1 00:00:06,640 --> 00:00:10,680 Speaker 1: Tonight, where is the S and P five hundred headed next? 2 00:00:10,760 --> 00:00:13,560 Speaker 1: One of the most influential investment banks in the world 3 00:00:13,640 --> 00:00:17,360 Speaker 1: apparently has that answer. You're listening to Simply Money, presented 4 00:00:17,400 --> 00:00:22,000 Speaker 1: by all Worth Financial on Bob Sponseller along with Brian James. Well, Brian, 5 00:00:22,040 --> 00:00:24,640 Speaker 1: we preach on this show all the time to never 6 00:00:25,079 --> 00:00:29,400 Speaker 1: act on media predictions or predictions from anyone for that matter. 7 00:00:30,000 --> 00:00:33,240 Speaker 1: But hey, because it's mid November, here come the projections 8 00:00:33,640 --> 00:00:38,440 Speaker 1: for twenty twenty six. Goldman sat Goldman Sachs appears to 9 00:00:38,479 --> 00:00:40,400 Speaker 1: be first out of the gate here, stepping up as 10 00:00:40,440 --> 00:00:42,760 Speaker 1: one of the first Wall Street banks to roll out 11 00:00:42,840 --> 00:00:46,159 Speaker 1: forecast for next year. Goldman strategists see the S and 12 00:00:46,240 --> 00:00:49,720 Speaker 1: P five hundred hitting seventy six hundred by the end 13 00:00:49,760 --> 00:00:53,720 Speaker 1: of twenty twenty six, roughly an eleven percent gain from here. 14 00:00:54,120 --> 00:00:56,760 Speaker 2: Well, it is Q four tis this season to make 15 00:00:56,840 --> 00:00:59,160 Speaker 2: stuff up, so let's start talking about the next year 16 00:00:59,200 --> 00:01:01,280 Speaker 2: and what everybody things is going to happen. I'm going 17 00:01:01,360 --> 00:01:03,640 Speaker 2: to go ahead and commit us as a team, Bob 18 00:01:03,720 --> 00:01:08,080 Speaker 2: and Jason, our producer, to look at what predictions came 19 00:01:08,080 --> 00:01:10,120 Speaker 2: from last year and because I'm sure we did this 20 00:01:10,160 --> 00:01:12,319 Speaker 2: whole thing a year ago, and let's just see how 21 00:01:12,360 --> 00:01:15,039 Speaker 2: that all landed. But in any case, there's another one. 22 00:01:15,160 --> 00:01:18,480 Speaker 2: A team led by chief global equity strategist Peter Oppenheimer, 23 00:01:18,480 --> 00:01:21,480 Speaker 2: that's a name you might recognize from Oppenheimer Funds, has 24 00:01:21,520 --> 00:01:23,600 Speaker 2: come up with a long term forecast from the S 25 00:01:23,640 --> 00:01:25,800 Speaker 2: and P five hundred and to deliver a six and 26 00:01:25,840 --> 00:01:28,600 Speaker 2: a half percent annualized return over the next ten years. 27 00:01:28,880 --> 00:01:32,200 Speaker 2: That's slightly below their forecast of a seven point seven 28 00:01:32,280 --> 00:01:35,000 Speaker 2: percent annualized return for global equity. So what they're saying 29 00:01:35,040 --> 00:01:37,480 Speaker 2: there is they think that the trend that has started 30 00:01:37,480 --> 00:01:40,399 Speaker 2: in twenty twenty five of global equities outpacing the United 31 00:01:40,440 --> 00:01:43,000 Speaker 2: States the S and P five hundred is going to continue. 32 00:01:43,080 --> 00:01:45,640 Speaker 2: So that six and a half percent return comprises six 33 00:01:45,680 --> 00:01:50,360 Speaker 2: percent annualized earnings per share growth, one percent annualized decline 34 00:01:50,400 --> 00:01:52,880 Speaker 2: in valuations, and a one point four percent average divid 35 00:01:52,920 --> 00:01:55,080 Speaker 2: and yield. Smush all that together and you get their 36 00:01:55,120 --> 00:01:57,360 Speaker 2: opinion that global stocks are going to be a slightly 37 00:01:57,360 --> 00:01:59,320 Speaker 2: better place to be than the S and P five hundred. 38 00:02:00,440 --> 00:02:03,480 Speaker 1: Not only do we get the bottom line prediction number, 39 00:02:03,520 --> 00:02:06,720 Speaker 1: we actually get a detailed breakdown over the next ten 40 00:02:06,800 --> 00:02:10,079 Speaker 1: years of precisely where the returns are gonna come from. 41 00:02:10,120 --> 00:02:11,799 Speaker 2: It don't make stuff up one year in a row. 42 00:02:11,840 --> 00:02:13,560 Speaker 2: We make stuff up decades in a row. 43 00:02:14,600 --> 00:02:18,560 Speaker 1: All right, it's not that great historically that you know 44 00:02:18,639 --> 00:02:22,080 Speaker 1: this six percent analyzed return forecast that would put us 45 00:02:22,080 --> 00:02:25,720 Speaker 1: in the twenty seventh percent tile of return since nineteen ninety. 46 00:02:26,320 --> 00:02:30,080 Speaker 1: The Goldman team says it's ten year SMP forecast includes 47 00:02:30,200 --> 00:02:33,920 Speaker 1: bearish and bullish cases in the range of three to 48 00:02:33,960 --> 00:02:36,919 Speaker 1: ten percent. Brian, you and I have both been doing 49 00:02:36,960 --> 00:02:40,040 Speaker 1: this a long time. Every year, you know, these people 50 00:02:40,080 --> 00:02:43,560 Speaker 1: come out and they predict that the stock market's gonna 51 00:02:43,600 --> 00:02:47,080 Speaker 1: go up seven to ten percent the next year. You know, 52 00:02:47,639 --> 00:02:49,840 Speaker 1: my reaction to that is, duh, that's that's what it 53 00:02:49,880 --> 00:02:53,680 Speaker 1: always does. That's what it's averaged, you know, forever. And 54 00:02:53,720 --> 00:02:56,200 Speaker 1: then they and then when they throw out this range 55 00:02:56,240 --> 00:02:58,959 Speaker 1: of three to ten percent, Shoot, we could all sit 56 00:02:59,000 --> 00:03:00,960 Speaker 1: and throw darts at a art board and come up 57 00:03:01,000 --> 00:03:05,280 Speaker 1: pretty close. I think this stuff is downright comical. I'm 58 00:03:05,360 --> 00:03:08,959 Speaker 1: surprised that these reputable investment banks even put themselves out 59 00:03:09,000 --> 00:03:11,239 Speaker 1: there with these kind of forecasts. 60 00:03:11,520 --> 00:03:11,760 Speaker 3: Yeah. 61 00:03:11,800 --> 00:03:13,959 Speaker 2: Well, nobody holds their feet to the fire and they're 62 00:03:13,960 --> 00:03:16,240 Speaker 2: they're They're honest human beings for the most part, just 63 00:03:16,320 --> 00:03:18,720 Speaker 2: like everybody else. So if if some if an analyst 64 00:03:18,760 --> 00:03:20,120 Speaker 2: is told to do their job or what else they 65 00:03:20,160 --> 00:03:21,720 Speaker 2: gonna do, They're gonna go do their job and write 66 00:03:21,760 --> 00:03:24,040 Speaker 2: these reports. But when when I get asked this question 67 00:03:24,320 --> 00:03:26,280 Speaker 2: in the process of financial planning, what do you think 68 00:03:26,280 --> 00:03:29,000 Speaker 2: the stock market's gonna do? Uh, my answer is always 69 00:03:29,400 --> 00:03:31,359 Speaker 2: h I believe the stock market is going to continue 70 00:03:31,440 --> 00:03:33,560 Speaker 2: to be the best place to have your super long 71 00:03:33,639 --> 00:03:36,600 Speaker 2: term money. But I'm not gonna put a number on it, 72 00:03:36,640 --> 00:03:39,360 Speaker 2: because who knows. It's the best combination of taking a 73 00:03:39,360 --> 00:03:43,040 Speaker 2: little bit of risk in exchange for better growth than 74 00:03:43,080 --> 00:03:46,440 Speaker 2: something that that is actually predictable. There's just there's just 75 00:03:46,520 --> 00:03:48,320 Speaker 2: really no getting around that. That's the way it's been 76 00:03:48,360 --> 00:03:50,640 Speaker 2: for hundreds of years. So I do not envision that 77 00:03:50,720 --> 00:03:53,920 Speaker 2: changing because it's driven by human greed. Anybody who is 78 00:03:53,960 --> 00:03:55,840 Speaker 2: at the head of a big company wants that company 79 00:03:55,880 --> 00:03:58,200 Speaker 2: to make more money. They're going to find ways to 80 00:03:58,240 --> 00:04:00,760 Speaker 2: do it, either by inventing new product and increasing the 81 00:04:00,760 --> 00:04:05,000 Speaker 2: bottom line, or resisting the reducing the expense it costs 82 00:04:05,040 --> 00:04:08,760 Speaker 2: to create their existing products and reduce increasing the profit margin. 83 00:04:08,800 --> 00:04:11,240 Speaker 2: That way, I don't see that ever, ever, ever changing. 84 00:04:11,240 --> 00:04:13,080 Speaker 2: That's how we've made money for thousands of years on 85 00:04:13,120 --> 00:04:13,720 Speaker 2: this planet. 86 00:04:14,080 --> 00:04:17,200 Speaker 1: Totally agree. I think an interesting point that Goldman points 87 00:04:17,240 --> 00:04:19,640 Speaker 1: out is that the S and P five hundred indexes 88 00:04:19,800 --> 00:04:23,000 Speaker 1: net profit margin, the profit margin of these companies is 89 00:04:23,120 --> 00:04:27,279 Speaker 1: near record highs at thirteen percent presently. That's up from 90 00:04:27,320 --> 00:04:30,600 Speaker 1: five percent back in nineteen nineties. So obviously the market's 91 00:04:30,640 --> 00:04:34,680 Speaker 1: been driven by the integration of global supply change as 92 00:04:34,680 --> 00:04:38,160 Speaker 1: well as falling interest rates since the nineteen nineties. You know, 93 00:04:38,200 --> 00:04:40,599 Speaker 1: in aggregate, we had you know, a great period of 94 00:04:40,600 --> 00:04:43,120 Speaker 1: time where rates were pretty much coming down, you know, 95 00:04:43,600 --> 00:04:45,800 Speaker 1: for a long period of time, and then corporate tax 96 00:04:45,880 --> 00:04:50,000 Speaker 1: rates have come down. The strategists don't, though, expect those 97 00:04:50,080 --> 00:04:53,800 Speaker 1: tailwinds to continue to boost profits, you know, as much 98 00:04:53,839 --> 00:04:57,560 Speaker 1: going forward, because let's face it, rates you know, they've 99 00:04:57,640 --> 00:04:59,720 Speaker 1: come down a little bit in recent years. But I 100 00:05:00,000 --> 00:05:02,120 Speaker 1: I don't think we're going to get you know, interest 101 00:05:02,200 --> 00:05:05,240 Speaker 1: rates falling to zero unless we have a huge recession, 102 00:05:05,560 --> 00:05:09,160 Speaker 1: which would obviously impact the stock market. So it's just interesting. 103 00:05:09,200 --> 00:05:12,080 Speaker 1: I find it interesting to your point, you know, the 104 00:05:12,120 --> 00:05:15,120 Speaker 1: companies always find a way to make money, and a 105 00:05:15,160 --> 00:05:18,800 Speaker 1: thirteen percent net profit margin is pretty darn impressive. 106 00:05:19,520 --> 00:05:22,000 Speaker 2: And another comment they made, I'm not going to beat 107 00:05:22,040 --> 00:05:24,960 Speaker 2: everybody about the ears with these numbers, because reading numbers 108 00:05:25,000 --> 00:05:26,920 Speaker 2: on the radio is just the best thing to listen. 109 00:05:26,680 --> 00:05:29,000 Speaker 3: To when you're trying to just drive home. 110 00:05:29,200 --> 00:05:31,159 Speaker 2: But the comment they made is they're assuming roughly no 111 00:05:31,400 --> 00:05:34,920 Speaker 2: change in corporate profit corporate profitability over the next decade, 112 00:05:35,480 --> 00:05:38,600 Speaker 2: you know, in quoting going forward, without a dramatic increase 113 00:05:38,640 --> 00:05:41,240 Speaker 2: in interest rates, in our sharp decline in corporate profitability, 114 00:05:41,240 --> 00:05:44,200 Speaker 2: we think it's likely that US equity valuations are going 115 00:05:44,240 --> 00:05:47,400 Speaker 2: to remain above long term averages, in other words, higher 116 00:05:47,440 --> 00:05:50,480 Speaker 2: for longer, is what this particular team is saying. So 117 00:05:50,680 --> 00:05:53,400 Speaker 2: let's not get too wound up over the fact that 118 00:05:53,520 --> 00:05:56,479 Speaker 2: valuations are slightly higher. I think there's more faith in 119 00:05:56,640 --> 00:05:58,800 Speaker 2: riskier investments than there has been in the past, so 120 00:05:58,839 --> 00:06:01,640 Speaker 2: we are willing to stick with them longer than we 121 00:06:01,760 --> 00:06:03,400 Speaker 2: used to, you know, say, thirty years ago. 122 00:06:04,320 --> 00:06:06,640 Speaker 1: You're listening to Simply Money presented by all Worth Financial 123 00:06:06,680 --> 00:06:10,080 Speaker 1: on Bob Sponseller along with Brian James. Brian, you mentioned 124 00:06:10,120 --> 00:06:13,000 Speaker 1: taking a look back at history on how these predictions 125 00:06:13,000 --> 00:06:15,560 Speaker 1: have worked out. Well, let's look back, you know, going 126 00:06:15,600 --> 00:06:19,160 Speaker 1: back to twenty twenty three. Many strategists back then expected 127 00:06:19,200 --> 00:06:22,880 Speaker 1: a really rough year for the market, and a lot 128 00:06:22,880 --> 00:06:26,720 Speaker 1: of people were calling for an economic recession. Instead, the 129 00:06:26,720 --> 00:06:31,240 Speaker 1: market rallied meaningful, meaningfully, and thanks in part to this 130 00:06:31,320 --> 00:06:35,760 Speaker 1: whole AI and tech you know boom, A lot of people, 131 00:06:35,920 --> 00:06:38,239 Speaker 1: most people did not see the kind of year coming 132 00:06:38,240 --> 00:06:40,960 Speaker 1: in twenty twenty three that we actually saw. And then 133 00:06:41,040 --> 00:06:44,039 Speaker 1: obviously we most people have heard a lot of people 134 00:06:44,040 --> 00:06:49,600 Speaker 1: have heard of Robert Kiyosaki. He has repeatedly predicted major crashes, 135 00:06:50,040 --> 00:06:53,640 Speaker 1: comes out and predicts a major crash every year, and 136 00:06:53,720 --> 00:06:57,039 Speaker 1: we're still kind of waiting. How about this one? Going 137 00:06:57,040 --> 00:07:01,000 Speaker 1: back to September of nineteen ninety nine, syndic Hated columnists 138 00:07:01,240 --> 00:07:05,240 Speaker 1: James Glassman and economist Kevin Hassett actually wrote a book 139 00:07:05,680 --> 00:07:08,640 Speaker 1: in which they argued that stocks at that time were 140 00:07:08,680 --> 00:07:13,800 Speaker 1: significantly undervalued and concluded that there would be a fourfold 141 00:07:13,880 --> 00:07:18,040 Speaker 1: market increase with the dal Jones average going to thirty 142 00:07:18,080 --> 00:07:21,320 Speaker 1: six thousand by two thousand and two or two thousand 143 00:07:21,360 --> 00:07:25,200 Speaker 1: and four. Well, we all know what happened next the 144 00:07:25,320 --> 00:07:30,120 Speaker 1: tech bubble, where the Nasdaq promptly went down over fifty percent. 145 00:07:30,320 --> 00:07:34,400 Speaker 1: You know, in pretty fast order. It just it just proved, 146 00:07:34,440 --> 00:07:37,280 Speaker 1: you know. Imagine taking the time to write a book 147 00:07:37,320 --> 00:07:39,800 Speaker 1: about all this and then being so wrong. 148 00:07:40,600 --> 00:07:42,760 Speaker 2: Yeah, And I remember at the time that Dow thirty 149 00:07:42,760 --> 00:07:45,320 Speaker 2: six thousand book came out, there was another one called 150 00:07:45,360 --> 00:07:50,000 Speaker 2: Dow fifty thousand. Guess which one sold more copies, Bob, So. 151 00:07:50,200 --> 00:07:51,840 Speaker 1: Was that after that Harry Dentz book. 152 00:07:52,000 --> 00:07:53,360 Speaker 3: Oh no, that's a whole other story. 153 00:07:53,480 --> 00:07:55,040 Speaker 2: Harry Deff was a guy who wrote a book called 154 00:07:55,040 --> 00:07:57,120 Speaker 2: The Great Boom Ahead, and it happened right before it 155 00:07:57,160 --> 00:07:59,400 Speaker 2: came out, right before the big technology boom, and everybody 156 00:07:59,480 --> 00:08:02,400 Speaker 2: decided that he was the next prognosticator. He then wrote 157 00:08:02,400 --> 00:08:04,760 Speaker 2: a second book called The Roaring two Thousands and hasn't 158 00:08:04,800 --> 00:08:07,680 Speaker 2: been heard from since because the two thousands didn't exactly roar. 159 00:08:07,720 --> 00:08:10,720 Speaker 2: We had two and eight and it came out slightly different. 160 00:08:10,760 --> 00:08:12,920 Speaker 2: So all this is it's the hot hand of somebody 161 00:08:12,920 --> 00:08:15,160 Speaker 2: who made the right call at the right time, and 162 00:08:15,200 --> 00:08:18,280 Speaker 2: we all everybody is desperately looking for somebody who's just 163 00:08:18,320 --> 00:08:20,440 Speaker 2: gonna tell me what buttons to push, what levers to pull. 164 00:08:20,560 --> 00:08:22,240 Speaker 2: I just don't want to think, So please give me 165 00:08:22,280 --> 00:08:24,160 Speaker 2: a book that says doubt fifty thousand, and I'll just 166 00:08:24,200 --> 00:08:25,520 Speaker 2: do whatever Chapter twelve says. 167 00:08:25,680 --> 00:08:26,560 Speaker 3: It doesn't work that way. 168 00:08:26,600 --> 00:08:28,720 Speaker 2: We have to learn our history, and we have to 169 00:08:28,800 --> 00:08:32,080 Speaker 2: understand how our own situations apply to it, and be 170 00:08:32,320 --> 00:08:35,839 Speaker 2: willing to be flexible financial planning. Investing is far, far, 171 00:08:36,040 --> 00:08:39,240 Speaker 2: far more art than science, despite the presence of numbers 172 00:08:39,240 --> 00:08:40,720 Speaker 2: in ample supply. 173 00:08:40,960 --> 00:08:43,560 Speaker 3: But it is way more about emotion and greed and 174 00:08:43,600 --> 00:08:45,520 Speaker 3: fear than anything else. You got to learn to ride 175 00:08:45,520 --> 00:08:47,360 Speaker 3: those waves, and it ain't gonna be found in a book. 176 00:08:48,240 --> 00:08:50,880 Speaker 1: All right, Well, hey, I can remember sitting in an 177 00:08:50,880 --> 00:08:54,160 Speaker 1: industry conference back in I think two thousand. Harry Dent 178 00:08:54,320 --> 00:08:57,839 Speaker 1: was the keynote speaker, and everyone was just mesmerized. Was 179 00:08:57,920 --> 00:09:01,160 Speaker 1: hit with his talk on you know, fifty thousand and 180 00:09:01,200 --> 00:09:05,360 Speaker 1: all that the roaring two thousands, and people were waiting 181 00:09:05,400 --> 00:09:07,760 Speaker 1: in line to get his autograph and buy his book. 182 00:09:07,840 --> 00:09:11,280 Speaker 1: And it was all people, and these were industry professionals, 183 00:09:11,360 --> 00:09:15,560 Speaker 1: just mesmerized by Harry Dent walking out of that conference saying, Wow, 184 00:09:16,000 --> 00:09:19,120 Speaker 1: this guy has just you know, unlocked the keys to 185 00:09:19,160 --> 00:09:21,040 Speaker 1: the kingdom, so to speak. And we all know what 186 00:09:21,120 --> 00:09:23,440 Speaker 1: happened next, a huge crash in the market. All right, 187 00:09:23,520 --> 00:09:26,600 Speaker 1: let's shift to what we should be doing Brian, fourth 188 00:09:26,720 --> 00:09:29,920 Speaker 1: quarter of twenty twenty five, We've had a pretty good 189 00:09:29,960 --> 00:09:33,000 Speaker 1: year in the markets. Instead of listening to all these predictions, 190 00:09:33,080 --> 00:09:37,200 Speaker 1: what should we be doing as responsible investors with a 191 00:09:37,200 --> 00:09:38,680 Speaker 1: good solid financial plan. 192 00:09:39,280 --> 00:09:41,679 Speaker 2: Well, I think it's making sure you understand what your 193 00:09:41,840 --> 00:09:44,319 Speaker 2: resources actually are. Look at your four oh and K, 194 00:09:44,480 --> 00:09:47,679 Speaker 2: look at your iras, your your streams of income that 195 00:09:47,720 --> 00:09:49,719 Speaker 2: could be social security, it could be a pension, maybe 196 00:09:49,760 --> 00:09:52,640 Speaker 2: you've got rental property businesses that kind of thing. Understand 197 00:09:52,640 --> 00:09:54,840 Speaker 2: what your resources are, and then more importantly, have a 198 00:09:54,880 --> 00:09:58,240 Speaker 2: separate coment conversation with either yourself or your spouse with 199 00:09:58,320 --> 00:10:00,200 Speaker 2: what are we trying to do with all this? That's 200 00:10:00,200 --> 00:10:02,840 Speaker 2: the hard part, right This is the heavy lifting. The 201 00:10:02,880 --> 00:10:05,160 Speaker 2: answer is not go find the thing that's just going 202 00:10:05,240 --> 00:10:07,200 Speaker 2: to give you a gigantic pile of money, because you 203 00:10:07,280 --> 00:10:09,720 Speaker 2: have no idea exactly how gigantic your pile of money 204 00:10:09,800 --> 00:10:12,520 Speaker 2: needs to be, because you haven't had the hard conversation, 205 00:10:12,600 --> 00:10:14,160 Speaker 2: which is, what do I want? 206 00:10:14,440 --> 00:10:16,160 Speaker 3: How much do we need? What does it cost us 207 00:10:16,200 --> 00:10:17,120 Speaker 3: to live our lifestyle? 208 00:10:17,320 --> 00:10:18,720 Speaker 1: How is our lifestyle. 209 00:10:18,320 --> 00:10:20,200 Speaker 2: Going to change when we have nothing but time on 210 00:10:20,200 --> 00:10:22,720 Speaker 2: our hands, when we've retired, what are our priorities. 211 00:10:22,800 --> 00:10:24,280 Speaker 3: Is it our kids, Do we feel like we're gonna 212 00:10:24,280 --> 00:10:26,280 Speaker 3: have to help them out a lot? Is it our parents? 213 00:10:26,280 --> 00:10:28,959 Speaker 2: Maybe we have to help them charities, all of these 214 00:10:28,960 --> 00:10:31,720 Speaker 2: other types of things. Put numbers and price tags on 215 00:10:31,800 --> 00:10:34,640 Speaker 2: each and every one of these goals. Assign an inflation rate, 216 00:10:34,679 --> 00:10:36,760 Speaker 2: because whatever something costs now is not what it will 217 00:10:36,800 --> 00:10:39,080 Speaker 2: cost fifteen years from now, and then make sure you 218 00:10:39,120 --> 00:10:42,040 Speaker 2: are on a trajectory to get there. The answer isn't 219 00:10:42,080 --> 00:10:43,719 Speaker 2: just I need a bigger pile of money. It is 220 00:10:43,800 --> 00:10:47,800 Speaker 2: much more complicated than that. Understand what you yourself need. 221 00:10:48,720 --> 00:10:50,439 Speaker 1: Yeah, And the only thing I'd add to that is 222 00:10:50,440 --> 00:10:53,120 Speaker 1: assign time horizons to when you're going to need the 223 00:10:53,160 --> 00:10:56,240 Speaker 1: money instead of thinking about, you know, predictions on what 224 00:10:56,280 --> 00:10:58,079 Speaker 1: the market's going to do in the next three, six, 225 00:10:58,280 --> 00:11:02,640 Speaker 1: nine or twelve months, because the downdrafts or the corrections 226 00:11:02,640 --> 00:11:06,440 Speaker 1: in the market, almost no one sees those coming. We 227 00:11:06,559 --> 00:11:09,120 Speaker 1: certainly don't, and most of these you know, highly paid 228 00:11:09,120 --> 00:11:11,640 Speaker 1: economists don't either. So you know, if you need that 229 00:11:11,760 --> 00:11:15,439 Speaker 1: money for short term needs like home repairs or tuition 230 00:11:15,760 --> 00:11:18,200 Speaker 1: or buying a new vehicle or something, even if you 231 00:11:18,280 --> 00:11:20,840 Speaker 1: think the market's going to go up thirty percent next year. 232 00:11:21,360 --> 00:11:24,400 Speaker 1: Don't swallow that bait and leave all that money at risk. 233 00:11:24,960 --> 00:11:28,160 Speaker 1: Get it into a different bucket that is not subjected 234 00:11:28,240 --> 00:11:31,280 Speaker 1: to short term volatility. Because the minute we think the 235 00:11:31,360 --> 00:11:34,880 Speaker 1: coast is clear and we go all in on risk assets, 236 00:11:34,960 --> 00:11:37,160 Speaker 1: we can usually get our you know, you know what 237 00:11:37,280 --> 00:11:39,600 Speaker 1: handed to us, and it's not a good situation to 238 00:11:39,640 --> 00:11:43,160 Speaker 1: go through. Here's the all Worth advice. Don't build your 239 00:11:43,200 --> 00:11:47,640 Speaker 1: plan around bold predictions, stick to the fundamentals and stay flexible. 240 00:11:47,960 --> 00:11:52,880 Speaker 1: That's how real financial freedom happens. You could owe taxes 241 00:11:53,000 --> 00:11:56,280 Speaker 1: on mutual funds even if you didn't sell one share, 242 00:11:56,960 --> 00:12:00,520 Speaker 1: and a credit card crackdown might be hitting your rewards 243 00:12:00,559 --> 00:12:03,720 Speaker 1: here in the coming weeks, months, and years. What's changing 244 00:12:04,200 --> 00:12:07,120 Speaker 1: and what to talk to your advisor about coming up next. 245 00:12:07,120 --> 00:12:09,600 Speaker 1: You're listening to Simply Money presented by all Worth Financial 246 00:12:09,600 --> 00:12:18,400 Speaker 1: on fifty five KRC the talk station. You're listening to 247 00:12:18,400 --> 00:12:21,240 Speaker 1: Simply Money presented by all Worth Financial on mob Sponsller 248 00:12:21,240 --> 00:12:24,160 Speaker 1: along with Brian James straight Ahead at six forty three. 249 00:12:24,640 --> 00:12:29,040 Speaker 1: From charitable trusts to rough conversions, we tackle your biggest 250 00:12:29,080 --> 00:12:32,520 Speaker 1: retirement questions and hopefully our answers could either save you 251 00:12:32,640 --> 00:12:36,560 Speaker 1: some money or make you some money. Well, it's mid November, 252 00:12:36,600 --> 00:12:41,199 Speaker 1: which means Thanksgiving, football, and yes, tech season is quietly 253 00:12:41,320 --> 00:12:44,160 Speaker 1: creeping up on all of us. If you're someone who 254 00:12:44,200 --> 00:12:48,200 Speaker 1: owns mutual funds in a taxable investment account, now's the 255 00:12:48,240 --> 00:12:51,920 Speaker 1: time to probably pay attention. Tell us why, Brian, tis 256 00:12:52,120 --> 00:12:53,640 Speaker 1: the season to. 257 00:12:53,400 --> 00:12:57,240 Speaker 2: Be angry about your capital gains distributions because they happen 258 00:12:57,280 --> 00:12:59,360 Speaker 2: in Q four, mostly in December. If you own a 259 00:12:59,440 --> 00:13:01,920 Speaker 2: mutual fund, mutual funds are good tools to use, nothing 260 00:13:01,920 --> 00:13:04,840 Speaker 2: wrong with that, But a mutual fund is a sort 261 00:13:04,840 --> 00:13:08,160 Speaker 2: of an older structure to own a balanced investment that 262 00:13:08,480 --> 00:13:10,920 Speaker 2: hoholds a bunch of other things. And if that mutual 263 00:13:10,920 --> 00:13:14,080 Speaker 2: fund sells something it has owned for thirty years at 264 00:13:14,120 --> 00:13:16,600 Speaker 2: a gain and you just bought the thing six months ago, 265 00:13:16,640 --> 00:13:19,040 Speaker 2: well you're going to receive a distribution of that gain. 266 00:13:19,120 --> 00:13:21,120 Speaker 2: Going back to the beginning, this is why we love 267 00:13:21,200 --> 00:13:24,240 Speaker 2: exchange traded funds or ETFs because they don't have that problem. 268 00:13:24,280 --> 00:13:28,720 Speaker 2: So we're only referring to taxable accounts here, and we're 269 00:13:28,720 --> 00:13:30,520 Speaker 2: not talking about iras ross anything like that. 270 00:13:30,559 --> 00:13:32,280 Speaker 3: Anything. This tax shelter does not apply to this. 271 00:13:32,360 --> 00:13:33,719 Speaker 2: But if you own it in a trust or a 272 00:13:33,800 --> 00:13:36,559 Speaker 2: joint account, or an individual non IRA account. Then it's 273 00:13:36,600 --> 00:13:38,680 Speaker 2: going to spit out a year end capital gains distribution, 274 00:13:38,720 --> 00:13:41,000 Speaker 2: which they are required to do by law. That's probably 275 00:13:41,040 --> 00:13:43,280 Speaker 2: gonna get reinvested. You may not even notice it until 276 00:13:43,320 --> 00:13:44,920 Speaker 2: you get that big fat ten ninety nine B. 277 00:13:46,360 --> 00:13:47,240 Speaker 3: In January here. 278 00:13:47,280 --> 00:13:49,360 Speaker 2: So even if you just sat tight all year, didn't trade, 279 00:13:49,360 --> 00:13:51,679 Speaker 2: didn't touch anything, you might still owe taxes. 280 00:13:51,920 --> 00:13:53,000 Speaker 1: So what should you do about this? 281 00:13:53,160 --> 00:13:53,560 Speaker 3: Right now? 282 00:13:53,840 --> 00:13:55,920 Speaker 2: Talk to your advisor and figure out if are any 283 00:13:55,920 --> 00:13:59,440 Speaker 2: of my mutual funds projecting large capital gains distributions and 284 00:13:59,600 --> 00:14:02,480 Speaker 2: if so, can we reposition into tax efficient ETFs or 285 00:14:02,520 --> 00:14:05,280 Speaker 2: funds that probably itself is going to be a taxable 286 00:14:05,280 --> 00:14:07,320 Speaker 2: move and it might be a short term sacrifice, but 287 00:14:07,440 --> 00:14:09,199 Speaker 2: a long term move to something that's gonna be a 288 00:14:09,200 --> 00:14:12,000 Speaker 2: little more efficient. But the big thing you can control 289 00:14:12,280 --> 00:14:14,640 Speaker 2: is hold off until you're to invest in these funds. 290 00:14:14,640 --> 00:14:17,160 Speaker 2: If you're thinking of adding more money, wait until after 291 00:14:17,200 --> 00:14:19,960 Speaker 2: those distributions go out. You are not not not missing 292 00:14:20,000 --> 00:14:23,520 Speaker 2: an opportunity because when those distributions go the share price 293 00:14:23,600 --> 00:14:26,280 Speaker 2: falls to account for them. So where you may gain 294 00:14:26,360 --> 00:14:28,240 Speaker 2: money from the distribution, you're gonna lose it in the 295 00:14:28,280 --> 00:14:30,480 Speaker 2: whole value. It's gonna net out, you will not miss 296 00:14:30,520 --> 00:14:32,360 Speaker 2: out on anything. It's better off not to eat that 297 00:14:32,640 --> 00:14:34,800 Speaker 2: a tax time. And then finally see if you have 298 00:14:34,880 --> 00:14:37,600 Speaker 2: any losses that you can go ahead and harvest proactively 299 00:14:37,640 --> 00:14:39,880 Speaker 2: sell a position at a loss to offset some of 300 00:14:39,880 --> 00:14:40,400 Speaker 2: those games. 301 00:14:40,400 --> 00:14:43,240 Speaker 1: Just a reminder on where all this taxable activity comes 302 00:14:43,240 --> 00:14:47,080 Speaker 1: from within these mutual funds. Remember, these fund managers have 303 00:14:47,160 --> 00:14:49,240 Speaker 1: to you know, juggle a few balls in the air. 304 00:14:49,280 --> 00:14:52,880 Speaker 1: At the same time, you know, shareholders are always redeeming 305 00:14:52,960 --> 00:14:56,000 Speaker 1: shares for whatever purpose. You know, shareholders might want some 306 00:14:56,040 --> 00:14:58,120 Speaker 1: of their money to buy something with. So when they 307 00:14:58,280 --> 00:15:01,640 Speaker 1: when they sell shares of that fund, going to impact everybody, 308 00:15:02,080 --> 00:15:05,080 Speaker 1: even those that those that didn't sell anything. The other 309 00:15:05,160 --> 00:15:08,680 Speaker 1: thing is funds get rebalanced over over time. Let's face it, 310 00:15:08,720 --> 00:15:11,320 Speaker 1: these people are doing what you hope they're going to do, 311 00:15:11,560 --> 00:15:14,720 Speaker 1: is you know, maybe sell some things that have huge 312 00:15:14,760 --> 00:15:18,360 Speaker 1: gains and reposition and rebalance you know into stocks that 313 00:15:18,400 --> 00:15:20,960 Speaker 1: are down and they project are going to come back up. 314 00:15:21,480 --> 00:15:24,240 Speaker 1: So this is why you know the evolution of this 315 00:15:24,400 --> 00:15:28,440 Speaker 1: industry has moved such the ETFs are so much more 316 00:15:28,480 --> 00:15:31,720 Speaker 1: tax efficient with new money. Brian, you mentioned putting new 317 00:15:31,720 --> 00:15:35,640 Speaker 1: money into mutual funds after the capital gain is paid out. 318 00:15:35,680 --> 00:15:38,720 Speaker 1: I would advocate don't put new money into mutual funds. 319 00:15:38,920 --> 00:15:42,520 Speaker 1: Look at an ETF, look at a direct indexing strategy 320 00:15:42,560 --> 00:15:45,920 Speaker 1: where you can own individual stocks and have some tax 321 00:15:45,960 --> 00:15:48,640 Speaker 1: lost harvesting going on in the background. It's just a 322 00:15:48,760 --> 00:15:53,920 Speaker 1: much more tax efficient way to operate here in twenty 323 00:15:53,960 --> 00:15:57,040 Speaker 1: twenty five. You just need to upgrade how you're doing things. 324 00:15:57,080 --> 00:15:58,400 Speaker 1: It will save you a lot of money. 325 00:15:58,480 --> 00:16:00,520 Speaker 3: That's a great point. You wouldn't buy black white TV. 326 00:16:00,640 --> 00:16:01,920 Speaker 2: So if you got new money, don't put it in 327 00:16:02,040 --> 00:16:04,440 Speaker 2: mutual funds, put it in ETFs. They're gonna get you 328 00:16:04,480 --> 00:16:05,240 Speaker 2: the same result. 329 00:16:06,120 --> 00:16:09,720 Speaker 1: All right. If you're among the folks holding premium credit cards, 330 00:16:09,800 --> 00:16:15,280 Speaker 1: think flagship travel reward cards, luxury concierge perks, and annual 331 00:16:15,320 --> 00:16:19,800 Speaker 1: feed cards. Brian, I know you love your concierge airport 332 00:16:19,920 --> 00:16:23,160 Speaker 1: lounge experience. You know, pay attention here because a new 333 00:16:23,200 --> 00:16:27,600 Speaker 1: settlement between Visa and MasterCard and US merchants could shake 334 00:16:27,680 --> 00:16:32,120 Speaker 1: up how those cards work, how merchants accept them, and 335 00:16:32,280 --> 00:16:36,400 Speaker 1: it might involve some hidden costs or rewards going away 336 00:16:36,440 --> 00:16:37,040 Speaker 1: in the future. 337 00:16:37,440 --> 00:16:39,880 Speaker 2: Well, I did love my lounge access, but it's kind 338 00:16:39,880 --> 00:16:41,760 Speaker 2: of gone away with the way they've changed the rules and. 339 00:16:41,760 --> 00:16:43,120 Speaker 3: They're packed with people nowadays. 340 00:16:43,120 --> 00:16:45,800 Speaker 2: So but anyway, the story today is for more than 341 00:16:45,840 --> 00:16:48,280 Speaker 2: two decades, some of these large US merchants have kind 342 00:16:48,280 --> 00:16:51,160 Speaker 2: of challenged the the honor all cards rule. They obviously 343 00:16:51,160 --> 00:16:53,440 Speaker 2: would really appreciate if you'd use their store cards. So 344 00:16:53,480 --> 00:16:55,320 Speaker 2: what they're saying is that, you know, this is the 345 00:16:55,400 --> 00:16:57,560 Speaker 2: rule that says if a store accepts one Visa card, 346 00:16:57,560 --> 00:16:59,200 Speaker 2: they must accept all Visa cards. 347 00:16:59,240 --> 00:17:00,760 Speaker 3: Therefore the same for Master Card. 348 00:17:01,040 --> 00:17:02,920 Speaker 2: But as part of this settlement, these merchants are going 349 00:17:03,000 --> 00:17:05,440 Speaker 2: to have more flexibility to reject cards if they don't want, 350 00:17:05,520 --> 00:17:07,320 Speaker 2: or add a surch charge to a different type of 351 00:17:07,320 --> 00:17:10,160 Speaker 2: a card, specifically the higher fee ones that are tied 352 00:17:10,160 --> 00:17:13,840 Speaker 2: to rich rewards. Remember, the merchants that you are using, 353 00:17:14,200 --> 00:17:16,480 Speaker 2: that you're using your credit cards with, are paying to 354 00:17:16,520 --> 00:17:19,040 Speaker 2: give you access to that It costs sometimes two three percent. 355 00:17:19,040 --> 00:17:21,639 Speaker 2: That's why you'll see these little little restaurants, mom and 356 00:17:21,680 --> 00:17:24,159 Speaker 2: pop diners are saying that we'll charge you less if 357 00:17:24,160 --> 00:17:26,119 Speaker 2: you're going to pay us cash because they don't have 358 00:17:26,200 --> 00:17:27,480 Speaker 2: to eat that charge. 359 00:17:27,600 --> 00:17:29,320 Speaker 3: So what should you do about this? How do we 360 00:17:29,440 --> 00:17:30,199 Speaker 3: going to react to this? 361 00:17:30,600 --> 00:17:30,959 Speaker 1: Review? 362 00:17:31,000 --> 00:17:33,240 Speaker 2: Those go to cards, the one you whip out every day. 363 00:17:33,440 --> 00:17:36,240 Speaker 2: Know exactly which premium cards you're using the most often, 364 00:17:36,320 --> 00:17:38,400 Speaker 2: what are their annual fees, and what are their benefits. 365 00:17:38,520 --> 00:17:40,800 Speaker 2: Make sure you're using all those benefits. If they're giving 366 00:17:40,800 --> 00:17:43,439 Speaker 2: you free streaming services, do you use it? Have you 367 00:17:43,520 --> 00:17:45,520 Speaker 2: signed up for it yet? If not, then don't convince 368 00:17:45,560 --> 00:17:47,480 Speaker 2: yourself you're getting a benefit out of it because you're not. 369 00:17:47,880 --> 00:17:50,639 Speaker 2: Keep an eye on those communications because they are telling you. 370 00:17:50,640 --> 00:17:53,639 Speaker 2: They're they're sending you junk mail. Sometimes they're telling you 371 00:17:53,680 --> 00:17:55,560 Speaker 2: in forming you of a change and a benefit. Maybe 372 00:17:55,560 --> 00:17:57,919 Speaker 2: some perk is going away. Point values are going to 373 00:17:57,920 --> 00:18:00,840 Speaker 2: be recalculated differently, or how you reach those points are 374 00:18:00,880 --> 00:18:03,639 Speaker 2: going to be recalculated. If you see those perks going away, 375 00:18:04,080 --> 00:18:06,960 Speaker 2: start to think about whether that card still has a 376 00:18:07,040 --> 00:18:10,240 Speaker 2: role in your portfolio, and if it doesn't, maybe keep 377 00:18:10,280 --> 00:18:13,040 Speaker 2: it open because it's a really old line that contributes 378 00:18:13,040 --> 00:18:13,720 Speaker 2: to your credit score. 379 00:18:13,760 --> 00:18:15,040 Speaker 3: But that doesn't mean you have to use it. 380 00:18:15,720 --> 00:18:19,000 Speaker 1: Brian, have you seen any evidence of rewards that you 381 00:18:19,200 --> 00:18:23,200 Speaker 1: folks have already earned airline miles or hotel points or 382 00:18:23,240 --> 00:18:26,600 Speaker 1: something like that, you know, starting to disappear? Are they 383 00:18:26,720 --> 00:18:29,320 Speaker 1: are they causing? Are some of these cards just saying well, 384 00:18:29,359 --> 00:18:32,120 Speaker 1: these points are expiring and going away. I'm talking about 385 00:18:32,160 --> 00:18:35,560 Speaker 1: stuff that people have already earned and are waiting to use. 386 00:18:36,000 --> 00:18:37,640 Speaker 2: Yes, but they do it in a very creative way. 387 00:18:37,680 --> 00:18:39,560 Speaker 2: They don't just say Nope, your points are gone. Poof, 388 00:18:39,680 --> 00:18:42,480 Speaker 2: they're gone. All they do is change the calculation because 389 00:18:42,480 --> 00:18:44,520 Speaker 2: they know very well nobody's gonna read the junk mail 390 00:18:44,560 --> 00:18:46,720 Speaker 2: disclosure in the tiny print that says, hey, we're going 391 00:18:46,800 --> 00:18:48,879 Speaker 2: to use this algorithm instead of that algorithm. If you 392 00:18:48,880 --> 00:18:51,479 Speaker 2: have any questions, please call our one eight hundred customer 393 00:18:51,520 --> 00:18:53,960 Speaker 2: service line. They change the math to make it more 394 00:18:53,960 --> 00:18:56,680 Speaker 2: profitable to them, but people don't don't have the time 395 00:18:56,720 --> 00:18:58,919 Speaker 2: to figure out exactly what they've lost in terms of 396 00:18:59,040 --> 00:19:01,240 Speaker 2: how do I translate these points into dollars? 397 00:19:02,240 --> 00:19:05,440 Speaker 1: Sounds like a fun way to spend the holidays, all right. 398 00:19:05,480 --> 00:19:09,040 Speaker 1: Coming up next, all Worth Chief Investment Officer Andy Stout 399 00:19:09,080 --> 00:19:12,119 Speaker 1: is back with solutions for investors who are looking to 400 00:19:12,240 --> 00:19:16,680 Speaker 1: boost their capital growth and their portfolio and protect themselves 401 00:19:16,760 --> 00:19:19,560 Speaker 1: from inflation. You're listening to Simply Money presented by all 402 00:19:19,560 --> 00:19:28,400 Speaker 1: Worth Financial on fifty five KRC the talk station. You're 403 00:19:28,400 --> 00:19:30,800 Speaker 1: listening to Simply Money presented by all Worth Financial on 404 00:19:30,880 --> 00:19:35,880 Speaker 1: Bob sponseller along with Brian James and our chief investment 405 00:19:35,920 --> 00:19:38,760 Speaker 1: officer here at Allworth, Andy Stout, is back with us 406 00:19:38,760 --> 00:19:42,400 Speaker 1: for this segment. Andy, you're here to talk about capital 407 00:19:42,480 --> 00:19:47,240 Speaker 1: and pre appreciation and inflation protection. Talk to us about 408 00:19:47,320 --> 00:19:49,520 Speaker 1: how to do that. What should we do with our 409 00:19:49,560 --> 00:19:50,919 Speaker 1: money to help it grow? 410 00:19:52,240 --> 00:19:56,800 Speaker 4: Well, there are many things you can do. Obviously, we've 411 00:19:56,840 --> 00:20:03,600 Speaker 4: heard real estate, individuals, stocks, individual you know, some various 412 00:20:03,960 --> 00:20:08,000 Speaker 4: heads fund private equity. There's lots of ways that you 413 00:20:08,040 --> 00:20:09,960 Speaker 4: can you know, benefit from that, and we're happy to 414 00:20:10,000 --> 00:20:11,320 Speaker 4: go into any detail you want. 415 00:20:11,440 --> 00:20:14,840 Speaker 1: But I would actually take a step back and I would. 416 00:20:14,680 --> 00:20:17,600 Speaker 4: Say when you think about, you know, your investments and 417 00:20:17,640 --> 00:20:21,000 Speaker 4: growing over time, and obviously nothing can be guaranteed. Saying 418 00:20:21,040 --> 00:20:24,160 Speaker 4: that for our compliance department out there, so we don't 419 00:20:24,160 --> 00:20:30,359 Speaker 4: get our hands slapped, but taking taking a step back, 420 00:20:31,440 --> 00:20:34,399 Speaker 4: the biggest thing you can do is not get in 421 00:20:34,480 --> 00:20:37,320 Speaker 4: your own way. I mean, if you think about it, 422 00:20:37,920 --> 00:20:39,880 Speaker 4: we have a fear of missing out, and we tend 423 00:20:39,920 --> 00:20:43,119 Speaker 4: to panic and we go through this emotional roller coaster 424 00:20:43,200 --> 00:20:45,040 Speaker 4: if you will, and what ends up happening if you 425 00:20:45,080 --> 00:20:48,000 Speaker 4: just let your emotions guide your investment decisions is you 426 00:20:48,160 --> 00:20:50,119 Speaker 4: end up buying high in selling love, which isn't the 427 00:20:50,200 --> 00:20:52,840 Speaker 4: exact opposite thing of what you want to do. Now, 428 00:20:53,000 --> 00:20:54,879 Speaker 4: you know, don't need to make this a you know, 429 00:20:55,320 --> 00:20:58,919 Speaker 4: a lesson on behavioral finance or anything like that, but 430 00:20:59,200 --> 00:21:01,679 Speaker 4: you know, I would say one takeaway is that know 431 00:21:01,840 --> 00:21:04,879 Speaker 4: that you're not rational. People are not rational. We're driven 432 00:21:04,880 --> 00:21:07,480 Speaker 4: by our emotions. Have a plan ahead of time, and 433 00:21:07,560 --> 00:21:09,800 Speaker 4: stick to that plan, because otherwise you are going to 434 00:21:09,840 --> 00:21:13,480 Speaker 4: be essentially buying high and selling low. And I mentioned 435 00:21:13,520 --> 00:21:15,520 Speaker 4: some of the strategies that I talked about a second ago, 436 00:21:15,560 --> 00:21:16,800 Speaker 4: and we can dive into them here. 437 00:21:17,080 --> 00:21:19,080 Speaker 1: But if you don't. 438 00:21:19,080 --> 00:21:22,720 Speaker 4: Separate your emotions from your investments, you're going to end 439 00:21:22,800 --> 00:21:26,400 Speaker 4: up not probably not doing as well as you could 440 00:21:26,400 --> 00:21:28,840 Speaker 4: have otherwise, in spite of maybe having the best strategy 441 00:21:28,920 --> 00:21:32,640 Speaker 4: in the entire universe, it won't matter if you let 442 00:21:32,640 --> 00:21:35,159 Speaker 4: your emotions take over. And I mean, there's lots of 443 00:21:35,200 --> 00:21:38,840 Speaker 4: really good strategies out there. You know, we can look 444 00:21:38,880 --> 00:21:44,520 Speaker 4: at individual equity strategies. If you're really maybe focused on 445 00:21:44,680 --> 00:21:47,480 Speaker 4: getting income, you know, there's plenty of really good individual 446 00:21:47,520 --> 00:21:50,720 Speaker 4: stocks out there, and just make sure that if you 447 00:21:50,800 --> 00:21:54,640 Speaker 4: want income, they're focused on dividends and they're well diversified, 448 00:21:54,640 --> 00:21:57,680 Speaker 4: so you can exposure to multiple sectors and if you're 449 00:21:57,680 --> 00:22:00,760 Speaker 4: looking for something that's more total return, which I think 450 00:22:00,800 --> 00:22:03,000 Speaker 4: probably makes more sense because you can always make your 451 00:22:03,000 --> 00:22:04,520 Speaker 4: own dividends just by selling stocks. 452 00:22:04,880 --> 00:22:08,240 Speaker 2: Andy, So I'm gonna shift because you're raising a question 453 00:22:08,320 --> 00:22:11,159 Speaker 2: here in my head inflation protection, and I'm thinking of 454 00:22:11,200 --> 00:22:14,400 Speaker 2: conversations I've had recently from people who are trying to separate. 455 00:22:14,480 --> 00:22:18,080 Speaker 2: I want to protect from from inflation, but I also 456 00:22:18,119 --> 00:22:20,040 Speaker 2: want to protect myself from the ups and downs of 457 00:22:20,080 --> 00:22:22,000 Speaker 2: the stock market. Now a lot of times, you know 458 00:22:22,200 --> 00:22:24,840 Speaker 2: those are those are almost mutually exclusive. You have to 459 00:22:24,920 --> 00:22:27,120 Speaker 2: accept a little risk on one side to somehow defer 460 00:22:27,200 --> 00:22:28,920 Speaker 2: the risk on the other side. So what would you 461 00:22:28,920 --> 00:22:31,399 Speaker 2: say to those people who were really sensitive to volatility 462 00:22:31,400 --> 00:22:34,800 Speaker 2: in the stock market you want to keep up with 463 00:22:35,000 --> 00:22:37,840 Speaker 2: inflation and trying to find a way to thread that needle. 464 00:22:39,080 --> 00:22:41,160 Speaker 4: I would say, you can't have your cake and eat 465 00:22:41,200 --> 00:22:43,800 Speaker 4: it too. To your point, you know you have to 466 00:22:44,040 --> 00:22:48,520 Speaker 4: get something or give something up to get something. Another 467 00:22:48,560 --> 00:22:52,320 Speaker 4: famous line in the investing world is there is no 468 00:22:52,440 --> 00:22:55,800 Speaker 4: free lunch. So when you think about it from that perspective, 469 00:22:56,200 --> 00:22:57,840 Speaker 4: you do have to give something up, and you can 470 00:22:58,400 --> 00:23:02,119 Speaker 4: you can protect the downside and have plenty of potential upside. 471 00:23:02,240 --> 00:23:05,800 Speaker 4: And there's different strategies for that. They can involve stock options, 472 00:23:06,040 --> 00:23:09,600 Speaker 4: they can involve buffer ETFs, they can involve structured notes, 473 00:23:09,720 --> 00:23:12,640 Speaker 4: they can involve having a diversified portfolio that's just done 474 00:23:12,600 --> 00:23:15,439 Speaker 4: one hundred percent stocks. Maybe it's eighty twenty eight percent stocks, 475 00:23:15,440 --> 00:23:18,359 Speaker 4: twenty percent mods or forty sixty really whatever risk profile 476 00:23:18,359 --> 00:23:20,359 Speaker 4: are comfortable with. Because when I think about just the 477 00:23:20,400 --> 00:23:25,080 Speaker 4: overall investment strategies for people and trying to essentially get 478 00:23:25,080 --> 00:23:27,080 Speaker 4: that return they need to get to beat inflation and 479 00:23:27,119 --> 00:23:30,040 Speaker 4: have capital appreciation. The big thing is making sure you're 480 00:23:30,040 --> 00:23:31,480 Speaker 4: able to sleep at night, because if you're not able 481 00:23:31,560 --> 00:23:33,919 Speaker 4: to sleep at night, you're going to end up, you know, 482 00:23:33,960 --> 00:23:36,760 Speaker 4: making that emotional decision. So having that right risk profile 483 00:23:36,760 --> 00:23:38,639 Speaker 4: at the very onset is really key. So you have 484 00:23:38,680 --> 00:23:41,360 Speaker 4: individual stock strategies. You know, one thing that I think 485 00:23:41,400 --> 00:23:43,800 Speaker 4: is really good because you think about individual stock strategies, 486 00:23:43,800 --> 00:23:47,000 Speaker 4: you think about a diversified strategy of using ets and 487 00:23:47,080 --> 00:23:50,800 Speaker 4: mutual funds and that's all those are all great, and 488 00:23:50,840 --> 00:23:53,120 Speaker 4: you're looking for what i'll call alpha or a relative 489 00:23:53,119 --> 00:23:55,679 Speaker 4: outperformance to you know, whatever you're trying to achieve. But 490 00:23:55,720 --> 00:23:58,920 Speaker 4: there's also tax alpha as well, and that's something that's 491 00:23:59,800 --> 00:24:03,000 Speaker 4: very very powerful. So you could look at some direct indexes, 492 00:24:03,040 --> 00:24:05,359 Speaker 4: which what they look to do is they look to, 493 00:24:05,760 --> 00:24:07,960 Speaker 4: you know, generate some losses to offset gains and still 494 00:24:08,000 --> 00:24:12,200 Speaker 4: have that total return essentially matchine index on a pre 495 00:24:12,280 --> 00:24:14,919 Speaker 4: tax basis, but then beat it on an after tax basis. 496 00:24:14,960 --> 00:24:16,679 Speaker 4: So how you could do that is you still get 497 00:24:16,720 --> 00:24:19,800 Speaker 4: the exposure to your i'll call it your maybe some 498 00:24:19,840 --> 00:24:22,720 Speaker 4: housing stocks or whatever, or home improvement stocks, let's let's 499 00:24:22,800 --> 00:24:25,560 Speaker 4: use that example instead, and maybe home deep. It goes down, 500 00:24:25,720 --> 00:24:27,720 Speaker 4: so you sell home depot and you buy more lows 501 00:24:27,880 --> 00:24:30,240 Speaker 4: because they're going to move kind of together, and you 502 00:24:30,280 --> 00:24:32,159 Speaker 4: still get that same general exposure, but all of a 503 00:24:32,160 --> 00:24:35,080 Speaker 4: sudden you bank the loss and overall hopefully you. 504 00:24:35,080 --> 00:24:35,840 Speaker 1: Still have gains. 505 00:24:35,880 --> 00:24:38,920 Speaker 4: And then what you end up showing for your tax 506 00:24:38,960 --> 00:24:42,560 Speaker 4: report is the ability to lower that those realize gains 507 00:24:42,560 --> 00:24:44,560 Speaker 4: and lower how much you pay to the irs. So 508 00:24:44,600 --> 00:24:46,760 Speaker 4: there's a lot of really good strategies out there. And 509 00:24:46,800 --> 00:24:50,159 Speaker 4: the last one I'll mention besides like direct indexes and 510 00:24:50,160 --> 00:24:53,720 Speaker 4: already mentioned fund of funds, individual stocks, you know, private investments, 511 00:24:53,840 --> 00:24:56,920 Speaker 4: those have the potential for outperformance as well, Like private 512 00:24:56,920 --> 00:25:00,359 Speaker 4: equity is a really good example, private real estate another 513 00:25:00,400 --> 00:25:02,600 Speaker 4: really good example. Now those tend to be more complex, 514 00:25:02,640 --> 00:25:06,320 Speaker 4: and you got to make sure it's a line through 515 00:25:06,359 --> 00:25:09,800 Speaker 4: I risk tolerance and the suitability really is set up 516 00:25:09,800 --> 00:25:12,000 Speaker 4: to make sure that you understand how all those things work. 517 00:25:12,160 --> 00:25:15,720 Speaker 4: But there is the ability for those types of investments 518 00:25:15,800 --> 00:25:18,359 Speaker 4: to be what i'll call uncorrelated, meaning they may not 519 00:25:18,520 --> 00:25:21,600 Speaker 4: move with the broad market, but over time they still 520 00:25:21,600 --> 00:25:24,120 Speaker 4: have plenty of upsides. So you know, Brian just asked 521 00:25:24,160 --> 00:25:26,840 Speaker 4: that question a second ago about you know, kind of 522 00:25:26,880 --> 00:25:29,880 Speaker 4: like a minimizing some downside rest to a degree, still 523 00:25:29,920 --> 00:25:32,160 Speaker 4: have that upside here. I would say you could also 524 00:25:32,200 --> 00:25:34,760 Speaker 4: do it by looking at the correlation or things that 525 00:25:34,800 --> 00:25:35,639 Speaker 4: don't move together. 526 00:25:36,240 --> 00:25:39,280 Speaker 1: All right, lots of good stuff to consider, and as always, 527 00:25:39,320 --> 00:25:43,119 Speaker 1: it's important to pair your risk tolerance with your goals 528 00:25:43,280 --> 00:25:46,480 Speaker 1: and it should all be part of a good comprehensive 529 00:25:46,960 --> 00:25:52,639 Speaker 1: financial plan that factors in both return, risk and tax planning. 530 00:25:52,720 --> 00:25:55,240 Speaker 1: You're listening to Simply Money presented by all Worth Financial 531 00:25:55,280 --> 00:26:03,760 Speaker 1: on fifty five KORC the talk station. You're listening to 532 00:26:03,760 --> 00:26:06,679 Speaker 1: Simply Money present up by all Worth Financial umpop Sponsorller 533 00:26:06,680 --> 00:26:10,080 Speaker 1: along with Brian James. You have a financial question you'd 534 00:26:10,080 --> 00:26:12,000 Speaker 1: like for us to answer, there is a red button 535 00:26:12,040 --> 00:26:14,240 Speaker 1: you can click while you're listening to the show. If 536 00:26:14,280 --> 00:26:17,919 Speaker 1: you're listening on the iHeart app, simply record your question 537 00:26:18,280 --> 00:26:21,720 Speaker 1: and it will come straight to us. Tom and Kettering 538 00:26:21,800 --> 00:26:24,000 Speaker 1: leads us off tonight. You know, all the way up 539 00:26:24,040 --> 00:26:28,200 Speaker 1: near Dayton. Love our listeners up in Dayton. Brian he says, 540 00:26:28,240 --> 00:26:33,280 Speaker 1: I've heard that rebalancing can trigger unnecessary taxes in taxable accounts. 541 00:26:33,640 --> 00:26:36,520 Speaker 1: How do you stay diversified without creating a big tax 542 00:26:36,600 --> 00:26:39,359 Speaker 1: problem every time you adjust or rebalance. 543 00:26:39,600 --> 00:26:40,640 Speaker 3: That's a great question, Tom. 544 00:26:40,680 --> 00:26:43,080 Speaker 2: This is one of those smart move but wrong account 545 00:26:43,200 --> 00:26:46,440 Speaker 2: issues that kind of keep it catches even experienced. 546 00:26:45,840 --> 00:26:48,199 Speaker 3: Investors of off balance here. 547 00:26:48,240 --> 00:26:50,840 Speaker 2: So rebalancing this is when you're selling your winners to 548 00:26:50,880 --> 00:26:53,040 Speaker 2: buy to buy some more losers, which sound doesn't sound 549 00:26:53,080 --> 00:26:53,600 Speaker 2: exactly right. 550 00:26:53,640 --> 00:26:55,840 Speaker 3: But stuff goes up, stuff goes down may still be 551 00:26:55,880 --> 00:26:56,480 Speaker 3: a good investment. 552 00:26:56,520 --> 00:26:58,679 Speaker 2: You might want to rebalance that way, but that's going 553 00:26:58,720 --> 00:27:00,560 Speaker 2: to keep your portfolio in line with your plan. But 554 00:27:00,600 --> 00:27:04,119 Speaker 2: in a taxable account, a good rebalance can trigger capital 555 00:27:04,160 --> 00:27:07,640 Speaker 2: gains taxes. So to stay diversified without overpaying Uncle Sam 556 00:27:07,680 --> 00:27:10,680 Speaker 2: make sure you're rebalancing inside your tax sheltered accounts. First 557 00:27:10,760 --> 00:27:13,600 Speaker 2: four to one k's iras roth iras. That's where move 558 00:27:13,720 --> 00:27:16,080 Speaker 2: The moves you make inside the account aren't taxable at all. 559 00:27:16,320 --> 00:27:20,000 Speaker 2: If it's a taxable account, use new contributions or perhaps 560 00:27:20,240 --> 00:27:22,919 Speaker 2: switch your dividends to cash, let them build up, and 561 00:27:22,960 --> 00:27:26,040 Speaker 2: then use that new cash to only buy to rebalance. 562 00:27:26,080 --> 00:27:30,080 Speaker 2: That's called cash flow rebalancing, versus actually selling something robotically 563 00:27:30,240 --> 00:27:32,600 Speaker 2: and then putting it putting it back into new positions. 564 00:27:32,800 --> 00:27:35,680 Speaker 2: If selling is necessary, look for positions that are sitting 565 00:27:35,720 --> 00:27:37,200 Speaker 2: at a loss to offset gains. 566 00:27:37,200 --> 00:27:38,560 Speaker 1: That's tax loss harvesting. 567 00:27:38,600 --> 00:27:40,080 Speaker 3: Tell me if you've heard us say that before. 568 00:27:40,720 --> 00:27:43,280 Speaker 2: Or stay within those long term capital gains windows for 569 00:27:43,320 --> 00:27:46,240 Speaker 2: those lower rates. And so these are there are steps 570 00:27:46,280 --> 00:27:48,159 Speaker 2: you can take make sure. The real point here is 571 00:27:48,200 --> 00:27:50,159 Speaker 2: to make sure that you're you're having less of an 572 00:27:50,200 --> 00:27:52,199 Speaker 2: impact in your taxable account than you are in your 573 00:27:52,200 --> 00:27:54,240 Speaker 2: IRA when it comes to rebalancing your portfolio. 574 00:27:54,800 --> 00:27:55,760 Speaker 1: So let's move to a. 575 00:27:55,720 --> 00:27:56,600 Speaker 3: Bill in Indian Hill. 576 00:27:56,600 --> 00:27:58,439 Speaker 2: Bill says he's got a few mutual funds in a 577 00:27:58,480 --> 00:28:01,399 Speaker 2: taxable account, and they keep shoving off these big capital 578 00:28:01,440 --> 00:28:02,280 Speaker 2: gains distributions. 579 00:28:02,320 --> 00:28:04,200 Speaker 3: Hey, Bob, I think we just talked about this, did we. 580 00:28:04,600 --> 00:28:05,080 Speaker 1: He did. 581 00:28:05,600 --> 00:28:07,840 Speaker 2: He's wondering is it better to sell now and reset 582 00:28:07,840 --> 00:28:10,360 Speaker 2: into ETFs or just wait it out. I think that's 583 00:28:10,400 --> 00:28:12,320 Speaker 2: a great thing for people to start thinking about. 584 00:28:12,600 --> 00:28:15,200 Speaker 1: Well, it's a great question, and it's a timely question. 585 00:28:15,320 --> 00:28:18,000 Speaker 1: I mean, Bill, we just talked about this, and I'll 586 00:28:18,080 --> 00:28:21,280 Speaker 1: use Brian's analogy. You know, it's time to gradually shift 587 00:28:21,400 --> 00:28:25,240 Speaker 1: from the black and white TV world into the plasma, 588 00:28:25,320 --> 00:28:28,760 Speaker 1: big screen color TV world. It doesn't mean you have 589 00:28:28,800 --> 00:28:31,080 Speaker 1: to take your black and white TV and smash it 590 00:28:31,119 --> 00:28:34,240 Speaker 1: on the driveway this afternoon. You can make a gradual change. 591 00:28:34,240 --> 00:28:37,520 Speaker 1: Here's what I mean. You know, have somebody sit down 592 00:28:37,560 --> 00:28:41,320 Speaker 1: with you and look at what are the annual you know, 593 00:28:41,520 --> 00:28:44,600 Speaker 1: distributions that you're likely to get from these mutual funds, 594 00:28:44,640 --> 00:28:47,120 Speaker 1: and what's your cost basis in these mutual funds, and 595 00:28:47,120 --> 00:28:50,760 Speaker 1: then evaluate how can we gradually unwind these mutual funds 596 00:28:51,200 --> 00:28:55,280 Speaker 1: in a taxable, responsible way and shift into the plasma 597 00:28:55,320 --> 00:28:58,760 Speaker 1: TV world of ETFs or direct indexing. The other thing 598 00:28:59,280 --> 00:29:01,600 Speaker 1: you can do is if you are charitably inclined and 599 00:29:01,640 --> 00:29:06,400 Speaker 1: you make annual distributions to charity, do that with low 600 00:29:06,480 --> 00:29:10,160 Speaker 1: cost basis mutual funds give those away to charities or 601 00:29:10,200 --> 00:29:13,440 Speaker 1: your donor advice fund rather than writing a check. So 602 00:29:13,640 --> 00:29:18,840 Speaker 1: between a combination of gradually moving, doing some tax loss harvesting, 603 00:29:19,120 --> 00:29:22,680 Speaker 1: and using maybe these low cost basis mutual funds to 604 00:29:22,760 --> 00:29:26,200 Speaker 1: do charitable giving, I think you can responsibly make that 605 00:29:26,360 --> 00:29:28,680 Speaker 1: shift out of the mutual fund world and into the 606 00:29:28,720 --> 00:29:32,120 Speaker 1: ETF or direct indexing world and not pay a boatload 607 00:29:32,160 --> 00:29:35,840 Speaker 1: of taxes in the process. Hope that Bob, yes. 608 00:29:35,920 --> 00:29:38,400 Speaker 3: Plasma TVs were so like ten years ago. 609 00:29:38,760 --> 00:29:41,840 Speaker 2: The new thing is O LED or maybe not something 610 00:29:42,000 --> 00:29:45,120 Speaker 2: LED anyway, but plasma yesterday, Bob yesterday. 611 00:29:45,880 --> 00:29:49,200 Speaker 1: Well, I still like my plasma TV better than my 612 00:29:49,280 --> 00:29:51,680 Speaker 1: black and white TV. But I'm glad I've got you 613 00:29:51,760 --> 00:29:55,520 Speaker 1: around to keep me updated on technology and credit card points. 614 00:29:55,560 --> 00:29:57,480 Speaker 3: Now we know that Bob still owns a black. 615 00:29:57,240 --> 00:30:01,360 Speaker 1: And white TV. All right, Pa, please answer Ken's question 616 00:30:01,440 --> 00:30:05,920 Speaker 1: from Mount Washington. Ken says, I'm hearing more about using 617 00:30:06,080 --> 00:30:10,920 Speaker 1: charitable remainder trusts to diversify appreciated stock. How do those 618 00:30:11,000 --> 00:30:13,960 Speaker 1: really work and what's the trade off? And before you 619 00:30:14,040 --> 00:30:16,920 Speaker 1: answer that, Brian, just so you know, I've got a 620 00:30:16,960 --> 00:30:20,200 Speaker 1: beautiful seventy two inch TV hanging on my you know, 621 00:30:20,240 --> 00:30:22,240 Speaker 1: in my living room that I had to fight my 622 00:30:22,360 --> 00:30:25,040 Speaker 1: wife tooth and nail to allow me to hang on 623 00:30:25,160 --> 00:30:28,760 Speaker 1: the above the fireplace. She thinks it's too big. I 624 00:30:28,880 --> 00:30:31,000 Speaker 1: demanded that it be hung there because I want to 625 00:30:31,040 --> 00:30:33,720 Speaker 1: watch and be able to see my football and baseball games. 626 00:30:34,320 --> 00:30:36,760 Speaker 1: The thing was purchased in the last you know, six 627 00:30:36,800 --> 00:30:38,760 Speaker 1: to twelve months, so I don't know what they call it. 628 00:30:38,840 --> 00:30:41,239 Speaker 1: I just know it works well. The picture's great and 629 00:30:41,280 --> 00:30:43,200 Speaker 1: I love it. But please answer Ken's question. 630 00:30:43,280 --> 00:30:45,920 Speaker 2: You heard it here first, Bob Sponzeller owns the only 631 00:30:45,920 --> 00:30:48,120 Speaker 2: black and white plasma TV in existence. 632 00:30:48,360 --> 00:30:51,840 Speaker 3: So let's move on to let's move on to adult 633 00:30:51,880 --> 00:30:52,360 Speaker 3: talk here. 634 00:30:52,400 --> 00:30:55,440 Speaker 2: And so we're talking about cheditable remainder trust, so charitable 635 00:30:55,440 --> 00:30:58,720 Speaker 2: remainder trust commonly known as a CRT, that that lets 636 00:30:58,720 --> 00:31:01,160 Speaker 2: you donate appreciated stuf without selling it first. 637 00:31:01,200 --> 00:31:02,680 Speaker 1: Now, there's a lot of ways. 638 00:31:02,440 --> 00:31:03,080 Speaker 3: You might do this. 639 00:31:03,600 --> 00:31:05,320 Speaker 2: Donor advice funds play a role here too, but we're 640 00:31:05,320 --> 00:31:06,920 Speaker 2: talking about CRT specifically. 641 00:31:07,120 --> 00:31:08,240 Speaker 3: The goal here is that you will. 642 00:31:08,400 --> 00:31:11,360 Speaker 2: Avoid immediate capital gains tax and you still get a 643 00:31:11,360 --> 00:31:14,400 Speaker 2: steady income stream. You still own the stock in a 644 00:31:14,480 --> 00:31:17,920 Speaker 2: sense because you control it inside your trust. However, you 645 00:31:17,920 --> 00:31:19,760 Speaker 2: can take an income stream out of it. You can 646 00:31:19,800 --> 00:31:23,680 Speaker 2: no longer manage those accounts, or you don't actually own 647 00:31:23,720 --> 00:31:26,080 Speaker 2: the stock to vote those kinds of things. So the 648 00:31:26,160 --> 00:31:29,440 Speaker 2: trust though sells the stock tax free. It's a charitable 649 00:31:29,440 --> 00:31:31,920 Speaker 2: remainder trust. It itself is not taxed. It's going to 650 00:31:32,000 --> 00:31:34,440 Speaker 2: reinvest that full amount however you want. This is a 651 00:31:34,480 --> 00:31:37,720 Speaker 2: way to diversify things, to balance portfolio out, and it's 652 00:31:37,720 --> 00:31:39,760 Speaker 2: going to pay you that annual income and that's often 653 00:31:39,800 --> 00:31:41,760 Speaker 2: you know, that's written into the trust document, but it 654 00:31:41,840 --> 00:31:43,960 Speaker 2: might be five to seven percent of the trust value 655 00:31:44,160 --> 00:31:46,600 Speaker 2: when you pass away. This is the remainder part of 656 00:31:47,240 --> 00:31:50,720 Speaker 2: charitable remainder trust. Whatever is left goes to any charity 657 00:31:50,880 --> 00:31:52,880 Speaker 2: that could be an university, it could be a different 658 00:31:52,920 --> 00:31:56,240 Speaker 2: donor advised fund, or a local foundation or something. And 659 00:31:57,160 --> 00:31:59,720 Speaker 2: you've already designated that in the trust. You will say 660 00:31:59,760 --> 00:32:03,880 Speaker 2: at my death, here is the charity of final of receipt. 661 00:32:04,360 --> 00:32:06,680 Speaker 2: But in the meantime you can also use those assets 662 00:32:06,680 --> 00:32:09,240 Speaker 2: for different charities that you like as well. You also 663 00:32:09,240 --> 00:32:13,160 Speaker 2: get an immediate charitable deduction based on the projected remainder gift. Right, 664 00:32:13,200 --> 00:32:16,640 Speaker 2: So it's a calculation a present value of whatever that 665 00:32:17,000 --> 00:32:19,480 Speaker 2: might be worth in the future. So the trade off 666 00:32:19,560 --> 00:32:21,680 Speaker 2: is you lose access to the principle it is locked 667 00:32:21,680 --> 00:32:24,560 Speaker 2: into that trust, and the income is taxable when it's received. 668 00:32:24,600 --> 00:32:26,440 Speaker 2: You haven't turned you know, you haven't created a tax 669 00:32:26,440 --> 00:32:29,200 Speaker 2: free stream of income. You've simply taken one asset and 670 00:32:29,240 --> 00:32:31,960 Speaker 2: given the ability to spread it out, diversify it, but 671 00:32:32,040 --> 00:32:34,800 Speaker 2: out without paying capital gains. And you've benefited a charity 672 00:32:34,800 --> 00:32:36,720 Speaker 2: that you might already be inclined to do anyway. So 673 00:32:37,040 --> 00:32:39,200 Speaker 2: a little more complicated donor advice funds play a role 674 00:32:39,200 --> 00:32:42,160 Speaker 2: there too, So look at both of those options. Paul 675 00:32:42,320 --> 00:32:45,200 Speaker 2: in Montgomery, Paul says, with rates bouncing around, Bob, we've 676 00:32:45,200 --> 00:32:47,719 Speaker 2: got a ladder of CDs in short term treasuries. How 677 00:32:47,720 --> 00:32:50,400 Speaker 2: do you decide when to roll it versus just when 678 00:32:50,400 --> 00:32:52,080 Speaker 2: to lock something in for the long term and forget 679 00:32:52,120 --> 00:32:52,440 Speaker 2: about it. 680 00:32:53,240 --> 00:32:56,440 Speaker 1: Well, the first thing is if we know where interest 681 00:32:56,520 --> 00:32:58,640 Speaker 1: rates are going, and when you know, we would all 682 00:32:58,640 --> 00:33:01,400 Speaker 1: know the answer to that question. And that's that's because 683 00:33:01,400 --> 00:33:03,640 Speaker 1: we don't know the answer to that question. That's why 684 00:33:03,960 --> 00:33:06,680 Speaker 1: people like to use a ladder strategy like it sounds 685 00:33:06,720 --> 00:33:09,360 Speaker 1: like you're doing, because we don't know what's going to happen, 686 00:33:09,400 --> 00:33:12,440 Speaker 1: and therefore we hedge our bets and we stagger it out. 687 00:33:12,480 --> 00:33:15,160 Speaker 1: So good for you for doing that already. You know, 688 00:33:15,520 --> 00:33:17,880 Speaker 1: my answer to your question is whether it's a CD 689 00:33:18,320 --> 00:33:21,840 Speaker 1: or treasuries or bonds, there's something called a yield to maturity, 690 00:33:21,920 --> 00:33:24,880 Speaker 1: which you can determine on a daily basis because the 691 00:33:24,960 --> 00:33:28,320 Speaker 1: prices of these CDs, if they're traded on the open market, 692 00:33:28,400 --> 00:33:31,400 Speaker 1: and short term treasuries they move daily with the movement 693 00:33:31,440 --> 00:33:33,920 Speaker 1: of interest rates. So you know, you can look at 694 00:33:33,960 --> 00:33:36,520 Speaker 1: all of your holdings and calculate what the yield to 695 00:33:36,600 --> 00:33:39,600 Speaker 1: maturity is, meaning if I hold these things to maturity 696 00:33:39,640 --> 00:33:42,920 Speaker 1: from now until when they mature, forget about where when 697 00:33:42,960 --> 00:33:46,440 Speaker 1: you bought them, from now until you mature, until they mature, 698 00:33:46,480 --> 00:33:48,400 Speaker 1: what's your yield going to be? And if there's a 699 00:33:48,440 --> 00:33:50,320 Speaker 1: couple of things that are really out of whack or 700 00:33:50,320 --> 00:33:53,120 Speaker 1: out of line with what you could do today by 701 00:33:53,240 --> 00:33:56,560 Speaker 1: redeeming that one, you know, treasury now and buying something else, 702 00:33:56,680 --> 00:33:59,200 Speaker 1: that's the time to make a move or roll as 703 00:33:59,240 --> 00:34:01,880 Speaker 1: you say. So, you know, I think you could sit 704 00:34:01,920 --> 00:34:04,440 Speaker 1: down on a case by case basis, look at every holding, 705 00:34:04,520 --> 00:34:06,840 Speaker 1: see if some things are out of whack and go 706 00:34:06,920 --> 00:34:09,000 Speaker 1: from there. Other than that, I think it's good to 707 00:34:09,120 --> 00:34:12,840 Speaker 1: just continue as one thing matures, you know, just continue 708 00:34:12,880 --> 00:34:15,799 Speaker 1: to ladder so you're not guessing on where interest rates 709 00:34:15,840 --> 00:34:18,800 Speaker 1: are going to go, and you've got a good sound 710 00:34:18,800 --> 00:34:21,839 Speaker 1: strategy in place, you know that takes advantage of all 711 00:34:21,840 --> 00:34:25,799 Speaker 1: interest rate environments. Hope that helps. Coming up next, how 712 00:34:25,880 --> 00:34:28,960 Speaker 1: skipping your vacation could cost you a lot more than 713 00:34:29,000 --> 00:34:31,280 Speaker 1: just a week at the beach. You're listening to Simply 714 00:34:31,320 --> 00:34:34,120 Speaker 1: Money presented by all Worth Financial on fifty five KRC 715 00:34:34,560 --> 00:34:42,640 Speaker 1: the talk station. You're listening to Simply Money by all 716 00:34:42,640 --> 00:34:46,560 Speaker 1: Worth Financial, umbop spond seller along with Brian James. As 717 00:34:46,560 --> 00:34:49,239 Speaker 1: we wrap things up tonight, let's talk about something that 718 00:34:49,360 --> 00:34:52,440 Speaker 1: doesn't show up in the scorebook or on your four 719 00:34:52,440 --> 00:34:56,560 Speaker 1: to one case statement, but absolutely impacts your financial life. 720 00:34:56,680 --> 00:35:00,680 Speaker 1: And that's your time off. Brian, A new search came 721 00:35:00,680 --> 00:35:03,960 Speaker 1: out just you know, recently on this and these numbers 722 00:35:04,000 --> 00:35:07,520 Speaker 1: are pretty staggering. Let's get into it because I think 723 00:35:07,880 --> 00:35:10,520 Speaker 1: not enough people are using their time off, and I 724 00:35:10,520 --> 00:35:11,600 Speaker 1: think that's not a good thing. 725 00:35:12,360 --> 00:35:13,879 Speaker 2: You know, I just did a survey in my own 726 00:35:13,920 --> 00:35:17,719 Speaker 2: household and fifty percent of my marriage hasn't taken all 727 00:35:17,719 --> 00:35:20,160 Speaker 2: of its vacation days. So, hey, hon are we going 728 00:35:20,200 --> 00:35:21,680 Speaker 2: to go to Savannah. We're still gonna do that because 729 00:35:21,680 --> 00:35:23,040 Speaker 2: we're kind of running out of time for the year. 730 00:35:23,280 --> 00:35:26,120 Speaker 2: But let's talk about a bigger survey, right, So this 731 00:35:26,200 --> 00:35:28,399 Speaker 2: is a new one that the nearly one in four 732 00:35:28,400 --> 00:35:31,000 Speaker 2: Americans didn't take a single vacation day this year. 733 00:35:31,080 --> 00:35:31,640 Speaker 3: Not one. 734 00:35:31,840 --> 00:35:34,080 Speaker 2: The top reason, well, I'm too busy. Number two, I'm 735 00:35:34,080 --> 00:35:36,040 Speaker 2: afraid of falling behind, which is kind of the same thing. 736 00:35:36,680 --> 00:35:38,680 Speaker 2: So let's be real, if you're listening to this show, 737 00:35:38,680 --> 00:35:40,720 Speaker 2: there's a real good chance you fall into that category 738 00:35:40,760 --> 00:35:42,719 Speaker 2: because you're stuck behind a steering wheel, steering at your 739 00:35:42,719 --> 00:35:45,200 Speaker 2: windshield on the way home. Maybe you run a business, 740 00:35:45,239 --> 00:35:47,880 Speaker 2: maybe you've got a leadership role, or you're still building 741 00:35:47,880 --> 00:35:48,680 Speaker 2: toward retirement. 742 00:35:48,840 --> 00:35:49,640 Speaker 3: But here's the problem. 743 00:35:49,680 --> 00:35:52,720 Speaker 2: Skipping that time off might feel productive in the short term, 744 00:35:52,840 --> 00:35:55,760 Speaker 2: but long term, it can get pretty expensive, right, Bob. 745 00:35:56,719 --> 00:35:58,840 Speaker 1: I think it gets real expensive. And I can speak 746 00:35:58,880 --> 00:36:01,520 Speaker 1: from personal experience. You know, during the years, you know, 747 00:36:01,560 --> 00:36:04,439 Speaker 1: many years I own my own business, I rarely took 748 00:36:04,480 --> 00:36:08,120 Speaker 1: any time off, real time off, because I couldn't. I 749 00:36:08,160 --> 00:36:12,280 Speaker 1: had to take care of stuff myself. And it really 750 00:36:12,320 --> 00:36:14,800 Speaker 1: does take a toll, you know, over time. And I 751 00:36:15,160 --> 00:36:18,840 Speaker 1: think people that have taken a good, solid vacation understand 752 00:36:18,880 --> 00:36:21,880 Speaker 1: what I'm about to say. Even though it might feel 753 00:36:21,880 --> 00:36:23,600 Speaker 1: like you're going to come back at the end of 754 00:36:23,600 --> 00:36:26,120 Speaker 1: that vacation to a big to do list or pile 755 00:36:26,160 --> 00:36:29,800 Speaker 1: of emails or what have you, your brain is just sharper, 756 00:36:30,000 --> 00:36:35,799 Speaker 1: your mind is refreshed. You're just healthier, you're happier, you're 757 00:36:35,840 --> 00:36:39,359 Speaker 1: more effective in your job after you take some time off. 758 00:36:39,560 --> 00:36:43,760 Speaker 1: And I'm a big proponent of doing that. And again, 759 00:36:43,880 --> 00:36:46,200 Speaker 1: I think we can get on that. You know, we 760 00:36:46,239 --> 00:36:48,959 Speaker 1: can get on that hamster wheel for years and years 761 00:36:49,000 --> 00:36:51,680 Speaker 1: and years and forget about all that. And it really 762 00:36:51,719 --> 00:36:54,319 Speaker 1: does take a toll over time. So you know, your 763 00:36:54,320 --> 00:36:57,360 Speaker 1: paid time off is it's part of your compensation. You know, 764 00:36:57,400 --> 00:36:59,480 Speaker 1: if you work for a company, if you don't use it, 765 00:36:59,520 --> 00:37:02,000 Speaker 1: you're literally leaving money on the table. And I think 766 00:37:02,040 --> 00:37:04,239 Speaker 1: you gotta you gotta look at it that way. You're 767 00:37:04,280 --> 00:37:08,000 Speaker 1: leaving I would say, potentially some mental health on the table. 768 00:37:08,640 --> 00:37:11,480 Speaker 1: That's value, that's part of your overall wealth picture. And 769 00:37:11,560 --> 00:37:14,319 Speaker 1: for some companies it doesn't roll over, So if you 770 00:37:14,360 --> 00:37:16,239 Speaker 1: don't take it, it's gone. 771 00:37:16,920 --> 00:37:19,160 Speaker 2: Not to mention, you're creating memories with the people you 772 00:37:19,200 --> 00:37:21,839 Speaker 2: care about. Nobody's gonna talk about how great that PowerPoint 773 00:37:21,960 --> 00:37:24,719 Speaker 2: was at your at your funeral, They're gonna talk about 774 00:37:24,760 --> 00:37:27,320 Speaker 2: the memories you created with them. So not only should 775 00:37:27,360 --> 00:37:29,560 Speaker 2: you be taking advantage of the of that time that 776 00:37:29,600 --> 00:37:33,080 Speaker 2: you have to not be a working drone you you're 777 00:37:33,120 --> 00:37:35,520 Speaker 2: also spending that time with your family and building those 778 00:37:35,760 --> 00:37:38,040 Speaker 2: relationships up, and that's far more important in the long 779 00:37:38,120 --> 00:37:41,160 Speaker 2: run anyway. So make sure you are not ignoring those 780 00:37:41,200 --> 00:37:43,239 Speaker 2: types of things, the opportunities that you have to build 781 00:37:43,320 --> 00:37:44,360 Speaker 2: something that really counts. 782 00:37:45,080 --> 00:37:47,200 Speaker 1: And one more thing on that topic, if you're someone 783 00:37:47,360 --> 00:37:50,640 Speaker 1: that's approaching retirement, you know in the next couple, you know, 784 00:37:50,719 --> 00:37:54,560 Speaker 1: three five years, that's even more of a reason to practice. Now, 785 00:37:54,719 --> 00:37:58,920 Speaker 1: take a vacation and practice what being retired might look like. 786 00:37:59,000 --> 00:38:01,319 Speaker 1: How are you gonna use your time and energy and 787 00:38:01,400 --> 00:38:03,920 Speaker 1: have fun and fill up your day. And if you 788 00:38:03,960 --> 00:38:07,520 Speaker 1: don't know how to step away from work for a week, 789 00:38:07,920 --> 00:38:10,840 Speaker 1: how are you going to handle stepping away for thirty years. 790 00:38:10,840 --> 00:38:13,880 Speaker 1: That's another reason to use your vacation and use it 791 00:38:13,920 --> 00:38:18,520 Speaker 1: strategically and kind of practice for an upcoming retirement. Here's 792 00:38:18,520 --> 00:38:20,560 Speaker 1: the all Worth advice. Your time is one of your 793 00:38:20,560 --> 00:38:25,760 Speaker 1: most valuable assets. Protect it, use it and invest it wisely. 794 00:38:26,120 --> 00:38:28,560 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 795 00:38:28,560 --> 00:38:31,600 Speaker 1: presented by all Worth Financial on fifty five KRC, the 796 00:38:31,880 --> 00:38:32,440 Speaker 1: talk station