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Speaker 1: Tonight, why the markets could get a little noisy this week,

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Speaker 1: plus some opportunities you definitely want to think about taking

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Speaker 1: advantage of in twenty twenty six. And as always we

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Speaker 1: answer your money questions. You're listening to Simply Money presented

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Speaker 1: by all Worth Financial. I'm Bob Sponseller along with Brian James.

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Speaker 1: We've got a lot to get to tonight and we

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Speaker 1: want to start by bringing in all Worth Chief Investment

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Speaker 1: Officer Andy Stout. Just as a reminder, Andy manages I

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Speaker 1: don't know over thirty five billion dollars worth of our

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Speaker 1: client's money for all Worth clients from right here in Cincinnati. Andy,

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Speaker 1: thank you for making time for us tonight. We were

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Speaker 1: ready to talk to you about the inflation report coming

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Speaker 1: up tomorrow, but we've got a few extra tidbits that

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Speaker 1: I know you want to talk about tonight, because, as

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Speaker 1: we know, the news is always moving, especially with our

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Speaker 1: current presidential administration hit it Andy, Yeah, I.

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Speaker 2: Mean you could definitely say that it's a fluid news environment.

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Speaker 2: There's no question about that. There were certainly some developments

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Speaker 2: late on Sunday. We had Chair Pow in a relatively

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Speaker 2: unusual approach, he released a video on the fed's website,

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Speaker 2: which is not the norm at all, But what he

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Speaker 2: was doing, he was addressing that the FED was served

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Speaker 2: some grand jury subpoenas tied to his testimony of June

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Speaker 2: of last year. The testimony was before the Senate Banking

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Speaker 2: Committee and it was related to the two and a

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Speaker 2: half billion headquarter renovation, So there is the potential for

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Speaker 2: criminal charges there. However, what chair Pal posted in his

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Speaker 2: video and what most people believe, is that this is

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Speaker 2: really an investigation. This investigation is really related to the

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Speaker 2: FED not bowing to what President Trump wants in terms

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Speaker 2: of lower interest rates. So the chair Pal talked about it,

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Speaker 2: you know, the political pressure being tied to monetary policy,

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Speaker 2: and that's kind of how he reframed it. So when

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Speaker 2: you look at that from that perspective, it certainly calls

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Speaker 2: into question the fed's independence. I mean, that's been one

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Speaker 2: of the main stays of our economy and it's really

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Speaker 2: critical that we do have a central bank that is

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Speaker 2: independent and can make interest rate decisions without being pressured,

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Speaker 2: because otherwise you end up making decisions that may or

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Speaker 2: may not be in the best interest of the public,

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Speaker 2: and even if they do end up being in the

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Speaker 2: best interest of the public. The lack of independence from

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Speaker 2: the markets perspective definitely increases the likelihood that you see

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Speaker 2: a about of market volatility. There's no question about that.

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Speaker 1: You know.

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Speaker 2: So far though, this is what's interesting. There really hasn't.

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Speaker 2: I mean, there's been some fallout, but it's not been

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Speaker 2: to two material obviously, it's early stages. And I say,

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Speaker 2: there's really two reasons for this, Okay. The first reason

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Speaker 2: is that this doesn't really change anything regarding what the

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Speaker 2: FED actually does. It's what we call their reaction function.

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Speaker 2: So policy it's still driven currently by inflation and the

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Speaker 2: labor data. And I know, we got some data last

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Speaker 2: week and that doesn't really go that's not really going

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Speaker 2: to force a head hand. And we have some important

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Speaker 2: data coming up this week and we'll talk about that

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Speaker 2: in the met But right now, the Fed's reaction function

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Speaker 2: remains intact. It's currently still based on monetary policy. Look

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Speaker 2: where markets pricing in the terms of any sort of

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Speaker 2: FED fund rate cuts coming up, and it's pretty much

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Speaker 2: negligible here in the near term.

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Speaker 3: Now.

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Speaker 2: The second, and really i'll call this the more important

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Speaker 2: one is the Senate Banking Committee politics. They support the

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Speaker 2: FED Republican. Republican Senator Tom Tillis publicly said he would

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Speaker 2: oppose confirming any Federal Reserve nominees while this investigation is ongoing.

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Speaker 2: And he also pretty much said that this investigation is

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Speaker 2: very political in nature and not really related to anything

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Speaker 2: of materiality. So when you look at the Senate Banking Committee,

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Speaker 2: it's a relatively narrow margin, and what his statement does

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Speaker 2: and what he plans to do, it creates a procedural roadblock.

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Speaker 2: So without getting into the week too much, it really

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Speaker 2: just creates that roadblock in going to essentially kind of

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Speaker 2: stop any sort of near term leadership changes. Now when

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Speaker 2: we look a little bit longer term out, it's important

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Speaker 2: to note that Chair Pal's term ends on May fifteenth

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Speaker 2: this year. That's his term as the FED chair. He

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Speaker 2: can't remain as a governor until twenty twenty eight, So

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Speaker 2: it's possible he might decide to resist political pressure to

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Speaker 2: or excuse me, to help the Fed resist political pressure.

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Speaker 2: He could stay on until twenty twenty eight if he

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Speaker 2: thinks that's the right thing to do. So there's a

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Speaker 2: lot of moving pieces there. There's no question about now.

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Speaker 2: I would say it's not any sort of like immediate catalyst,

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Speaker 2: but it's a longer term institutional risk that you have

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Speaker 2: to monitor. But what's more important than the near term,

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Speaker 2: I guess from an economic standpoint, is what the FED

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Speaker 2: is going to look at at regarding the jobs market

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Speaker 2: and the inflation data, because that's their duel.

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Speaker 3: Land Andy, how much more crazy can the world take

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Speaker 3: of the United States behaving the way that we currently are.

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Speaker 3: Is there a point in the future where you feel like,

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Speaker 3: at some point investors are going to start thinking very

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Speaker 3: very differently about whether they're willing to continue with the

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Speaker 3: level of debt that that they own. You know, other countries,

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Speaker 3: Japan owns a lot of our debt, so this is China.

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Speaker 3: Is there some point where they're going to say, we

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Speaker 3: just cannot feel comfortable with predictability out of out of

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Speaker 3: the United States. That's a great question.

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Speaker 2: It's what I've heard a lot from just some people

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Speaker 2: in general. And the short answer is, you know, the

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Speaker 2: US economy drives the global economy, and a lot of

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Speaker 2: people will look you know, past any sort of short

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Speaker 2: term you know, volatility in terms of you know, what

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Speaker 2: might be coming out of Washington because they know, you know,

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Speaker 2: where the money is right and that's ultimately what's going

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Speaker 2: to drive it. So the short answer is no, I

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Speaker 2: don't really see a material global impact from this where

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Speaker 2: you see investors pulling money out, because when it comes

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Speaker 2: to the when it comes to everything, at the end

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Speaker 2: of the day, you know, we're still the largest economy,

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Speaker 2: and that's ultimately what's going to matter. I mean, when

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Speaker 2: you ask what matters, you know, money talks.

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Speaker 1: Andy speaking of what matters. I mean, just you know,

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Speaker 1: from where I sit here, even without all this noise

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Speaker 1: about the Federal Reserve subpoenas and all that, the FED

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Speaker 1: was not really or the market is really not pricing

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Speaker 1: in any FED rate cuts until the middle of twenty

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Speaker 1: twenty six at the soonest, right, So let's get into

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Speaker 1: a little bit about the upcoming inflation report and the

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Speaker 1: latest labor report. Those are the two you know, dual

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Speaker 1: mandates that the FED has. What's the latest data telling

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Speaker 1: you and telling us in terms of where the economy sits?

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Speaker 1: Here on a Monday morning, January, Well.

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Speaker 2: Yeah, the really nice thing is we're finally starting to

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Speaker 2: get some data following a shut down in a timely manner.

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Speaker 2: So we did receive the December jobs market report last

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Speaker 2: week and it wasn't great, but it wasn't terrible. And

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Speaker 2: what it continued to show was what we've been talking

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Speaker 2: about for the past basically six twelve months. The labor

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Speaker 2: market is cooling, but it's not collapsing. So when we

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Speaker 2: look at the job report, it has there's two surveys

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Speaker 2: in there. Right, we have the government who talks to

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Speaker 2: businesses and one survey to get the data on the

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Speaker 2: number of jobs being at it. Then we have a

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Speaker 2: second survey that's independent of the first one. That's where

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Speaker 2: the government reaches out to households or individuals and say, hey,

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Speaker 2: do you have a job? Do you not have a job?

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Speaker 2: That's where we get the unemployment rate from. So we

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Speaker 2: get two different you know, data points there. So the

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Speaker 2: first one on the what employers were at it, they

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Speaker 2: added fifty thousand jobs in December. That was, you know,

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Speaker 2: definitely less than the seventy thousand that economists we're looking for.

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Speaker 2: But on top of that, you know, what we also

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Speaker 2: saw was that the prior two months were revised lower

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Speaker 2: by seventy six thousand. So it's not good from that perspective.

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Speaker 2: And I was looking at it just like a chart

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Speaker 2: of the number of jobs being added by employers, and

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Speaker 2: it looked pretty strong until like the last seven months,

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Speaker 2: and you see it flattened and get really close to zero.

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Speaker 2: We even had, you know, a pretty sizeable draw down

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Speaker 2: just a few months ago in October of almost two

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Speaker 2: hundred thousand. But when you look at like the average

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Speaker 2: number of new jobs added since last May, it's only

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Speaker 2: twelve thousand. You know, that's not a strong environment. Now,

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Speaker 2: on the bright side, the household Survey that's where the

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Speaker 2: government talks individuals, that actually showed that the unemployment rate fell.

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Speaker 2: It fell from a four point five to four point

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Speaker 2: four percent, so essentially reversing a prior uptic and that

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Speaker 2: improvement came really on two levels. One is that the

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Speaker 2: number of people saying that they were unemployed actually fell

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Speaker 2: by two hundred and seventy eight thousand. Meanwhile, the number

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Speaker 2: of people who said they found a job or were

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Speaker 2: employed increased by two hundred and thirty two thousand, and

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Speaker 2: that's essentially why we saw that unemployment rate drop from

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Speaker 2: four point five to four point four percent.

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Speaker 1: So when you look at.

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Speaker 2: It, you have part of it being part of the

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Speaker 2: report strong, part of it not so strong. Taken together,

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Speaker 2: it's a cooling labor market. It's not collapsing, and it's

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Speaker 2: stable enough to keep the FED from really having to

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Speaker 2: cut rates because the economy is slowing down on the

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Speaker 2: labor side.

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Speaker 3: And I want to clarify one point because doesn't that

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Speaker 3: you know, sometimes when we talk about the unemployment rate dropping,

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Speaker 3: that sounds good. That's a good thing, right, our brains go, Okay,

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Speaker 3: more people are working, that's a good thing. But that

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Speaker 3: can't that also mean that fewer people are even looking

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Speaker 3: for jobs, people drop out of the job hunt. How

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Speaker 3: does that relate to these most recent numbers.

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Speaker 2: Yeah, the change in the labor market participation, it wasn't

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Speaker 2: too much. I mean it dropped by like fifty thousand

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Speaker 2: or something like that. I mean it was pretty immaterial. Again,

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Speaker 2: the real improvement came when they when the government asked, hey,

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Speaker 2: do you have a job, and you had two hundred

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Speaker 2: and thirty two thousand people saying yes, I have a job.

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Speaker 2: And when there was also how many people's you know,

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Speaker 2: few were said that they lost their job, and that

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Speaker 2: was that was a further improvement where it was less

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Speaker 2: a decline of two hundred and seventy eight thousand, so

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Speaker 2: you had a lot more people saying I have a

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Speaker 2: job and a lot fewer people saying I don't have

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Speaker 2: a job. So that was the real big drivers. It

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Speaker 2: wasn't necessarily the labor force participation in this round of things.

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Speaker 1: All right, Ay, we've got one full week of trading

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Speaker 1: in the books. You know, we had a slight bump

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Speaker 1: higher in the markets last week. We've got earning seasons

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Speaker 1: starting to you know, come into play in earnest this

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Speaker 1: week with a lot of bank earnings coming out. We

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Speaker 1: always hear the media talks about this all the time

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Speaker 1: as January goes, So does the year? Is there any

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Speaker 1: truth to that, you know saying? And is does history

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Speaker 1: tend to bear.

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Speaker 3: That out at all?

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Speaker 1: Or is that just noise that we should just kind

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Speaker 1: of ignore.

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Speaker 2: Or yeah, there is I guess a little bit of

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Speaker 2: truth in that. You know, January you know, uh, you

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Speaker 2: know uh as saying, uh, you know that said when

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Speaker 2: you look at it, January has historically been one of

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Speaker 2: the stronger months. If you just look at the returns

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Speaker 2: by month and the person of months that are positive,

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Speaker 2: really the November through Jane or mid October really through

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Speaker 2: the end of January is really one of your strongest periods,

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Speaker 2: But that doesn't mean that an investor should really you know,

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Speaker 2: exit and you know, get out for the rest of time,

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Speaker 2: because there's still positive returns on average and still better

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Speaker 2: than you know, the chance that you see positive returns

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Speaker 2: at least historically on the following months. But so, you know,

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Speaker 2: what really drives it. I think to your point that

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Speaker 2: you're really getting that is earning in corporate profits. And

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Speaker 2: when you look at profits over the past uh, you

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Speaker 2: know year, we look at all of twenty twenty five,

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Speaker 2: and we're starting to get we're going to start to

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Speaker 2: get fourth quarter earnings this year. We have seen quarterly

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Speaker 2: profits somewhere between ten and fifteen percent for each of

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Speaker 2: those first three quarters. When we look at what's expected

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Speaker 2: in the first quarter or expected this to be released

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Speaker 2: in this week for the fourth quarter of last year,

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Speaker 2: we'll probably see that continue in all I see right

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Speaker 2: now Wall Street's expecting in the upper single digits. But

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Speaker 2: what I'm really looking for most likely is a continuation

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Speaker 2: on that ten to fifteen percent year over year profit growth.

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Speaker 2: And that's really what drives stocks over the longer run,

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Speaker 2: because if you think about in the stock market, it's

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Speaker 2: really a collection of stocks and what matters for stocks

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Speaker 2: is if they're making money or not making money. And

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Speaker 2: when you when it comes down to it, they make

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Speaker 2: money when the economy is growing, when there isn't a recession.

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Speaker 2: So that's why we want to really pay close attention

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Speaker 2: to whether or not we see recession risk getting elevated.

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Speaker 2: Right now, I'll call the recession risk over the next

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Speaker 2: six to nine months kind of I'll call it slightly middle,

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Speaker 2: maybe a little bit low to middle, certainly not high,

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Speaker 2: and that tends to build well for the stock market.

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Speaker 2: Doesn't mean there will be short tom Rois, especially you know,

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Speaker 2: you know, as things might come out of Washington regarding

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Speaker 2: the Federal Reserve, that can certainly have an impact. But

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Speaker 2: for longer term investors, intermediate term investors, paying attention to

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Speaker 2: corporate profits, economic growth, that's really the drivers of what's

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Speaker 2: going to help your portfolios or not.

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Speaker 1: Sounds good, Andy, Thank you as always for spending time

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Speaker 1: with us tonight. Coming up next, a few key financial

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Speaker 1: opportunities you'll want to consider in twenty twenty six. These

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Speaker 1: are some smart moves that could position your portfolio for

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Speaker 1: a stronger year coming up in twenty twenty six. You're

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Speaker 1: listening to Simply Money, presented by Allworth Financial. Right here

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Speaker 1: on fifty five KRC, the talk station 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 can't listen to Simply

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Speaker 1: Money live every night, subscribe and 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 podcasts. Multiple accounts, missed, r and ds,

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Speaker 1: oh boy, and messy donations straight ahead at six forty three.

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Speaker 1: We're gonna clean all of that stuff up for you

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Speaker 1: with our quick, quick hit answers to your top money questions.

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Speaker 1: All right, Brian. Each year brings a new set of

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Speaker 1: challenges and a new set of opportunities, and there are

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Speaker 1: several opportunities out there to take advantage advantage of Pardon me.

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Speaker 1: In twenty twenty six.

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Speaker 3: YEP numbers change as the seasons. In the years do

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Speaker 3: so retirement contribution limits have changed. The IRS has announced

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Speaker 3: that contributions to four oh one k's, four h three b's,

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Speaker 3: Thrift Savings Plans and governmental four to fifty sevens can

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Speaker 3: now be maximized up to twenty four thousand, five hundred dollars.

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Speaker 3: That's up one thousand bucks. It was twenty three and

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Speaker 3: a half and twenty five. Now in twenty six it's

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Speaker 3: twenty four thousand, five hundred. That's the everybody under the

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Speaker 3: sun can make those contributions. Those over fifty we have

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Speaker 3: what's called that catchup and that's eight thousand dollars. Now again,

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Speaker 3: if you're fifty year older, then now your total limit

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Speaker 3: is thirty two five hundred dollars. Brand new rule though,

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Speaker 3: if you are a high earner, which is one hundred

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Speaker 3: and fifty thousand dollars. This is an individual if you're married.

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Speaker 3: Doesn't matter if you're married or not, it matters how

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Speaker 3: much you earn under your Social Security number on your

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Speaker 3: W two. New rule for twenty twenty six is gonna

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Speaker 3: require you to make that catchup contribution to a designated

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Speaker 3: broth account. This could be a challenge or it could

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Speaker 3: be an opportunity. I mean, I'm not overly bothered by this.

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Speaker 3: My happiest clients wind up with two piles of money

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Speaker 3: of some pre tax stuff that they benefited from on

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Speaker 3: the deduction side, and also you know, some some wroth

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Speaker 3: type stuff that has grown over time and won't be

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Speaker 3: taxed at all. But any case, remember that catchup contribution

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Speaker 3: that has to happen in a WROTH. You're not gonna

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Speaker 3: get a choice about it. So don't be surprised if

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Speaker 3: you look at your your four to one case statement

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Speaker 3: and you see something looks a little funky. I didn't

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Speaker 3: choose WROTH. It's just happening in the background because of

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Speaker 3: what that ketchup has to be.

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Speaker 1: Now, yeah, Brian and we brought these things up, you know,

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Speaker 1: I think in December we talked about it, you know, conceptually.

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Speaker 1: Now twenty twenty six though, is here, so you know,

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Speaker 1: one thing to check on. And sometimes people want to

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Speaker 1: do this. All of these spreadsheet people that you like

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Speaker 1: to talk about that stay on top of this stuff

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Speaker 1: all day every day, are probably already on it. But

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Speaker 1: for those of you that are just more casual participants

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Speaker 1: in your retirement plans at work, you know, do check things.

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Speaker 1: Check that website here once payroll is processed in January,

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Speaker 1: and just make sure that if you really should be

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Speaker 1: taking advantage of these catchup provisions, you're doing so, and

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Speaker 1: that your payroll provider has this stuff updated in terms

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Speaker 1: of the updated numbers. And then yeah, make sure that

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Speaker 1: that catch up money is going into the Wroth bucket. Again,

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Speaker 1: just a good reason to log into your account and

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Speaker 1: just make sure everything is up to date. We're pretty

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Speaker 1: confident it probably is. You know, most of these companies

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Speaker 1: are all on top of it. But again, good reason

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Speaker 1: to spend thirty seconds, a couple of minutes just logging

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Speaker 1: into your retirement account just to make sure Brian get

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Speaker 1: into some of the IRA and WROTH limits. In terms

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Speaker 1: of contract, we've got some updates there to discuss as well.

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Speaker 3: Yeah, so what we just covered was the employer based

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Speaker 3: retirement plan, you know, something you get through your job.

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Speaker 3: Now we'll pivot here to the individual retirement or individual

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Speaker 3: Wroth IRA type thing that you're doing outside of your employer.

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Speaker 3: So for twenty twenty six, IRA and Wroth IRA contribution

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Speaker 3: limit is seven five hundred dollars with an additional eleven

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Speaker 3: hundred dollars catchup. So it's a thousand dollars or eight

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Speaker 3: thousand dollars ketchup in four one K eleven hundred, just

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Speaker 3: to keep people confused. Catch up contribution for age fifty

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Speaker 3: and over, So now eighty six hundred dollars total contribution

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Speaker 3: for those fifty plus that's up from twenty twenty five,

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Speaker 3: and for a single filer, eligibility for this to begin

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Speaker 3: with phases out between one hundred and fifty three and

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Speaker 3: one hundred and sixty eight thousand dollars worth of modified

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Speaker 3: adjusted gross income. This is getting a little bit brow

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Speaker 3: beating with the numbers here, but if you earn between

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Speaker 3: one hundred and fifty hundred and seventy be paying attention.

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Speaker 3: As a single filer. If you're married filing jointly, it's

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Speaker 3: going to phase out between two forty and two hundred

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Speaker 3: and fifty seven thousand, so watch for that if you're

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Speaker 3: in that range. HSA. Let's pivot to hell savingscounts, one

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Speaker 3: of our favorite topics here twenty twenty six. The contribution

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Speaker 3: limit is forty four hundred dollars for an individual, only

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Speaker 3: eighty seven fifty for family coverage, and again an additional thousand

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Speaker 3: dollars catchup contribution if you're fifty five or over. So

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Speaker 3: if you are funding those accounts, as we always like

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Speaker 3: to say CURI, if if you're not using it for

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Speaker 3: current expenses, treat it like an investment. Make sure it's

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Speaker 3: landing in something that looks like a you know, a

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Speaker 3: mutual fund or something like that. You may or may

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Speaker 3: not be able to do that with your current custodian,

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Speaker 3: but you can move those dollars. You're not getting the

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Speaker 3: benefit of tax free growth if you're leaving it sit

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Speaker 3: in that optim bank account or whatever. Those banks are

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Speaker 3: all right.

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Speaker 1: And then one other thing we want to cover quickly

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Speaker 1: is this big beautiful bill deduction which goes into effect

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Speaker 1: here in twenty twenty six. It's a if the bill

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Speaker 1: does not become permanent, it's a temporary thing that runs

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Speaker 1: through twenty twenty eight, an extra six thousand dollars temporary

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Speaker 1: deduction on top of the standard deduction per spouse. But

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Speaker 1: there is a phase out on that as well, and

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Speaker 1: that phase out starts for taxpayers with incomes above seventy

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Speaker 1: five thousand for single filers one hundred and fifty thousand

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Speaker 1: dollars for joint filers. Brian, you and I have gotten

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Speaker 1: into this already, you know, with some reviews at the

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Speaker 1: end of last year, when people are starting to do

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Speaker 1: some income planning for twenty twenty six. It's just one

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Speaker 1: more thing to keep on top of. If you try

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Speaker 1: to pull money forward, pull taxable income forward, you could

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Speaker 1: you know, get into a situation where you're kind of

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Speaker 1: pricing your incoming yourself out of this. You know, senior

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Speaker 1: deduction for those age sixty five and older. So just

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Speaker 1: one more thing to keep an eye on. Here is

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Speaker 1: you do income planning for twenty twenty six. Here's the

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Speaker 1: all Worth advice. Twenty twenty six could provide a series

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Speaker 1: of opportunities for your investments. Talk to your financial advisor

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Speaker 1: about which opportunities make the most sense for your individual situation.

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Speaker 1: Should you worry about an AI bubble in twenty twenty six, Brian,

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Speaker 1: I feel like we talk about this every other week,

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Speaker 1: but with earning season coming up, it's worth mentioning again.

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Speaker 1: We'll break that down. What's real, what's the hype and

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Speaker 1: what could happen next. You're listening to Simply Money presenting

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Speaker 1: by Allworth Financial on fifty five KRC the talk station.

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Speaker 1: You're listening to Simply Money presented by all Worth Financial

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Speaker 1: and Bob Sponsller along with Brian James Well as we

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Speaker 1: talk about all the time. AI stocks have powered most

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Speaker 1: of the S and P five hundreds gains in recent years,

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Speaker 1: but with soaring valuations and big warning warnings from some

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Speaker 1: season portfolio managers, people that you know, let's face that

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Speaker 1: are talking their book might even be shorting these stocks

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Speaker 1: right now, Brian, Should we be worried about a bubble

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Speaker 1: in AI stocks? And if there is a bubble, is

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Speaker 1: it going to burst this year? Something we should probably

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Speaker 1: mention here with fourth quarter earning season starting to really

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Speaker 1: get into full gear here over the next couple of weeks.

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Speaker 3: Yeah, we'll be paying a lot of attention to this

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Speaker 3: because AI has been the catalyst, right There's always a

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Speaker 3: catalyst driving something behind the market, you know, and most

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Speaker 3: recently it's been artificial intelligence and the scale that it

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Speaker 3: can bring to public traded companies. But investors haven't really

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Speaker 3: reacted to this yet, Bob, so nine out of ten

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Speaker 3: investors who already own AI related stocks say they plan

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Speaker 3: to either hold or buy more in twenty six. That's

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Speaker 3: coming from Motley Fool, aptly named because you know, I

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Speaker 3: feel like, of course, of course that's what they're saying.

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Speaker 3: They're saying, no, we're not stampeding right now, We're gonna

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Speaker 3: stampede later, you know. So that's not necessarily an indicator

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Speaker 3: of the If these people were saying, yes, I'm gonna

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Speaker 3: get out they'd be getting out right now. So but

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Speaker 3: in any case, surveys are worth what they are. So

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Speaker 3: ninety three percent of current AI investors do remain bullish

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Speaker 3: on the long term return potential. And again that's coming

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Speaker 3: despite those warnings from those portfolio managers that that that

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Speaker 3: you referred there.

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Speaker 1: Well, and I think, as we talk about all the time, Brian,

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Speaker 1: it all comes down to valuation and other in other words,

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Speaker 1: how much are you willing to pay for a dollar's

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Speaker 1: worth of earnings and what's the expected future earnings growth rate?

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Speaker 1: And really these numbers fly all over the place. There

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Speaker 1: are companies that are trading at you know, over one

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Speaker 1: hundred times earnings on a forward moving basis, and and

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Speaker 1: that you know, can be a little rich, and those

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Speaker 1: kind of stocks can really tank in a hurry if

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Speaker 1: and when we get a little blip in any kind

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Speaker 1: of earnings news that creates any negativity. There are other

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Speaker 1: AI related stocks that are really not trading you know,

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Speaker 1: at obscene multiples. The growth rates have justified the stock

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Speaker 1: prices and are expected to do so. So it's really

434
00:22:52,960 --> 00:22:56,359
Speaker 1: on a stock by stock basis, which again for the

435
00:22:56,520 --> 00:23:00,359
Speaker 1: investor listening out there, it all comes down to how

436
00:23:00,440 --> 00:23:03,959
Speaker 1: you are managing your portfolio personally, or if you have

437
00:23:04,000 --> 00:23:07,359
Speaker 1: an advisor, how your advisor and his or her team

438
00:23:07,480 --> 00:23:09,840
Speaker 1: are managing things. I think the point we want to

439
00:23:09,880 --> 00:23:13,200
Speaker 1: make here is stay diversified. Don't have all your eggs

440
00:23:13,240 --> 00:23:16,639
Speaker 1: in one basket. If you really have ridden the ride

441
00:23:16,680 --> 00:23:19,000
Speaker 1: here on some of these AI stocks and have some

442
00:23:19,119 --> 00:23:22,280
Speaker 1: really nice gains and you have a need to diversify

443
00:23:22,320 --> 00:23:28,120
Speaker 1: your portfolio for tax reasons or risk management reasons, now

444
00:23:28,240 --> 00:23:30,400
Speaker 1: might be a time to sit down with your advisor

445
00:23:30,720 --> 00:23:33,120
Speaker 1: and really look under the hood, see what you own,

446
00:23:33,440 --> 00:23:37,120
Speaker 1: see what some of these valuations are, and be proactive

447
00:23:37,160 --> 00:23:40,399
Speaker 1: about adjusting the overall allocation of your portfolio.

448
00:23:40,840 --> 00:23:43,120
Speaker 3: Yeah, I would agree with that, And I mean there's

449
00:23:43,160 --> 00:23:45,240
Speaker 3: really never not a good time to be paying attention

450
00:23:45,240 --> 00:23:47,520
Speaker 3: to that. But the worst time to pay attention to

451
00:23:47,680 --> 00:23:50,320
Speaker 3: to not pay attention to that is never, And that's

452
00:23:50,320 --> 00:23:52,160
Speaker 3: what a lot of people do, just kind of blindly

453
00:23:52,240 --> 00:23:55,359
Speaker 3: let things wander and don't come back into that. And

454
00:23:55,680 --> 00:23:58,480
Speaker 3: to review what that portfolio actually looks like. So that

455
00:23:58,560 --> 00:24:01,240
Speaker 3: we always talk about those magnificent seven stocks, make sure

456
00:24:01,280 --> 00:24:03,800
Speaker 3: that you've spread your portfolio out beyond those those are

457
00:24:04,280 --> 00:24:05,800
Speaker 3: and you know all the names at this point, we

458
00:24:05,800 --> 00:24:07,440
Speaker 3: don't need to beat it to death. But those are

459
00:24:07,480 --> 00:24:09,440
Speaker 3: a huge part of the S and P five hundred.

460
00:24:09,520 --> 00:24:11,600
Speaker 3: So even if you're sitting on index fund, yeah, you're

461
00:24:11,640 --> 00:24:14,120
Speaker 3: kind of diversified. But at the same time, just remember

462
00:24:14,680 --> 00:24:17,480
Speaker 3: that those those stocks are making up a large portion

463
00:24:17,520 --> 00:24:20,400
Speaker 3: of your overall portfolio. And that group lost a trillion

464
00:24:20,480 --> 00:24:24,120
Speaker 3: dollars in one week in late late last year, and

465
00:24:24,200 --> 00:24:26,720
Speaker 3: we started to see a big, big bearish investors like

466
00:24:26,760 --> 00:24:28,720
Speaker 3: Michael Burry. I don't remember him, but he's famous from

467
00:24:28,720 --> 00:24:30,400
Speaker 3: two thousand and eight. He is one of the ones

468
00:24:30,400 --> 00:24:34,120
Speaker 3: that predicted the real estate downturn, doesn't meganma genius. He's

469
00:24:34,119 --> 00:24:36,480
Speaker 3: also made some bad guesses too, but he certainly was

470
00:24:36,520 --> 00:24:41,080
Speaker 3: moving against alter artificial intelligence type stocks. Also Ray Dalio,

471
00:24:41,680 --> 00:24:45,560
Speaker 3: another famous name soothsayer if you will, He feels like

472
00:24:45,880 --> 00:24:48,880
Speaker 3: the AI boom is getting into an early bubble territory.

473
00:24:48,880 --> 00:24:51,440
Speaker 3: To use his words, just kind of saying that the

474
00:24:51,640 --> 00:24:55,159
Speaker 3: has characteristics to similar pass bubbles. So just be careful

475
00:24:55,160 --> 00:24:58,800
Speaker 3: what we're getting into, you know, don't necessarily throw good

476
00:24:58,800 --> 00:25:01,240
Speaker 3: money after bad if if things move south on you.

477
00:25:02,119 --> 00:25:03,960
Speaker 1: Well, and Brian, you raise a good point. I mean,

478
00:25:04,040 --> 00:25:06,119
Speaker 1: just looking back over at the last say, four to

479
00:25:06,160 --> 00:25:08,359
Speaker 1: six weeks of twenty twenty five, if you look at

480
00:25:08,400 --> 00:25:11,119
Speaker 1: these big cap stocks, they really didn't do much and

481
00:25:11,160 --> 00:25:13,040
Speaker 1: in fact, they kind of pulled back a little bit,

482
00:25:13,320 --> 00:25:16,680
Speaker 1: while the overall market did just fine. And I think

483
00:25:16,680 --> 00:25:19,199
Speaker 1: we've already started to see a little bit of this

484
00:25:19,440 --> 00:25:24,320
Speaker 1: rebalancing and sector rotation, you know, amongst institutional money managers.

485
00:25:24,359 --> 00:25:26,679
Speaker 1: I personally think that's a good thing, you know, for

486
00:25:26,760 --> 00:25:30,640
Speaker 1: folks that are managing portfolios responsibly, because you know, if

487
00:25:30,640 --> 00:25:33,719
Speaker 1: you get away from just these AI hyperscalers that are

488
00:25:33,720 --> 00:25:38,760
Speaker 1: putting huge capital investments into AI, it eventually it's going

489
00:25:38,840 --> 00:25:42,160
Speaker 1: to come down to who can make money and generate

490
00:25:42,240 --> 00:25:46,240
Speaker 1: profits from utilizing this up and coming technology. And the

491
00:25:46,280 --> 00:25:49,840
Speaker 1: answer to that should be every industry, every sector, if

492
00:25:49,880 --> 00:25:53,560
Speaker 1: they're really paying attention and allocating capital correctly. So I

493
00:25:53,560 --> 00:25:56,040
Speaker 1: think we've already started to see a little bit of

494
00:25:56,119 --> 00:26:00,359
Speaker 1: healthy sector rotation. I expect that personally to continue twenty

495
00:26:00,400 --> 00:26:04,280
Speaker 1: twenty six. Again while not abandoning all these big cap

496
00:26:04,359 --> 00:26:07,720
Speaker 1: AI stocks who let's freight, let's face it, they still

497
00:26:07,760 --> 00:26:12,719
Speaker 1: have really nice earnings growth. Again, it's just don't pile

498
00:26:12,800 --> 00:26:15,280
Speaker 1: in to just a handful of stocks because you could

499
00:26:15,359 --> 00:26:18,119
Speaker 1: end up, you know, being sorry if and when the

500
00:26:18,760 --> 00:26:21,239
Speaker 1: whole earning story maybe pivots a little bit.

501
00:26:21,320 --> 00:26:24,359
Speaker 3: Yeah, I have zero concern about AI going away, and

502
00:26:24,440 --> 00:26:26,280
Speaker 3: just as if it was never here. This kind of

503
00:26:26,320 --> 00:26:28,720
Speaker 3: feels like that when the Internet was first a thing

504
00:26:28,760 --> 00:26:30,280
Speaker 3: and people were saying, well, this is a flash in

505
00:26:30,280 --> 00:26:32,720
Speaker 3: the pan. Nobod's gonna want to use their computers to

506
00:26:32,800 --> 00:26:36,000
Speaker 3: buy stuff online? Right with this Amazon company they sell books?

507
00:26:36,000 --> 00:26:37,800
Speaker 3: Who cares about that? I can get books for free

508
00:26:37,800 --> 00:26:41,280
Speaker 3: from the library. But I feel like the AI is

509
00:26:41,320 --> 00:26:44,240
Speaker 3: definitely these are tools that do make things more efficient

510
00:26:44,320 --> 00:26:46,399
Speaker 3: and they make work easier. Is it going to be

511
00:26:46,440 --> 00:26:49,160
Speaker 3: the hype that is currently presented. No, that's what makes

512
00:26:49,200 --> 00:26:51,200
Speaker 3: it hype. But at the same time, these tools will

513
00:26:51,240 --> 00:26:53,360
Speaker 3: not go away. They do allow for much more efficient

514
00:26:53,720 --> 00:26:57,119
Speaker 3: day to day business activity. So again, just just be

515
00:26:57,480 --> 00:27:00,320
Speaker 3: just be responsible and mindful of what the limitates.

516
00:27:01,240 --> 00:27:05,000
Speaker 1: Here's the all Worth advice. Diversify, diversify, diversify and focus

517
00:27:05,040 --> 00:27:09,719
Speaker 1: on fundamentals and plan for both corrections and continued growth.

518
00:27:10,119 --> 00:27:13,560
Speaker 1: And as Brian said, planning ahead is better than planning

519
00:27:13,560 --> 00:27:16,840
Speaker 1: after it already happens. That's what we call discipline, not

520
00:27:17,080 --> 00:27:20,879
Speaker 1: fear or fear of missing out. That's what protects and

521
00:27:20,920 --> 00:27:24,680
Speaker 1: grows your wealth over time. Did you forget your R

522
00:27:24,800 --> 00:27:27,400
Speaker 1: and D last year? Well, you're not alone. We'll tackle

523
00:27:27,600 --> 00:27:32,640
Speaker 1: real listener questions on that topic and some misdeadlines on

524
00:27:32,960 --> 00:27:37,439
Speaker 1: rmds to Wroth moves and smarter giving strategies. All that

525
00:27:37,480 --> 00:27:39,879
Speaker 1: and more coming up next. You're listening to Simply Money

526
00:27:40,000 --> 00:27:43,000
Speaker 1: presented by all Worth Financial on fifty five KRC the

527
00:27:43,280 --> 00:27:49,600
Speaker 1: talk station. You're listening to Simply Money presented by all

528
00:27:49,640 --> 00:27:53,240
Speaker 1: Worth Financial Lambob Sponseller along with Brian James. Do you

529
00:27:53,280 --> 00:27:55,719
Speaker 1: have a financial question you'd like for us to answer?

530
00:27:55,760 --> 00:27:58,040
Speaker 1: There's a red button you can click while you're listening

531
00:27:58,080 --> 00:28:00,760
Speaker 1: to the show if and only if you're listening to

532
00:28:00,800 --> 00:28:04,119
Speaker 1: the show on the iHeart app. Simply record your question

533
00:28:04,280 --> 00:28:07,480
Speaker 1: there and it will come straight to us. All right.

534
00:28:07,520 --> 00:28:10,760
Speaker 1: Brian Arthur in Hyde Park leads us off tonight. He says,

535
00:28:10,760 --> 00:28:14,600
Speaker 1: we delayed Wroth conversions for years and now we're in

536
00:28:14,680 --> 00:28:18,239
Speaker 1: twenty twenty six wishing we had done more. Is it

537
00:28:18,280 --> 00:28:22,399
Speaker 1: too late to make meaningful changes to our portfolio and

538
00:28:22,520 --> 00:28:23,320
Speaker 1: text strategy?

539
00:28:23,359 --> 00:28:26,280
Speaker 3: Brian, Now, I would say it's never too late to

540
00:28:26,320 --> 00:28:29,040
Speaker 3: really think about roth conversions, because we're you're talking about

541
00:28:29,080 --> 00:28:31,840
Speaker 3: something that is a sacrifice right now but will do

542
00:28:31,960 --> 00:28:34,800
Speaker 3: nothing but benefit as we go forward. And roth conversions

543
00:28:34,840 --> 00:28:37,159
Speaker 3: really need a lot of time to be beneficial anyway.

544
00:28:37,200 --> 00:28:39,040
Speaker 3: So don't feel like just because we missed a year

545
00:28:39,200 --> 00:28:41,840
Speaker 3: that it no longer makes sense. But so what I

546
00:28:41,840 --> 00:28:46,320
Speaker 3: would suggest is separate the missed opportunity from the remaining opportunity. Yeah,

547
00:28:46,360 --> 00:28:48,840
Speaker 3: converting aggressively when you're in lower tax years, of course,

548
00:28:48,880 --> 00:28:51,440
Speaker 3: that would have reduced fewer RMD exposures. That's perfect. So

549
00:28:51,480 --> 00:28:53,520
Speaker 3: would betting on last year's lottery numbers. You'd have been

550
00:28:53,560 --> 00:28:55,560
Speaker 3: fine doing that too, if you can predict the future.

551
00:28:56,360 --> 00:28:58,600
Speaker 3: But WROTH planning, it's not an on and off switch.

552
00:28:58,640 --> 00:29:02,200
Speaker 3: It is very much a multi decade tax rate arbitrage problem.

553
00:29:02,200 --> 00:29:04,440
Speaker 3: You're simply trying to say, I want to pay taxes

554
00:29:04,480 --> 00:29:07,280
Speaker 3: now because I feel like taxes are gonna go up

555
00:29:07,280 --> 00:29:09,880
Speaker 3: in the future, or because I think the overall growth

556
00:29:10,040 --> 00:29:13,880
Speaker 3: will be beneficial to me, And so just make sure

557
00:29:13,920 --> 00:29:15,880
Speaker 3: that you understand, you know what the impact you haven't

558
00:29:15,880 --> 00:29:18,760
Speaker 3: really lost, And tax planning and roth conversion to me

559
00:29:18,880 --> 00:29:22,720
Speaker 3: is an annual decision anyway. So I feel like there's

560
00:29:22,760 --> 00:29:25,160
Speaker 3: still plenty of room. I wouldn't worry about too much

561
00:29:25,160 --> 00:29:27,680
Speaker 3: about that. So let's move on to Beth and Mainville,

562
00:29:27,680 --> 00:29:30,720
Speaker 3: who says she forgot this can give me PTSD forgot

563
00:29:30,720 --> 00:29:33,200
Speaker 3: to take my rm D and I'm freaking out. Well

564
00:29:33,240 --> 00:29:34,520
Speaker 3: what can she do? Bob?

565
00:29:35,240 --> 00:29:37,680
Speaker 1: All right? Well, first of all, Beth, calm down, no

566
00:29:37,840 --> 00:29:40,520
Speaker 1: reason to freak out. By the same token, you do

567
00:29:40,640 --> 00:29:43,200
Speaker 1: need to address this. We see this come up from

568
00:29:43,200 --> 00:29:46,760
Speaker 1: time to time. So the first thing is, don't bury

569
00:29:46,760 --> 00:29:48,840
Speaker 1: your head in the sand and just wish and hope

570
00:29:48,880 --> 00:29:51,360
Speaker 1: this problem is gonna go away, because I can promise

571
00:29:51,400 --> 00:29:54,040
Speaker 1: you the IRS is not going to treat it that way.

572
00:29:54,120 --> 00:29:56,920
Speaker 1: So here's what you do. First, figure out what your

573
00:29:57,040 --> 00:30:00,160
Speaker 1: rm D should have been for twenty twenty five. Figure

574
00:30:00,160 --> 00:30:03,520
Speaker 1: out what that number is and make sure that gets processed,

575
00:30:03,600 --> 00:30:07,280
Speaker 1: and then work with your tax professional CPA if you

576
00:30:07,360 --> 00:30:09,760
Speaker 1: have one, or if you do it yourself. You're you know,

577
00:30:09,840 --> 00:30:12,160
Speaker 1: either way, you're gonna have to file something called an

578
00:30:12,200 --> 00:30:16,400
Speaker 1: IRS Form five three two nine to address the missed

579
00:30:16,720 --> 00:30:19,200
Speaker 1: rm D. So what's gonna happen is you got to

580
00:30:19,280 --> 00:30:21,840
Speaker 1: take this rm D, and I'd recommend taking it sooner

581
00:30:21,920 --> 00:30:24,280
Speaker 1: rather than later. The IRS is going to want to

582
00:30:24,320 --> 00:30:28,000
Speaker 1: see evidence that you address the problem, recognize it, and

583
00:30:28,080 --> 00:30:31,600
Speaker 1: dealt with it. Don't try to, you know, take advantage

584
00:30:31,640 --> 00:30:34,400
Speaker 1: of seven more months of tax deferral and try to

585
00:30:34,440 --> 00:30:37,440
Speaker 1: get out from under penalties. Uh, address it right away,

586
00:30:37,920 --> 00:30:41,720
Speaker 1: file form fifty three twenty nine, you know, because again

587
00:30:41,760 --> 00:30:44,680
Speaker 1: as a reminder, there is a twenty five percent penalty

588
00:30:45,200 --> 00:30:48,360
Speaker 1: on the missed rm D amount that the IRS can

589
00:30:48,480 --> 00:30:52,000
Speaker 1: levy on you if they want to. They ten that's

590
00:30:52,080 --> 00:30:55,040
Speaker 1: reduced to ten percent if you correct it within the

591
00:30:55,080 --> 00:30:58,440
Speaker 1: first two years and file that fifty three to twenty

592
00:30:58,520 --> 00:31:02,560
Speaker 1: nine form properly. In a lot of cases, the IRS

593
00:31:02,720 --> 00:31:06,680
Speaker 1: will waive the penalty entirely if you can show reasonable

594
00:31:06,760 --> 00:31:09,920
Speaker 1: cause on that form for why you missed it and

595
00:31:10,040 --> 00:31:14,320
Speaker 1: show evidence that you fixed it promptly. Brian, I've had

596
00:31:14,320 --> 00:31:16,520
Speaker 1: a couple clients go through this over the last couple

597
00:31:16,520 --> 00:31:18,600
Speaker 1: of years, and we got on it in the first

598
00:31:18,640 --> 00:31:21,880
Speaker 1: couple weeks of January, and we went ahead and pulled

599
00:31:21,880 --> 00:31:24,680
Speaker 1: out both the rm D for twenty twenty five plus

600
00:31:24,720 --> 00:31:28,200
Speaker 1: any earnings that accrued in twenty twenty six on that

601
00:31:28,280 --> 00:31:30,840
Speaker 1: missed rm D amount. We pulled it out right now,

602
00:31:31,160 --> 00:31:34,200
Speaker 1: got it out of there filed the form. Now, remember

603
00:31:34,440 --> 00:31:37,920
Speaker 1: you also still have to take your twenty twenty six RMD,

604
00:31:38,400 --> 00:31:42,080
Speaker 1: and for tax planning purposes, both of those distributions are

605
00:31:42,120 --> 00:31:45,320
Speaker 1: going to be treated as taxable income for twenty twenty six.

606
00:31:46,080 --> 00:31:49,120
Speaker 1: I've yet to have a client that addressed this, you know,

607
00:31:49,280 --> 00:31:54,520
Speaker 1: promptly and thoroughly get assessed a penalty. Have you had situations,

608
00:31:54,640 --> 00:31:56,960
Speaker 1: you know, similar to this, And how is this all

609
00:31:57,000 --> 00:31:58,560
Speaker 1: shaken out for you and your clients?

610
00:31:58,800 --> 00:32:01,120
Speaker 3: You know, honestly, honestly, Bob, I've never had a negative

611
00:32:01,160 --> 00:32:03,080
Speaker 3: interaction with the I R S when people are just

612
00:32:03,120 --> 00:32:04,200
Speaker 3: trying to figure things out.

613
00:32:04,320 --> 00:32:04,800
Speaker 1: Yeah, there is.

614
00:32:04,920 --> 00:32:07,440
Speaker 3: There is so much that it's so complicated that even

615
00:32:07,480 --> 00:32:09,480
Speaker 3: the I R S folks, they'll never tell you, you know,

616
00:32:09,520 --> 00:32:11,640
Speaker 3: here's the exact playbook. What you do in this situation.

617
00:32:11,960 --> 00:32:14,520
Speaker 3: You simply make your case. And I've always found them

618
00:32:15,240 --> 00:32:18,320
Speaker 3: outside of situations where somebody is obviously trying to commit

619
00:32:18,400 --> 00:32:22,239
Speaker 3: fraud or or you know, is just blatantly, you know,

620
00:32:22,720 --> 00:32:25,160
Speaker 3: just ignoring their taxes if it's just a one off, whoops,

621
00:32:25,160 --> 00:32:27,000
Speaker 3: I did my tax is wrong, They've always been flexible.

622
00:32:27,080 --> 00:32:28,680
Speaker 3: One quick thought I want to throw out to Beth

623
00:32:29,200 --> 00:32:31,240
Speaker 3: is that if this happens to be your first time

624
00:32:31,320 --> 00:32:34,200
Speaker 3: taking an RMD, you haven't missed a deadline yet because

625
00:32:34,240 --> 00:32:36,320
Speaker 3: the first year you take it is that the deadline

626
00:32:36,360 --> 00:32:39,760
Speaker 3: is tax time for the prior year, so that would

627
00:32:39,800 --> 00:32:41,960
Speaker 3: be April of twenty six. So if this hacks will

628
00:32:42,040 --> 00:32:45,640
Speaker 3: be your very first you're still okay. So but yeah,

629
00:32:45,680 --> 00:32:46,840
Speaker 3: just pay attention to that. We don't we don't know

630
00:32:46,840 --> 00:32:48,360
Speaker 3: if that's the situation for you, but you might you

631
00:32:48,400 --> 00:32:48,920
Speaker 3: might be okay.

632
00:32:49,440 --> 00:32:51,560
Speaker 1: Yeah, so, Beth, no reason to freak out. But by

633
00:32:51,600 --> 00:32:53,800
Speaker 1: the same token, get on top of it, be thorough,

634
00:32:53,880 --> 00:32:55,880
Speaker 1: do your filing, and I think everything's going to work

635
00:32:55,880 --> 00:32:58,760
Speaker 1: out just fine. All right. John in Blue Ash says,

636
00:32:58,800 --> 00:33:01,000
Speaker 1: I have a four to one K plan through my employer,

637
00:33:01,400 --> 00:33:04,880
Speaker 1: but I also have started a site hustle that's bringing

638
00:33:04,920 --> 00:33:08,640
Speaker 1: in some pretty significant income. Am I allowed to also

639
00:33:08,840 --> 00:33:11,120
Speaker 1: have a solo for a one K? Brian?

640
00:33:11,600 --> 00:33:13,960
Speaker 3: Yeah? So here this is where it gets a little confusing.

641
00:33:14,000 --> 00:33:16,440
Speaker 3: So the quick answer to John is yes, you're allowed

642
00:33:16,440 --> 00:33:18,720
Speaker 3: to have both plans. Here's a situation. You've got a

643
00:33:18,800 --> 00:33:21,000
Speaker 3: W two type job with an employer sponsored for a

644
00:33:21,040 --> 00:33:23,800
Speaker 3: one K and a bona fide self employment income. That

645
00:33:23,840 --> 00:33:26,360
Speaker 3: means you've got a schedule see our partnership K one

646
00:33:26,560 --> 00:33:29,120
Speaker 3: single member LLC that kind of thing. Then yes, you

647
00:33:29,160 --> 00:33:31,800
Speaker 3: can establish and contribute to a solo for a one K.

648
00:33:32,240 --> 00:33:36,240
Speaker 3: However that this might be what you're asking. That employee

649
00:33:36,280 --> 00:33:39,240
Speaker 3: salary deferral limit, which is as we said earlier in

650
00:33:39,320 --> 00:33:43,400
Speaker 3: this broadcast is twenty four five hundred plus to catch up.

651
00:33:43,760 --> 00:33:48,600
Speaker 3: That applies across all of your all of your retirement plans.

652
00:33:48,600 --> 00:33:51,800
Speaker 3: So you'll still need to pay attention to the total

653
00:33:51,840 --> 00:33:53,920
Speaker 3: dollar amount going into these. You don't get that twenty

654
00:33:53,960 --> 00:33:57,680
Speaker 3: four and a half in twenty six using for each plan.

655
00:33:57,760 --> 00:33:59,760
Speaker 3: It is a total. You can't double it, so make

656
00:33:59,760 --> 00:34:02,840
Speaker 3: sure you're paying attention to that. It's really the employer

657
00:34:02,960 --> 00:34:05,400
Speaker 3: contributions that's what's separate. That's the real advantage of the

658
00:34:05,440 --> 00:34:07,360
Speaker 3: solo for OH one K, because you get to put

659
00:34:07,400 --> 00:34:09,440
Speaker 3: some more on money on top that comes from the business.

660
00:34:09,480 --> 00:34:11,560
Speaker 3: I know it's confusing if you're a soul prop because

661
00:34:11,600 --> 00:34:14,680
Speaker 3: you're both the employee and the employer, But the IRS

662
00:34:14,719 --> 00:34:18,240
Speaker 3: looks at those two contributions, those two sources as very different.

663
00:34:18,400 --> 00:34:22,439
Speaker 3: The employer contribution does not count against your personal deferral limit.

664
00:34:22,480 --> 00:34:24,239
Speaker 3: That's why you're doing this, that's the benefit of the

665
00:34:24,280 --> 00:34:26,440
Speaker 3: solo for O on K. It's not to take advantage

666
00:34:26,440 --> 00:34:28,600
Speaker 3: of the twenty four to five that everybody gets, is

667
00:34:28,640 --> 00:34:30,719
Speaker 3: to take advantage of the employer side of things.

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00:34:31,840 --> 00:34:34,279
Speaker 1: All right. Coming up next, we're going to unpack what

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00:34:34,360 --> 00:34:39,280
Speaker 1: the latest legit research says about where investors are actually

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00:34:39,320 --> 00:34:43,680
Speaker 1: getting their information with which to make investment decisions, and

671
00:34:43,760 --> 00:34:47,040
Speaker 1: the big question should you follow suit. You're listening to

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00:34:47,080 --> 00:34:49,680
Speaker 1: Simply Money Presided by all Worth Financial lung fifty five

673
00:34:49,760 --> 00:34:57,000
Speaker 1: KRC the talk station. You're listening to Simply Money Presided

674
00:34:57,040 --> 00:34:59,640
Speaker 1: by all Worth Financial on Bob Sponseller along with Brian

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00:34:59,760 --> 00:35:02,600
Speaker 1: ja Games. Well, let's talk about, Brian. One of the

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00:35:02,640 --> 00:35:07,359
Speaker 1: hottest trends in personal finance right now, finn influencers and

677
00:35:07,440 --> 00:35:11,600
Speaker 1: social media advice, something I know nothing about, but I

678
00:35:11,640 --> 00:35:14,120
Speaker 1: know you're a hip gen X kind of dude, so

679
00:35:14,160 --> 00:35:16,880
Speaker 1: you're probably all on top of this. Brian. Do you

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00:35:16,920 --> 00:35:20,040
Speaker 1: get your financial advice off TikTok? Is that where you

681
00:35:20,120 --> 00:35:21,760
Speaker 1: get all your great trading ideas?

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00:35:21,800 --> 00:35:23,680
Speaker 3: That's all That's all I do. I mean, it's a

683
00:35:23,680 --> 00:35:26,040
Speaker 3: financial advisor. All I need to do is regurgitate stuff

684
00:35:26,040 --> 00:35:28,040
Speaker 3: I see in thirty second video clips on the internet.

685
00:35:28,080 --> 00:35:29,480
Speaker 3: That's really it's tops easy about.

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00:35:30,120 --> 00:35:33,400
Speaker 1: All right, Well, tell us tell us about what the

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00:35:33,560 --> 00:35:40,680
Speaker 1: Finra Investor Education Foundation has concluded after some fairly significant research.

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00:35:40,880 --> 00:35:43,480
Speaker 3: Yeah, so this is limited to they interview at finn

689
00:35:43,640 --> 00:35:45,279
Speaker 3: by the way, that's one of the governing bodies of

690
00:35:45,280 --> 00:35:49,440
Speaker 3: our industry, and it surveyed nearly three thousand people with

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00:35:49,560 --> 00:35:52,640
Speaker 3: non retirement investment accounts. So we're talking about people who

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00:35:52,680 --> 00:35:55,279
Speaker 3: have investment money, because that's normally where people kind of

693
00:35:55,280 --> 00:35:57,640
Speaker 3: play with their assets in some kind of broker's account

694
00:35:57,680 --> 00:35:59,319
Speaker 3: that is not a four one K, not an IRA.

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00:35:59,560 --> 00:36:02,440
Speaker 3: So among these three thousand people, three and ten of

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00:36:02,480 --> 00:36:05,960
Speaker 3: them report on relying on social media as an information source,

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00:36:06,560 --> 00:36:09,000
Speaker 3: and when asked separately about the social channels they actually

698
00:36:09,120 --> 00:36:12,960
Speaker 3: use for investing information, YouTube is the most popular. And

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00:36:13,120 --> 00:36:16,000
Speaker 3: also three and ten stated that they use these recommendations

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00:36:16,000 --> 00:36:19,320
Speaker 3: from these social media influencers when making investment decisions. In

701
00:36:19,360 --> 00:36:21,120
Speaker 3: other words, it's just not something to stare at. They're

702
00:36:21,120 --> 00:36:24,319
Speaker 3: actually acting on the information they're getting. Six in ten

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00:36:24,400 --> 00:36:26,799
Speaker 3: of those under thirty five and six and ten of

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00:36:26,840 --> 00:36:29,399
Speaker 3: those with less than two years of investing experience. What

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00:36:29,440 --> 00:36:32,319
Speaker 3: that tells me is that that is the most that

706
00:36:32,400 --> 00:36:35,040
Speaker 3: is good, bad, or and different. But social media is

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00:36:35,280 --> 00:36:38,719
Speaker 3: viewed as the most obvious way to get started. These

708
00:36:38,719 --> 00:36:41,560
Speaker 3: are younger people and people who don't have much investing experience,

709
00:36:41,560 --> 00:36:43,880
Speaker 3: and that's where they're starting. And I don't mean to

710
00:36:43,920 --> 00:36:45,600
Speaker 3: sound Ryan Bryan.

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00:36:45,719 --> 00:36:48,359
Speaker 1: Does this mean that I can go on YouTube and

712
00:36:48,480 --> 00:36:54,319
Speaker 1: simultaneously learn all about tying fly fishing flies and learn

713
00:36:54,360 --> 00:36:58,160
Speaker 1: about what the best triple leverage bitcoin ETF is? Can

714
00:36:58,200 --> 00:36:59,600
Speaker 1: I get all that in one location?

715
00:36:59,719 --> 00:37:02,040
Speaker 3: Yes, you can get lots of terrible advice from social media.

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00:37:02,239 --> 00:37:02,279
Speaker 1: No.

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00:37:02,400 --> 00:37:05,560
Speaker 3: I help me to sound an alarm here, because there

718
00:37:05,600 --> 00:37:07,880
Speaker 3: is good information to be had out there, But the

719
00:37:07,960 --> 00:37:11,680
Speaker 3: flashyar it is and the more obnoxious it is, probably

720
00:37:11,719 --> 00:37:14,280
Speaker 3: the more useless it actually is. I would be looking

721
00:37:14,320 --> 00:37:18,520
Speaker 3: toward the more boring influencers out there, right. There are

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00:37:18,520 --> 00:37:21,960
Speaker 3: some out there that do provide a much broader picture

723
00:37:22,360 --> 00:37:25,200
Speaker 3: than just invest in this one XYZ thing because it's

724
00:37:25,239 --> 00:37:27,680
Speaker 3: going to make a bazillion dollars next week. That's where

725
00:37:27,719 --> 00:37:30,120
Speaker 3: the attraction starts, and that's where people can get stounded

726
00:37:30,200 --> 00:37:33,120
Speaker 3: down the wrong path. And my concern there is if

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00:37:33,200 --> 00:37:36,080
Speaker 3: for these folks who are using these types of resources

728
00:37:36,080 --> 00:37:38,600
Speaker 3: for their very first time investing. There's a real good

729
00:37:38,680 --> 00:37:40,400
Speaker 3: chance that they're just going to get a bad taste

730
00:37:40,400 --> 00:37:41,960
Speaker 3: in their mouth. These are the people who ten years

731
00:37:42,000 --> 00:37:43,840
Speaker 3: from now we'll talk about, well, I lost all my

732
00:37:43,920 --> 00:37:46,400
Speaker 3: money in the stock market, which is simply a silly

733
00:37:46,400 --> 00:37:48,480
Speaker 3: comment because I'm looking at the stock market right now.

734
00:37:48,520 --> 00:37:51,240
Speaker 3: It didn't go away. It's still here. If you lost

735
00:37:51,360 --> 00:37:53,040
Speaker 3: or so and so lost all their money in the

736
00:37:53,040 --> 00:37:55,600
Speaker 3: stock market, so and so is gambling on stupid ideas.

737
00:37:55,719 --> 00:37:57,319
Speaker 3: So that's the kind of stuff that you have to

738
00:37:57,360 --> 00:38:00,480
Speaker 3: watch for. Build the core, do the boring stuff first,

739
00:38:00,640 --> 00:38:02,239
Speaker 3: and then look to the If you really still have

740
00:38:02,280 --> 00:38:04,919
Speaker 3: that temptation, look for these influencers and these these little

741
00:38:05,120 --> 00:38:06,759
Speaker 3: take a flyer on something, but do it with a

742
00:38:06,800 --> 00:38:09,040
Speaker 3: small portion of your assets and learn how it works.

743
00:38:09,800 --> 00:38:12,160
Speaker 1: Well. A positive spin on this story, and I mean

744
00:38:12,160 --> 00:38:14,319
Speaker 1: that I think it's positive that folks are out there

745
00:38:14,360 --> 00:38:17,120
Speaker 1: trying to learn more about investing. The good news here

746
00:38:17,239 --> 00:38:19,040
Speaker 1: is that the folks that are going out on these

747
00:38:19,080 --> 00:38:23,920
Speaker 1: social media challenge channels, they're getting about seventy five percent

748
00:38:24,080 --> 00:38:28,440
Speaker 1: of their recommendations and ideas from actual brokerage firms and

749
00:38:28,600 --> 00:38:32,840
Speaker 1: financial professionals, which means this industry is starting to evolve

750
00:38:32,960 --> 00:38:35,680
Speaker 1: enough to be to have a presence on these channels

751
00:38:36,000 --> 00:38:40,880
Speaker 1: where actual young people are and live and operate. Education

752
00:38:41,120 --> 00:38:43,920
Speaker 1: is always a good thing. It's just interesting to watch

753
00:38:43,920 --> 00:38:46,680
Speaker 1: how it all unfolds. And you know the hard thing

754
00:38:46,719 --> 00:38:50,040
Speaker 1: for these young folks is to sift the bad information

755
00:38:50,200 --> 00:38:52,920
Speaker 1: from the good information, and that's what makes things so

756
00:38:53,200 --> 00:38:57,040
Speaker 1: challenging out there in social media land. Here's the all

757
00:38:57,080 --> 00:39:01,200
Speaker 1: Worth advice. Social media can spark financial creosity, but your

758
00:39:01,239 --> 00:39:06,360
Speaker 1: wealth deserves insight grounded in expertise, not just likes in views.

759
00:39:06,760 --> 00:39:09,200
Speaker 1: Thanks for listening tonight. You've been listening to Simply Money,

760
00:39:09,320 --> 00:39:12,239
Speaker 1: presented by all Worth Financial on fifty five KRC, the

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00:39:12,560 --> 00:39:13,080
Speaker 1: talk station