January 16, 2026 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian unpack the booming world of alternative investments—from gold and crypto to private equity and real estate. Is now the time to diversify beyond stocks and bonds? Plus, what big bank earnings tell us about the economy, what a Cincinnati real estate expert sees in 2026, and how to financially support aging parents without derailing your own retirement. And if you waited until now to think about your 2025 taxes—don’t worry, there’s still time.
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Speaker 1 (00:07):
Should you take advantage of the explosions of alternative investments.
Now we'll explore that tonight. You're listening to Simply Money
presented by all Worth Financial. I'm Bob Sponseller along with
Brian James.
Speaker 2 (00:18):
Well.
Speaker 1 (00:19):
Right now, the most exciting stuff in the financial services
industry is in investing. Isn't happening in just the stock
and bond market. It's happening kind of what we'll call
off to the side. Private market investments are booming, and
that's stuff that just used to be available for big
institutional investors and it's now within reach of everyone, seemingly,
(00:42):
and the whole idea of what it means to be
diversified is starting to shift just a little bit. And
we're not talking just about private equity tonight, the whole
alternative investment space.
Speaker 2 (00:53):
So that's what Brian and I want to jump into
for a little.
Speaker 1 (00:56):
Bit tonight, because there's a lot to talk about here
and it can get very complex very quickly.
Speaker 3 (01:01):
It can everything but stocks, bonds, mutual funds is what
we're talking about today. So as we start off twenty
twenty six, let's start with data.
Speaker 2 (01:07):
You know, I love my data, Bob. That's where we're
going to start today.
Speaker 3 (01:10):
So alternative investments have topped over twenty six trillion dollars
in total assets under management, private equity and hedge funds.
Of course, those are the most commonly known people, most
people are most familiar with. This is coming from a
website called coin law dot io, which aggregates financial data
and trends and things like that. So let's take a
look at where all this is playing out and then
(01:31):
in the alternative landscape, and how are the more sophisticated
investors taking advantage of these opportunities and working these assets
in the long term plans? Starting to get more and
more questions about whether whether these types of things fit
into a more standard financial plan.
Speaker 1 (01:45):
Yeah, and the whole thing here within a well constructed
financial plan, Brian. And that's what the segment like this
is difficult.
Speaker 2 (01:52):
But when you when.
Speaker 1 (01:53):
You throw out the world the word alternative investments or
the term alternative investments, just.
Speaker 2 (01:58):
Like we're about to throw out another term cryptocurrency. Man,
there's a lot.
Speaker 1 (02:02):
Of stuff packed into those couple of words, and it
gets complex, and we're gonna do the best we can
to kind of, you.
Speaker 2 (02:10):
Know, give the overview of this stuff. But yeah, let's
start with gold.
Speaker 1 (02:14):
It's been a classic hedge, not a growth engine over time.
But let's face it, Brian, over the last couple of years,
the price of gold has just been skyrocketing, and like
anything else in the financial world, once we have two
or three tremendously good up years, then the questions start coming,
should I get into it now? Kind of like buying
(02:35):
Navidia stock after it went up a few hundred percent.
Speaker 3 (02:37):
Yeah, So to me, gold is nothing but market market
timing because we only hear about it when people get
a little spooked, and we normally really start hearing about it,
like you just said, after the horses out of the barn,
and gold has run up because there are scary headlines
out there, and that's kind of the situation we're in
right now. But nobody brings up gold in terms of
I should buy this and sit on it for the
rest of my life. Some people do that, and they
tend to throw it in a safe and let the
(02:59):
kids deal with it and they inherit it. But to me,
gold is something when people start bringing it up that
that don't have much experience with precious metals in those
kinds of things. Then what they're thinking is should I
put my money into that, into something that I perceive
to be more a little safer for the time being
until things settle down. That is no different than I
should sell all my investments because I read a scary
headline this morning, and I will worry about it later
(03:21):
when to get back in. That's how most people tend
to think about gold. But like you said, gold is
not an asset that is that is aligned with a
growth philosophy. It does not spit out income. It's not
going to invent the next you know, the next iPhone
we all have to have. It's not going to find
a new market to sell, and it's simply worth what
people think it is. So all you're really trying to
do is time human emotions. So I'm not saying it's
(03:42):
a bad investment. It is a decent hedge against stuff
that goes up and down.
Speaker 2 (03:46):
But if you are not.
Speaker 3 (03:46):
Somebody who really truly panics between the peaks and valleys
of the overall market, then I don't feel like it's
got a very significant place in a well balanced portfolio.
Speaker 1 (03:55):
Yeah, decent inflation hedge for sure. I mean it beats
sitting in cash. But what a lot of people don't
bargain for when they get into gold is it's a
lot more volatile to the upside and the downside than cash.
So you know, it's not a CD replacement. So again
you've kind of made the point there. Look carefully and
make sure let me polish it off there on. Could
(04:15):
you just triggered a thought for me too.
Speaker 3 (04:17):
Remember it's gold is worth what people think it is,
so right now gold is worth a lot because a
lot of people feel like it's a good part of
their portfolio. Sooner or later, the dust will settle, as
it has done over the many, many cycles we've had
over the decades.
Speaker 2 (04:28):
You can look at and.
Speaker 3 (04:29):
Eventually the herd is going to move the other way
and it won't feel that cash at all.
Speaker 2 (04:32):
It will drop.
Speaker 1 (04:33):
Yeah, it may and and I think a lot of
people pile into gold based on this thirty eight trillion
dollar and accumulating US debt, which that isn't going away
anytime soon. So yeah, it's it's just always an interesting
asset class. All right, Let's dive into crypto, because, man, Brian,
when we talk about crypto currency, there's a whole lot
(04:53):
of stuff out there and we got to try to separate.
I guess what's become part of the institutional acid allocation
class now, I guess some responsible, responsibly managed, regulated ETFs,
for example, versus some of this just garbage out there,
these doge coins and coins that are being advertised in
(05:14):
social media. There's a wide variety and vast difference between
a good, diversified you know, bitcoin ETF and some of this.
Speaker 2 (05:24):
What I'll call just flat out garbage that's out there.
Speaker 3 (05:26):
Yeah, and I think we're starting there's a light at
the end of the tunnel for the garbage. I mean,
I'm hoping we are past the days where the Hawktua
girl can release her own crypto for whatever stupid reason,
for her twelve minutes of fame. I'm not even gonna
give her fifteen minutes of fame, and she's long gone anyway.
But I hope we are moving to a part I
don't think the big financial institutions we're ever going to
(05:48):
buy the Hawktua coin. However, they are starting to build
structures around having cryptocurrency as part of a portfolio. This
isn't a bad thing. Sophisticated investors are starting to pay
attention to this. The good reasons are there is potential
for uncorrelated return streams, something that isn't regular stocks and bonds,
something else that can command the attention.
Speaker 2 (06:06):
Of investors for a while.
Speaker 3 (06:07):
Pretty good liquidity because there are significant markets for these
very rapid market responsiveness. Now that goes both ways, right,
that's not only a good thing. That just means it
moves quickly in either direction. More real world use cases
that every time you hear some industry talking about the
blockchain that came from cryptocurrency and then the settlement technologies,
this means we can move money faster, and we can
complete transactions more quickly. Expanded access through all the custodial
(06:32):
platforms meaning your fidelities in your schwabs and so on
and so forth, and regulated vehicles. It's starting to look
more like a tool that the average investor can use.
That said, there is still risk, right, There's still going
to be extreme volatility. You're never certain of the valuation
of these things. There is a commodity aspect to these things. Still,
it's still worth what the crowd says. Yeah, and again
(06:52):
back to why people use alternative investments in the first place.
As part of a well diversified financial plan and strategy.
A lot of people are looking for negatively correlated assets,
you know, in other words, assets that zig when the
rest of their portfolio zags. Brian Cryptocurrency did not behave
that way in twenty twenty five when we saw corrections
(07:14):
in tech stocks, for example, I mean, the price of
bitcoin fell and fell precipitously. So to me, that's not
a reason to own cryptocurrency is to kind of hedge
or offset any volatility in the rest of your portfolio,
because it just isn't It isn't working that way. Yeah,
we don't have enough history yet to truly say this
(07:35):
is a hedge. This is not, because there just hasn't been,
and it's going to take decades really for us to
get to that point to truly understand how does cryptocurrency
behave in various interest rate cycles. We've seen a few
things like that, but we've only seen it for the
first time. And the more people get into it, the
more differently it will behave as the flock of birds
gets bigger and more unpredictable.
Speaker 1 (07:55):
All right, let's get into an asset class that might
actually make a lot of sense for some growth orient
in long term investors, folks that can be patient and select,
you know, investments appropriately.
Speaker 2 (08:07):
And that's the whole private equity space.
Speaker 1 (08:09):
This whole space has really taken off, and I think
it will continue to do. So let's talk about what
private equity even is. It's where you have the opportunity
to invest in companies and these are usually early stage
growth companies that are not traded in the public markets.
You cannot buy their public stock. It's a good thing
(08:30):
to get in early on some of these if you
know what you're getting into. I think a lot of
people Brian look at this as kind of like the
IPO space, where man if I could get in early,
like the owners of this company or the senior executives,
I'm going to make a killing. They want they want
to swing for the fence and make a huge return.
You got to know what you're getting into here. And
(08:52):
when you're talking to an advisor or somebody in the
financial services industry, I'm just telling you're not going to
get in to the earth stuff where it's just free money.
So you better have somebody that can vet what this
stuff really is, evaluate the fees, evaluate the liquidity issues.
There's a lot that goes into evaluate, evaluating this whole
(09:14):
private equity space.
Speaker 2 (09:15):
It can be play.
Speaker 1 (09:17):
A great role in a long term portfolio if you
have somebody you know selecting the right place to be
or better yet not to be.
Speaker 2 (09:25):
Yeah, and these things may be closer to you than
you think.
Speaker 3 (09:28):
If you're driving down the street going on your commute
for the five billionth time, and you notice that that
little vet clinic on the corner that's been there for
fifty years, all of a sudden has a new logo
and a new name, you can pretty you can be
pretty confident that there's a private equity firm behind that.
What they're starting to do for those types of small businesses.
Whoever that veterinarian is to beat that example to death,
(09:48):
wants to retire at some point, and for some of
those folks, a private equity exit is how they do it.
They sell their practice into a larger entity, and that
entity combines, combines expenses, and takes advantage of a kind
that means a scale and allows other people to invest
in it.
Speaker 2 (10:03):
Now, it does create a different environment.
Speaker 3 (10:04):
Sometimes in those four walls you might hear some grumpy
people because of the changes that are coming.
Speaker 2 (10:10):
But if you're standing.
Speaker 3 (10:11):
Outside those four walls wanting to invest in it, Just
beware that's the kind of thing you're investing in. You're
not going to see that little vet clinic. Inside a
mutual fund or something like that. The returns can be better,
but they can go south as well because they're just
more volatility, less liquidity. That's for darn shirt. There isn't
a publicly traded market. That's literally the difference. Publicly traded
means I can see the ticker symbol, I can see
(10:31):
the price all day every day. Private means I'll probably
hear from an accounting firm a few times a year
as to what it's worth.
Speaker 1 (10:38):
And that's where you want to evaluate. You want to
just be in one or two or five companies. Do you
really want to spread out your risk and be in
a broadly diversified private equity portfolio, maybe a fund to
fund approach with several different managers. Again, watch the fees,
watch the liquidity terms, Watch how taxes are reported.
Speaker 2 (10:57):
A lot of people get into.
Speaker 1 (10:58):
This stuff and they have no idea that they're gonna
get k one tax reporting, Brian, you and I talk
to clients all the time. You want you want to
make somebody unhappy, you know, real, quickly tell them they're
not gonna be able to file their tax return until
they're October, so you better know what you're getting into
in terms of tax reporting.
Speaker 2 (11:16):
That is a virtual guarantee.
Speaker 3 (11:17):
If you're gonna get into these types of things, you're
done filing in April, You're gonna file an extension, and
you're gonna figet about all of it until August.
Speaker 1 (11:23):
That's a fact, all right, Brian, walk us through real
estate because you know, well, we again another term where
we throw out, well, real estate.
Speaker 2 (11:30):
Any more of it, right, Bob.
Speaker 1 (11:31):
You can either own it yourself or you can have
a professionally managed portfolio.
Speaker 2 (11:36):
Both options come with various pros and cons.
Speaker 3 (11:39):
Yeah, and then I think we've officially reached that reach
the stage where if you are somebody who has never
owned it and you're thinking about picking up one or
two apartment buildings on the side to run and to
have a stream of income, I'm just gonna go ahead
and say, don't people who do this for the first
time and have never it seems like they cannot wait
to get out of it after two or three years
maybe being invested in these things. Now if you figured
out the game and you know how to make a
(12:00):
scalable business out of it. That's a whole different environment.
But if you just want to have something, if you
refer to it as passive income, rest assured. It ain't passive.
It's very active income, unless you're going to hire a property
management firm, in which case you're probably going to get
more like CD level returns out of an interpet.
Speaker 2 (12:15):
Yeah.
Speaker 1 (12:15):
And then if you go the institutional side and get
into a professionally managed rate, that comes with some complexities,
you know, different set of complexities. A lot of times
these scenes have high fees, high commissions, you know, some
liquidity constraints. So again, buyer beware when you're evaluating this,
and in the best case, work with a good fiduciary advisor.
(12:36):
Here's the all Worth advice. Alternatives can add real value
to a well constructed portfolio, but only when they're thoughtfully
integrated into a plan that fits your unique goals, risk
and liquidity needs. So make sure you're working with a
fiduciary who truly puts your interests first.
Speaker 2 (12:55):
Well.
Speaker 1 (12:55):
Five of the nation's biggest banks just reported their fourth
quarter earnings, and we've got them all for you. We'll
break it down and what it could mean for investors.
Coming up next, you're listening to Simply Money presented by
all Worth Financial on fifty five KRC, the Talk station.
You'll look the Money presented by all Worth Financial on
(13:17):
Bob Sponsella along with Brian James. Straight ahead at six
forty three, we're diving into the questions that hit home
for many of you, from how to help aging parents
without drailing your own retirement plan, to the right way
to prioritize experiences over things plus Medicare IRMA surprises, and
why outdated retirement projections might be leading you off track. Brian,
(13:42):
sharpen your pencil here because we got a lot to
talk about coming up here at six forty three. All right,
the big banks continue to report fourth quarter earnings and
the news seems to be mixed depending on which bank
we're looking at. And remember, big bank earnings can be
somewhat significant to how everybody's viewing the broader market because
they do kind of act like a pulse check on
(14:05):
the broader economy and the overall financial system. So let's
get into it. We got a few banks that have
already reported for the most part. The news has been
pretty good. Nothing to really, you know, cause anyone to
lose any sleep though.
Speaker 3 (14:18):
Yeah, I think we're in a solid position here. But
just I want to reiterate why you said what you
did about that bank earnings are Banks aren't the sexiest
things to look at. That's not the most exciting industry
to pay attention to. However, like you said, it's just
the pulse. If banks are doing well, that means other companies,
other businesses are probably borrowing money so they can expand
and grow and so forth.
Speaker 2 (14:38):
That's a great sign for the economy.
Speaker 1 (14:39):
Yeah, and you hit the magic word borrow. I mean
this whole lot of these gross companies function on access
to credit, access to money, liquidity, So we got to
have our banking system healthy or else a lot of
things can shut down in a hurry. But let's get
into some of these major bank and their fourth year.
Speaker 3 (14:57):
So some of the headlines, and we've been talking about
this all week because it's bank week. So Goldman Sacks,
Goldman Sacks had a great earnings report here. They blew
through their expectations. And again, as we always say, remember
it's not about what they did, it's about whether the
analysts were right or not, so they blew through the
analyst expectations for their equities trading revenue. Golden Sacks is
a slightly different bank than what you might be thinking
of on the Street corner. All time Wall Street record
(15:19):
of four point three billion dollars in the final three
months of last year.
Speaker 2 (15:23):
I know I sleep better knowing those Goldman.
Speaker 3 (15:25):
Sachs folks are going to get giant bonuses here in
the next few months. Anyway, they increased their targets and
this is this is really what the market can care about.
They also increase their own internal targets for their asset
and wealth management businesses, and those those themselves posted a
quarterly record for fees. They're now targeting a thirty percent
pre tax margin and the medium term, so in the
intermediate term, which was up from the mid twenties, and
(15:47):
returns in the high teens.
Speaker 2 (15:48):
Blah blah blah. These are all numbers.
Speaker 3 (15:50):
Basically, they're saying, we thought we were going to do good,
now we think we're going to do better. That's a
good sign from for at least one bank.
Speaker 1 (15:56):
Yeah, and I'd say Morgan Stanley's report was almost identical.
I mean, they hi the highlight in the report was
how well their wealth management and asset management business is doing.
Let's face it, Brian, we've all heard the TV commercials.
You do better when we do better, when you do better, right,
I mean, if the markets go up fifteen, eighteen, twenty percent,
(16:16):
you know a few years in a row, guess what,
wealth managers are going to make more money because there's
more assets under management, and that is.
Speaker 2 (16:23):
Playing itself out in the earnings report. All right.
Speaker 1 (16:25):
Wells Fargo, however, missed analytics analyst profit estimates in the
fourth quarter.
Speaker 2 (16:33):
There.
Speaker 1 (16:33):
They got some other issues going on over there at
Wells Fargo, but you know, they missed expectations. A stock
guid hit a little bit. Bank of America, City Group,
you know, on and on. Bank of America had an
earnings beat. City Group had a little hiccup here, taking
a little bit of a loss related to its plan
to sell some assets in Russia. Brian, Without getting into
(16:55):
the weeds here, Russia is probably not the best place
to be trying to operate right now.
Speaker 3 (17:01):
So yeah, Russia has always been a little bit of
the wild West, but I'm not sure right now that
I'd want to be partnering out there. But in any case,
let's get local, right, So we got a big bank
right here in town.
Speaker 2 (17:10):
How are they looking?
Speaker 3 (17:12):
Fifth Third Bank just got approval to merge with Comerica Bank,
which is mostly up in Michigan. Federal Reserve finally approved.
It's about almost an eleven billion dollar deal. And I
know Fifth Third has been on the hunt for a
long time for a move like this. This goes back,
you know, more than a decade in terms of their
desires because of the banking industry for these sort of
mid level and Fifth Third is a little more than
(17:32):
a mid level bank. But these regional banks, it's it's
very much acquire or be acquired, and they still want
to be the hunter.
Speaker 2 (17:38):
And so far, so good. But the Federal Reserve finally approved.
Speaker 3 (17:41):
That deal and that that will allow Fifth Third to
become one of the largest banks combined. It's going to
be the ninth largest bank in the United States, two
hundred and ninety billion dollars in total assets, reaching seventeen
of the twenty fastest growing US markets now Texas, California, Florida,
and across the southeast. A lot of us think is
Fifth Third to someplace that Uncle Charlie worked a million
(18:02):
years ago. Now it's becoming a national bank. A little bit,
a little bit different.
Speaker 1 (18:05):
Now, all right, Well, let's turn our attention to the
broader economy and a new report that suggests, well, like always,
we continue to spend no matter what's going on, Brian
and I will maintain this until I die. The average American,
if we have a dollar in our pocket, we're going
to spend a dollar about a dollar and five cents.
That's a lump in my pocket.
Speaker 2 (18:24):
I want to get rid of. Yeah, I'm American, aren't
it Exactly so?
Speaker 1 (18:27):
US retail sales rose in November by the highest mark
since July, fueling a rebound in auto purchases and very
resilient holiday shopping. Consumers spent a record breaking amount online
during the holiday season that should probably come as no surprise,
and spending at restaurants and bars, the only service sector
(18:49):
category in the retail report, gained zero point six percent
after falling the prior month. I always go back to
my personal you know, anecdotal evidence of how the economy doing.
Look at a average Applebee's parking lot on a Tuesday night.
If that place is packed, People have jobs, have money,
they're out spending.
Speaker 2 (19:08):
Life is good, Brian, but unlimited appetizers.
Speaker 3 (19:10):
So they're making smart financial decisions right and bringing doggy bags.
Speaker 2 (19:14):
I'm sure.
Speaker 3 (19:14):
Now I want to throw out here the data we're
sharing here, This is not adjusted for inflation, so a
lot of this can can indicate that people are simply
doing what they've always done. It's just costing more because
this report is simply telling telling us how many dollars
we're spending these various categories.
Speaker 2 (19:28):
Yeah, and the fact that people are spending doesn't necessarily mean.
Speaker 1 (19:31):
That the retailers that are offering those goods are growing
their profits. I mean they'll they'll price it to move it,
so we'll see how the earnings shakeout for the real tale.
Speaker 2 (19:42):
Good news is it's not a decline, yep, for sure.
All right. Coming up next, a look at the Lozel
local housing market. When to take advantage of buying or selling?
Coming up next, you're listening to Simply Money, presented by
all Worth Financial on fifty five KRC.
Speaker 1 (19:56):
The talk station. You're listening to Simply Money, said of
by all Worth Financial. I'm Bob sponsorer along with Brian James,
joined tonight by our Real Estate expert Michelle Sloan, owner
of Remax Time and Michelle, it's twenty twenty six, Happy
new year to you. And as we turn the page
(20:18):
and turn the page on a new calendar year, we
really need to get into what's going on with the
real estate market here in January of twenty twenty six,
now that the temperatures are subfreezing. What's going on in
the real estate market? How busy are you right now?
Speaker 4 (20:34):
Not too crazy yet, We're not in that frenzy of
the season. But there are good deals to be had
if for buyers out there in the world. And the biggest,
absolutely best thing that could happen is our mortgage rates
have dipped below six percent, so as of today, we're
(20:56):
at five point nine four for a thirty year fixed
strate mortgage. Now, obviously it's going to depend on your
credit and that information, but you know, if we're seeing
the trend going down and if we're in the fives,
I personally think that, in my expert opinion, that that
(21:17):
is the sweet spot for buyers to get back on
the horse and ride towards their new home.
Speaker 3 (21:25):
So, Michelle, what is it like We always talk about
the buying season, and you know, we talk about it
on the radio.
Speaker 2 (21:31):
All the time.
Speaker 3 (21:31):
This is not the buying season because, as Bob hinted at,
the weather kind of stinks and people don't want to
deal with it. Is there like a period of time
where your phone just stops ringing and it just goes
over the cliff and it's quiet for a while, then
it ramps up.
Speaker 2 (21:43):
Does it really work like that.
Speaker 5 (21:46):
In a certain sort of sort of You know, I
still get calls, but certainly not as many calls as
I get during the peak season.
Speaker 4 (21:57):
And really the peak season starts around to March and
April because it takes thirty to sixty days to close
on a property if you find a property. So I
always recommend, like everybody asks, when's the best time to
list my home for sale? When they're going to be
the most eyeballs looking at it. And honestly, I do
(22:19):
think there are a lot of people that are right
now that are looking at the market. They're watching the
realtor dot com and the different websites.
Speaker 2 (22:27):
There's a lot of.
Speaker 4 (22:28):
People just looking online, but they're not looking in person
just yet. So once March hits, and that's really again,
I find that I end up listening and getting under
contract more homes in March and April, and then they
close in May and June, and then by the time
(22:50):
we get to July we see a little bit of
a fall off again. So if we're looking at our
upcoming year, this is the planning season. So if you know,
if you're thinking about buying a home, now, it's an
awesome time to get with your real estate agent, find
a real estate agent that you want to hire, that
you want to work with, and you know, get under
(23:12):
You will have to get under contract, because that's the
new rule. If you're a buyer, you have to be
under contract with a real estate agent in order to
even view homes on the market. So that's something that
happened last year. It's a change from a lot of
people are like, I just want to look. Well, that's fine,
you can put you can go find an open house maybe,
(23:34):
but if you want to seriously look at a home
and you want to take an agent with you, you're
going to have to be have a contract with that agent.
Speaker 2 (23:42):
Okay, so what if it did does then yeah, I
actually went through that last In other words, the tire
kicking is over.
Speaker 3 (23:47):
Yeah, exactly, when you're curious.
Speaker 4 (23:51):
You gotta be serious, yeah.
Speaker 3 (23:53):
Miche, What if I'm a seller, So if I'm if
I'm in a situation where maybe my job changed or
something like that, I just got to sell my house,
maybe at the not the ideal time.
Speaker 2 (24:01):
What are those folks doing during this time of the year.
Speaker 3 (24:03):
Are they saying, you know what, we will just tough
it out until spring when the prices will be better.
Speaker 2 (24:07):
Or do they hang on or do they pull it
off the market? How does that work?
Speaker 4 (24:12):
Well? I recommend that you go ahead and put your
home on the market. If you're in a situation where
you need to sell because you're moving, or there is
some other circumstance personally that you have to sell your home.
You can't really sell your home unless it's on the market.
So yes, if you put your home on the market
in January or February, we may have fewer buyers looking
(24:36):
at it. I try to set the tone and you
have everybody just ready to understand that you're not going
to have ten showings on the first day. You're likely
to have maybe one showing a week. And if you're
getting one showing a week, that's good. And so we
have to set those expectations. Again, if I were in
(24:59):
a perfect way world and you don't have to sell
and you have a little bit of time, I recommend
you go ahead and put your home on the market
in March. That way, you're beating the rush of other
properties going on the market, and you're going to have
more eyeballs on it. You're going to have more potential
buyers looking at the home. It might be a little
slow to start, but again, you're going to get your
(25:20):
professional photos. It takes a minute to get your house ready,
and I want to make sure now is the time
and we're not in the same time frame as we
were a few years ago. That homes will sell no
matter what it looks like. You have to do the
prep work again, and being in the business for twenty years,
I think it's so very, very very important to have
(25:43):
your home ready, staged, decluttered, all of those things that
we talk about if you're planning to sell your home.
Speaker 1 (25:51):
Yeah, Michelle, you almost anticipated exactly my next question. And
it goes back to, you know, if March and April
or kind of go time for listing the prop it
would seem to me January and February are prep time,
so you know, I know you're very thorough in helping
people get their home actually ready to market in the
(26:11):
best condition at the best price.
Speaker 2 (26:13):
And that doesn't take that's not just a forty eight
hour process.
Speaker 1 (26:17):
Walk people through what they need to be thinking about
now if they're going to work with a real estate
professional like yourself to really have the best outcome.
Speaker 2 (26:27):
You know, when the calendar does flip around March.
Speaker 1 (26:29):
April, May, June, and when you really want to sell
your house, what do we need to be doing now
to get ready?
Speaker 4 (26:35):
Yeah? Absolutely, now is the time to really, like I said,
lock in your real estate agents, have them talk to you,
talk to a couple different real estate agents. Here's the thing.
If you are a seller, you have an opportunity. You know,
you may call me and say, Michelle Sloane, I'd like
you to come look at my house I'm thinking about selling.
(26:57):
And then you're going to call another agent with a
different broker and they're going to come over and maybe
you get along with me better, and you you like
what I have to say, and you know, we think
that we have a good working relationship because it is
a relationship after all, and it's one that you really
have to trust the agent is going to do what's
(27:17):
in your best interest. So talk to a couple of agents.
I wouldn't say that you necessarily need to talk to
more than two, but if the first two are does,
go ahead talk to another one. That's something that you
can be doing right now. The other thing is listen
to the advice. I know you think your house is beautiful.
I know that you think your house is worth a
(27:38):
million dollars. Listen to your real estate agent because it
may not be beautiful for everybody.
Speaker 1 (27:44):
You mean, you might not like my shag carpeting in
the third bedroom. That might actually have to be replaced.
Speaker 2 (27:50):
Nobody likes it.
Speaker 4 (27:50):
Don't have that in there. I told you to get
rid of that.
Speaker 2 (27:53):
You've been telling me that for months.
Speaker 1 (27:55):
All right, Hey, great advice, Great advice as always tonight
for our real estate expert, Michelle Sloan, owner of Remax 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 on Bob Sponsller
(28:17):
along with Brian James. You have a financial question you'd
like for us to answer. There's a red button. You
can click while you're listening to the show. If you're
listening to the show on the iHeart app, simply record
your question and as always, it will come straight to us.
All right, Brian, Mark and Mason says, I'm considering a
second home mainly for lifestyle reasons, not return. How should
(28:40):
I think about that decision without forcing it to just
justify it financially. I love this question because this is
what a lot of people do. They buy something because
they want to buy it, and then they walk in
here and try to talk us into why it's a
great quote unquote investment. It's great to see Mark walking
in here with his eyes wide open.
Speaker 2 (29:00):
Yeah, this is good. So this is a good instinct,
Mark that you're thinking about here.
Speaker 3 (29:03):
And by the way, my job and I don't know
if you feel this way, but over the decades it
has evolved into begging people to spend their own money.
So this isn't necessarily a bad thing that somebody's considering this.
I think we have to go in like you said, Bob,
eyes wide open.
Speaker 1 (29:17):
So this is why all the wives you know in
our couple's client relationships love you more and more each year, Brian,
you give them permission to go to the mall and
buy new cars, and it's wonderful.
Speaker 3 (29:30):
I got I have plenty of wives who don't want
their husbands thinking that way on the spending side, so
I think that has balanced out a bit. But in
any case, but if it fits the planet, something you
want to do. We are not on this planet to
look at at a growing pile of money, right when
nobody's going to sit on their deathbed and talk about
that time they didn't spend that money. So if this
is truly something that your family would enjoy and it
(29:51):
fits the financial plan, right, that's of course, that, of
course is very important. We need to make sure it's
not going to disrupt your ability to pay your bills
in the short run. But if those things are all
true and by all means, let's figure out a way
to do it. What I would say the first thing,
if you know you really want to do it, but
you're feeling your responsible on spending the money, first I
would say, redefine your terms. Buying a second home is
not spending. It is investing in an ill liquid asset
(30:14):
that's not going to be all that productive financially.
Speaker 2 (30:15):
But you've already referenced that mark.
Speaker 3 (30:17):
You've already said that I don't want this to justify
itself financially. I just want to be in a good place.
But the eyes wide open part. If you're thinking Florida,
as many people in this area tend to think over
the decades, be looking at those homeowners association fees, be
looking at property taxes and all the different whatever it
is that you have to pay just for the privilege
of owning it. I'm not even talking about the mortgage.
Speaker 2 (30:38):
That said.
Speaker 3 (30:39):
Also, speaking of mortgages, be open to it. Right just
because you have signed on for a thirty year mortgage
for a second home that maybe you didn't have to,
doesn't mean you're going to have a mortgage for thirty years.
You may simply be buying yourself time. So, for example,
if you were looking at this right now, then you
could sign up for a thirty year mortgage and that
will buy you time over the next three, say four
(31:00):
years to slowly liquidate other assets and pay taxes on them,
and then pay off that mortgage over time. But again,
just be open to more creative ideas. Then I'll just
sell everything and write a check. But again, first and foremost,
if This is truly a lifestyle decision. Make sure it
doesn't disrupt your other bill paying abilities. That's the important part. Okay,
we're gonna move on to Rachel and Anderson. Rachel says
(31:21):
she's helping her parents out part of that sandwich generation.
I'm guessing our parents are starting to need more help,
she says, and it's affecting our own plans. How do
families support aging parents without quietly sacrificing their own future.
Speaker 2 (31:32):
This is a tough one, Bob. Yeah, it is a
tough one.
Speaker 1 (31:35):
And this is a situation I'm going through with you
more than a few of my clients right now in
their families.
Speaker 2 (31:40):
It's tough.
Speaker 1 (31:41):
So I'd say the two words that jump out to
me is setting some boundaries, you know, so boundaries.
Speaker 2 (31:48):
And then communication. And here's what I mean.
Speaker 1 (31:51):
What you don't want to do is just open up
the checkbook and pour out funds after funds and put
yourself in a situation twenty years from now that you're
trying to help your parents deal with today.
Speaker 2 (32:02):
That goes for kids too.
Speaker 1 (32:03):
Yeah, you got you got to put some boundaries or
limits around what you can really responsibly afford to do
in this area. Without derailing your own long term plan.
And then a lot of times this is both a
money decision and just a you know, how much stamina
and time do I have every day to deal with this?
And sometimes and we deal with this, Brian all the time.
(32:24):
Some of the kids don't live in the same city
as their parents, a couple do, and the ones that
do tend to take on a huge amount of the burden,
you know, going over there and taking care of things,
buying groceries, cleaning the house, you know, making sure mom.
Speaker 2 (32:38):
And dad are safe. It's a tough situation.
Speaker 1 (32:41):
So I would say sit down, first of all, and
update your financial plan, Rachel, and just put some boundaries
around what you can really afford to do financially, and
then proactively communicate with both your parents and your siblings
if you have them, and try to develop a team
approach here where everybody is doing what they can do
(33:03):
to protect the long term dignity and care for your
parents without putting any one of the siblings in either
financial jeopardy or just you know, emotional exhaustion as you
go through the process. I hope that helps, all right,
Chris and fort Thomas says, I want to prioritize experiences
over things. I love this, but I'm not sure how
(33:24):
to plan for that without losing structure. How do I
budget for what truly matters?
Speaker 2 (33:29):
Brian? This is right in your wheelhouse.
Speaker 3 (33:31):
Yeah, I love this stuff because I'm not a person
who wants to go to that same beach I've been
going to for the last fifty years of my life.
Beaches are great, and margarita's are awesome, but that stuff
kind of has its limit.
Speaker 2 (33:43):
I'm the same way. I want different experiences too.
Speaker 1 (33:44):
So what I would suggest you want to have your
McDonald's breakfast at like six or seven different McDonald's exactly.
Speaker 2 (33:51):
I want to see if it's different anywhere else. Yes, exactly.
But now think of it this way.
Speaker 3 (33:55):
Maybe define, define the experiences you want to have, and
then assign a budget to each of them. So you
might have that two week summer family trip that's where
you are going to hit the margarita in the beach
and get sand in your underwear and all that kind
of stuff.
Speaker 2 (34:05):
That's great, go do it. That's one of them.
Speaker 3 (34:08):
And then monthly local experiences so there's maybe there's plenty
of things right around to your hometown that.
Speaker 2 (34:13):
You've never done. We'll come up with a budget for that.
Speaker 3 (34:16):
You can also look at you know, some people will
categorize an annual learning or enrichment trip, you know, something
where I'm going to go somewhere, but it's going to
be much more focused on, you know, putting my brain
in a place that's never been. Maybe that's museums, maybe
it's art, whatever it is, rather than sitting on my
rear end on the beach and drinking margaretas. And again
I'm still a fan of that. Don't don't let me,
I can tell don't let me get that wrong. And
(34:37):
then also maybe you're hosting friends and family, if you've
got people coming in from elsewhere and you want to
entertain them around town. So the point would be figure
out what the categories of the experiences you want to
have are and then assign different things you might do
within that, and then you can start to put price
tags on everything.
Speaker 1 (34:52):
All right, Coming up next, Brian has his bottom line,
and stay tuned for this segment. Brian's going to help
all you procrastinators out there by telling you what you
could still do to help your twenty twenty five tax bill,
even though you've waited till twenty twenty six to get started.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
(35:19):
Simply Money presented by all Worth Financial, umbop sponsorer along
with Brian James, and Brian's got some good stuff for us,
For all of us that like to put off tax
planning for twenty twenty five until January or February of
twenty twenty.
Speaker 2 (35:32):
Six, this is good stuff. There's some real nuggets in here.
Speaker 3 (35:34):
Hey, procrastinators, You've still got some time to do some stuff.
Even though New Year's Eve has come and gone. There
are still things that you can do before tax time
comes here in April. So, first off, a lot of
people know this, but some people are new to it.
You can still contribute to an IRA for last year
all the way up until the tax filing deadline. Anybody
can contribute up to seven thousand dollars to an IRA.
Speaker 2 (35:56):
Right.
Speaker 3 (35:57):
There are income limitations. Let's not forget that. Your deductibility
may or may may or may not happen. But don't
forget about the back door wroth. But that's a little
bit of a different Radio segment. We'll get into that
another time, but the point is, if you want to
do these things, you can still do them up until
tax time. If you are fifty year older, there's a
catch up provision that allows up to eight thousand dollars.
Speaker 2 (36:18):
Now.
Speaker 3 (36:18):
If on the traditional side, of course, you're looking at
reducing your taxable income, that's a deduction that will help
you this year. Or on the rosside, if you make
too much money, you may only have the choice of
doing a straight up wroth IRA contribution, or you may
have to do a backdoor WROTH, which means you're literally
going through the back door to do it because your
income is too high.
Speaker 2 (36:37):
But that would be a decision. It's going to help
you in the future.
Speaker 3 (36:39):
You don't get a deduction on the WROTH, but you'll
never pay taxes on whatever it grows to.
Speaker 2 (36:43):
Don't stick the stuff in a ced folks.
Speaker 3 (36:45):
If you're going to do a roth IRA, invested in
something that has the ability to grow, because it doesn't
help you at all until it has grown somewhere. Second,
Health savings Accounts HSA is one of the most powerful
and most overlooked tax tools that's out there. If you're
covered by a high deductible health plan. This has to
be something that you chose back in the November December
timeframe when your company was chasing you for your benefit decisions.
(37:07):
But a high deductible health care plan comes along with
an HSA account that you can be funding with your
own money. So the limits here for four and fifty
bucks for individual coverage, eighty three hundred per year for
family coverage. If you're fifty five or older, you can
add an extra thousand dollars catch up contribution. But the
reason we love these is because you can get a
triple tax benefit out of this. You can get deductions
(37:29):
on the way in if you invest it properly, which
is a huge step a lot of people miss. Don't
just throw it in there and ignore it. Make sure
it's invested in something, and you can move these dollars.
You do not have to stay with the bank that
your company has set you up with, but if you
invested in some kind of mutual fund, any of that
growth is tax free, and then withdrawals down the road
for qualified medical expenses themselves are tax free.
Speaker 2 (37:49):
Now here's the big bullet that few people get. You
can if you.
Speaker 3 (37:52):
Hang onto your receipts for twenty twenty six and you
cash them in in twenty thirty five. That means you
got ten years worth of free tax free growth and
you'll be taking that distribution out pay any bill you
want with it. But you're basing it off of something
that happened in twenty twenty five. So hang on to
those receipts, let it grow, then withdraw it.
Speaker 1 (38:10):
Yeah, most people never think of that, and that's a
great idea, great way to kill two birds with one stone,
maximum tax deferral, tax deduction and then investing.
Speaker 2 (38:20):
That money and using it later. There's nothing else quite like.
And you can still contribute for last year up until
tax time. All right, thanks for listening tonight.
Speaker 1 (38:27):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC, the talk station
Should you take advantage of the explosions of alternative investments.
Now we'll explore that tonight. You're listening to Simply Money
presented by all Worth Financial. I'm Bob Sponseller along with
Brian James.
Speaker 2 (00:18):
Well.
Speaker 1 (00:19):
Right now, the most exciting stuff in the financial services
industry is in investing. Isn't happening in just the stock
and bond market. It's happening kind of what we'll call
off to the side. Private market investments are booming, and
that's stuff that just used to be available for big
institutional investors and it's now within reach of everyone, seemingly,
(00:42):
and the whole idea of what it means to be
diversified is starting to shift just a little bit. And
we're not talking just about private equity tonight, the whole
alternative investment space.
Speaker 2 (00:53):
So that's what Brian and I want to jump into
for a little.
Speaker 1 (00:56):
Bit tonight, because there's a lot to talk about here
and it can get very complex very quickly.
Speaker 3 (01:01):
It can everything but stocks, bonds, mutual funds is what
we're talking about today. So as we start off twenty
twenty six, let's start with data.
Speaker 2 (01:07):
You know, I love my data, Bob. That's where we're
going to start today.
Speaker 3 (01:10):
So alternative investments have topped over twenty six trillion dollars
in total assets under management, private equity and hedge funds.
Of course, those are the most commonly known people, most
people are most familiar with. This is coming from a
website called coin law dot io, which aggregates financial data
and trends and things like that. So let's take a
look at where all this is playing out and then
(01:31):
in the alternative landscape, and how are the more sophisticated
investors taking advantage of these opportunities and working these assets
in the long term plans? Starting to get more and
more questions about whether whether these types of things fit
into a more standard financial plan.
Speaker 1 (01:45):
Yeah, and the whole thing here within a well constructed
financial plan, Brian. And that's what the segment like this
is difficult.
Speaker 2 (01:52):
But when you when.
Speaker 1 (01:53):
You throw out the world the word alternative investments or
the term alternative investments, just.
Speaker 2 (01:58):
Like we're about to throw out another term cryptocurrency. Man,
there's a lot.
Speaker 1 (02:02):
Of stuff packed into those couple of words, and it
gets complex, and we're gonna do the best we can
to kind of, you.
Speaker 2 (02:10):
Know, give the overview of this stuff. But yeah, let's
start with gold.
Speaker 1 (02:14):
It's been a classic hedge, not a growth engine over time.
But let's face it, Brian, over the last couple of years,
the price of gold has just been skyrocketing, and like
anything else in the financial world, once we have two
or three tremendously good up years, then the questions start coming,
should I get into it now? Kind of like buying
(02:35):
Navidia stock after it went up a few hundred percent.
Speaker 3 (02:37):
Yeah, So to me, gold is nothing but market market
timing because we only hear about it when people get
a little spooked, and we normally really start hearing about it,
like you just said, after the horses out of the barn,
and gold has run up because there are scary headlines
out there, and that's kind of the situation we're in
right now. But nobody brings up gold in terms of
I should buy this and sit on it for the
rest of my life. Some people do that, and they
tend to throw it in a safe and let the
(02:59):
kids deal with it and they inherit it. But to me,
gold is something when people start bringing it up that
that don't have much experience with precious metals in those
kinds of things. Then what they're thinking is should I
put my money into that, into something that I perceive
to be more a little safer for the time being
until things settle down. That is no different than I
should sell all my investments because I read a scary
headline this morning, and I will worry about it later
(03:21):
when to get back in. That's how most people tend
to think about gold. But like you said, gold is
not an asset that is that is aligned with a
growth philosophy. It does not spit out income. It's not
going to invent the next you know, the next iPhone
we all have to have. It's not going to find
a new market to sell, and it's simply worth what
people think it is. So all you're really trying to
do is time human emotions. So I'm not saying it's
(03:42):
a bad investment. It is a decent hedge against stuff
that goes up and down.
Speaker 2 (03:46):
But if you are not.
Speaker 3 (03:46):
Somebody who really truly panics between the peaks and valleys
of the overall market, then I don't feel like it's
got a very significant place in a well balanced portfolio.
Speaker 1 (03:55):
Yeah, decent inflation hedge for sure. I mean it beats
sitting in cash. But what a lot of people don't
bargain for when they get into gold is it's a
lot more volatile to the upside and the downside than cash.
So you know, it's not a CD replacement. So again
you've kind of made the point there. Look carefully and
make sure let me polish it off there on. Could
(04:15):
you just triggered a thought for me too.
Speaker 3 (04:17):
Remember it's gold is worth what people think it is,
so right now gold is worth a lot because a
lot of people feel like it's a good part of
their portfolio. Sooner or later, the dust will settle, as
it has done over the many, many cycles we've had
over the decades.
Speaker 2 (04:28):
You can look at and.
Speaker 3 (04:29):
Eventually the herd is going to move the other way
and it won't feel that cash at all.
Speaker 2 (04:32):
It will drop.
Speaker 1 (04:33):
Yeah, it may and and I think a lot of
people pile into gold based on this thirty eight trillion
dollar and accumulating US debt, which that isn't going away
anytime soon. So yeah, it's it's just always an interesting
asset class. All right, Let's dive into crypto, because, man, Brian,
when we talk about crypto currency, there's a whole lot
(04:53):
of stuff out there and we got to try to separate.
I guess what's become part of the institutional acid allocation
class now, I guess some responsible, responsibly managed, regulated ETFs,
for example, versus some of this just garbage out there,
these doge coins and coins that are being advertised in
(05:14):
social media. There's a wide variety and vast difference between
a good, diversified you know, bitcoin ETF and some of this.
Speaker 2 (05:24):
What I'll call just flat out garbage that's out there.
Speaker 3 (05:26):
Yeah, and I think we're starting there's a light at
the end of the tunnel for the garbage. I mean,
I'm hoping we are past the days where the Hawktua
girl can release her own crypto for whatever stupid reason,
for her twelve minutes of fame. I'm not even gonna
give her fifteen minutes of fame, and she's long gone anyway.
But I hope we are moving to a part I
don't think the big financial institutions we're ever going to
(05:48):
buy the Hawktua coin. However, they are starting to build
structures around having cryptocurrency as part of a portfolio. This
isn't a bad thing. Sophisticated investors are starting to pay
attention to this. The good reasons are there is potential
for uncorrelated return streams, something that isn't regular stocks and bonds,
something else that can command the attention.
Speaker 2 (06:06):
Of investors for a while.
Speaker 3 (06:07):
Pretty good liquidity because there are significant markets for these
very rapid market responsiveness. Now that goes both ways, right,
that's not only a good thing. That just means it
moves quickly in either direction. More real world use cases
that every time you hear some industry talking about the
blockchain that came from cryptocurrency and then the settlement technologies,
this means we can move money faster, and we can
complete transactions more quickly. Expanded access through all the custodial
(06:32):
platforms meaning your fidelities in your schwabs and so on
and so forth, and regulated vehicles. It's starting to look
more like a tool that the average investor can use.
That said, there is still risk, right, There's still going
to be extreme volatility. You're never certain of the valuation
of these things. There is a commodity aspect to these things. Still,
it's still worth what the crowd says. Yeah, and again
(06:52):
back to why people use alternative investments in the first place.
As part of a well diversified financial plan and strategy.
A lot of people are looking for negatively correlated assets,
you know, in other words, assets that zig when the
rest of their portfolio zags. Brian Cryptocurrency did not behave
that way in twenty twenty five when we saw corrections
(07:14):
in tech stocks, for example, I mean, the price of
bitcoin fell and fell precipitously. So to me, that's not
a reason to own cryptocurrency is to kind of hedge
or offset any volatility in the rest of your portfolio,
because it just isn't It isn't working that way. Yeah,
we don't have enough history yet to truly say this
(07:35):
is a hedge. This is not, because there just hasn't been,
and it's going to take decades really for us to
get to that point to truly understand how does cryptocurrency
behave in various interest rate cycles. We've seen a few
things like that, but we've only seen it for the
first time. And the more people get into it, the
more differently it will behave as the flock of birds
gets bigger and more unpredictable.
Speaker 1 (07:55):
All right, let's get into an asset class that might
actually make a lot of sense for some growth orient
in long term investors, folks that can be patient and select,
you know, investments appropriately.
Speaker 2 (08:07):
And that's the whole private equity space.
Speaker 1 (08:09):
This whole space has really taken off, and I think
it will continue to do. So let's talk about what
private equity even is. It's where you have the opportunity
to invest in companies and these are usually early stage
growth companies that are not traded in the public markets.
You cannot buy their public stock. It's a good thing
(08:30):
to get in early on some of these if you
know what you're getting into. I think a lot of
people Brian look at this as kind of like the
IPO space, where man if I could get in early,
like the owners of this company or the senior executives,
I'm going to make a killing. They want they want
to swing for the fence and make a huge return.
You got to know what you're getting into here. And
(08:52):
when you're talking to an advisor or somebody in the
financial services industry, I'm just telling you're not going to
get in to the earth stuff where it's just free money.
So you better have somebody that can vet what this
stuff really is, evaluate the fees, evaluate the liquidity issues.
There's a lot that goes into evaluate, evaluating this whole
(09:14):
private equity space.
Speaker 2 (09:15):
It can be play.
Speaker 1 (09:17):
A great role in a long term portfolio if you
have somebody you know selecting the right place to be
or better yet not to be.
Speaker 2 (09:25):
Yeah, and these things may be closer to you than
you think.
Speaker 3 (09:28):
If you're driving down the street going on your commute
for the five billionth time, and you notice that that
little vet clinic on the corner that's been there for
fifty years, all of a sudden has a new logo
and a new name, you can pretty you can be
pretty confident that there's a private equity firm behind that.
What they're starting to do for those types of small businesses.
Whoever that veterinarian is to beat that example to death,
(09:48):
wants to retire at some point, and for some of
those folks, a private equity exit is how they do it.
They sell their practice into a larger entity, and that
entity combines, combines expenses, and takes advantage of a kind
that means a scale and allows other people to invest
in it.
Speaker 2 (10:03):
Now, it does create a different environment.
Speaker 3 (10:04):
Sometimes in those four walls you might hear some grumpy
people because of the changes that are coming.
Speaker 2 (10:10):
But if you're standing.
Speaker 3 (10:11):
Outside those four walls wanting to invest in it, Just
beware that's the kind of thing you're investing in. You're
not going to see that little vet clinic. Inside a
mutual fund or something like that. The returns can be better,
but they can go south as well because they're just
more volatility, less liquidity. That's for darn shirt. There isn't
a publicly traded market. That's literally the difference. Publicly traded
means I can see the ticker symbol, I can see
(10:31):
the price all day every day. Private means I'll probably
hear from an accounting firm a few times a year
as to what it's worth.
Speaker 1 (10:38):
And that's where you want to evaluate. You want to
just be in one or two or five companies. Do you
really want to spread out your risk and be in
a broadly diversified private equity portfolio, maybe a fund to
fund approach with several different managers. Again, watch the fees,
watch the liquidity terms, Watch how taxes are reported.
Speaker 2 (10:57):
A lot of people get into.
Speaker 1 (10:58):
This stuff and they have no idea that they're gonna
get k one tax reporting, Brian, you and I talk
to clients all the time. You want you want to
make somebody unhappy, you know, real, quickly tell them they're
not gonna be able to file their tax return until
they're October, so you better know what you're getting into
in terms of tax reporting.
Speaker 2 (11:16):
That is a virtual guarantee.
Speaker 3 (11:17):
If you're gonna get into these types of things, you're
done filing in April, You're gonna file an extension, and
you're gonna figet about all of it until August.
Speaker 1 (11:23):
That's a fact, all right, Brian, walk us through real
estate because you know, well, we again another term where
we throw out, well, real estate.
Speaker 2 (11:30):
Any more of it, right, Bob.
Speaker 1 (11:31):
You can either own it yourself or you can have
a professionally managed portfolio.
Speaker 2 (11:36):
Both options come with various pros and cons.
Speaker 3 (11:39):
Yeah, and then I think we've officially reached that reach
the stage where if you are somebody who has never
owned it and you're thinking about picking up one or
two apartment buildings on the side to run and to
have a stream of income, I'm just gonna go ahead
and say, don't people who do this for the first
time and have never it seems like they cannot wait
to get out of it after two or three years
maybe being invested in these things. Now if you figured
out the game and you know how to make a
(12:00):
scalable business out of it. That's a whole different environment.
But if you just want to have something, if you
refer to it as passive income, rest assured. It ain't passive.
It's very active income, unless you're going to hire a property
management firm, in which case you're probably going to get
more like CD level returns out of an interpet.
Speaker 2 (12:15):
Yeah.
Speaker 1 (12:15):
And then if you go the institutional side and get
into a professionally managed rate, that comes with some complexities,
you know, different set of complexities. A lot of times
these scenes have high fees, high commissions, you know, some
liquidity constraints. So again, buyer beware when you're evaluating this,
and in the best case, work with a good fiduciary advisor.
(12:36):
Here's the all Worth advice. Alternatives can add real value
to a well constructed portfolio, but only when they're thoughtfully
integrated into a plan that fits your unique goals, risk
and liquidity needs. So make sure you're working with a
fiduciary who truly puts your interests first.
Speaker 2 (12:55):
Well.
Speaker 1 (12:55):
Five of the nation's biggest banks just reported their fourth
quarter earnings, and we've got them all for you. We'll
break it down and what it could mean for investors.
Coming up next, you're listening to Simply Money presented by
all Worth Financial on fifty five KRC, the Talk station.
You'll look the Money presented by all Worth Financial on
(13:17):
Bob Sponsella along with Brian James. Straight ahead at six
forty three, we're diving into the questions that hit home
for many of you, from how to help aging parents
without drailing your own retirement plan, to the right way
to prioritize experiences over things plus Medicare IRMA surprises, and
why outdated retirement projections might be leading you off track. Brian,
(13:42):
sharpen your pencil here because we got a lot to
talk about coming up here at six forty three. All right,
the big banks continue to report fourth quarter earnings and
the news seems to be mixed depending on which bank
we're looking at. And remember, big bank earnings can be
somewhat significant to how everybody's viewing the broader market because
they do kind of act like a pulse check on
(14:05):
the broader economy and the overall financial system. So let's
get into it. We got a few banks that have
already reported for the most part. The news has been
pretty good. Nothing to really, you know, cause anyone to
lose any sleep though.
Speaker 3 (14:18):
Yeah, I think we're in a solid position here. But
just I want to reiterate why you said what you
did about that bank earnings are Banks aren't the sexiest
things to look at. That's not the most exciting industry
to pay attention to. However, like you said, it's just
the pulse. If banks are doing well, that means other companies,
other businesses are probably borrowing money so they can expand
and grow and so forth.
Speaker 2 (14:38):
That's a great sign for the economy.
Speaker 1 (14:39):
Yeah, and you hit the magic word borrow. I mean
this whole lot of these gross companies function on access
to credit, access to money, liquidity, So we got to
have our banking system healthy or else a lot of
things can shut down in a hurry. But let's get
into some of these major bank and their fourth year.
Speaker 3 (14:57):
So some of the headlines, and we've been talking about
this all week because it's bank week. So Goldman Sacks,
Goldman Sacks had a great earnings report here. They blew
through their expectations. And again, as we always say, remember
it's not about what they did, it's about whether the
analysts were right or not, so they blew through the
analyst expectations for their equities trading revenue. Golden Sacks is
a slightly different bank than what you might be thinking
of on the Street corner. All time Wall Street record
(15:19):
of four point three billion dollars in the final three
months of last year.
Speaker 2 (15:23):
I know I sleep better knowing those Goldman.
Speaker 3 (15:25):
Sachs folks are going to get giant bonuses here in
the next few months. Anyway, they increased their targets and
this is this is really what the market can care about.
They also increase their own internal targets for their asset
and wealth management businesses, and those those themselves posted a
quarterly record for fees. They're now targeting a thirty percent
pre tax margin and the medium term, so in the
intermediate term, which was up from the mid twenties, and
(15:47):
returns in the high teens.
Speaker 2 (15:48):
Blah blah blah. These are all numbers.
Speaker 3 (15:50):
Basically, they're saying, we thought we were going to do good,
now we think we're going to do better. That's a
good sign from for at least one bank.
Speaker 1 (15:56):
Yeah, and I'd say Morgan Stanley's report was almost identical.
I mean, they hi the highlight in the report was
how well their wealth management and asset management business is doing.
Let's face it, Brian, we've all heard the TV commercials.
You do better when we do better, when you do better, right,
I mean, if the markets go up fifteen, eighteen, twenty percent,
(16:16):
you know a few years in a row, guess what,
wealth managers are going to make more money because there's
more assets under management, and that is.
Speaker 2 (16:23):
Playing itself out in the earnings report. All right.
Speaker 1 (16:25):
Wells Fargo, however, missed analytics analyst profit estimates in the
fourth quarter.
Speaker 2 (16:33):
There.
Speaker 1 (16:33):
They got some other issues going on over there at
Wells Fargo, but you know, they missed expectations. A stock
guid hit a little bit. Bank of America, City Group,
you know, on and on. Bank of America had an
earnings beat. City Group had a little hiccup here, taking
a little bit of a loss related to its plan
to sell some assets in Russia. Brian, Without getting into
(16:55):
the weeds here, Russia is probably not the best place
to be trying to operate right now.
Speaker 3 (17:01):
So yeah, Russia has always been a little bit of
the wild West, but I'm not sure right now that
I'd want to be partnering out there. But in any case,
let's get local, right, So we got a big bank
right here in town.
Speaker 2 (17:10):
How are they looking?
Speaker 3 (17:12):
Fifth Third Bank just got approval to merge with Comerica Bank,
which is mostly up in Michigan. Federal Reserve finally approved.
It's about almost an eleven billion dollar deal. And I
know Fifth Third has been on the hunt for a
long time for a move like this. This goes back,
you know, more than a decade in terms of their
desires because of the banking industry for these sort of
mid level and Fifth Third is a little more than
(17:32):
a mid level bank. But these regional banks, it's it's
very much acquire or be acquired, and they still want
to be the hunter.
Speaker 2 (17:38):
And so far, so good. But the Federal Reserve finally approved.
Speaker 3 (17:41):
That deal and that that will allow Fifth Third to
become one of the largest banks combined. It's going to
be the ninth largest bank in the United States, two
hundred and ninety billion dollars in total assets, reaching seventeen
of the twenty fastest growing US markets now Texas, California, Florida,
and across the southeast. A lot of us think is
Fifth Third to someplace that Uncle Charlie worked a million
(18:02):
years ago. Now it's becoming a national bank. A little bit,
a little bit different.
Speaker 1 (18:05):
Now, all right, Well, let's turn our attention to the
broader economy and a new report that suggests, well, like always,
we continue to spend no matter what's going on, Brian
and I will maintain this until I die. The average American,
if we have a dollar in our pocket, we're going
to spend a dollar about a dollar and five cents.
That's a lump in my pocket.
Speaker 2 (18:24):
I want to get rid of. Yeah, I'm American, aren't
it Exactly so?
Speaker 1 (18:27):
US retail sales rose in November by the highest mark
since July, fueling a rebound in auto purchases and very
resilient holiday shopping. Consumers spent a record breaking amount online
during the holiday season that should probably come as no surprise,
and spending at restaurants and bars, the only service sector
(18:49):
category in the retail report, gained zero point six percent
after falling the prior month. I always go back to
my personal you know, anecdotal evidence of how the economy doing.
Look at a average Applebee's parking lot on a Tuesday night.
If that place is packed, People have jobs, have money,
they're out spending.
Speaker 2 (19:08):
Life is good, Brian, but unlimited appetizers.
Speaker 3 (19:10):
So they're making smart financial decisions right and bringing doggy bags.
Speaker 2 (19:14):
I'm sure.
Speaker 3 (19:14):
Now I want to throw out here the data we're
sharing here, This is not adjusted for inflation, so a
lot of this can can indicate that people are simply
doing what they've always done. It's just costing more because
this report is simply telling telling us how many dollars
we're spending these various categories.
Speaker 2 (19:28):
Yeah, and the fact that people are spending doesn't necessarily mean.
Speaker 1 (19:31):
That the retailers that are offering those goods are growing
their profits. I mean they'll they'll price it to move it,
so we'll see how the earnings shakeout for the real tale.
Speaker 2 (19:42):
Good news is it's not a decline, yep, for sure.
All right. Coming up next, a look at the Lozel
local housing market. When to take advantage of buying or selling?
Coming up next, you're listening to Simply Money, presented by
all Worth Financial on fifty five KRC.
Speaker 1 (19:56):
The talk station. You're listening to Simply Money, said of
by all Worth Financial. I'm Bob sponsorer along with Brian James,
joined tonight by our Real Estate expert Michelle Sloan, owner
of Remax Time and Michelle, it's twenty twenty six, Happy
new year to you. And as we turn the page
(20:18):
and turn the page on a new calendar year, we
really need to get into what's going on with the
real estate market here in January of twenty twenty six,
now that the temperatures are subfreezing. What's going on in
the real estate market? How busy are you right now?
Speaker 4 (20:34):
Not too crazy yet, We're not in that frenzy of
the season. But there are good deals to be had
if for buyers out there in the world. And the biggest,
absolutely best thing that could happen is our mortgage rates
have dipped below six percent, so as of today, we're
(20:56):
at five point nine four for a thirty year fixed
strate mortgage. Now, obviously it's going to depend on your
credit and that information, but you know, if we're seeing
the trend going down and if we're in the fives,
I personally think that, in my expert opinion, that that
(21:17):
is the sweet spot for buyers to get back on
the horse and ride towards their new home.
Speaker 3 (21:25):
So, Michelle, what is it like We always talk about
the buying season, and you know, we talk about it
on the radio.
Speaker 2 (21:31):
All the time.
Speaker 3 (21:31):
This is not the buying season because, as Bob hinted at,
the weather kind of stinks and people don't want to
deal with it. Is there like a period of time
where your phone just stops ringing and it just goes
over the cliff and it's quiet for a while, then
it ramps up.
Speaker 2 (21:43):
Does it really work like that.
Speaker 5 (21:46):
In a certain sort of sort of You know, I
still get calls, but certainly not as many calls as
I get during the peak season.
Speaker 4 (21:57):
And really the peak season starts around to March and
April because it takes thirty to sixty days to close
on a property if you find a property. So I
always recommend, like everybody asks, when's the best time to
list my home for sale? When they're going to be
the most eyeballs looking at it. And honestly, I do
(22:19):
think there are a lot of people that are right
now that are looking at the market. They're watching the
realtor dot com and the different websites.
Speaker 2 (22:27):
There's a lot of.
Speaker 4 (22:28):
People just looking online, but they're not looking in person
just yet. So once March hits, and that's really again,
I find that I end up listening and getting under
contract more homes in March and April, and then they
close in May and June, and then by the time
(22:50):
we get to July we see a little bit of
a fall off again. So if we're looking at our
upcoming year, this is the planning season. So if you know,
if you're thinking about buying a home, now, it's an
awesome time to get with your real estate agent, find
a real estate agent that you want to hire, that
you want to work with, and you know, get under
(23:12):
You will have to get under contract, because that's the
new rule. If you're a buyer, you have to be
under contract with a real estate agent in order to
even view homes on the market. So that's something that
happened last year. It's a change from a lot of
people are like, I just want to look. Well, that's fine,
you can put you can go find an open house maybe,
(23:34):
but if you want to seriously look at a home
and you want to take an agent with you, you're
going to have to be have a contract with that agent.
Speaker 2 (23:42):
Okay, so what if it did does then yeah, I
actually went through that last In other words, the tire
kicking is over.
Speaker 3 (23:47):
Yeah, exactly, when you're curious.
Speaker 4 (23:51):
You gotta be serious, yeah.
Speaker 3 (23:53):
Miche, What if I'm a seller, So if I'm if
I'm in a situation where maybe my job changed or
something like that, I just got to sell my house,
maybe at the not the ideal time.
Speaker 2 (24:01):
What are those folks doing during this time of the year.
Speaker 3 (24:03):
Are they saying, you know what, we will just tough
it out until spring when the prices will be better.
Speaker 2 (24:07):
Or do they hang on or do they pull it
off the market? How does that work?
Speaker 4 (24:12):
Well? I recommend that you go ahead and put your
home on the market. If you're in a situation where
you need to sell because you're moving, or there is
some other circumstance personally that you have to sell your home.
You can't really sell your home unless it's on the market.
So yes, if you put your home on the market
in January or February, we may have fewer buyers looking
(24:36):
at it. I try to set the tone and you
have everybody just ready to understand that you're not going
to have ten showings on the first day. You're likely
to have maybe one showing a week. And if you're
getting one showing a week, that's good. And so we
have to set those expectations. Again, if I were in
(24:59):
a perfect way world and you don't have to sell
and you have a little bit of time, I recommend
you go ahead and put your home on the market
in March. That way, you're beating the rush of other
properties going on the market, and you're going to have
more eyeballs on it. You're going to have more potential
buyers looking at the home. It might be a little
slow to start, but again, you're going to get your
(25:20):
professional photos. It takes a minute to get your house ready,
and I want to make sure now is the time
and we're not in the same time frame as we
were a few years ago. That homes will sell no
matter what it looks like. You have to do the
prep work again, and being in the business for twenty years,
I think it's so very, very very important to have
(25:43):
your home ready, staged, decluttered, all of those things that
we talk about if you're planning to sell your home.
Speaker 1 (25:51):
Yeah, Michelle, you almost anticipated exactly my next question. And
it goes back to, you know, if March and April
or kind of go time for listing the prop it
would seem to me January and February are prep time,
so you know, I know you're very thorough in helping
people get their home actually ready to market in the
(26:11):
best condition at the best price.
Speaker 2 (26:13):
And that doesn't take that's not just a forty eight
hour process.
Speaker 1 (26:17):
Walk people through what they need to be thinking about
now if they're going to work with a real estate
professional like yourself to really have the best outcome.
Speaker 2 (26:27):
You know, when the calendar does flip around March.
Speaker 1 (26:29):
April, May, June, and when you really want to sell
your house, what do we need to be doing now
to get ready?
Speaker 4 (26:35):
Yeah? Absolutely, now is the time to really, like I said,
lock in your real estate agents, have them talk to you,
talk to a couple different real estate agents. Here's the thing.
If you are a seller, you have an opportunity. You know,
you may call me and say, Michelle Sloane, I'd like
you to come look at my house I'm thinking about selling.
(26:57):
And then you're going to call another agent with a
different broker and they're going to come over and maybe
you get along with me better, and you you like
what I have to say, and you know, we think
that we have a good working relationship because it is
a relationship after all, and it's one that you really
have to trust the agent is going to do what's
(27:17):
in your best interest. So talk to a couple of agents.
I wouldn't say that you necessarily need to talk to
more than two, but if the first two are does,
go ahead talk to another one. That's something that you
can be doing right now. The other thing is listen
to the advice. I know you think your house is beautiful.
I know that you think your house is worth a
(27:38):
million dollars. Listen to your real estate agent because it
may not be beautiful for everybody.
Speaker 1 (27:44):
You mean, you might not like my shag carpeting in
the third bedroom. That might actually have to be replaced.
Speaker 2 (27:50):
Nobody likes it.
Speaker 4 (27:50):
Don't have that in there. I told you to get
rid of that.
Speaker 2 (27:53):
You've been telling me that for months.
Speaker 1 (27:55):
All right, Hey, great advice, Great advice as always tonight
for our real estate expert, Michelle Sloan, owner of Remax 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 on Bob Sponsller
(28:17):
along with Brian James. You have a financial question you'd
like for us to answer. There's a red button. You
can click while you're listening to the show. If you're
listening to the show on the iHeart app, simply record
your question and as always, it will come straight to us.
All right, Brian, Mark and Mason says, I'm considering a
second home mainly for lifestyle reasons, not return. How should
(28:40):
I think about that decision without forcing it to just
justify it financially. I love this question because this is
what a lot of people do. They buy something because
they want to buy it, and then they walk in
here and try to talk us into why it's a
great quote unquote investment. It's great to see Mark walking
in here with his eyes wide open.
Speaker 2 (29:00):
Yeah, this is good. So this is a good instinct,
Mark that you're thinking about here.
Speaker 3 (29:03):
And by the way, my job and I don't know
if you feel this way, but over the decades it
has evolved into begging people to spend their own money.
So this isn't necessarily a bad thing that somebody's considering this.
I think we have to go in like you said, Bob,
eyes wide open.
Speaker 1 (29:17):
So this is why all the wives you know in
our couple's client relationships love you more and more each year, Brian,
you give them permission to go to the mall and
buy new cars, and it's wonderful.
Speaker 3 (29:30):
I got I have plenty of wives who don't want
their husbands thinking that way on the spending side, so
I think that has balanced out a bit. But in
any case, but if it fits the planet, something you
want to do. We are not on this planet to
look at at a growing pile of money, right when
nobody's going to sit on their deathbed and talk about
that time they didn't spend that money. So if this
is truly something that your family would enjoy and it
(29:51):
fits the financial plan, right, that's of course, that, of
course is very important. We need to make sure it's
not going to disrupt your ability to pay your bills
in the short run. But if those things are all
true and by all means, let's figure out a way
to do it. What I would say the first thing,
if you know you really want to do it, but
you're feeling your responsible on spending the money, first I
would say, redefine your terms. Buying a second home is
not spending. It is investing in an ill liquid asset
(30:14):
that's not going to be all that productive financially.
Speaker 2 (30:15):
But you've already referenced that mark.
Speaker 3 (30:17):
You've already said that I don't want this to justify
itself financially. I just want to be in a good place.
But the eyes wide open part. If you're thinking Florida,
as many people in this area tend to think over
the decades, be looking at those homeowners association fees, be
looking at property taxes and all the different whatever it
is that you have to pay just for the privilege
of owning it. I'm not even talking about the mortgage.
Speaker 2 (30:38):
That said.
Speaker 3 (30:39):
Also, speaking of mortgages, be open to it. Right just
because you have signed on for a thirty year mortgage
for a second home that maybe you didn't have to,
doesn't mean you're going to have a mortgage for thirty years.
You may simply be buying yourself time. So, for example,
if you were looking at this right now, then you
could sign up for a thirty year mortgage and that
will buy you time over the next three, say four
(31:00):
years to slowly liquidate other assets and pay taxes on them,
and then pay off that mortgage over time. But again,
just be open to more creative ideas. Then I'll just
sell everything and write a check. But again, first and foremost,
if This is truly a lifestyle decision. Make sure it
doesn't disrupt your other bill paying abilities. That's the important part. Okay,
we're gonna move on to Rachel and Anderson. Rachel says
(31:21):
she's helping her parents out part of that sandwich generation.
I'm guessing our parents are starting to need more help,
she says, and it's affecting our own plans. How do
families support aging parents without quietly sacrificing their own future.
Speaker 2 (31:32):
This is a tough one, Bob. Yeah, it is a
tough one.
Speaker 1 (31:35):
And this is a situation I'm going through with you
more than a few of my clients right now in
their families.
Speaker 2 (31:40):
It's tough.
Speaker 1 (31:41):
So I'd say the two words that jump out to
me is setting some boundaries, you know, so boundaries.
Speaker 2 (31:48):
And then communication. And here's what I mean.
Speaker 1 (31:51):
What you don't want to do is just open up
the checkbook and pour out funds after funds and put
yourself in a situation twenty years from now that you're
trying to help your parents deal with today.
Speaker 2 (32:02):
That goes for kids too.
Speaker 1 (32:03):
Yeah, you got you got to put some boundaries or
limits around what you can really responsibly afford to do
in this area. Without derailing your own long term plan.
And then a lot of times this is both a
money decision and just a you know, how much stamina
and time do I have every day to deal with this?
And sometimes and we deal with this, Brian all the time.
(32:24):
Some of the kids don't live in the same city
as their parents, a couple do, and the ones that
do tend to take on a huge amount of the burden,
you know, going over there and taking care of things,
buying groceries, cleaning the house, you know, making sure mom.
Speaker 2 (32:38):
And dad are safe. It's a tough situation.
Speaker 1 (32:41):
So I would say sit down, first of all, and
update your financial plan, Rachel, and just put some boundaries
around what you can really afford to do financially, and
then proactively communicate with both your parents and your siblings
if you have them, and try to develop a team
approach here where everybody is doing what they can do
(33:03):
to protect the long term dignity and care for your
parents without putting any one of the siblings in either
financial jeopardy or just you know, emotional exhaustion as you
go through the process. I hope that helps, all right,
Chris and fort Thomas says, I want to prioritize experiences
over things. I love this, but I'm not sure how
(33:24):
to plan for that without losing structure. How do I
budget for what truly matters?
Speaker 2 (33:29):
Brian? This is right in your wheelhouse.
Speaker 3 (33:31):
Yeah, I love this stuff because I'm not a person
who wants to go to that same beach I've been
going to for the last fifty years of my life.
Beaches are great, and margarita's are awesome, but that stuff
kind of has its limit.
Speaker 2 (33:43):
I'm the same way. I want different experiences too.
Speaker 1 (33:44):
So what I would suggest you want to have your
McDonald's breakfast at like six or seven different McDonald's exactly.
Speaker 2 (33:51):
I want to see if it's different anywhere else. Yes, exactly.
But now think of it this way.
Speaker 3 (33:55):
Maybe define, define the experiences you want to have, and
then assign a budget to each of them. So you
might have that two week summer family trip that's where
you are going to hit the margarita in the beach
and get sand in your underwear and all that kind
of stuff.
Speaker 2 (34:05):
That's great, go do it. That's one of them.
Speaker 3 (34:08):
And then monthly local experiences so there's maybe there's plenty
of things right around to your hometown that.
Speaker 2 (34:13):
You've never done. We'll come up with a budget for that.
Speaker 3 (34:16):
You can also look at you know, some people will
categorize an annual learning or enrichment trip, you know, something
where I'm going to go somewhere, but it's going to
be much more focused on, you know, putting my brain
in a place that's never been. Maybe that's museums, maybe
it's art, whatever it is, rather than sitting on my
rear end on the beach and drinking margaretas. And again
I'm still a fan of that. Don't don't let me,
I can tell don't let me get that wrong. And
(34:37):
then also maybe you're hosting friends and family, if you've
got people coming in from elsewhere and you want to
entertain them around town. So the point would be figure
out what the categories of the experiences you want to
have are and then assign different things you might do
within that, and then you can start to put price
tags on everything.
Speaker 1 (34:52):
All right, Coming up next, Brian has his bottom line,
and stay tuned for this segment. Brian's going to help
all you procrastinators out there by telling you what you
could still do to help your twenty twenty five tax bill,
even though you've waited till twenty twenty six to get started.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC the talk station. You're listening to
(35:19):
Simply Money presented by all Worth Financial, umbop sponsorer along
with Brian James, and Brian's got some good stuff for us,
For all of us that like to put off tax
planning for twenty twenty five until January or February of
twenty twenty.
Speaker 2 (35:32):
Six, this is good stuff. There's some real nuggets in here.
Speaker 3 (35:34):
Hey, procrastinators, You've still got some time to do some stuff.
Even though New Year's Eve has come and gone. There
are still things that you can do before tax time
comes here in April. So, first off, a lot of
people know this, but some people are new to it.
You can still contribute to an IRA for last year
all the way up until the tax filing deadline. Anybody
can contribute up to seven thousand dollars to an IRA.
Speaker 2 (35:56):
Right.
Speaker 3 (35:57):
There are income limitations. Let's not forget that. Your deductibility
may or may may or may not happen. But don't
forget about the back door wroth. But that's a little
bit of a different Radio segment. We'll get into that
another time, but the point is, if you want to
do these things, you can still do them up until
tax time. If you are fifty year older, there's a
catch up provision that allows up to eight thousand dollars.
Speaker 2 (36:18):
Now.
Speaker 3 (36:18):
If on the traditional side, of course, you're looking at
reducing your taxable income, that's a deduction that will help
you this year. Or on the rosside, if you make
too much money, you may only have the choice of
doing a straight up wroth IRA contribution, or you may
have to do a backdoor WROTH, which means you're literally
going through the back door to do it because your
income is too high.
Speaker 2 (36:37):
But that would be a decision. It's going to help
you in the future.
Speaker 3 (36:39):
You don't get a deduction on the WROTH, but you'll
never pay taxes on whatever it grows to.
Speaker 2 (36:43):
Don't stick the stuff in a ced folks.
Speaker 3 (36:45):
If you're going to do a roth IRA, invested in
something that has the ability to grow, because it doesn't
help you at all until it has grown somewhere. Second,
Health savings Accounts HSA is one of the most powerful
and most overlooked tax tools that's out there. If you're
covered by a high deductible health plan. This has to
be something that you chose back in the November December
timeframe when your company was chasing you for your benefit decisions.
(37:07):
But a high deductible health care plan comes along with
an HSA account that you can be funding with your
own money. So the limits here for four and fifty
bucks for individual coverage, eighty three hundred per year for
family coverage. If you're fifty five or older, you can
add an extra thousand dollars catch up contribution. But the
reason we love these is because you can get a
triple tax benefit out of this. You can get deductions
(37:29):
on the way in if you invest it properly, which
is a huge step a lot of people miss. Don't
just throw it in there and ignore it. Make sure
it's invested in something, and you can move these dollars.
You do not have to stay with the bank that
your company has set you up with, but if you
invested in some kind of mutual fund, any of that
growth is tax free, and then withdrawals down the road
for qualified medical expenses themselves are tax free.
Speaker 2 (37:49):
Now here's the big bullet that few people get. You
can if you.
Speaker 3 (37:52):
Hang onto your receipts for twenty twenty six and you
cash them in in twenty thirty five. That means you
got ten years worth of free tax free growth and
you'll be taking that distribution out pay any bill you
want with it. But you're basing it off of something
that happened in twenty twenty five. So hang on to
those receipts, let it grow, then withdraw it.
Speaker 1 (38:10):
Yeah, most people never think of that, and that's a
great idea, great way to kill two birds with one stone,
maximum tax deferral, tax deduction and then investing.
Speaker 2 (38:20):
That money and using it later. There's nothing else quite like.
And you can still contribute for last year up until
tax time. All right, thanks for listening tonight.
Speaker 1 (38:27):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC, the talk station
Simply Money News
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