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Speaker 1: Tonight, what is the rate of return on your life?

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Speaker 1: In other words, are you using your money to create

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Speaker 1: a rich and meaningful set of experiences or are you

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Speaker 1: just sitting at home counting your money. You're listening to

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Speaker 1: Simply Money, presented by all Worth Financial. I'm Bob Sponseller

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Speaker 1: along with Brian James. If you think you've won the

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Speaker 1: money game, congratulations. Maybe you've sold a business, you've built

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Speaker 1: a wonderful career and retired, You've invested well, and now

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Speaker 1: you're sitting on let's say, a few million dollars or

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Speaker 1: maybe even more so. In other words, financially you're set.

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Speaker 1: So here's the uncomfortable question that we ask and need

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Speaker 1: to ask some folks that we work with. Are you

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Speaker 1: still just chasing return on investments? Or are you getting

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Speaker 1: any return on your life? In other words, benefiting for

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Speaker 1: all these years and years of hard work and wealth

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Speaker 1: that you've created. Brian, it comes up a caseasonly in

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Speaker 1: our office. It's something we like to call just being

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Speaker 1: trapped in accumulation mode.

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Speaker 2: Yeah, I'm gonna steal that rol return on life. I

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Speaker 2: love that that Jason provided us with that this morning.

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Speaker 2: So we normally think of return on investment ROI, well,

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Speaker 2: this is return on life, meaning what are you getting

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Speaker 2: out all this? But you built this big pile of whatever?

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Speaker 2: What does it mean to you? And we see this

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Speaker 2: very frequently. I'm going to share some stories that are

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Speaker 2: going to generate emails from people who will recognize themselves

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Speaker 2: anonymized on the radio, because we've had these conversations very

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Speaker 2: recent recently with some of our clients who are also listeners.

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Speaker 2: And the ones I'm thinking of the most are the

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Speaker 2: ones who are accumulators, endless accumulators, just kind of trapped

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Speaker 2: in that mode of I have to have more and

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Speaker 2: more and more. I've been saving for thirty four years.

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Speaker 2: I don't really know what else to do, so I'm

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Speaker 2: just going to keep saving. These are the folks who

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Speaker 2: spend decades building this well through discipline, you know, constant

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Speaker 2: saving and good stewardship of their assets, not panicking during recessions,

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Speaker 2: down markets. You know, the business cycle goes up and down,

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Speaker 2: but they stay steady through all of.

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Speaker 3: It, all of those habits that got them there.

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Speaker 2: That's really hard to turn off, right that you can

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Speaker 2: only be a squirrel burying nuts for so long before

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Speaker 2: you got to go dig them up again. And even

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Speaker 2: after you've hit that number, people have a tough time transitioning.

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Speaker 3: Out of this. And a lot of times people don't

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Speaker 3: even have a number.

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Speaker 1: Right.

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Speaker 2: I've just been working for thirty years. I don't really

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Speaker 2: know how much I need. I never stopped and step

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Speaker 2: back to look at the forest for the trees.

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Speaker 3: This is what I do.

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Speaker 2: I save things, and I build things. I don't spend

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Speaker 2: unless it's absolutely necessary. Well, one thing I can guarantee

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Speaker 2: is that if you don't spend it, your kids will.

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Speaker 2: You know, occasionally maybe treat yourself to that first class

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Speaker 2: ticket instead of coach, because that's what your kids are

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Speaker 2: gonna do. They didn't build it. They'll have a very

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Speaker 2: different different lifestyle with it.

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Speaker 1: Yeah. I think, like a lot of things in life, Brian,

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Speaker 1: it comes down to balance, and I think that's one

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Speaker 1: of the areas you know, a good fiduciary financial advisor

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Speaker 1: can help folks with. And you mentioned one thing, having

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Speaker 1: a plan in the first place. I think a lot

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Speaker 1: of people, a lot of times, fear will dissipate, comfort

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Speaker 1: level will go up when they know they have a

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Speaker 1: plan and have clear goals set out and you're able

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Speaker 1: to run numbers and show people yep, using you know,

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Speaker 1: probability analysis and rate of return and inflat of inflation

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Speaker 1: assumptions and all that and just running the numb. I mean,

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Speaker 1: we can show people, you know, it makes sense from

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Speaker 1: a brain standpoint that you have enough money to hit

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Speaker 1: your goals. I think a lot of time that opens

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Speaker 1: up at least a door to start to discuss some

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Speaker 1: other things and allow people to dream a little. Sometimes, Brian,

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Speaker 1: even after showing people the quote unquote numbers, people just

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Speaker 1: can't get out of that accumulation mode or fear of

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Speaker 1: running out.

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Speaker 3: Why do you think that is? Well, I think that's

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Speaker 3: just it.

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Speaker 2: We get we get ingrained in whatever we we have

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Speaker 2: the habit of rights. Habits get are tough to break.

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Speaker 2: Think about quitting smoking or you know, any bad habits

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Speaker 2: you want that it's just something you did for a

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Speaker 2: long time, it's part of your life. Well that actually

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Speaker 2: hit This is a good habit. But that works the

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Speaker 2: same way. I'm just used to making more money than

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Speaker 2: I spend and putting it away and saving it and

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Speaker 2: building an estech. Well what happens there is And I

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Speaker 2: use this example all the time in my meetings here

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Speaker 2: in my office when we're doing financial planning, is you know,

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Speaker 2: there's a huge mountain that we all kind of hide behind.

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Speaker 2: We all simply convince ourselves that I don't know how

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Speaker 2: much I do. I don't really know what I want, right,

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Speaker 2: So don't I just know I don't have enough money.

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Speaker 2: I'm going to work toward that because there aren't any

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Speaker 2: other clear goals. Well, eventually you'll get to a point

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Speaker 2: where there is more than enough money as well. If

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Speaker 2: you do this for you know, several decades of your

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Speaker 2: working career, there's going to be more than enough. And honestly,

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Speaker 2: I think what the scary part becomes is what am

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Speaker 2: I going to do? I could do whatever I want,

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Speaker 2: Oh my gosh, what is it that I want to do?

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Speaker 2: I've never stopped to think about that, and that causes

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Speaker 2: a lot of us to hide behind the money. It

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Speaker 2: can be scary to think about the time that we're

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Speaker 2: going to have. It can be downright terrifying, Bob. I've

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Speaker 2: seen people just kind of stop in their tracks thinking

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Speaker 2: about this when it dawns on them that they have

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Speaker 2: built a plan that they can retire and they've simply

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Speaker 2: never sat down to figure out what that means.

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Speaker 3: And I think a lot of.

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Speaker 2: Us kind of revert to you know what, I I'm

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Speaker 2: just going to keep saving until I figure all that out.

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Speaker 2: And that can be a scary habit to get into

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Speaker 2: because it can lead you to work a lot longer,

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Speaker 2: you know, taking away time from you know, whatever you

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Speaker 2: want to do, your family, and so forth, working a

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Speaker 2: lot longer than you actually had to, simply because we

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Speaker 2: never took a breath to think about it.

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Speaker 1: Yeah, speaking of taking a breath to think about it,

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Speaker 1: I'm going to share one story from an actual client

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Speaker 1: meeting I had earlier this year on this very topic.

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Speaker 1: This happens to be a widow. Her late husband was

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Speaker 1: one of my best friends. I mean, we've worked together

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Speaker 1: for years and years. Know the family really well, very

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Speaker 1: charitably inclined family, very involved in global missions work around

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Speaker 1: the world and big givers. And this lady happens to travel,

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Speaker 1: you know, overseas to Africa to you know, take a

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Speaker 1: look at how all these ministries are going, and it's

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Speaker 1: very tiresome to do that. And you know this, this

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Speaker 1: is a lady that's in her you know, early seventies.

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Speaker 1: And I just threw out the idea. I'm like, why

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Speaker 1: don't you start traveling first class, you'll arrive less tired,

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Speaker 1: You'll be able to sleep on the plane. I mean,

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Speaker 1: oftentimes these are twenty four hour trips to get to

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Speaker 1: these places. And you know, I just showed her, you know,

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Speaker 1: by adding one little budget item to her whole picture,

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Speaker 1: you know, I showed her she could afford it. She

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Speaker 1: started to do that on a couple of trips, and

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Speaker 1: in the next meeting we had, it was the first

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Speaker 1: thing she brought up. She's like, thank you so much

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Speaker 1: for suggesting that. It made me enjoy these trips much more.

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Speaker 1: I'm of more value when I get over there to

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Speaker 1: help the people I want to help, you know, just

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Speaker 1: opening the door to some of the possibilities that are

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Speaker 1: already in alignment with people in their hearts and minds

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Speaker 1: already know they want to do.

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Speaker 3: Yeah. And I think here's another example of that.

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Speaker 2: I have a lot of people who have grown up,

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Speaker 2: you know, over the decades, thinking that we are going

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Speaker 2: to buy a property somewhere near beach X because we

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Speaker 2: just love that play. We always go, this's just where

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Speaker 2: we went or where we've always gone. And the people

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Speaker 2: think differently about that. Now, with the cost of property insurance,

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Speaker 2: property taxes in someplace, hoa fees and all that kind

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Speaker 2: of stuff to buy a resort type of a property

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Speaker 2: that you have to worry about when you're not there.

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Speaker 2: These are the kind of folks who will leave family

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Speaker 2: parties here in Cincinnati early because there's a hurricane somewhere

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Speaker 2: in Florida and they need to go talk to whoever

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Speaker 2: the designated person in that neighborhood is who calls everybody

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Speaker 2: and says, you're roof blue off.

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Speaker 3: That's another that's a shadow roll.

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Speaker 2: By the way, I have lots of clients who I

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Speaker 2: have this other mystery person somewhere whose job is to

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Speaker 2: walk up down the street and tell everybody.

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Speaker 3: What the damage is, the one who lives there all day.

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Speaker 2: But anyway, what I'm talking about here is just a

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Speaker 2: difference in thinking. So a lot of those people have

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Speaker 2: come to the conclusion that, you know what, we were

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Speaker 2: planning on dropping seven hundred and fifty thousand to a

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Speaker 2: million maybe on some kind of property down there, including

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Speaker 2: the cost of having to maintain it and all that,

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Speaker 2: and we've kind of concluded that, you know what, why

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Speaker 2: don't you instead of dealing with all that extra hassle,

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Speaker 2: why don't you just go nicer places, stay in nicer places,

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Speaker 2: pick the airbnb something that's right on the beach, and

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Speaker 2: pay whatever it is. That's still going to be a

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Speaker 2: heck of a lot cheaper and a lot less stressful

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Speaker 2: than maintaining a property you're only going to be at,

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Speaker 2: you know, so many times year and again. It's just

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Speaker 2: all about that budget. I think when we're raising kids

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Speaker 2: and taking them on vacations and all that, we kind

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Speaker 2: of get in our head that a vacation should cost

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Speaker 2: only a couple three thousand dollars maybe, and that's it,

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Speaker 2: and we'll stay two or three blocks away from the beach.

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Speaker 2: But you don't have to do that anymore, right when

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Speaker 2: the budget says you can live differently than you should

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Speaker 2: do so within reason, just understand what the expenses are

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Speaker 2: and understand whether you value it. Just because I'm saying

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Speaker 2: it doesn't mean you got to do it, but it's

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Speaker 2: just something to take a breath and consider and challenge

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Speaker 2: the assumptions you've had for all these decades.

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Speaker 1: One of the reasons we're bringing this topic up in

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Speaker 1: the first place is we came across the latest survey

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Speaker 1: called a World Happiness Report, and people in the United States,

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Speaker 1: believe it or not, dropped to twenty fourth globally, the

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Speaker 1: lowest ranking ever recorded in terms of people living in

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Speaker 1: the United States. And that's striking because obviously we have

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Speaker 1: more wealth on average than anybody in the world. This

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Speaker 1: isn't a story about lack of money. It's for many

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Speaker 1: Americas there's there's more than enough money, but there's not

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Speaker 1: enough happiness and and Brian, fewer than half of the

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Speaker 1: respondents to this survey said that the way they manage

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Speaker 1: or use their money actually makes them happy. Fewer than half.

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Speaker 1: And when asked what really brings them happiness, a lot

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Speaker 1: of people said saving and investing for the future. Pretty

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Speaker 1: shocking numbers. And you know, only a third of these

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Speaker 1: folks surveyed, even talked about are pointed to experiences, you know,

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Speaker 1: having experiences either with your spouse, or with your grandkids,

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Speaker 1: or with your family. I find that those survey results

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Speaker 1: to be uh sad and certainly lacking.

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Speaker 2: And again I think, you know, like you said, the

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Speaker 2: key thing you said and all that was the person

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Speaker 2: who simply says, well, I save for.

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Speaker 3: The future, it's what I do.

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Speaker 2: Well, that's great, but you're gonna you're gonna probably wind

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Speaker 2: up regretting you didn't do the things that you do.

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Speaker 2: Nobody sits on their deathbed with their children and then

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Speaker 2: talks about that they didn't spend that money. So let's

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Speaker 2: go through examp some of a couple quick examples here

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Speaker 2: of just some similar situations to.

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Speaker 3: Kind of compare and contrast.

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Speaker 2: So we've got two people of the same age by

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Speaker 2: the same amount of money. Let's call it five million dollars.

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Speaker 2: Both of them are financially independent, there's no debt, we've

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Speaker 2: got good health situations. Life ahead of them is just

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Speaker 2: kind of all laid out there, and we're in good shape.

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Speaker 2: So John John is what we call a maximizer. He

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Speaker 2: tracks his net worth every month. That is his bread

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Speaker 2: and Butter's getting in that spreadsheet and updating his dollar amounts,

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Speaker 2: and he's gotten all of his accounts and taking a

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Speaker 2: look at zillo for what the house is worth, and

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Speaker 2: getting estimates on what the cars are worth, just so

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Speaker 2: we can look at see what his net worth is

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Speaker 2: doing every single month. He's still working part time, not

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Speaker 2: because he needs to, but he's never been able to

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Speaker 2: stop because he's just not confident he's ready for that.

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Speaker 2: And frankly hasn't thought about it because it's too scary.

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Speaker 2: He also chases CDs all over town looking for that

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Speaker 2: extra half percent here and there, those promo rates and

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Speaker 2: all that hasn't ever flown first class, and by god,

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Speaker 2: he's not going to buy a new car. He kind

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Speaker 2: of says he's going to travel once things calmed down,

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Speaker 2: but doesn't have anything booked yet.

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Speaker 3: And he's his biggest fear.

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Speaker 2: Is running out of money, even though he's obsessively tracking

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Speaker 2: all this, and his withdrawal rate is under two percent,

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Speaker 2: so his portfolio is perfect, but his calendar is empty.

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Speaker 2: So he's optimized his life, right, He's got it all perfect,

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Speaker 2: but it's all nice and tight and controlled, always worried

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Speaker 2: about what could go wrong. John is not a super

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Speaker 2: happy guy. We have clients that are in this kind

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Speaker 2: of a situation. So here's the other. The other is Renee. Now,

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Speaker 2: Renee's got everything all lined up. She's got five million bucks.

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Speaker 2: She's clear on what this is for. She has decided

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Speaker 2: that she's going to fly her grandkids into visit her

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Speaker 2: and make those memories that she's that's what she's investing in.

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Speaker 2: She's investing in memory. She's set up a donor advice

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Speaker 2: fund to give to causes she cares about. That gives

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Speaker 2: her control, but also also tax deductions on an annual basis.

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Speaker 2: And she also took her partner on this food tour

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Speaker 2: of Italy, something they dreamed of since their thirties. Still

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Speaker 2: investing wisely, but she's really focused on what that enables

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Speaker 2: her to do, not what it earns. She does not

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Speaker 2: have a really detailed super spreadsheet that she spends all

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Speaker 2: weekend updating. So again, put similar portfolios. Well, one calendar

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Speaker 2: is full and the other one is not. So choose

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Speaker 2: which of those who want to be and you can

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Speaker 2: probably guess which person is happier in retirement.

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Speaker 1: Yeah, which person I'd rather hang out with at a

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Speaker 1: Christmas party? Who's way more interesting to spend time with. Yeah,

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Speaker 1: here's the all Worth advice. Once you have enough, don't

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Speaker 1: just continue to build wealth, build a life. Wealth doesn't

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Speaker 1: guarantee happiness. It's all about how you use it and

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Speaker 1: the meaningful experiences and relationships that you use your wealth

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Speaker 1: and your money to build into. That's what really matters

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Speaker 1: at the end of the day. One of the world's

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Speaker 1: largest asset managers just reverse course a bit and open

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Speaker 1: the door to crypto ETFs, what that means for sophisticated investors,

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Speaker 1: and whether now's the time to maybe reconsider digital assets.

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Speaker 1: You're listening to Simply Money is thated buy all Worth

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Speaker 1: Financial on fifty five KRC, the talk station. You're listening

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Speaker 1: to Simply Money presented by all Worth Financial on Bob

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Speaker 1: Sponsor along with Brian James. If you can't listen to

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Speaker 1: Simply Money live every night, subscribing get our daily podcasts.

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Speaker 1: Just search Simply Money on the iHeart app or wherever

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Speaker 1: you find your podcast. Straight ahead of six forty three.

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Speaker 1: We help people navigate appreciated investments in taxable accounts, how

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Speaker 1: to make sense of something called factor investing and how,

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Speaker 1: and we're going to help you figure out whether you're

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Speaker 1: over insured. A lot to talk about here coming up, Brian.

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Speaker 1: All Right, big news in the investment world tonight, and

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Speaker 1: it's not your usual market twist. The huge firm van Guard,

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Speaker 1: huge and well respected firm Vanguard, long known for conservative

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Speaker 1: long term investing. Just flip a major switch, Brian, what's

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Speaker 1: going on here with Vanguard?

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Speaker 2: Well, Vanguard they manage about eleven trillion dollars in assets.

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Speaker 2: This is one of the biggest financial asset managers on

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Speaker 2: the face of the earth and in the universe, of course,

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Speaker 2: and they have about fifty million different households that they serve.

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Speaker 2: But they've decided to allow exchange trade funds and mutual

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Speaker 2: funds that primarily hold cryptocurrencies to be traded on their platform.

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Speaker 2: This is a big change. Uh, you know, this is

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Speaker 2: what it looks like today, is a policy change. But

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Speaker 2: this could be a pretty big moment for for how

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Speaker 2: mainstream investors start to view crypto because Vanguard is kind

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Speaker 2: of known as a you know, your main street type

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Speaker 2: of investment platform. But you know, for high net worth

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Speaker 2: folks like many of our listeners, then that this could

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Speaker 2: be a bit of an attention getter in terms of

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Speaker 2: I've always been nervous about having a bitcoin wallet set

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Speaker 2: up and doing all that crazy stuff. But if it

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Speaker 2: starts to look like regular investments, that might look a

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Speaker 2: little more attractive.

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Speaker 1: Yeah, I mean, I think this is great. I mean

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Speaker 1: people are obviously asking for this, and you know, Vanguard

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Speaker 1: is just responding to what what folks out there want.

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Speaker 1: They want access to cryptocurrency. You know, the whole the

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Speaker 1: whole discussion of crypto is is. You know, we could

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Speaker 1: go on until dinner time talking about the pros and

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Speaker 1: cons and why you would use crypto in these wallets.

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Speaker 1: You know, they're aside from mutual funds and ETFs. There's

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Speaker 1: there's the reasons people want to have their hands on

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Speaker 1: their cryptocurrency, which I won't get into now. But where

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Speaker 1: where could crypto fit brian into a well diversified, responsibly

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Speaker 1: built portfolio. Why would folks want to even consider having

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Speaker 1: some of this stuff in their portfolio in the first place.

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Speaker 2: Well, crypto can be just just like anything else, it

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Speaker 2: can be something that does offset other things in the portfolio.

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Speaker 3: You know, I don't know that there's enough.

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Speaker 2: History yet to truly say, you know, here, here's how

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Speaker 2: it works in modern portfolio theory in terms of what

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Speaker 2: kind of volatility it brings. That's the whole point of

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Speaker 2: modern portfolio theory. How do you mix different asset classes

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Speaker 2: together to maximize returns and minimize the roller coaster ride.

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Speaker 3: That's what modern portfolio theory is.

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Speaker 2: Crypto is new enough that it's really tough to say

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Speaker 2: here's how it where. It'll be decades before we can

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Speaker 2: truly identify this is what it does. Repeatedly in this

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Speaker 2: type of an environment, you know, with regard to economic

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Speaker 2: expansions and contractions, interest rate shifts, all those kinds of

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Speaker 2: things just take years to come together.

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Speaker 3: And as crypto is in its infancy still, maybe it's

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Speaker 3: in todlerhood.

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Speaker 2: I guess uh that it's going to take a very

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Speaker 2: long time to determine that, but it could be, and

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Speaker 2: it probably will someday be a valuable way to offset

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Speaker 2: some of the risk of the other types of investments

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Speaker 2: that we're that we're exposed to. So, you know, the

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Speaker 2: whole idea here that this is kind of a could

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Speaker 2: this could be a tipping point for crypto as an

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Speaker 2: institutional asset class. Some of the analysts out there are

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Speaker 2: arguing that vanguards take taking a cautious but significant entry

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Speaker 2: and that kind of signals that crypto is now being

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Speaker 2: accepted into mainstream finance, and that could accelerate adoption by

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Speaker 2: other traditional institutions, uh and kind of make things move

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Speaker 2: in a more mainstream manner. Now that's gonna that itself

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Speaker 2: will affect what crypto is and how it behaves, because

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Speaker 2: if you've got mom and pop type investors owning traditional

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Speaker 2: traditional type ETFs and mutual funds that are investing in

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Speaker 2: these things, well, that's going to affect how crypto moves

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Speaker 2: because there's a lot of dollar amounts that are going

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Speaker 2: to move into this. It will no longer just be

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Speaker 2: the play the playground for the speculators out there. People

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Speaker 2: are gonna be doing this in their four to one

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Speaker 2: k is that we've been talking about that all year long,

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Speaker 2: haven't we, Bob yep.

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Speaker 1: And if you do, if we do start to see bitcoin,

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Speaker 1: for example, as part of target date retirement plan funds,

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Speaker 1: to your point, it does put a floor under the

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Speaker 1: price of bitcoin. But man, most people that are looking

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Speaker 1: for target date funds or looking for diversified portfolio that

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Speaker 1: they want exactly what you let off the segment talking about.

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Speaker 1: They want more of a modern portfolio theory approach here

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Speaker 1: where you know, in other words, you can measure over time,

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Speaker 1: over a long period of time, what mix of asset

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Speaker 1: classes gives me the highest rate of return per unit

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Speaker 1: of risk and have a pretty good idea of what

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Speaker 1: your expected volatility can be in a down market. This

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Speaker 1: is probably a good time to remind folks. I mean,

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Speaker 1: if you look at just the last month, I mean

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Speaker 1: cryptocurrency Bitcoin in particular, has been a.

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Speaker 3: Very volatile asset class.

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Speaker 1: It's moved way with way more volatility than the stock

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Speaker 1: market has, so, you know it, we're still, to your point,

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Speaker 1: still learning how to use this stuff. You know, is

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Speaker 1: part of modern portfolio theory, and it's in a part

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Speaker 1: of a diversified portfolio. So I don't know my take

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Speaker 1: on this, Feel free to disagree. This is still you know,

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Speaker 1: should be used as a specultive asset class. I mean

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Speaker 1: maybe taking one, two, three, five percent of your portfolio

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Speaker 1: and investing in it more as a long term speculative

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Speaker 1: growth play, not looking to use it as a volatility hedge,

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Speaker 1: because it certainly has not been behaving that way.

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Speaker 2: And just because they're starting to look like, uh, you know,

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Speaker 2: an investment you've held before exchange traded funds or mutual funds,

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Speaker 2: doesn't mean it's not going to be any less volatile.

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Speaker 2: Those those those types of things still own the underlying

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Speaker 2: asset that has always been volatile. So I wouldn't treat

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Speaker 2: this necessarily as a I'm gonna throw a quarter of

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Speaker 2: my portfolio into it and then sit on it. That's

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Speaker 2: not really the case here. Might you might use it

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Speaker 2: as seasoning for your portfolio maybe one to five percent

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Speaker 2: or something like that of a regulated crypto ETF and

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Speaker 2: and don't don't pull the trigger on any of these yet.

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Speaker 2: I would wagit n til Vanguard gets out there and

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Speaker 2: kind of starts to drive the market. In terms of

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Speaker 2: what this is going to look like, it's gonna start

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Speaker 2: to get a lot more attention from.

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Speaker 3: The regulators as who are going to be very open

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Speaker 3: to it.

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Speaker 2: Right this administration has been very clear that we're not

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Speaker 2: gonna we're not gonna put the pull the reins on

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Speaker 2: too much on these types of things, so it'll probably

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Speaker 2: be less regulated than we've seen in the past when

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Speaker 2: these types of things come up. But that said, again,

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Speaker 2: you don't treat it like a satellite position. This is

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Speaker 2: not something that did is to be a core of

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Speaker 2: your portfolio. And I definitely wouldn't be shocked if you

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Speaker 2: buy one of these things thinking I'm gonna sit on

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Speaker 2: it forever and it's gonna go through its various swings,

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Speaker 2: So don't be.

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Speaker 3: Shocked if it's particularly volatile.

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Speaker 2: But remember that's why you've got ninety five percent of

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Speaker 2: the rest of your portfolio of doing something entirely.

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Speaker 3: Different exactly here's the all Worth advice.

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Speaker 1: Don't treat crypto ETFs like the next great foundation of

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Speaker 1: your portfolio. Treat them, as Brian said, like a little

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Speaker 1: spice added to a well balanced meal. Add sparingly, with

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Speaker 1: purpose and within the context of a diversified, goal oriented portfolio.

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Speaker 3: Season to Taste, Season to Taste Up.

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Speaker 1: Next, our local housing expert joins us to break down

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Speaker 1: what's really happening in the greater Cincinnati real estate market

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Speaker 1: as we move on toward Christmas. You're listening to Simply

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Speaker 1: Money presented by all Worth Financial on fifty five KRC,

436
00:20:16,520 --> 00:20:23,679
Speaker 1: the talk station. You're listening to Simply Money presented by

437
00:20:23,720 --> 00:20:26,840
Speaker 1: all Worth Financial. I'm Bob Sponseller along with Brian James,

438
00:20:26,920 --> 00:20:32,440
Speaker 1: joined tonight by our real estate guru, missus Michelle Sloan. Michelle,

439
00:20:32,480 --> 00:20:35,480
Speaker 1: thank you as always for making time for us and

440
00:20:36,040 --> 00:20:38,120
Speaker 1: we all just want to know, as we head into

441
00:20:38,119 --> 00:20:41,399
Speaker 1: the last few weeks of twenty twenty five, how's it

442
00:20:41,480 --> 00:20:44,399
Speaker 1: looking out there in terms of the housing market and

443
00:20:44,640 --> 00:20:47,520
Speaker 1: what do you see happening, if anything, in the way

444
00:20:47,520 --> 00:20:50,640
Speaker 1: of change as we flip the calendar and head into

445
00:20:50,640 --> 00:20:51,600
Speaker 1: twenty twenty six.

446
00:20:53,240 --> 00:20:57,359
Speaker 4: Well, those are all good questions and Honestly, we're in

447
00:20:57,359 --> 00:21:02,040
Speaker 4: that December deep freeze in the real estate market where

448
00:21:02,400 --> 00:21:06,840
Speaker 4: things definitely slow down, and you know, the buyers that

449
00:21:06,880 --> 00:21:10,000
Speaker 4: are out there are super serious. They need to find

450
00:21:10,080 --> 00:21:13,840
Speaker 4: a home. We have more inventory than we've seen in

451
00:21:13,920 --> 00:21:17,560
Speaker 4: quite some time. I do have some statistics for you

452
00:21:17,680 --> 00:21:22,359
Speaker 4: just sort of late twenty twenty five. Statistics is that

453
00:21:22,520 --> 00:21:28,200
Speaker 4: the median sales price in the Cincinnati area has increased

454
00:21:29,080 --> 00:21:32,320
Speaker 4: about four and a half percent, which is good, so

455
00:21:32,359 --> 00:21:37,960
Speaker 4: that's a positive. Our median price per square foot is

456
00:21:38,000 --> 00:21:41,440
Speaker 4: about one hundred and seventy seven dollars per square foot.

457
00:21:41,960 --> 00:21:46,640
Speaker 4: That's up almost eight percent over last year. And then

458
00:21:46,840 --> 00:21:50,919
Speaker 4: you know, if we're looking at the broader area, the

459
00:21:50,960 --> 00:21:55,159
Speaker 4: different markets within Cincinnati and each neighborhood is always just

460
00:21:55,200 --> 00:21:59,920
Speaker 4: a little bit different. But roughly our prices, the sales

461
00:22:00,119 --> 00:22:03,800
Speaker 4: prices are up, but the other thing that is up

462
00:22:03,920 --> 00:22:08,320
Speaker 4: is inventory. And with inventory up, the days on market

463
00:22:08,680 --> 00:22:14,000
Speaker 4: have also gone up pretty considerably. So we are seeing

464
00:22:14,119 --> 00:22:18,080
Speaker 4: homes that are on the market anywhere between thirty and

465
00:22:18,200 --> 00:22:23,480
Speaker 4: ninety days fifty two days on average, So that is

466
00:22:23,680 --> 00:22:26,960
Speaker 4: quite a change from what we have seen over the

467
00:22:27,040 --> 00:22:32,960
Speaker 4: last couple of years. So more inventory, fewer buyers, meaning

468
00:22:33,000 --> 00:22:37,280
Speaker 4: we have an inventory of about three months on hand,

469
00:22:37,400 --> 00:22:39,639
Speaker 4: so it could take up to three months to sell

470
00:22:39,680 --> 00:22:42,959
Speaker 4: your home. So you really need to be smart if

471
00:22:43,000 --> 00:22:46,080
Speaker 4: you're thinking about putting your home on the market anytime soon.

472
00:22:46,720 --> 00:22:49,360
Speaker 2: Hey, Michelle, the something I've been wondering about. With these

473
00:22:49,400 --> 00:22:51,600
Speaker 2: prices where they are, do you feel like that people

474
00:22:51,720 --> 00:22:55,440
Speaker 2: more recently are looking smaller than.

475
00:22:55,240 --> 00:22:55,840
Speaker 3: They used to?

476
00:22:55,920 --> 00:22:57,480
Speaker 2: I mean, do we do we still have people looking

477
00:22:57,520 --> 00:23:00,000
Speaker 2: for the same size home, you know, four or five bedrooms,

478
00:23:00,080 --> 00:23:02,199
Speaker 2: or few people who only really need three maybe or

479
00:23:02,480 --> 00:23:04,320
Speaker 2: have thinking changed on that yet.

480
00:23:05,320 --> 00:23:08,399
Speaker 4: I think that we are seeing a bit of a change.

481
00:23:09,000 --> 00:23:12,439
Speaker 4: But you know, in those lower price points and the

482
00:23:12,600 --> 00:23:16,359
Speaker 4: smaller homes, there aren't as many of them out there,

483
00:23:16,600 --> 00:23:21,800
Speaker 4: So you know where I'm seeing that there are more

484
00:23:21,840 --> 00:23:25,120
Speaker 4: and more four bedroom sort of typical four bedroom, two

485
00:23:25,160 --> 00:23:27,560
Speaker 4: and a half back homes that are sitting on the

486
00:23:27,600 --> 00:23:33,200
Speaker 4: market a little bit longer, and so there are opportunities there.

487
00:23:33,320 --> 00:23:35,639
Speaker 4: And that's the one thing that I would like to

488
00:23:35,720 --> 00:23:41,440
Speaker 4: stress to anyone who is considering getting back into the

489
00:23:41,480 --> 00:23:46,239
Speaker 4: buying side of things. There are so many opportunities and

490
00:23:46,280 --> 00:23:48,399
Speaker 4: there may be a home that's been on the market

491
00:23:48,440 --> 00:23:52,080
Speaker 4: for ninety days and let's say it's listed for five

492
00:23:52,160 --> 00:23:56,040
Speaker 4: hundred thousand dollars, which is above average for the city,

493
00:23:56,680 --> 00:23:59,479
Speaker 4: but you know, it's it's a price point that we

494
00:23:59,560 --> 00:24:03,480
Speaker 4: have seen being sold over and over again. There may

495
00:24:03,520 --> 00:24:07,000
Speaker 4: be more room for negotiation. Now. I wouldn't tell you

496
00:24:07,080 --> 00:24:11,000
Speaker 4: ever to go in on a home that's priced at

497
00:24:11,040 --> 00:24:15,080
Speaker 4: five hundred thousand dollars and offer like three hundred or

498
00:24:15,119 --> 00:24:17,840
Speaker 4: three point fifty. I mean, that's just a total slap

499
00:24:17,840 --> 00:24:20,920
Speaker 4: in the face to the cellar. So that's not realistic.

500
00:24:21,640 --> 00:24:25,600
Speaker 4: We're not in that sort of atmosphere that we want

501
00:24:25,640 --> 00:24:30,200
Speaker 4: to go in. But you know, there's opportunities to do

502
00:24:30,240 --> 00:24:34,760
Speaker 4: some negotiating, and that is definitely something that you want

503
00:24:34,800 --> 00:24:38,400
Speaker 4: to talk to your real estate agent about, Michelle.

504
00:24:38,400 --> 00:24:40,720
Speaker 1: I want to ask a little bit about location where

505
00:24:40,760 --> 00:24:43,960
Speaker 1: these homes are available and where home buyers want to live.

506
00:24:43,960 --> 00:24:45,639
Speaker 1: And this is what I mean by that, are a

507
00:24:45,720 --> 00:24:49,200
Speaker 1: lot of first time home buyers wanting to stay closer

508
00:24:49,240 --> 00:24:53,160
Speaker 1: to the city and find smaller homes, which you said

509
00:24:53,200 --> 00:24:56,080
Speaker 1: there's not a whole lot of right now, And are

510
00:24:56,119 --> 00:24:59,919
Speaker 1: they reticent or hesitant to move out to the suburb

511
00:25:00,000 --> 00:25:03,080
Speaker 1: herbs along the two seventy five belt Way is there

512
00:25:03,119 --> 00:25:06,639
Speaker 1: a little bit of a mismatch on where the quote

513
00:25:06,680 --> 00:25:10,480
Speaker 1: unquote affordable homes are and where the people that are

514
00:25:10,520 --> 00:25:13,879
Speaker 1: potentially buyers of those homes want to live. What are

515
00:25:13,880 --> 00:25:14,359
Speaker 1: you seeing?

516
00:25:14,480 --> 00:25:14,679
Speaker 3: You know?

517
00:25:14,760 --> 00:25:19,520
Speaker 4: In that respect, absolutely, there are definitely parts of the

518
00:25:19,560 --> 00:25:24,120
Speaker 4: city and that's something that you need to consider when

519
00:25:24,160 --> 00:25:26,159
Speaker 4: you're buying a home. Do you want to live on

520
00:25:26,200 --> 00:25:27,760
Speaker 4: the West side? Do you want to live on the

521
00:25:27,800 --> 00:25:32,399
Speaker 4: east side? Where's your family? Where's your job? Where your kids?

522
00:25:32,440 --> 00:25:35,159
Speaker 4: If you have children, where would you like them to

523
00:25:35,200 --> 00:25:38,480
Speaker 4: go to school? How long are you planning on to

524
00:25:38,560 --> 00:25:42,560
Speaker 4: being in your home. There's so many questions, Bob, that

525
00:25:42,600 --> 00:25:48,520
Speaker 4: you want to answer for yourself, and then depending on

526
00:25:48,640 --> 00:25:52,080
Speaker 4: what you're looking for. You know, I often hear first

527
00:25:52,080 --> 00:25:54,959
Speaker 4: time home buyers say, you know, I'm fine with a small,

528
00:25:55,560 --> 00:25:58,280
Speaker 4: smaller home, but I would like to have a big yard,

529
00:25:58,359 --> 00:26:02,480
Speaker 4: a big fencedin yard for my dog. Well, that's a

530
00:26:02,640 --> 00:26:06,560
Speaker 4: great goal, but you may not find that inside the

531
00:26:06,600 --> 00:26:09,640
Speaker 4: two seventy five loop in your price range. You might

532
00:26:09,680 --> 00:26:12,800
Speaker 4: have to go farther outside of the city, and so

533
00:26:13,359 --> 00:26:17,080
Speaker 4: you have to really understand, Okay, how far do you

534
00:26:17,200 --> 00:26:19,919
Speaker 4: want to drive to get to work? How far do

535
00:26:20,000 --> 00:26:22,640
Speaker 4: you want to drive to get to the grocery, how

536
00:26:22,760 --> 00:26:26,080
Speaker 4: far you know, those all of those factors are so

537
00:26:26,359 --> 00:26:29,840
Speaker 4: very important. And when I have buyers who say, well,

538
00:26:29,880 --> 00:26:34,800
Speaker 4: I can live anywhere, boy, anywhere is a really tough

539
00:26:35,040 --> 00:26:40,480
Speaker 4: go because you're driving all around the city and it's

540
00:26:40,600 --> 00:26:45,720
Speaker 4: just it's not the best way to plan and strategize

541
00:26:45,800 --> 00:26:48,640
Speaker 4: to get the best value for your money.

542
00:26:48,720 --> 00:26:50,320
Speaker 1: Well, because at the end of the day, you're not

543
00:26:50,400 --> 00:26:54,000
Speaker 1: just buying a home, you are buying an overall lifestyle

544
00:26:54,200 --> 00:26:56,240
Speaker 1: the things that you mentioned, And I think that's why

545
00:26:56,240 --> 00:26:59,480
Speaker 1: it's so important for someone to have an open and

546
00:26:59,600 --> 00:27:03,680
Speaker 1: honest conversation with a real estate professional like yourself, who

547
00:27:03,800 --> 00:27:07,320
Speaker 1: really will ask the right questions and then focus the

548
00:27:07,400 --> 00:27:10,200
Speaker 1: search accordingly. And I think a lot of times people

549
00:27:10,240 --> 00:27:13,040
Speaker 1: are just so quick to just buy something and then

550
00:27:13,119 --> 00:27:15,960
Speaker 1: six months later they're disappointed that they didn't think about

551
00:27:16,040 --> 00:27:19,359
Speaker 1: all the lifestyle issues that go into this things that

552
00:27:19,400 --> 00:27:20,240
Speaker 1: you've already listed.

553
00:27:21,520 --> 00:27:25,520
Speaker 4: Absolutely, planning is key, and that's the one thing that

554
00:27:25,760 --> 00:27:30,960
Speaker 4: I really feel is important about a When you're a buyer,

555
00:27:31,040 --> 00:27:34,399
Speaker 4: you need to choose and hire a real estate agent

556
00:27:34,720 --> 00:27:37,399
Speaker 4: who's going to work with you every step of the way.

557
00:27:38,040 --> 00:27:40,840
Speaker 4: And that meaning is they're going to be not just

558
00:27:41,400 --> 00:27:44,879
Speaker 4: getting you to the closing table, not just finding you

559
00:27:44,960 --> 00:27:47,399
Speaker 4: our house and saying yep, that's the one by it,

560
00:27:48,040 --> 00:27:51,119
Speaker 4: you know, asking those tough questions. And I will often

561
00:27:51,320 --> 00:27:57,280
Speaker 4: ask my clients. I treat all of my clients as

562
00:27:57,280 --> 00:28:01,840
Speaker 4: if they're family, yeah, and I ask those questions. Do

563
00:28:01,920 --> 00:28:05,960
Speaker 4: you see yourself in this home for five to seven years?

564
00:28:06,200 --> 00:28:09,120
Speaker 4: Will it fit your lifestyle? Will it fit what you're

565
00:28:09,160 --> 00:28:09,879
Speaker 4: looking for?

566
00:28:10,200 --> 00:28:13,240
Speaker 1: Great stuff? Michelle. You're listening to Simply moneyse ied by

567
00:28:13,280 --> 00:28:16,639
Speaker 1: all Worth Financial on fifty five KRC, the talk station.

568
00:28:21,440 --> 00:28:23,560
Speaker 1: You're listening to Simply Money Pause I buy all Worth

569
00:28:23,600 --> 00:28:26,840
Speaker 1: Financial on Bob Sponseller along with Brian James. Do you

570
00:28:26,880 --> 00:28:29,080
Speaker 1: have a financial question you'd like for us to answer.

571
00:28:29,119 --> 00:28:31,320
Speaker 1: There's a red button you can click while you're listening

572
00:28:31,400 --> 00:28:34,320
Speaker 1: to the show. If you're listening on the iHeart app,

573
00:28:34,720 --> 00:28:38,800
Speaker 1: simply record your question and it always comes straight to us.

574
00:28:39,320 --> 00:28:42,040
Speaker 1: All right, Brian, get ready for Rachel In Blue ass

575
00:28:42,040 --> 00:28:45,360
Speaker 1: she says, we're both working now, but our income swings

576
00:28:45,520 --> 00:28:48,120
Speaker 1: from year to year. How do you build an investment

577
00:28:48,160 --> 00:28:51,840
Speaker 1: plan that doesn't fall apart when cash flow is a

578
00:28:51,880 --> 00:28:53,160
Speaker 1: bit less predictable.

579
00:28:53,840 --> 00:28:56,560
Speaker 2: Well, we need to make sure that we understand what

580
00:28:56,600 --> 00:28:59,600
Speaker 2: our cash flow is in the first place, and so

581
00:29:00,560 --> 00:29:02,960
Speaker 2: that makes really means understanding what your budget is, what

582
00:29:02,960 --> 00:29:05,120
Speaker 2: what income do you need to you know, think and

583
00:29:05,160 --> 00:29:06,960
Speaker 2: think expenses, don't think about income. I think a lot

584
00:29:07,000 --> 00:29:09,000
Speaker 2: of people get bogged down in this just trying just

585
00:29:09,040 --> 00:29:11,360
Speaker 2: trying to figure out, here's what my salary was, and

586
00:29:11,440 --> 00:29:13,800
Speaker 2: therefore that must be my income stream and I need

587
00:29:13,800 --> 00:29:18,440
Speaker 2: to to match that exact amount. Well, so if your

588
00:29:18,480 --> 00:29:22,800
Speaker 2: investment plan, your investment plan hopefully isn't completely tied to

589
00:29:22,840 --> 00:29:24,960
Speaker 2: your to your income anyway, those two things should be

590
00:29:25,000 --> 00:29:28,400
Speaker 2: really you know, kind of separate. Since you're working now, Yeah,

591
00:29:28,440 --> 00:29:31,120
Speaker 2: your income goes up and down, but the income is

592
00:29:31,160 --> 00:29:33,480
Speaker 2: there to pay the bills on a current basis, but

593
00:29:33,600 --> 00:29:36,240
Speaker 2: also there to uh for you to be able to

594
00:29:36,280 --> 00:29:38,200
Speaker 2: carve off a little bits and pieces here and save

595
00:29:38,520 --> 00:29:40,160
Speaker 2: that is going to go up and down, and that's okay.

596
00:29:40,280 --> 00:29:42,280
Speaker 2: As long as you've got an emergency fund out there.

597
00:29:42,440 --> 00:29:44,560
Speaker 2: Income swings are gonna happen. You're gonna have your feast

598
00:29:44,600 --> 00:29:46,560
Speaker 2: and famine years. You know, perhaps you're in sales, you're

599
00:29:46,600 --> 00:29:49,440
Speaker 2: in the kind of kind of unpredictable types of situations.

600
00:29:49,640 --> 00:29:51,840
Speaker 2: So just make sure there's enough on the side is

601
00:29:51,880 --> 00:29:54,880
Speaker 2: sitting in a heeled savings account or something like that. Uh,

602
00:29:54,920 --> 00:29:57,280
Speaker 2: that is there, and be okay with tapping into it

603
00:29:57,320 --> 00:30:00,440
Speaker 2: when you need to. You know there stuff happens, And

604
00:30:00,680 --> 00:30:02,640
Speaker 2: what I always recommend is, let's figure out what the

605
00:30:02,680 --> 00:30:04,920
Speaker 2: new zero is. Maybe your emergency fund needs to be

606
00:30:04,960 --> 00:30:06,880
Speaker 2: fifty thousand dollars something like that.

607
00:30:06,880 --> 00:30:07,320
Speaker 3: That's great.

608
00:30:07,360 --> 00:30:09,440
Speaker 2: Then when it creeps up to sixty thousand dollars, that

609
00:30:09,480 --> 00:30:11,600
Speaker 2: means you got ten thousand to go do anything else with,

610
00:30:12,040 --> 00:30:15,080
Speaker 2: make that extra roth IRA contribution, take the extra trip

611
00:30:15,080 --> 00:30:15,960
Speaker 2: with the family.

612
00:30:15,680 --> 00:30:18,040
Speaker 3: If that's if that's appropriate or whatever.

613
00:30:18,200 --> 00:30:20,160
Speaker 2: But if it drops from fifty to forty, well now

614
00:30:20,200 --> 00:30:22,040
Speaker 2: we're not doing any of those things, and we're gonna

615
00:30:22,080 --> 00:30:23,480
Speaker 2: do what we can to get it back up to

616
00:30:23,560 --> 00:30:26,640
Speaker 2: that fifty thousand dollars amount. So income swings will happen.

617
00:30:26,680 --> 00:30:27,320
Speaker 3: It is okay.

618
00:30:27,360 --> 00:30:30,360
Speaker 2: You are allowed to dip into your emergency fund when

619
00:30:30,480 --> 00:30:32,400
Speaker 2: everything else is otherwise stable. You'll get it back to

620
00:30:32,400 --> 00:30:34,520
Speaker 2: where it's supposed to be. Deal with life as it's

621
00:30:34,520 --> 00:30:37,280
Speaker 2: handed to You'll be all right. Moving on to Greg

622
00:30:37,280 --> 00:30:40,360
Speaker 2: and Mason, and Greg. Greg's got he's got some appreciated

623
00:30:40,360 --> 00:30:42,360
Speaker 2: investments that he's really scared to touch, and we're gonna

624
00:30:42,360 --> 00:30:44,560
Speaker 2: guess that he's gonna talk about taxes. So, Bob, how

625
00:30:44,600 --> 00:30:46,600
Speaker 2: do you decide when the tax bill is worth it

626
00:30:47,000 --> 00:30:48,480
Speaker 2: versus a shift in strategy?

627
00:30:49,600 --> 00:30:52,200
Speaker 1: Well, I'd first say to Greg, if you were sitting

628
00:30:52,240 --> 00:30:54,440
Speaker 1: in the office talking to me, I would I would

629
00:30:54,440 --> 00:30:58,040
Speaker 1: first ask your why, In other words, why are you scared?

630
00:30:59,160 --> 00:31:01,800
Speaker 1: And you know, for a lot of people, they have

631
00:31:01,840 --> 00:31:04,520
Speaker 1: different reasons. I would say, if I had to guess,

632
00:31:04,560 --> 00:31:07,400
Speaker 1: the two most common ones here would be these are

633
00:31:07,440 --> 00:31:11,120
Speaker 1: probably some long term winners. And Greg likes looking at

634
00:31:11,120 --> 00:31:15,400
Speaker 1: that high accumulated return of those investments and like it says, man,

635
00:31:15,560 --> 00:31:17,760
Speaker 1: what what should I What? What am I going to do?

636
00:31:17,960 --> 00:31:20,240
Speaker 1: If I get out of this thing that's done really well?

637
00:31:20,840 --> 00:31:22,360
Speaker 1: Where am I going to put that money? And then

638
00:31:22,360 --> 00:31:26,280
Speaker 1: the other thing you already mentioned. People just do not want,

639
00:31:26,400 --> 00:31:29,760
Speaker 1: under any circumstances to pay the irs anything if they

640
00:31:29,760 --> 00:31:32,479
Speaker 1: can avoid it. And a lot of times, you know,

641
00:31:32,560 --> 00:31:35,600
Speaker 1: we we can tend to let the tax tail wag

642
00:31:35,680 --> 00:31:38,200
Speaker 1: the dogs, so to speak. And then you really don't

643
00:31:38,240 --> 00:31:41,120
Speaker 1: have a strategy. So I would say, sit down. You know,

644
00:31:41,160 --> 00:31:44,240
Speaker 1: there's pros and cons to making any shifts or any

645
00:31:44,360 --> 00:31:49,280
Speaker 1: changes to your investment portfolio in terms of risk, reward, taxes,

646
00:31:49,320 --> 00:31:51,640
Speaker 1: so to speak. So sit down with a good advisor

647
00:31:52,080 --> 00:31:55,160
Speaker 1: and actually know what your strategy is, and then you

648
00:31:55,280 --> 00:31:57,360
Speaker 1: got to make some assumptions on if I do this,

649
00:31:57,480 --> 00:32:00,080
Speaker 1: how does it impact that vice versa, and if if

650
00:32:00,120 --> 00:32:03,760
Speaker 1: you sit down and collaborate with a good advisor, most

651
00:32:03,760 --> 00:32:05,480
Speaker 1: of the time you can come up with some good

652
00:32:05,520 --> 00:32:09,000
Speaker 1: trade offs and feel good about the decisions you are

653
00:32:09,040 --> 00:32:12,600
Speaker 1: either going to make or sometimes not make. Sometimes we

654
00:32:12,720 --> 00:32:16,200
Speaker 1: tell people not to do anything because it could potentially

655
00:32:16,240 --> 00:32:18,800
Speaker 1: do more harm than good. So hope that helps Greg.

656
00:32:19,160 --> 00:32:21,360
Speaker 1: Let's move to Andy and Hyde Park. He says, we

657
00:32:21,400 --> 00:32:24,400
Speaker 1: have a mix of mutual funds and ETFs in a

658
00:32:24,440 --> 00:32:27,720
Speaker 1: taxable account. Is it smarter to clean it up now

659
00:32:27,800 --> 00:32:32,120
Speaker 1: for tax efficiency or let sleeping dogs lie. Sounds like

660
00:32:32,160 --> 00:32:35,520
Speaker 1: a very similar question, just worded a little bit differently

661
00:32:35,600 --> 00:32:36,800
Speaker 1: than what Greg was asking me.

662
00:32:36,920 --> 00:32:39,360
Speaker 2: Yeah, that's right, and I think Andy's been probably a

663
00:32:39,360 --> 00:32:41,640
Speaker 2: long time recent listener because we've been talking about these

664
00:32:41,680 --> 00:32:44,719
Speaker 2: types of things. So, yeah, mutual funds ETFs have been

665
00:32:44,760 --> 00:32:48,240
Speaker 2: a great investment strategies for long periods of time. They're

666
00:32:48,360 --> 00:32:50,840
Speaker 2: not the most tax efficient, they're not terrible either, but

667
00:32:51,000 --> 00:32:54,720
Speaker 2: they're not the most tax efficient given what is available

668
00:32:54,760 --> 00:32:56,360
Speaker 2: out there now. So yeah, I think it is at

669
00:32:56,440 --> 00:32:59,280
Speaker 2: least worth understanding how you could get to a more

670
00:32:59,480 --> 00:33:02,240
Speaker 2: taxific type of a position while still maintaining that kind

671
00:33:02,240 --> 00:33:04,880
Speaker 2: of growth position there. So easiest thing first thing you

672
00:33:04,880 --> 00:33:07,200
Speaker 2: do is look for any position that's sitting at a loss.

673
00:33:07,320 --> 00:33:09,600
Speaker 2: And I'm not talking just about that ticker symbol, just

674
00:33:09,640 --> 00:33:11,840
Speaker 2: the fun look underneath it. Look at what are called

675
00:33:11,880 --> 00:33:17,080
Speaker 2: tax lots. Every position that is having its dividends reinvested

676
00:33:17,360 --> 00:33:20,280
Speaker 2: is buying something every month, every quarter whenever the dividends hit,

677
00:33:20,600 --> 00:33:23,760
Speaker 2: and those each individual lot of those reinvestments could be

678
00:33:23,800 --> 00:33:26,160
Speaker 2: sitting at a loss. Look underneath that in the cost

679
00:33:26,200 --> 00:33:30,080
Speaker 2: basis section of your financial provider's website. And this is

680
00:33:30,080 --> 00:33:32,600
Speaker 2: an a taxable account, of course, and see if there's

681
00:33:32,600 --> 00:33:34,280
Speaker 2: anything sitting at a loss that you can sell and

682
00:33:34,320 --> 00:33:36,760
Speaker 2: then sell it. So what that does, of course, is

683
00:33:36,760 --> 00:33:38,720
Speaker 2: now you're stacking up losses that you get to take

684
00:33:38,760 --> 00:33:41,120
Speaker 2: as a deduction against anything that you're going to generate

685
00:33:41,200 --> 00:33:43,560
Speaker 2: gains off of. And if you happen to have more

686
00:33:43,600 --> 00:33:45,520
Speaker 2: losses than gains in a given year, you get a

687
00:33:45,520 --> 00:33:48,280
Speaker 2: straight up deduction of up to three thousand dollars. Now

688
00:33:48,280 --> 00:33:49,920
Speaker 2: the question is always, well what do I do with this?

689
00:33:50,000 --> 00:33:50,680
Speaker 3: Well, you can't.

690
00:33:50,800 --> 00:33:53,400
Speaker 2: What you can't do is buy the same thing right back.

691
00:33:53,440 --> 00:33:55,080
Speaker 2: You can't sell it in the morning and by it

692
00:33:55,120 --> 00:33:57,080
Speaker 2: in the afternoon. The IRS will call that a wash

693
00:33:57,160 --> 00:34:00,440
Speaker 2: sale and they will disallow that loss out of it

694
00:34:00,480 --> 00:34:02,760
Speaker 2: for thirty days. Or find something that is similar but

695
00:34:02,920 --> 00:34:04,840
Speaker 2: not identical. That's the free one.

696
00:34:04,840 --> 00:34:05,400
Speaker 3: That's easy.

697
00:34:05,720 --> 00:34:07,560
Speaker 2: And then figure out if any of your winners the

698
00:34:07,800 --> 00:34:10,120
Speaker 2: funds that are sitting at gains are they creating ongoing

699
00:34:10,200 --> 00:34:10,800
Speaker 2: tax drag.

700
00:34:10,920 --> 00:34:12,080
Speaker 3: You're going to see it very soon.

701
00:34:12,120 --> 00:34:14,640
Speaker 2: If you've got a mutual fund out there, especially the

702
00:34:14,680 --> 00:34:17,680
Speaker 2: older actively trading ones, those can kick out huge capital

703
00:34:17,680 --> 00:34:20,160
Speaker 2: gains distributions in every December. You might want to have

704
00:34:20,160 --> 00:34:22,200
Speaker 2: an eye on what they're going to do. And they're

705
00:34:22,280 --> 00:34:24,719
Speaker 2: usually are informing you. If you're reading a lot of

706
00:34:24,719 --> 00:34:26,360
Speaker 2: the junk email they send out, one of them is

707
00:34:26,360 --> 00:34:29,319
Speaker 2: going to tell you what to expect with capital gained purposes.

708
00:34:29,520 --> 00:34:32,080
Speaker 2: So pay attention to that and then just understand what

709
00:34:32,120 --> 00:34:34,640
Speaker 2: that gain is. If you have a low income year

710
00:34:34,719 --> 00:34:37,640
Speaker 2: coming up, it probably is okay. You might even get

711
00:34:37,640 --> 00:34:40,879
Speaker 2: away with a zero percent capital gain taxation. So these

712
00:34:40,920 --> 00:34:43,120
Speaker 2: are there's a lot of moves that can be made here,

713
00:34:43,160 --> 00:34:44,920
Speaker 2: but you have to understand the situation that you're in.

714
00:34:45,160 --> 00:34:48,040
Speaker 2: Talk to your tax tax professional or your financial advisor

715
00:34:48,200 --> 00:34:49,640
Speaker 2: to see if there's any things you should be taken

716
00:34:49,719 --> 00:34:50,840
Speaker 2: care of, taken advantage of.

717
00:34:52,000 --> 00:34:54,680
Speaker 1: All Right, coming up next, we've got Brian's bottom line

718
00:34:54,719 --> 00:34:58,759
Speaker 1: where he's going to talk about IRMA and just overall

719
00:34:58,840 --> 00:35:02,840
Speaker 1: how that factors into managing your health care expenses heading

720
00:35:02,880 --> 00:35:05,480
Speaker 1: into twenty twenty six. You're listening to Simply Money presented

721
00:35:05,480 --> 00:35:09,120
Speaker 1: by Allworth Financial on fifty five KRC, the talk station.

722
00:35:14,320 --> 00:35:16,880
Speaker 1: You're listening to Simply Money present up by Allworth Financial.

723
00:35:16,880 --> 00:35:20,640
Speaker 1: I'm Bob Sponseller along with Brian James. We spent more

724
00:35:20,680 --> 00:35:23,480
Speaker 1: than a few minutes yesterday just talking about the overall

725
00:35:23,680 --> 00:35:27,920
Speaker 1: challenges of planning for healthcare expenses. And in Brian's bottom

726
00:35:27,960 --> 00:35:31,080
Speaker 1: line tonight, he talks he gives us some practical advice

727
00:35:31,160 --> 00:35:33,520
Speaker 1: on how to handle the situation here as we head

728
00:35:33,520 --> 00:35:37,080
Speaker 1: into twenty twenty six. Brian, anxious to hear your thoughts

729
00:35:37,080 --> 00:35:38,280
Speaker 1: on healthcare planning.

730
00:35:38,719 --> 00:35:41,279
Speaker 2: Well, It's is the season to have the family over

731
00:35:41,360 --> 00:35:44,120
Speaker 2: the holidays and that includes Aunt good old Aunt Irma

732
00:35:44,160 --> 00:35:46,880
Speaker 2: and her marshmellow whatever cast role, the weird thing that

733
00:35:46,920 --> 00:35:49,640
Speaker 2: she's always made for all these years, but now we're

734
00:35:49,640 --> 00:35:50,480
Speaker 2: not talking about.

735
00:35:51,040 --> 00:35:53,680
Speaker 1: Is that different than Aunt Edna, the lady that likes

736
00:35:53,719 --> 00:35:55,680
Speaker 1: to ride on top of station wagons?

737
00:35:55,840 --> 00:35:57,680
Speaker 2: But I don't know if she enjoyed that in that movie.

738
00:35:57,719 --> 00:35:59,280
Speaker 2: She kind of didn't have a choice about it because

739
00:35:59,280 --> 00:36:02,240
Speaker 2: she was dead. By No, this is ant irma, perfectly

740
00:36:02,280 --> 00:36:04,600
Speaker 2: healthy and with us today. IRMA that's her nickname. It

741
00:36:04,640 --> 00:36:08,520
Speaker 2: stands for income related Monthly Adjustment amount. Most people know

742
00:36:08,600 --> 00:36:10,520
Speaker 2: it as the search ards I got to pay for

743
00:36:11,000 --> 00:36:14,600
Speaker 2: my Medicare premium. Most more retirees are paying this now

744
00:36:14,920 --> 00:36:17,920
Speaker 2: than ever before because those income brackets that trigger IRMA

745
00:36:18,160 --> 00:36:21,200
Speaker 2: didn't rise as fast as wages and investment income have

746
00:36:21,560 --> 00:36:24,279
Speaker 2: over the decades. So IRMA is based off of your

747
00:36:24,280 --> 00:36:27,000
Speaker 2: income from two years ago. So your twenty twenty five

748
00:36:27,080 --> 00:36:29,960
Speaker 2: Medicare premiums are being calculated based off of what you

749
00:36:30,040 --> 00:36:32,640
Speaker 2: earned in twenty twenty three from salary if you are

750
00:36:32,640 --> 00:36:36,840
Speaker 2: still working, any required minimum distributions, ROTH conversions, capital gains,

751
00:36:36,880 --> 00:36:40,600
Speaker 2: business income, basically everything. Once you cross that threshold. This

752
00:36:40,640 --> 00:36:43,440
Speaker 2: is what people get surprised by Once you cross a

753
00:36:43,480 --> 00:36:45,719
Speaker 2: threshold of IRMA by even a dollar, you don't just

754
00:36:45,719 --> 00:36:47,680
Speaker 2: pay a little more. It's not marginal like it used

755
00:36:47,719 --> 00:36:50,160
Speaker 2: to be. You can pay hundreds or even thousands extra

756
00:36:50,200 --> 00:36:52,600
Speaker 2: per year. So it is very well worth making sure

757
00:36:52,640 --> 00:36:55,799
Speaker 2: you know where those thresholds are and what kind of

758
00:36:55,800 --> 00:36:59,520
Speaker 2: income you're generating that may trigger you or push you into.

759
00:36:59,360 --> 00:37:00,480
Speaker 3: A higher ERMA racket.

760
00:37:00,640 --> 00:37:03,000
Speaker 2: So where this is coming from and the kind of

761
00:37:03,000 --> 00:37:05,680
Speaker 2: cost that we're looking to battle here. So your standard

762
00:37:05,680 --> 00:37:07,839
Speaker 2: medicare Part B Premium aout one hundred and seventy five

763
00:37:07,920 --> 00:37:10,600
Speaker 2: hundred and eighty bucks a month per person, but with

764
00:37:10,719 --> 00:37:12,640
Speaker 2: IRMA that can go up to that's a month, by

765
00:37:12,680 --> 00:37:14,720
Speaker 2: the way, that can go up to five hundred bucks

766
00:37:14,880 --> 00:37:17,600
Speaker 2: per person with those IRMA charges. And then if you

767
00:37:17,640 --> 00:37:21,480
Speaker 2: have Part D the drug benefit too, now you've got.

768
00:37:21,320 --> 00:37:22,120
Speaker 3: Those search charges.

769
00:37:22,200 --> 00:37:24,440
Speaker 2: You know, wealthy retirees can end up paying over six

770
00:37:24,520 --> 00:37:28,239
Speaker 2: thousand dollars extra per year, sometimes even more. Now what

771
00:37:28,280 --> 00:37:31,240
Speaker 2: do we do about this, Well, manage your taxable income

772
00:37:31,280 --> 00:37:34,920
Speaker 2: before retirement, so years before their retirement, you know, higher earners,

773
00:37:34,920 --> 00:37:37,320
Speaker 2: you're gonna you're gonna have bonus, you're gonna have restricted

774
00:37:37,320 --> 00:37:40,680
Speaker 2: stock things coming do vesting schedules, all those kinds of

775
00:37:40,680 --> 00:37:43,560
Speaker 2: things that are gonna create taxation in a year, so

776
00:37:43,560 --> 00:37:45,000
Speaker 2: you're gonna want to make sure that you know what

777
00:37:45,040 --> 00:37:46,440
Speaker 2: those are. There may not be anything you can do

778
00:37:46,480 --> 00:37:48,680
Speaker 2: about it, but be aware so you can identify the

779
00:37:48,680 --> 00:37:52,080
Speaker 2: ones you can impact. Roth conversions are always valuable, but

780
00:37:52,120 --> 00:37:53,719
Speaker 2: make sure you do them at the right time. Try

781
00:37:53,760 --> 00:37:56,799
Speaker 2: to get them done before you're gonna have this situation.

782
00:37:57,120 --> 00:37:59,200
Speaker 2: If you can at all, early sixties is great, if

783
00:37:59,200 --> 00:38:01,839
Speaker 2: you can pull that off. Health savings accounts use those

784
00:38:01,880 --> 00:38:05,000
Speaker 2: as well. You can shelter money tax free and take

785
00:38:05,040 --> 00:38:07,480
Speaker 2: advantage of that tax free medical IRA that's out there.

786
00:38:07,520 --> 00:38:10,319
Speaker 2: And finally, if you've got large capital gains, spread them

787
00:38:10,320 --> 00:38:12,440
Speaker 2: into multiple years. You've got a month to sort that

788
00:38:12,480 --> 00:38:14,200
Speaker 2: out to get something in twenty five and maybe a

789
00:38:14,200 --> 00:38:15,319
Speaker 2: little something in twenty six.

790
00:38:16,400 --> 00:38:19,359
Speaker 1: Brian, don't you just love how Congress continues to make

791
00:38:19,400 --> 00:38:22,279
Speaker 1: the tax code nice and simple for us more and

792
00:38:22,320 --> 00:38:22,920
Speaker 1: more every year.

793
00:38:22,960 --> 00:38:25,719
Speaker 3: It's wonderful taxs on those cards. That's what we're doing.

794
00:38:26,360 --> 00:38:29,320
Speaker 1: Thanks for listening tonight. You've been listening to Simply Money,

795
00:38:29,320 --> 00:38:32,320
Speaker 1: presented by all Worth Financial on fifty five KRC, the

796
00:38:32,640 --> 00:38:33,200
Speaker 1: talk station