1 00:00:06,080 --> 00:00:11,760 Speaker 1: Tonight, social securities projected shortfall could arrive even sooner than 2 00:00:11,840 --> 00:00:15,440 Speaker 1: previously expected. You're listening to simply Money presented by all 3 00:00:15,440 --> 00:00:19,200 Speaker 1: Worth Financial on Bob Spondseller along with Brian James. That's 4 00:00:19,200 --> 00:00:22,160 Speaker 1: one of the biggest hot potatoes out there, and those 5 00:00:22,200 --> 00:00:26,200 Speaker 1: in Congress want nothing to do with it. That's always 6 00:00:26,200 --> 00:00:30,080 Speaker 1: fun when the people responsible for fixing a problem don't 7 00:00:30,080 --> 00:00:32,680 Speaker 1: even want to talk about it. And that problem is 8 00:00:32,720 --> 00:00:35,680 Speaker 1: how to fund Social Security, you know, going on into 9 00:00:35,760 --> 00:00:40,080 Speaker 1: the next you know, several decades, because any decision they 10 00:00:40,159 --> 00:00:44,160 Speaker 1: might make would impact millions of Americans and potentially their 11 00:00:44,240 --> 00:00:47,479 Speaker 1: own seats on Capitol Hill. But now we've learned that 12 00:00:47,800 --> 00:00:51,960 Speaker 1: this window to do something about it is even closer. Brian, 13 00:00:52,120 --> 00:00:55,600 Speaker 1: some new data out from the Congressional Budget Office. 14 00:00:55,560 --> 00:00:57,680 Speaker 2: And that new data, Bob, it's the same as the 15 00:00:57,720 --> 00:00:58,240 Speaker 2: old data. 16 00:00:58,280 --> 00:01:00,200 Speaker 3: This is the time of year where we point at 17 00:01:00,200 --> 00:01:02,279 Speaker 3: this on rushing train and go, oh my gosh, this 18 00:01:02,320 --> 00:01:02,760 Speaker 3: is a problem. 19 00:01:02,840 --> 00:01:03,920 Speaker 2: What are we going to do about it? And then 20 00:01:03,920 --> 00:01:04,720 Speaker 2: promptly ignore it. 21 00:01:04,760 --> 00:01:07,440 Speaker 3: So, beginning or early in the first quarter of every 22 00:01:07,480 --> 00:01:10,840 Speaker 3: year or so, the Congregulal bushet Off Budget Office otherwise 23 00:01:10,880 --> 00:01:13,680 Speaker 3: known as the CBO, they're the ones who basically track 24 00:01:13,720 --> 00:01:16,280 Speaker 3: all these different financial projections for a lot of different things. 25 00:01:16,920 --> 00:01:20,240 Speaker 3: But the CBO comes up with a new forecast for 26 00:01:20,520 --> 00:01:24,720 Speaker 3: Social Security, retirement benefits, old age and Survivors Insurance Trust Fund, 27 00:01:24,840 --> 00:01:26,840 Speaker 3: those kinds of things, all that they're saying now can 28 00:01:26,880 --> 00:01:28,440 Speaker 3: be depleted by twenty thirty two. 29 00:01:28,680 --> 00:01:30,520 Speaker 2: Now, this is a year we've heard before. This is 30 00:01:30,560 --> 00:01:30,920 Speaker 2: not new. 31 00:01:30,959 --> 00:01:33,240 Speaker 3: Yeah, that's only six years from now, right, So we're 32 00:01:33,319 --> 00:01:35,880 Speaker 3: really in the home stretch of getting to this point. 33 00:01:36,440 --> 00:01:38,000 Speaker 2: But I think my entire. 34 00:01:37,920 --> 00:01:41,039 Speaker 3: Thirty year career, I have always heard about the arrange 35 00:01:41,080 --> 00:01:43,640 Speaker 3: from about twenty thirty two to maybe twenty thirty six. 36 00:01:43,680 --> 00:01:45,559 Speaker 2: It just moves back and forthep. 37 00:01:45,959 --> 00:01:47,960 Speaker 3: Based on what we do now it really, I mean, 38 00:01:48,680 --> 00:01:50,680 Speaker 3: a lot of the things that have happened, the decisions 39 00:01:50,680 --> 00:01:53,800 Speaker 3: that we've made from a fiscal standpoint and the deficit 40 00:01:53,880 --> 00:01:56,680 Speaker 3: and all those kinds of things over the past couple 41 00:01:56,680 --> 00:01:58,240 Speaker 3: of years have pulled it closer. 42 00:01:58,320 --> 00:01:58,480 Speaker 2: Right. 43 00:01:58,520 --> 00:01:59,960 Speaker 3: We've done some things in the past that we'll put 44 00:02:00,360 --> 00:02:02,640 Speaker 3: out most recently, we will pulling it toward us again, 45 00:02:02,680 --> 00:02:03,800 Speaker 3: and we're not doing anything about it. 46 00:02:04,360 --> 00:02:05,720 Speaker 2: But let's clear up some confusion. 47 00:02:05,800 --> 00:02:10,760 Speaker 3: Right, So, the fact that Social Security Fund could be 48 00:02:10,840 --> 00:02:13,280 Speaker 3: depleted does not mean it's going to zero. There are 49 00:02:13,360 --> 00:02:15,840 Speaker 3: plenty of people out there who will run with this, tweet, 50 00:02:16,200 --> 00:02:18,720 Speaker 3: this post, this whatever, saying social Security is not going 51 00:02:18,760 --> 00:02:20,440 Speaker 3: to be there when I retire, blah blah blah. I 52 00:02:20,440 --> 00:02:22,560 Speaker 3: hear it from clients all the time. That is impossible 53 00:02:22,800 --> 00:02:24,760 Speaker 3: unless they banish FIKA taxes. 54 00:02:25,160 --> 00:02:25,760 Speaker 2: What happens. 55 00:02:26,000 --> 00:02:28,160 Speaker 3: What we're talking about is there's a surplus right now 56 00:02:28,200 --> 00:02:30,560 Speaker 3: as we're sitting here, and for apparently the next six years, 57 00:02:30,720 --> 00:02:33,120 Speaker 3: we've got a surplus. We are pulling in more money 58 00:02:33,200 --> 00:02:36,480 Speaker 3: via payroll taxes then has to be paid out in 59 00:02:36,520 --> 00:02:39,160 Speaker 3: the form of benefits. That's only going to last approximately 60 00:02:39,200 --> 00:02:42,280 Speaker 3: another six years before it's at a break even status. 61 00:02:42,480 --> 00:02:46,040 Speaker 3: So if nothing happens right, if there are no changes 62 00:02:46,040 --> 00:02:48,720 Speaker 3: made in terms of either raising taxes or lowering benefits, 63 00:02:48,919 --> 00:02:51,760 Speaker 3: then benefits will be forced to drop to about eighty 64 00:02:51,800 --> 00:02:54,640 Speaker 3: percent of what that shows on your report there. 65 00:02:54,720 --> 00:02:56,440 Speaker 2: But again, eighty percent is not zero. 66 00:02:56,440 --> 00:02:58,320 Speaker 3: I'm not celebrating this is a good thing, but I'm 67 00:02:58,360 --> 00:03:00,400 Speaker 3: asking people to pump the brakes a little bit and 68 00:03:00,440 --> 00:03:03,640 Speaker 3: not buy into anybody who says social Security is going away. 69 00:03:03,760 --> 00:03:06,280 Speaker 2: It is not well Brian. 70 00:03:06,320 --> 00:03:08,720 Speaker 1: When you talk about that surplus. I think what you're 71 00:03:08,720 --> 00:03:11,040 Speaker 1: referring to correct me if I'm wrong, is this you know, 72 00:03:11,120 --> 00:03:14,280 Speaker 1: this term out there called the Social Security Trust Fund. 73 00:03:14,840 --> 00:03:17,359 Speaker 1: Is though, there's this fund out there with all this 74 00:03:17,440 --> 00:03:20,480 Speaker 1: accumulated money that's going to pay for all of these 75 00:03:20,480 --> 00:03:24,640 Speaker 1: Social Security benefits, you know, in adfinitum, and Uh, what 76 00:03:24,720 --> 00:03:27,240 Speaker 1: I do think we need to do is realize that 77 00:03:27,320 --> 00:03:30,600 Speaker 1: there is no trust fund. Uh, there's a surplus. As 78 00:03:30,639 --> 00:03:33,880 Speaker 1: you pointed out, that surplus is scheduled to disappear and 79 00:03:33,919 --> 00:03:37,040 Speaker 1: then it becomes purely a pay as you go system. 80 00:03:37,400 --> 00:03:40,760 Speaker 1: And that's why the CBO is saying, hey, the pay 81 00:03:40,800 --> 00:03:42,640 Speaker 1: as you go plans only going to be able to 82 00:03:42,720 --> 00:03:45,200 Speaker 1: pay for about eighty percent of scheduled benefits. So I 83 00:03:45,200 --> 00:03:46,000 Speaker 1: have that about right. 84 00:03:46,640 --> 00:03:48,560 Speaker 2: Yeah, that's exactly the right. Pay as you go is 85 00:03:48,600 --> 00:03:50,200 Speaker 2: becoming pay as you're gone. 86 00:03:50,360 --> 00:03:53,000 Speaker 3: So when we're moving to a point where they're there again, 87 00:03:53,040 --> 00:03:55,320 Speaker 3: there's there's no pile of gold in a closet somewhere 88 00:03:55,320 --> 00:03:57,560 Speaker 3: in DC that they've been doling out to us for decades. 89 00:03:57,600 --> 00:03:59,440 Speaker 3: That's not how it works. It's just the money that 90 00:03:59,480 --> 00:04:00,600 Speaker 3: has collected from Pyron. 91 00:04:01,760 --> 00:04:04,080 Speaker 1: All right. Well, the interesting thing is we are in 92 00:04:04,160 --> 00:04:08,240 Speaker 1: a midterm election year, and so you know what is interesting, Brian, 93 00:04:08,440 --> 00:04:11,640 Speaker 1: is the people that are elected to the United States 94 00:04:11,720 --> 00:04:14,280 Speaker 1: Senate in November of this year, you know, to a 95 00:04:14,360 --> 00:04:17,479 Speaker 1: six year term. They are going to actually be in 96 00:04:17,640 --> 00:04:21,279 Speaker 1: office and be responsible for fixing this problem, you know, 97 00:04:21,440 --> 00:04:24,280 Speaker 1: while they are serving their Senate term. So that is 98 00:04:24,440 --> 00:04:28,000 Speaker 1: at least some source of optimism here in my view. 99 00:04:28,000 --> 00:04:30,239 Speaker 1: But I think, like a lot of things that happen 100 00:04:30,360 --> 00:04:35,039 Speaker 1: up there in DC, the can literally gets kicked down 101 00:04:35,080 --> 00:04:40,400 Speaker 1: the road until it's just a flashing red light, you know, danger, danger, danger, 102 00:04:40,480 --> 00:04:42,440 Speaker 1: and then they get into a room in the eleventh 103 00:04:42,480 --> 00:04:46,440 Speaker 1: hour and fix it. Brian, I think any fixes out 104 00:04:46,440 --> 00:04:50,040 Speaker 1: there are going to make somebody, you know, unhappy. And 105 00:04:50,440 --> 00:04:53,120 Speaker 1: let's face it, with the political climate we've got today, 106 00:04:53,279 --> 00:04:55,680 Speaker 1: I mean, we can't even keep the government open for 107 00:04:55,839 --> 00:04:58,080 Speaker 1: God's sakes, you know, much less get in a room 108 00:04:58,080 --> 00:05:01,560 Speaker 1: and solve some real problems. But you know, like everything 109 00:05:01,600 --> 00:05:06,880 Speaker 1: else that's happened historically in America, we do eventually get 110 00:05:06,880 --> 00:05:10,000 Speaker 1: in a room and fix these major problems. I expect 111 00:05:10,040 --> 00:05:14,039 Speaker 1: it'll happen the same with Social Security. Your guess is 112 00:05:14,040 --> 00:05:16,320 Speaker 1: as good as mine whether we get a twenty percent 113 00:05:16,400 --> 00:05:19,440 Speaker 1: cut and benefits. I don't think that'll happen, but I 114 00:05:19,480 --> 00:05:22,240 Speaker 1: think the tax system might change. I think the Social 115 00:05:22,240 --> 00:05:25,520 Speaker 1: Security wage gap might pay change. There could be some 116 00:05:25,640 --> 00:05:29,280 Speaker 1: means testing, you know, or a combination of all the above. 117 00:05:29,360 --> 00:05:32,240 Speaker 1: And I think, if some reasonable people get in a room, 118 00:05:32,360 --> 00:05:35,919 Speaker 1: this is a math problem. This isn't a political problem. 119 00:05:35,960 --> 00:05:39,560 Speaker 1: This is a math problem. I think, Brian, I'm interested 120 00:05:39,600 --> 00:05:43,560 Speaker 1: in your thoughts. Most Americans realize this is a problem, 121 00:05:44,360 --> 00:05:47,400 Speaker 1: and they realize that we are all going to have 122 00:05:47,480 --> 00:05:49,880 Speaker 1: to do a little give and take here and come 123 00:05:50,000 --> 00:05:53,000 Speaker 1: up with a reasonable solution to fix this problem. Because, 124 00:05:53,080 --> 00:05:57,080 Speaker 1: let's face it, at the time Social Security started, people 125 00:05:57,120 --> 00:05:59,479 Speaker 1: weren't expected to live as long as they do. Now, 126 00:05:59,560 --> 00:06:03,000 Speaker 1: that's the real problem. I think most adults out there 127 00:06:03,080 --> 00:06:06,599 Speaker 1: are intelligent enough to understand that. I just wish some 128 00:06:06,680 --> 00:06:09,320 Speaker 1: folks would start to get in a room, run some math, 129 00:06:09,520 --> 00:06:12,760 Speaker 1: run some different proposals, and let's settle on one and 130 00:06:12,839 --> 00:06:15,279 Speaker 1: put this thing to bed. What do you think? Yeah? 131 00:06:15,400 --> 00:06:17,320 Speaker 3: No, And I think if you hit the nail on 132 00:06:17,360 --> 00:06:23,320 Speaker 3: the head a little bit ago when you said that. 133 00:06:19,680 --> 00:06:24,440 Speaker 2: That something's gonna have to change. But nobody's talking about 134 00:06:24,440 --> 00:06:24,720 Speaker 2: it right. 135 00:06:24,760 --> 00:06:27,520 Speaker 3: So the way this works there's only really there's two 136 00:06:27,600 --> 00:06:28,440 Speaker 3: levers we can pull. 137 00:06:28,560 --> 00:06:28,760 Speaker 2: Right. 138 00:06:28,880 --> 00:06:31,840 Speaker 3: We can either increase or change the benefit amount, or 139 00:06:31,880 --> 00:06:34,040 Speaker 3: we can change what we are taxing on current employees. 140 00:06:34,800 --> 00:06:37,480 Speaker 3: And there's a million ways that can be implemented. 141 00:06:37,560 --> 00:06:37,680 Speaker 1: Right. 142 00:06:37,720 --> 00:06:40,640 Speaker 3: We can reduce benefits just straight up reduce the dollar amount. 143 00:06:40,640 --> 00:06:43,120 Speaker 3: We can push the retirement age out. We can set 144 00:06:43,160 --> 00:06:44,960 Speaker 3: hurdles you have to get over with, as you mentioned, 145 00:06:44,960 --> 00:06:46,839 Speaker 3: we could make it means based. By the way some 146 00:06:46,920 --> 00:06:48,920 Speaker 3: of this, there already is a little bit of means 147 00:06:48,920 --> 00:06:51,640 Speaker 3: testing going on here, right, because we tax Social Security 148 00:06:51,839 --> 00:06:54,320 Speaker 3: at different levels based on your income, So there already 149 00:06:54,320 --> 00:06:56,479 Speaker 3: is a little bit of sneaky means testing happening in there. 150 00:06:56,600 --> 00:06:58,760 Speaker 3: It's not exactly testing, it's just the way we tax it. 151 00:06:58,760 --> 00:07:01,120 Speaker 3: But there already is different a different set of benefits 152 00:07:01,120 --> 00:07:03,479 Speaker 3: a little bit for different income classes. That's been in 153 00:07:03,480 --> 00:07:06,799 Speaker 3: place for years. But the problem is, if you follow 154 00:07:06,880 --> 00:07:09,479 Speaker 3: that along, it's a sacrifice for everybody. Right, it means 155 00:07:09,520 --> 00:07:12,920 Speaker 3: we're either increasing taxes on current workers or we are 156 00:07:13,000 --> 00:07:16,320 Speaker 3: decreasing benefits on current beneficiaries, and. 157 00:07:16,560 --> 00:07:17,760 Speaker 2: Either way that's a sacrifice. 158 00:07:17,760 --> 00:07:21,240 Speaker 3: So nobody can run for office with this wonderful platform 159 00:07:21,280 --> 00:07:24,240 Speaker 3: of I'm going to fix social security by making somebody 160 00:07:24,320 --> 00:07:27,800 Speaker 3: sacrifice something. That's a that's a campaign that's dead in 161 00:07:27,840 --> 00:07:29,840 Speaker 3: the water, right, So it's going to have to take 162 00:07:29,880 --> 00:07:33,520 Speaker 3: It's going to take a bipartisan group that realizes. 163 00:07:33,040 --> 00:07:34,679 Speaker 2: That, you know what, we have no choice anymore. 164 00:07:34,840 --> 00:07:37,240 Speaker 3: We just have to pull the other group across the 165 00:07:37,280 --> 00:07:39,920 Speaker 3: aisle and all talk together about how it's time to 166 00:07:39,960 --> 00:07:42,120 Speaker 3: be adults in this country and realize that some of 167 00:07:42,120 --> 00:07:44,120 Speaker 3: the things that we've built in the past just plain 168 00:07:44,280 --> 00:07:47,120 Speaker 3: no longer work. So but then I don't think that's 169 00:07:47,120 --> 00:07:49,000 Speaker 3: going to happen anytime soon, because we are just where 170 00:07:49,040 --> 00:07:50,720 Speaker 3: our backs are not against the wall. We can still 171 00:07:50,720 --> 00:07:53,600 Speaker 3: get away with it for another almost full Senate term. 172 00:07:54,000 --> 00:07:55,760 Speaker 3: But I think at about four or five years you'll start 173 00:07:55,760 --> 00:07:58,080 Speaker 3: to hear somebody talking about the need to fix it, 174 00:07:58,280 --> 00:08:01,239 Speaker 3: but not being very specific about what their solution is 175 00:08:01,280 --> 00:08:03,080 Speaker 3: because it has to be a sacrifice. 176 00:08:03,400 --> 00:08:05,320 Speaker 1: All right, Well, then let's pivot to what we should 177 00:08:05,360 --> 00:08:08,280 Speaker 1: be doing about this as we build financial plans and 178 00:08:08,360 --> 00:08:12,760 Speaker 1: think about retirement strategies in twenty twenty six. I think, 179 00:08:12,880 --> 00:08:15,600 Speaker 1: you know, Brian, what what we shouldn't do is panic, 180 00:08:15,720 --> 00:08:18,520 Speaker 1: And as you've already said, just assume that the whole 181 00:08:18,520 --> 00:08:22,280 Speaker 1: program is going to go away. I think you and 182 00:08:22,320 --> 00:08:24,560 Speaker 1: I can agree. You know, that's not going to happen. 183 00:08:25,520 --> 00:08:28,400 Speaker 1: What we can do is run some scenarios if people 184 00:08:28,400 --> 00:08:30,960 Speaker 1: are really nervous about it, and say, hey, let's run 185 00:08:31,000 --> 00:08:35,880 Speaker 1: your plan assuming a twenty percent cut in Social Security benefits. 186 00:08:36,320 --> 00:08:38,480 Speaker 1: That way you at least know what the impact is. 187 00:08:38,520 --> 00:08:40,120 Speaker 1: I think those are the kind of things that we 188 00:08:40,200 --> 00:08:42,920 Speaker 1: need to be doing today, you know, just to stress 189 00:08:43,000 --> 00:08:47,280 Speaker 1: test different scenarios while we're waiting for some adults in 190 00:08:47,280 --> 00:08:49,240 Speaker 1: the room to fix this problem for us in a 191 00:08:49,280 --> 00:08:49,960 Speaker 1: few years. 192 00:08:50,240 --> 00:08:52,880 Speaker 3: Yeah, I think that really is the best way to 193 00:08:52,920 --> 00:08:56,560 Speaker 3: make sure that your plan can withstand something like that. 194 00:08:56,600 --> 00:08:59,320 Speaker 3: And again, let go of the notion that social Security 195 00:08:59,360 --> 00:09:02,040 Speaker 3: is going to zero. People are very very passionate about that, 196 00:09:02,080 --> 00:09:04,360 Speaker 3: but it's just not on the table. There's always going 197 00:09:04,400 --> 00:09:06,880 Speaker 3: to be dollars collected. I'll be working in six years 198 00:09:06,920 --> 00:09:09,319 Speaker 3: when this happens, and I'm pretty sure there's going to 199 00:09:09,360 --> 00:09:10,679 Speaker 3: be a fight a line on the top half of 200 00:09:10,720 --> 00:09:13,080 Speaker 3: my pay stuff. So there's going to be income going 201 00:09:13,120 --> 00:09:15,120 Speaker 3: to somebody, and I'm happy to contribute it as long 202 00:09:15,120 --> 00:09:16,760 Speaker 3: as I get mine on the back end myself. But 203 00:09:17,080 --> 00:09:19,040 Speaker 3: in any case, Yeah, so make sure you have a 204 00:09:19,080 --> 00:09:22,480 Speaker 3: financial plan and look at the ways that the different 205 00:09:22,520 --> 00:09:25,280 Speaker 3: ways that that lack of or that reduction and potential 206 00:09:25,280 --> 00:09:28,600 Speaker 3: social security could impact it. This might mean you need 207 00:09:28,640 --> 00:09:31,560 Speaker 3: to think possibly about maybe working a little longer, not 208 00:09:31,640 --> 00:09:34,480 Speaker 3: necessarily in the right and the same role that it 209 00:09:34,559 --> 00:09:36,280 Speaker 3: could be you know, something that you go out and 210 00:09:36,280 --> 00:09:38,120 Speaker 3: do just because you want to keep busy, and that 211 00:09:38,200 --> 00:09:38,920 Speaker 3: might fill that gap. 212 00:09:39,120 --> 00:09:40,559 Speaker 2: It may not be as much as you're thinking. 213 00:09:40,559 --> 00:09:42,959 Speaker 3: Twenty percent isn't quite that much of a hurdle to 214 00:09:43,000 --> 00:09:46,000 Speaker 3: get over, but in case you've got time to plan 215 00:09:46,080 --> 00:09:49,319 Speaker 3: for it, then then this is the time to take 216 00:09:49,320 --> 00:09:52,320 Speaker 3: advantage of it. There is also a decent chance, I'd 217 00:09:52,360 --> 00:09:54,560 Speaker 3: say better than decent, that the way this plays out 218 00:09:54,960 --> 00:09:57,320 Speaker 3: is that there is a grandfathering of anyone who is 219 00:09:57,400 --> 00:09:59,880 Speaker 3: already receiving benefits. Those are the people who are going 220 00:09:59,920 --> 00:10:02,480 Speaker 3: to feel it immediately, and they all tend to be 221 00:10:02,520 --> 00:10:04,880 Speaker 3: a a pretty. 222 00:10:04,600 --> 00:10:05,800 Speaker 2: Vocal voting block. 223 00:10:06,280 --> 00:10:08,960 Speaker 3: So I would say that there is a decent chance 224 00:10:08,960 --> 00:10:11,400 Speaker 3: we have no idea, we're just projecting here, but decent 225 00:10:11,480 --> 00:10:13,440 Speaker 3: chance that that that it may only be changing for 226 00:10:13,440 --> 00:10:16,560 Speaker 3: people who have yet to receive benefits, because frankly, we 227 00:10:16,640 --> 00:10:18,160 Speaker 3: are the ones who won't. 228 00:10:17,920 --> 00:10:19,520 Speaker 2: Be as vocal about it. 229 00:10:19,559 --> 00:10:21,800 Speaker 3: So anyway, just just some more things to consider as 230 00:10:21,800 --> 00:10:23,280 Speaker 3: you figure out how this is going to impact your 231 00:10:23,280 --> 00:10:23,680 Speaker 3: own plan. 232 00:10:24,679 --> 00:10:27,480 Speaker 1: Yeah, and Brian, we occasionally, you know, run across people 233 00:10:27,480 --> 00:10:30,200 Speaker 1: that come into the office, folks that have sizable net 234 00:10:30,240 --> 00:10:33,800 Speaker 1: worths and they're worried about, you know, not getting any 235 00:10:33,880 --> 00:10:37,200 Speaker 1: social security benefits at all. Again, we think that's a 236 00:10:37,240 --> 00:10:42,800 Speaker 1: bit of an extreme assumption or fear. But you know, again, 237 00:10:43,440 --> 00:10:46,040 Speaker 1: if that's something you want to build into your financial 238 00:10:46,080 --> 00:10:49,320 Speaker 1: plan as a client out there that has wealth, you know, 239 00:10:49,440 --> 00:10:52,000 Speaker 1: has assets, and thinks your social security is going to 240 00:10:52,040 --> 00:10:55,080 Speaker 1: go away, Yeah, you run a scenario and say, hey, 241 00:10:55,240 --> 00:10:57,880 Speaker 1: let's look at you know, scenario one where there is 242 00:10:57,960 --> 00:11:02,960 Speaker 1: social security full own social security, scenario B cut the 243 00:11:03,000 --> 00:11:06,600 Speaker 1: benefits back by twenty percent, or scenario C make it zero. 244 00:11:07,040 --> 00:11:09,559 Speaker 1: You know, run it both all three ways, and then 245 00:11:09,640 --> 00:11:12,640 Speaker 1: people can at least plan accordingly based on what their 246 00:11:12,960 --> 00:11:16,640 Speaker 1: presuppositions or assumptions are. I mean, obviously you and I 247 00:11:16,679 --> 00:11:18,440 Speaker 1: aren't going to be able to fix this problem. What 248 00:11:18,520 --> 00:11:20,839 Speaker 1: we can is do the best we can to plan 249 00:11:21,040 --> 00:11:24,320 Speaker 1: around it while all this uncertainty is out there. 250 00:11:24,720 --> 00:11:26,920 Speaker 3: Yeah, and one of the things that you know to 251 00:11:27,000 --> 00:11:29,200 Speaker 3: consider is a tool that's already out there in terms 252 00:11:29,240 --> 00:11:31,800 Speaker 3: of Wroth conversions. Right, So one of the solutions may be, 253 00:11:32,240 --> 00:11:34,560 Speaker 3: as we talked about, we may need to increase tax 254 00:11:34,600 --> 00:11:36,960 Speaker 3: income taxes to cover some of these bills, not just 255 00:11:37,040 --> 00:11:39,240 Speaker 3: Social Security, but some other bills we have floating around 256 00:11:39,240 --> 00:11:42,040 Speaker 3: here too. So Roth conversions kind of come to the 257 00:11:42,080 --> 00:11:44,440 Speaker 3: forefront as a way to protect dollars that you have 258 00:11:44,520 --> 00:11:47,280 Speaker 3: probably spent three or four decades building up on a 259 00:11:47,280 --> 00:11:50,679 Speaker 3: pre tax account, and so you may consider in these 260 00:11:50,720 --> 00:11:53,319 Speaker 3: lower tax years, and we talk about this frequently, maybe 261 00:11:53,600 --> 00:11:56,480 Speaker 3: taking some of your investments that are outside of a 262 00:11:56,559 --> 00:11:58,760 Speaker 3: four toh one K type strategy and using that to 263 00:11:58,800 --> 00:12:02,559 Speaker 3: pay taxes to protect from that day forward any pre 264 00:12:02,640 --> 00:12:05,120 Speaker 3: tax dollars by moving them onto the raw side. Very 265 00:12:05,160 --> 00:12:07,880 Speaker 3: much a math problem, very much a sacrifice upfront in 266 00:12:07,920 --> 00:12:10,720 Speaker 3: exchange for a benefit later. But you should really be 267 00:12:10,800 --> 00:12:13,480 Speaker 3: looking at those numbers if you're worried about the impact 268 00:12:13,480 --> 00:12:14,920 Speaker 3: that increased taxation could have. 269 00:12:15,720 --> 00:12:18,720 Speaker 1: Excellent thought. Here's the all Worth advice. While we can't 270 00:12:18,720 --> 00:12:23,480 Speaker 1: control Congress, we can control our own planning. Run the numbers, 271 00:12:23,800 --> 00:12:27,440 Speaker 1: stress test the assumptions, build some flexibility in your plan 272 00:12:27,600 --> 00:12:31,720 Speaker 1: because your retirement security should not be at the mercy 273 00:12:31,840 --> 00:12:36,880 Speaker 1: of political gridlock. Strategies once reserved for the few are 274 00:12:36,920 --> 00:12:41,040 Speaker 1: now going mainstream. Is that opportunity or just hype? We'll 275 00:12:41,040 --> 00:12:43,800 Speaker 1: explain next. You're listening to Simply Money presented by all 276 00:12:43,840 --> 00:12:52,320 Speaker 1: Worth Financial on fifty five KRC, the talk station. You're 277 00:12:52,320 --> 00:12:54,959 Speaker 1: listening to Simply Money presented by all Worth Financial on 278 00:12:55,080 --> 00:12:58,480 Speaker 1: Bob Sponseller along with Brian James. If you can't listen 279 00:12:58,480 --> 00:13:01,920 Speaker 1: to Simply Money live every night, go ahead and subscribe 280 00:13:02,000 --> 00:13:05,080 Speaker 1: and get our daily podcasts. Just search Simply Money on 281 00:13:05,160 --> 00:13:09,559 Speaker 1: the iHeart app or wherever you find your podcast. Are 282 00:13:09,600 --> 00:13:14,160 Speaker 1: you actually diversified or just simply riding a bull market? Plus, 283 00:13:14,640 --> 00:13:18,600 Speaker 1: if your portfolio has grown, are you taking more risk 284 00:13:18,720 --> 00:13:21,319 Speaker 1: right now than maybe you think you are? Well answering 285 00:13:21,480 --> 00:13:25,640 Speaker 1: those questions and more straight ahead at six forty three, Well, 286 00:13:25,679 --> 00:13:28,599 Speaker 1: Blackrock and some other asset managers are rolling out a 287 00:13:28,640 --> 00:13:32,520 Speaker 1: whole new wave of ets designed to build hedge fund 288 00:13:32,679 --> 00:13:36,760 Speaker 1: like strategies for the masses. Think long short equity, managed 289 00:13:36,840 --> 00:13:41,319 Speaker 1: futures options overlays, strategies that used to be reserved for 290 00:13:41,520 --> 00:13:46,040 Speaker 1: institutional and high net worth investors only. And so these 291 00:13:46,040 --> 00:13:47,960 Speaker 1: tools are going to be, you know, coming out for 292 00:13:48,040 --> 00:13:52,319 Speaker 1: everybody to use. But does this actually improve your portfolio 293 00:13:52,559 --> 00:13:56,160 Speaker 1: or does it just add complexity and possibly fees. Brian, 294 00:13:56,240 --> 00:13:57,200 Speaker 1: let's get into this one. 295 00:13:57,800 --> 00:14:00,120 Speaker 3: Well, let's look at what's actually going on here, right, 296 00:14:00,160 --> 00:14:05,200 Speaker 3: So there's details coming out now based on there. For example, 297 00:14:05,200 --> 00:14:07,720 Speaker 3: where hedge funds used to be, so for a long time, 298 00:14:07,720 --> 00:14:10,240 Speaker 3: hedge funds were able to charge higher fees and right, so, 299 00:14:10,280 --> 00:14:12,880 Speaker 3: hedge funds often charge a two percent or more management feed, 300 00:14:12,920 --> 00:14:14,280 Speaker 3: plus they'll take twenty percent. 301 00:14:14,080 --> 00:14:14,720 Speaker 2: Of the profits. 302 00:14:15,280 --> 00:14:17,680 Speaker 3: But they do this by providing some unique features such 303 00:14:17,679 --> 00:14:21,080 Speaker 3: as downside protection, returns that aren't correlated with the market, 304 00:14:21,160 --> 00:14:23,600 Speaker 3: so purporting to be a little bit more asset allocated, 305 00:14:24,000 --> 00:14:28,720 Speaker 3: more diversified, some tactical flexibility, and access to sophisticated strategies 306 00:14:28,760 --> 00:14:31,400 Speaker 3: that aren't available in your standard mutual funds and exchange 307 00:14:31,400 --> 00:14:34,840 Speaker 3: traded funds. So asset managers are now basically saying, well, 308 00:14:34,880 --> 00:14:36,680 Speaker 3: we can do that kind of stuff in an ETF 309 00:14:36,720 --> 00:14:39,600 Speaker 3: for a lot cheaper than we used to one percent 310 00:14:39,680 --> 00:14:41,880 Speaker 3: or less. And they are right about a few things. 311 00:14:41,920 --> 00:14:43,960 Speaker 3: An exchange traded fund, We've talked about them on these 312 00:14:44,000 --> 00:14:47,920 Speaker 3: airwaves frequently. Exchange traded funds are our preferred method of 313 00:14:47,920 --> 00:14:51,400 Speaker 3: asset allocation. That's a great way, a good, cost effective 314 00:14:51,440 --> 00:14:54,080 Speaker 3: way to get access to large chunks of the market 315 00:14:54,480 --> 00:14:56,680 Speaker 3: across lots of things. And normally, you know when we 316 00:14:56,800 --> 00:15:00,400 Speaker 3: think of exchange traded funds, where think of index based investments, Well, 317 00:15:00,400 --> 00:15:04,080 Speaker 3: we're basically saying now that exchange traded funds can be 318 00:15:04,160 --> 00:15:06,440 Speaker 3: used to wrap up a lot of different types of strategies. 319 00:15:06,840 --> 00:15:10,040 Speaker 3: The ETFs are more tax efficient. They are because of 320 00:15:10,080 --> 00:15:12,360 Speaker 3: the way they are run. A share of an ETF, 321 00:15:12,400 --> 00:15:14,680 Speaker 3: although it is a diversified item that owns a bunch 322 00:15:14,720 --> 00:15:17,440 Speaker 3: of other things under the hood, similar to a mutual fund, 323 00:15:18,760 --> 00:15:22,840 Speaker 3: those items are purchased as soon as that asset, that 324 00:15:22,960 --> 00:15:26,080 Speaker 3: share of the ETF is purchased in an individual client's account, 325 00:15:26,280 --> 00:15:29,440 Speaker 3: versus an open ended mutual fund, where that client inherits 326 00:15:29,440 --> 00:15:32,840 Speaker 3: the cost basis of something that may have been purchased 327 00:15:32,840 --> 00:15:36,080 Speaker 3: thirty years ago, even though the shareholder, the new investor, 328 00:15:36,400 --> 00:15:38,720 Speaker 3: just bought the fund a few months ago. So ETFs 329 00:15:38,760 --> 00:15:41,840 Speaker 3: are very much more tax efficient than that daily liquidity. 330 00:15:41,840 --> 00:15:43,920 Speaker 2: They trade all day every day. A mutual fund. 331 00:15:43,960 --> 00:15:45,520 Speaker 3: If we want to buy or sell it, we get 332 00:15:45,520 --> 00:15:48,480 Speaker 3: that done at four o'clock in the afternoon. An exchange 333 00:15:48,480 --> 00:15:51,320 Speaker 3: traded fund happens at ten thirty two in the morning 334 00:15:51,400 --> 00:15:53,440 Speaker 3: or one thirty six PM, or whenever that trade is 335 00:15:53,440 --> 00:15:56,320 Speaker 3: actually placed in the account. So those are the different details. 336 00:15:56,320 --> 00:15:58,280 Speaker 3: That's been true for ets for a long time. But 337 00:15:58,400 --> 00:16:00,240 Speaker 3: now all of a sudden, we've got the ability to 338 00:16:00,320 --> 00:16:04,360 Speaker 3: do these more complicated strategies inside that ETF wrapper with 339 00:16:04,440 --> 00:16:06,440 Speaker 3: all of the benefits the dtfs have already brought. 340 00:16:07,680 --> 00:16:09,480 Speaker 1: Yeah, you know, for a lot of folks, when we're 341 00:16:09,520 --> 00:16:13,200 Speaker 1: talking about hedge funds and things like that, long short strategies, 342 00:16:13,720 --> 00:16:16,920 Speaker 1: what most people are thinking about, or the reason they're 343 00:16:17,040 --> 00:16:21,400 Speaker 1: using these is to buffer some investment risk in their portfolio. 344 00:16:21,480 --> 00:16:23,680 Speaker 1: And Brian, you and I have been talking about this 345 00:16:23,760 --> 00:16:27,520 Speaker 1: for months now. You know, the concentration in the S 346 00:16:27,560 --> 00:16:30,640 Speaker 1: and P five hundred broad index to those MAG thirty stocks, 347 00:16:30,640 --> 00:16:34,160 Speaker 1: and we're actually seeing that come to fruition so far 348 00:16:34,360 --> 00:16:37,680 Speaker 1: in twenty twenty six, where the MAG seven stocks have 349 00:16:37,840 --> 00:16:41,320 Speaker 1: kind of flatlined for about six months, and so, you know, 350 00:16:41,360 --> 00:16:44,240 Speaker 1: with a lot of volatility in between, and so people 351 00:16:44,240 --> 00:16:48,160 Speaker 1: are looking for ways to benefit from certain stocks going 352 00:16:48,240 --> 00:16:51,200 Speaker 1: up and benefit from certain stocks going down. So I 353 00:16:51,240 --> 00:16:53,920 Speaker 1: think it's important to define what we're talking about here. 354 00:16:54,040 --> 00:16:57,480 Speaker 1: When we talk about a quote unquote hedge fund or 355 00:16:57,600 --> 00:17:01,640 Speaker 1: long short strategy, you are literally placing bets or the 356 00:17:01,680 --> 00:17:05,080 Speaker 1: manager of the ETF is placing bets in the fund 357 00:17:05,160 --> 00:17:07,480 Speaker 1: saying hey, we think this stock is going to go down, 358 00:17:08,080 --> 00:17:10,919 Speaker 1: and it's a way to profit from that stock going 359 00:17:10,960 --> 00:17:14,640 Speaker 1: down if the overall market goes down, and that can 360 00:17:14,760 --> 00:17:19,720 Speaker 1: tend offset if managed properly, just an all long, all 361 00:17:19,800 --> 00:17:23,360 Speaker 1: index strategy where you know, you introduce a lot of volatility. 362 00:17:23,400 --> 00:17:27,040 Speaker 1: The problem is most of the time when people guess 363 00:17:27,200 --> 00:17:31,320 Speaker 1: or plan or bet on stocks going down, it's a 364 00:17:31,400 --> 00:17:33,919 Speaker 1: dangerous game because you know, as we all know, the 365 00:17:33,960 --> 00:17:37,400 Speaker 1: stock market over a long periods of time goes up, 366 00:17:37,640 --> 00:17:40,439 Speaker 1: not down. And so you better have a manager that 367 00:17:40,520 --> 00:17:46,000 Speaker 1: can exit those those hedge fund or short strategies quickly 368 00:17:46,119 --> 00:17:49,679 Speaker 1: and pivot when the market turns around. There are people 369 00:17:49,720 --> 00:17:53,600 Speaker 1: that can do it, those tend to be far few 370 00:17:53,640 --> 00:17:56,679 Speaker 1: and far between, And Brian, when I look at the 371 00:17:56,720 --> 00:18:00,000 Speaker 1: actual returns you know, long term from some of these 372 00:18:00,119 --> 00:18:02,480 Speaker 1: funds that I've looked at over years, if you net 373 00:18:02,480 --> 00:18:07,040 Speaker 1: it out for fees, it might feel good to you know, 374 00:18:07,160 --> 00:18:10,040 Speaker 1: to think that you're managing your risk, but the overall 375 00:18:10,080 --> 00:18:11,879 Speaker 1: return at the end of the day, you'd have been 376 00:18:11,920 --> 00:18:14,600 Speaker 1: better off just staying in a plain old, you know, 377 00:18:14,720 --> 00:18:18,720 Speaker 1: good asset allocation strategy with stocks and bonds and diversified. 378 00:18:19,000 --> 00:18:21,400 Speaker 1: It usually always comes out better that way. 379 00:18:21,800 --> 00:18:23,560 Speaker 3: Yeah, I think I think more often than that I'd 380 00:18:23,560 --> 00:18:25,800 Speaker 3: say it in the past, it has always come out 381 00:18:25,840 --> 00:18:27,679 Speaker 3: that way. If you're not somebody who would have panicked 382 00:18:27,680 --> 00:18:30,359 Speaker 3: when the market drops, then you don't necessarily need these things. 383 00:18:30,880 --> 00:18:32,760 Speaker 2: They can be kind of gimmicky. There are there are 384 00:18:32,800 --> 00:18:33,960 Speaker 2: reasons that exist, there are. 385 00:18:33,880 --> 00:18:36,520 Speaker 3: Portfolio managers who will use them, but the big question 386 00:18:36,600 --> 00:18:38,200 Speaker 3: is do we actually need this stuff? 387 00:18:38,880 --> 00:18:41,520 Speaker 2: Is so, and like Bob says, if we've got. 388 00:18:41,440 --> 00:18:44,919 Speaker 3: A plan in place, you know, and we are comfortable 389 00:18:44,960 --> 00:18:47,080 Speaker 3: that we've got the ability to cover our needs in 390 00:18:47,119 --> 00:18:48,960 Speaker 3: the next you know, let's say twelve to maybe twenty 391 00:18:48,960 --> 00:18:51,600 Speaker 3: four months, maybe there's enough cash on the sidelines, or 392 00:18:51,640 --> 00:18:54,439 Speaker 3: we've got income coming in from pensions, social security, whatever, 393 00:18:54,640 --> 00:18:56,520 Speaker 3: and those are going to cover those needs, then there 394 00:18:56,560 --> 00:18:58,879 Speaker 3: isn't much concern that the market might. 395 00:18:58,720 --> 00:19:00,000 Speaker 2: Take a hit over a couple of years. 396 00:19:00,200 --> 00:19:01,639 Speaker 3: Yes, there's always going to be the two thousand and 397 00:19:01,640 --> 00:19:04,600 Speaker 3: eight type scenarios, but there's really only five years in 398 00:19:04,680 --> 00:19:07,360 Speaker 3: the last eighty that are like that. We've seen two 399 00:19:07,400 --> 00:19:09,480 Speaker 3: of them in the last twenty years, really three of them, 400 00:19:10,080 --> 00:19:12,200 Speaker 3: so we've been through it before, you've seen it before. 401 00:19:12,320 --> 00:19:13,359 Speaker 2: There's no need to panic. 402 00:19:13,400 --> 00:19:15,360 Speaker 3: As long as you can take a breath and make 403 00:19:15,440 --> 00:19:17,119 Speaker 3: and make sure your things are covered up, then you 404 00:19:17,119 --> 00:19:18,160 Speaker 3: don't really need to worry too. 405 00:19:18,119 --> 00:19:20,600 Speaker 1: Much about Brian, I do want to call out one 406 00:19:20,720 --> 00:19:23,800 Speaker 1: situation where I think it does make sense to introduce 407 00:19:23,840 --> 00:19:26,399 Speaker 1: some hedging into your portfolio, and that's the folks that 408 00:19:26,480 --> 00:19:29,879 Speaker 1: are sitting out there with a highly concentrated position in 409 00:19:29,960 --> 00:19:33,720 Speaker 1: any public company. And we've talked about that often. Here's 410 00:19:33,760 --> 00:19:37,480 Speaker 1: where you can buy some put protection. You can buy collars, 411 00:19:37,560 --> 00:19:39,800 Speaker 1: you know, sell an out of the money call buy 412 00:19:39,800 --> 00:19:44,600 Speaker 1: a downside protected put to protect that large concentrated position 413 00:19:45,000 --> 00:19:49,040 Speaker 1: while you're responsibly diversifying out of it and managing your 414 00:19:49,080 --> 00:19:51,919 Speaker 1: taxes in the process. But that's different than some of 415 00:19:51,960 --> 00:19:54,919 Speaker 1: these long short ETFs. All right, here's the all Worth advice. 416 00:19:55,000 --> 00:19:59,000 Speaker 1: Hedge fund strategies in an ETF. They're sure, for sure interesting, 417 00:19:59,600 --> 00:20:02,760 Speaker 1: but if you get involved, keep it small and never 418 00:20:02,920 --> 00:20:07,600 Speaker 1: use that as a replacement for your core portfolio. Is 419 00:20:07,600 --> 00:20:12,320 Speaker 1: there anything we can be doing out there to add value, 420 00:20:12,560 --> 00:20:15,280 Speaker 1: you know, in our for ourselves in terms of value 421 00:20:15,320 --> 00:20:18,399 Speaker 1: we bring to an employer in a world where people 422 00:20:18,520 --> 00:20:22,000 Speaker 1: are some people are just completely freaking out that AI 423 00:20:22,320 --> 00:20:25,040 Speaker 1: is going to eliminate their jobs. We're going to attempt 424 00:20:25,080 --> 00:20:27,919 Speaker 1: to tackle that. Next. You're listening to Simply Money presented 425 00:20:27,960 --> 00:20:31,399 Speaker 1: by all Worth Financial on fifty five KRC the talk station. 426 00:20:36,480 --> 00:20:39,200 Speaker 1: You're listening to Simply Money presented by all Worth Financial. 427 00:20:39,520 --> 00:20:42,760 Speaker 1: I'm Bob Sponseller, joined tonight by our good friend of 428 00:20:42,800 --> 00:20:46,560 Speaker 1: the show and career expert Julie Balki. Julie, thank you 429 00:20:46,600 --> 00:20:49,879 Speaker 1: as always for making time for us tonight, and uh 430 00:20:49,960 --> 00:20:53,680 Speaker 1: let's get into a topic that seems to be everywhere now. 431 00:20:53,760 --> 00:20:57,520 Speaker 1: I'm sure front of mind for a lot of your clients, 432 00:20:57,680 --> 00:20:59,920 Speaker 1: and I'm sure you're getting a lot of questions about it. 433 00:21:00,000 --> 00:21:03,840 Speaker 1: It's the whole topic of AI and its threat on 434 00:21:03,920 --> 00:21:07,440 Speaker 1: the job market. So that's what we want to talk 435 00:21:07,480 --> 00:21:09,439 Speaker 1: about tonight. And I know you're loaded for bear with 436 00:21:09,480 --> 00:21:11,119 Speaker 1: a lot of good information. 437 00:21:10,760 --> 00:21:12,720 Speaker 2: So let's start off. 438 00:21:12,840 --> 00:21:16,320 Speaker 1: Let's let's eliminate some of the headlines and what I'll 439 00:21:16,359 --> 00:21:19,480 Speaker 1: say fear out there, and I want to know you know, 440 00:21:19,600 --> 00:21:23,080 Speaker 1: from your experience talking to actual clients, what's going on 441 00:21:23,080 --> 00:21:24,680 Speaker 1: on the actual ground out there. 442 00:21:24,720 --> 00:21:25,800 Speaker 2: What are you hearing. 443 00:21:25,560 --> 00:21:28,800 Speaker 1: Most about, what are your clients coming to you for 444 00:21:28,920 --> 00:21:29,480 Speaker 1: help with? 445 00:21:30,040 --> 00:21:31,280 Speaker 2: And what what? 446 00:21:30,720 --> 00:21:30,760 Speaker 4: What? 447 00:21:31,040 --> 00:21:35,200 Speaker 1: What's reality here in February of twenty twenty six as 448 00:21:35,200 --> 00:21:36,879 Speaker 1: it stands today regarding AI. 449 00:21:37,080 --> 00:21:40,280 Speaker 4: So let's start with a cautionary tale. Probably fifteen years 450 00:21:40,280 --> 00:21:44,000 Speaker 4: ago or more might have been like in the early 451 00:21:44,040 --> 00:21:46,120 Speaker 4: two thousands, I had a client. This was an attorney 452 00:21:46,119 --> 00:21:49,000 Speaker 4: who just lost his job. His company was sold, and 453 00:21:49,040 --> 00:21:51,080 Speaker 4: he was of retirement age and had the means to 454 00:21:51,080 --> 00:21:53,040 Speaker 4: do so. And he came in with his legal pad 455 00:21:53,560 --> 00:21:55,720 Speaker 4: and he said to me, if I have to use 456 00:21:55,800 --> 00:21:58,520 Speaker 4: a computer in my next job, I'm going to retire. 457 00:21:59,280 --> 00:22:02,720 Speaker 4: And I said, okay, well, then happy retirement. And so 458 00:22:03,119 --> 00:22:06,760 Speaker 4: I think the cautionary tale is it's very easy when 459 00:22:06,800 --> 00:22:09,320 Speaker 4: you get to a certain age or level in your 460 00:22:09,359 --> 00:22:12,400 Speaker 4: career to say, I don't need to know this stuff, 461 00:22:12,960 --> 00:22:15,280 Speaker 4: but you if you still need to work, if you're 462 00:22:15,320 --> 00:22:18,359 Speaker 4: like my former client, have at it. But if you 463 00:22:18,480 --> 00:22:21,560 Speaker 4: still need to work, you cannot put your hands over 464 00:22:21,600 --> 00:22:25,159 Speaker 4: your ears. And that's the biggest mistake that people are making. 465 00:22:25,600 --> 00:22:30,760 Speaker 4: They're so worried about AI taking their job that they're 466 00:22:30,880 --> 00:22:35,520 Speaker 4: missing what is really the call here, which is learn 467 00:22:35,560 --> 00:22:39,239 Speaker 4: how to use it to make you more effective in 468 00:22:39,280 --> 00:22:43,919 Speaker 4: your job and instead of saying I'm not going to 469 00:22:44,080 --> 00:22:47,560 Speaker 4: do it. And so that's I think the lesson AI 470 00:22:47,800 --> 00:22:52,120 Speaker 4: can make your can make you more efficient, can make 471 00:22:52,160 --> 00:22:54,080 Speaker 4: if you use the right way, it can make you 472 00:22:54,119 --> 00:22:57,680 Speaker 4: more effective, and it can make you more valuable at work. 473 00:22:57,800 --> 00:23:00,639 Speaker 4: Because if you come across in any way, shape or 474 00:23:00,680 --> 00:23:04,720 Speaker 4: form as a I don't want to do that, I'm 475 00:23:04,720 --> 00:23:06,840 Speaker 4: not going to learn that, then you will be on 476 00:23:06,880 --> 00:23:10,760 Speaker 4: the layoff list. So let's let's start with a smart 477 00:23:10,880 --> 00:23:11,800 Speaker 4: thing you can do. 478 00:23:12,840 --> 00:23:13,960 Speaker 2: Yeah, no, let's get into it. 479 00:23:14,080 --> 00:23:14,280 Speaker 4: Yep. 480 00:23:15,119 --> 00:23:17,560 Speaker 2: No. I just listening to you tell that story about 481 00:23:17,600 --> 00:23:18,320 Speaker 2: your older. 482 00:23:18,080 --> 00:23:21,919 Speaker 1: Client, you know, I I'm just laughing because you know, 483 00:23:22,080 --> 00:23:25,879 Speaker 1: that's kind of become me. In twenty twenty six, meaning uh, 484 00:23:25,960 --> 00:23:28,080 Speaker 1: thirty five years ago when I got started in this. 485 00:23:28,119 --> 00:23:29,160 Speaker 2: Business, Julie. 486 00:23:29,359 --> 00:23:32,680 Speaker 1: Literally, you know, in the financial planning business, the Internet 487 00:23:32,880 --> 00:23:36,080 Speaker 1: had really just started to become. 488 00:23:36,359 --> 00:23:38,520 Speaker 2: You know, ubiquitous necessary. 489 00:23:38,600 --> 00:23:41,720 Speaker 1: Meaning literally the year I started is when they put 490 00:23:41,760 --> 00:23:45,480 Speaker 1: personal computers on everybody's desk and we were introduced to 491 00:23:45,520 --> 00:23:48,919 Speaker 1: the Internet. And to your point, you know I was 492 00:23:48,960 --> 00:23:52,160 Speaker 1: only twenty six back then, the person that was sixty 493 00:23:52,200 --> 00:23:54,880 Speaker 1: six if they said, hey, I don't want to touch. 494 00:23:54,680 --> 00:23:55,240 Speaker 2: This use it. 495 00:23:56,280 --> 00:23:58,359 Speaker 1: I want to keep you know, writing things down with 496 00:23:58,400 --> 00:24:00,639 Speaker 1: a pencil on a piece of paper. Yeah, you get 497 00:24:00,760 --> 00:24:03,840 Speaker 1: left behind real quick. And that was only thirty five 498 00:24:03,920 --> 00:24:07,080 Speaker 1: years ago. So let's move into what I know you 499 00:24:07,080 --> 00:24:08,760 Speaker 1: want to talk about. What do we need to do 500 00:24:08,840 --> 00:24:13,119 Speaker 1: here to make sure we're adding value, staying relevant to 501 00:24:13,280 --> 00:24:16,600 Speaker 1: our employers and our businesses and think of AI as 502 00:24:16,600 --> 00:24:20,520 Speaker 1: a positive to help advance our career rather than threaten 503 00:24:20,560 --> 00:24:21,000 Speaker 1: our career. 504 00:24:22,560 --> 00:24:24,399 Speaker 4: So the first thing you want to think about is 505 00:24:24,640 --> 00:24:26,560 Speaker 4: you have to start what I did was and you 506 00:24:26,560 --> 00:24:28,680 Speaker 4: know I'm of that age. I start using it for 507 00:24:28,800 --> 00:24:33,320 Speaker 4: personal things. Plan a weekend for a woman of my 508 00:24:33,400 --> 00:24:36,960 Speaker 4: age who's traveling alone with the dog, who likes this, this, 509 00:24:37,119 --> 00:24:40,240 Speaker 4: and this. So jump in, get on perplexity, chat, GPT 510 00:24:40,880 --> 00:24:44,880 Speaker 4: and tropic, you know, any of the platforms, the big platforms, 511 00:24:45,240 --> 00:24:50,240 Speaker 4: and start using it for yourself and start understanding what 512 00:24:50,320 --> 00:24:53,240 Speaker 4: the power of it is. And so we can't utilize 513 00:24:53,240 --> 00:24:58,400 Speaker 4: what we don't understand. So I started with simple personal use, 514 00:24:59,160 --> 00:25:01,440 Speaker 4: just to see how powerful it was, and it blew 515 00:25:01,480 --> 00:25:05,040 Speaker 4: me away. I mean, Bob I went in there and said, 516 00:25:05,119 --> 00:25:07,920 Speaker 4: tell me about Julie Balki and what she believes. I'm 517 00:25:07,920 --> 00:25:09,600 Speaker 4: going to tell you what they came back with. I 518 00:25:09,640 --> 00:25:12,560 Speaker 4: was like, oh my gosh, that's me exactly, and they 519 00:25:12,600 --> 00:25:15,440 Speaker 4: said it better than I did. Number one. Number two, 520 00:25:15,920 --> 00:25:19,760 Speaker 4: you don't have to learn it all. Figure out how 521 00:25:19,840 --> 00:25:25,080 Speaker 4: AI is currently being used in your profession and or 522 00:25:25,119 --> 00:25:28,959 Speaker 4: your industry. So if you're a claims you know, if 523 00:25:28,960 --> 00:25:31,119 Speaker 4: you're a VP of claims, if you're you know, an 524 00:25:31,240 --> 00:25:35,720 Speaker 4: SVP of it, or you know or marketing, how's it 525 00:25:35,720 --> 00:25:38,280 Speaker 4: already being used? To figure out what are the core 526 00:25:38,400 --> 00:25:41,679 Speaker 4: tools in your world? And just start there. You know, 527 00:25:41,760 --> 00:25:45,119 Speaker 4: you don't have to know everything. Take the initiative to 528 00:25:45,160 --> 00:25:51,480 Speaker 4: go online and attend webinars, attend conferences, talk to other 529 00:25:51,560 --> 00:25:53,320 Speaker 4: people who might be a little bit younger than you. 530 00:25:53,359 --> 00:25:57,320 Speaker 4: Put together, are more technically savvy than you. Put together 531 00:25:57,359 --> 00:26:00,560 Speaker 4: a little task force in your company of people that 532 00:26:00,640 --> 00:26:04,119 Speaker 4: are excited about this, and give them the responsibility to 533 00:26:04,119 --> 00:26:06,120 Speaker 4: go out and learn some things and bring it back 534 00:26:06,160 --> 00:26:09,240 Speaker 4: and teach others. And then when you look at so 535 00:26:09,600 --> 00:26:12,320 Speaker 4: what the mistake people are making is This is a 536 00:26:12,359 --> 00:26:16,520 Speaker 4: mistake of who says I'm going to I'm going to 537 00:26:16,640 --> 00:26:18,639 Speaker 4: just put some questions in and then I'm going to 538 00:26:18,720 --> 00:26:20,680 Speaker 4: take the answers that's back and I'm just going to 539 00:26:20,760 --> 00:26:22,919 Speaker 4: use those. This is where people are getting in trouble. 540 00:26:23,480 --> 00:26:26,840 Speaker 4: So think of it this way. It's a consolidator, it's 541 00:26:26,880 --> 00:26:31,639 Speaker 4: a thought prompter's it can do some roade thinking, it 542 00:26:31,680 --> 00:26:34,400 Speaker 4: can connect dots, it can bring you back some information. 543 00:26:34,920 --> 00:26:37,480 Speaker 4: But the value that a human being as is what 544 00:26:37,640 --> 00:26:41,000 Speaker 4: you do with that. And so it allows you to 545 00:26:41,040 --> 00:26:45,000 Speaker 4: get into your highest and best use, getting away from 546 00:26:45,480 --> 00:26:48,800 Speaker 4: the roat sort of routine things and getting into how 547 00:26:48,840 --> 00:26:50,359 Speaker 4: do I take what I've learned? In other words, how 548 00:26:50,359 --> 00:26:53,399 Speaker 4: do I speed up the stuff that is you know 549 00:26:53,440 --> 00:26:58,840 Speaker 4: that's repetitive or predictable that I can then get good information? 550 00:26:59,119 --> 00:27:01,280 Speaker 4: Now what do I do with it? And that's where 551 00:27:01,800 --> 00:27:05,600 Speaker 4: you stay valuable is that human element, because right now 552 00:27:05,960 --> 00:27:10,800 Speaker 4: AI is not able to say and then what and 553 00:27:10,920 --> 00:27:15,520 Speaker 4: apply it to your company, your department, your situation. And 554 00:27:15,600 --> 00:27:17,720 Speaker 4: so the lazy way is to just let it do 555 00:27:17,800 --> 00:27:19,480 Speaker 4: all the work, and that is going to get you 556 00:27:19,520 --> 00:27:22,520 Speaker 4: in trouble because then that proves they really don't need to. 557 00:27:23,680 --> 00:27:25,639 Speaker 2: Yeah, and that's consistent with what I'm hearing. 558 00:27:25,680 --> 00:27:28,040 Speaker 1: You know, for folks in their forties and fifties that 559 00:27:28,200 --> 00:27:30,720 Speaker 1: have the knowledge that can actually sit in front of 560 00:27:30,800 --> 00:27:33,720 Speaker 1: a client or customer and actually look them in the 561 00:27:33,720 --> 00:27:37,600 Speaker 1: eye and communicate AI just really makes those people more 562 00:27:37,640 --> 00:27:42,440 Speaker 1: efficient that already have that experience in those quote unquote 563 00:27:42,480 --> 00:27:46,320 Speaker 1: soft skills. Talk about advice to the younger folks that 564 00:27:46,359 --> 00:27:49,440 Speaker 1: are just and I don't want to overgeneralize, but people 565 00:27:49,520 --> 00:27:52,240 Speaker 1: that are just glued to their screens on their phones 566 00:27:52,280 --> 00:27:55,840 Speaker 1: and maybe don't have a lot of experience actually dealing 567 00:27:55,920 --> 00:27:58,800 Speaker 1: with other human beings face to face. What is your 568 00:27:58,840 --> 00:28:01,600 Speaker 1: critical advice to folks maybe in their twenties or thirties 569 00:28:01,640 --> 00:28:03,720 Speaker 1: that are trying to get started, you. 570 00:28:03,720 --> 00:28:06,920 Speaker 4: Know, don't the mistake younger people will make is they 571 00:28:06,920 --> 00:28:10,440 Speaker 4: will rely on the fact that they are more adept 572 00:28:10,920 --> 00:28:14,000 Speaker 4: at utilizing technology at work than older generations are. But 573 00:28:14,040 --> 00:28:17,000 Speaker 4: that is a very bad long term career strategy because 574 00:28:17,040 --> 00:28:19,640 Speaker 4: that's going to catch up with you because you're going 575 00:28:19,680 --> 00:28:22,440 Speaker 4: to be just one of one of many soon as 576 00:28:22,520 --> 00:28:25,800 Speaker 4: more older people retire. And so what companies are saying 577 00:28:26,000 --> 00:28:29,560 Speaker 4: is they want two things. They want the ability to 578 00:28:29,880 --> 00:28:31,960 Speaker 4: jump in love the ability and willingness to jump in 579 00:28:32,000 --> 00:28:36,879 Speaker 4: and learn, for the agility, the ability to utilize technology 580 00:28:37,440 --> 00:28:40,080 Speaker 4: for the company's benefit and for your benefit in doing 581 00:28:40,120 --> 00:28:43,440 Speaker 4: your job, but also how do you problem solve? How 582 00:28:43,480 --> 00:28:46,080 Speaker 4: do you connect with others? What's your emotional intelligence like? 583 00:28:46,120 --> 00:28:48,680 Speaker 4: How do you communicate? What are your presentation skills like? 584 00:28:48,720 --> 00:28:51,200 Speaker 4: What are your writing skills like? So it's this funny 585 00:28:51,200 --> 00:28:54,760 Speaker 4: world we're in now where you have to be somewhat 586 00:28:54,800 --> 00:28:57,880 Speaker 4: comfortable with technology, and you have to be willing to 587 00:28:57,920 --> 00:29:01,840 Speaker 4: get more comfortable. Bigger than that, you also have to 588 00:29:01,880 --> 00:29:05,240 Speaker 4: be really good at what we've always called those saft skills, 589 00:29:05,480 --> 00:29:08,000 Speaker 4: and what employers are saying now is those really aren't 590 00:29:08,040 --> 00:29:11,880 Speaker 4: soft skills anymore. Those are the most valuable skills, And 591 00:29:11,960 --> 00:29:15,600 Speaker 4: so younger people have to start investing in how do 592 00:29:15,720 --> 00:29:19,400 Speaker 4: I communicate, show up, make eye contests with deliver bad news, 593 00:29:19,400 --> 00:29:21,520 Speaker 4: deliver good news, sit in a room with people, and 594 00:29:21,560 --> 00:29:24,560 Speaker 4: do the kind of human stuff that the younger generation 595 00:29:24,680 --> 00:29:28,080 Speaker 4: is often criticized for being really really light on to 596 00:29:28,120 --> 00:29:29,520 Speaker 4: their own destriments. 597 00:29:30,040 --> 00:29:32,000 Speaker 1: Yeah, we're gonna have to leave it there for tonight, Julie, 598 00:29:32,040 --> 00:29:34,320 Speaker 1: but thank you so much for that great advice and 599 00:29:34,400 --> 00:29:37,000 Speaker 1: for taking time to be with us Tonight, you're listening 600 00:29:37,000 --> 00:29:39,600 Speaker 1: to Simply Money presented by all Worth Financial on fifty 601 00:29:39,600 --> 00:29:47,640 Speaker 1: five KRC, the talk station. You're listening to Simply Money 602 00:29:47,720 --> 00:29:50,280 Speaker 1: presented by all Worth Financial on Bob's Fun Seller along 603 00:29:50,320 --> 00:29:53,120 Speaker 1: with Brian James. Do you have a financial question you'd 604 00:29:53,200 --> 00:29:55,960 Speaker 1: like for us to answer? There's a red button you 605 00:29:56,000 --> 00:29:58,800 Speaker 1: can click. As always if you're listening to the show 606 00:29:58,960 --> 00:30:02,440 Speaker 1: on the iHeart app, just record your question there and 607 00:30:02,480 --> 00:30:04,000 Speaker 1: it will come straight to us. 608 00:30:04,840 --> 00:30:05,200 Speaker 2: All right. 609 00:30:05,240 --> 00:30:08,000 Speaker 1: Brian Brad in Madeira leads us off tonight. He says, 610 00:30:08,040 --> 00:30:11,840 Speaker 1: we own several ETFs that track similar benchmarks. How do 611 00:30:11,880 --> 00:30:16,560 Speaker 1: you measure overlap in a way that actually factors in 612 00:30:16,720 --> 00:30:17,880 Speaker 1: risk of the portfolio. 613 00:30:18,680 --> 00:30:22,080 Speaker 3: Well, when people talk about overlap, what they're referring to here, Brad, 614 00:30:22,160 --> 00:30:25,240 Speaker 3: is a holding level duplication. But from a risk perspective, 615 00:30:25,400 --> 00:30:28,560 Speaker 3: what really matters is the factors of concentration and correlation 616 00:30:28,680 --> 00:30:31,520 Speaker 3: behavior you have under when the market's providing stress. Really 617 00:30:31,520 --> 00:30:34,160 Speaker 3: not just whether two ETFs own Apple. That's a for example, 618 00:30:34,160 --> 00:30:35,520 Speaker 3: that's part of it, but that's not all of it. 619 00:30:35,800 --> 00:30:37,760 Speaker 3: So first of all, but start with that though, So 620 00:30:37,880 --> 00:30:40,720 Speaker 3: holding's based overlap, you can calculate the percentage of one 621 00:30:40,720 --> 00:30:44,680 Speaker 3: ETF's holdings that also appear in another weighted by presition side. 622 00:30:44,720 --> 00:30:47,040 Speaker 3: There are tools online that will do this, But for example, 623 00:30:47,040 --> 00:30:49,680 Speaker 3: if sixty percent of your first ETF's weight is also 624 00:30:49,760 --> 00:30:52,000 Speaker 3: in ETF your second ETF, then. 625 00:30:51,840 --> 00:30:53,200 Speaker 2: That's real actual duplication. 626 00:30:53,240 --> 00:30:55,080 Speaker 3: You got the same thing in two places and is 627 00:30:55,120 --> 00:30:58,520 Speaker 3: probably pulling in the same direction. That's really common when 628 00:30:58,520 --> 00:31:00,760 Speaker 3: you've got S and P five hundred total market large 629 00:31:00,760 --> 00:31:03,120 Speaker 3: cap growth ETFs. All those are based on the S 630 00:31:03,160 --> 00:31:04,959 Speaker 3: and P five hundred, so they often share. You know, 631 00:31:05,120 --> 00:31:07,440 Speaker 3: almost eighty percent of their top positions can be the same. 632 00:31:08,040 --> 00:31:09,560 Speaker 2: Something else you need to look at dig a little 633 00:31:09,600 --> 00:31:11,160 Speaker 2: deeper as factor exposure. 634 00:31:11,240 --> 00:31:13,880 Speaker 3: So they might have not have identical securities, but they 635 00:31:13,920 --> 00:31:16,240 Speaker 3: may have the same factors such as their large cap 636 00:31:16,400 --> 00:31:20,280 Speaker 3: or growth momentum, quality, value, low volatility, and so forth. 637 00:31:20,600 --> 00:31:22,600 Speaker 2: If there's high exposure to large cap growth. 638 00:31:22,440 --> 00:31:26,440 Speaker 3: And momentum, they're going to behave very similarly correlation during 639 00:31:26,480 --> 00:31:29,360 Speaker 3: stress periods. Right, they may have entirely different things in them, 640 00:31:29,360 --> 00:31:32,480 Speaker 3: but if you can see that they are highly correlated. Again, 641 00:31:33,280 --> 00:31:36,400 Speaker 3: using tools online, you can see exactly how correlated to 642 00:31:36,560 --> 00:31:40,000 Speaker 3: exchange traded funds are that might feel diversified because under 643 00:31:40,040 --> 00:31:43,240 Speaker 3: the hood they have different things, But if they behave 644 00:31:43,360 --> 00:31:45,760 Speaker 3: the same way during bear markets and things, then you 645 00:31:45,760 --> 00:31:48,800 Speaker 3: don't really have meaningful diversification. So think about it this way. 646 00:31:48,840 --> 00:31:51,320 Speaker 3: First look at the holdings overlap, and then look for 647 00:31:51,440 --> 00:31:53,840 Speaker 3: factors right the different types of investments that are in 648 00:31:53,840 --> 00:31:56,760 Speaker 3: it stress correlation, and then if you can get a 649 00:31:56,880 --> 00:32:00,280 Speaker 3: handle on those things, you can make sure that you've 650 00:32:00,280 --> 00:32:02,680 Speaker 3: got the right amount of diversification to your portfolio, or 651 00:32:02,920 --> 00:32:05,640 Speaker 3: hire a fiduciary advisor and dump it in somebody else's lap. 652 00:32:06,280 --> 00:32:09,280 Speaker 3: So let's move on to David and Batesville. David says, 653 00:32:09,280 --> 00:32:12,120 Speaker 3: when we say a portfolio is quote unquote balanced, Bob, 654 00:32:12,160 --> 00:32:15,520 Speaker 3: what does that mean in terms of exposure to growth rates, inflation, 655 00:32:15,640 --> 00:32:16,080 Speaker 3: and credit? 656 00:32:16,080 --> 00:32:17,080 Speaker 2: What are we talking about there? 657 00:32:17,800 --> 00:32:21,120 Speaker 1: Well, David, those four things you listed, growth rates, inflation, 658 00:32:21,280 --> 00:32:24,720 Speaker 1: and credit. I deem those as risks you know, to 659 00:32:24,800 --> 00:32:27,520 Speaker 1: your portfolio and the well being of your long term 660 00:32:27,560 --> 00:32:31,880 Speaker 1: retirement plan. So you want to have all of that 661 00:32:31,920 --> 00:32:36,360 Speaker 1: stuff accounted for in how you put a asset allocation 662 00:32:36,520 --> 00:32:40,040 Speaker 1: plan together, and more importantly, how you construct your financial plan, 663 00:32:40,520 --> 00:32:43,160 Speaker 1: factoring in what you're actually going to need to spend 664 00:32:43,520 --> 00:32:46,440 Speaker 1: and when and when you retire and all that. So 665 00:32:46,720 --> 00:32:50,719 Speaker 1: you know, a good software package that most you know 666 00:32:50,800 --> 00:32:55,120 Speaker 1: what i'd say, qualified responsible fiduciary advisors use. They factor 667 00:32:55,240 --> 00:32:58,880 Speaker 1: all of those things, those risks, so to speak, when 668 00:32:58,920 --> 00:33:02,200 Speaker 1: they build out a financial plan using some pretty nice 669 00:33:02,240 --> 00:33:05,120 Speaker 1: software that's out there. So all the things that you 670 00:33:05,240 --> 00:33:08,280 Speaker 1: mentioned are important. You got to have enough growth in 671 00:33:08,320 --> 00:33:12,280 Speaker 1: your portfolio to have your portfolio outpaced taxes and inflation. 672 00:33:12,840 --> 00:33:16,200 Speaker 1: You want it sensitive to movements and interest rates, inflation 673 00:33:16,320 --> 00:33:18,920 Speaker 1: we've already talked about. And then credit risk, you know 674 00:33:18,920 --> 00:33:23,040 Speaker 1: when you get into private credit, or just the duration 675 00:33:23,200 --> 00:33:26,080 Speaker 1: of your bond portfolio. All of those are risks too. 676 00:33:26,200 --> 00:33:29,840 Speaker 1: So you're bringing up a good question, you know. My 677 00:33:29,960 --> 00:33:33,200 Speaker 1: answer is yes, you got to account for all of that, 678 00:33:33,800 --> 00:33:36,240 Speaker 1: and that's hard to do a lot of times for 679 00:33:36,360 --> 00:33:39,640 Speaker 1: people working, you know, by themselves without a good advisor. 680 00:33:39,760 --> 00:33:43,200 Speaker 1: So factor in all those things. Hopefully you'll find somebody 681 00:33:43,200 --> 00:33:45,960 Speaker 1: to help you do it real quick. We got time 682 00:33:46,120 --> 00:33:49,120 Speaker 1: for one more Jennifer and Lovelin. She says, when markets 683 00:33:49,200 --> 00:33:51,880 Speaker 1: go up, I feel good about her risk level, but 684 00:33:51,960 --> 00:33:54,600 Speaker 1: when they drop, I feel like I want to change everything. 685 00:33:54,800 --> 00:33:57,640 Speaker 1: How do I know what our true risk tolerance is. 686 00:33:57,840 --> 00:33:59,680 Speaker 1: I love this question, Brian Well Jennifer. 687 00:33:59,720 --> 00:34:02,680 Speaker 3: First off, congratulations on being a normal human being. This 688 00:34:02,760 --> 00:34:04,960 Speaker 3: is a completely normal ways to react to this thing. 689 00:34:05,000 --> 00:34:07,080 Speaker 3: And this is why we can't really mass measure risk 690 00:34:07,160 --> 00:34:10,480 Speaker 3: tolerance when the markets are calm, you know, so as 691 00:34:10,719 --> 00:34:14,319 Speaker 3: when things are very calm and obviously we don't really 692 00:34:14,320 --> 00:34:15,880 Speaker 3: know how we're going to react. I always explain to 693 00:34:15,880 --> 00:34:17,759 Speaker 3: people when we walk through what a portfolio is going 694 00:34:17,800 --> 00:34:19,880 Speaker 3: to do, what they should expect in up markets and 695 00:34:19,960 --> 00:34:21,920 Speaker 3: down markets, and more important, when we. 696 00:34:21,880 --> 00:34:23,400 Speaker 2: Stress test their plan itself. 697 00:34:23,600 --> 00:34:25,440 Speaker 3: I always tell them it's one thing to look at 698 00:34:25,680 --> 00:34:27,640 Speaker 3: what the market might do, what your portfolio might do 699 00:34:27,719 --> 00:34:30,160 Speaker 3: in a down markets. It's one thing to do that 700 00:34:30,239 --> 00:34:32,239 Speaker 3: on the screen and just throw some random numbers in there. 701 00:34:32,280 --> 00:34:34,520 Speaker 3: It's another thing to do it in the midst of 702 00:34:34,600 --> 00:34:37,680 Speaker 3: your friends and your family panicking and scary headlines and 703 00:34:37,719 --> 00:34:39,640 Speaker 3: all kinds of things. So those are the things we 704 00:34:39,719 --> 00:34:41,680 Speaker 3: really need to think long and hard about. Don't just 705 00:34:41,719 --> 00:34:44,680 Speaker 3: limit it to the numbers. Think about Go read old articles, 706 00:34:44,719 --> 00:34:46,680 Speaker 3: go read things that might have scared you in the past, 707 00:34:46,880 --> 00:34:49,480 Speaker 3: and really get a sense for how you yourself will react. 708 00:34:50,640 --> 00:34:53,120 Speaker 1: Coming up next, I've got my two cents. Just some 709 00:34:53,200 --> 00:34:57,680 Speaker 1: things to think about how to simultaneously get your account 710 00:34:57,760 --> 00:35:04,000 Speaker 1: paperwork process while all also protecting your private information in 711 00:35:04,080 --> 00:35:08,840 Speaker 1: today's day and age of technology and scams and identity theft. 712 00:35:09,040 --> 00:35:11,520 Speaker 1: You're listening to Simply Money presented by all Worth Financial 713 00:35:11,560 --> 00:35:18,279 Speaker 1: on fifty five KRC the talk station. You're listening to 714 00:35:18,320 --> 00:35:21,239 Speaker 1: Simply Money presented by all Worth Financial. I'm Bob Sponseller 715 00:35:21,360 --> 00:35:24,640 Speaker 1: along with Brian James. Well tonight, I want to talk 716 00:35:24,680 --> 00:35:27,080 Speaker 1: about I think, you know, what can be a sensitive 717 00:35:27,120 --> 00:35:30,879 Speaker 1: topic for folks, especially folks that are what I put 718 00:35:30,960 --> 00:35:34,279 Speaker 1: in the senior citizen category. And here's what I mean. 719 00:35:34,360 --> 00:35:37,600 Speaker 1: You know, with the advent of trying to really keep 720 00:35:38,080 --> 00:35:43,680 Speaker 1: client information secure and prevent identity theft, you know, there 721 00:35:43,719 --> 00:35:46,440 Speaker 1: have been some great tools developed, you know, and I'm 722 00:35:46,480 --> 00:35:51,080 Speaker 1: talking specifically like docu sign where information can be passed 723 00:35:51,120 --> 00:35:55,240 Speaker 1: through encrypted email, you know, but it doesn't involve paper. 724 00:35:55,640 --> 00:36:00,160 Speaker 1: But you know, Brian, we occasionally get put pushback from folks, know, 725 00:36:00,480 --> 00:36:03,759 Speaker 1: particularly in the older age category. Some will even say, 726 00:36:03,840 --> 00:36:06,600 Speaker 1: I don't use a computer. I don't like a computer, 727 00:36:07,160 --> 00:36:11,320 Speaker 1: and I hate the idea of DocuSign because I don't 728 00:36:11,360 --> 00:36:15,080 Speaker 1: know that my information is secure. Well, the flip side 729 00:36:15,080 --> 00:36:17,520 Speaker 1: of that, the only option then is to mail this 730 00:36:17,560 --> 00:36:20,920 Speaker 1: stuff out using an overnight courier. And I am running 731 00:36:21,120 --> 00:36:24,200 Speaker 1: I've run across the situation this week where I had 732 00:36:24,200 --> 00:36:29,160 Speaker 1: a client that insisted on that type of scenario. And uh, 733 00:36:29,719 --> 00:36:33,719 Speaker 1: I'm not gonna I'm not gonna specify which courier, but uh, 734 00:36:33,880 --> 00:36:37,560 Speaker 1: envelopes were sent out, signatures were not required. We're still 735 00:36:37,600 --> 00:36:41,440 Speaker 1: looking for the envelopes, Brian. And uh so I I 736 00:36:42,160 --> 00:36:46,759 Speaker 1: say all that to say, the most secure way to 737 00:36:46,840 --> 00:36:51,680 Speaker 1: get business done quickly and efficiently for everyone while still 738 00:36:51,719 --> 00:36:54,879 Speaker 1: protecting information is to you know, and I'm gonna say 739 00:36:54,920 --> 00:36:59,800 Speaker 1: this gently, please move into the new world here of technology. 740 00:37:00,200 --> 00:37:02,640 Speaker 1: And if you don't want to do it yourself, you know, 741 00:37:02,760 --> 00:37:06,400 Speaker 1: maybe have a loved one or kid or you know, 742 00:37:06,600 --> 00:37:09,840 Speaker 1: niece or nephew help you. It's a much better way 743 00:37:09,960 --> 00:37:15,720 Speaker 1: to get information processed, business processed, accounts, open beneficiaries, change 744 00:37:15,800 --> 00:37:20,640 Speaker 1: all of that while simultaneously protecting your information. Brian, A 745 00:37:20,680 --> 00:37:22,920 Speaker 1: lot of people don't want to hear that, and that's 746 00:37:22,960 --> 00:37:25,960 Speaker 1: an adjustment people are just gonna need to make. In 747 00:37:26,040 --> 00:37:29,560 Speaker 1: my opinion, are you running into you know, similar scenarios? 748 00:37:30,080 --> 00:37:32,239 Speaker 3: Oh, for sure, and there's just so much information that 749 00:37:32,320 --> 00:37:35,400 Speaker 3: has to pass back and forth, and paper to me 750 00:37:35,560 --> 00:37:37,680 Speaker 3: is just at this point, it's just far more risky 751 00:37:37,800 --> 00:37:39,080 Speaker 3: than anything else. 752 00:37:39,080 --> 00:37:40,359 Speaker 2: And I try to encourage people. 753 00:37:40,360 --> 00:37:43,200 Speaker 3: There are people out there who almost wear a refusal 754 00:37:43,280 --> 00:37:45,120 Speaker 3: to use computers as a badge of honor. 755 00:37:45,360 --> 00:37:46,840 Speaker 2: That is not a safer way to go. 756 00:37:46,920 --> 00:37:50,600 Speaker 3: If you refuse to set up your banking information online, 757 00:37:50,760 --> 00:37:53,680 Speaker 3: that doesn't mean you are anymore protected. You're actually you're 758 00:37:53,719 --> 00:37:56,440 Speaker 3: exposed because if somebody has enough information, they'll set it 759 00:37:56,520 --> 00:37:59,080 Speaker 3: up for you, versus if you set it up yourself. 760 00:37:59,280 --> 00:38:01,720 Speaker 3: Now you're gonna get text messages, you're gonna get emails 761 00:38:01,840 --> 00:38:04,400 Speaker 3: if somebody tries to change it, versus none of that 762 00:38:04,440 --> 00:38:06,160 Speaker 3: will happen if they if they are able to set 763 00:38:06,160 --> 00:38:08,600 Speaker 3: it up themselves. So just because you aren't willing to 764 00:38:08,719 --> 00:38:10,920 Speaker 3: use it and you haven't set it up online, doesn't 765 00:38:10,960 --> 00:38:13,520 Speaker 3: mean it can't be set up at all. So you're 766 00:38:13,520 --> 00:38:15,600 Speaker 3: more exposed there. I had a client about a year ago, 767 00:38:16,040 --> 00:38:17,600 Speaker 3: on a little bit of a different note, get a 768 00:38:17,600 --> 00:38:19,680 Speaker 3: paper check stolen out of one of those blue metal 769 00:38:19,680 --> 00:38:22,360 Speaker 3: mailboxes that I haven't seen in forever, But just his 770 00:38:22,440 --> 00:38:25,800 Speaker 3: normal routine paying his bill had his payper checks stolen 771 00:38:25,880 --> 00:38:28,080 Speaker 3: and washed. Right, So what they do when they wash 772 00:38:28,160 --> 00:38:30,360 Speaker 3: checks is they will just change the writing that's on 773 00:38:30,400 --> 00:38:32,560 Speaker 3: the check, make it payable to whoever they want. He 774 00:38:32,640 --> 00:38:36,120 Speaker 3: lost twenty thousand dollars and it's unrecoverable. So paper is 775 00:38:36,239 --> 00:38:39,400 Speaker 3: not safer than computers. Computers can track things. There are 776 00:38:39,680 --> 00:38:42,200 Speaker 3: breadcrumbs that follow every little transaction that happens. 777 00:38:43,239 --> 00:38:45,279 Speaker 1: Thanks for listening, he said, Man, you've been listening to 778 00:38:45,280 --> 00:38:48,400 Speaker 1: Simply Money, presented by all Worth Financial on fifty five KRC, 779 00:38:48,920 --> 00:38:49,880 Speaker 1: the talk station