1 00:00:05,600 --> 00:00:10,440 Speaker 1: Tonight, a somewhat surprising inflation report, new information on the 2 00:00:10,520 --> 00:00:13,840 Speaker 1: labor market, and more. You're listening to Simply Money, presented 3 00:00:13,840 --> 00:00:17,960 Speaker 1: by all Worth Financial on Bob Sponseller along with Brian James. Well, 4 00:00:18,040 --> 00:00:19,959 Speaker 1: you've got a lot to get to tonight in the 5 00:00:20,000 --> 00:00:22,959 Speaker 1: way of headlines. Are going to start with the November 6 00:00:23,079 --> 00:00:27,360 Speaker 1: inflation report and it's some positive news for a change. 7 00:00:27,400 --> 00:00:29,960 Speaker 2: Brian, Yeah, this is this was a bit of a 8 00:00:30,000 --> 00:00:34,400 Speaker 2: stunn So prices rose two point seven percent year over year, 9 00:00:34,440 --> 00:00:36,479 Speaker 2: and the core CPI, that's the one we always like 10 00:00:36,520 --> 00:00:38,239 Speaker 2: to talk about. That's the one that the government really 11 00:00:38,280 --> 00:00:41,240 Speaker 2: pays attention to. It strips out food and energy prices, 12 00:00:41,240 --> 00:00:42,600 Speaker 2: and I know a lot of people think that's weird, 13 00:00:42,600 --> 00:00:44,960 Speaker 2: but those are extremely volatile things and what they're trying 14 00:00:44,960 --> 00:00:47,600 Speaker 2: to do is get a really clear picture without that volatility. Anyway, 15 00:00:47,800 --> 00:00:50,880 Speaker 2: core CPI was only two point six percent year over year, 16 00:00:51,360 --> 00:00:54,280 Speaker 2: way way lower than expected. And so for the core 17 00:00:54,400 --> 00:00:57,279 Speaker 2: and the headline, both of these the economists just did 18 00:00:57,280 --> 00:01:00,640 Speaker 2: not see this coming. The lowest estimate in Bloomberg survey 19 00:01:00,680 --> 00:01:03,760 Speaker 2: of sixty two economists was two point eight percent for 20 00:01:03,840 --> 00:01:05,959 Speaker 2: the core year over year, and that was City Group 21 00:01:06,000 --> 00:01:08,560 Speaker 2: so they win the prize for being least wrong, and 22 00:01:08,600 --> 00:01:10,800 Speaker 2: then the reading came in two tenths below that. 23 00:01:11,040 --> 00:01:12,360 Speaker 3: So this is this is good news. 24 00:01:13,600 --> 00:01:16,320 Speaker 1: Well hopefully this is good news for everybody. I mean, 25 00:01:16,400 --> 00:01:19,880 Speaker 1: let's face it, consumer businesses. I mean, we've got a 26 00:01:19,880 --> 00:01:22,200 Speaker 1: little bit of struggles here in the labor market and 27 00:01:22,280 --> 00:01:24,720 Speaker 1: job growth that we'll get to here in a second. 28 00:01:24,760 --> 00:01:28,319 Speaker 1: But let's face it, when when the prices of things 29 00:01:28,319 --> 00:01:31,440 Speaker 1: and raw materials come down, that's great for the economy. 30 00:01:31,520 --> 00:01:35,160 Speaker 1: That's great for you know, just everyday pocket books out there. 31 00:01:35,319 --> 00:01:38,240 Speaker 1: It's good for corporate balance sheet. It should help the 32 00:01:38,280 --> 00:01:41,840 Speaker 1: stock market shoot. It might even you know, induce the 33 00:01:41,840 --> 00:01:44,600 Speaker 1: Fed to drop rates even a little more or sooner 34 00:01:44,640 --> 00:01:48,120 Speaker 1: that inspect than expected. As we turn the calendar into 35 00:01:48,160 --> 00:01:51,160 Speaker 1: twenty twenty six, again, when these numbers go down, you know, 36 00:01:51,200 --> 00:01:54,760 Speaker 1: that's good news to everybody. And I the only caution 37 00:01:54,920 --> 00:01:58,280 Speaker 1: flag I put out there is we constantly, constantly get 38 00:01:58,320 --> 00:02:02,760 Speaker 1: revisions in these numbers, both the inflation number and the 39 00:02:02,880 --> 00:02:07,000 Speaker 1: jobs number. You know, revisions happen all the time. You know, 40 00:02:07,040 --> 00:02:09,320 Speaker 1: we went through that forty three day period with the 41 00:02:09,320 --> 00:02:13,120 Speaker 1: government shutdown where we didn't get any data. So you know, 42 00:02:13,160 --> 00:02:15,840 Speaker 1: as good as the numbers look today, we all need 43 00:02:15,880 --> 00:02:18,360 Speaker 1: to be on the lookout for revisions, you know, up 44 00:02:18,480 --> 00:02:20,840 Speaker 1: or down, because they happen, and they seem to happen 45 00:02:20,919 --> 00:02:22,320 Speaker 1: more often than not these days. 46 00:02:22,600 --> 00:02:24,760 Speaker 2: Yeah, that's just the world we live in, unfortunately, and 47 00:02:24,760 --> 00:02:26,840 Speaker 2: we always had that, and then of course we had 48 00:02:26,880 --> 00:02:30,720 Speaker 2: the the more curveballs from the current administration that was 49 00:02:31,400 --> 00:02:34,080 Speaker 2: the kids started to mess with the data sources. So 50 00:02:34,280 --> 00:02:36,240 Speaker 2: there's always going to be questioned about this. So just 51 00:02:36,280 --> 00:02:39,680 Speaker 2: stay flexible, you know, trust but verify. 52 00:02:39,360 --> 00:02:40,880 Speaker 3: I think is really the really the big thing. 53 00:02:40,919 --> 00:02:44,400 Speaker 2: But if this stays on course, then we we should 54 00:02:44,480 --> 00:02:47,040 Speaker 2: be knock on wood, we should be looking at potentially 55 00:02:47,120 --> 00:02:49,320 Speaker 2: more rate cuts. If you're a person who has that 56 00:02:49,360 --> 00:02:51,640 Speaker 2: mortgage from you know, a few years ago that's in 57 00:02:51,720 --> 00:02:53,880 Speaker 2: the seven, seven and a half maybe eight percent range, 58 00:02:54,040 --> 00:02:56,640 Speaker 2: time to start looking for those refinancing opportunities. 59 00:02:56,680 --> 00:02:57,880 Speaker 3: So I'd start paying attention to that. 60 00:02:58,760 --> 00:03:00,920 Speaker 1: Yeah, that'll be interesting to see, you know, with this 61 00:03:01,000 --> 00:03:04,160 Speaker 1: inflation report, and these are new numbers that just came 62 00:03:04,200 --> 00:03:06,760 Speaker 1: out early this morning. You know, the thing we talk 63 00:03:06,800 --> 00:03:08,959 Speaker 1: about all the time, Brian, The thing I know I 64 00:03:09,480 --> 00:03:12,680 Speaker 1: watch every day is the ten year interest rate number, 65 00:03:12,760 --> 00:03:15,840 Speaker 1: not the short term number, the ten year treasury number, 66 00:03:15,880 --> 00:03:21,440 Speaker 1: because that's what really moves mortgage rates, and that number 67 00:03:21,480 --> 00:03:24,760 Speaker 1: has really not moved much at all in spite of 68 00:03:24,760 --> 00:03:27,880 Speaker 1: what happens to short term rates. We're sitting in the 69 00:03:27,919 --> 00:03:31,640 Speaker 1: low fours here on that ten year treasury, and you know, 70 00:03:31,960 --> 00:03:35,280 Speaker 1: that number could actually go up if we think these 71 00:03:35,320 --> 00:03:38,640 Speaker 1: lower inflation numbers are going to lead to stronger than 72 00:03:38,680 --> 00:03:42,000 Speaker 1: expected economic growth. So it just it's a yin and 73 00:03:42,040 --> 00:03:44,520 Speaker 1: a yang here. You could get good news in one area, 74 00:03:44,600 --> 00:03:47,840 Speaker 1: which could be bad news in another area. It depends 75 00:03:47,840 --> 00:03:50,760 Speaker 1: on what you're looking for and what's going to benefit 76 00:03:50,840 --> 00:03:54,480 Speaker 1: your pocketbook or your profits if you're a business owner. 77 00:03:54,480 --> 00:03:57,720 Speaker 1: But you know, keep an eye on that ten year treasury, 78 00:03:57,920 --> 00:04:00,360 Speaker 1: you know note as it relates to mortgage rates. 79 00:04:00,560 --> 00:04:01,640 Speaker 3: Yeah, that's a great point, Bob. 80 00:04:01,760 --> 00:04:03,880 Speaker 2: I think I might have been a little bit flippant 81 00:04:03,880 --> 00:04:06,960 Speaker 2: there talking about because the Federal Reserve does not just 82 00:04:06,960 --> 00:04:08,560 Speaker 2: straight up dictate mortgage rates right. 83 00:04:08,760 --> 00:04:10,120 Speaker 3: Market demand does it too. 84 00:04:10,120 --> 00:04:11,920 Speaker 2: This is why we always talk about what the bond 85 00:04:11,960 --> 00:04:14,400 Speaker 2: market is doing with regard to to inter trains. 86 00:04:14,480 --> 00:04:15,640 Speaker 3: But again, if you're. 87 00:04:15,560 --> 00:04:17,359 Speaker 2: In that seven eight percent mortgage range, it really is 88 00:04:17,400 --> 00:04:19,200 Speaker 2: time to start paying attention the rate could be low 89 00:04:19,320 --> 00:04:20,960 Speaker 2: enough as it is right now to make it worth 90 00:04:20,960 --> 00:04:21,320 Speaker 2: your while. 91 00:04:21,400 --> 00:04:24,400 Speaker 1: Don't lose sight of that for sure. All right, well, hey, 92 00:04:24,480 --> 00:04:28,039 Speaker 1: let's get into the jobs report. We finally got the 93 00:04:28,160 --> 00:04:31,400 Speaker 1: US jobs data that have been delayed for weeks due 94 00:04:31,440 --> 00:04:34,720 Speaker 1: to that forty three day government shut down, and what 95 00:04:34,760 --> 00:04:37,400 Speaker 1: it tells us is, you know, I think what we've 96 00:04:37,440 --> 00:04:39,839 Speaker 1: been seeing in the headlines, you know, in the news 97 00:04:39,880 --> 00:04:42,440 Speaker 1: over the last month or so, you know, just kind 98 00:04:42,480 --> 00:04:47,440 Speaker 1: of a slowing you know, slightly concerning job market. Here again, 99 00:04:47,800 --> 00:04:50,240 Speaker 1: not a lot of people are getting fired, but the 100 00:04:50,240 --> 00:04:52,960 Speaker 1: flip side, not a lot of people are getting hired. 101 00:04:53,040 --> 00:04:56,160 Speaker 1: You know, it's just kind of a stagnant situation as 102 00:04:56,200 --> 00:04:59,440 Speaker 1: far as jobs growth. But now we actually have some 103 00:04:59,720 --> 00:05:02,640 Speaker 1: action data and numbers to talk about, you know, in 104 00:05:02,760 --> 00:05:06,159 Speaker 1: terms of November and October numbers. Let's get into that tonight, 105 00:05:06,200 --> 00:05:06,560 Speaker 1: Brian A. 106 00:05:06,600 --> 00:05:06,960 Speaker 3: That's right. 107 00:05:06,960 --> 00:05:09,239 Speaker 2: This is the US jobs data that had been delayed 108 00:05:09,240 --> 00:05:12,039 Speaker 2: for several weeks due to that longest ever forty three 109 00:05:12,120 --> 00:05:15,160 Speaker 2: day federal government shutdown. But what it tells us isn't 110 00:05:15,160 --> 00:05:17,800 Speaker 2: exactly a roaring economy. Right, So we just gave you 111 00:05:17,839 --> 00:05:22,839 Speaker 2: good inflation inflation numbers, but with inflation slowing. Sometimes that 112 00:05:22,839 --> 00:05:25,040 Speaker 2: can come along with a slowing economy too. That's kind 113 00:05:25,040 --> 00:05:29,160 Speaker 2: of where the slowing role happens from. So this report 114 00:05:29,200 --> 00:05:30,840 Speaker 2: gives us a picture of a labor market that's kind 115 00:05:30,839 --> 00:05:32,560 Speaker 2: of slowing down a little more than a lot of 116 00:05:32,560 --> 00:05:33,400 Speaker 2: people expected. 117 00:05:33,920 --> 00:05:35,559 Speaker 3: Sixty four thousand jobs. 118 00:05:35,560 --> 00:05:37,599 Speaker 2: That's how many of the economy added here in November 119 00:05:37,600 --> 00:05:40,720 Speaker 2: twenty twenty five. Good news is that that's ahead of 120 00:05:40,760 --> 00:05:42,839 Speaker 2: economists forecast of around forty thousand. 121 00:05:42,880 --> 00:05:44,520 Speaker 3: We have a lot of ere economists out here. 122 00:05:44,600 --> 00:05:46,520 Speaker 2: They were wrong on interest rates and they were they 123 00:05:46,640 --> 00:05:48,680 Speaker 2: kind of missed on how bad the jobs report was 124 00:05:48,680 --> 00:05:51,520 Speaker 2: going to be. Now that said, that's a relatively small 125 00:05:51,560 --> 00:05:54,840 Speaker 2: gain by historical standards and on more importantly, that was 126 00:05:54,920 --> 00:05:57,040 Speaker 2: right after, right on the heels of a significant loss 127 00:05:57,040 --> 00:05:59,480 Speaker 2: of about one hundred and five thousand jobs in October 128 00:06:00,120 --> 00:06:02,680 Speaker 2: Tober drop Bob. That wasn't just a quirk of statistics. 129 00:06:02,960 --> 00:06:05,800 Speaker 2: That was the impact of federal workforce reductions. You know, 130 00:06:05,880 --> 00:06:08,640 Speaker 2: lots of government workers who had deferred those buyouts because 131 00:06:08,640 --> 00:06:11,200 Speaker 2: of that shutdown. They finally got taken off the payrolls 132 00:06:11,240 --> 00:06:13,920 Speaker 2: in October, all at once, right leading to that steep decline. 133 00:06:13,960 --> 00:06:16,160 Speaker 2: So that's what happens when we you know, the shutdown 134 00:06:16,240 --> 00:06:18,479 Speaker 2: and the and the turning off of the data spigots 135 00:06:18,520 --> 00:06:19,960 Speaker 2: and then turning them back on again when all the 136 00:06:20,040 --> 00:06:21,520 Speaker 2: data starts flowing, and we kind. 137 00:06:21,440 --> 00:06:23,279 Speaker 3: Of we'll get these a bit of these shocks. 138 00:06:23,520 --> 00:06:26,520 Speaker 2: So end result here, US unemployment rose to four point 139 00:06:26,600 --> 00:06:29,320 Speaker 2: six percent in November. That's the highest level in more 140 00:06:29,360 --> 00:06:33,120 Speaker 2: than four years, even as employers were adding jobs. Because 141 00:06:33,160 --> 00:06:35,600 Speaker 2: the overall labor force picture that includes workers who are 142 00:06:35,600 --> 00:06:38,599 Speaker 2: re entering the job hunt, and it reflects broader weakness 143 00:06:38,600 --> 00:06:41,400 Speaker 2: and hiring outside those few pockets of strength out there 144 00:06:41,400 --> 00:06:42,159 Speaker 2: in certain industries. 145 00:06:43,440 --> 00:06:46,000 Speaker 1: Yeah, that that headline number, the four point six percent 146 00:06:46,040 --> 00:06:49,239 Speaker 1: unemployment rate, obviously that is up and as you said, 147 00:06:49,279 --> 00:06:52,440 Speaker 1: that's the highest percentage figure we've seen in four years. 148 00:06:53,040 --> 00:06:55,680 Speaker 1: That could be there could be a silver lining to 149 00:06:55,720 --> 00:06:57,920 Speaker 1: that because as you mentioned, Brian, and this is what 150 00:06:58,080 --> 00:07:00,480 Speaker 1: you know, doesn't get talked about a lot in media, 151 00:07:00,560 --> 00:07:03,000 Speaker 1: and if people don't study this stuff as closely as 152 00:07:03,040 --> 00:07:05,640 Speaker 1: we do, you miss out on the point that it 153 00:07:05,800 --> 00:07:09,239 Speaker 1: really that these numbers are impacted, as you've already said, 154 00:07:09,279 --> 00:07:12,040 Speaker 1: by the number of workers who are actually looking for 155 00:07:12,120 --> 00:07:15,160 Speaker 1: a job. If people aren't even looking for a job 156 00:07:15,440 --> 00:07:19,040 Speaker 1: that can skew that unemployment rate down. Uh, And to 157 00:07:19,120 --> 00:07:21,320 Speaker 1: me that that that doesn't make a whole lot of 158 00:07:21,360 --> 00:07:24,320 Speaker 1: sense in defining what's actually going on in the economy. 159 00:07:24,480 --> 00:07:27,160 Speaker 1: So I think, I think what we need to see 160 00:07:27,200 --> 00:07:32,640 Speaker 1: here is continued, hopefully continued real wage growth and continued 161 00:07:32,680 --> 00:07:35,840 Speaker 1: private sector job growth. That would be a sign that 162 00:07:35,880 --> 00:07:41,040 Speaker 1: the economy really is improving in real inflation adjusted numbers. 163 00:07:42,080 --> 00:07:44,160 Speaker 1: And it would be some evidence of some of this 164 00:07:44,360 --> 00:07:48,560 Speaker 1: on shoring that the President and his administration has talked about. 165 00:07:48,960 --> 00:07:51,000 Speaker 1: It takes a while for that all that stuff to 166 00:07:51,040 --> 00:07:53,720 Speaker 1: take hold. It remains to be seen how quickly we 167 00:07:53,800 --> 00:07:57,080 Speaker 1: can add you know, jobs in that manufacturing sector, which, 168 00:07:57,120 --> 00:08:01,160 Speaker 1: by the way, uh, manufacturing jobs can continued to shrink 169 00:08:01,880 --> 00:08:04,840 Speaker 1: over the latest quarters. So it'll be it'll be interesting 170 00:08:04,880 --> 00:08:08,360 Speaker 1: to see how long all that on shoring takes hold 171 00:08:08,400 --> 00:08:11,480 Speaker 1: as all this investment is coming back into the United States. 172 00:08:12,040 --> 00:08:15,200 Speaker 1: It doesn't happen overnight, but you know, hopefully we'll see 173 00:08:15,400 --> 00:08:18,760 Speaker 1: some green shoots of private sector job growth here as 174 00:08:18,800 --> 00:08:21,800 Speaker 1: we get into the first and second quarter of twenty 175 00:08:21,800 --> 00:08:22,400 Speaker 1: twenty six. 176 00:08:22,680 --> 00:08:24,600 Speaker 2: Yeah, so all this it adds up to a labor 177 00:08:24,680 --> 00:08:26,560 Speaker 2: market not really collapsing This isn't you know what. 178 00:08:26,640 --> 00:08:28,280 Speaker 3: We're not kind of waving the flag of the end 179 00:08:28,280 --> 00:08:28,840 Speaker 3: of the world here. 180 00:08:28,880 --> 00:08:32,160 Speaker 2: Employers are not slashing thousands upon thousands of jobs, but 181 00:08:32,360 --> 00:08:35,600 Speaker 2: definitely slowing down. So job growth used to be robust, 182 00:08:35,640 --> 00:08:37,520 Speaker 2: that's kind of become a little more muted, you know, 183 00:08:37,760 --> 00:08:40,840 Speaker 2: and definitely uneven across the various sectors, different parts of 184 00:08:40,840 --> 00:08:43,560 Speaker 2: the economy or are having different experiences. The FED has 185 00:08:43,559 --> 00:08:45,880 Speaker 2: already been cut cutting interest rates all through twenty twenty 186 00:08:45,880 --> 00:08:48,480 Speaker 2: five because inflation is stubbornly hanging around. But we did 187 00:08:48,520 --> 00:08:51,199 Speaker 2: just get that great headline this morning. Not a labor 188 00:08:51,240 --> 00:08:53,840 Speaker 2: market in crisis, but things are shifting, so you know, 189 00:08:53,880 --> 00:08:55,800 Speaker 2: we might just be be on your toes and be 190 00:08:55,880 --> 00:08:59,120 Speaker 2: ready for you know, for things to come ahead and 191 00:08:59,120 --> 00:08:59,920 Speaker 2: and you'll be okay. 192 00:09:00,880 --> 00:09:03,720 Speaker 1: Well, another good news before we leave this whole inflation 193 00:09:03,880 --> 00:09:06,480 Speaker 1: and wage growth topic. I mean, Brian, I know you 194 00:09:06,600 --> 00:09:09,160 Speaker 1: like to study history and data and I do as well. 195 00:09:09,200 --> 00:09:11,120 Speaker 1: I mean, I just took a look at you know, 196 00:09:11,200 --> 00:09:14,320 Speaker 1: cause when we see wage growth, you know, we see 197 00:09:14,360 --> 00:09:17,199 Speaker 1: stories how wages aren't growing blah blah blah. But you know, 198 00:09:17,240 --> 00:09:21,200 Speaker 1: if we look at real wage growth, inflation adjusted wage 199 00:09:21,240 --> 00:09:24,720 Speaker 1: growth as inflation has really been coming down since late 200 00:09:24,760 --> 00:09:27,600 Speaker 1: twenty twenty one. I mean, I'm looking at numbers that 201 00:09:27,640 --> 00:09:31,360 Speaker 1: have been consistently improving really since the third quarter of 202 00:09:31,400 --> 00:09:34,720 Speaker 1: twenty twenty two, when inflation really started to go down. 203 00:09:35,360 --> 00:09:38,000 Speaker 1: You know, with the exception of a couple of blips here, 204 00:09:38,120 --> 00:09:42,720 Speaker 1: we've seen real wage growth, which is inflation adjusted wage growth, 205 00:09:42,920 --> 00:09:46,120 Speaker 1: you know, not off to the races, not huge wage growth, 206 00:09:46,160 --> 00:09:49,560 Speaker 1: but consistent real wage growth. And let's face it, when 207 00:09:49,600 --> 00:09:52,280 Speaker 1: people have more money in their pockets to spend, that's 208 00:09:52,280 --> 00:09:55,360 Speaker 1: a good thing for the economy, which leads us to 209 00:09:55,400 --> 00:09:57,800 Speaker 1: the next thing we want to touch on tonight, and that's, 210 00:09:58,080 --> 00:10:01,319 Speaker 1: you know, taking a look at how consumers spending is doing. Because, 211 00:10:01,360 --> 00:10:05,720 Speaker 1: after all, Brian consumer spending makes up seventy percent of 212 00:10:05,720 --> 00:10:09,400 Speaker 1: our gross domestic product here in the United States, that's right. 213 00:10:09,480 --> 00:10:12,360 Speaker 2: And as per the season, nearly two hundred and three 214 00:10:12,480 --> 00:10:15,240 Speaker 2: million US shoppers hit the stores and of course the 215 00:10:15,280 --> 00:10:18,160 Speaker 2: online stores during the five day stretch from Thanksgiving through 216 00:10:18,160 --> 00:10:18,880 Speaker 2: Cyber Monday. 217 00:10:19,120 --> 00:10:22,400 Speaker 3: That's the highest turnout we've seen in at least nine years. 218 00:10:22,400 --> 00:10:25,160 Speaker 2: According to the National Retail Federation, they're the ones who 219 00:10:25,200 --> 00:10:27,960 Speaker 2: survey the shoppers to calculate, give us the Sanuel estimate. 220 00:10:28,280 --> 00:10:29,120 Speaker 3: So what are we. 221 00:10:29,080 --> 00:10:33,240 Speaker 2: Hearing from big box club retailers like Walmart, Best Buying COSTC. Well, 222 00:10:33,240 --> 00:10:37,400 Speaker 2: they're topping quarterly sales expectations. They're beating what Wall Street thinks. Remember, 223 00:10:37,440 --> 00:10:39,200 Speaker 2: all we really care about is whether the analysts were 224 00:10:39,240 --> 00:10:42,439 Speaker 2: right or wrong. And so those are blowing the doors 225 00:10:42,440 --> 00:10:45,160 Speaker 2: off for right now. And those executives saw said they 226 00:10:45,160 --> 00:10:47,560 Speaker 2: saw an encouraging start to that crucial shopping season. 227 00:10:47,559 --> 00:10:49,960 Speaker 3: Remember this is this is when Black Friday. 228 00:10:50,559 --> 00:10:52,800 Speaker 2: What that actually means is the beginning of the season 229 00:10:52,840 --> 00:10:55,560 Speaker 2: where the numbers for retailers tend to turn black for 230 00:10:55,559 --> 00:10:59,120 Speaker 2: the year because of the spike and spending those discretionary retailers. 231 00:10:59,240 --> 00:11:00,280 Speaker 3: Go ahead, Bob, no. 232 00:11:00,400 --> 00:11:03,599 Speaker 1: You go. I just have to laugh, because, Brian, it 233 00:11:03,679 --> 00:11:07,680 Speaker 1: seems like Christmas and holiday shopping season seems to start, 234 00:11:07,760 --> 00:11:09,880 Speaker 1: you know, around the fourth of July. Now we just 235 00:11:09,960 --> 00:11:12,440 Speaker 1: call it different things, you know, we just try to 236 00:11:12,440 --> 00:11:15,720 Speaker 1: do everything we can to allure people online and into 237 00:11:15,720 --> 00:11:19,280 Speaker 1: those stores to shop, shop, shop, spend, spend, spend. It's 238 00:11:19,280 --> 00:11:21,679 Speaker 1: the American way, Brian. But go ahead, go ahead with 239 00:11:21,720 --> 00:11:22,480 Speaker 1: the data. 240 00:11:22,640 --> 00:11:25,240 Speaker 2: The United States a profit margin where the Christmas shopping 241 00:11:25,280 --> 00:11:28,920 Speaker 2: season starts two Thanksgivings before. But some of these, some 242 00:11:28,960 --> 00:11:31,520 Speaker 2: of these other smaller retails like Gap, Gap, Amber, Comby, 243 00:11:31,520 --> 00:11:34,559 Speaker 2: and Fitch American Eagle, they also exceeded quarterly estimates, which 244 00:11:34,600 --> 00:11:36,360 Speaker 2: is interesting. I have those are names I haven't heard, 245 00:11:36,600 --> 00:11:38,280 Speaker 2: you know, and it feels like in a long time, 246 00:11:38,960 --> 00:11:40,840 Speaker 2: you know, because they used to be darlings of the 247 00:11:40,840 --> 00:11:43,680 Speaker 2: industry and then got real quiet there. But doing okay 248 00:11:43,720 --> 00:11:47,120 Speaker 2: there as well. Some other key dynamics we're seeing, you know, 249 00:11:47,400 --> 00:11:50,240 Speaker 2: even as concerns about an AI investment bubble and layoffs 250 00:11:50,240 --> 00:11:53,000 Speaker 2: by these companies including a Verizon and Target, you know, 251 00:11:53,080 --> 00:11:55,839 Speaker 2: kind of cloud the twenty twenty six economic outlook, we're 252 00:11:55,840 --> 00:11:58,400 Speaker 2: still seeing these green shoots coming out of the retail industry. 253 00:11:58,400 --> 00:12:00,679 Speaker 2: Which that's not something we've talked about long time. It's 254 00:12:00,720 --> 00:12:01,720 Speaker 2: all been technology. 255 00:12:02,640 --> 00:12:05,760 Speaker 1: Yeah, if people are still shopping in the Applebee's parking 256 00:12:05,800 --> 00:12:09,120 Speaker 1: lot is still packed at six pm, the economy can't 257 00:12:09,120 --> 00:12:13,920 Speaker 1: be doing all that bad. All right. Here's the all 258 00:12:13,960 --> 00:12:17,320 Speaker 1: Worth advice. A solid long term financial plan will help 259 00:12:17,360 --> 00:12:20,880 Speaker 1: you prepare for a year where you know, being intentional, 260 00:12:21,080 --> 00:12:24,840 Speaker 1: worth your money and being value oriented could matter more 261 00:12:24,960 --> 00:12:27,680 Speaker 1: than ever. Coming up next, we're gonna walk through some 262 00:12:27,760 --> 00:12:31,520 Speaker 1: of the most common situations we see where family and 263 00:12:31,679 --> 00:12:35,200 Speaker 1: money collide and what you can do now to maybe 264 00:12:35,400 --> 00:12:39,480 Speaker 1: hopefully avoid some family drama down the road. You're listening 265 00:12:39,559 --> 00:12:42,000 Speaker 1: to Simply Money presented by all Worth Financial on fifty 266 00:12:42,000 --> 00:12:50,240 Speaker 1: five KRC the talk station. You're listening to Simply Money 267 00:12:50,280 --> 00:12:53,080 Speaker 1: presented by all Worth Financial on Bob Sponsller along with 268 00:12:53,120 --> 00:12:56,720 Speaker 1: Brian James. If you can't listen to Simply Money live 269 00:12:56,800 --> 00:12:59,800 Speaker 1: every night, we help subscribe and get our daily podcast. 270 00:13:00,120 --> 00:13:02,920 Speaker 1: Just search Simply Money on the iHeart app or wherever 271 00:13:02,960 --> 00:13:06,679 Speaker 1: you find your podcast. Straight ahead of six forty three, 272 00:13:06,800 --> 00:13:11,800 Speaker 1: we're answering your questions about charitable bunching, alternative investments iras, 273 00:13:11,880 --> 00:13:15,079 Speaker 1: and how to invest when you and your spouse see risk. 274 00:13:15,320 --> 00:13:18,160 Speaker 1: Maybe a little bit differently, if you've ever had tension 275 00:13:18,360 --> 00:13:22,440 Speaker 1: in your family around money, you are not alone, especially 276 00:13:22,440 --> 00:13:26,280 Speaker 1: when someone passes away, or when parents start aging, or 277 00:13:26,360 --> 00:13:29,160 Speaker 1: even just trying to help an adult child who's still 278 00:13:29,720 --> 00:13:32,560 Speaker 1: figuring things out in terms of getting rolling from a 279 00:13:32,600 --> 00:13:36,640 Speaker 1: financial standpoint. Let's face it, the emotions can run high, 280 00:13:36,720 --> 00:13:39,760 Speaker 1: and Brian let's break down tonight some of the common 281 00:13:39,840 --> 00:13:44,480 Speaker 1: situations we run into and unfortunately we run into these 282 00:13:44,559 --> 00:13:45,680 Speaker 1: quite often. 283 00:13:45,720 --> 00:13:46,079 Speaker 3: We do. 284 00:13:46,440 --> 00:13:49,920 Speaker 2: Obviously, it's not all about one person in their money. 285 00:13:49,920 --> 00:13:51,480 Speaker 2: It's usually about a lot of people and how we're 286 00:13:51,480 --> 00:13:53,280 Speaker 2: going to deal with all the issues that come up. 287 00:13:53,320 --> 00:13:55,920 Speaker 2: So let's pretend, for example, you got three kids. One's 288 00:13:55,960 --> 00:13:58,560 Speaker 2: a school teacher, one's a surgeon, and one just went 289 00:13:58,600 --> 00:14:00,960 Speaker 2: through a divorce and is barely making it. You know, 290 00:14:01,000 --> 00:14:02,520 Speaker 2: obviously you want to want you want to help the 291 00:14:02,520 --> 00:14:04,559 Speaker 2: one who's struggling more so the plan is to leave 292 00:14:04,600 --> 00:14:06,280 Speaker 2: them a bigger share of the estate because they just 293 00:14:06,360 --> 00:14:08,520 Speaker 2: might not be getting the same chance that the others are. 294 00:14:08,760 --> 00:14:10,319 Speaker 3: Well, it makes sense, right, but. 295 00:14:10,360 --> 00:14:13,960 Speaker 2: Unless you communicate that clearly, it can create some resentment. 296 00:14:14,120 --> 00:14:16,640 Speaker 2: So you know, this is here's hypothetical example. It kind 297 00:14:16,640 --> 00:14:19,000 Speaker 2: of follows. This is a fairly standard when we see this, 298 00:14:19,080 --> 00:14:22,120 Speaker 2: it looks like this. So fake family named the Johnsons 299 00:14:22,160 --> 00:14:24,760 Speaker 2: four and a half million dollars, left fifty percent of 300 00:14:24,800 --> 00:14:27,120 Speaker 2: that to their one daughter, who had some financial issues, 301 00:14:27,160 --> 00:14:28,600 Speaker 2: and then twenty five percent each. 302 00:14:28,440 --> 00:14:29,120 Speaker 3: To the other two. 303 00:14:29,480 --> 00:14:32,040 Speaker 2: Nobody told the kids in advance, and so after they 304 00:14:32,080 --> 00:14:34,720 Speaker 2: passed what happened while the son stopped speaking to their 305 00:14:34,720 --> 00:14:39,040 Speaker 2: sister because they they decided that she had somehow engineered 306 00:14:39,080 --> 00:14:41,320 Speaker 2: some kind of way to get half the estate and 307 00:14:41,600 --> 00:14:44,560 Speaker 2: cheat the other two thinking you know, she had manipulated them. 308 00:14:44,920 --> 00:14:47,320 Speaker 2: This wasn't the case at all. But because because mom 309 00:14:47,360 --> 00:14:49,240 Speaker 2: and Dad did not lay this all out to everybody 310 00:14:49,240 --> 00:14:51,560 Speaker 2: in advance and allow everybody to share feedback and react 311 00:14:51,560 --> 00:14:55,120 Speaker 2: in real time, everybody was simply left to determine for 312 00:14:55,160 --> 00:14:58,000 Speaker 2: themselves how this had come to be. And let's just 313 00:14:58,000 --> 00:15:00,360 Speaker 2: say nobody gets together during the holidays anymore, So how 314 00:15:00,360 --> 00:15:02,320 Speaker 2: do we deal with this? If you want to divide 315 00:15:02,360 --> 00:15:05,280 Speaker 2: assets unequally, just have a family meeting while you're alive, 316 00:15:05,400 --> 00:15:07,680 Speaker 2: or at least leave a letter explaining your reasoning. You 317 00:15:07,680 --> 00:15:10,040 Speaker 2: don't have to justify every decision. These are your decisions 318 00:15:10,040 --> 00:15:12,320 Speaker 2: and no one else's, but you do need to communicate. 319 00:15:12,360 --> 00:15:14,520 Speaker 2: You can't assume that they're just going to assume you 320 00:15:14,560 --> 00:15:17,200 Speaker 2: had their best interest in mind. Better to have that 321 00:15:17,280 --> 00:15:20,840 Speaker 2: difficult conversation now than cause permanent damage later after you're 322 00:15:20,880 --> 00:15:21,240 Speaker 2: long gone. 323 00:15:22,240 --> 00:15:25,720 Speaker 1: Yeah, Brian, what I find in situations like this is 324 00:15:25,800 --> 00:15:28,680 Speaker 1: there could be a little code dependency going on in 325 00:15:28,760 --> 00:15:31,080 Speaker 1: the late stages of a couple's life. And here's what 326 00:15:31,160 --> 00:15:35,040 Speaker 1: I mean. Oftentimes, let's face it, today, kids live all 327 00:15:35,040 --> 00:15:37,480 Speaker 1: over the country in different parts of the country, and 328 00:15:37,600 --> 00:15:40,600 Speaker 1: for whatever reason, the thing that I find happens more 329 00:15:40,600 --> 00:15:44,160 Speaker 1: often than not is the child that needs some assistance 330 00:15:44,520 --> 00:15:47,400 Speaker 1: lives a lot closer to mom and dad than the 331 00:15:47,520 --> 00:15:51,160 Speaker 1: kid that's maybe a successful professional or attorney or doctor 332 00:15:51,200 --> 00:15:53,520 Speaker 1: that doesn't need money and they moved, you know, for 333 00:15:53,600 --> 00:15:57,720 Speaker 1: their job. They're highly successful. And as the parents age 334 00:15:57,720 --> 00:16:00,800 Speaker 1: a little bit, you know, they like you only needed 335 00:16:00,840 --> 00:16:04,240 Speaker 1: and wanted and having that child around. And that's what 336 00:16:04,400 --> 00:16:08,200 Speaker 1: can lead sometimes to this unequal treatment of kids. And 337 00:16:08,600 --> 00:16:11,200 Speaker 1: the point we're trying to make is a lack of communication. 338 00:16:11,440 --> 00:16:14,520 Speaker 1: So every family's different. We don't have time to go 339 00:16:14,600 --> 00:16:17,280 Speaker 1: into all the different scenarios that might crop up. But 340 00:16:17,320 --> 00:16:19,680 Speaker 1: I think the point we're trying to make here correct 341 00:16:19,680 --> 00:16:23,440 Speaker 1: me if I'm wrong, Brian, is communication. Communication can avoid 342 00:16:23,560 --> 00:16:26,720 Speaker 1: a lot of things. Because I've never met one set 343 00:16:26,760 --> 00:16:30,920 Speaker 1: of parents that dreams after they're gone of their kids 344 00:16:31,120 --> 00:16:34,640 Speaker 1: never getting together, never having the family all together. And 345 00:16:34,680 --> 00:16:38,240 Speaker 1: it's just shame when things like this happen simply because 346 00:16:38,320 --> 00:16:41,240 Speaker 1: of a lack of proactive communication. Let's move on to 347 00:16:41,280 --> 00:16:43,560 Speaker 1: scenario number two, and this is fighting over mom and 348 00:16:43,640 --> 00:16:46,320 Speaker 1: dad's care it seems like every generation nowadays is the 349 00:16:46,320 --> 00:16:48,520 Speaker 1: sandwich generation where you got to worry about your own 350 00:16:48,560 --> 00:16:49,720 Speaker 1: kids as well as your parents. 351 00:16:50,080 --> 00:16:52,360 Speaker 2: So a lot of times, here's as this goes. You know, 352 00:16:53,360 --> 00:16:56,160 Speaker 2: families with adult children, one sibling tends to live nearby 353 00:16:56,200 --> 00:16:57,200 Speaker 2: and others have moved on a. 354 00:16:57,200 --> 00:16:58,000 Speaker 3: Little further away. 355 00:16:58,280 --> 00:17:01,000 Speaker 2: So for obvious reasons, the one who lives closest tends 356 00:17:01,040 --> 00:17:03,400 Speaker 2: to be managing all the doctor's appointments, the bills, and 357 00:17:03,440 --> 00:17:05,480 Speaker 2: the errands. Those others they all live out of town, 358 00:17:05,520 --> 00:17:07,320 Speaker 2: and they think, hey, everything's great. I never hear about it, 359 00:17:07,359 --> 00:17:11,119 Speaker 2: so everything must be fine. Well, so here's a hypothetical story, 360 00:17:11,119 --> 00:17:13,239 Speaker 2: and this is again a very common outcome for all this. 361 00:17:13,600 --> 00:17:16,239 Speaker 2: Mom falls ill. And let's say brother Tom has been 362 00:17:16,240 --> 00:17:19,000 Speaker 2: handling everything because he lives nearby, but his sister and 363 00:17:19,040 --> 00:17:21,760 Speaker 2: brother just assume the state is going to be split. Evenly, 364 00:17:22,080 --> 00:17:25,080 Speaker 2: Tom's feeling burned out and underappreciated because he's there every day, 365 00:17:25,119 --> 00:17:27,720 Speaker 2: mowing the lawn, making sandwiches, dealing with the mail that 366 00:17:27,800 --> 00:17:30,959 Speaker 2: comes in, and dealing with scammers and technology and all 367 00:17:31,000 --> 00:17:32,800 Speaker 2: that kind of stuff that happens tends to happen to 368 00:17:32,920 --> 00:17:35,399 Speaker 2: us when we get a little older, time to settle 369 00:17:35,400 --> 00:17:37,919 Speaker 2: the estate. He demanded a larger share, turned into a 370 00:17:37,960 --> 00:17:41,160 Speaker 2: lawsuit between the siblings. So how can we avoid this, Well, 371 00:17:41,200 --> 00:17:43,600 Speaker 2: this is what a trust can do. A trust can 372 00:17:43,640 --> 00:17:47,239 Speaker 2: allocate what's called a caregiver credit, compensating that sibling who 373 00:17:47,280 --> 00:17:50,600 Speaker 2: took on more responsibility. But again, make sure everybody knows, Hey, 374 00:17:50,640 --> 00:17:52,720 Speaker 2: we know Tom lives close by and he's going to 375 00:17:52,760 --> 00:17:54,560 Speaker 2: wind up carrying a lot of the burden of caring 376 00:17:54,600 --> 00:17:57,159 Speaker 2: for me, mom and dad. So we're going to make 377 00:17:57,200 --> 00:18:00,440 Speaker 2: sure he gets a little bit in advance. It gets 378 00:18:00,480 --> 00:18:01,960 Speaker 2: to be aware of this in the future, you can 379 00:18:01,960 --> 00:18:03,600 Speaker 2: avoid a lot of blow ups. 380 00:18:04,640 --> 00:18:06,240 Speaker 1: Yeah, Brian, I don't know about you, but in the 381 00:18:06,280 --> 00:18:10,160 Speaker 1: situations I've dealt with, you know that involve caregiving, It's 382 00:18:10,160 --> 00:18:12,679 Speaker 1: not so much the kids fighting over money. It's just 383 00:18:12,840 --> 00:18:17,520 Speaker 1: everyone's busy and we let one sibling get overburdened with 384 00:18:17,640 --> 00:18:20,360 Speaker 1: the scheduling and the demands of that care And that's 385 00:18:20,400 --> 00:18:22,879 Speaker 1: where I think the siblings need to communicate, getting a 386 00:18:22,960 --> 00:18:25,520 Speaker 1: room together and put a plan together. And the folks 387 00:18:25,520 --> 00:18:28,240 Speaker 1: that I've seen do that are able to manage this 388 00:18:28,280 --> 00:18:31,359 Speaker 1: a little better. Let's get into a last scenario we 389 00:18:31,400 --> 00:18:34,159 Speaker 1: want to cover and that's who gets what at the 390 00:18:34,280 --> 00:18:36,280 Speaker 1: end of the day. And Brian, we're seeing more and 391 00:18:36,359 --> 00:18:40,359 Speaker 1: more families that have that lake cabin, vacation home, you know, 392 00:18:40,480 --> 00:18:44,040 Speaker 1: even just family heirlooms, you know, personal property in their house. 393 00:18:44,200 --> 00:18:47,879 Speaker 1: And you'd be amazed at how often families and kids 394 00:18:48,000 --> 00:18:51,560 Speaker 1: fight over what seem like small things, you know, the china, 395 00:18:51,640 --> 00:18:54,399 Speaker 1: the jewelry, all that, but a bigger thing like a 396 00:18:54,480 --> 00:18:58,080 Speaker 1: vacation home. Everybody loves it when they're coming to visit, 397 00:18:58,240 --> 00:19:01,280 Speaker 1: but then when mom and dad passed away, it's it's 398 00:19:01,280 --> 00:19:05,960 Speaker 1: sometimes shocking how the objectives change, and there could be some, 399 00:19:06,160 --> 00:19:09,160 Speaker 1: you know, significant arguments over how to handle that ill 400 00:19:09,160 --> 00:19:10,920 Speaker 1: liquid vacation property. 401 00:19:11,080 --> 00:19:13,240 Speaker 2: Yeah, there can be a lot of disagreement on how 402 00:19:13,280 --> 00:19:15,320 Speaker 2: much time we actually are gonna spend there after mom 403 00:19:15,359 --> 00:19:16,879 Speaker 2: and dad are gone. Mom and dad might think that 404 00:19:16,920 --> 00:19:18,960 Speaker 2: everybody wants it and wants to hang on to it forever, 405 00:19:19,160 --> 00:19:20,600 Speaker 2: but that may not be the case for the kids 406 00:19:20,600 --> 00:19:22,399 Speaker 2: who have their own kids and their own lives now. 407 00:19:22,440 --> 00:19:24,600 Speaker 2: So make sure you're clear on really how everybody feels 408 00:19:24,600 --> 00:19:25,159 Speaker 2: about everything. 409 00:19:25,760 --> 00:19:27,680 Speaker 1: Here's the all Worth advice that the end of the day, 410 00:19:27,720 --> 00:19:30,679 Speaker 1: your wealth is a tool and it should bring peace 411 00:19:30,800 --> 00:19:35,399 Speaker 1: to your family members not conflict. Here's a big question 412 00:19:35,520 --> 00:19:38,080 Speaker 1: when the time comes and it's time to move, what 413 00:19:38,320 --> 00:19:42,240 Speaker 1: makes better sense a house or a condo or some 414 00:19:42,359 --> 00:19:44,720 Speaker 1: other kind of property to live in like a town home. 415 00:19:44,960 --> 00:19:48,040 Speaker 1: We'll explain that question next. You're listening to Simply Money, 416 00:19:48,040 --> 00:19:50,920 Speaker 1: presented by all Worth Financial on fifty five KRC, the 417 00:19:51,240 --> 00:19:59,080 Speaker 1: talk station. You're listening to Simply moneyed by all Worth 418 00:19:59,119 --> 00:20:02,320 Speaker 1: Financial on mops on Seller along with Brian James. Joined 419 00:20:02,359 --> 00:20:06,439 Speaker 1: tonight by our real estate expert Michelle Sloan, owner of 420 00:20:06,520 --> 00:20:10,480 Speaker 1: Remax Time. Michelle, thanks as always for making time for 421 00:20:10,560 --> 00:20:13,280 Speaker 1: us tonight, and we want to get into the pros 422 00:20:13,359 --> 00:20:17,119 Speaker 1: and cons of buying a house or you know, traditional 423 00:20:17,160 --> 00:20:23,120 Speaker 1: home versus maybe a condo or a townhouse situation. Walk 424 00:20:23,200 --> 00:20:25,280 Speaker 1: us through some of the decision points we need to 425 00:20:25,280 --> 00:20:27,600 Speaker 1: work through and some of the pros and cons as 426 00:20:27,640 --> 00:20:29,480 Speaker 1: we navigate that kind of a decision. 427 00:20:30,880 --> 00:20:33,560 Speaker 4: Yeah, it's very interesting because I have a lot of 428 00:20:33,720 --> 00:20:37,919 Speaker 4: new clients who are in their sixties. They're looking to 429 00:20:38,040 --> 00:20:42,920 Speaker 4: downsize or right size their home, and with that they 430 00:20:43,040 --> 00:20:47,840 Speaker 4: have options. Do you want a single family home? Again? 431 00:20:47,960 --> 00:20:50,320 Speaker 4: Do you want what goes with a single family home? 432 00:20:50,359 --> 00:20:53,880 Speaker 4: And really, if you look at the when you want 433 00:20:53,920 --> 00:20:57,399 Speaker 4: to buy a house, do you want space, do you 434 00:20:57,440 --> 00:20:59,399 Speaker 4: want your own yard? Do you want to be able 435 00:20:59,440 --> 00:21:03,159 Speaker 4: to control like the color of your front door? And 436 00:21:04,200 --> 00:21:09,520 Speaker 4: you have fewer rules, and technically when you buy a home, 437 00:21:10,200 --> 00:21:14,400 Speaker 4: most often there's more long term growth. A single family 438 00:21:14,440 --> 00:21:20,480 Speaker 4: home historically appreciates a little bit faster than a condo would. 439 00:21:20,840 --> 00:21:24,719 Speaker 4: But the cons of buying that single family home is 440 00:21:25,119 --> 00:21:27,720 Speaker 4: you have to consider all of the maintenance. You have 441 00:21:27,800 --> 00:21:31,600 Speaker 4: to do your own yard work. Still, you have to 442 00:21:31,840 --> 00:21:37,480 Speaker 4: maintain the entire home and take on the responsibilities of 443 00:21:37,600 --> 00:21:40,720 Speaker 4: maintaining the home. The nice thing is with a single 444 00:21:40,760 --> 00:21:45,280 Speaker 4: family home, your HOA or your homeowners' association costs are 445 00:21:45,400 --> 00:21:49,480 Speaker 4: usually one time annual fee if you're in a neighborhood 446 00:21:49,960 --> 00:21:54,119 Speaker 4: and you don't have a monthly fee like you would 447 00:21:54,280 --> 00:21:57,600 Speaker 4: a condo. So then you're looking on the flip side 448 00:21:58,080 --> 00:22:01,320 Speaker 4: of do you want to buy a condo? And the 449 00:22:01,359 --> 00:22:05,760 Speaker 4: pros of that are certainly it's lower maintenance living. It's 450 00:22:05,800 --> 00:22:09,520 Speaker 4: not like you have you're completely like you're renting, you 451 00:22:09,640 --> 00:22:13,520 Speaker 4: have no maintenance. You still have maintenance on the interior 452 00:22:13,640 --> 00:22:15,600 Speaker 4: of the home. You just may not have all of 453 00:22:15,600 --> 00:22:18,719 Speaker 4: the maintenance on the exterior of your home, so that 454 00:22:18,760 --> 00:22:22,840 Speaker 4: could save you a little bit of time and energy. Also, 455 00:22:23,240 --> 00:22:26,480 Speaker 4: it could be and again it depends on where you're 456 00:22:26,520 --> 00:22:29,439 Speaker 4: looking and what you want. A condo could have a 457 00:22:29,520 --> 00:22:33,879 Speaker 4: lower price point and have more amenities like a swimming pool, 458 00:22:33,920 --> 00:22:37,320 Speaker 4: a fitness center, clubhouse, walking path, you know, all those 459 00:22:37,440 --> 00:22:42,720 Speaker 4: kinds of great things. But you have a monthly homeowners 460 00:22:42,760 --> 00:22:46,359 Speaker 4: association fee. So you may have a lower mortgage or 461 00:22:46,400 --> 00:22:49,520 Speaker 4: a lower price point, but you may need to add 462 00:22:49,560 --> 00:22:53,840 Speaker 4: on two, three, four hundred dollars a month for all 463 00:22:53,880 --> 00:22:59,080 Speaker 4: of those extra amenities. So it's certainly a lot to consider, 464 00:23:00,000 --> 00:23:02,240 Speaker 4: and in the end, it ends up to be right 465 00:23:02,280 --> 00:23:04,680 Speaker 4: about the same price if you buy a single family 466 00:23:04,720 --> 00:23:08,200 Speaker 4: home or a condo, because you have to factor in 467 00:23:08,240 --> 00:23:09,920 Speaker 4: the homeowner's association fee. 468 00:23:10,600 --> 00:23:13,320 Speaker 2: So along those lines, can you share some stories of 469 00:23:13,320 --> 00:23:17,240 Speaker 2: where you've seen buyers remorse in either of these situations. 470 00:23:17,280 --> 00:23:18,760 Speaker 2: I think that would be helpful for our listeners to 471 00:23:18,840 --> 00:23:20,679 Speaker 2: kind of identify when they might be heading down on 472 00:23:20,720 --> 00:23:22,640 Speaker 2: a path where they might regret a decision. 473 00:23:24,000 --> 00:23:30,119 Speaker 4: Absolutely, I do. I feel like there is more pushback 474 00:23:30,280 --> 00:23:34,199 Speaker 4: or more regret when it comes to moving from a 475 00:23:34,240 --> 00:23:36,359 Speaker 4: single family home that you've been in for a really 476 00:23:36,400 --> 00:23:41,720 Speaker 4: long time having that autonomy. Going into a condo where 477 00:23:41,760 --> 00:23:45,719 Speaker 4: everybody's in your business, you know, you have HOA fees, 478 00:23:45,840 --> 00:23:49,480 Speaker 4: you have rules, you have restrictions. You can't just let 479 00:23:49,480 --> 00:23:53,000 Speaker 4: the dog out in the backyard do their business. Most 480 00:23:53,080 --> 00:23:56,119 Speaker 4: often in a condo situation, you're going to have to 481 00:23:56,160 --> 00:23:58,280 Speaker 4: take your dogs for a walk, You're going to have 482 00:23:58,359 --> 00:24:01,159 Speaker 4: to pick up after it. You know, it's going to 483 00:24:01,200 --> 00:24:06,919 Speaker 4: be not as free like free wheeling in a condo 484 00:24:07,040 --> 00:24:11,040 Speaker 4: as it would be in a single family home. And occasionally, 485 00:24:11,400 --> 00:24:14,240 Speaker 4: you know, the price goes up. So with an HOA, 486 00:24:15,000 --> 00:24:18,080 Speaker 4: just like taxes, you know, the fees may go up 487 00:24:18,119 --> 00:24:21,800 Speaker 4: as well. So I find more people that get into 488 00:24:21,840 --> 00:24:26,719 Speaker 4: condos that aren't really ready to be told what to 489 00:24:26,800 --> 00:24:30,920 Speaker 4: do all the time saying, Okay, I need to sell 490 00:24:30,960 --> 00:24:33,760 Speaker 4: this condo. That's just too small, it's too tight, the 491 00:24:33,800 --> 00:24:37,120 Speaker 4: world is closing in on me. I need my own space. 492 00:24:37,760 --> 00:24:40,960 Speaker 4: And then they go back to looking for a single 493 00:24:41,000 --> 00:24:43,399 Speaker 4: family home. So those are kind some of the things 494 00:24:43,400 --> 00:24:44,200 Speaker 4: that I have seen. 495 00:24:44,960 --> 00:24:46,880 Speaker 1: Hey, Michelle, correct me if I'm wrong here. But there's 496 00:24:47,040 --> 00:24:51,600 Speaker 1: there's another big, potentially huge component to condo ownership, and 497 00:24:51,640 --> 00:24:55,359 Speaker 1: that's the reserve fund of the HOA that's designed to 498 00:24:55,480 --> 00:24:59,399 Speaker 1: accumulate some money over time to help pay for these 499 00:24:59,440 --> 00:25:02,840 Speaker 1: ongoing maintenance repair issues. And I think one of the 500 00:25:02,880 --> 00:25:05,320 Speaker 1: big parts of due diligence is to look at the 501 00:25:05,400 --> 00:25:08,480 Speaker 1: health of that reserve fund so that you don't go 502 00:25:08,640 --> 00:25:12,240 Speaker 1: buy a condo with one set of expectations only to 503 00:25:12,280 --> 00:25:14,560 Speaker 1: turn around a year or two later and get hit 504 00:25:14,640 --> 00:25:17,520 Speaker 1: with some huge assessment where you've got to write a 505 00:25:17,520 --> 00:25:20,800 Speaker 1: big check to help you replace the roof on the 506 00:25:20,840 --> 00:25:24,480 Speaker 1: whole building because the HOA, you know, over years and years, 507 00:25:24,560 --> 00:25:27,000 Speaker 1: did not manage money correctly. You ever run into that 508 00:25:27,200 --> 00:25:30,920 Speaker 1: and how do you advise your clients accordingly? Oh? 509 00:25:31,040 --> 00:25:34,920 Speaker 4: Absolutely, And that's a tough one because we have seen 510 00:25:35,000 --> 00:25:39,159 Speaker 4: that situation over and over. If you are paying cash 511 00:25:39,240 --> 00:25:44,240 Speaker 4: for the condo, oftentimes you don't have the maybe the 512 00:25:44,280 --> 00:25:49,200 Speaker 4: wherewithal or the knowledge to look at those documents and 513 00:25:49,600 --> 00:25:53,480 Speaker 4: see what that reserve is and what it means and 514 00:25:53,520 --> 00:25:56,800 Speaker 4: how healthy it is. When you are getting a mortgage, 515 00:25:56,880 --> 00:26:02,600 Speaker 4: the mortgage company is looking at the health of that reserve. 516 00:26:03,240 --> 00:26:06,359 Speaker 4: So that's one of those things that you know, you 517 00:26:06,440 --> 00:26:11,159 Speaker 4: really don't know until you get into that situation. A 518 00:26:11,160 --> 00:26:14,600 Speaker 4: lot of times now you could do that extra due 519 00:26:14,640 --> 00:26:18,880 Speaker 4: diligence and talk to the HOA, which is smart before 520 00:26:19,119 --> 00:26:23,960 Speaker 4: or talk to the neighbors, ask them how the HOA functions. 521 00:26:24,160 --> 00:26:27,680 Speaker 4: Is it helpful? Is it difficult to get things done 522 00:26:27,720 --> 00:26:30,639 Speaker 4: on the exterior of the home. Are you seeing a 523 00:26:30,720 --> 00:26:33,960 Speaker 4: lack of maintenance and then all of a sudden, Now 524 00:26:34,040 --> 00:26:38,840 Speaker 4: it's really interesting because you know your HOA fees are 525 00:26:38,960 --> 00:26:44,080 Speaker 4: usually lower on a newer property, but then they start 526 00:26:44,160 --> 00:26:47,280 Speaker 4: to go up pretty quickly. Those monthly fees go up 527 00:26:47,320 --> 00:26:51,520 Speaker 4: pretty quickly when you need exterior maintenance. And so if 528 00:26:51,520 --> 00:26:54,919 Speaker 4: that reserve is not strong enough, yeah, you definitely are 529 00:26:54,960 --> 00:26:58,480 Speaker 4: going to see a huge increase of potential for a 530 00:26:58,560 --> 00:27:03,320 Speaker 4: one time a set that could be pretty hefty. Definitely 531 00:27:03,400 --> 00:27:07,280 Speaker 4: important to look at all of the latest minutes and 532 00:27:07,359 --> 00:27:09,560 Speaker 4: try to gauge the health of that HLA. 533 00:27:11,000 --> 00:27:13,640 Speaker 1: All right, great stuff as always, Michelle, thanks so much 534 00:27:13,680 --> 00:27:17,879 Speaker 1: for spending time with us receiving, especially during this busy 535 00:27:18,040 --> 00:27:18,919 Speaker 1: holiday season. 536 00:27:19,080 --> 00:27:20,520 Speaker 3: Great stuff as always. 537 00:27:20,840 --> 00:27:23,440 Speaker 1: You're listening to Simply Money presented by all Worth Financial 538 00:27:23,480 --> 00:27:31,960 Speaker 1: on fifty five KRC the talk station. You're listening to 539 00:27:31,960 --> 00:27:34,000 Speaker 1: Simply Money sause I have buy all Worth Financial on 540 00:27:34,119 --> 00:27:36,919 Speaker 1: bob Sponseller along with Brian James, do you have a 541 00:27:36,960 --> 00:27:39,480 Speaker 1: financial question you'd like for us to answer. There's a 542 00:27:39,560 --> 00:27:42,040 Speaker 1: red button you can click if you're listening to our 543 00:27:42,119 --> 00:27:45,480 Speaker 1: show from the iHeart app, simply record your question and 544 00:27:45,560 --> 00:27:49,760 Speaker 1: it will, as always, comes straight to us. Kyle M. 545 00:27:49,840 --> 00:27:52,800 Speaker 1: Anderson leads us off tonight, Brian. He says, our advisor 546 00:27:52,920 --> 00:27:57,760 Speaker 1: set our portfolio is overfitted to the last decade. I 547 00:27:57,840 --> 00:27:59,960 Speaker 1: love how he phrased that. How do you build an 548 00:28:00,040 --> 00:28:04,160 Speaker 1: allocation that can survive a completely different market environment? 549 00:28:04,359 --> 00:28:06,400 Speaker 2: Yeah, that's and he put that in quotes for us too, 550 00:28:06,400 --> 00:28:08,639 Speaker 2: So that must literally be the way the advisor said that. 551 00:28:08,680 --> 00:28:10,199 Speaker 3: So it's an interesting way to phrase that. 552 00:28:10,400 --> 00:28:12,600 Speaker 2: So I think what they're talking about here is, uh, 553 00:28:12,880 --> 00:28:14,560 Speaker 2: what're what they're saying is that this was built for 554 00:28:14,720 --> 00:28:17,919 Speaker 2: the world we just finished, you know, low rates, cheap money, 555 00:28:18,359 --> 00:28:20,840 Speaker 2: mega cap tech dominance, you know, rather than the world 556 00:28:20,840 --> 00:28:23,040 Speaker 2: we may be moving into. So how do we build 557 00:28:23,080 --> 00:28:25,840 Speaker 2: an allocation that's going to be robust across these multiple 558 00:28:25,880 --> 00:28:27,880 Speaker 2: changes that are coming? Well, first off, let let's let's 559 00:28:27,880 --> 00:28:32,080 Speaker 2: figure out where we're They're saying your portfolio is implicitly concentrated. 560 00:28:32,119 --> 00:28:35,360 Speaker 2: Wouldn't surprise me if it's long duration growth stocks, US 561 00:28:35,480 --> 00:28:38,239 Speaker 2: large caps, uh, you know, even bonds that benefited from 562 00:28:38,240 --> 00:28:41,000 Speaker 2: following rates. If most of your returns came from those factors, 563 00:28:41,040 --> 00:28:42,600 Speaker 2: you might be exposed. If we're going to be in 564 00:28:42,640 --> 00:28:45,120 Speaker 2: a different rate environment, just a kind of different you know, 565 00:28:45,120 --> 00:28:47,600 Speaker 2: different stock market environment too, so you know this this 566 00:28:47,680 --> 00:28:51,280 Speaker 2: could be make sure you're looking to diversify this correctly. 567 00:28:51,360 --> 00:28:54,000 Speaker 2: That means pairing assets that can win in different environments. 568 00:28:54,320 --> 00:28:56,360 Speaker 2: Value in small cap stocks are where we want to 569 00:28:56,400 --> 00:29:00,000 Speaker 2: be for inflationary periods, for example, international or emerging markets, 570 00:29:00,080 --> 00:29:02,320 Speaker 2: for global growth cycles, and that's definitely happening here in 571 00:29:02,320 --> 00:29:05,760 Speaker 2: twenty twenty five. Shorter duration bonds or tips for rising 572 00:29:05,800 --> 00:29:08,000 Speaker 2: rate scenarios, so those are just generally speaking to the 573 00:29:08,120 --> 00:29:10,880 Speaker 2: kind of moves you want to make in those different markets. 574 00:29:11,040 --> 00:29:13,120 Speaker 2: So you know, finally, and then stress test this whole mix. 575 00:29:13,240 --> 00:29:16,080 Speaker 2: Run the portfolio through periods like the nineteen seventies. There 576 00:29:16,080 --> 00:29:17,640 Speaker 2: are tech tools out there to help you do this, 577 00:29:17,760 --> 00:29:20,560 Speaker 2: the two thousand technology blow up and of course the 578 00:29:20,560 --> 00:29:23,920 Speaker 2: two thousand and eight credit crisis. If that strategy only 579 00:29:23,920 --> 00:29:25,760 Speaker 2: works in one era, it's not durable. So you have 580 00:29:25,840 --> 00:29:27,920 Speaker 2: to make sure that you have the buildy to be 581 00:29:27,960 --> 00:29:30,120 Speaker 2: flexible if not understand what you already mentioned, you have 582 00:29:30,160 --> 00:29:32,240 Speaker 2: an advisor he or she should be taking care of 583 00:29:32,240 --> 00:29:34,240 Speaker 2: this for you, So really push on them to get 584 00:29:34,280 --> 00:29:36,520 Speaker 2: to be more clear as to what they're asking you 585 00:29:36,560 --> 00:29:38,520 Speaker 2: to do. All right, So we're gonna move on to 586 00:29:38,560 --> 00:29:41,720 Speaker 2: Brian and Westchester. Who's Oh, here's our favorite topic. He's 587 00:29:41,720 --> 00:29:45,400 Speaker 2: talking about bunching charitable gifts every few years. Their CPA, though, 588 00:29:45,480 --> 00:29:48,040 Speaker 2: is concerned that that's going to impact medicare premiums. How 589 00:29:48,080 --> 00:29:51,200 Speaker 2: do you coordinate these giving strategies, Bob, without triggering these 590 00:29:51,240 --> 00:29:52,240 Speaker 2: tax cliffs. 591 00:29:53,000 --> 00:29:57,160 Speaker 1: Well, without understanding the nuanced details of Brian's question. And 592 00:29:57,200 --> 00:29:59,680 Speaker 1: here's what I'm you know, it's difficult to answer this 593 00:29:59,760 --> 00:30:03,560 Speaker 1: question question, you know, specifically because I don't know the 594 00:30:03,600 --> 00:30:07,080 Speaker 1: source that you're using, Brian, to make these charitable gifts. So, 595 00:30:07,520 --> 00:30:10,760 Speaker 1: you know, charitable gifts can come in many ways, cash gifts, 596 00:30:11,600 --> 00:30:15,640 Speaker 1: qualified charitable distributions from your IRA, or giving away appreciated 597 00:30:15,680 --> 00:30:18,400 Speaker 1: assets either directly to a charity or in a donor 598 00:30:18,440 --> 00:30:21,920 Speaker 1: advice fund. And depending on where those charitable gifts come 599 00:30:21,960 --> 00:30:25,240 Speaker 1: from or the source of them, that can impact, as 600 00:30:25,280 --> 00:30:29,200 Speaker 1: your CPA called out, Medicare premiums. And I think he's 601 00:30:29,240 --> 00:30:33,200 Speaker 1: talking about, you know, avoiding that irm attax, which we 602 00:30:33,240 --> 00:30:36,080 Speaker 1: all want to avoid if at all possible. So, you know, 603 00:30:36,120 --> 00:30:38,760 Speaker 1: getting back to your question about coordination, you do have 604 00:30:38,880 --> 00:30:42,480 Speaker 1: to sit down and run different scenarios on how to 605 00:30:42,560 --> 00:30:45,720 Speaker 1: do this charitable giving and how much to do every year. 606 00:30:46,560 --> 00:30:49,240 Speaker 1: And this is where a good fiduciary advisor can run 607 00:30:49,280 --> 00:30:52,320 Speaker 1: those scenarios for you. And you know what Brian and 608 00:30:52,360 --> 00:30:55,120 Speaker 1: I always do. After we've done all our work, we 609 00:30:55,240 --> 00:30:58,080 Speaker 1: always go back to the client's CPA and say, hey, 610 00:30:58,360 --> 00:31:01,560 Speaker 1: here's what we're seeing. What are you seeing. Let's all 611 00:31:01,600 --> 00:31:03,440 Speaker 1: get on the same page so that we have a 612 00:31:03,520 --> 00:31:08,240 Speaker 1: coordinated strategy to help the client accomplish their charitable giving 613 00:31:08,240 --> 00:31:13,200 Speaker 1: objectives in the most efficient tax manner possible. So it 614 00:31:13,320 --> 00:31:16,840 Speaker 1: does require a little bit of coordination in planning, Brian, 615 00:31:16,960 --> 00:31:21,200 Speaker 1: because this stuff is getting more complicated every year in 616 00:31:21,600 --> 00:31:24,400 Speaker 1: terms of making sure you take advantage of what deductions 617 00:31:24,400 --> 00:31:27,200 Speaker 1: are out there and avoid some of these triggers like 618 00:31:27,280 --> 00:31:31,920 Speaker 1: the CPA called out medical Medicare premium adjustments. All right, 619 00:31:32,040 --> 00:31:35,400 Speaker 1: Karen and mount lookout, Brian says, we are being pushed 620 00:31:35,960 --> 00:31:39,680 Speaker 1: toward alternative investments, But I want to understand what problem 621 00:31:39,920 --> 00:31:43,440 Speaker 1: each of those solves. How do you imagine alternative asset 622 00:31:43,880 --> 00:31:46,640 Speaker 1: to a specific weakness in your portfolio? 623 00:31:47,240 --> 00:31:49,800 Speaker 2: Yeah, this is another comment when we've had all your 624 00:31:49,840 --> 00:31:52,200 Speaker 2: long bobs. What do alternatives? What are alternatives and what 625 00:31:52,280 --> 00:31:55,000 Speaker 2: do they mean to me? So a smart way I 626 00:31:55,080 --> 00:31:57,960 Speaker 2: think to think about alternatives, Karen. Not a shiny new category. 627 00:31:57,960 --> 00:32:00,600 Speaker 2: But these are tools that can address very specific weaknesses 628 00:32:00,640 --> 00:32:03,280 Speaker 2: in a traditional sixty forty type portfolio, which we still 629 00:32:03,320 --> 00:32:05,080 Speaker 2: believe is the core of where you ought to be. 630 00:32:05,120 --> 00:32:07,239 Speaker 2: But that doesn't mean you can't season it a little bit. So, 631 00:32:07,320 --> 00:32:09,320 Speaker 2: you know, start by looking at the gaps of these things. 632 00:32:09,320 --> 00:32:12,080 Speaker 2: So a lot of portfolios struggle with three things. Too 633 00:32:12,120 --> 00:32:15,520 Speaker 2: much reliance on equity markets for returns, too much sensitivitied 634 00:32:15,520 --> 00:32:18,320 Speaker 2: interest rates, and too much volatility. During these stress periods, 635 00:32:18,760 --> 00:32:20,720 Speaker 2: each of those weaknesses can be matched to it to 636 00:32:20,800 --> 00:32:22,840 Speaker 2: an alternative that can address it. So maybe if you're 637 00:32:22,840 --> 00:32:26,120 Speaker 2: overly dependent on, you know, on stocks, private equity or 638 00:32:26,200 --> 00:32:28,960 Speaker 2: venture capital can add some return drivers that will not 639 00:32:29,040 --> 00:32:31,320 Speaker 2: be moving in lockstep with public markets. That's the whole 640 00:32:31,320 --> 00:32:33,680 Speaker 2: point of alts in the first place. For example, if 641 00:32:33,720 --> 00:32:38,000 Speaker 2: interest rate sensitivity is the problem, then real assets like commodities, infrastructure, 642 00:32:38,040 --> 00:32:41,400 Speaker 2: real estate, those historically will respond better in inflationary or 643 00:32:41,520 --> 00:32:44,959 Speaker 2: rising rate environments. You know, if volatility is the problem, 644 00:32:45,000 --> 00:32:47,560 Speaker 2: look at the strategies themselves rather than the assets. There 645 00:32:47,560 --> 00:32:50,240 Speaker 2: are market neutral strategies. These are these are different things 646 00:32:50,240 --> 00:32:53,360 Speaker 2: that use more traditional stocks and bonds underneath, but are 647 00:32:53,400 --> 00:32:57,200 Speaker 2: positioning derivatives against them to manipulate the markets in certain 648 00:32:57,240 --> 00:33:00,360 Speaker 2: ways to support, you know, whatever that weakness might be. 649 00:33:00,600 --> 00:33:02,320 Speaker 2: And then, and here's a big question you should ask 650 00:33:02,400 --> 00:33:05,240 Speaker 2: finally before you pull the trigger into one of these 651 00:33:05,360 --> 00:33:07,160 Speaker 2: in which historical environment. 652 00:33:06,840 --> 00:33:08,240 Speaker 3: Would this have helped out the most. 653 00:33:08,280 --> 00:33:10,840 Speaker 2: If you can't tie an alternative to a specific problem 654 00:33:10,920 --> 00:33:13,560 Speaker 2: you're trying to solve, such as rate risk, concentration risk, 655 00:33:13,640 --> 00:33:15,600 Speaker 2: or draw down risk, then it's not a solution. 656 00:33:15,720 --> 00:33:16,240 Speaker 3: It's just going to. 657 00:33:16,240 --> 00:33:19,440 Speaker 2: Add complexity to your portfolio. So that's a lot of information, 658 00:33:19,480 --> 00:33:21,720 Speaker 2: but I hope that helps also going to be a 659 00:33:21,760 --> 00:33:24,320 Speaker 2: continued headline I think throughout twenty twenty six. 660 00:33:24,480 --> 00:33:25,520 Speaker 3: Larry in cold Spring. 661 00:33:25,600 --> 00:33:27,760 Speaker 2: Larry says, part of our IRA money Bob is going 662 00:33:27,800 --> 00:33:29,840 Speaker 2: to eventually go to charity, but part's going to go 663 00:33:29,840 --> 00:33:32,560 Speaker 2: to their kids. How do you invest differently for beneficiaries 664 00:33:32,600 --> 00:33:34,440 Speaker 2: with completely different tax outcomes. 665 00:33:35,320 --> 00:33:39,360 Speaker 1: Well, Larry, my answer might surprise you. I don't think 666 00:33:39,360 --> 00:33:41,840 Speaker 1: you should invest differently at all. I don't think you 667 00:33:41,840 --> 00:33:43,720 Speaker 1: should focus on this at all. I think you should 668 00:33:43,720 --> 00:33:47,560 Speaker 1: focus first of all, on investing this IRA money for 669 00:33:47,760 --> 00:33:50,640 Speaker 1: your lifetime and if you're married, for your and your 670 00:33:50,680 --> 00:33:54,280 Speaker 1: spouse's lifetime. Make sure this money is invested appropriately to 671 00:33:54,280 --> 00:33:56,880 Speaker 1: take care of you first, because at the end of 672 00:33:56,880 --> 00:33:59,480 Speaker 1: the day, whatever you leave to charity isn't it isn't 673 00:33:59,520 --> 00:34:02,560 Speaker 1: going to be away. So I don't care whether you 674 00:34:02,600 --> 00:34:05,880 Speaker 1: invest in all bonds, all stocks, The charities don't care. 675 00:34:06,200 --> 00:34:08,239 Speaker 1: They're gonna be able to take whatever you leave them, 676 00:34:08,400 --> 00:34:11,400 Speaker 1: convert that to cash on a completely tax free basis, 677 00:34:11,719 --> 00:34:13,839 Speaker 1: and go on with life and benefit the people that 678 00:34:13,880 --> 00:34:16,560 Speaker 1: you want them to benefit. And in terms of your kids, 679 00:34:16,560 --> 00:34:18,480 Speaker 1: it's kind of the same way. They're gonna be taxed 680 00:34:18,560 --> 00:34:21,920 Speaker 1: either way they're gonna have they're gonna be subject to 681 00:34:21,960 --> 00:34:25,120 Speaker 1: those IRS rules on you know, pulling that money out 682 00:34:25,239 --> 00:34:28,160 Speaker 1: over their lifetime or over the ten year period, whatever 683 00:34:28,200 --> 00:34:30,960 Speaker 1: the case may be. So again, focus on what you 684 00:34:31,080 --> 00:34:34,439 Speaker 1: need to be doing during your lifetime. Don't just by 685 00:34:34,520 --> 00:34:38,879 Speaker 1: default change the investment objectives of your iras. Because some 686 00:34:38,960 --> 00:34:41,560 Speaker 1: of this money is eventually going to go to charity. 687 00:34:42,239 --> 00:34:46,600 Speaker 1: Coming up next, Brian has his ever popular bottom line segment. 688 00:34:47,040 --> 00:34:49,520 Speaker 1: You're listening to Simply Money presented by it all Worth 689 00:34:49,520 --> 00:34:57,759 Speaker 1: Financial on fifty five KRC the talk station moment. You're 690 00:34:57,760 --> 00:35:00,080 Speaker 1: listening to simply Money sent by all Worth Financial. Well, 691 00:35:00,080 --> 00:35:03,080 Speaker 1: I'm Bob Sponseeller along with Brian James. And speaking of 692 00:35:03,120 --> 00:35:06,640 Speaker 1: Brian James, it's time for Brian's bottom line and he's 693 00:35:06,680 --> 00:35:11,560 Speaker 1: got a high net worth financial planning playbook to discuss 694 00:35:12,600 --> 00:35:17,360 Speaker 1: in periods where we might have a potentially slowing economy. Brian, 695 00:35:17,520 --> 00:35:18,160 Speaker 1: I can't wait. 696 00:35:19,000 --> 00:35:20,719 Speaker 2: Well, yeah, so as eve been, you know, kind of 697 00:35:20,719 --> 00:35:23,480 Speaker 2: paying attention and just thinking about how there are different 698 00:35:23,800 --> 00:35:26,560 Speaker 2: periods of time throughout the you know, were the market's 699 00:35:26,600 --> 00:35:28,160 Speaker 2: going up, things are going down. Today we're going to 700 00:35:28,239 --> 00:35:30,120 Speaker 2: talk about, you know, how do I react when the 701 00:35:30,160 --> 00:35:32,319 Speaker 2: economy is slowing. I'll tell you in a few years 702 00:35:32,320 --> 00:35:34,319 Speaker 2: whether it's actually slowing right now, it doesn't really matter. 703 00:35:34,320 --> 00:35:36,480 Speaker 2: We should still have a playbook for it. So, you know, 704 00:35:37,080 --> 00:35:39,840 Speaker 2: in a slowing economy, this means growth is cooling, hiring 705 00:35:39,880 --> 00:35:42,400 Speaker 2: is slowing down, corporate earnings or being revised lower and 706 00:35:42,400 --> 00:35:44,279 Speaker 2: so forth. This doesn't mean we're on the way to 707 00:35:44,320 --> 00:35:46,160 Speaker 2: a recession. It just means the foot's coming off the 708 00:35:46,200 --> 00:35:48,520 Speaker 2: gas a little bit, and so that's going to have 709 00:35:48,600 --> 00:35:52,480 Speaker 2: impacts on on markets. The volatility will increase, and wealthier 710 00:35:52,520 --> 00:35:56,400 Speaker 2: households need to be particularly thoughtful about their risk management. 711 00:35:56,719 --> 00:35:59,919 Speaker 2: So for affluent families, economic slowdowns aren't only felt first 712 00:36:00,120 --> 00:36:02,040 Speaker 2: the job market. They're first felt in the markets with 713 00:36:02,239 --> 00:36:06,040 Speaker 2: those overall asset swings through the portfolio, liquidity tightens up, 714 00:36:06,080 --> 00:36:08,320 Speaker 2: asset valuations change, and so forth. So we got a 715 00:36:08,360 --> 00:36:10,720 Speaker 2: little bit of a playbook here today things you should 716 00:36:10,719 --> 00:36:13,440 Speaker 2: be looking at. One of the biggest vulnerabilities for our 717 00:36:13,480 --> 00:36:17,120 Speaker 2: wealthy investors is over concentration. This could be a single stock, 718 00:36:17,200 --> 00:36:19,960 Speaker 2: maybe it's a company you've worked for, or just in 719 00:36:20,000 --> 00:36:22,319 Speaker 2: a single sector or real estate or something like that. 720 00:36:22,640 --> 00:36:25,000 Speaker 2: So this is the time to review your exposure to 721 00:36:25,040 --> 00:36:27,680 Speaker 2: those single stock positions. How much of your net worth 722 00:36:27,719 --> 00:36:30,240 Speaker 2: is tied to your company, your industry, one type of asset. 723 00:36:30,360 --> 00:36:32,480 Speaker 2: Remember if your four oh one k is all one 724 00:36:32,480 --> 00:36:35,200 Speaker 2: big company, that may that may be wonderful, but remember 725 00:36:35,239 --> 00:36:37,520 Speaker 2: your paycheck is also tied to that company. 726 00:36:37,719 --> 00:36:38,960 Speaker 3: So if it hits. 727 00:36:38,840 --> 00:36:41,200 Speaker 2: The skids, your job as well as your portfolio could 728 00:36:41,239 --> 00:36:43,200 Speaker 2: be tied to it. So think about how you can 729 00:36:43,239 --> 00:36:46,440 Speaker 2: strategically diversify or maybe some hedging strategies to protect that 730 00:36:46,520 --> 00:36:48,920 Speaker 2: stock if you can't unload some of it in the 731 00:36:48,920 --> 00:36:51,120 Speaker 2: first place and put it into a more diversified portfolio. 732 00:36:51,440 --> 00:36:54,319 Speaker 2: The goal is not to eliminate concentration. You're probably always 733 00:36:54,360 --> 00:36:56,560 Speaker 2: going to be overly concentrated in some of these situations. 734 00:36:56,680 --> 00:36:59,520 Speaker 2: It's just to make sure you're not unintentionally making it worse. 735 00:37:00,440 --> 00:37:02,280 Speaker 2: Next play here is let's talk about liquidity. 736 00:37:02,320 --> 00:37:03,200 Speaker 3: So high networth. 737 00:37:02,960 --> 00:37:05,400 Speaker 2: Clients a lot of times have pretty complex balance sheets 738 00:37:05,400 --> 00:37:09,040 Speaker 2: with private investments, business interest, real estate, taxbile accounts out 739 00:37:09,040 --> 00:37:12,439 Speaker 2: there in a slowing economy. You guessed that liquidity is king, 740 00:37:12,560 --> 00:37:15,520 Speaker 2: So make sure you're twelve to twenty four month cash 741 00:37:15,560 --> 00:37:16,720 Speaker 2: flow needs are fully funded. 742 00:37:16,760 --> 00:37:18,560 Speaker 3: That's going to protect you from needing. 743 00:37:18,360 --> 00:37:21,279 Speaker 2: To have a fire sale, you know, if some bill 744 00:37:21,280 --> 00:37:23,360 Speaker 2: comes due and you didn't have the liquidity to handle it. 745 00:37:23,800 --> 00:37:24,920 Speaker 3: This liquidity can. 746 00:37:24,800 --> 00:37:27,839 Speaker 2: Be cash, short duration bonds, high quality fixed income types 747 00:37:27,880 --> 00:37:29,839 Speaker 2: of things that aren't really going to suffer too much 748 00:37:30,080 --> 00:37:32,600 Speaker 2: as long as a as long as the price is 749 00:37:32,640 --> 00:37:36,000 Speaker 2: hold up. So much so, liquidity that's that shock absorber, 750 00:37:36,040 --> 00:37:37,560 Speaker 2: and we want to make sure we've got flexibility. 751 00:37:37,600 --> 00:37:39,400 Speaker 3: I can see you want to have a reaction, Bob, 752 00:37:39,440 --> 00:37:39,880 Speaker 3: go ahead. 753 00:37:40,360 --> 00:37:42,319 Speaker 1: No, all it's going to add is here is you 754 00:37:42,320 --> 00:37:45,120 Speaker 1: could kind of kill two birds with one stone. Sometimes 755 00:37:45,160 --> 00:37:50,319 Speaker 1: avoiding that over concentration risk by default solves that illiquidity risk. 756 00:37:50,480 --> 00:37:53,440 Speaker 1: So you know, I think you're making two great points 757 00:37:53,440 --> 00:37:55,640 Speaker 1: that should always be talked about. But they kind of 758 00:37:55,719 --> 00:37:57,680 Speaker 1: work hand in hand, is what I was thinking as 759 00:37:57,719 --> 00:38:00,360 Speaker 1: you as you were sharing that great advice asolutely. 760 00:38:00,680 --> 00:38:02,319 Speaker 2: This isn't pick one thing and do it. These are 761 00:38:02,320 --> 00:38:03,799 Speaker 2: all the things you ought to be looking at. So 762 00:38:03,800 --> 00:38:05,719 Speaker 2: so yeah, and so evalue a look at private market 763 00:38:05,800 --> 00:38:08,200 Speaker 2: and alternative investments if you haven't yet. These are things 764 00:38:08,280 --> 00:38:10,680 Speaker 2: that can move in different directions than your other types 765 00:38:10,719 --> 00:38:13,440 Speaker 2: of assets. Learn about them, maybe maybe make a commitment 766 00:38:13,440 --> 00:38:15,160 Speaker 2: in twenty six to learn what those are and whether 767 00:38:15,200 --> 00:38:18,480 Speaker 2: they might help you. Tax efficiency always important thing, tax 768 00:38:18,520 --> 00:38:21,000 Speaker 2: loss harvesting strategies if you have. If you if you 769 00:38:21,040 --> 00:38:22,600 Speaker 2: haven't done that yet, take a look to see if 770 00:38:22,600 --> 00:38:25,040 Speaker 2: there's any opportunities for you there for a little bit 771 00:38:25,040 --> 00:38:27,480 Speaker 2: of savings and then finally reinforce that long term plan. 772 00:38:27,560 --> 00:38:29,080 Speaker 2: Figure out what you were trying to do in the 773 00:38:29,080 --> 00:38:31,239 Speaker 2: first place, which you probably knew at some point. Make 774 00:38:31,280 --> 00:38:32,319 Speaker 2: sure you're still on that path. 775 00:38:33,120 --> 00:38:35,479 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 776 00:38:35,480 --> 00:38:38,600 Speaker 1: presented by all Worth Financial on fifty five KRC, the 777 00:38:38,960 --> 00:38:39,520 Speaker 1: talk station