1 00:00:01,280 --> 00:00:08,080 Speaker 1: Tonight, market volatility the opportunity of SPARTA investors play both 2 00:00:08,160 --> 00:00:12,080 Speaker 1: defense and offense. You're listening to Simply Money Presided by 3 00:00:12,080 --> 00:00:16,200 Speaker 1: all Worth Financial on Bob Sponseller along with Brian James. Well, 4 00:00:16,239 --> 00:00:21,439 Speaker 1: obviously markets are swinging around again. Headlines are screaming uncertainty 5 00:00:21,600 --> 00:00:26,479 Speaker 1: virtually every day. But what if volatility can work to 6 00:00:26,560 --> 00:00:30,880 Speaker 1: your advantage in sometimes actually be your biggest advantage. Tonight, 7 00:00:30,880 --> 00:00:34,080 Speaker 1: we're breaking down how you can turn that market uncertainty 8 00:00:34,080 --> 00:00:38,800 Speaker 1: and volatility into some big time, long term opportunity and 9 00:00:38,880 --> 00:00:44,640 Speaker 1: the specific strategies you can be using even right now. Brian, Well, let's. 10 00:00:44,440 --> 00:00:47,640 Speaker 2: First of all, let's reframe volatility. Volatility gets a bad 11 00:00:47,760 --> 00:00:50,479 Speaker 2: rap because it's most people hear the word volatility and 12 00:00:50,520 --> 00:00:53,440 Speaker 2: they think down. Volatility is the swing between the ups 13 00:00:53,440 --> 00:00:56,280 Speaker 2: and downs. So let's move that from being a threat 14 00:00:56,320 --> 00:00:59,120 Speaker 2: to being a tool. We don't like it because it 15 00:00:59,120 --> 00:01:02,240 Speaker 2: feels uncomfortable, like riding a roller coaster that we weren't expecting, 16 00:01:02,320 --> 00:01:04,560 Speaker 2: especially when when we are in a retirement or that 17 00:01:04,640 --> 00:01:07,520 Speaker 2: glide path down to it. You know, nobody likes looking 18 00:01:07,560 --> 00:01:09,400 Speaker 2: at their statements and seeing that they've lost money and 19 00:01:09,440 --> 00:01:12,400 Speaker 2: the market is pulled back And this is interesting because 20 00:01:13,040 --> 00:01:15,039 Speaker 2: you know, everybody went through two thousand and eight, right, 21 00:01:15,120 --> 00:01:17,360 Speaker 2: nobody really got the sidestep it for the most part. 22 00:01:17,480 --> 00:01:20,600 Speaker 2: But I still hear people talking about how much quote 23 00:01:20,680 --> 00:01:23,480 Speaker 2: unquote I lost, I lost X amount of dollars in 24 00:01:23,480 --> 00:01:25,280 Speaker 2: two thousand and eight. Of course you did. Everybody did, 25 00:01:25,480 --> 00:01:27,319 Speaker 2: but we don't. People don't tend to think of it 26 00:01:27,319 --> 00:01:29,479 Speaker 2: in terms of something that happened to the entire world. 27 00:01:29,600 --> 00:01:31,759 Speaker 2: They tend to think of those pullbacks as something that 28 00:01:31,760 --> 00:01:34,520 Speaker 2: the market targeted them for and took advantage of them, 29 00:01:34,680 --> 00:01:37,600 Speaker 2: and they somehow made a mistake, even with a diversified portfolio. 30 00:01:37,959 --> 00:01:41,039 Speaker 2: So this happens also to disciplined investors, especially the ones 31 00:01:41,080 --> 00:01:44,720 Speaker 2: with significant assets. Volatility isn't just noise, it's an opportunity. 32 00:01:44,760 --> 00:01:46,480 Speaker 2: It is a loud noise because if you've got a 33 00:01:46,480 --> 00:01:48,320 Speaker 2: lot of wealth, then we tend to see, you know, 34 00:01:48,360 --> 00:01:51,000 Speaker 2: maybe the same percentage loss ends up being a much 35 00:01:51,080 --> 00:01:53,600 Speaker 2: larger dollar amount, and that could be a lot very disconcerting. 36 00:01:53,880 --> 00:01:56,080 Speaker 2: But if you've reached that point where you've built that 37 00:01:56,120 --> 00:01:58,440 Speaker 2: real wealth, you're really no longer trying to just grow it. 38 00:01:58,440 --> 00:02:01,520 Speaker 2: You've got other things going on. Your manage, taxes, income 39 00:02:01,520 --> 00:02:04,400 Speaker 2: streams out of it, whatever the legacy is that you want, 40 00:02:04,800 --> 00:02:06,800 Speaker 2: you know, and in volatility now becomes a lever you 41 00:02:06,840 --> 00:02:09,559 Speaker 2: can actually pull. So think of it like this, Volatility 42 00:02:09,639 --> 00:02:11,720 Speaker 2: is just the price you pay for those returns that 43 00:02:11,840 --> 00:02:14,160 Speaker 2: gave you that pile of wealth. It is the source 44 00:02:14,240 --> 00:02:15,000 Speaker 2: of those returns. 45 00:02:16,360 --> 00:02:19,200 Speaker 1: Yeah, and as you said, Brian, the bigger the pile 46 00:02:19,320 --> 00:02:23,120 Speaker 1: starts to become, you know, even three or four percent 47 00:02:23,240 --> 00:02:25,280 Speaker 1: moves down in the market. You know, you look at 48 00:02:25,400 --> 00:02:28,240 Speaker 1: the impact on your account statement or if you look 49 00:02:28,280 --> 00:02:31,359 Speaker 1: it up online or whatever, it starts to become real money. 50 00:02:31,880 --> 00:02:34,320 Speaker 1: And you know, I think people it's just an emotional 51 00:02:34,360 --> 00:02:37,320 Speaker 1: reaction to you know, I work so hard to build 52 00:02:37,320 --> 00:02:39,960 Speaker 1: this net worth and save and invest and grow it 53 00:02:40,000 --> 00:02:42,080 Speaker 1: and do all the right things. And then at the 54 00:02:42,120 --> 00:02:45,960 Speaker 1: first sign, especially as you're approaching retirement, or in the 55 00:02:46,040 --> 00:02:49,040 Speaker 1: early years of retirement, or even the latter years of retirement, 56 00:02:49,440 --> 00:02:52,440 Speaker 1: the first sign of any leak in the boat, so 57 00:02:52,560 --> 00:02:57,400 Speaker 1: to speak, people could sometimes get have a real emotional 58 00:02:57,400 --> 00:03:00,400 Speaker 1: reaction to that. And as you've already pointed it out, 59 00:03:00,400 --> 00:03:03,560 Speaker 1: we got to remind people sometimes that volatility is the 60 00:03:03,560 --> 00:03:07,640 Speaker 1: price you pay for outsized returns. And by outside they 61 00:03:07,680 --> 00:03:12,040 Speaker 1: mean returns that over the long term beat inflation and taxes. 62 00:03:12,560 --> 00:03:14,840 Speaker 1: And I think you know usually Brian, I don't know 63 00:03:14,840 --> 00:03:16,840 Speaker 1: about you, but every time we have somebody come in 64 00:03:16,880 --> 00:03:20,080 Speaker 1: for a review and we actually show them their financial plan, 65 00:03:20,480 --> 00:03:22,760 Speaker 1: you know, in other words, keep people's eyes on the 66 00:03:22,760 --> 00:03:25,600 Speaker 1: ball here from a long term and see that, hey, 67 00:03:25,639 --> 00:03:30,160 Speaker 1: we can stress us this thing up and down for 68 00:03:30,320 --> 00:03:34,000 Speaker 1: various levels of volatility and the plan still works. It 69 00:03:34,000 --> 00:03:37,080 Speaker 1: works quite well, you know. Seeing that, you know, with 70 00:03:37,160 --> 00:03:39,760 Speaker 1: your own eyes on a screen with some actual data, 71 00:03:40,200 --> 00:03:43,640 Speaker 1: tends to calm people down. So, yeah, just a reminder 72 00:03:43,680 --> 00:03:47,080 Speaker 1: tonight that, yeah, volatility is the price you pay for returns, 73 00:03:47,080 --> 00:03:49,760 Speaker 1: and we got to keep it all in perspective. Let's 74 00:03:49,840 --> 00:03:54,640 Speaker 1: pivot now to turning from the negative feelings about volatility. 75 00:03:55,120 --> 00:03:58,800 Speaker 1: What are the actual positive strategies we can use to 76 00:03:59,160 --> 00:04:01,680 Speaker 1: make this volatile until he work to our advantage. 77 00:04:02,040 --> 00:04:04,240 Speaker 2: Yeah, you're talking about the silver lining. Since we don't 78 00:04:04,240 --> 00:04:05,960 Speaker 2: get to side step this, we don't get to dodge it. 79 00:04:05,960 --> 00:04:08,480 Speaker 2: Everybody's got to go through it because sometimes it rains. Well, 80 00:04:08,520 --> 00:04:10,360 Speaker 2: what can you do about that? How can you take 81 00:04:10,360 --> 00:04:12,640 Speaker 2: advantage of it? Very first strategy is something we talk 82 00:04:12,680 --> 00:04:16,240 Speaker 2: about frequently, but I think bears repeating tax loss harvesting. 83 00:04:16,320 --> 00:04:20,080 Speaker 2: This is one of the most powerful and underutilized tools, right, 84 00:04:20,120 --> 00:04:22,200 Speaker 2: So this is something you can take advantage of an 85 00:04:22,200 --> 00:04:24,000 Speaker 2: a taxable account, it doesn't help you if you've got 86 00:04:24,000 --> 00:04:26,160 Speaker 2: IRA's four to one case. Those are not taxable. Those 87 00:04:26,160 --> 00:04:29,120 Speaker 2: are tax deferred, which means nothing matters except for when 88 00:04:29,120 --> 00:04:31,280 Speaker 2: you pull money out of the account. When it crosses 89 00:04:31,279 --> 00:04:34,279 Speaker 2: that line, it's tax but the activity inside the account 90 00:04:34,800 --> 00:04:37,760 Speaker 2: in that case does not get taxed. So we're talking 91 00:04:37,839 --> 00:04:40,159 Speaker 2: about a plain old broker's account, a joint account of trust, 92 00:04:40,160 --> 00:04:42,599 Speaker 2: something like that. A simple example, let's say you bought 93 00:04:42,600 --> 00:04:45,279 Speaker 2: a large cap exchange trade at fun one hundred thousand bucks. 94 00:04:45,680 --> 00:04:48,040 Speaker 2: We have a market pullback. This would have happened to 95 00:04:48,320 --> 00:04:50,760 Speaker 2: know an S and P type fund in April twenty 96 00:04:50,760 --> 00:04:53,440 Speaker 2: twenty five, and we had the initial panic about the tariffs. 97 00:04:53,640 --> 00:04:56,120 Speaker 2: That one hundred thousand dollars briefly dropped to about eighty 98 00:04:56,120 --> 00:04:58,800 Speaker 2: eighty five thousand during that pullback. And most people look 99 00:04:58,839 --> 00:05:00,560 Speaker 2: at this and they go, shoot, I've lost lost fifteen 100 00:05:00,600 --> 00:05:03,320 Speaker 2: thousand dollars. But somebody who knows what they're doing says, cool, 101 00:05:03,400 --> 00:05:05,960 Speaker 2: now I have a fifteen thousand dollars tax asset rather 102 00:05:06,000 --> 00:05:08,279 Speaker 2: have a gain, of course, right, I'd rather tax loss 103 00:05:08,279 --> 00:05:11,320 Speaker 2: harvesting never be an opportunity. But since markets come down, 104 00:05:11,600 --> 00:05:13,560 Speaker 2: they are. So what to do is you sell that 105 00:05:13,600 --> 00:05:16,400 Speaker 2: position in that taxable account, You lock in that loss, 106 00:05:16,440 --> 00:05:19,160 Speaker 2: and then immediately reinvest those dollars in a similar but 107 00:05:19,279 --> 00:05:22,480 Speaker 2: not the same and not identical investment, something close enough. 108 00:05:22,760 --> 00:05:25,080 Speaker 2: So in that case, over just the in and out 109 00:05:25,120 --> 00:05:28,440 Speaker 2: period of selling and buying something, you've maintained that market exposure, 110 00:05:28,560 --> 00:05:31,960 Speaker 2: and you incurred a fifteen thousand dollars capital loss, you 111 00:05:32,000 --> 00:05:34,680 Speaker 2: can use the offset gains elsewhere. In other words, if 112 00:05:34,880 --> 00:05:36,640 Speaker 2: later in the year, which could have happened last year 113 00:05:36,640 --> 00:05:38,400 Speaker 2: in twenty five, because the market went onto one of 114 00:05:38,400 --> 00:05:41,360 Speaker 2: our better years we've ever seen, you might have had 115 00:05:41,400 --> 00:05:44,000 Speaker 2: gains to offset somewhere else. Well, you already stockpiled that 116 00:05:44,040 --> 00:05:46,039 Speaker 2: loss earlier in the year to do that. If you 117 00:05:46,160 --> 00:05:49,240 Speaker 2: have losses that outpace your gains, then you get to 118 00:05:49,320 --> 00:05:53,400 Speaker 2: offset three thousand dollars of just plain old ordinary income annually, 119 00:05:53,480 --> 00:05:57,200 Speaker 2: meaning every year until that fifteen thousand dollars loss is 120 00:05:57,279 --> 00:05:59,640 Speaker 2: used up. That's why your accountant always asked you, do 121 00:05:59,640 --> 00:06:01,960 Speaker 2: you have an lost carry forwards. Most people don't know 122 00:06:02,000 --> 00:06:04,159 Speaker 2: what they're talking about. But this is a loss you 123 00:06:04,279 --> 00:06:07,279 Speaker 2: incurred in years past that has not been completely consumed 124 00:06:07,640 --> 00:06:11,480 Speaker 2: by that three thousand dollars ordinary income deduction or offset 125 00:06:11,480 --> 00:06:13,320 Speaker 2: by other gains somewhere else in your portfolio. 126 00:06:14,160 --> 00:06:17,080 Speaker 1: Brian, this is a wonderful planning tool. And to me, 127 00:06:17,240 --> 00:06:20,159 Speaker 1: this is just the evolution of this industry, you know, 128 00:06:20,320 --> 00:06:24,720 Speaker 1: moving out of the mutual fun world of the seventies, eighties, 129 00:06:24,720 --> 00:06:28,200 Speaker 1: and nineties into the ETF world or even the individual 130 00:06:28,279 --> 00:06:31,880 Speaker 1: direct indexing stock world. And I think that we should 131 00:06:31,920 --> 00:06:34,159 Speaker 1: spend a few more minutes on this topic because a 132 00:06:34,200 --> 00:06:36,360 Speaker 1: lot of people, when we talk to them about this, 133 00:06:36,880 --> 00:06:40,360 Speaker 1: you know, even more experienced investors, really don't understand how 134 00:06:40,400 --> 00:06:44,520 Speaker 1: this is working to have these tax loss harvesting algorithms 135 00:06:44,600 --> 00:06:47,480 Speaker 1: working in their portfolio. You know, you brought up, you know, 136 00:06:47,560 --> 00:06:50,520 Speaker 1: a large cap ETF and selling it and taking the loss, 137 00:06:51,040 --> 00:06:54,719 Speaker 1: and long term disciplined investors will say, wait a minute, 138 00:06:54,760 --> 00:06:57,479 Speaker 1: you guys always tell us to stay fully invested, don't 139 00:06:57,560 --> 00:07:00,000 Speaker 1: take the loss. It always comes back, YadA, YadA yah, 140 00:07:00,200 --> 00:07:03,280 Speaker 1: and the right. But the magic here is there's a 141 00:07:03,400 --> 00:07:06,240 Speaker 1: lot of ways in the ETF world right now to 142 00:07:06,320 --> 00:07:10,600 Speaker 1: get the same exposure stay you know, fully invested at 143 00:07:10,640 --> 00:07:14,840 Speaker 1: all times. You just swap one large cap growth ETF 144 00:07:14,960 --> 00:07:18,360 Speaker 1: for another, and that allows you to stay fully invested. 145 00:07:18,640 --> 00:07:21,120 Speaker 1: You know, we're not moving to cash, we're not market timing, 146 00:07:21,200 --> 00:07:25,040 Speaker 1: but still harvesting that fifteen thousand dollars loss, as you 147 00:07:25,080 --> 00:07:27,880 Speaker 1: pointed out. And then you know, we talk about all 148 00:07:27,920 --> 00:07:32,040 Speaker 1: the time how to gradually manage out of say concentrated 149 00:07:32,080 --> 00:07:35,640 Speaker 1: stock positions or other mutual fund positions that have these 150 00:07:35,720 --> 00:07:39,200 Speaker 1: long term embedded capital gains. It's that loss that we 151 00:07:39,320 --> 00:07:42,880 Speaker 1: harvest that we can use later on to gradually move 152 00:07:42,960 --> 00:07:46,360 Speaker 1: people out of those positions and get their portfolio back 153 00:07:46,440 --> 00:07:50,480 Speaker 1: in balance and move gradually out of that seventies eighties 154 00:07:50,600 --> 00:07:53,840 Speaker 1: ninety world of mutual funds into a much more tax 155 00:07:53,880 --> 00:07:58,000 Speaker 1: efficient world of ETFs and individual stocks and direct indexing. 156 00:07:58,200 --> 00:08:01,240 Speaker 1: That's that's kind of how the made and this is 157 00:08:01,280 --> 00:08:05,280 Speaker 1: a wonderful opportunity for those that are not taking advantage 158 00:08:05,320 --> 00:08:06,000 Speaker 1: of it right now. 159 00:08:06,200 --> 00:08:08,880 Speaker 2: Yeah, Bob, you said the M word mutual funds. Mutual 160 00:08:08,880 --> 00:08:11,160 Speaker 2: funds aren't evil, but there it's kind of like, you know, 161 00:08:11,160 --> 00:08:13,440 Speaker 2: black and white TVs aren't evil either. There's just better 162 00:08:13,480 --> 00:08:16,520 Speaker 2: options available now. Yeah, and I'm starting to see more 163 00:08:16,520 --> 00:08:18,440 Speaker 2: and more people who have invested in mutual funds over 164 00:08:18,440 --> 00:08:21,560 Speaker 2: the past twenty and thirty years have significant wealth, you know, 165 00:08:21,640 --> 00:08:24,200 Speaker 2: sometimes several million dollars built up in these mutual funds. 166 00:08:24,200 --> 00:08:25,920 Speaker 2: And that's a good thing, right, I'm never gonna poopoo 167 00:08:25,920 --> 00:08:28,280 Speaker 2: the idea of growth. But what I would say is 168 00:08:29,040 --> 00:08:31,080 Speaker 2: if that money was cash right now, if someone was 169 00:08:31,120 --> 00:08:32,960 Speaker 2: bringing me cash and saying, what should we do with this, 170 00:08:33,280 --> 00:08:35,040 Speaker 2: I would not be looking at, you know, for that 171 00:08:35,120 --> 00:08:38,000 Speaker 2: pile of cash. I would not be looking immediately at 172 00:08:38,120 --> 00:08:40,680 Speaker 2: mutual funds or frankly even ETFs for that moment, for 173 00:08:40,760 --> 00:08:43,640 Speaker 2: that matter, I would be looking at direct indexing, meaning 174 00:08:43,640 --> 00:08:46,400 Speaker 2: if you're gonna buy index funds anyway, by the securities 175 00:08:46,480 --> 00:08:48,800 Speaker 2: underneath the index. Yes, you'll have a big fat statement 176 00:08:48,840 --> 00:08:50,839 Speaker 2: with five hundred for the account that represents the S 177 00:08:50,880 --> 00:08:53,560 Speaker 2: and P five hundred, But at the same time, that 178 00:08:53,679 --> 00:08:56,600 Speaker 2: gives you the ability to harvest those losses individually. This 179 00:08:56,720 --> 00:08:59,480 Speaker 2: did not exist twenty and thirty years ago unless you 180 00:08:59,559 --> 00:09:01,280 Speaker 2: had tens of not one, hundreds of millions of dollars 181 00:09:01,320 --> 00:09:03,199 Speaker 2: and we're kind of running your own index. But now 182 00:09:03,240 --> 00:09:05,199 Speaker 2: you can do it with relatively small amounts of money 183 00:09:05,240 --> 00:09:07,840 Speaker 2: few hundred thousand dollars can be used in a direct 184 00:09:08,720 --> 00:09:12,280 Speaker 2: index indexing portfolio, where again you have literally those five 185 00:09:12,360 --> 00:09:14,920 Speaker 2: hundred individual securities. Each of them does its own thing 186 00:09:15,000 --> 00:09:17,280 Speaker 2: up or down, and you can look for these opportunities 187 00:09:17,280 --> 00:09:20,000 Speaker 2: to harvest gains and be a lot more methodical and 188 00:09:20,040 --> 00:09:23,120 Speaker 2: surgically precise than you can in an exchange traded fund, 189 00:09:23,160 --> 00:09:25,480 Speaker 2: which is still better than a mutual fund, which is 190 00:09:25,679 --> 00:09:28,000 Speaker 2: again just the structure of a mutual fund causes a 191 00:09:28,000 --> 00:09:31,160 Speaker 2: lot of unex necessary taxation. Perfectly fine for smaller accounts, 192 00:09:31,320 --> 00:09:35,120 Speaker 2: definitely perfectly fine for retirement accounts, but we miss opportunities 193 00:09:35,120 --> 00:09:37,679 Speaker 2: when we put large sums of money in taxable accounts 194 00:09:37,760 --> 00:09:40,520 Speaker 2: inside those large, open ended mutual funds. 195 00:09:40,920 --> 00:09:43,880 Speaker 1: Yeah, and the reason to own all those individual stocks, 196 00:09:43,960 --> 00:09:47,320 Speaker 1: as you know, as opposed to this one index fund, 197 00:09:47,640 --> 00:09:51,000 Speaker 1: and you mentioned it, more tax control, meaning you know, 198 00:09:51,040 --> 00:09:53,920 Speaker 1: I think everybody knows that every stock in the index 199 00:09:54,000 --> 00:09:56,439 Speaker 1: is not going to move in the same you know, direction, 200 00:09:56,640 --> 00:09:59,280 Speaker 1: at the same time by the same amount. So you 201 00:09:59,360 --> 00:10:03,000 Speaker 1: want to use that sector and individual stock volatility to 202 00:10:03,120 --> 00:10:06,520 Speaker 1: your advantage. And you know, especially for folks that are 203 00:10:06,600 --> 00:10:09,880 Speaker 1: charribly inclined you know, you can pick out individual stocks 204 00:10:10,240 --> 00:10:13,680 Speaker 1: to give to your donor advice fund or give directly 205 00:10:13,720 --> 00:10:17,920 Speaker 1: to charity. It gives you just a lot more optimization 206 00:10:18,960 --> 00:10:22,200 Speaker 1: and options on which assets we want to sell and 207 00:10:22,280 --> 00:10:26,120 Speaker 1: harvest the law for the loss, which assets or stocks 208 00:10:26,160 --> 00:10:29,000 Speaker 1: to give away, you know, for charitable purposes. It just 209 00:10:29,000 --> 00:10:31,760 Speaker 1: gives us a lot more tools in the toolbox. And 210 00:10:31,800 --> 00:10:35,400 Speaker 1: again this is just evolving from the nineteen eighties into 211 00:10:35,480 --> 00:10:39,520 Speaker 1: twenty twenty five and twenty twenty six. Wonderful strategy again 212 00:10:39,600 --> 00:10:43,520 Speaker 1: that not many people know. Still are not aware that 213 00:10:43,520 --> 00:10:46,720 Speaker 1: it's out there and it's available to you know, most 214 00:10:46,760 --> 00:10:49,440 Speaker 1: investors today. If you if you take advantage of it. 215 00:10:49,679 --> 00:10:51,680 Speaker 2: Yeah, so make sure make sure you understand what those 216 00:10:51,679 --> 00:10:54,840 Speaker 2: different tools are and that than that you can use 217 00:10:54,880 --> 00:10:57,480 Speaker 2: them in tying down times when the market has come down, 218 00:10:57,480 --> 00:10:59,760 Speaker 2: which obviously is not ideal. We don't want that, but 219 00:10:59,760 --> 00:11:02,240 Speaker 2: there is a silver lining of looking for tax loss 220 00:11:02,240 --> 00:11:05,400 Speaker 2: harvesting opportunities. This is the time of year where people 221 00:11:05,400 --> 00:11:07,480 Speaker 2: are getting their tax returns back and maybe you're not 222 00:11:07,520 --> 00:11:10,559 Speaker 2: so happy with the things that are happening in there. 223 00:11:10,640 --> 00:11:13,959 Speaker 2: I was referencing mutual funds before. If your accountant told 224 00:11:14,040 --> 00:11:16,400 Speaker 2: you that Wow, you must have had this big distribution, 225 00:11:16,480 --> 00:11:18,839 Speaker 2: and maybe you had something significant happen in December. I 226 00:11:18,840 --> 00:11:21,880 Speaker 2: don't think this December was particularly bad, but the prior 227 00:11:21,920 --> 00:11:24,920 Speaker 2: couple had some pretty significant gains that were taken by 228 00:11:24,960 --> 00:11:28,000 Speaker 2: mutual funds got passed through to the taxpayer. If you 229 00:11:28,040 --> 00:11:31,680 Speaker 2: ever hear your accountant or your tax prepairer talking about 230 00:11:32,240 --> 00:11:35,320 Speaker 2: significant distributions from your investments, the chances are that you 231 00:11:35,360 --> 00:11:37,480 Speaker 2: have a mutual fund in there that had to, for 232 00:11:37,520 --> 00:11:40,120 Speaker 2: whatever reason, spit out a gain that it may have 233 00:11:40,360 --> 00:11:43,560 Speaker 2: incurred long before you ever even owned it. They just 234 00:11:43,640 --> 00:11:46,840 Speaker 2: never actually sold. That's the trick of mutual funds downside 235 00:11:46,920 --> 00:11:49,720 Speaker 2: is if they build up a gain over decades and 236 00:11:49,760 --> 00:11:51,800 Speaker 2: then you buy it, you know, just six months ago, 237 00:11:52,320 --> 00:11:54,559 Speaker 2: and the fund then subsequently decides to go ahead and 238 00:11:54,640 --> 00:11:57,080 Speaker 2: take that gain for whatever reason, you owe taxes as 239 00:11:57,120 --> 00:11:59,400 Speaker 2: the individual shareholder even though you never owned the fund 240 00:11:59,480 --> 00:12:01,960 Speaker 2: for that entire period of that gain that they generated. 241 00:12:02,240 --> 00:12:04,200 Speaker 2: That's the benefit of exchange traded funds. They don't have 242 00:12:04,240 --> 00:12:06,800 Speaker 2: that issue, and certainly not direct direct indexing. So if 243 00:12:06,800 --> 00:12:09,360 Speaker 2: you're hearing those keywords from your tax prepared now that 244 00:12:09,400 --> 00:12:11,480 Speaker 2: you're getting your twenty five taxes, back. Then you might 245 00:12:11,520 --> 00:12:12,880 Speaker 2: want to live at your portfolio and see if there's 246 00:12:12,880 --> 00:12:14,680 Speaker 2: an opportunity to make it more tax efficient. 247 00:12:15,400 --> 00:12:18,880 Speaker 1: Here's the ar with advice. Volatility only hurts investors who 248 00:12:18,920 --> 00:12:24,480 Speaker 1: react emotionally. If you plan ahead, stay disciplined, volatility can 249 00:12:24,520 --> 00:12:28,439 Speaker 1: become one of your greatest wealth building tools. Well, you 250 00:12:28,559 --> 00:12:31,720 Speaker 1: might think money is the biggest risk to your retirement plan, 251 00:12:31,800 --> 00:12:35,000 Speaker 1: but what if something else forces you to retire before 252 00:12:35,040 --> 00:12:37,480 Speaker 1: you're ready. We're going to get into that next. You're 253 00:12:37,520 --> 00:12:40,200 Speaker 1: listening to Simply Money, presented by all Worth Financial on 254 00:12:40,280 --> 00:12:49,720 Speaker 1: fifty five KRC the talk station. You're listening to Certain 255 00:12:49,760 --> 00:12:53,960 Speaker 1: Money Allworth Financial, bop spon seller along with Brian James. 256 00:12:54,600 --> 00:12:57,400 Speaker 1: How much cash is too much when you've got more 257 00:12:57,520 --> 00:13:00,719 Speaker 1: options than ever in which to invest. What happens when 258 00:13:00,760 --> 00:13:05,280 Speaker 1: your family isn't on the same financial page, meaning siblings, aging, parents, 259 00:13:05,640 --> 00:13:09,720 Speaker 1: even your own downsizing decisions. We're tackling those real life 260 00:13:09,760 --> 00:13:13,160 Speaker 1: money conversations that can make or break a financial plan 261 00:13:13,679 --> 00:13:17,319 Speaker 1: straight ahead. Well, it seems like an easy formula. You 262 00:13:17,480 --> 00:13:21,040 Speaker 1: work hard, you save, you plan on retiring sometime in 263 00:13:21,080 --> 00:13:24,240 Speaker 1: your sixties, and then you finally get to enjoy life 264 00:13:24,240 --> 00:13:28,480 Speaker 1: on your terms. That's the plan, of course, but oftentimes 265 00:13:28,640 --> 00:13:32,400 Speaker 1: it's not the reality. Oftentimes people are forced to stop 266 00:13:32,440 --> 00:13:35,000 Speaker 1: working ahead of when they plan to, and that's the 267 00:13:35,160 --> 00:13:37,520 Speaker 1: challenge we are talking about tonight, Brian. 268 00:13:38,120 --> 00:13:40,680 Speaker 2: So there's some numbers behind the concern here. According to 269 00:13:40,720 --> 00:13:43,880 Speaker 2: the Center for Retirement Research, about six and ten people 270 00:13:43,960 --> 00:13:46,720 Speaker 2: sixty percent retire earlier than they plan to, meaning they 271 00:13:46,720 --> 00:13:49,560 Speaker 2: didn't get to call their shot, while many aspire to 272 00:13:49,600 --> 00:13:52,120 Speaker 2: retire around age sixty six when asked, that's that's kind 273 00:13:52,120 --> 00:13:53,720 Speaker 2: of the goal, that's that they want to shoot for. 274 00:13:53,760 --> 00:13:55,720 Speaker 2: That has a lot to do with Oftentimes people are 275 00:13:55,720 --> 00:13:58,199 Speaker 2: looking for medical insurance because that's the age of Medicare 276 00:13:58,200 --> 00:14:01,760 Speaker 2: at sixty five. But realistically, the average actual retirement age 277 00:14:01,800 --> 00:14:04,640 Speaker 2: is sixty one to sixty two. Now, let's contrast that 278 00:14:04,679 --> 00:14:08,360 Speaker 2: with a recent Fidelity survey that showed about seventy percent 279 00:14:08,480 --> 00:14:11,160 Speaker 2: expect to retire on their own terms. And what's more, Bob, 280 00:14:11,200 --> 00:14:14,360 Speaker 2: that's up five percentage points from last year. So there 281 00:14:14,400 --> 00:14:17,840 Speaker 2: is a huge difference between what people expect and what 282 00:14:17,920 --> 00:14:20,080 Speaker 2: the actual outcome is here. Now, we should note though 283 00:14:20,320 --> 00:14:23,240 Speaker 2: the Fidelity survey was limited, of course, to their own customers, 284 00:14:23,240 --> 00:14:25,320 Speaker 2: which means people who have four o one camera retirement 285 00:14:25,360 --> 00:14:28,080 Speaker 2: accounts with Fidelity, So these are people who are starting 286 00:14:28,080 --> 00:14:30,840 Speaker 2: off with a nest egg, you know. In Fidelity, of course, 287 00:14:30,920 --> 00:14:33,520 Speaker 2: is not surveying people who don't have any assets at all, 288 00:14:33,640 --> 00:14:36,760 Speaker 2: which I'm sure they'd get a different answer. However, that 289 00:14:36,840 --> 00:14:40,920 Speaker 2: same study, to me, it just indicates that the more 290 00:14:40,960 --> 00:14:42,600 Speaker 2: likely you are to feel you can retire on your 291 00:14:42,600 --> 00:14:44,840 Speaker 2: own terms, the more likely you are to have assets 292 00:14:44,880 --> 00:14:47,120 Speaker 2: in the first place. But again, the point of all 293 00:14:47,160 --> 00:14:50,520 Speaker 2: this is that there's a disconnect between how many people 294 00:14:50,560 --> 00:14:52,240 Speaker 2: think they're going to be able to retire and make 295 00:14:52,280 --> 00:14:54,280 Speaker 2: their own decision on their own terms, and then how 296 00:14:54,280 --> 00:14:56,920 Speaker 2: many people actually get to do that realistically. It doesn't 297 00:14:56,920 --> 00:14:59,480 Speaker 2: sound like we really get that shot over time. 298 00:15:00,280 --> 00:15:04,520 Speaker 1: Well, and the reasons Fidelity cited for these early exits. 299 00:15:04,560 --> 00:15:09,160 Speaker 1: Among those retiring earlier than quote unquote planned, forty five 300 00:15:09,240 --> 00:15:13,560 Speaker 1: percent of folks cited health issues and forty two percent 301 00:15:13,760 --> 00:15:18,360 Speaker 1: cited employment related issues like layoffs. So the reasons for 302 00:15:18,400 --> 00:15:20,720 Speaker 1: this are all over the board, you know, Brian. The 303 00:15:20,760 --> 00:15:23,240 Speaker 1: good news that we're seeing is that many are finding 304 00:15:23,280 --> 00:15:28,160 Speaker 1: alternatives to that whole forced retirement world. Again, according to 305 00:15:28,200 --> 00:15:32,240 Speaker 1: Fidelity's twenty twenty six State of retirement plan studies. So 306 00:15:32,280 --> 00:15:36,120 Speaker 1: these are recent numbers released just last week. Six and 307 00:15:36,240 --> 00:15:40,800 Speaker 1: ten respondents planned to do some type of transition into 308 00:15:40,840 --> 00:15:43,520 Speaker 1: their golden years. And we're seeing that more and more 309 00:15:43,600 --> 00:15:48,080 Speaker 1: with folks that we talk to Brian. Sometimes people they 310 00:15:48,240 --> 00:15:50,760 Speaker 1: like their job, they don't want to completely quit, they 311 00:15:50,880 --> 00:15:53,680 Speaker 1: just like to slow down a little bit, live life 312 00:15:53,760 --> 00:15:57,600 Speaker 1: a little more on their terms. And oftentimes for folks 313 00:15:57,600 --> 00:15:59,960 Speaker 1: that are doing a real good job and are valuable 314 00:16:00,120 --> 00:16:03,840 Speaker 1: to their company, we're finding that companies are being more 315 00:16:03,840 --> 00:16:07,440 Speaker 1: and more accommodative to that type of retirement transition. 316 00:16:08,400 --> 00:16:10,480 Speaker 2: Yeah. And what's more so, the Fidelity study went a 317 00:16:10,520 --> 00:16:12,960 Speaker 2: little deeper too, and what they found out was that 318 00:16:13,000 --> 00:16:15,720 Speaker 2: those with a financial plan were more than twice as 319 00:16:15,840 --> 00:16:17,720 Speaker 2: likely to feel confident. This is to give you the numbers. 320 00:16:17,720 --> 00:16:20,080 Speaker 2: This is the eighty three percent versus thirty eight percent. 321 00:16:20,760 --> 00:16:22,200 Speaker 2: Meaning you know, if you if you have a plan, 322 00:16:22,240 --> 00:16:24,120 Speaker 2: you're more confident. If you don't have a plan, you're 323 00:16:24,200 --> 00:16:26,080 Speaker 2: less confident. Now, well, here's one thing I would question 324 00:16:26,160 --> 00:16:28,240 Speaker 2: is I don't think people generally know what a financial 325 00:16:28,280 --> 00:16:30,560 Speaker 2: plan is. I think some some might be referring to 326 00:16:30,640 --> 00:16:32,680 Speaker 2: a financial plan simply meaning up. I'm pretty sure I've 327 00:16:32,680 --> 00:16:34,000 Speaker 2: got more than I'm gonna need, and that's kind of 328 00:16:34,000 --> 00:16:36,080 Speaker 2: where the plan ends. So I'm sure that's a little 329 00:16:36,080 --> 00:16:38,360 Speaker 2: bit fuzzy in there, but you know, let's let's go. 330 00:16:38,520 --> 00:16:40,440 Speaker 2: There's some examples here. Let's say you know, you're fifty 331 00:16:40,440 --> 00:16:42,120 Speaker 2: five years old. You're thinking, I'm going to work till 332 00:16:42,160 --> 00:16:45,160 Speaker 2: sixty five, sixty seven, stack up a little more Benjamin's 333 00:16:45,160 --> 00:16:47,320 Speaker 2: and my retirement plan, then I'll be good. But then 334 00:16:47,320 --> 00:16:51,600 Speaker 2: it's sixty something. Changes your health, your spouse's health, your parents' health. 335 00:16:51,680 --> 00:16:53,920 Speaker 2: Now you've got five fewer years of income. And maybe 336 00:16:53,960 --> 00:16:55,760 Speaker 2: it was even your company just decided, hey, we don't 337 00:16:55,760 --> 00:16:58,440 Speaker 2: need this person anymore, you know, thanks for all your service. 338 00:16:58,520 --> 00:17:01,880 Speaker 2: Here's you know, a cake and a pretend gold watch. 339 00:17:02,200 --> 00:17:04,920 Speaker 2: So that means your portfolio needs to support an extra 340 00:17:05,040 --> 00:17:07,439 Speaker 2: five years of living expenses, five years of life. And 341 00:17:07,480 --> 00:17:08,919 Speaker 2: this was not your plan. You were going to work 342 00:17:08,960 --> 00:17:11,800 Speaker 2: an extra five or six years. Potentially, if you're the 343 00:17:11,800 --> 00:17:14,200 Speaker 2: one with that healthcare problem or your spouse now higher 344 00:17:14,240 --> 00:17:16,800 Speaker 2: health care cost than you may have anticipated in your plan, 345 00:17:17,000 --> 00:17:19,920 Speaker 2: that is a completely different outcome. And this is why 346 00:17:20,119 --> 00:17:22,640 Speaker 2: the people who feel the most confident about retirement, Bob 347 00:17:22,840 --> 00:17:25,000 Speaker 2: aren't the ones who just hope it works out. They're 348 00:17:25,000 --> 00:17:27,800 Speaker 2: the ones who actually pressure tested their plan. In other words, 349 00:17:27,960 --> 00:17:30,000 Speaker 2: here's what happens if I get to call my shot. 350 00:17:30,280 --> 00:17:32,840 Speaker 2: If I go at sixty five and everything happens, everything's 351 00:17:32,880 --> 00:17:35,600 Speaker 2: hunky dory from here on out, then you know, that's 352 00:17:35,600 --> 00:17:37,760 Speaker 2: all great. But if it doesn't happen that way, maybe 353 00:17:37,760 --> 00:17:40,560 Speaker 2: I'm forced to retire earlier. Could I handle it now? Interestingly, 354 00:17:40,760 --> 00:17:44,000 Speaker 2: this usually starts with a conversation of you know, what 355 00:17:44,040 --> 00:17:46,400 Speaker 2: if I wanted to retire earlier. You know, I'm talking 356 00:17:46,400 --> 00:17:48,320 Speaker 2: to that fifty five year old who's kicking around working 357 00:17:48,359 --> 00:17:51,280 Speaker 2: another five or ten years. But really what we're saying 358 00:17:51,320 --> 00:17:52,480 Speaker 2: is what if I and I don't say this in 359 00:17:52,520 --> 00:17:55,520 Speaker 2: the meeting, but what if I'm forced to retire when 360 00:17:55,560 --> 00:17:58,560 Speaker 2: I wasn't expecting to. All of that is called stress testing. 361 00:17:58,640 --> 00:18:00,800 Speaker 2: Let's just throw in some variables that maybe you don't 362 00:18:00,800 --> 00:18:02,920 Speaker 2: want to happen. Right. It's it's one thing to get 363 00:18:02,920 --> 00:18:05,439 Speaker 2: to retire with everything that I want in place. It's 364 00:18:05,480 --> 00:18:07,800 Speaker 2: another thing to be informed that I'm about to retire 365 00:18:08,119 --> 00:18:10,480 Speaker 2: and not have all that stuff, you know, having thought 366 00:18:10,480 --> 00:18:11,320 Speaker 2: about all that stuff. 367 00:18:12,040 --> 00:18:15,480 Speaker 1: Yeah, and all of these conversations are good reasons to 368 00:18:15,560 --> 00:18:18,320 Speaker 1: have a good fiduciary advisor in the room with you 369 00:18:18,480 --> 00:18:21,760 Speaker 1: that has no emotion tied to this, to ask these 370 00:18:21,800 --> 00:18:24,640 Speaker 1: appropriate questions because as you pointed out, Brian, and we've 371 00:18:24,680 --> 00:18:27,679 Speaker 1: talked about this often on this show, you know, in 372 00:18:27,720 --> 00:18:30,000 Speaker 1: today's day and age, we see a lot of people, 373 00:18:30,440 --> 00:18:33,400 Speaker 1: you know, they didn't want to necessarily retire or slow down, 374 00:18:33,400 --> 00:18:35,680 Speaker 1: but they feel like they kind of have to because 375 00:18:36,200 --> 00:18:39,600 Speaker 1: they're taking care of aging parents. It's becoming more and 376 00:18:39,680 --> 00:18:41,960 Speaker 1: more of an issue. You know, you brought up the 377 00:18:42,040 --> 00:18:45,000 Speaker 1: term stress test. You know, to most people that means 378 00:18:45,000 --> 00:18:49,240 Speaker 1: stress testing against inflation, you know, assumptions and market volatility 379 00:18:49,280 --> 00:18:51,359 Speaker 1: and all that. But you made a great point. Another 380 00:18:51,400 --> 00:18:54,480 Speaker 1: good reason to stress just your financial plan is to 381 00:18:54,600 --> 00:18:57,160 Speaker 1: stress test. You know, if you chop two or three 382 00:18:57,200 --> 00:18:59,879 Speaker 1: years off of your working life, how's that going to impact? 383 00:19:00,359 --> 00:19:04,480 Speaker 1: And that could open up some wonderful conversations about if 384 00:19:04,520 --> 00:19:08,080 Speaker 1: that situation occurs, well, what kind of give and take 385 00:19:08,160 --> 00:19:12,280 Speaker 1: are we going to have, Whether it's spending, vacation, planning, gifting. 386 00:19:12,760 --> 00:19:15,200 Speaker 1: All those things need to at least be talked about 387 00:19:15,240 --> 00:19:18,320 Speaker 1: in a perfect world so that there's no surprises that 388 00:19:18,400 --> 00:19:21,600 Speaker 1: come down the pike. If that working career, you know, 389 00:19:21,720 --> 00:19:24,879 Speaker 1: unexpectedly gets cut short by a few years. Here's the 390 00:19:24,920 --> 00:19:27,560 Speaker 1: all Worth advice. Don't just plan for when you want 391 00:19:27,560 --> 00:19:31,840 Speaker 1: to retire, plan for what happens if life forces you 392 00:19:32,280 --> 00:19:36,320 Speaker 1: to maybe retire a little bit sooner. How safe is 393 00:19:36,359 --> 00:19:40,240 Speaker 1: your money? Next, we're tackling the newest bank scams out there. 394 00:19:40,280 --> 00:19:42,920 Speaker 1: You're listening to Simply Money presented by all Worth Financial 395 00:19:42,920 --> 00:19:49,639 Speaker 1: on fifty five KRCD talk station. You're listening to Simply 396 00:19:49,680 --> 00:19:52,879 Speaker 1: Money presented by all Worth Financial on Bob Fontseller along 397 00:19:52,880 --> 00:19:58,120 Speaker 1: with Brian James, joined tonight by our technology and cybersecurity guru, 398 00:19:58,359 --> 00:20:01,800 Speaker 1: mister Dave hatter Boy. It's always good to have Dave 399 00:20:02,000 --> 00:20:04,920 Speaker 1: join us, you know, frequently on this show because it 400 00:20:05,000 --> 00:20:08,920 Speaker 1: seems like, Brian, these scams are just coming out of nowhere, 401 00:20:09,160 --> 00:20:11,960 Speaker 1: new ones every couple of weeks. And Dave, I know 402 00:20:12,040 --> 00:20:15,560 Speaker 1: you want to talk about some new consumer oriented scams 403 00:20:15,880 --> 00:20:18,240 Speaker 1: that are out there. Uh, bring us up to date 404 00:20:18,320 --> 00:20:19,760 Speaker 1: on what we need to be watching out for. 405 00:20:20,520 --> 00:20:22,440 Speaker 3: Yeah, guys, what is always Thanks for having me on. 406 00:20:22,480 --> 00:20:25,520 Speaker 3: And you know scams are everywhere. They're targeting businesses, they're 407 00:20:25,560 --> 00:20:29,320 Speaker 3: targeting governments, they're targeting nonprofits. And you know, like always, 408 00:20:29,320 --> 00:20:31,600 Speaker 3: they continue to target individual consumers. 409 00:20:31,680 --> 00:20:34,640 Speaker 1: And unfortunately, I know several people personally. 410 00:20:34,720 --> 00:20:37,400 Speaker 3: I'll tell a couple of these stories who have been 411 00:20:37,480 --> 00:20:40,320 Speaker 3: victims of these sort of scams, And just so I 412 00:20:40,359 --> 00:20:43,399 Speaker 3: don't forget, I want to rewind people. The FBI has 413 00:20:43,440 --> 00:20:47,120 Speaker 3: a website called the Internet Crime Complaint Center ICC. 414 00:20:47,680 --> 00:20:47,880 Speaker 1: Right. 415 00:20:48,600 --> 00:20:51,399 Speaker 3: You can get to it from IC three dot gov 416 00:20:51,800 --> 00:20:54,879 Speaker 3: literally the letter I, the letter C, the number. 417 00:20:54,680 --> 00:20:57,480 Speaker 1: Three dot gov. And I bring it up for two reasons. 418 00:20:57,520 --> 00:21:00,240 Speaker 3: Ay, it's full of public service announcements about the kind 419 00:21:00,240 --> 00:21:02,960 Speaker 3: of scams they're seeing, and B it gives you a 420 00:21:03,040 --> 00:21:05,680 Speaker 3: place where you can report these scams. Now, let's be real. 421 00:21:05,760 --> 00:21:07,639 Speaker 3: You know, if you lose five hundred bucks in a scam, 422 00:21:07,680 --> 00:21:09,240 Speaker 3: the FBI is not going to get. 423 00:21:09,080 --> 00:21:10,200 Speaker 1: Involved and help you out. 424 00:21:10,600 --> 00:21:12,680 Speaker 3: But when you report these things, A, at least there's 425 00:21:12,720 --> 00:21:14,680 Speaker 3: a record of it, and B you're doing the rest 426 00:21:14,760 --> 00:21:17,040 Speaker 3: of us as solid by helping the FBI and other 427 00:21:17,119 --> 00:21:20,800 Speaker 3: law enforcement agencies discover some novel new scam that may 428 00:21:20,840 --> 00:21:23,560 Speaker 3: have just shown up. Because to your point, these things 429 00:21:23,600 --> 00:21:29,199 Speaker 3: are constantly coming out. They're very devious, they're very creative 430 00:21:29,200 --> 00:21:31,600 Speaker 3: in their scams, and thanks to AI, the ability to 431 00:21:31,680 --> 00:21:36,760 Speaker 3: create very realistic deep fake audio, text and video. The 432 00:21:36,880 --> 00:21:38,960 Speaker 3: quality of the scams are much better. You know, all 433 00:21:38,960 --> 00:21:41,159 Speaker 3: the old school tells where the grammar was weird, the 434 00:21:41,160 --> 00:21:43,080 Speaker 3: punctuation is bad, and all that stuff. 435 00:21:43,320 --> 00:21:46,000 Speaker 1: That's all gone. Now for any scammer that's ever heard 436 00:21:46,000 --> 00:21:47,520 Speaker 1: of CHADGPT or groc. 437 00:21:47,400 --> 00:21:50,520 Speaker 3: Or anything like that. A big one right now, guys, 438 00:21:50,680 --> 00:21:53,160 Speaker 3: is tax season. You know there are always tax scams. 439 00:21:54,240 --> 00:21:56,760 Speaker 3: The FBI or i'm sorry, the IRS warns about this 440 00:21:56,880 --> 00:21:57,359 Speaker 3: every year. 441 00:21:58,080 --> 00:21:59,320 Speaker 1: One of the things you can do. 442 00:21:59,280 --> 00:22:02,160 Speaker 3: To help try to prevent this besides file your taxes early, 443 00:22:02,200 --> 00:22:03,600 Speaker 3: and you know we're now at the end of March, 444 00:22:03,640 --> 00:22:05,520 Speaker 3: so that's maybe not as relevant as it would have 445 00:22:05,520 --> 00:22:07,480 Speaker 3: been earlier in the year, but you can get a 446 00:22:07,520 --> 00:22:09,480 Speaker 3: pin from the IRS, and you should protect that. 447 00:22:09,520 --> 00:22:10,320 Speaker 1: You should get a pin. 448 00:22:10,800 --> 00:22:13,280 Speaker 3: You should protect that pen just like you would a password, 449 00:22:13,800 --> 00:22:16,560 Speaker 3: so that someone else can't get in file their taxes 450 00:22:16,560 --> 00:22:18,920 Speaker 3: as you claim any refund they might get. Now, hey, 451 00:22:18,920 --> 00:22:21,480 Speaker 3: if you're out there listening to your hacker scammer and 452 00:22:21,520 --> 00:22:23,520 Speaker 3: you want to file my taxes and pay what I owe, 453 00:22:23,560 --> 00:22:25,520 Speaker 3: hey have at it. I'm all for that. That would 454 00:22:25,520 --> 00:22:27,720 Speaker 3: be awesome and appreciate you. But you know that's not 455 00:22:27,800 --> 00:22:30,720 Speaker 3: usually the case, guys. Usually they're trying to get your refund, 456 00:22:31,240 --> 00:22:32,800 Speaker 3: which will cause you all kinds of problems. 457 00:22:32,880 --> 00:22:34,240 Speaker 1: Plus, if they can get into. 458 00:22:34,040 --> 00:22:36,520 Speaker 3: Your tax waity to count the irs, they can steal 459 00:22:36,520 --> 00:22:40,400 Speaker 3: your Social Security number and other sensitive information. So that's 460 00:22:40,440 --> 00:22:42,960 Speaker 3: one thing you know, File your taxes early, get that pen, 461 00:22:43,160 --> 00:22:46,399 Speaker 3: be very careful with that information. It's super sensitive. But 462 00:22:46,480 --> 00:22:49,919 Speaker 3: one of the more interesting things I've seen recently, and 463 00:22:50,000 --> 00:22:52,600 Speaker 3: I'm sure every one of your listeners out there has 464 00:22:52,640 --> 00:22:55,680 Speaker 3: seen the proliferation of text based scams. I bet every 465 00:22:55,720 --> 00:22:58,359 Speaker 3: one of you guys out there has gotten the scam 466 00:22:58,440 --> 00:23:01,280 Speaker 3: send that you owe a toll. Now recently, the Kentucky 467 00:23:01,320 --> 00:23:04,040 Speaker 3: State Police just reported on a scam here in Kentucky 468 00:23:04,920 --> 00:23:07,120 Speaker 3: claiming that you owe some kind of fee and they're 469 00:23:07,119 --> 00:23:08,560 Speaker 3: going to come get you in that sort of thing. 470 00:23:08,600 --> 00:23:11,359 Speaker 3: They actually sent out a screenshot of this as a 471 00:23:11,400 --> 00:23:14,159 Speaker 3: warning through their official channels on Facebook and x and 472 00:23:14,160 --> 00:23:16,960 Speaker 3: so forth. I happen to get one of those myself 473 00:23:17,040 --> 00:23:19,560 Speaker 3: just this week, as did my wife, and I want 474 00:23:19,560 --> 00:23:20,000 Speaker 3: to back. 475 00:23:19,880 --> 00:23:22,800 Speaker 1: In, I've gotten three of them from the state of 476 00:23:22,800 --> 00:23:26,399 Speaker 1: Ohio in the last couple of weeks. Three of them same. 477 00:23:26,119 --> 00:23:29,680 Speaker 2: Thing you sure your driving habits, Bob, it's. 478 00:23:29,520 --> 00:23:31,399 Speaker 1: Not I hit go ahead, could be. 479 00:23:32,440 --> 00:23:35,080 Speaker 3: I appreciate you bringing that up, Bob, because again it's 480 00:23:35,080 --> 00:23:38,280 Speaker 3: important for people to understand these things are super common, 481 00:23:38,680 --> 00:23:41,879 Speaker 3: and we're now at a place because of two things. Hey, 482 00:23:42,080 --> 00:23:44,000 Speaker 3: so much of your data is out there, and it's 483 00:23:44,040 --> 00:23:46,639 Speaker 3: been leaked so many times that it's easy for the 484 00:23:46,640 --> 00:23:50,359 Speaker 3: scammers to get information they need to trick you into 485 00:23:50,359 --> 00:23:53,560 Speaker 3: believing they are some legitimate agency like the Kentucky State 486 00:23:53,600 --> 00:23:55,960 Speaker 3: Police or the Ohio Auditor or whoever it is. 487 00:23:55,920 --> 00:23:57,480 Speaker 1: They're pretending to be right. 488 00:23:57,560 --> 00:24:00,520 Speaker 3: They Almost every day there's some data brea out there. 489 00:24:00,560 --> 00:24:02,280 Speaker 3: I bet all of your listeners have gotten at least 490 00:24:02,280 --> 00:24:04,919 Speaker 3: one letter saying their data has been breached. And frankly, 491 00:24:04,960 --> 00:24:07,760 Speaker 3: to Ohio's credit, Ohio has done a lot to improve 492 00:24:07,840 --> 00:24:11,440 Speaker 3: the cybersecurity posture of the state and it's local governments. 493 00:24:11,480 --> 00:24:13,880 Speaker 3: So fuddos to Ohio. You guys are doing a lot 494 00:24:13,880 --> 00:24:16,560 Speaker 3: of smart things over there to try to reduce some 495 00:24:16,680 --> 00:24:19,320 Speaker 3: of this data leakage. But because that data is out there, 496 00:24:19,359 --> 00:24:21,119 Speaker 3: it makes it really easy for me to as a 497 00:24:21,119 --> 00:24:23,239 Speaker 3: bad guy, to know your phone number, to know an 498 00:24:23,280 --> 00:24:26,600 Speaker 3: email address, to pretend to be some agency and potentially 499 00:24:26,600 --> 00:24:29,439 Speaker 3: have some information that would help me convince you that 500 00:24:29,520 --> 00:24:32,760 Speaker 3: I am that legitimate agency. My point being, you cannot 501 00:24:32,760 --> 00:24:35,960 Speaker 3: trust anything that you receive electronically at this point. What 502 00:24:36,160 --> 00:24:38,040 Speaker 3: especially if it's on slicity. 503 00:24:40,920 --> 00:24:42,160 Speaker 2: Every link of my EMA click. 504 00:24:42,880 --> 00:24:47,000 Speaker 3: You must verify things out of band, you know. They 505 00:24:47,040 --> 00:24:50,320 Speaker 3: couple these attacks with social engineering. Some terrible thing is 506 00:24:50,359 --> 00:24:52,159 Speaker 3: going to happen to you if you don't respond quickly, 507 00:24:52,320 --> 00:24:55,359 Speaker 3: or in some cases, hey, if you if you do 508 00:24:55,440 --> 00:24:57,160 Speaker 3: this thing, you're going to get money back or whatever. 509 00:24:57,200 --> 00:24:59,640 Speaker 3: You know, they will play either side of the act 510 00:24:59,680 --> 00:25:03,439 Speaker 3: quickly because something terrible's gonna happen, I quickly because something's 511 00:25:03,480 --> 00:25:06,880 Speaker 3: good is gonna happen. But any kind of unsolicited message 512 00:25:06,920 --> 00:25:10,119 Speaker 3: you get email, text, could even be you know, voicemail 513 00:25:10,200 --> 00:25:12,359 Speaker 3: or a live phone call. These scammers are con artists. 514 00:25:12,400 --> 00:25:14,480 Speaker 3: They'll call you on the phone and tell you any lie. 515 00:25:15,320 --> 00:25:17,880 Speaker 3: You should stop, take a breath, go out a band 516 00:25:17,880 --> 00:25:20,640 Speaker 3: to verify it. Sites like that at IC three dot 517 00:25:20,680 --> 00:25:22,280 Speaker 3: gov are a good place to go if you get 518 00:25:22,359 --> 00:25:25,560 Speaker 3: something from you know, let's say the Ohio Secretary of 519 00:25:25,600 --> 00:25:29,240 Speaker 3: State or the Kentucky State Police or the Indiana Department 520 00:25:29,280 --> 00:25:33,639 Speaker 3: of Taxation. Assume it's fake, and then go to their website, 521 00:25:33,880 --> 00:25:36,560 Speaker 3: look up a number from their website that you verified 522 00:25:36,600 --> 00:25:38,959 Speaker 3: independently and call them. So one, I know, well one 523 00:25:38,960 --> 00:25:40,760 Speaker 3: out of time, let me hit you with a real scam. 524 00:25:40,800 --> 00:25:43,159 Speaker 3: I know the person that's happened to, And this is 525 00:25:43,480 --> 00:25:47,000 Speaker 3: a smart person. They got a call on their phone 526 00:25:47,520 --> 00:25:49,879 Speaker 3: from a number that appeared to be their bank. Again, 527 00:25:49,960 --> 00:25:52,360 Speaker 3: easy to spoof a phone number. Could I know who 528 00:25:52,359 --> 00:25:54,720 Speaker 3: you bank with because your data has been leaked somewhere. Yeah, 529 00:25:54,880 --> 00:25:56,600 Speaker 3: so I could just guess and get lucky that it 530 00:25:56,600 --> 00:25:59,240 Speaker 3: happens to be your bank. But in any case, phone 531 00:25:59,280 --> 00:26:02,960 Speaker 3: call comes in and looks like this person's bank answers 532 00:26:03,040 --> 00:26:06,240 Speaker 3: the call, and the bank quote unquote proceeds to tell 533 00:26:06,280 --> 00:26:10,399 Speaker 3: them that they're suspected fraud at the bank and the 534 00:26:10,440 --> 00:26:14,320 Speaker 3: bank wants this person to help them uncover this fraud. 535 00:26:15,000 --> 00:26:19,600 Speaker 1: So not My wife has gotten the same thing two 536 00:26:19,720 --> 00:26:22,600 Speaker 1: times in the last couple of weeks from a very 537 00:26:22,680 --> 00:26:25,520 Speaker 1: well known, respected bank here in town. So this is 538 00:26:25,720 --> 00:26:29,960 Speaker 1: very real, very timely to get this guys now Again, 539 00:26:30,040 --> 00:26:33,920 Speaker 1: they're the bank quote unquote is not saying that this 540 00:26:34,000 --> 00:26:37,160 Speaker 1: person has fraud on their account. They're saying they want 541 00:26:37,200 --> 00:26:41,000 Speaker 1: to enlist this person to help them brack down this fraud. 542 00:26:41,080 --> 00:26:46,800 Speaker 1: So now you're helping us. Okay, So what they want this. 543 00:26:46,760 --> 00:26:48,879 Speaker 3: Person to do is go take the money out of 544 00:26:48,920 --> 00:26:52,440 Speaker 3: their account and transfer through an ATM. 545 00:26:51,920 --> 00:26:52,680 Speaker 1: To another bank. 546 00:26:53,680 --> 00:26:57,280 Speaker 3: And unfortunately, unfortunately, I guess because the con artist on 547 00:26:57,320 --> 00:26:59,320 Speaker 3: the phone was good and because the number looked legit. 548 00:26:59,720 --> 00:27:02,080 Speaker 1: Let me reiterate again, it is. 549 00:27:02,160 --> 00:27:05,639 Speaker 3: Trivially easy for anyone with no technical skill to spoof 550 00:27:05,640 --> 00:27:08,280 Speaker 3: a phone number. Anyone listening to this right now can 551 00:27:08,320 --> 00:27:10,760 Speaker 3: go find a website that will allow you to type 552 00:27:10,800 --> 00:27:12,640 Speaker 3: in the phone number you want to make a call 553 00:27:12,640 --> 00:27:14,920 Speaker 3: from or send a text from, and it will make 554 00:27:14,920 --> 00:27:17,159 Speaker 3: a call or send a text from that number. You 555 00:27:17,200 --> 00:27:20,040 Speaker 3: cannot look at a phone number on your phone and 556 00:27:20,119 --> 00:27:22,520 Speaker 3: know that it is legit, So just because your bank 557 00:27:22,600 --> 00:27:24,399 Speaker 3: shows up doesn't mean it's legit. 558 00:27:24,560 --> 00:27:26,320 Speaker 2: Hey, guys, I gotta run. I go to text from 559 00:27:26,359 --> 00:27:28,160 Speaker 2: the CEO of fifth thirty wants me to go take 560 00:27:28,200 --> 00:27:29,560 Speaker 2: all my money out of my account and put it 561 00:27:29,600 --> 00:27:31,280 Speaker 2: at a shoe box behind the dumpter. So you guys, 562 00:27:31,280 --> 00:27:32,000 Speaker 2: have a good day, gouta. 563 00:27:32,080 --> 00:27:35,159 Speaker 3: Yeah, yeah, you better hurry on that because you know 564 00:27:35,160 --> 00:27:36,800 Speaker 3: you might miss out on side just if you don't 565 00:27:36,800 --> 00:27:38,840 Speaker 3: act quickly sure there's a promo attached. 566 00:27:39,320 --> 00:27:41,920 Speaker 1: You're listening to Simply Money presented by all Worth Financial 567 00:27:41,920 --> 00:27:50,960 Speaker 1: on fifty five krc DP talk station. You're listening to 568 00:27:50,960 --> 00:27:54,119 Speaker 1: Simply Money presented by all Worth Financial on Bob Sponsorller 569 00:27:54,160 --> 00:27:57,320 Speaker 1: along with Brian James. You have a financial question you'd 570 00:27:57,359 --> 00:27:59,240 Speaker 1: like for us to answer. There's a red button you 571 00:27:59,240 --> 00:28:02,160 Speaker 1: can click while you're listening to the show. If you're 572 00:28:02,160 --> 00:28:06,159 Speaker 1: listening on the iHeart app, simply record your question and 573 00:28:06,200 --> 00:28:09,760 Speaker 1: it will come straight to us. Jerry in Mount Lookout 574 00:28:09,920 --> 00:28:12,119 Speaker 1: leads us off tonight Brian. He says, how do you 575 00:28:12,200 --> 00:28:15,320 Speaker 1: know how much cash to have and how much of 576 00:28:15,320 --> 00:28:18,959 Speaker 1: it to invest if your income amount tends to change 577 00:28:18,960 --> 00:28:19,840 Speaker 1: from months to month? 578 00:28:20,480 --> 00:28:22,800 Speaker 2: Well, Jerry, when your income moves around, as if you notice, 579 00:28:22,840 --> 00:28:24,960 Speaker 2: we're not. This is not about picking a perfect number. 580 00:28:25,000 --> 00:28:27,159 Speaker 2: It's about building a system that can keep you from 581 00:28:27,200 --> 00:28:29,960 Speaker 2: making bad decisions at the wrong time because you're kind 582 00:28:29,960 --> 00:28:32,479 Speaker 2: of forced into a situation where you didn't expect because, 583 00:28:32,520 --> 00:28:34,760 Speaker 2: like you said, your income's moving around. So let's start 584 00:28:34,760 --> 00:28:36,800 Speaker 2: with that baseline spending. What does it cost you to 585 00:28:36,840 --> 00:28:39,000 Speaker 2: run your life at an absolute minimum just to keep 586 00:28:39,040 --> 00:28:41,880 Speaker 2: the ship afloat, not your lifestyle, just the essentials. That's 587 00:28:41,920 --> 00:28:43,960 Speaker 2: the baseline. Then that's the thing you don't have a 588 00:28:44,040 --> 00:28:46,560 Speaker 2: choice about. And then from there that cash reserve should 589 00:28:46,600 --> 00:28:49,080 Speaker 2: be driven by how unpredictable your income is. If it 590 00:28:49,120 --> 00:28:51,680 Speaker 2: fluctuates just a little bit, maybe six to nine months 591 00:28:51,680 --> 00:28:54,200 Speaker 2: of expenses. But if it's highly variable, maybe you're self 592 00:28:54,240 --> 00:28:57,720 Speaker 2: employed or your commission based, therefore super subject to what 593 00:28:57,760 --> 00:28:59,600 Speaker 2: the economy wants to do to you, then then it 594 00:28:59,640 --> 00:29:01,760 Speaker 2: might be more like nine to eighteen months worth of 595 00:29:01,800 --> 00:29:04,560 Speaker 2: an emergency fund. Now here's the key distinction. A lot 596 00:29:04,560 --> 00:29:06,760 Speaker 2: of people miss this. Not all cash has the same job. 597 00:29:06,800 --> 00:29:09,600 Speaker 2: You really want two buckets of cash operating cash that's 598 00:29:09,640 --> 00:29:11,840 Speaker 2: one to three three months, or for your normal ups 599 00:29:11,840 --> 00:29:13,920 Speaker 2: and downs, sitting in the checking account ready for you 600 00:29:14,000 --> 00:29:16,240 Speaker 2: to tap into at any moment day to day. And 601 00:29:16,320 --> 00:29:18,520 Speaker 2: then also reserve cash. This is the rest of it. 602 00:29:18,760 --> 00:29:20,960 Speaker 2: Acting like a shock absorber. She don't have to sell 603 00:29:20,960 --> 00:29:22,520 Speaker 2: in a panic, you don't have to sell at a loss, 604 00:29:22,520 --> 00:29:24,920 Speaker 2: that kind of thing, so you know when Then from 605 00:29:24,920 --> 00:29:27,720 Speaker 2: there on, once you've identified those you know those limits, 606 00:29:27,880 --> 00:29:30,240 Speaker 2: when when you've noticed that you've fallen below you know 607 00:29:30,280 --> 00:29:32,400 Speaker 2: if you go below your say a fifty thousand dollars 608 00:29:32,400 --> 00:29:35,120 Speaker 2: emergency fund. Then that means all the available cash you have, 609 00:29:35,200 --> 00:29:37,640 Speaker 2: the extra income you have, goes back into that fund first. 610 00:29:37,800 --> 00:29:41,120 Speaker 2: When you go above, you know that that minimum. Now 611 00:29:41,120 --> 00:29:43,240 Speaker 2: you've got the chance to go tackle whatever your next 612 00:29:43,280 --> 00:29:45,440 Speaker 2: goals were. Maybe it was funding a roth IRA, or 613 00:29:45,480 --> 00:29:47,440 Speaker 2: maybe it was paying down the mortgage, paying down dead 614 00:29:47,560 --> 00:29:50,520 Speaker 2: or helping the kids something else. But treat that when 615 00:29:50,520 --> 00:29:53,040 Speaker 2: you come to that cash number, treat that like zero, 616 00:29:53,200 --> 00:29:56,000 Speaker 2: above means you have opportunity. Below means you got some 617 00:29:56,040 --> 00:29:58,640 Speaker 2: work to do. All right, So let's pivot to Rachel 618 00:29:58,640 --> 00:30:01,800 Speaker 2: and Mason. Rachel says, we've got so many options now, Bob, investments, 619 00:30:01,840 --> 00:30:05,600 Speaker 2: tax strategies, timing decisions that they feel stuck more than anything. 620 00:30:05,880 --> 00:30:08,920 Speaker 2: So how do you simplify this but not not lose 621 00:30:08,960 --> 00:30:10,040 Speaker 2: sight of the important things. 622 00:30:11,520 --> 00:30:13,600 Speaker 1: Well, Rachel, I'd come back to you with a question, 623 00:30:13,720 --> 00:30:16,600 Speaker 1: are you and your husband currently working with a financial 624 00:30:16,680 --> 00:30:19,440 Speaker 1: advisor right now? Do you have what you would consider 625 00:30:19,480 --> 00:30:22,520 Speaker 1: to be a good advisor with a comprehensive wealth strategy? 626 00:30:23,200 --> 00:30:25,800 Speaker 1: And if the answer that's yes, you're currently working with 627 00:30:25,880 --> 00:30:29,520 Speaker 1: an advisor and you still are feeling so stuck and 628 00:30:29,600 --> 00:30:33,520 Speaker 1: not confident about how these decisions are being made. Perhaps 629 00:30:33,520 --> 00:30:36,440 Speaker 1: it's time to evaluate, you know, moving to a different 630 00:30:36,480 --> 00:30:40,320 Speaker 1: advisor by the same token. If you're trying to do 631 00:30:40,400 --> 00:30:43,960 Speaker 1: this yourself and you're still feeling stuck, my guess is 632 00:30:44,040 --> 00:30:47,880 Speaker 1: you're in your husband's net worth and buckets of assets 633 00:30:47,880 --> 00:30:50,719 Speaker 1: have grown to the level now where things are getting 634 00:30:50,760 --> 00:30:53,200 Speaker 1: more complex, and as you said, you've got a lot 635 00:30:53,200 --> 00:30:56,320 Speaker 1: of options available to you. If you haven't worked with 636 00:30:56,360 --> 00:30:59,480 Speaker 1: a good fiduciary advisor up to now, now might be 637 00:30:59,560 --> 00:31:02,840 Speaker 1: the time to engage with a good advisor, because that's 638 00:31:03,000 --> 00:31:08,720 Speaker 1: really what comprehensive effective wealth planning is all about, managing 639 00:31:08,760 --> 00:31:12,080 Speaker 1: all of these different decisions, the timing, the tax strategies, 640 00:31:12,400 --> 00:31:15,960 Speaker 1: everything that you just listed, And if that's not going 641 00:31:16,000 --> 00:31:18,280 Speaker 1: on in a way that's making you and your husband 642 00:31:18,320 --> 00:31:21,640 Speaker 1: feel confident, might be time to evaluate some different options 643 00:31:21,640 --> 00:31:25,600 Speaker 1: there all right, Mark in Westchester says, my siblings all 644 00:31:25,640 --> 00:31:29,640 Speaker 1: handle money very differently, and we'll eventually be dealing with 645 00:31:29,680 --> 00:31:33,600 Speaker 1: our parents' estate together. How do you prepare for that 646 00:31:33,720 --> 00:31:36,840 Speaker 1: kind of a mismatch? Brian, Well, I think what. 647 00:31:38,360 --> 00:31:41,479 Speaker 2: You're dealing with here isn't really It's not the estate itself, 648 00:31:41,600 --> 00:31:43,440 Speaker 2: And you said a state. So I assume this means 649 00:31:43,440 --> 00:31:45,840 Speaker 2: mom and Dad are gone, we're trying to settle the estates. 650 00:31:45,920 --> 00:31:48,880 Speaker 2: Well everybody will, you know, unless there's something super complicated 651 00:31:49,120 --> 00:31:51,760 Speaker 2: going on that's going to drag it out over time. 652 00:31:51,800 --> 00:31:54,200 Speaker 2: Perhaps there's a trust that has to exist for ten, fifteen, 653 00:31:54,240 --> 00:31:57,200 Speaker 2: twenty years or whatever while it distributes. If that's the case, 654 00:31:57,200 --> 00:31:58,600 Speaker 2: then yeah, this is going to be a problem. But 655 00:31:59,080 --> 00:32:01,400 Speaker 2: most of the time that doesn't happen. In the In 656 00:32:01,520 --> 00:32:03,600 Speaker 2: the the each of the siblings is going to receive 657 00:32:03,640 --> 00:32:06,240 Speaker 2: whatever their share is as from what mom and dad wanted, 658 00:32:06,280 --> 00:32:08,080 Speaker 2: and then you all walk away make your own decisions. 659 00:32:08,080 --> 00:32:11,000 Speaker 2: But let's talk about the question that you asked. So 660 00:32:11,000 --> 00:32:13,840 Speaker 2: I think the goal here is to reduce surprises and 661 00:32:14,200 --> 00:32:16,760 Speaker 2: just define that process early. Meaning now, if mom and 662 00:32:16,840 --> 00:32:18,480 Speaker 2: dad are still around and the kids are on the picture, 663 00:32:18,480 --> 00:32:20,560 Speaker 2: it sounds like it's time for a family dinner where 664 00:32:20,560 --> 00:32:23,200 Speaker 2: we can talk about make sure everybody's clear. So are 665 00:32:23,200 --> 00:32:25,400 Speaker 2: we talking about a will or a trust in the 666 00:32:25,480 --> 00:32:28,200 Speaker 2: in the picture here? Who is the executor and or 667 00:32:28,240 --> 00:32:30,560 Speaker 2: trustee of these things? It's it's a good chance it's 668 00:32:30,560 --> 00:32:32,680 Speaker 2: one of you or or a couple of you, as 669 00:32:32,680 --> 00:32:35,720 Speaker 2: the siblings are things split evenly. Are their assets like 670 00:32:35,720 --> 00:32:38,240 Speaker 2: a house that can cause emotional tension. If all of 671 00:32:38,320 --> 00:32:40,440 Speaker 2: that's unclear, that's where the risks are going to come from. 672 00:32:40,520 --> 00:32:42,160 Speaker 2: So that's why it's good to kind of get it 673 00:32:42,160 --> 00:32:44,280 Speaker 2: all out in the open to the to the extent 674 00:32:44,400 --> 00:32:46,360 Speaker 2: that mom and dad are comfortable, this is their decision 675 00:32:46,360 --> 00:32:50,000 Speaker 2: whether this conversation occurs. And if there's reasons that people 676 00:32:50,000 --> 00:32:52,600 Speaker 2: don't get along, oftentimes there will be no no interest 677 00:32:52,600 --> 00:32:54,600 Speaker 2: in having that conversation. So you have to tread lightly there. 678 00:32:55,120 --> 00:32:56,560 Speaker 2: But as soon we can get to that stage, you know, 679 00:32:56,720 --> 00:32:58,160 Speaker 2: you want to try to make sure that to have 680 00:32:58,200 --> 00:33:00,960 Speaker 2: that conversation when everything is calm, i know, not around 681 00:33:01,120 --> 00:33:03,360 Speaker 2: you know, the bed at the hospital when some kind 682 00:33:03,360 --> 00:33:06,040 Speaker 2: of health situation has occurred. And then make sure that 683 00:33:06,080 --> 00:33:08,320 Speaker 2: there's those personalities you know that you have to kind 684 00:33:08,320 --> 00:33:10,959 Speaker 2: of mesh them all together. There's usually one sibling, for example, 685 00:33:10,960 --> 00:33:13,520 Speaker 2: who wants to preserve everything, another one who wants to 686 00:33:13,520 --> 00:33:16,040 Speaker 2: simplify and move on, and and and some who simply 687 00:33:16,080 --> 00:33:18,640 Speaker 2: won't make a decision. And there's others who agree with 688 00:33:18,640 --> 00:33:21,320 Speaker 2: absolutely everything, meaning that they really agree to nothing. So 689 00:33:21,640 --> 00:33:23,120 Speaker 2: you know, make sure you can you can make some 690 00:33:23,160 --> 00:33:25,600 Speaker 2: progress over these outcomes. Agree on how you're going to 691 00:33:25,640 --> 00:33:28,160 Speaker 2: make these decisions? Does the executor have full authority and 692 00:33:28,200 --> 00:33:30,280 Speaker 2: what he or she says goes? And or the trustee? 693 00:33:30,560 --> 00:33:32,640 Speaker 2: What happens if there's a disagreement? How do how does? 694 00:33:32,840 --> 00:33:35,560 Speaker 2: How does? How does the decision finally get made? Do 695 00:33:35,600 --> 00:33:38,440 Speaker 2: you bring in an attorney or another advisor? That structure 696 00:33:38,480 --> 00:33:40,959 Speaker 2: is more important than anything because that brings everybody together. 697 00:33:41,440 --> 00:33:43,000 Speaker 2: All right, we've got time for I think one more 698 00:33:43,080 --> 00:33:45,400 Speaker 2: quick one from a Lisa and Matt Adams. Lisa says, 699 00:33:45,520 --> 00:33:48,040 Speaker 2: we've talked about downsizing for years, but we keep putting 700 00:33:48,080 --> 00:33:50,000 Speaker 2: it off. How do you know when it's actually time 701 00:33:50,120 --> 00:33:52,080 Speaker 2: versus just a nice idea? Bob, you kind of did 702 00:33:52,120 --> 00:33:53,120 Speaker 2: this not that long ago, if. 703 00:33:53,080 --> 00:33:58,240 Speaker 1: I recall, Yeah, I mean usually when people talk about downsizing, 704 00:33:58,440 --> 00:34:01,280 Speaker 1: you know, they're talking about maybe doing one of two things. 705 00:34:01,360 --> 00:34:04,680 Speaker 1: You know, if you're truly downsizing. A lot of times 706 00:34:04,720 --> 00:34:07,320 Speaker 1: people are saying, hey, we've raised the kids, we're in 707 00:34:07,360 --> 00:34:10,080 Speaker 1: this big house, we don't need this big house anymore, 708 00:34:10,680 --> 00:34:12,920 Speaker 1: and we're able to pull some equity out of this 709 00:34:12,960 --> 00:34:16,920 Speaker 1: thing and buy a less expensive home, have lower property taxes, 710 00:34:17,120 --> 00:34:21,280 Speaker 1: have a lower overall cost. Structure that's an economic reason, 711 00:34:21,400 --> 00:34:24,640 Speaker 1: and I'd say a lifestyle reason for downsizing the thing 712 00:34:24,680 --> 00:34:26,399 Speaker 1: you got to watch out for. And I see this 713 00:34:26,440 --> 00:34:29,160 Speaker 1: more often than not. People think they're going to sell 714 00:34:29,239 --> 00:34:32,160 Speaker 1: that you know, four bedroom home, you know, built in 715 00:34:32,200 --> 00:34:35,160 Speaker 1: the nineteen sixties or seventies, and everybody wants to buy 716 00:34:35,200 --> 00:34:39,080 Speaker 1: that three bedroom ranch with everything on the first floor, 717 00:34:39,080 --> 00:34:42,960 Speaker 1: and they call that downsizing. Sometimes people get sticker shock 718 00:34:43,120 --> 00:34:47,319 Speaker 1: on what downsizing really means to move into that different home. 719 00:34:47,480 --> 00:34:49,759 Speaker 1: So you know you asked the question, is it When 720 00:34:49,800 --> 00:34:52,520 Speaker 1: does it go from just a nice idea to when 721 00:34:52,560 --> 00:34:55,439 Speaker 1: it's actually time? I think you've got to really think 722 00:34:55,480 --> 00:34:58,920 Speaker 1: through this and really run the numbers. And again we 723 00:34:58,960 --> 00:35:02,359 Speaker 1: talk about all the time, know your why, about what 724 00:35:02,400 --> 00:35:05,759 Speaker 1: you're really trying to accomplish here, and then hopefully make 725 00:35:05,800 --> 00:35:08,480 Speaker 1: a good, a good decision. Don't just make a rass 726 00:35:08,480 --> 00:35:11,279 Speaker 1: decision to go buy something and then hope your your 727 00:35:11,280 --> 00:35:14,480 Speaker 1: house sells. A lot of times people regret that decision 728 00:35:14,920 --> 00:35:17,200 Speaker 1: in hindsight because they haven't thought it all the way through. 729 00:35:17,640 --> 00:35:20,200 Speaker 1: All Right, Coming up next, Brian has his bottom line 730 00:35:20,239 --> 00:35:22,920 Speaker 1: or does it make more sense to buy a used 731 00:35:22,960 --> 00:35:26,560 Speaker 1: car or a brand new vehicle? You're listening to Simply Money, 732 00:35:26,560 --> 00:35:30,400 Speaker 1: presented by all Worth Financial fifty five krc B Talk station. 733 00:35:34,280 --> 00:35:36,960 Speaker 1: All Right, you're listening to Simply Money presented by all 734 00:35:37,000 --> 00:35:41,320 Speaker 1: Worth Financial, Box spot seller along with Brian James. All Right, Brian, 735 00:35:41,680 --> 00:35:44,480 Speaker 1: shoot us hit it hit us straight between the eyes here, 736 00:35:45,000 --> 00:35:47,800 Speaker 1: Use car or new car? What's the best strategy? 737 00:35:47,880 --> 00:35:50,200 Speaker 2: Always a commod debate, even with people who have wealth, 738 00:35:50,239 --> 00:35:53,120 Speaker 2: because the people who are significantly well off still will 739 00:35:53,120 --> 00:35:54,759 Speaker 2: look at prices and just go, I'm not willing to 740 00:35:54,760 --> 00:35:56,680 Speaker 2: pay what they're asking these days on the sticker. So 741 00:35:56,719 --> 00:36:00,279 Speaker 2: maybe I'm looking used use cars themselves and nothing is deal. 742 00:36:00,320 --> 00:36:01,759 Speaker 2: It used to be, for sure. So here's the new 743 00:36:01,800 --> 00:36:04,239 Speaker 2: math between new cars and used cars. So it's going 744 00:36:04,239 --> 00:36:06,040 Speaker 2: on right now. Of course, as we all know, used 745 00:36:06,040 --> 00:36:09,000 Speaker 2: car prices exploded during COVID, up thirty to forty percent. 746 00:36:09,239 --> 00:36:11,399 Speaker 2: Prices have back down a little bit, but they're still 747 00:36:11,440 --> 00:36:13,960 Speaker 2: well above pre twenty twenty levels. I'm pretty comfortable Sam, 748 00:36:13,960 --> 00:36:16,720 Speaker 2: we're not going back below that. Same time, interest rates 749 00:36:16,719 --> 00:36:18,840 Speaker 2: have surged too, as the Freighter Reserve was trying to 750 00:36:18,840 --> 00:36:22,000 Speaker 2: battle inflation. So new car loans are roughly five to 751 00:36:22,080 --> 00:36:24,360 Speaker 2: seven percent depending on your credits. You can get that 752 00:36:24,960 --> 00:36:27,279 Speaker 2: that's going to sound really really good compared to use 753 00:36:27,360 --> 00:36:29,640 Speaker 2: car loans, which are seven to ten percent. So even 754 00:36:29,680 --> 00:36:31,640 Speaker 2: though the cars themselves are cheaper at the cost to 755 00:36:31,680 --> 00:36:34,879 Speaker 2: borrow is significantly higher. So let's talk about something called 756 00:36:34,920 --> 00:36:38,400 Speaker 2: the payment illusion whereas, and this is what the dealerships 757 00:36:38,440 --> 00:36:41,000 Speaker 2: will occasionally try to do to just make sure that 758 00:36:41,000 --> 00:36:44,360 Speaker 2: people don't understand that maybe that they're not getting the 759 00:36:44,360 --> 00:36:46,080 Speaker 2: deal they think they are. So, for example, a used 760 00:36:46,160 --> 00:36:48,799 Speaker 2: car twenty five thousand bucks at eight and a half 761 00:36:48,880 --> 00:36:51,440 Speaker 2: percent for sixty months, that results in a payment of 762 00:36:51,440 --> 00:36:54,080 Speaker 2: about five hundred and thirteen dollars total interest over the 763 00:36:54,120 --> 00:36:57,239 Speaker 2: loan of fifty eight hundred bucks. A new car, let's 764 00:36:57,239 --> 00:36:59,640 Speaker 2: see you can find one where you're financing thirty thousand 765 00:36:59,680 --> 00:37:01,919 Speaker 2: dollars at five and a half percent for sixty months. 766 00:37:01,920 --> 00:37:04,400 Speaker 2: That's the difference is the interest rate five hundred and 767 00:37:04,440 --> 00:37:06,880 Speaker 2: seventy three dollars results in a higher payment, but the 768 00:37:06,960 --> 00:37:09,879 Speaker 2: total interest is only forty seven hundred dollars. So you're 769 00:37:09,880 --> 00:37:11,959 Speaker 2: saving sixty months of months a month, but you're getting 770 00:37:12,000 --> 00:37:14,480 Speaker 2: a brand new car with a warranty, fewer repair risks 771 00:37:14,480 --> 00:37:17,760 Speaker 2: and so forth. That's a little smaller than some people expect. 772 00:37:18,600 --> 00:37:21,240 Speaker 2: Another thing we run into is some of the challenges 773 00:37:21,320 --> 00:37:23,960 Speaker 2: is focusing only on that sticker price that monthly payment 774 00:37:24,040 --> 00:37:26,080 Speaker 2: hides the real cost, right, don't just look at the 775 00:37:26,080 --> 00:37:28,120 Speaker 2: sticker price. Make sure when you get into the finance 776 00:37:28,120 --> 00:37:30,520 Speaker 2: department you haven't made your decision until you've had a 777 00:37:30,560 --> 00:37:33,239 Speaker 2: conversation with the finance person. Make sure that you're on 778 00:37:33,280 --> 00:37:34,960 Speaker 2: the same page with them as to what the interest 779 00:37:35,040 --> 00:37:37,080 Speaker 2: rate is going to be and that the payment results 780 00:37:37,120 --> 00:37:40,440 Speaker 2: on that in making sure maintenance. Maintenance is a big 781 00:37:40,480 --> 00:37:43,160 Speaker 2: deal now that people are driving cars longer. You know, 782 00:37:43,520 --> 00:37:45,640 Speaker 2: during COVID a lot of used cars were fairly new, 783 00:37:45,680 --> 00:37:47,840 Speaker 2: but now inventory is getting old again because people have 784 00:37:47,840 --> 00:37:50,200 Speaker 2: been sitting on them. So repairs, parts and labor have 785 00:37:50,239 --> 00:37:52,279 Speaker 2: an idea of that. It's not really any different than 786 00:37:52,360 --> 00:37:54,520 Speaker 2: than buying a big house and ignoring what the property 787 00:37:54,560 --> 00:37:56,239 Speaker 2: taxes are going to be on it. Make sure you 788 00:37:56,239 --> 00:37:58,880 Speaker 2: know what's coming down the pike. And then finally, insurance 789 00:37:58,880 --> 00:38:01,439 Speaker 2: shock auto insurance of courses you might figure up double 790 00:38:01,480 --> 00:38:04,040 Speaker 2: digits in a lot of areas. Even older vehicles aren't 791 00:38:04,040 --> 00:38:06,240 Speaker 2: as cheap to ensure as they used to be. Be prepared, 792 00:38:06,360 --> 00:38:08,640 Speaker 2: get a quote from your insurance agent, before you buy 793 00:38:08,640 --> 00:38:09,080 Speaker 2: the vehicle. 794 00:38:10,160 --> 00:38:12,600 Speaker 1: Thanks for listening. Tonight. You've been listening to Simply Money, 795 00:38:12,600 --> 00:38:15,800 Speaker 1: presented by all Worth Financial on fifty five krc D 796 00:38:16,239 --> 00:38:16,800 Speaker 1: talk station