places like Naples, Florida and Sarasota, Florida still dominate those
(11:34):
top warm weather no state income tax destinations. But it's
not just sunshine states getting attention. A newer trend, cooler
climate and midwestern or more temperate areas are making strong
showings now thanks to lower cost of living, solid access
to healthcare, and relaxed lifestyles. Walk us through some of
(11:57):
the new retirement destinations, Brian.
Speaker 2 (12:00):
Well, we're looking at different things nowadays. It's not just
those those beat states that we've talked about forever. So
the kinds of things we're looking for, you know, have
just simply changed. So for example, Rochester, Minnesota, this is
near the Mayo Clinic, right. Obviously, if you've got some
health issues or loved ones with those types of things,
you might want to be close to something like that.
Speaker 3 (12:18):
Or just parts of the heartland appeal to people who.
Speaker 2 (12:20):
Care as much about tax efficiency and access to good
healthcare as they do about palm trees and beat sunsets.
Speaker 3 (12:26):
This has become more fittant recently than it used to be.
Speaker 1 (12:29):
Brian. I know you like to pound away on chat
pt during the show, even sometimes to do your research.
When's the last time we saw a hurricane roll through Rochester, Minnesota?
Can you look that up for us?
Speaker 3 (12:41):
You know, I'm gonna go ahead and say that has
not happened.
Speaker 2 (12:44):
However, I will say that we did have a hurricane
here and good old Cincinnati in two thousand and eight.
It happened right before, right before I believe it was,
Bear Stearns went under. Right, we had that weird hurricane
way back then, Hurricane Ike I believe it was, And
immediately the next day bear Stearns went under. I remember
that being just the weird, the weirdest weeks in my
entire life. So it does happen out there. But again,
(13:04):
you're just kind of looking at the odds of how
much am I going to have to deal with? So
lets let's talk about some of these other examples. Let's
talk about the Greenville, South Carolina. That's a newly popular one.
They've They've done a lot to revitalize their downtown. Of course,
there's a pretty mild climate South Carolina, not going to
get an extreme heat and extreme cold in western South Carolina.
Big time art scene down there, moderate cost of living.
Speaker 3 (13:26):
Another one. This then this kind of surprised me.
Speaker 2 (13:27):
Bentonville, Arkansas, of all places, A lot of money flown
around Bentonville, Arkansas. You may not have heard of it,
but that's where Walmart is based. So the Walton family,
of course has thrown a lot of money around that town,
and that has now made it an unexpected hub for hiking, cycling, museums,
food culture, things like that. And then another one last
one here Traverse City, Michigan. If you like the northern climates,
(13:49):
retirees who actually want to experience those four seasons, including
about a month worth of summer living on the lake
in a slower pace, strong food, wine culture, and growing
health care capacity, I would just throw just look beyond
the beaten path. Just because your family always went to
Hilton Head every year doesn't mean you have to buy
a condo down there. I always advise my clients go
to some other places, use some of that money you
(14:09):
budgeted to maybe buy a place to potentially look at
it it staying in nicer places and areas you haven't been.
Make sure that whatever you decided on thirty years ago
is truly truly what you want before you actually pull
the trigger.
Speaker 1 (14:22):
In those types of yeah, and a lot of times, Brian,
And we see this all the time. People go out
and look and they want to move and retirement, retire somewhere,
and they conclude, after a bunch of iterations, I'm buying
and selling real estate or running all over the country.
That good old Cincinnati, Ohio and northern Kentucky, Southeast Indiana
not too bad of a place to set up shop
(14:43):
for all the reasons that we just mentioned. We've got
great health care here, cost of living is good. Yeah,
the weather's kind of iffy between January and April, but
you know, there's no utopia on earth, so you know,
make sure you look at all the factors that are
going to impact your life before just pulling the trigger
on a so called retirement destination. All right, This next
(15:04):
story has spread like wildfire, and it's always good to
share some good news out there, especially as we head
into a weekend. If you haven't heard or seen it yet,
this is a pretty awesome story. A viral fundraiser raised
over one point seven million dollars to help an eighty
eight year old Army veteran finally be able to retire
(15:25):
with some dignity. Brian, this is a great story.
Speaker 2 (15:28):
Yeah, this gentleman's name is ed Bombas and he's a veteran,
so we certainly thank him for his service. And then,
of course, after his service, he worked for a full
career of forty years at General Motors, which this is kind
of ancient history. I'm reminded of this now, but General
Motors did actually declare bankruptcy in two thousand and nine,
so it still exists, of course, but it did go
(15:49):
through a big bankruptcy and that's where we lost Pontiac, Saturn,
Hummer and SOB and a lot of.
Speaker 3 (15:55):
Factories and dealerships closed.
Speaker 2 (15:57):
Forty days later, it re emerged as the new GM
with a fixed balance sheet. But anybody who was holding
the original GM shares, yeah, you lost all those dollars.
November twenty ten, GM came back to the public markets.
It was through an IPO, so it was a very
very intense, fast period of kind of crazy from one
of the old venerable brands there. But anyway, the point
is that affected this gentleman and he lost his pension.
(16:20):
After his wife passed away, the bill started to pile
up and he lost those benefits. He ended up working
full time at a grocery store. Well, into his eighties. Well,
that story hit social media, of course, so there's a
content creator by the name of Samuel Weidenhoffer posted a
video of him doing his job there at the grocery
store and asking him what his dream was, and he
simply said, I just want to live a little the
life I was hoping for. How heartrending of a statement
(16:42):
is that from an eighty year old who fought for us.
It worked a full, long, honest career and lost his
pension anyway, and was still stuck working at a grocery
store instead of having retired.
Speaker 1 (16:52):
Yeah, and I think these stories come up often. I mean,
the American people are still very generous, very easy, eager
to help their neighbors. They just want to know that
the money is going to a good place. And wow,
one point seven million dollars was raised by total strangers
in a very short amount of time. Donations poured in
from everywhere, and lo and behold, this guy's now set up.
(17:16):
Mister Bombas who fought, like you said, to protect our freedom.
He's never lived in a large home. He actually had
to sell his house and go work in this grocery store.
And now he's going to be able to live with
dignity into his final years here, and I think that
is wonderful news and it really speaks to the just
the wonderful heart of most American people out there. They
(17:40):
see a need, they fill it quickly and strip all
the political bs out of it. We still our friends
and neighbors out there from all over the country are
always eager to do good and this is a great
story to share, ye.
Speaker 2 (17:54):
So yeah, so let's wrap up the story here. So
why are we talking about this? Well, that video that
was out there struck a chord. It almost instantly, people
from around the country mobilized and donations came in through
through a crowdfunding effort. Just a few days that total
climb passed one point seven million dollars and he wound
up with a nest egg that he pretty much lost
when General Motors went under. So this is the person
(18:15):
who really never lived all that large, ended up, you know,
having to rechange everything about his life just to make
the math work.
Speaker 3 (18:22):
So this is huge.
Speaker 2 (18:22):
Now he's got financial security and his twilight years doesn't
have to spend every day at the grocery store. And again,
this was all simply because the American people looked at
a story and said, you know what, that's not right?
Speaker 3 (18:31):
What can we do to fix it? All?
Speaker 1 (18:33):
Right, every Sunday you'll find our all Worth Advice in
the Cincinnati Inquire and here's a preview. Brian walk us through.
You know Veronica's question and independent she says, can you
just simply help me better understand donor advice funds? What
are they and how do they work?
Speaker 3 (18:50):
Yeah?
Speaker 2 (18:50):
So donor advice funds all day, every day right now
because it's the end of the year and people are
trying to get their tax moves done here by the
end of.
Speaker 3 (18:56):
Before the before the clock strikes zero.
Speaker 2 (18:58):
So with a donor advice fund, of effectively, what you're
doing is you are if you are already charitably inclined anyway,
that's very important. If you were already giving let's say
ten thousand dollars over a year to your church or
whatever charity, then what you can do. You know, that
much is not enough to get you to itemize deductions,
so you're not getting any tax benefit out of it.
But a donor advice fund will allow you to lump
say five years, that's just made up number, but five years,
(19:19):
that's fifty thousand dollars one time this year and then.
Speaker 3 (19:22):
Dole it out as you see fit to the to
the charity so that they don't understand it.
Speaker 2 (19:27):
They don't come to the conclusion that something has changed
and you've got more money than you do. You're still
giving them the money on the same kid as you
were before, but you lumped all of the donation and
the taxable part of it, the tax deduction part of
it into one year, so you actually did get a
tax benefit.
Speaker 3 (19:41):
So yeah, more on that in the future. We'll be
talking about that a lot. This decemmer good stuff, all right.
Speaker 1 (19:46):
Wealth can open many doors, but it could also make
it harder to say no. We'll help you set clear,
confident boundaries without guilt. Coming up next, 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 Lambob Sponseller along with Brian James.
(20:09):
When you've achieved financial success, it often comes with some
unspoken expectations, perhaps from friends, extended family, even distant acquaintances.
Whether it's a request cost sign alone for example, or
invest in a business idea or fund of family members.
Emergency saying no can feel awkward at best and guilt
(20:31):
inducing at worst. Brian, I've had situations like this come
up several times over the years and years I've been
doing this.
Speaker 3 (20:39):
What about you?
Speaker 2 (20:40):
Oh yeah, absolutely, it comes up all the time within
family dynamics. So we all want to support our children
and our our siblings and our extended families when we can.
Stuff happens, life happens to everybody, and it's good to
have that family network around you that can kind of
step in. However, it can totally backfire.
Speaker 3 (20:56):
Of course.
Speaker 2 (20:56):
We all run into these horror stories every now and then.
I think, I think, really the one that off the
page to me is co signing alone.
Speaker 3 (21:02):
I have I have just never heard of a situation
where this ended.
Speaker 2 (21:04):
Well, if you're asked to co sign alone, that means
whoever is asking you has been turned down by the
banks unless someone else's credit can back them up. That
means that the banks out there think that this person
is not gonna be able to pay these bills. And
if you're co signing alone, then you are you are
on that loan as if you were borrowing the money
yourself that you don't have any more protection than if
you were literally borrowing or signing for that mortgage your
absolute self. So just know that if you if you
(21:27):
agree with the bank that maybe this person isn't going
to be good for it, then you are probably gonna
get stuck with that bill.
Speaker 1 (21:32):
Well, maybe without getting too off on a religious tangent,
maybe that maybe that's illustrative of why in the Bible
it warns us against co signing for other people's loans. Right,
maybe God, even Jesus pretty smart after all. All right, Hey,
but the point we're trying to make here is constantly
saying yes to other people when they know you've got
(21:52):
some money and they think, well, he's he or she's
got a lot of money. It doesn't matter they can
quote unquote afford it. It can set unsustainable expectations and
quietly erode your own autonomy over your own money, and
that emotional weight that you carry around could be exhausting,
(22:12):
leading to resentment or burnout or just fracture relationships if
it's not managed correctly.
Speaker 2 (22:19):
Yeah, and so I think, so get creative, right, It
doesn't have to be a hard no. It can first
of all, be not right now, or let let's pretend you.
I'll give an example of this from a real client.
So how we found the solution. So let's say that
you know, the client's kid wants to buy a house
and the banks aren't willing to lend at a at
a reasonable rate. So the client says, well, I'll step in,
I'll co sign the mortgage and we'll go from there. Well, then,
obviously we've talked about what exposure that lead. So what
(22:41):
if the compromise point is, Okay, you're not happy in
your apartment right now, it's not big enough or whatever.
What if I gave you an extra few hundred dollars
every month actually making an investment versus taking on a
much more massive risk, buy you some time, get you
in a nicer place, and then I will work with you,
child of mind, to get your finances looking better so
that maybe the next two or three years you can
do it without my help. That's kind of a middle ground,
(23:02):
and it's actually an investment of dollars that you won't
see again. But at the same time, it might be
a lot better than putting yourself a risk for several
hundred thousand dollars should your kid not be able to
make that payment.
Speaker 1 (23:11):
I like where you're going there, because there's there's a
big difference between just saying flat out no and never
helping a loved one or a child or what have you,
versus partnering with that loved one to help, you know,
whether you say, coach them or counsel them, or assist
them in becoming financially responsible and you know, help them
(23:32):
bridge that gap between just learning about money and getting
them to where they can manage their own affairs. And
that's really what we're talking about here, coaching people to
be responsive, responsible versus just enabling them to have what
they feel they want or deserve. That that's what we're
really trying to get into here.
Speaker 2 (23:52):
Yeah, for sure, and again you are not rejecting the
person and you're not saying no. You're saying no, but
and then come up with a solution that could get
them across the finish line.
Speaker 1 (24:00):
You're listening to simply money presented by All with Financial
on Bob Sponseller along with Brian James. Let's get into
how to maybe prepare to say no in a in
a dignified way for everyone. And this comes down to
some communication and advanced planning. I like things like this.
Try some responses like, Hey, I care deeply about you,
(24:21):
but I've made a commitment to keep financial matters separate
from personal relationships. I think that's a good line to
use when we're dealing with maybe parties outside of our family,
where we just get we get bombarded with requests from
charities and other people coming at us asking for money.
Speaker 2 (24:38):
And I think what you're really talking about there is
just just have a policy, sit down and think in advance.
If you think this is coming, then then then give
yourself some time to figure out what do I really
believe here? What is my policy as to whether I
would do this? And I'm not talking about something necessarily
if for write down unless that works for you to
kind of cement it into your brain. But just give
some forethought and then then you'll know how to respond
(24:59):
rather than stuttering and stafmmering when the question arises.
Speaker 3 (25:01):
Here's another good response.
Speaker 1 (25:03):
You could say something like, Hey, this isn't something I
can support financially, but I'm happy to help brainstorm other
solutions with you. You're inviting that person into more of
a relationship to coach them through helping them solve some
of their financial problems versus just pulling out the checkbook
and writing a check and hoping it all works out.
(25:24):
And you shouldn't feel pressure to answer right away. Right
And I think of a quick yes or a quick no.
Tells this person one of two things. A quick guess says, well, hey.
Speaker 3 (25:32):
This is easy.
Speaker 2 (25:32):
This, I guess, is just how the world works, and
it's just easy to get money. A no will tell
them this person doesn't care about me, so tell them,
even if you already know your answer, tell them, I
need to think about this. This is a huge decision
and both of us are going to be impacted by
it one way or another. And I really have got
to put some thought into this. Then you can come
back with your response even if you already knew what
it was. Give it some time to percolate.
Speaker 1 (25:52):
Yeah, and one other thing to point out here, you
don't owe anyone more than maybe a few second explanation.
If you get into a twenty mins an explanation on
why you don't want to give them money. The longer
you just drivel on and talk and talk and talk,
you know it quickly comes across. As you're rationalizing, you
feel guilty and uncomfortable and the way you're managing yourself
(26:14):
through this is just by talking and talking and talking
about all the reasons why you're gonna say no. That
can make that other person feel very uncomfortable as well.
And there's no need to.
Speaker 2 (26:23):
Go there, and we can find out that there's a
lot more to a relationship like that. Suddenly it becomes
not about money, it becomes about interpersonal stuff.
Speaker 3 (26:30):
Yeah.
Speaker 1 (26:30):
And then lastly, and I tell clients all this all
the time, Brian, blame me, Blame your financial advisor. For
those that work with a financial advisor, they can serve
as a helpful buffer in these conversations as well.
Speaker 3 (26:43):
You heard it here, folks, it's Bob's fault.
Speaker 1 (26:45):
Well, but referring financial request to your advisor, you know,
puts that buffer if it needs to be there between
you and your money. And yeah, you can blame somebody else,
someone your fiduciary advisor that's looking out for you. You
and let the financial advisor come up with that quick
twenty second response on why we can't go there where
(27:06):
we all know we're being asked to make a decision
that might not be in the best interest of all parties.
Here's the all worth advice protecting your well starts with
setting boundaries that align with your values, because saying no
is sometimes the smartest financial decision.
Speaker 3 (27:22):
You can make.
Speaker 1 (27:23):
Coming up next, see if you can separate fact from
fiction before it costs you big time. 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. I'm Bob Sponseller along with Brian James.
(27:45):
You have a financial question for us. There's a red
button you can click while you're listening to the show
right there on the iHeart app. Simply record your question
and it will come straight to us. All right, Brian,
it's time to play financial planning fact or fiction, and
I'll let you have the easy one.
Speaker 3 (28:02):
First fact factor fiction.
Speaker 1 (28:04):
You don't need bonds in your portfolio once you retire.
Speaker 3 (28:08):
Brian, I don't know about easy. I'm gonna call that
one faction, right.
Speaker 2 (28:11):
It's a little of both, So bonds in your portfolio normally,
Historically we've recognized that bonds can be kind of the
rudder for the portfolio to smooth out the tougher times.
Over the past couple decades, the behavior of bonds has
kind of shifted. Everything gets speculated on no matter what
it is, bond moves, bonds move with interest rates, and
we have absolutely had very different interest rate environments over
the prior couple decades than we had for the century
(28:33):
prior to that. So the way I here's I don't know,
you tell me, Here's how I talked to my clients
about it. I don't really want to necessarily make a
portfolio conservative simply because someone is now fits under the
definition of retire. That's not the trigger for me. The
trigger for me is when do we need these specific dollars.
Some people are in a situation where they don't. They've
got income coming in from I don't know, rental properties,
or maybe they still own a chunk of the business
(28:55):
they used to run, whatever, and maybe they don't need
these investments. So that means or they have a pension, yeah,
you know, pensions, so scary. Maybe that pays the bills.
That's fine to me. That pushes out the need for
these particular invested dollars out you know, ten twenty. Sometimes
it really isn't even an horizon where it's needed. So
in that case, sure, let's stay aggressive and continue to grow.
Why wouldn't we Otherwise we're taking it out of our kids'
mouths ultimately, So that situation itself means I don't necessarily
(29:18):
need bonds because it's just something different.
Speaker 3 (29:20):
And if I do want a rudder, there are other
options out there.
Speaker 2 (29:23):
I can do book chiefs, I can do some I
can arrange my investments in another way and create that rudder.
Speaker 3 (29:30):
No, I think you hit the nail on the head there.
Speaker 1 (29:31):
It comes down to a the individual client's financial plan
and retirement income plan. And then second they're emotional tolerance
for risk. It's not a one size fits all situation. Yeah,
all right, here coming at you. Now, it's your turn
for what I think is an easy one. But let's
see what Bob says. Buying municipal bonds is a better
move when you're in a.
Speaker 3 (29:49):
High tax bracket.
Speaker 1 (29:50):
Factor fiction, Bob, I would say, fact here, it certainly
can be, but you got to run the numbers. And
I had a client where we actually did that here recently,
and they're sitting on a boatload of cash, and they
feel great about the gross marginal interest rate they're getting
on that cash, and they've got a bunch of municipal
(30:11):
bonds elsewhere in their portfolio. And I just had the
conversation like, hey, do you understand what you're actually netting
here net of taxes and inflation by sitting on all
this cash. And this was a very smart person, very
numbers oriented, and their answer to me was, yes, I understand.
Speaker 3 (30:31):
I just like holding all that cash. It makes me
feel better just knowing I can get to it.
Speaker 1 (30:36):
So it's just you got to look at the gross
you know, the gross yield versus the net yield, look
at your tax situation, and make sure you're going in
with your eyes wide open on what you actually own.
And if you feel okay with it, fine, but at
least know what you've got.
Speaker 2 (30:52):
So I want to weigh in on this a little
bit because this is another thing I've been given some
thought to, and this is this could affect me personally,
and sometime I'm starting talking to clients about if I
want better. You know, the whole point of municipal is
tax free, right, that's what we want, But you can
do that a couple of ways. One thing I'm thinking
about doing when I get to that point, I've got
another ten years or so. I'm thinking of overstuffing my
wroth IRA with megaback door four and K contributions, backdoor
(31:13):
contributions or whatever, and just knowing that that money I'm
carving out is my emergency fund, and I'll stick it
in a you know, in a money market fund that
a bank might have. I could be getting four or
five percent on my wroth IRA if in my brain
I know that's my emergency fund, and I could quickly
move money to my checking account. Now I got the
best of both worlds. I get high rates of return
but no taxes.
Speaker 1 (31:32):
The key there, and what you said is you're getting
out in front of it, you know, ten years in
advance and doing some you know, advanced planning.
Speaker 3 (31:38):
Not everybody does that.
Speaker 1 (31:40):
And for folks that sell a business and get a
big whopping paycheck, they don't have that option available to them.
But no great discussion, all right, Brian Factor. Fiction, having
multiple financial advisors is a smart way to diversify your advice.
Speaker 3 (31:55):
Yeah, this one again.
Speaker 2 (31:56):
I'm gonna go with fiction on this one because I
just feel like, you know, whenever somebody has multiple advisors,
they're never happy because they're hearing from they have to
babysit two different people they're hearing slightly differing points of view.
Even if both advisors are really stronger, sometimes there's three
or four, but it just seems to cloud all the
decision making and they can't commit, and it just really
(32:16):
drags everything out that they want to do. So find
one that you trust and move on. So think of
this way. You might get a second opinion from a doctor,
but you don't have both doctors perform the actual You
pick one to do the actual procedu You're not going
to get the procedure done twice. With financial planning, you
can have everything done twice if you really want to,
but it's really going to throw an anchor in your
overall comfort. It makes you your own financial advisor because
(32:37):
you're responsible to decide who's right.
Speaker 3 (32:39):
I don't think that could be said any better. That
is spot on, all right.
Speaker 1 (32:43):
Factor fiction Brian, A five twenty nine plan can be
converted into a raw ira.
Speaker 3 (32:48):
Fact fact fact fact fact.
Speaker 2 (32:49):
This is my favorite new cool rule here. So so
the new rule came out five nine. Plans, as we know,
are tax free if they're pulled out, used for college tuition, books,
room board.
Speaker 3 (32:59):
That's the way it's been for decades.
Speaker 2 (33:00):
But The concern in the past has been that I
don't want to put money in my five twenty nine
because I don't know if this newborn baby, or perhaps
this child who doesn't even exist yet.
Speaker 3 (33:08):
That's another thing you can do.
Speaker 2 (33:10):
I don't know if this person's gonna be gonna go
to college, maybe they're gonna go a full ride. I
won't need these dollars. So then aren't I losing out?
The answer is now not at all, because there are
new rules in place as of twenty twenty four that
will allow you to As long as the account, the
five to nine has been in existence for fifteen years,
you can contribute over time up to thirty five thousand
dollars from the five twenty nine two year wroth just
(33:30):
using that thirty five thousand dollars over three four years
as the annual contribution to the roth IRA. So if
you think about this, I love this thought, Bob. So
if I fund this, Let's say I find out my
adult child is pregnant, and now I know within the
next year something I'm gonna have a baby. I can
fund that account now, and that money could grow for
sixty five years until my grandchild actually retires. That is
(33:52):
an absolutely enormous amount of money. If you want to
think lump sums, you could put twelve in now, it'll
be worth thirty five by the time they're eighteen. And
now you funded wroth irate contributions for until they're in
their mid twenties and hopefully really really stable.
Speaker 3 (34:04):
I love that rule. Now, it's a great rule.
Speaker 1 (34:06):
And I think this just the overall arching theme here
is never give up those wrath dollars until you absolutely
have to, because that compounded long term growth is a powerful,
powerful thing. All right, factor fiction, and I'll take this one.
An inheritance plan is more important than in a state plan, Brian,
I don't. I don't think I even understand the question here,
(34:28):
but I think what they're so.
Speaker 3 (34:29):
I let you take that. I don't get that either,
so go to Well, the.
Speaker 1 (34:32):
Only way I can interpret this is an estate plan.
I think when people think of an a state plan,
I think they're talking about illegal documents, you know, and
a lot of times people don't read them. There's a
lot of boiler plate legal eese in them. The difference
in an inheritance plan is you're actually communicating and making
it very clear to your heirs. And your beneficiaries what
(34:54):
you want this money to do for them and win.
And I think that comes down to actual communication rather
than just drafting and leaving to someone this complicated document
that just appears out of the desk drawer after you
pass away.
Speaker 3 (35:09):
Yeah.
Speaker 2 (35:09):
I think this might be referring to an unfunded trust,
which happens when you run across a lawyer who may
be perfectly well meaning and they want it. They want
to have you write up trust document. That could be
perfectly fine, but if you never put anything in the trust,
meaning you've literally gone to your investment firms you've named
the trust as beneficiary or even as the owner, that
trust doesn't do squat Bob until something til it owns something.
Speaker 1 (35:29):
Coming up next, you'll get my two cents on some
additional estate planning considerations. You're listening to Simply Money presented
by all Worth Financial on fifty five KRC the talk station.
You're listening to Simple Money presented by all Worth Financial.
Bob Sponsorer along with Brian James and Brian I want
(35:50):
to take a couple seconds here and just talk about
an actual store a client story I ran across here recently,
and I think it illustrates something that a lot of
people should be doing and rarely do, and that's actually
review your estate planning documents every so often. And here's
why Brian. I had a client and this is an
(36:10):
elderly woman that actually lived down in Alabama, and she
left her nephew as her power of attorney. Okay, everything
good so far. However, the power of attorney document did
not allow this nephew to make any changes to beneficiaries
in any of her accounts. Well, what he did was
he set up the account for him to run, you know,
(36:33):
the account, and he named.
Speaker 3 (36:36):
Transferrun death beneficiaries and that's fun.
Speaker 1 (36:40):
Well, this this lady ended up passing away, and we're
trying to get the estate settled and get all the
money moving around where it needs to go. And the
custodio firm, you know, rejected moving this to that nephew's account,
you know, per the beneficiaries that were set up because
the power of attorney document did not allow this individual
(37:03):
to name beneficiaries. And this is something that should have
and could have been caught years and years ago and
made provisions for that. Instead, we had to help the
client get an attorney down in Alabama, take the thing
through probate court, and it took about two months.
Speaker 3 (37:20):
To get all this sorted out, and it.
Speaker 1 (37:22):
Was just an unnecessary delay in probating and settling this
woman's estate that could have been avoided if those documents
had not been reviewed periodically and make the necessary adjustments.
I just call that out as a reminder, review what
you've got, don't just set it and forget it, and
pull these things out down the road.
Speaker 3 (37:43):
Because you could be in for a surprise.
Speaker 2 (37:44):
So I got a little war story from the trenches too,
from last week. So that's a client of mine that
passed away. Unfortunately, and at some point we had asked
multiple times to get a hold of the trust document.
They could never locate it. The trust in this case
was only the beneficiary. Didn't own anything is the beneficiary,
so we didn't really need it, but obviously we like
to have it on file for this exact reason. No
(38:04):
one knows where this trust document is, so all we
know is that the name of it and the date
of it, but we can't figure out who we need
to legally be talking to to retitle these assets. So
the moral of that story is make sure that your
financial advisors, your banks make sure that they have something
on file. They should have asked you for the trust
document itself, or what's called a trustee certification, which basically
pulls out the important details and you sign a form
(38:25):
saying yes, it was dated this date.
Speaker 3 (38:26):
Here are the.
Speaker 2 (38:27):
Trustees, here's the success or trustee, and here's how to
get a hold of us. So make sure you've done that,
otherwise you don't have much of a plan at place. Well.
Speaker 1 (38:34):
I don't know about you, Brian, but sometimes when I
ask clients or prospective clients to review this stuff, they
look at me like, are you really gonna make me
dig this stuff out? And I'm like, yes, I am.
I mean that's our job, and some people don't initially
want to think of that as our job. But boy,
if you can get out in front of this stuff,
you know, people thank us after the fact, because this
(38:57):
stuff really does need to be reviewed every two, three,
four years, just to make sure this estate plan is
actually set up to do what you actually intended for
it to do when you had the documents drafted. It's
very very important in something that we stress with our
clients all the time.
Speaker 3 (39:14):
Thanks for listening.
Speaker 1 (39:15):
You've been listening to simply money, presented by all Worth
Financial on fifty five KRC the talk station
Tonight. Are you ready for a market that ziggs when
it should zag? Why volatility could be the name of
the game in twenty twenty six, and how to position
your portfolio so it not only survives but thrives. You're
listening to Simply Money, presented by all Worth Financial and
Bob Sponseller, along with Brian James, Hedge funds, institutional investors,
(00:28):
and even some of the biggest state backed funds around
the globe. They're all making one big assumption about twenty
twenty six. There will be volatility not just in the market,
but across economies, policy, and geopolitical events. Obviously, we're heading
into mid term elections in twenty twenty six. Walk us
(00:50):
through some of this, Brian.
Speaker 2 (00:52):
Well, why is this happening? Bib Well, first, it's the economy.
Let's talk about that. We're in this kind of strange
environment where the economy, yes, it is still expanding, but
corporate earnings are coming across okay, but they're not predictable.
That doesn't bother you too much. They're never all that predictable.
But then we got this inflation situation that.
Speaker 3 (01:08):
Just won't go away.
Speaker 2 (01:09):
It's not quite high, but it's not down where we
want it, and it's been stuck for a long time.
We would very much prefer to be to be down
closer to the lower twos, but we're kind of stuck
in the threes right now, and the FED is walking
a tightrope. We haven't talked about this soft landing in
a long time. Sometimes I think like when a successful
soft landing is when we just stop talking about it.
We're not going to declare, you know, victory over it.
It just hasn't been a headline in a while. And
(01:30):
our soft landing has survived a lot of crazy with
tariffs and all these kinds of things. So though that
itself and brings in questions, So throw in some geopolitical
tension speaking of tariffs and even things like energy prices
or extreme weather.
Speaker 3 (01:42):
Of course, bird flew all this other crazy stuff.
Speaker 2 (01:45):
You've got a recipe for these daily markets wings that
tend to make people panic about their money.
Speaker 1 (01:50):
Yeah, Brian. Rather than try to worry about or predict
what's going to cause volatility, I want to share a
little bit of data that I actually heard this morning.
Listen to an interview from a pretty well respected money manager,
and he just threw out data He wasn't sharing predictions
or political thoughts or anything. He just said, Hey, if
you look back over time, regardless of whether the Republics
(02:11):
or Democrats are in control or what have you, Historically,
in non midterm years, the average downside movement, you know,
intra year in the stock market is about twelve percent.
During years where we have midterm elections, that number spikes
up to nineteen percent. And I think that's really the
message here, you know, rather than trying to predict what's
(02:32):
going to cause the volatility, that's a fool's game and
no one's very good at doing that. I think it's
just you know, putting the data out there, making people
aware of how this generally works. As we head into
twenty twenty six. So with that being said, how should
investors be thinking a little differently or planning ahead for
potential volatility just given what's happened historically to the markets
(02:55):
in midterm election years.
Speaker 2 (02:57):
Well, because we've always got chaos. The market doesn't care
who is in control. It just wants to know which
flavor is it right. The market basically has a blue
playbook and a red playbook. Companies will make decisions on
who they support based on whoever will bring home the
most profits that year. That's not great for a democratic
society because it does drive a lot of decisions that
maybe aren't necessarily the best that is, they could be
(03:19):
for the society as a whole.
Speaker 3 (03:20):
But at the same time, that is how it works.
Speaker 2 (03:22):
And as long as you understand that and are comfortable
with it, then we don't have to worry too much
about how the politics are going to affect things as
long as the companies themselves are able to or are
able to make a profit. And again I'm limiting to
this to what do I do about my portfolio if
X happens in the political realm, The answer is usually nothing.
Just understand what to expect based on one outcome versus
(03:43):
the other, because they're really just I don't have a
whole lot of concern that either political party is going
to make decisions that are going to permanently ruin the
stock market and sink four in case, because that's a
sure way to not get reelected for those people who
are making those types of decisions.
Speaker 1 (03:57):
All right, well, let's talk about a couple of hypothetical examples.
We'll call number one the what we'll call the happy
but exposed growth investor. You know, say you got a
few million bucks and it's been a great year because
you were overweight in big tech. You're winning. You can
go to your holiday parties and talk about the performance
in your Navidia stock or your growth ETF performance. Maybe
(04:20):
you added AI stocks last year and you're killing it
this year. You stayed invested, You're not doing anything to
make any changes because you're up and you're feeling great.
But now your portfolio, whether you realize it or not,
is more concentrated than ever. Forty percent of your net
worth if you're just in the s and P five
hundred is writing on just about six stocks. That's a
(04:44):
lot of risk tied to a handful of earnings calls.
And if that AI bubble cools at all, even a little,
those gains can disappear fast. And Brian, you and I
have been talking about this, it seems like every night
for weeks and weeks. Now, well, you know, consider, just
consider a little bit of rebalancing in a tax efficient way.
(05:06):
Maybe harvest some gains, shift some risk towards some non
correlated asset classes, something to mitigate the risks so you
don't end up being shocked if and when, And I
always say this, it's not a matter of if, it's
when we get a correction in the market. You just
don't want to be caught off guard here just because
everything has just been going swimmingly for the last couple
(05:30):
of years now without a whole lot of volatility.
Speaker 2 (05:33):
Yeah, any any investor with any amount of experience knows
that when we've had, you know, these these three years
of really strong growth, especially following a really scary twenty two,
that you know something is coming.
Speaker 3 (05:44):
We don't know when.
Speaker 2 (05:45):
And I'm not remotely saying you should rush out and
do something today, but be ready because something's gonna happen.
Speaker 3 (05:49):
So the right thing to do.
Speaker 2 (05:50):
You know, maybe you're looking at harvesting gains and that
might mean yeah, pulling trigger and paying some taxes. But
if things have gotten out of whack from a balance standpoint,
that might be something you're going to want to look into,
making that sacrific tax wise to go ahead and get
your portfolio back to where it should be from a
balance standpoint. You might look at alternative income, infrastructure, some
other types of things that are a little less correlated.
Speaker 3 (06:09):
So right, Brian.
Speaker 1 (06:10):
Walk through another investor, somebody we're going to call the
underperforming diversifier, right.
Speaker 2 (06:16):
So this is this is a situation where let's say
we've got two and a half million dollars and then
try to be diversified, so we've got small caps, international,
maybe some value in there.
Speaker 3 (06:24):
Didn't really chase AI stocks.
Speaker 2 (06:26):
Only up five percent of the for the year, you know,
in a year where the market is up double digits
for the for the third year in a row, and
you're wondering, did I miss something? What am I doing wrong?
That maybe my portfolio is not keeping up with things.
So the answer is, you know, not necessarily up is up.
We always like up better than down, but you might
need to rethink how you're diversifying that portfolio. Some diversification
hasn't worked this year, but other strategies could help smooth
(06:49):
the right ahead. And I would throw out here, you know,
more recently, if you're somebody who abandoned bonds or international
stocks over the past couple of decades when it was
nothing but the S and P five hundred, that's part
of your problem because those two asset classes have rotated
back around into too being more in favor than they
used to be. Matter of fact, international stocks are leading
or have been leading the pack all year long. Really
(07:09):
since we started goof around in this country with tariffs,
international companies kind of rose to the forefront for investors.
So if you don't have any international exposure, that is
currently costing you.
Speaker 3 (07:19):
So what's the solution here.
Speaker 2 (07:20):
Bob, Well, we'll add some assets that behave Differently, you
might look at private credit, maybe bufferdtfs to help kind
of help us smooth things out.
Speaker 3 (07:28):
Real estate tactically manage funds.
Speaker 2 (07:29):
Don't just diversify only by geography or size, diversify also
by the return behavior that those underlying investments have.
Speaker 1 (07:37):
Yeah, and I think this is a good time to
call out, you know, for the person out there that
has under you know, underperformed quote unquote underperformed because they
didn't have a whole ton of exposure to AI stocks. Uh,
you know. Eventually, and again like you, Brian, I'm not predicting,
you know, the sky's gonna fall here, but you know,
we are going to have to see some actual revenue
(07:59):
and earning growth from these companies that have invested so
heavily into AI, and valuations can get out of whack
on these stocks and sooner or later. You know, there's
a lot of sets in the economy where the if
you look at the price earnings ratio, you know there's
just some boring stuff like healthcare and bank stocks and
(08:19):
you know, some other things that haven't been flying high
this year. You know, even if you're feeling like you're
underperforming this year, we do get sector rotations into more
value oriented stocks. Money is always going to look for
a home where it's treated best. So don't give up
on what you've been doing. Just make make sure you
(08:41):
are fully diversified, You've got all sectors covered, and just
ride this thing out and don't get overweighted to any
one sector. That'd be my advice because things do and
often change quickly, and you don't want to chase yesterday's returns.
Just assuming you know, using that recency bias, that what
(09:02):
worked in twenty three, twenty four, and twenty five is
just going to continue to pound its way higher on
steroids in twenty twenty six, it's not likely to happen.
Speaker 3 (09:11):
Yeah, let's talk about another emotion.
Speaker 2 (09:14):
I don't know if this is an emotion or what,
but a more of a mental state, and that can
be complacency. This is a trap, and we want to
help a lot of people avoid because a lot of
people will come to the conclusion that, you know, kind
of like Bob, what you just said, not necessarily with
regard to specific investments, just but just the overall idea
that the market was good last year. So I don't
have to pay attention anymore because we've had three good
years in a row. Maybe we're out of the craziness,
(09:35):
and I can promise, and this is one of the
few guarantees I get to give. We're never out of
the crazy. It's gonna come out of left field. It
always does. So let's make sure you know we were
not assuming that the storm has passed simply because it's
quiet right now. We might just be in the eye
of it. All signs point to continued choppiness in twenty
twenty six. That means this year's leaders could become next
year's laggers. But that was true a year ago, so
(09:56):
don't confuse a good year with a calm year.
Speaker 3 (09:58):
They're not the same thing.
Speaker 2 (10:00):
The best portfolios always built for what's next, not just
what worked last quarter.
Speaker 1 (10:04):
On Yeah, and regardless of what sectors of this economy,
you're in love with just good famental financial planning is
make darn sure that emergency fund or short term liquidity needs,
either for cash flow or for a major purchase, make
sure you carve out those assets and have that in
for lack of a better term, just a safe bucket,
(10:26):
and that'll give you the cash flow and the liquidity
you need and also give you time to ride out
whatever volatility might be coming down the pike in twenty
twenty six. Here's the all Worth advice. Don't let a
good year lull you into complacency, because thriving in twenty
twenty six will take more than just riding last year's winners.
(10:48):
Coming up next, the best places to retire right now,
plus a powerful look at what retirement can and should
look like thanks to help from Total Strangers. You're listening
to Simply Money, presented by Allworth Financial on fifty five
k R see the talk station. You're listening to Simply
(11:11):
Money presented by Allworth Financial on Bob Spondseller along with
Brian James. Are you falling for costly money myths? We'll
play some financial planning fact or fiction straight ahead at
six forty three. A new list of retirement destinations is out, Brian. Unsurprisingly,
places like Naples, Florida and Sarasota, Florida still dominate those
(11:34):
top warm weather no state income tax destinations. But it's
not just sunshine states getting attention. A newer trend, cooler
climate and midwestern or more temperate areas are making strong
showings now thanks to lower cost of living, solid access
to healthcare, and relaxed lifestyles. Walk us through some of
(11:57):
the new retirement destinations, Brian.
Speaker 2 (12:00):
Well, we're looking at different things nowadays. It's not just
those those beat states that we've talked about forever. So
the kinds of things we're looking for, you know, have
just simply changed. So for example, Rochester, Minnesota, this is
near the Mayo Clinic, right. Obviously, if you've got some
health issues or loved ones with those types of things,
you might want to be close to something like that.
Speaker 3 (12:18):
Or just parts of the heartland appeal to people who.
Speaker 2 (12:20):
Care as much about tax efficiency and access to good
healthcare as they do about palm trees and beat sunsets.
Speaker 3 (12:26):
This has become more fittant recently than it used to be.
Speaker 1 (12:29):
Brian. I know you like to pound away on chat
pt during the show, even sometimes to do your research.
When's the last time we saw a hurricane roll through Rochester, Minnesota?
Can you look that up for us?
Speaker 3 (12:41):
You know, I'm gonna go ahead and say that has
not happened.
Speaker 2 (12:44):
However, I will say that we did have a hurricane
here and good old Cincinnati in two thousand and eight.
It happened right before, right before I believe it was,
Bear Stearns went under. Right, we had that weird hurricane
way back then, Hurricane Ike I believe it was, And
immediately the next day bear Stearns went under. I remember
that being just the weird, the weirdest weeks in my
entire life. So it does happen out there. But again,
(13:04):
you're just kind of looking at the odds of how
much am I going to have to deal with? So
lets let's talk about some of these other examples. Let's
talk about the Greenville, South Carolina. That's a newly popular one.
They've They've done a lot to revitalize their downtown. Of course,
there's a pretty mild climate South Carolina, not going to
get an extreme heat and extreme cold in western South Carolina.
Big time art scene down there, moderate cost of living.
Speaker 3 (13:26):
Another one. This then this kind of surprised me.
Speaker 2 (13:27):
Bentonville, Arkansas, of all places, A lot of money flown
around Bentonville, Arkansas. You may not have heard of it,
but that's where Walmart is based. So the Walton family,
of course has thrown a lot of money around that town,
and that has now made it an unexpected hub for hiking, cycling, museums,
food culture, things like that. And then another one last
one here Traverse City, Michigan. If you like the northern climates,
(13:49):
retirees who actually want to experience those four seasons, including
about a month worth of summer living on the lake
in a slower pace, strong food, wine culture, and growing
health care capacity, I would just throw just look beyond
the beaten path. Just because your family always went to
Hilton Head every year doesn't mean you have to buy
a condo down there. I always advise my clients go
to some other places, use some of that money you
(14:09):
budgeted to maybe buy a place to potentially look at
it it staying in nicer places and areas you haven't been.
Make sure that whatever you decided on thirty years ago
is truly truly what you want before you actually pull
the trigger.
Speaker 1 (14:22):
In those types of yeah, and a lot of times, Brian,
And we see this all the time. People go out
and look and they want to move and retirement, retire somewhere,
and they conclude, after a bunch of iterations, I'm buying
and selling real estate or running all over the country.
That good old Cincinnati, Ohio and northern Kentucky, Southeast Indiana
not too bad of a place to set up shop
(14:43):
for all the reasons that we just mentioned. We've got
great health care here, cost of living is good. Yeah,
the weather's kind of iffy between January and April, but
you know, there's no utopia on earth, so you know,
make sure you look at all the factors that are
going to impact your life before just pulling the trigger
on a so called retirement destination. All right, This next
(15:04):
story has spread like wildfire, and it's always good to
share some good news out there, especially as we head
into a weekend. If you haven't heard or seen it yet,
this is a pretty awesome story. A viral fundraiser raised
over one point seven million dollars to help an eighty
eight year old Army veteran finally be able to retire
(15:25):
with some dignity. Brian, this is a great story.
Speaker 2 (15:28):
Yeah, this gentleman's name is ed Bombas and he's a veteran,
so we certainly thank him for his service. And then,
of course, after his service, he worked for a full
career of forty years at General Motors, which this is kind
of ancient history. I'm reminded of this now, but General
Motors did actually declare bankruptcy in two thousand and nine,
so it still exists, of course, but it did go
(15:49):
through a big bankruptcy and that's where we lost Pontiac, Saturn,
Hummer and SOB and a lot of.
Speaker 3 (15:55):
Factories and dealerships closed.
Speaker 2 (15:57):
Forty days later, it re emerged as the new GM
with a fixed balance sheet. But anybody who was holding
the original GM shares, yeah, you lost all those dollars.
November twenty ten, GM came back to the public markets.
It was through an IPO, so it was a very
very intense, fast period of kind of crazy from one
of the old venerable brands there. But anyway, the point
is that affected this gentleman and he lost his pension.
(16:20):
After his wife passed away, the bill started to pile
up and he lost those benefits. He ended up working
full time at a grocery store. Well, into his eighties. Well,
that story hit social media, of course, so there's a
content creator by the name of Samuel Weidenhoffer posted a
video of him doing his job there at the grocery
store and asking him what his dream was, and he
simply said, I just want to live a little the
life I was hoping for. How heartrending of a statement
(16:42):
is that from an eighty year old who fought for us.
It worked a full, long, honest career and lost his
pension anyway, and was still stuck working at a grocery
store instead of having retired.
Speaker 1 (16:52):
Yeah, and I think these stories come up often. I mean,
the American people are still very generous, very easy, eager
to help their neighbors. They just want to know that
the money is going to a good place. And wow,
one point seven million dollars was raised by total strangers
in a very short amount of time. Donations poured in
from everywhere, and lo and behold, this guy's now set up.
(17:16):
Mister Bombas who fought, like you said, to protect our freedom.
He's never lived in a large home. He actually had
to sell his house and go work in this grocery store.
And now he's going to be able to live with
dignity into his final years here, and I think that
is wonderful news and it really speaks to the just
the wonderful heart of most American people out there. They
(17:40):
see a need, they fill it quickly and strip all
the political bs out of it. We still our friends
and neighbors out there from all over the country are
always eager to do good and this is a great
story to share, ye.
Speaker 2 (17:54):
So yeah, so let's wrap up the story here. So
why are we talking about this? Well, that video that
was out there struck a chord. It almost instantly, people
from around the country mobilized and donations came in through
through a crowdfunding effort. Just a few days that total
climb passed one point seven million dollars and he wound
up with a nest egg that he pretty much lost
when General Motors went under. So this is the person
(18:15):
who really never lived all that large, ended up, you know,
having to rechange everything about his life just to make
the math work.
Speaker 3 (18:22):
So this is huge.
Speaker 2 (18:22):
Now he's got financial security and his twilight years doesn't
have to spend every day at the grocery store. And again,
this was all simply because the American people looked at
a story and said, you know what, that's not right?
Speaker 3 (18:31):
What can we do to fix it? All?
Speaker 1 (18:33):
Right, every Sunday you'll find our all Worth Advice in
the Cincinnati Inquire and here's a preview. Brian walk us through.
You know Veronica's question and independent she says, can you
just simply help me better understand donor advice funds? What
are they and how do they work?
Speaker 3 (18:50):
Yeah?
Speaker 2 (18:50):
So donor advice funds all day, every day right now
because it's the end of the year and people are
trying to get their tax moves done here by the
end of.
Speaker 3 (18:56):
Before the before the clock strikes zero.
Speaker 2 (18:58):
So with a donor advice fund, of effectively, what you're
doing is you are if you are already charitably inclined anyway,
that's very important. If you were already giving let's say
ten thousand dollars over a year to your church or
whatever charity, then what you can do. You know, that
much is not enough to get you to itemize deductions,
so you're not getting any tax benefit out of it.
But a donor advice fund will allow you to lump
say five years, that's just made up number, but five years,
(19:19):
that's fifty thousand dollars one time this year and then.
Speaker 3 (19:22):
Dole it out as you see fit to the to
the charity so that they don't understand it.
Speaker 2 (19:27):
They don't come to the conclusion that something has changed
and you've got more money than you do. You're still
giving them the money on the same kid as you
were before, but you lumped all of the donation and
the taxable part of it, the tax deduction part of
it into one year, so you actually did get a
tax benefit.
Speaker 3 (19:41):
So yeah, more on that in the future. We'll be
talking about that a lot. This decemmer good stuff, all right.
Speaker 1 (19:46):
Wealth can open many doors, but it could also make
it harder to say no. We'll help you set clear,
confident boundaries without guilt. Coming up next, 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 Lambob Sponseller along with Brian James.
(20:09):
When you've achieved financial success, it often comes with some
unspoken expectations, perhaps from friends, extended family, even distant acquaintances.
Whether it's a request cost sign alone for example, or
invest in a business idea or fund of family members.
Emergency saying no can feel awkward at best and guilt
(20:31):
inducing at worst. Brian, I've had situations like this come
up several times over the years and years I've been
doing this.
Speaker 3 (20:39):
What about you?
Speaker 2 (20:40):
Oh yeah, absolutely, it comes up all the time within
family dynamics. So we all want to support our children
and our our siblings and our extended families when we can.
Stuff happens, life happens to everybody, and it's good to
have that family network around you that can kind of
step in. However, it can totally backfire.
Speaker 3 (20:56):
Of course.
Speaker 2 (20:56):
We all run into these horror stories every now and then.
I think, I think, really the one that off the
page to me is co signing alone.
Speaker 3 (21:02):
I have I have just never heard of a situation
where this ended.
Speaker 2 (21:04):
Well, if you're asked to co sign alone, that means
whoever is asking you has been turned down by the
banks unless someone else's credit can back them up. That
means that the banks out there think that this person
is not gonna be able to pay these bills. And
if you're co signing alone, then you are you are
on that loan as if you were borrowing the money
yourself that you don't have any more protection than if
you were literally borrowing or signing for that mortgage your
absolute self. So just know that if you if you
(21:27):
agree with the bank that maybe this person isn't going
to be good for it, then you are probably gonna
get stuck with that bill.
Speaker 1 (21:32):
Well, maybe without getting too off on a religious tangent,
maybe that maybe that's illustrative of why in the Bible
it warns us against co signing for other people's loans. Right,
maybe God, even Jesus pretty smart after all. All right, Hey,
but the point we're trying to make here is constantly
saying yes to other people when they know you've got
(21:52):
some money and they think, well, he's he or she's
got a lot of money. It doesn't matter they can
quote unquote afford it. It can set unsustainable expectations and
quietly erode your own autonomy over your own money, and
that emotional weight that you carry around could be exhausting,
(22:12):
leading to resentment or burnout or just fracture relationships if
it's not managed correctly.
Speaker 2 (22:19):
Yeah, and so I think, so get creative, right, It
doesn't have to be a hard no. It can first
of all, be not right now, or let let's pretend you.
I'll give an example of this from a real client.
So how we found the solution. So let's say that
you know, the client's kid wants to buy a house
and the banks aren't willing to lend at a at
a reasonable rate. So the client says, well, I'll step in,
I'll co sign the mortgage and we'll go from there. Well, then,
obviously we've talked about what exposure that lead. So what
(22:41):
if the compromise point is, Okay, you're not happy in
your apartment right now, it's not big enough or whatever.
What if I gave you an extra few hundred dollars
every month actually making an investment versus taking on a
much more massive risk, buy you some time, get you
in a nicer place, and then I will work with you,
child of mind, to get your finances looking better so
that maybe the next two or three years you can
do it without my help. That's kind of a middle ground,
(23:02):
and it's actually an investment of dollars that you won't
see again. But at the same time, it might be
a lot better than putting yourself a risk for several
hundred thousand dollars should your kid not be able to
make that payment.
Speaker 1 (23:11):
I like where you're going there, because there's there's a
big difference between just saying flat out no and never
helping a loved one or a child or what have you,
versus partnering with that loved one to help, you know,
whether you say, coach them or counsel them, or assist
them in becoming financially responsible and you know, help them
(23:32):
bridge that gap between just learning about money and getting
them to where they can manage their own affairs. And
that's really what we're talking about here, coaching people to
be responsive, responsible versus just enabling them to have what
they feel they want or deserve. That that's what we're
really trying to get into here.
Speaker 2 (23:52):
Yeah, for sure, and again you are not rejecting the
person and you're not saying no. You're saying no, but
and then come up with a solution that could get
them across the finish line.
Speaker 1 (24:00):
You're listening to simply money presented by All with Financial
on Bob Sponseller along with Brian James. Let's get into
how to maybe prepare to say no in a in
a dignified way for everyone. And this comes down to
some communication and advanced planning. I like things like this.
Try some responses like, Hey, I care deeply about you,
(24:21):
but I've made a commitment to keep financial matters separate
from personal relationships. I think that's a good line to
use when we're dealing with maybe parties outside of our family,
where we just get we get bombarded with requests from
charities and other people coming at us asking for money.
Speaker 2 (24:38):
And I think what you're really talking about there is
just just have a policy, sit down and think in advance.
If you think this is coming, then then then give
yourself some time to figure out what do I really
believe here? What is my policy as to whether I
would do this? And I'm not talking about something necessarily
if for write down unless that works for you to
kind of cement it into your brain. But just give
some forethought and then then you'll know how to respond
(24:59):
rather than stuttering and stafmmering when the question arises.
Speaker 3 (25:01):
Here's another good response.
Speaker 1 (25:03):
You could say something like, Hey, this isn't something I
can support financially, but I'm happy to help brainstorm other
solutions with you. You're inviting that person into more of
a relationship to coach them through helping them solve some
of their financial problems versus just pulling out the checkbook
and writing a check and hoping it all works out.
(25:24):
And you shouldn't feel pressure to answer right away. Right
And I think of a quick yes or a quick no.
Tells this person one of two things. A quick guess says, well, hey.
Speaker 3 (25:32):
This is easy.
Speaker 2 (25:32):
This, I guess, is just how the world works, and
it's just easy to get money. A no will tell
them this person doesn't care about me, so tell them,
even if you already know your answer, tell them, I
need to think about this. This is a huge decision
and both of us are going to be impacted by
it one way or another. And I really have got
to put some thought into this. Then you can come
back with your response even if you already knew what
it was. Give it some time to percolate.
Speaker 1 (25:52):
Yeah, and one other thing to point out here, you
don't owe anyone more than maybe a few second explanation.
If you get into a twenty mins an explanation on
why you don't want to give them money. The longer
you just drivel on and talk and talk and talk,
you know it quickly comes across. As you're rationalizing, you
feel guilty and uncomfortable and the way you're managing yourself
(26:14):
through this is just by talking and talking and talking
about all the reasons why you're gonna say no. That
can make that other person feel very uncomfortable as well.
And there's no need to.
Speaker 2 (26:23):
Go there, and we can find out that there's a
lot more to a relationship like that. Suddenly it becomes
not about money, it becomes about interpersonal stuff.
Speaker 3 (26:30):
Yeah.
Speaker 1 (26:30):
And then lastly, and I tell clients all this all
the time, Brian, blame me, Blame your financial advisor. For
those that work with a financial advisor, they can serve
as a helpful buffer in these conversations as well.
Speaker 3 (26:43):
You heard it here, folks, it's Bob's fault.
Speaker 1 (26:45):
Well, but referring financial request to your advisor, you know,
puts that buffer if it needs to be there between
you and your money. And yeah, you can blame somebody else,
someone your fiduciary advisor that's looking out for you. You
and let the financial advisor come up with that quick
twenty second response on why we can't go there where
(27:06):
we all know we're being asked to make a decision
that might not be in the best interest of all parties.
Here's the all worth advice protecting your well starts with
setting boundaries that align with your values, because saying no
is sometimes the smartest financial decision.
Speaker 3 (27:22):
You can make.
Speaker 1 (27:23):
Coming up next, see if you can separate fact from
fiction before it costs you big time. 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. I'm Bob Sponseller along with Brian James.
(27:45):
You have a financial question for us. There's a red
button you can click while you're listening to the show
right there on the iHeart app. Simply record your question
and it will come straight to us. All right, Brian,
it's time to play financial planning fact or fiction, and
I'll let you have the easy one.
Speaker 3 (28:02):
First fact factor fiction.
Speaker 1 (28:04):
You don't need bonds in your portfolio once you retire.
Speaker 3 (28:08):
Brian, I don't know about easy. I'm gonna call that
one faction, right.
Speaker 2 (28:11):
It's a little of both, So bonds in your portfolio normally,
Historically we've recognized that bonds can be kind of the
rudder for the portfolio to smooth out the tougher times.
Over the past couple decades, the behavior of bonds has
kind of shifted. Everything gets speculated on no matter what
it is, bond moves, bonds move with interest rates, and
we have absolutely had very different interest rate environments over
the prior couple decades than we had for the century
(28:33):
prior to that. So the way I here's I don't know,
you tell me, Here's how I talked to my clients
about it. I don't really want to necessarily make a
portfolio conservative simply because someone is now fits under the
definition of retire. That's not the trigger for me. The
trigger for me is when do we need these specific dollars.
Some people are in a situation where they don't. They've
got income coming in from I don't know, rental properties,
or maybe they still own a chunk of the business
(28:55):
they used to run, whatever, and maybe they don't need
these investments. So that means or they have a pension, yeah,
you know, pensions, so scary. Maybe that pays the bills.
That's fine to me. That pushes out the need for
these particular invested dollars out you know, ten twenty. Sometimes
it really isn't even an horizon where it's needed. So
in that case, sure, let's stay aggressive and continue to grow.
Why wouldn't we Otherwise we're taking it out of our kids'
mouths ultimately, So that situation itself means I don't necessarily
(29:18):
need bonds because it's just something different.
Speaker 3 (29:20):
And if I do want a rudder, there are other
options out there.
Speaker 2 (29:23):
I can do book chiefs, I can do some I
can arrange my investments in another way and create that rudder.
Speaker 3 (29:30):
No, I think you hit the nail on the head there.
Speaker 1 (29:31):
It comes down to a the individual client's financial plan
and retirement income plan. And then second they're emotional tolerance
for risk. It's not a one size fits all situation. Yeah,
all right, here coming at you. Now, it's your turn
for what I think is an easy one. But let's
see what Bob says. Buying municipal bonds is a better
move when you're in a.
Speaker 3 (29:49):
High tax bracket.
Speaker 1 (29:50):
Factor fiction, Bob, I would say, fact here, it certainly
can be, but you got to run the numbers. And
I had a client where we actually did that here recently,
and they're sitting on a boatload of cash, and they
feel great about the gross marginal interest rate they're getting
on that cash, and they've got a bunch of municipal
(30:11):
bonds elsewhere in their portfolio. And I just had the
conversation like, hey, do you understand what you're actually netting
here net of taxes and inflation by sitting on all
this cash. And this was a very smart person, very
numbers oriented, and their answer to me was, yes, I understand.
Speaker 3 (30:31):
I just like holding all that cash. It makes me
feel better just knowing I can get to it.
Speaker 1 (30:36):
So it's just you got to look at the gross
you know, the gross yield versus the net yield, look
at your tax situation, and make sure you're going in
with your eyes wide open on what you actually own.
And if you feel okay with it, fine, but at
least know what you've got.
Speaker 2 (30:52):
So I want to weigh in on this a little
bit because this is another thing I've been given some
thought to, and this is this could affect me personally,
and sometime I'm starting talking to clients about if I
want better. You know, the whole point of municipal is
tax free, right, that's what we want, But you can
do that a couple of ways. One thing I'm thinking
about doing when I get to that point, I've got
another ten years or so. I'm thinking of overstuffing my
wroth IRA with megaback door four and K contributions, backdoor
(31:13):
contributions or whatever, and just knowing that that money I'm
carving out is my emergency fund, and I'll stick it
in a you know, in a money market fund that
a bank might have. I could be getting four or
five percent on my wroth IRA if in my brain
I know that's my emergency fund, and I could quickly
move money to my checking account. Now I got the
best of both worlds. I get high rates of return
but no taxes.
Speaker 1 (31:32):
The key there, and what you said is you're getting
out in front of it, you know, ten years in
advance and doing some you know, advanced planning.
Speaker 3 (31:38):
Not everybody does that.
Speaker 1 (31:40):
And for folks that sell a business and get a
big whopping paycheck, they don't have that option available to them.
But no great discussion, all right, Brian Factor. Fiction, having
multiple financial advisors is a smart way to diversify your advice.
Speaker 3 (31:55):
Yeah, this one again.
Speaker 2 (31:56):
I'm gonna go with fiction on this one because I
just feel like, you know, whenever somebody has multiple advisors,
they're never happy because they're hearing from they have to
babysit two different people they're hearing slightly differing points of view.
Even if both advisors are really stronger, sometimes there's three
or four, but it just seems to cloud all the
decision making and they can't commit, and it just really
(32:16):
drags everything out that they want to do. So find
one that you trust and move on. So think of
this way. You might get a second opinion from a doctor,
but you don't have both doctors perform the actual You
pick one to do the actual procedu You're not going
to get the procedure done twice. With financial planning, you
can have everything done twice if you really want to,
but it's really going to throw an anchor in your
overall comfort. It makes you your own financial advisor because
(32:37):
you're responsible to decide who's right.
Speaker 3 (32:39):
I don't think that could be said any better. That
is spot on, all right.
Speaker 1 (32:43):
Factor fiction Brian, A five twenty nine plan can be
converted into a raw ira.
Speaker 3 (32:48):
Fact fact fact fact fact.
Speaker 2 (32:49):
This is my favorite new cool rule here. So so
the new rule came out five nine. Plans, as we know,
are tax free if they're pulled out, used for college tuition, books,
room board.
Speaker 3 (32:59):
That's the way it's been for decades.
Speaker 2 (33:00):
But The concern in the past has been that I
don't want to put money in my five twenty nine
because I don't know if this newborn baby, or perhaps
this child who doesn't even exist yet.
Speaker 3 (33:08):
That's another thing you can do.
Speaker 2 (33:10):
I don't know if this person's gonna be gonna go
to college, maybe they're gonna go a full ride. I
won't need these dollars. So then aren't I losing out?
The answer is now not at all, because there are
new rules in place as of twenty twenty four that
will allow you to As long as the account, the
five to nine has been in existence for fifteen years,
you can contribute over time up to thirty five thousand
dollars from the five twenty nine two year wroth just
(33:30):
using that thirty five thousand dollars over three four years
as the annual contribution to the roth IRA. So if
you think about this, I love this thought, Bob. So
if I fund this, Let's say I find out my
adult child is pregnant, and now I know within the
next year something I'm gonna have a baby. I can
fund that account now, and that money could grow for
sixty five years until my grandchild actually retires. That is
(33:52):
an absolutely enormous amount of money. If you want to
think lump sums, you could put twelve in now, it'll
be worth thirty five by the time they're eighteen. And
now you funded wroth irate contributions for until they're in
their mid twenties and hopefully really really stable.
Speaker 3 (34:04):
I love that rule. Now, it's a great rule.
Speaker 1 (34:06):
And I think this just the overall arching theme here
is never give up those wrath dollars until you absolutely
have to, because that compounded long term growth is a powerful,
powerful thing. All right, factor fiction, and I'll take this one.
An inheritance plan is more important than in a state plan, Brian,
I don't. I don't think I even understand the question here,
(34:28):
but I think what they're so.
Speaker 3 (34:29):
I let you take that. I don't get that either,
so go to Well, the.
Speaker 1 (34:32):
Only way I can interpret this is an estate plan.
I think when people think of an a state plan,
I think they're talking about illegal documents, you know, and
a lot of times people don't read them. There's a
lot of boiler plate legal eese in them. The difference
in an inheritance plan is you're actually communicating and making
it very clear to your heirs. And your beneficiaries what
(34:54):
you want this money to do for them and win.
And I think that comes down to actual communication rather
than just drafting and leaving to someone this complicated document
that just appears out of the desk drawer after you
pass away.
Speaker 3 (35:09):
Yeah.
Speaker 2 (35:09):
I think this might be referring to an unfunded trust,
which happens when you run across a lawyer who may
be perfectly well meaning and they want it. They want
to have you write up trust document. That could be
perfectly fine, but if you never put anything in the trust,
meaning you've literally gone to your investment firms you've named
the trust as beneficiary or even as the owner, that
trust doesn't do squat Bob until something til it owns something.
Speaker 1 (35:29):
Coming up next, you'll get my two cents on some
additional estate planning considerations. You're listening to Simply Money presented
by all Worth Financial on fifty five KRC the talk station.
You're listening to Simple Money presented by all Worth Financial.
Bob Sponsorer along with Brian James and Brian I want
(35:50):
to take a couple seconds here and just talk about
an actual store a client story I ran across here recently,
and I think it illustrates something that a lot of
people should be doing and rarely do, and that's actually
review your estate planning documents every so often. And here's
why Brian. I had a client and this is an
(36:10):
elderly woman that actually lived down in Alabama, and she
left her nephew as her power of attorney. Okay, everything
good so far. However, the power of attorney document did
not allow this nephew to make any changes to beneficiaries
in any of her accounts. Well, what he did was
he set up the account for him to run, you know,
(36:33):
the account, and he named.
Speaker 3 (36:36):
Transferrun death beneficiaries and that's fun.
Speaker 1 (36:40):
Well, this this lady ended up passing away, and we're
trying to get the estate settled and get all the
money moving around where it needs to go. And the
custodio firm, you know, rejected moving this to that nephew's account,
you know, per the beneficiaries that were set up because
the power of attorney document did not allow this individual
(37:03):
to name beneficiaries. And this is something that should have
and could have been caught years and years ago and
made provisions for that. Instead, we had to help the
client get an attorney down in Alabama, take the thing
through probate court, and it took about two months.
Speaker 3 (37:20):
To get all this sorted out, and it.
Speaker 1 (37:22):
Was just an unnecessary delay in probating and settling this
woman's estate that could have been avoided if those documents
had not been reviewed periodically and make the necessary adjustments.
I just call that out as a reminder, review what
you've got, don't just set it and forget it, and
pull these things out down the road.
Speaker 3 (37:43):
Because you could be in for a surprise.
Speaker 2 (37:44):
So I got a little war story from the trenches too,
from last week. So that's a client of mine that
passed away. Unfortunately, and at some point we had asked
multiple times to get a hold of the trust document.
They could never locate it. The trust in this case
was only the beneficiary. Didn't own anything is the beneficiary,
so we didn't really need it, but obviously we like
to have it on file for this exact reason. No
(38:04):
one knows where this trust document is, so all we
know is that the name of it and the date
of it, but we can't figure out who we need
to legally be talking to to retitle these assets. So
the moral of that story is make sure that your
financial advisors, your banks make sure that they have something
on file. They should have asked you for the trust
document itself, or what's called a trustee certification, which basically
pulls out the important details and you sign a form
(38:25):
saying yes, it was dated this date.
Speaker 3 (38:26):
Here are the.
Speaker 2 (38:27):
Trustees, here's the success or trustee, and here's how to
get a hold of us. So make sure you've done that,
otherwise you don't have much of a plan at place. Well.
Speaker 1 (38:34):
I don't know about you, Brian, but sometimes when I
ask clients or prospective clients to review this stuff, they
look at me like, are you really gonna make me
dig this stuff out? And I'm like, yes, I am.
I mean that's our job, and some people don't initially
want to think of that as our job. But boy,
if you can get out in front of this stuff,
you know, people thank us after the fact, because this
(38:57):
stuff really does need to be reviewed every two, three,
four years, just to make sure this estate plan is
actually set up to do what you actually intended for
it to do when you had the documents drafted. It's
very very important in something that we stress with our
clients all the time.
Speaker 3 (39:14):
Thanks for listening.
Speaker 1 (39:15):
You've been listening to simply money, presented by all Worth
Financial on fifty five KRC the talk station
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