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Speaker 1: Tonight. Four hidden forces that shape every financial decision you're

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Speaker 1: listening to simplely money, Because I have about all words financial,

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Speaker 1: I'm Bob Sponseller along with Brian James. All Right, you've

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Speaker 1: done the modeling, the plan checks out, the spreadsheets say

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Speaker 1: you can retire early, make that gift, or finally buy

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Speaker 1: that vacation home. And yet you pause, you hesitate, you freeze.

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Speaker 1: This isn't because you're bad with money. It's because financial

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Speaker 1: decisions aren't made in a vacuum. Let's explore four hidden

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Speaker 1: forces that often guide high stakes, high dollar financial decisions,

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Speaker 1: especially for those with significant wealth, and how to bring

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Speaker 1: some of these decisions into alignment. Brian, let's get into

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Speaker 1: these four major and let's just call it what it is.

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Speaker 1: It's emotions.

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Speaker 2: Yeah, these are obstacles, Bob. So the first one, first

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Speaker 2: big one here is emotional, right, the gut reaction. So

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Speaker 2: anytime we talk about money, you can't do that, You

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Speaker 2: really can't do that without some kind of emotion setting

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Speaker 2: in somewhere, usually between fear and greed. And even this

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Speaker 2: happens even for people who really manage these things. Well,

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Speaker 2: we're all human beings. If somebody has a lot of money.

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Speaker 2: Then often we get really wound up about the fear

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Speaker 2: of loss. This is the kind of thing when when

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Speaker 2: our clients will will tell us that you'll call us

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Speaker 2: and stab. I really can't afford to lose any of

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Speaker 2: this at all. I can't handle a market downturn, and

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Speaker 2: so therefore I want to protect, protect, protect, And that's fine,

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Speaker 2: except what that brings into is the risk of inflation

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Speaker 2: over time? Will market downturn fall apart? Will I live

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Speaker 2: longer than expected? What happens if you know, if I

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Speaker 2: give a generous gift today or that I really want

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Speaker 2: to do, and that screws up my future independence? How

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Speaker 2: do I know when I'm going to be okay? And

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Speaker 2: sometimes it's not fear, but the emotion is guilt. So

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Speaker 2: some investors struggle with just that idea of I have

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Speaker 2: way too much, I'm too fortunate, others have too little,

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Speaker 2: and that causes them to freeze and not really make

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Speaker 2: any decisions at all, because they simply can't get over

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Speaker 2: the notion that they've that they've been too blessed in Others,

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Speaker 2: you know, are suffering out there, and sometimes there's anxiety

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Speaker 2: about whether they've earned it or it was given it

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Speaker 2: to them, and how will those choices be perceived by family.

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Speaker 2: All of this stuff, Bob gets in the way of good,

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Speaker 2: intelligent decision making that we all have to do at

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Speaker 2: some point.

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Speaker 1: Yeah, I see this come into play, you know, this

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Speaker 1: fear part. You know when folks first retire, and I

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Speaker 1: think what happens is when people are building their wealth,

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Speaker 1: they're at work every day. They're working very hard, focused

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Speaker 1: on a business or a high end executive or what

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Speaker 1: have you. They're buried in their work for eight to twelve,

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Speaker 1: sometimes fourteen, sixteen hours a day, working at their job.

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Speaker 1: They don't have time to look at the markets, and

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Speaker 1: they don't have the emotional capacity to worry about the markets.

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Speaker 1: Yet when all that stops and all they have left

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Speaker 1: to do is think about and worry about their pile

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Speaker 1: of money, even a two to three percent pullback in

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Speaker 1: the market, you know, translated into into dollars and cents,

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Speaker 1: which could be big at times, that really freaks people out.

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Speaker 1: And that's something that we got to talk with folks about,

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Speaker 1: especially in those early stages of retirement. Yeah.

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Speaker 2: I think of an example there that I'm sure you'll

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Speaker 2: relate to too.

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Speaker 1: But for our Procter and.

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Speaker 2: Gamble friends out there. Everybody remembers the Dirk Yager years

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Speaker 2: twenty some years ago, and we always talk about how that,

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Speaker 2: you know that the market basically did not like the

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Speaker 2: CEO that was put in place and his plan, and

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Speaker 2: it took about half the value of the company away

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Speaker 2: in approximately six weeks. That does happen to Procter and Gamble,

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Speaker 2: as wonderful as it is, it's a stock like any other.

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Speaker 2: But I always tell people, remember you you remember that,

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Speaker 2: but at the time you didn't. It wasn't a big

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Speaker 2: deal because you were working, you were raising kids, you

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Speaker 2: were building your career. It wasn't that scary, and you knew, hey,

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Speaker 2: I got a long time frame ahead of me. It'll recover,

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Speaker 2: it'll move on, always has and that's you know, still

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Speaker 2: pretty much been the case. However, the next time that

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Speaker 2: kind of thing happens to any stock out there that

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Speaker 2: you might own, you'll be paying a lot more attention

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Speaker 2: to it because you've got the time and it's gonna

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Speaker 2: hurt a little more.

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Speaker 1: So let's move on.

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Speaker 2: Move on here to the social side of things, Bob,

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Speaker 2: You know that keeping up with the Joneses.

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Speaker 1: Yeah, the pro the quiet pressure to keep up, Brian,

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Speaker 1: Here's what I think about this one. I think we're all,

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Speaker 1: you know, in some way, shape or form. We all

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Speaker 1: start to make decisions based on the people we surround

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Speaker 1: ourselves with. That becomes our normal. And I can remember,

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Speaker 1: you know, just my college days, and this is a

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Speaker 1: good thing, you know, being in the business school at

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Speaker 1: Miami and being in a fraternity, the people that I

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Speaker 1: spent four years with and you know, process life with

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Speaker 1: and kind of set some initial career goals with. You know,

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Speaker 1: you you all kind of get in alignment and you

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Speaker 1: get a sense of what's normal. And I think sometimes

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Speaker 1: that translates later in life. You start to look at well,

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Speaker 1: how's this guy doing, how's that guy doing? Does he

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Speaker 1: have two homes? Or what kind of car does he drive?

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Speaker 1: Or what kind of vacations do they take? And the

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Speaker 1: quiet social pressure can creep in, like, well, hey, I

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Speaker 1: work really hard too, I deserve to have this, I

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Speaker 1: deserve to have that, And it can lead to make

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Speaker 1: making decisions based on that quiet pressure or that social pressure,

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Speaker 1: rather than making decisions based on deeply held values that

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Speaker 1: you have.

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Speaker 2: Yeah, fomo is a nasty thing. Fear of missing out,

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Speaker 2: and we all tend to focus on, you know, those

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Speaker 2: questions that you just asked, What are the visible things

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Speaker 2: that I can see about this this person, whether I know,

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Speaker 2: maybe I don't even know them, but maybe I'm just

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Speaker 2: vaguely aware of their existence or whatever. It's just something

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Speaker 2: to compare myself against. So I think one way to

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Speaker 2: deal with that is to whenever you find yourself going

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Speaker 2: down that path, always ask yourself, I wonder what the

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Speaker 2: conversations at their dinner table is like. Is everything going

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Speaker 2: okay in that household? Is it not? And it may

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Speaker 2: very well be. But my point is, somebody makes a

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Speaker 2: sacrifice somewhere. We all cannot have it all except in extreme,

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Speaker 2: extremely rare.

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Speaker 1: Rare cases.

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Speaker 2: But in a lot of cases where somebody appears to

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Speaker 2: be very very successful in the outside, that comes with

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Speaker 2: a massive, massive investment of time. So I can think

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Speaker 2: of clients who I know who have very successful businesses

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Speaker 2: and they rarely make it to their kids baseball games,

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Speaker 2: and you know, the family just isn't quite as tight

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Speaker 2: versus other people who wish they had a little bit more.

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Speaker 2: But sure enough, they're the ones out there, you know,

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Speaker 2: coaching the little league games and just being more involved

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Speaker 2: in their families. Both of them are. They're both just

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Speaker 2: different lifestyle choices. Nothing right or wrong with either one

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Speaker 2: of them. But neither one of those examples in what

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Speaker 2: I gave there, is truly happy. They all feel like

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Speaker 2: they're missing something. So just make sure if you feel

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Speaker 2: like you're missing out on something, that you understand what

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Speaker 2: that other person has sacrificed to get where they are,

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Speaker 2: because it may be something that you've taken for granted.

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Speaker 2: How about generational issues. You inherited some kind of mindset,

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Speaker 2: didn't you.

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Speaker 1: Yeah, I think this is a big one, Brian. I mean,

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Speaker 1: we all have parents, we all grow up in families.

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Speaker 1: And then the challenging part is for those of us

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Speaker 1: that get married all of a sudden, now you inherit

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Speaker 1: a spouse and their upbringing and their values and the

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Speaker 1: way their families handle money, and that can just become

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Speaker 1: a big conundrum of values, you know, how families operate.

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Speaker 1: So you know, one way of thinking is you can

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Speaker 1: never have enough. You know, folks that are coming from

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Speaker 1: a holdover mindset from the depression where scarcity was the thing,

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Speaker 1: you know, just getting by, You know, you can never

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Speaker 1: have enough, And those kind of people tend to be

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Speaker 1: afraid to spend any money whatso whatsoever? Other families never

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Speaker 1: talked about money at all, ever, ever ever, And the

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Speaker 1: lack of being willing to have conversations about money with

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Speaker 1: your kids and grandkids and spouses and other family members

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Speaker 1: that can shut down important planning conversations that really need

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Speaker 1: to happen. And then a third one that we run

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Speaker 1: into from time to time, Brian, is you know that

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Speaker 1: you know unspoken quote that you know we help family

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Speaker 1: no matter what, meaning if anybody needs anything at any time,

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Speaker 1: we must, must, must pull the check book out and

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Speaker 1: write a check for that. And sometimes that is warranted,

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Speaker 1: and sometimes it isn't because it can enable unhealthy behavior

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Speaker 1: and some habits that need to change, quite frankly for

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Speaker 1: family members.

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Speaker 2: Yeah, and it's not only you. It's not only changing

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Speaker 2: how we think about supporting people too much. It can

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Speaker 2: also be supporting yourself not enough. So you mentioned a

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Speaker 2: few bullets ago, you mentioned that can never have enough

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Speaker 2: depression era thinking, I'll never forget this story from my youth.

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Speaker 2: So I used to work in Northgate Park retirement home

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Speaker 2: over in Colreine Township, and I worked in the kitchen.

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Speaker 2: I was a waiter and one of us always had

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Speaker 2: to be on duty to guard the salad bar because

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Speaker 2: these folks who grew up in the depression would go

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Speaker 2: get their salad. They'd sit down, you a little bit

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Speaker 2: of it, and you, by god, you weren't going to

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Speaker 2: throw any of that away, right if you didn't want it.

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Speaker 2: They weren't by their refrigerator, so they would go back

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Speaker 2: to the salad bar and put the lettuce back in

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Speaker 2: the lettuce thing, and the cottage cheese back and the

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Speaker 2: cottage cheese thing. If that happened, the health department, of course,

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Speaker 2: would require that we break down the whole salad bar.

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Speaker 2: So one of us had to play goalie at the

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Speaker 2: salad bar to make sure it didn't happen. And God forbid,

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Speaker 2: if they got away with it, the whole place would

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Speaker 2: erupt watching us throw all this food away. But that's

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Speaker 2: the rules we.

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Speaker 1: Had to follow.

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Speaker 2: That mindset is good in terms of not overspending, but

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Speaker 2: it can also work extremely against you in terms of

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Speaker 2: always worrying that the world is going to end and

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Speaker 2: I have to I have to be paranoid. I'd always

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Speaker 2: be looking over my shoulder. That causes family conflicts too,

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Speaker 2: so you don't know what you can get away with.

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Speaker 2: And that's what financial planning does well.

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Speaker 1: And I'll share mine. I mean, I can remember being

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Speaker 1: sat down at the dinner table at the age of

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Speaker 1: nine and they said, hey, my parents said, hey, Bobby,

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Speaker 1: the allowance is over. You want money, you want to

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Speaker 1: buy a candy bar, you want to go to a

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Speaker 1: movie or whatever. You need to go get a job.

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Speaker 1: And this is at age nine. So I mean I

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Speaker 1: went out and got two paper routes, and it was

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Speaker 1: just a mindset drilled into me. The only person that's

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Speaker 1: going to take care of you is you. And you know,

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Speaker 1: it led to a great work ethic obviously and all that,

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Speaker 1: but there there there are some things that that are

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Speaker 1: not so good that come from that as well. So

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Speaker 1: it's very interesting how those early, those early experiences kind

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Speaker 1: of hardwire our brain and cause us to make financial decisions. Bob.

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Speaker 2: My paper out was on Jessup Road. There were four

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Speaker 2: candy stores. I didn't make a dime, but I walked

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Speaker 2: a lot.

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Speaker 1: All right, Well, let's get into the fourth hidden one here,

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Speaker 1: And that's just the logical the analysis paralysis. I know,

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Speaker 1: you're really good at this. The spreadsheets, the projections, the

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Speaker 1: tax model, they're all crucial, but they can often just

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Speaker 1: confirm rather than drive decisions, because, let's face it, at

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Speaker 1: the end of the day, decisions people want to make

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Speaker 1: decisions based on emotion. And we have this happen often. Brian.

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Speaker 1: People come in and I can tell they've already made

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Speaker 1: the decision. They already know what they're going to do.

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Speaker 1: They want me to run the numbers to rationalize how

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Speaker 1: this is all gonna work out in the spreadsheets. Say see, honey,

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Speaker 1: Bob told us we can do this, and whether I

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Speaker 1: told them they can or can't, they're already gonna do it.

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Speaker 1: Do you have any meetings like that? Oh? Yeah.

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Speaker 2: And this comes up for whatever reason. This comes up

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Speaker 2: with people who who are going to help their kids,

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Speaker 2: you know, to become hell or high water. That's the

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Speaker 2: first thing that they're gonna do. And there's of course

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Speaker 2: nothing wrong with that. That's just the reality today that

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Speaker 2: that needs to happen a little more than it used to.

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Speaker 2: But but there are a lot of times people will

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Speaker 2: come in with one goal. This is gonna happen no

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Speaker 2: matter what, and it will. It will dictate all the

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Speaker 2: other things. But here is my number one priority, and

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Speaker 2: and that's perfectly fine. I mean this at least it's

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Speaker 2: happening in the in the in the guise of a

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Speaker 2: planning conversation, where they're at least asking is this gonna work?

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Speaker 2: Ers are gonna totally sink our ship, and that's our job.

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Speaker 2: So I don't mind that at all. And I know

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Speaker 2: and you don't. We enjoy it. That's really that's kind

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Speaker 2: of how we put the puzzle pieces together. Uh, you know,

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Speaker 2: so it doesn't mean that it's a bad idea at all,

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Speaker 2: but again it does mean step back and look at

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Speaker 2: all the trees. Don't stare at one of them.

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Speaker 1: Yeah. So there's just a few questions we'll run through

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Speaker 1: here quickly, you know, in terms of aligning your forces

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Speaker 1: before you make a decision, a large dollar decision. Number One,

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Speaker 1: What am I feeling? Is this decision rooted in fear, excitement, anxiety,

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Speaker 1: or relief? Get your get your arms around what you're feeling?

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Speaker 1: Number two? Who might I be trying to impress or

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Speaker 1: match by making this decision? Three?

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Speaker 2: Well, you know what, I'll add one there, and does

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Speaker 2: this person think about me at all? In turn?

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Speaker 1: Exactly because the answers usually know three what money stories?

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Speaker 1: Did I inherit that's driving this decision? Four what do

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Speaker 1: the numbers actually say? You know? Does the plan actually work? Five?

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Speaker 1: Have have I discussed this with an objective third party?

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Speaker 1: Oftentimes an objective third party whether it's us, other family

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Speaker 1: members or trusted friends, that can be worth its weight

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Speaker 1: in gold? Getting a non emotional second or third opinion? Six?

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Speaker 1: Does this align this decision aligned with my broader goals

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Speaker 1: and values? And then seven? Am I rushing? Or am

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Speaker 1: I giving this the time and the thought that it deserves?

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Speaker 1: Big decisions benefit from a brief pause and deeper reflection.

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Speaker 1: Here's the all Worth advice. The most effective plans are

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Speaker 1: built not just on spreadsheets, but on self awareness, meaningful conversations,

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Speaker 1: in a clear understanding of what matters most to you.

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Speaker 1: Coming up next, what to learn from financial mistakes that

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Speaker 1: successful investors admit behind closed doors. You're listening to Simply

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Speaker 1: Money presented by Allworth Financial on fifty five KRC, the

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Speaker 1: talk station. You're listening to Simply Money presented by Allworth

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Speaker 1: Financial on Bob Spunseller along with Brian James. If you

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Speaker 1: can't listen to Simply Money every night, subscribe to get

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Speaker 1: our daily podcasts. You can listen the following morning during

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Speaker 1: your commute or at the gym, just search simply Money

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Speaker 1: on the iHeart app or wherever you find your podcast

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Speaker 1: straight ahead at six forty three, we're going to tackle

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Speaker 1: the real life questions and decision making that you're facing

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Speaker 1: in your real life, the questions that you've submitted to

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Speaker 1: us in today's Ask the Advisor segment. Have you ever

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Speaker 1: set around the dinner table with friends people like you,

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Speaker 1: successful people who built something, professionals, entrepreneurs, maybe a partner

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Speaker 1: in your firm, and after that second or third drink,

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Speaker 1: the conversation shifts in opinion on the markets, a quick

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Speaker 1: comment about real estate prices, or maybe that new advisor

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Speaker 1: or attorney someone just hired. Then come the financial confessions. Brian,

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Speaker 1: let's get into some of these that often come up,

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Speaker 1: and it's just signals maybe we need to dust off

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Speaker 1: our financial plan and get some things updated. Yeah.

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Speaker 2: I think these are great opportunities. If you find yourself

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Speaker 2: in a situation where that what the blank question comes

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Speaker 2: up from somebody else, jot it down because it's probably

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Speaker 2: gonna affect you at at some point too. So one

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Speaker 2: big one that happens all the time is somebody that

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Speaker 2: has an estate plan that was put together when the

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Speaker 2: kids were in diapers, and now their kids have kids

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Speaker 2: in diapers, so you know, we did our state plan

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Speaker 2: way back in the kids are little. I think it's fine, right,

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Speaker 2: should be fine, right, nothing changes, Well, of course things change.

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Speaker 2: You have documents, which is better. That means it's not

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Speaker 2: the state that's going to dictate what happens to your

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Speaker 2: kids and your assets after you're gone. But that structure,

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Speaker 2: you know, usually doesn't reflect their family's reality anymore. Or

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Speaker 2: or the stuff you own your balance sheet probably has changed.

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Speaker 2: Tax laws for sure have changed and always will, and

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Speaker 2: probably your priorities have changed. You may be thinking, you know,

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Speaker 2: maybe maybe you only worried about I want to get

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Speaker 2: my stuff to my kids. Well maybe now you've always

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Speaker 2: had the or you've more recently had a thought of

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Speaker 2: I want to like this charity, this group, I want

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Speaker 2: to support somebody else. That's fine, you got to get

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Speaker 2: it on paper, or it doesn't really matter. So make

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Speaker 2: sure that you're thinking about all these kinds of things.

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Speaker 2: And there are structures out there. There's grant or retained

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Speaker 2: annuity trust, spousal lifetime access trusts, there are a lot

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Speaker 2: of more complicated things that may not have been appropriate

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Speaker 2: or applicable when you were first discussing this, but might now.

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Speaker 2: This is where lawyers bring a lot of value in

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Speaker 2: terms of uh putting structures in place that can accomplish

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Speaker 2: the things that you want. Now, how about this one, Bob?

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Speaker 2: What about too much in one basket?

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Speaker 1: Yeah, yeah, you'll hit You'll hear people sit around and say, well,

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Speaker 1: I've always done really really well with real estate. That's

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Speaker 1: where most of my net worth is. And I guess

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Speaker 1: I never thought about risk or you know, what have

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Speaker 1: you you know, or too much money in one single

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Speaker 1: company or maybe a business. And let's face it, most

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Speaker 1: people that build some real wealth do it because they've

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Speaker 1: worked extremely hard, they've taken some risk, and they like control, Brian.

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Speaker 1: They like to control the outcome, and they have the

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Speaker 1: ability and the resources and the intellect to control the outcome.

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Speaker 1: What I see happen is when people get older and

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Speaker 1: they start to think about retirement. They might be able

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Speaker 1: to still be engaged, but they don't want to have

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Speaker 1: that much control. They want to be able to do

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Speaker 1: some other things with their time and energy. And that's

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Speaker 1: a good time to sit down and take a look

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Speaker 1: at the whole package here and say, what are some

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Speaker 1: things that we can do to diversify a little bit

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Speaker 1: and still have you know, still have my fingers in it,

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Speaker 1: but maybe not be have this whole world, the whole

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Speaker 1: orbit focused on what I get done every day, because

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Speaker 1: that wears people out when they get into their late

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Speaker 1: fifties or sixties.

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Speaker 2: Yeah. Another topic that I think comes up all the

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Speaker 2: time every year. Of course, it comes up every year

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Speaker 2: on accounter is taxes. So a lot of people tend

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Speaker 2: to only think of taxes as a thing I worry

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Speaker 2: about in the first quarter, and I really worry about

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Speaker 2: it in April, and then I forget about it until

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Speaker 2: the next year. That's not really the case, and this

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Speaker 2: is this I think some of this comes from the

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Speaker 2: people that we use for tax prep. Tax prep firms

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Speaker 2: are extremely busy. They get more and more work every year.

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Speaker 1: I swear.

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Speaker 2: When we partner with a local firm and we make

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Speaker 2: referrals to them, eventually it almost feels like sometimes we

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Speaker 2: shut them down because we give them too much business.

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Speaker 2: So I kind of understand. But the point of all

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Speaker 2: this is to say that tax planning is very different

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Speaker 2: from tax prep. Tax planning means, how do I think

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Speaker 2: about what I should be doing two, three, four, five

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Speaker 2: years from now? Maybe should I be doing roth conversions?

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Speaker 2: Should I plan on doing those?

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Speaker 1: Over time?

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Speaker 2: But my tax preparer can really only focus on getting

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Speaker 2: my tax returned done by the tax deadline because he

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Speaker 2: or she has a bunch more to do right behind mind,

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Speaker 2: So the time doesn't get put in there, and we

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Speaker 2: don't come back after that tax return is filed. This

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Speaker 2: could be a summer or early fall thing maybe to

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Speaker 2: to kind of have that discussion. Tax preparers like to

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Speaker 2: do tax planning in the summer. But anyway, the point

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Speaker 2: is do it also. You know another another concern, Bob,

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Speaker 2: I'm going to ask you about this here. So what

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Speaker 2: about what about somebody who says, well, we've been fortunate,

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Speaker 2: we got plenty of money. You know, that's that's enough

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Speaker 2: to fund retirement. So we really haven't put any much

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Speaker 2: else thought into things. Do we think is that a

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Speaker 2: good idea?

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Speaker 1: Well, that that having plenty of money, thinking about just

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Speaker 1: the total dollar value of the pile, and you know,

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Speaker 1: using a simple formula like well, if I take four

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Speaker 1: percent out of this you know pile, I'm gonna have enough.

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Speaker 1: So I'm good, I'm ready to go. I'm not going

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Speaker 1: to think about it anymore. And it goes back to

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Speaker 1: your last point. There is a huge difference between tax

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Speaker 1: preparation and tax planning. And there are so many strategies

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Speaker 1: out there. You know, the saying holds it's not what

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Speaker 1: you make, it's what you keep, And there are so

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Speaker 1: many opportunities out there to craft an actual income strategy

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Speaker 1: that's very taxifi you know, think about things like roth conversions,

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Speaker 1: how to handle your required minimum distributions, where to take

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Speaker 1: your monthly income from. There's a lot of things you

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Speaker 1: can factor in that really put dollars back in your

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Speaker 1: pocket and your family's pocket rather than the IRS's pocket.

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Speaker 1: And then the fifth one we want to touch on, Brian,

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Speaker 1: is insurance planning. That policy, that insurance policy that might

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Speaker 1: be sitting in the dress drawer that hasn't been looked

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Speaker 1: at for twenty thirty forty years.

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Speaker 2: Yeah, so there's a lot of cases where we bought

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Speaker 2: a life insurance policy because the kids are little. We

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Speaker 2: need to make sure they have what they need. But

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Speaker 2: then all of a sudden we realize, you know, what,

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Speaker 2: we've kind of made it. They're up on their own,

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Speaker 2: they don't really need the death benefit anymore, and then

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Speaker 2: we just ignore the policy. There are other things you

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Speaker 2: can do. You might be able to pivot that to

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Speaker 2: cover long term care, for example, So look into other opportunities.

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Speaker 2: Don't let it die on the vine.

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Speaker 1: Here's the all Worth advice. So if you've ever left

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Speaker 1: a dinner party thinking maybe it's time we looked at that,

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Speaker 1: you've just uncovered the moment many people miss. That's where

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Speaker 1: real planning can start. Next, the cost mistakes divorcing couples

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Speaker 1: often make, and how you could protect your long term wealth,

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Speaker 1: especially if you built a healthy nest egg. You're listening

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

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Speaker 1: five KRC the talk station. You're listening to Simply Money

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Speaker 1: and presented by all Worth Financial on Bob Sponseller along

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Speaker 1: with Brian James. Divorce obviously is a legal proceeding, but

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Speaker 1: it's a highly emotional process as we all know. But

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Speaker 1: it's also at its core a massive financial transaction, and

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Speaker 1: for couples that have established a healthy nest egg, the

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Speaker 1: stakes can be very very high. Brian, We're going to

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Speaker 1: get into some of the mistakes that people don't often

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Speaker 1: or sometimes don't think about in the midst of this

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Speaker 1: high stake, highly emotional process. Uh mistake number one not

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00:20:54,640 --> 00:20:56,639
Speaker 1: understanding the full financial picture.

434
00:20:57,359 --> 00:21:00,560
Speaker 2: Yeah, so I'm actually taking a client through that right now,

435
00:21:00,640 --> 00:21:03,680
Speaker 2: so jump on you and yeah, okay, well then I'll

436
00:21:03,680 --> 00:21:05,439
Speaker 2: be sure to leave you some time too. It so

437
00:21:05,960 --> 00:21:10,600
Speaker 2: even the happiest married couples don't often sit down and

438
00:21:10,640 --> 00:21:12,679
Speaker 2: have the same clear picture because it's usually one spouse

439
00:21:12,720 --> 00:21:15,119
Speaker 2: takes over the finances and provides an update, and then

440
00:21:15,200 --> 00:21:17,879
Speaker 2: that usually morphs into the other spouse never knows anything

441
00:21:17,920 --> 00:21:20,720
Speaker 2: that's going on. That's even the happiest couples in that situation.

442
00:21:21,000 --> 00:21:23,880
Speaker 2: Somebody who has gotten divorced probably hasn't been talking about

443
00:21:23,880 --> 00:21:26,080
Speaker 2: anything in a long time. So if you are going

444
00:21:26,160 --> 00:21:28,320
Speaker 2: to or somebody who's on the path to divorce, rather

445
00:21:28,359 --> 00:21:29,880
Speaker 2: hasn't been talking to each other for a long time.

446
00:21:29,920 --> 00:21:31,640
Speaker 2: So when you actually get to the point where you're

447
00:21:31,680 --> 00:21:34,359
Speaker 2: doing the discovery of assets and all that, one spouse

448
00:21:34,440 --> 00:21:37,680
Speaker 2: usually just has no idea, So make sure you know

449
00:21:37,760 --> 00:21:39,960
Speaker 2: how and where to look for things. Get used to

450
00:21:39,960 --> 00:21:42,000
Speaker 2: the idea of pulling that tax return from a couple

451
00:21:42,000 --> 00:21:44,120
Speaker 2: of years ago. Look for fifty four to ninety eights

452
00:21:44,119 --> 00:21:46,240
Speaker 2: off of iras. These are the things that show up

453
00:21:46,240 --> 00:21:48,480
Speaker 2: in your mailbox that will confirm the existence of an account.

454
00:21:48,560 --> 00:21:49,920
Speaker 2: What have you seen out there.

455
00:21:49,800 --> 00:21:53,160
Speaker 1: Bob, Well, the main thing in the in the situation

456
00:21:53,240 --> 00:21:55,840
Speaker 1: I'm dealing with, I'm acting kind of as the forensic

457
00:21:55,880 --> 00:21:59,280
Speaker 1: account here. I know what questions to ask, and therefore

458
00:21:59,320 --> 00:22:02,639
Speaker 1: I'm asking of the attorney, and in this case, the

459
00:22:02,680 --> 00:22:05,439
Speaker 1: attorney she is going out and getting this information. So

460
00:22:05,640 --> 00:22:10,199
Speaker 1: oftentimes for that spouse that is not financially involved and

461
00:22:10,320 --> 00:22:13,200
Speaker 1: has no clue what's going on, it's knowing the questions

462
00:22:13,240 --> 00:22:18,520
Speaker 1: to ask. Mistake number two keeping the house for emotional reasons, Brian,

463
00:22:18,640 --> 00:22:21,719
Speaker 1: this has reared its head in a big way for

464
00:22:21,760 --> 00:22:25,959
Speaker 1: this situation. I'm dealing with one spouse just left. The

465
00:22:26,000 --> 00:22:29,240
Speaker 1: other spouse is home with three kids. Two of them

466
00:22:29,280 --> 00:22:31,440
Speaker 1: are out of high school and they're in college. There's

467
00:22:31,520 --> 00:22:33,840
Speaker 1: one still in high school and this is where all

468
00:22:33,920 --> 00:22:37,800
Speaker 1: the family memories are. And the one spouse still living

469
00:22:37,800 --> 00:22:40,520
Speaker 1: in the home deeply wants to stay there. There's huge

470
00:22:40,520 --> 00:22:44,040
Speaker 1: emotional ties. Wants that son to finish high school at

471
00:22:44,080 --> 00:22:46,800
Speaker 1: their current high school. But when you start to look

472
00:22:46,840 --> 00:22:50,480
Speaker 1: at the bills, you know, the mortgage, the property taxes,

473
00:22:50,520 --> 00:22:54,359
Speaker 1: the insurance, the upkeep, the maintenance, The numbers just don't

474
00:22:54,400 --> 00:22:57,919
Speaker 1: add up. It's just not going to work. And you know,

475
00:22:58,040 --> 00:23:01,520
Speaker 1: so the sad news here is eventually this house is

476
00:23:01,560 --> 00:23:03,680
Speaker 1: gonna have to be sold and the equity is gonna

477
00:23:03,720 --> 00:23:07,840
Speaker 1: have to be divided up. You just gotta pick with

478
00:23:07,880 --> 00:23:11,600
Speaker 1: all the other stuff going on here. You gotta help

479
00:23:11,720 --> 00:23:14,080
Speaker 1: guide people on when the right time to pull the

480
00:23:14,119 --> 00:23:16,680
Speaker 1: trigger on this is and it can be very difficult.

481
00:23:17,040 --> 00:23:18,439
Speaker 2: Yeah, one of the thought I'd throw out there, if

482
00:23:18,440 --> 00:23:20,440
Speaker 2: you're gonna do it to do something with the house,

483
00:23:21,080 --> 00:23:22,960
Speaker 2: one of the factors that probably needs to play a

484
00:23:23,040 --> 00:23:25,800
Speaker 2: role is making sure or being aware that if they've

485
00:23:25,800 --> 00:23:27,480
Speaker 2: been in that house that long, that interest rate if

486
00:23:27,520 --> 00:23:29,320
Speaker 2: there is a mortgage, is probably really low and they're

487
00:23:29,400 --> 00:23:31,520
Speaker 2: not gonna get that treatment again. So that will offset

488
00:23:31,560 --> 00:23:33,520
Speaker 2: some of the negative numbers. All the outcomes are a

489
00:23:33,520 --> 00:23:35,919
Speaker 2: little bit scary, but but that can be a thing

490
00:23:35,920 --> 00:23:39,639
Speaker 2: that comes up as well. So taxes, right, so overlooking

491
00:23:39,680 --> 00:23:43,919
Speaker 2: tax implications, meaning a five hundred thousand dollars IRA or

492
00:23:44,000 --> 00:23:46,600
Speaker 2: roth ira is not the same as a five hundred

493
00:23:46,320 --> 00:23:50,240
Speaker 2: thousand dollars broker. It's regular taxable account. One is tax sheltered.

494
00:23:50,600 --> 00:23:53,240
Speaker 2: The other is post tax completely, meaning it receives a

495
00:23:53,280 --> 00:23:55,600
Speaker 2: ten nine to nine gets taxed, you know, every single year.

496
00:23:55,960 --> 00:23:57,760
Speaker 2: Both of these have both of these pros and cons.

497
00:23:57,800 --> 00:23:59,439
Speaker 2: There isn't one better than the other, but they have

498
00:23:59,440 --> 00:24:01,600
Speaker 2: different impact. So a lot of times clients will say,

499
00:24:01,600 --> 00:24:03,199
Speaker 2: you know, we're gonna split things fifty to fifty in

500
00:24:03,200 --> 00:24:05,840
Speaker 2: this account. This IRA is roughly this size, so I'll

501
00:24:05,840 --> 00:24:08,359
Speaker 2: take that, and this taxble account is roughly the same size,

502
00:24:08,400 --> 00:24:10,640
Speaker 2: so you can have that, only to realize that they've

503
00:24:10,640 --> 00:24:15,399
Speaker 2: basically not spread the tax treatment out. Maybe the dollars

504
00:24:15,440 --> 00:24:17,679
Speaker 2: are spread equally, but not the tax treatment. A five

505
00:24:17,800 --> 00:24:19,840
Speaker 2: hundred thousand dollars IRA is more like a three hundred

506
00:24:19,840 --> 00:24:22,320
Speaker 2: and fifty four hundred thousand dollars assets. Once you take

507
00:24:22,400 --> 00:24:23,760
Speaker 2: taxes into account.

508
00:24:23,880 --> 00:24:26,240
Speaker 1: You're listening to simply money presented by all Worth Financial

509
00:24:26,240 --> 00:24:29,040
Speaker 1: on Bob Sponseller along with Brian James. Let's move into

510
00:24:29,080 --> 00:24:32,600
Speaker 1: mistake number four and Brian, unfortunately we see this way

511
00:24:32,640 --> 00:24:37,240
Speaker 1: too often, failing to update state planning documents and beneficiaries

512
00:24:37,240 --> 00:24:41,639
Speaker 1: on retirement accounts. After that divorce is done, your ex

513
00:24:41,680 --> 00:24:44,639
Speaker 1: could still inherit everything, you know, because let's face it,

514
00:24:44,680 --> 00:24:46,880
Speaker 1: most of the times the spouse is named as one

515
00:24:46,960 --> 00:24:50,840
Speaker 1: hundred percent primary beneficiary and then the kids are contingent

516
00:24:50,880 --> 00:24:55,800
Speaker 1: beneficiaries if you've named them. You gotta get that stuff fixed. Otherwise,

517
00:24:55,920 --> 00:24:58,800
Speaker 1: this spouse that you no longer you know are going

518
00:24:58,880 --> 00:25:02,920
Speaker 1: to be married to could unintentionally inherit everything, and what

519
00:25:02,960 --> 00:25:05,480
Speaker 1: a mess that would be. So you gotta make sure

520
00:25:05,920 --> 00:25:10,320
Speaker 1: you update those beneficiary forms and estate planning documents where appropriate.

521
00:25:11,000 --> 00:25:13,840
Speaker 2: Yeah, we log into people's four oh one ks we're

522
00:25:13,840 --> 00:25:15,879
Speaker 2: in that situation, and we look at that, and then

523
00:25:15,720 --> 00:25:17,960
Speaker 2: the new spouse will be sitting there looking at the

524
00:25:18,080 --> 00:25:20,440
Speaker 2: x spouse's name on the screen as the beneficiary. The

525
00:25:20,480 --> 00:25:23,040
Speaker 2: eyeballs get real big when that happens. Quick fix though,

526
00:25:23,480 --> 00:25:26,600
Speaker 2: So one last one here ignoring the long term impact

527
00:25:26,680 --> 00:25:29,040
Speaker 2: on your retirement. So divorce will really cut that nest

528
00:25:29,040 --> 00:25:31,520
Speaker 2: egg in half, right, there's lots of jokes about that,

529
00:25:31,600 --> 00:25:35,200
Speaker 2: but obviously serious situations. If you're in your fifties or sixties,

530
00:25:35,200 --> 00:25:36,879
Speaker 2: there's really not a lot of time to rebuild that.

531
00:25:36,960 --> 00:25:38,919
Speaker 2: So make sure if this is a step you have

532
00:25:39,000 --> 00:25:40,680
Speaker 2: got to take, and there's more to this than money,

533
00:25:40,720 --> 00:25:43,640
Speaker 2: for sure, but don't underestimate the impact of your assets

534
00:25:43,640 --> 00:25:46,760
Speaker 2: gonna that's gonna have and then therefore your retirement viability.

535
00:25:47,760 --> 00:25:50,840
Speaker 1: Here's the all Worth advice. When love ends, your financial

536
00:25:50,880 --> 00:25:54,520
Speaker 1: life does not have to completely unravel. Slow down, get

537
00:25:54,600 --> 00:25:58,560
Speaker 1: good advice and be sure to protect your future self.

538
00:25:59,359 --> 00:26:01,880
Speaker 1: What's on your mind when it comes to investing, retirement

539
00:26:02,000 --> 00:26:05,120
Speaker 1: or passing wealth to the next generation. We're gonna dive

540
00:26:05,160 --> 00:26:09,119
Speaker 1: into your questions in our Ask the Advisors segment coming

541
00:26:09,200 --> 00:26:11,520
Speaker 1: up next. You're listening to Simply Money presented by all

542
00:26:11,560 --> 00:26:20,040
Speaker 1: Worth Financial on fifty five KRC the talk station. You're

543
00:26:20,080 --> 00:26:22,480
Speaker 1: listening to Simply Money presented by all Worth Financial on

544
00:26:22,600 --> 00:26:25,639
Speaker 1: Bob's Fun Seller along with Brian James. Do you have

545
00:26:25,680 --> 00:26:27,960
Speaker 1: a financial question you'd like for us to answer. There's

546
00:26:28,000 --> 00:26:30,199
Speaker 1: a red button you can click while you're listening to

547
00:26:30,240 --> 00:26:33,320
Speaker 1: the show right there on the iHeart app. Simply record

548
00:26:33,359 --> 00:26:37,000
Speaker 1: your question and it will come straight to us. All Right.

549
00:26:37,160 --> 00:26:40,520
Speaker 1: Mark from West Palm Beach, Florida leads us off tonight

550
00:26:40,640 --> 00:26:43,600
Speaker 1: and he says, Brian, I'm a Cincinnati and now living

551
00:26:43,640 --> 00:26:47,040
Speaker 1: in Florida. He loves listening to the show, but can

552
00:26:47,080 --> 00:26:50,480
Speaker 1: you please explain what a wash sale is and when

553
00:26:50,520 --> 00:26:51,720
Speaker 1: it makes sense to do one?

554
00:26:52,280 --> 00:26:54,399
Speaker 2: God bless the internet. Is that is so cool that

555
00:26:54,440 --> 00:26:56,920
Speaker 2: people all over the all over the world really now

556
00:26:56,960 --> 00:26:59,360
Speaker 2: can hear the show, which is which is great. So anyway, Yeah,

557
00:26:59,359 --> 00:27:03,720
Speaker 2: so a wash sale. Wash sale basically means that you

558
00:27:04,400 --> 00:27:07,800
Speaker 2: sold an asset and you you took a loss on it,

559
00:27:08,359 --> 00:27:10,200
Speaker 2: and then you buy it back right away.

560
00:27:10,840 --> 00:27:11,520
Speaker 1: So the whole the.

561
00:27:11,480 --> 00:27:13,240
Speaker 2: Reason this might come up is because somebody might want

562
00:27:13,240 --> 00:27:15,840
Speaker 2: to do what's called a loss harvest, meaning maybe you

563
00:27:15,880 --> 00:27:17,800
Speaker 2: bought a stock. You know, maybe you have put ten

564
00:27:17,840 --> 00:27:20,080
Speaker 2: thousand dollars into it, it is now worth eight thousand,

565
00:27:20,400 --> 00:27:22,560
Speaker 2: and if you don't know this, you can actually take

566
00:27:22,600 --> 00:27:24,560
Speaker 2: a deductible loss off of that if you sold it

567
00:27:24,600 --> 00:27:27,040
Speaker 2: at eight thousand dollars. So when people get w into this,

568
00:27:27,080 --> 00:27:28,680
Speaker 2: sometimes what they'll do is they'll say, well, I still

569
00:27:28,680 --> 00:27:30,399
Speaker 2: want to own the stock. I want to, but I

570
00:27:30,400 --> 00:27:32,000
Speaker 2: want to take that tax benefit. So I'm going to

571
00:27:32,080 --> 00:27:35,159
Speaker 2: sell it today on Tuesday, and then I'll buy it

572
00:27:35,240 --> 00:27:38,120
Speaker 2: back on Wednesday. That's a wash sale because you were

573
00:27:38,119 --> 00:27:40,480
Speaker 2: not out of the position for longer than thirty days.

574
00:27:40,520 --> 00:27:44,960
Speaker 2: The irs will disallow that that deduction. So you need

575
00:27:44,960 --> 00:27:46,080
Speaker 2: to if you're going to do that, you need to

576
00:27:46,119 --> 00:27:47,840
Speaker 2: stay out of the stock for thirty days then you

577
00:27:47,880 --> 00:27:50,119
Speaker 2: can buy it back in. There isn't really when it

578
00:27:50,160 --> 00:27:53,199
Speaker 2: makes sense to do one. But really, I say, as

579
00:27:53,200 --> 00:27:57,359
Speaker 2: part of an overall tax loss harvesting plan. And you know,

580
00:27:57,520 --> 00:27:59,280
Speaker 2: if you were at absolutely love with the stock and

581
00:27:59,320 --> 00:28:00,480
Speaker 2: you just don't want to be out of it for

582
00:28:00,480 --> 00:28:02,360
Speaker 2: any moment in time because it could go any day

583
00:28:02,400 --> 00:28:04,520
Speaker 2: now and that's why you bought it, well, hopefully that's

584
00:28:04,520 --> 00:28:06,639
Speaker 2: not a big party your portfolio anyway, But then you

585
00:28:06,720 --> 00:28:08,320
Speaker 2: might not want to do a Washdale because again you

586
00:28:08,359 --> 00:28:09,639
Speaker 2: got to stay out of that thirty days, and it

587
00:28:09,640 --> 00:28:11,879
Speaker 2: doesn't it makes no sense to do that within the

588
00:28:11,920 --> 00:28:14,520
Speaker 2: thirty day plan. So let's move on to a Jack

589
00:28:14,560 --> 00:28:17,560
Speaker 2: and Madeira. Jack was wondering about annuities in his portfolio.

590
00:28:17,600 --> 00:28:19,479
Speaker 2: Do I need annuities if I already have a big

591
00:28:19,520 --> 00:28:20,679
Speaker 2: pile of money? What do you think of that?

592
00:28:20,680 --> 00:28:24,560
Speaker 1: Bob Well? Jack? In general, I look at annuities. You know,

593
00:28:25,160 --> 00:28:28,080
Speaker 1: they basically do two things, two reasons to own One.

594
00:28:28,200 --> 00:28:31,720
Speaker 1: One is people like it in non qualified accounts for

595
00:28:32,400 --> 00:28:36,960
Speaker 1: tax deferred growth. That's one reason to own them. The

596
00:28:37,040 --> 00:28:40,040
Speaker 1: other is when you want some guaranteed income out of

597
00:28:40,080 --> 00:28:43,000
Speaker 1: a piece of your portfolio. I think with how this

598
00:28:43,280 --> 00:28:47,040
Speaker 1: industry has evolved over the years with tax loss harvesting

599
00:28:47,120 --> 00:28:52,000
Speaker 1: and other tax strategies in taxable non qualified accounts. Most

600
00:28:52,000 --> 00:28:55,440
Speaker 1: of the time, my opinion is these annuities can cause

601
00:28:55,520 --> 00:28:58,920
Speaker 1: more harm than good because once you've started to grow

602
00:28:58,960 --> 00:29:01,440
Speaker 1: money in an annuity, when you pull it out, it

603
00:29:01,560 --> 00:29:05,680
Speaker 1: is all taxed at ordinary income rates and that sticks.

604
00:29:06,160 --> 00:29:10,160
Speaker 1: So there's there's usually always a better way to skin

605
00:29:10,240 --> 00:29:13,080
Speaker 1: the cat from a tax standpoint other than annuities.

606
00:29:13,560 --> 00:29:16,680
Speaker 2: It turn out, please please, if I could share one

607
00:29:16,680 --> 00:29:19,479
Speaker 2: one thought, So, I'm you're right, But people do look

608
00:29:19,480 --> 00:29:21,640
Speaker 2: at annuities and they realize that, hey, this is a way.

609
00:29:21,680 --> 00:29:23,320
Speaker 2: It's not an IRA. You know, maybe I've got a

610
00:29:23,320 --> 00:29:25,240
Speaker 2: pile of money I inherited or I sold a business

611
00:29:25,280 --> 00:29:27,960
Speaker 2: or some asset or something, and I want to tax

612
00:29:27,960 --> 00:29:29,600
Speaker 2: to fer that so I can stick it in my IRA.

613
00:29:29,800 --> 00:29:29,960
Speaker 1: Right.

614
00:29:30,000 --> 00:29:31,440
Speaker 2: Well, no, of course, not that you can only put

615
00:29:31,440 --> 00:29:33,480
Speaker 2: a very limited amount every year. Can't do a couple

616
00:29:33,600 --> 00:29:35,680
Speaker 2: hundred thousand. So the next thing people discover is I

617
00:29:35,720 --> 00:29:38,240
Speaker 2: can use an annuity and invest in things that look

618
00:29:38,360 --> 00:29:41,200
Speaker 2: like stock market type growth. Uh, And I will, and

619
00:29:41,240 --> 00:29:43,160
Speaker 2: it's all tax sheltered. And that is kind of true.

620
00:29:43,160 --> 00:29:45,040
Speaker 2: But what you've done in that case, as Bob just mentioned,

621
00:29:45,080 --> 00:29:50,000
Speaker 2: you have changed relatively favorable capital gains taxation to ordinary

622
00:29:50,040 --> 00:29:52,880
Speaker 2: income taxation on the On the back end, ordinary income

623
00:29:52,920 --> 00:29:55,440
Speaker 2: taxation is marginal. The more you have, the more you make,

624
00:29:55,480 --> 00:29:57,520
Speaker 2: the more you pay in taxes, and that can just

625
00:29:57,600 --> 00:30:00,400
Speaker 2: really set up a negative situation years down the road

626
00:30:00,440 --> 00:30:01,720
Speaker 2: when it's far too late to do any about it.

627
00:30:01,760 --> 00:30:04,640
Speaker 2: Annuities are wonderful during life, they're terrible to die with.

628
00:30:04,680 --> 00:30:06,280
Speaker 2: If your kids inherit it, they're really going to be

629
00:30:06,320 --> 00:30:07,720
Speaker 2: unhappy when they hear how much of a yeah?

630
00:30:07,720 --> 00:30:10,960
Speaker 1: Because yet you don't get that stepped up cost basis

631
00:30:10,960 --> 00:30:14,920
Speaker 1: at death. You limit your charitable giving opportunities. You can

632
00:30:15,040 --> 00:30:17,000
Speaker 1: probably tell I'm not a big fan. All right, let's

633
00:30:17,000 --> 00:30:20,520
Speaker 1: move on here, Betsy and Indian Hill. Is there a

634
00:30:20,560 --> 00:30:23,680
Speaker 1: point where I should stop trying to grow my portfolio

635
00:30:23,960 --> 00:30:26,160
Speaker 1: and just protect it? Yeah?

636
00:30:26,320 --> 00:30:28,560
Speaker 2: I think a great question, Betsy. There's a lot of

637
00:30:28,600 --> 00:30:30,280
Speaker 2: people get to this point where they realize, you know

638
00:30:30,280 --> 00:30:32,200
Speaker 2: what I've grown. I've worked my rear end off, I

639
00:30:32,240 --> 00:30:34,640
Speaker 2: have a big pile of money, and I've gotten pretty stable.

640
00:30:34,680 --> 00:30:36,920
Speaker 2: Should I just not have to worry anymore? I always

641
00:30:36,960 --> 00:30:39,440
Speaker 2: tell people that that that is a personal decision. First

642
00:30:39,440 --> 00:30:41,040
Speaker 2: of all, this assumes that you've sat down with a

643
00:30:41,080 --> 00:30:43,680
Speaker 2: fiduciary advisor and done a full financial plan, which is

644
00:30:43,720 --> 00:30:46,440
Speaker 2: to say, here on my resources, here's what I'm trying

645
00:30:46,480 --> 00:30:48,200
Speaker 2: to do with it, and then here's what comes out

646
00:30:48,240 --> 00:30:49,920
Speaker 2: the back end. Then you need to stress test it

647
00:30:49,960 --> 00:30:52,200
Speaker 2: if there is risk, you know, because you have some

648
00:30:52,280 --> 00:30:56,040
Speaker 2: kind of unexpected major expense or investment rub poor investment results,

649
00:30:56,080 --> 00:30:58,440
Speaker 2: something like that. If all of that looks good, then

650
00:30:58,880 --> 00:31:01,240
Speaker 2: then you're looking at a decision of okay. On one

651
00:31:01,320 --> 00:31:03,640
Speaker 2: end of the spectrum, I don't have to take any risk.

652
00:31:03,760 --> 00:31:05,520
Speaker 2: Maybe I shouldn't, And I think this is what Betsy

653
00:31:05,600 --> 00:31:08,000
Speaker 2: is thinking. I could park all this stuff in super

654
00:31:08,040 --> 00:31:10,320
Speaker 2: safe investments. I know I've got enough to make it,

655
00:31:10,640 --> 00:31:13,000
Speaker 2: and therefore I wouldn't have to read the headlines anymore.

656
00:31:13,000 --> 00:31:14,720
Speaker 2: The flip side of that is, and I've seen people

657
00:31:14,760 --> 00:31:17,480
Speaker 2: do this, Eventually you'll conclude that, my gosh, most of

658
00:31:17,480 --> 00:31:19,360
Speaker 2: this money is gonna sit here for the remaining thirty

659
00:31:19,440 --> 00:31:21,440
Speaker 2: years of my life. Am I taking it out of

660
00:31:21,440 --> 00:31:24,240
Speaker 2: my kid's mouths if I don't allow it to grow

661
00:31:24,320 --> 00:31:26,720
Speaker 2: since I'm not gonna need it. So that's where people

662
00:31:26,840 --> 00:31:28,760
Speaker 2: usually land somewhere in the middle. I don't need the

663
00:31:28,760 --> 00:31:30,720
Speaker 2: go go growth that I needed when I was twenty

664
00:31:30,720 --> 00:31:32,120
Speaker 2: and thirty years old, just trying to get the thing

665
00:31:32,120 --> 00:31:34,280
Speaker 2: off the ground. But at the same time, it's a

666
00:31:34,320 --> 00:31:36,400
Speaker 2: lost opportunity if I lock it all down and make

667
00:31:36,440 --> 00:31:40,120
Speaker 2: it perfectly secure. So very personal decision your thought there

668
00:31:40,240 --> 00:31:42,800
Speaker 2: is on is reasonable, but at the same time, there's

669
00:31:42,800 --> 00:31:46,000
Speaker 2: a flip side. Let's move on to Charles in Deerfield Township,

670
00:31:46,000 --> 00:31:50,960
Speaker 2: who desperately wants to know Bob's opinion on diversification. Bob says,

671
00:31:51,560 --> 00:31:53,840
Speaker 2: Charles says, I'm already diversitive with stocks and bonds. When

672
00:31:53,880 --> 00:31:57,000
Speaker 2: does private credit actually make sense to kind of complement

673
00:31:57,000 --> 00:31:57,640
Speaker 2: a portfolio.

674
00:31:58,760 --> 00:32:02,360
Speaker 1: Well, i'd say, Charles, private credit, private equity, those are

675
00:32:02,400 --> 00:32:05,320
Speaker 1: sexy terms. It makes us all feel like we're cutting

676
00:32:05,440 --> 00:32:08,480
Speaker 1: edge and we're out there doing something you know, exotic

677
00:32:08,520 --> 00:32:11,440
Speaker 1: that other people don't know about or don't have access to.

678
00:32:12,600 --> 00:32:16,080
Speaker 1: And sometimes that's true. But look, private credit, you're basically

679
00:32:16,160 --> 00:32:19,560
Speaker 1: loaning money to companies that want to go to the

680
00:32:19,600 --> 00:32:22,960
Speaker 1: private credit markets in most cases because they can't get

681
00:32:23,040 --> 00:32:27,680
Speaker 1: loans from traditional banks because the things that they're borrowing

682
00:32:27,760 --> 00:32:32,120
Speaker 1: money for and to do come with higher risk, higher

683
00:32:32,160 --> 00:32:35,560
Speaker 1: interest rates, higher yield for the investors. So that's the

684
00:32:35,640 --> 00:32:38,680
Speaker 1: reason why as an investor you like to get involved

685
00:32:38,680 --> 00:32:42,400
Speaker 1: with private credit. You could potentially earning earn a higher yield,

686
00:32:42,600 --> 00:32:45,560
Speaker 1: higher return on your money, but you've got to understand

687
00:32:45,600 --> 00:32:49,440
Speaker 1: that comes with more credit risk and more risk of default.

688
00:32:49,520 --> 00:32:51,600
Speaker 1: So I'd say, if you're going to venture into that space,

689
00:32:51,720 --> 00:32:56,200
Speaker 1: make sure that you're in a diversified, well managed portfolio

690
00:32:56,360 --> 00:32:59,560
Speaker 1: with some professionals that know how to do the actual

691
00:32:59,600 --> 00:33:03,040
Speaker 1: credit evaluation to make sure you're not putting all your

692
00:33:03,080 --> 00:33:06,040
Speaker 1: eggs in one basket here to chase yield and really

693
00:33:06,040 --> 00:33:08,560
Speaker 1: get burned in the process. That'd be by that'd be

694
00:33:08,640 --> 00:33:10,720
Speaker 1: my answer. All right, let's end here with Bill and

695
00:33:10,800 --> 00:33:14,600
Speaker 1: Fort Thomas. Brian Bill asked, what's the number one mistake

696
00:33:14,880 --> 00:33:18,080
Speaker 1: you see people with a few million dollars making today?

697
00:33:18,520 --> 00:33:20,240
Speaker 2: You know when when I when I saw Bill's question,

698
00:33:20,280 --> 00:33:22,560
Speaker 2: my first reaction was, well, you know, obviously it's taking

699
00:33:22,560 --> 00:33:24,360
Speaker 2: your eye off the ball, just kind of checking the

700
00:33:24,400 --> 00:33:26,600
Speaker 2: box and and you know, going, I got enough and

701
00:33:26,600 --> 00:33:28,320
Speaker 2: I don't have to think anymore that that does happen.

702
00:33:28,520 --> 00:33:31,040
Speaker 2: But sometimes, especially in a case like this, it can

703
00:33:31,080 --> 00:33:33,400
Speaker 2: be keeping your eye on the ball too much. And

704
00:33:33,480 --> 00:33:35,320
Speaker 2: what I mean by that is, and I'm thinking of

705
00:33:35,360 --> 00:33:37,040
Speaker 2: a client who also lives in Fort Thomas, who did

706
00:33:37,080 --> 00:33:40,680
Speaker 2: this to themselves, tagging some number out there. Let's say

707
00:33:40,720 --> 00:33:43,360
Speaker 2: you're worth one point eight million dollars and it's got

708
00:33:43,360 --> 00:33:45,400
Speaker 2: to get to two before you retire. And I had

709
00:33:45,480 --> 00:33:47,240
Speaker 2: I had a client that had some health problems and

710
00:33:47,320 --> 00:33:49,040
Speaker 2: lots of things going on, but by god, he was

711
00:33:49,080 --> 00:33:50,600
Speaker 2: going to get to that two million dollars before he

712
00:33:50,640 --> 00:33:54,240
Speaker 2: pulled the trigger and retired. He wound up listening to

713
00:33:54,400 --> 00:33:57,320
Speaker 2: me and his spouse and finally realized that it really

714
00:33:57,320 --> 00:33:59,480
Speaker 2: doesn't matter. It's just a number, and I've got bigger

715
00:33:59,480 --> 00:34:01,479
Speaker 2: things to worry about. So don't take your eye off

716
00:34:01,520 --> 00:34:02,960
Speaker 2: the ball, but don't have your eye on the ball

717
00:34:03,000 --> 00:34:03,720
Speaker 2: too much either.

718
00:34:04,960 --> 00:34:07,320
Speaker 1: All right, Next, I've got my two cents just to

719
00:34:07,360 --> 00:34:09,880
Speaker 1: add to how we started the show tonight, how to

720
00:34:09,960 --> 00:34:13,880
Speaker 1: make some of these key decisions where emotion and feelings

721
00:34:13,920 --> 00:34:17,160
Speaker 1: come into play. Here, you're listening to Simply Money presented

722
00:34:17,160 --> 00:34:20,520
Speaker 1: by Allworth Financial on fifty five KRC the talk station.

723
00:34:24,360 --> 00:34:27,000
Speaker 1: You're listening to Simply Money presented by Allworth Financial on

724
00:34:27,120 --> 00:34:31,560
Speaker 1: Bob sponseller along with Brian James. All Right, I want

725
00:34:31,560 --> 00:34:35,040
Speaker 1: to go back and revisit something Brian we talk about

726
00:34:35,040 --> 00:34:39,760
Speaker 1: all the time, and that's all the factors, whether it's emotional, financial,

727
00:34:40,239 --> 00:34:44,160
Speaker 1: family dynamics, all that that come into making major decisions.

728
00:34:44,160 --> 00:34:46,160
Speaker 1: And I just want to share a story that I

729
00:34:46,200 --> 00:34:48,759
Speaker 1: had the privilege of being a part of here with

730
00:34:48,840 --> 00:34:52,319
Speaker 1: a family here recently. And you know this is this

731
00:34:52,360 --> 00:34:55,360
Speaker 1: is a couple, married, couple in their mid fifties, and

732
00:34:55,400 --> 00:34:58,799
Speaker 1: they're dealing with how to handle in this case, the

733
00:34:58,840 --> 00:35:02,399
Speaker 1: wife's mother who really they needed to move her down

734
00:35:02,480 --> 00:35:05,040
Speaker 1: to Cincinnati. She needed to get into a long term

735
00:35:05,080 --> 00:35:09,120
Speaker 1: care situation, and money is tight, money is scarce. There's

736
00:35:09,160 --> 00:35:11,880
Speaker 1: some emotional ties that are keeping her from wanting to

737
00:35:11,920 --> 00:35:15,080
Speaker 1: move down to Cincinnati, but it needs to be done.

738
00:35:15,160 --> 00:35:17,480
Speaker 1: This family didn't have a lot of extra money to

739
00:35:17,520 --> 00:35:22,319
Speaker 1: throw at it, and the mother in this case was

740
00:35:22,360 --> 00:35:25,719
Speaker 1: being a bit irrational, and I just I guess it

741
00:35:25,840 --> 00:35:28,359
Speaker 1: just comes down to you know, you can run spreadsheets

742
00:35:28,400 --> 00:35:31,040
Speaker 1: to your blue in the face, you can talk about

743
00:35:31,080 --> 00:35:34,240
Speaker 1: all the emotional things, and at some point in time

744
00:35:34,320 --> 00:35:37,279
Speaker 1: you got to look at your family's values. And I

745
00:35:37,320 --> 00:35:40,319
Speaker 1: don't want to get too inappropriate or off the rails here.

746
00:35:40,400 --> 00:35:45,360
Speaker 1: But the nice thing in this case is this family

747
00:35:45,800 --> 00:35:48,640
Speaker 1: has a deeply held Christian faith. I happened to be

748
00:35:48,719 --> 00:35:51,160
Speaker 1: in the same boat, and we were able to talk

749
00:35:51,200 --> 00:35:54,480
Speaker 1: about that. And my point in bringing this topic up is,

750
00:35:55,520 --> 00:35:58,080
Speaker 1: you know, you can run these spreadsheets all day long,

751
00:35:58,160 --> 00:35:59,640
Speaker 1: but you got to look at the end of the

752
00:35:59,719 --> 00:36:03,400
Speaker 1: day on what are your core values, what's your true north,

753
00:36:03,520 --> 00:36:08,080
Speaker 1: what's guiding these decisions. And believe it or not, some

754
00:36:08,120 --> 00:36:10,560
Speaker 1: people might not be aware of this. The Bible has

755
00:36:10,640 --> 00:36:13,960
Speaker 1: more to say about money than any other topic. And

756
00:36:14,000 --> 00:36:16,560
Speaker 1: we were able to talk about that as a family

757
00:36:16,600 --> 00:36:20,280
Speaker 1: as a team here and actually spend some time praying

758
00:36:20,320 --> 00:36:23,560
Speaker 1: about the situation because we didn't have a lot of

759
00:36:23,560 --> 00:36:27,680
Speaker 1: easy answers. And I'm happy to report that I got

760
00:36:27,719 --> 00:36:30,319
Speaker 1: a text from this client. I got a message about

761
00:36:30,360 --> 00:36:33,440
Speaker 1: a week ago because I had no idea how this

762
00:36:33,520 --> 00:36:36,359
Speaker 1: whole situation was going to work out, and he said,

763
00:36:36,400 --> 00:36:38,920
Speaker 1: you know what, Bob, I just wanted to let you

764
00:36:39,040 --> 00:36:42,959
Speaker 1: know that mom decided to come down and move five

765
00:36:43,040 --> 00:36:46,520
Speaker 1: minutes from us in this exact nursing home that you mentioned.

766
00:36:46,560 --> 00:36:49,960
Speaker 1: We look at, looked at She's happy about it. We're

767
00:36:50,000 --> 00:36:53,920
Speaker 1: happy about it and thanks for talking through this with us.

768
00:36:54,000 --> 00:36:56,839
Speaker 1: And it was one of the best outcomes that I've

769
00:36:56,880 --> 00:36:59,319
Speaker 1: had in a meeting so far in twenty twenty five.

770
00:36:59,400 --> 00:37:04,640
Speaker 1: And it had nothing to do with buffert ETF's loss

771
00:37:04,680 --> 00:37:07,920
Speaker 1: harvesting any of these techniques we talked about. It was

772
00:37:08,040 --> 00:37:11,840
Speaker 1: just getting the family in a room and realigning decision

773
00:37:11,920 --> 00:37:16,520
Speaker 1: making with what I knew was the family's deeply health values.

774
00:37:16,600 --> 00:37:20,960
Speaker 1: And then sometime good old prayer asking God to intervene

775
00:37:21,040 --> 00:37:23,880
Speaker 1: and give us a little guidance. Here ended up winning

776
00:37:23,920 --> 00:37:26,280
Speaker 1: the day and it was a good outcome.

777
00:37:26,520 --> 00:37:29,200
Speaker 2: Those are those yeah, those are those outcomes, those moments

778
00:37:29,200 --> 00:37:30,840
Speaker 2: where you go, you know, I really am still a

779
00:37:30,840 --> 00:37:33,239
Speaker 2: little mad that Major League Baseball did not recognize my

780
00:37:33,280 --> 00:37:35,160
Speaker 2: talents at the age of ten, but I'm kind of

781
00:37:35,160 --> 00:37:37,279
Speaker 2: glad for where I landed and what we get to

782
00:37:37,280 --> 00:37:38,840
Speaker 2: do in this job. But yeah, you're right, Pa, A

783
00:37:38,880 --> 00:37:40,520
Speaker 2: lot of people tend to we tend to hide behind

784
00:37:40,520 --> 00:37:42,680
Speaker 2: the numbers. It's a lot easier to talk about the

785
00:37:42,760 --> 00:37:45,840
Speaker 2: numbers than it is to talk about the emotional stuff

786
00:37:45,880 --> 00:37:47,560
Speaker 2: and the making sure I'm on the same page with

787
00:37:47,640 --> 00:37:50,160
Speaker 2: my loved ones. So people will go down a lot

788
00:37:50,200 --> 00:37:52,760
Speaker 2: of rabbit holes over money and dollar amounts and accounts

789
00:37:52,800 --> 00:37:55,239
Speaker 2: and investments and all that kind of stuff. Meanwhile there's

790
00:37:55,239 --> 00:37:57,400
Speaker 2: somebody staring them straight in the face that has something

791
00:37:57,440 --> 00:37:59,680
Speaker 2: else on their mind that they're not bringing up. Because

792
00:37:59,680 --> 00:38:01,600
Speaker 2: we can't take our eyeballs off the money. That happens

793
00:38:01,719 --> 00:38:03,440
Speaker 2: very very frequently, So I think the easiest thing to

794
00:38:03,480 --> 00:38:05,240
Speaker 2: do is get it out of the way. The numbers

795
00:38:05,239 --> 00:38:07,520
Speaker 2: are black and white. Here's some spreadsheets. Now, let's quit

796
00:38:07,520 --> 00:38:10,040
Speaker 2: talking about spreadsheets and talk about what's really in your

797
00:38:10,040 --> 00:38:11,680
Speaker 2: minds that you're not bringing up right now.

798
00:38:12,200 --> 00:38:16,080
Speaker 1: Yeah, And that's where trusted friends and families and just

799
00:38:16,239 --> 00:38:19,880
Speaker 1: running these things by people, whether it's a professional advisor

800
00:38:20,080 --> 00:38:24,520
Speaker 1: or just trusted close friends. Oftentimes they can give you

801
00:38:24,600 --> 00:38:28,320
Speaker 1: the answers that you know deep down are the answers

802
00:38:28,360 --> 00:38:32,800
Speaker 1: in the course of action you need to take. Something's

803
00:38:32,840 --> 00:38:36,399
Speaker 1: just holding you back from pulling the trigger. And that's

804
00:38:36,440 --> 00:38:40,560
Speaker 1: the value of having close family, close friends, close advisors

805
00:38:40,600 --> 00:38:43,839
Speaker 1: to help you out here. And prayer comes in all

806
00:38:43,880 --> 00:38:46,440
Speaker 1: the time too. Thanks for listening. You've been listening to

807
00:38:46,480 --> 00:38:48,880
Speaker 1: Simply Money and presented by all Worth Financial on fifty

808
00:38:48,880 --> 00:38:50,919
Speaker 1: five KRC, the talk station