1 00:00:06,120 --> 00:00:09,440 Speaker 1: Tonight look at what the economy and the markets might 2 00:00:09,560 --> 00:00:12,360 Speaker 1: hold for us in twenty twenty six. You're listening to 3 00:00:12,400 --> 00:00:15,200 Speaker 1: Simply Money, presented by all Worth Financial on Bob Spondseller 4 00:00:15,240 --> 00:00:18,560 Speaker 1: along with Brian James. Well, it's the first Monday of 5 00:00:18,600 --> 00:00:21,400 Speaker 1: twenty twenty six, and many might be wondering will the 6 00:00:21,520 --> 00:00:25,639 Speaker 1: market have another banner year? Is a recession on the table. 7 00:00:26,360 --> 00:00:28,560 Speaker 1: We want to kick things off with the new year 8 00:00:28,600 --> 00:00:32,760 Speaker 1: with ALWORS Chief Investment Officer Andy Stout as a reminder, 9 00:00:32,800 --> 00:00:36,159 Speaker 1: Andy manages a little more than thirty five billion dollars 10 00:00:36,200 --> 00:00:39,280 Speaker 1: worth of investments for all WORS clients from right here 11 00:00:39,320 --> 00:00:43,600 Speaker 1: in Cincinnati, Ohio. Andy, thanks for being with us tonight 12 00:00:44,280 --> 00:00:48,400 Speaker 1: and walk us through just some highlights to remember from 13 00:00:48,440 --> 00:00:50,879 Speaker 1: twenty twenty five, and then kick us off on what 14 00:00:50,920 --> 00:00:53,560 Speaker 1: we might expect here in the new year. 15 00:00:55,000 --> 00:00:58,440 Speaker 2: Thanks for having me in Happy twenty twenty six. And 16 00:00:58,920 --> 00:01:01,840 Speaker 2: when we look back at last year, there's a lot 17 00:01:01,880 --> 00:01:05,080 Speaker 2: of things I think investors forgot about. To be honest 18 00:01:05,120 --> 00:01:07,160 Speaker 2: with you, I mean, if you think back about a 19 00:01:07,240 --> 00:01:09,760 Speaker 2: year ago, not quite a year ago from now, but 20 00:01:09,800 --> 00:01:12,800 Speaker 2: that's when we started to see a pretty large sell 21 00:01:12,840 --> 00:01:15,000 Speaker 2: off start to occur. I mean the market s and 22 00:01:15,000 --> 00:01:19,280 Speaker 2: P five hundred fell about nineteen percent from February to 23 00:01:19,440 --> 00:01:23,560 Speaker 2: early April period. And if you if you recall we 24 00:01:23,600 --> 00:01:26,720 Speaker 2: had Liberation Day where we had President Trump, you know, 25 00:01:26,800 --> 00:01:29,240 Speaker 2: holding up that board with all these different terarif rates, 26 00:01:29,240 --> 00:01:31,679 Speaker 2: and you know, the market panic and you know we're 27 00:01:31,680 --> 00:01:34,640 Speaker 2: going to see massive trade wars, We're gonna see inflation 28 00:01:34,800 --> 00:01:38,240 Speaker 2: spiral out of control, and basically the world will come 29 00:01:38,280 --> 00:01:41,600 Speaker 2: to an end as we know it. That obviously did 30 00:01:41,640 --> 00:01:43,960 Speaker 2: not happen, right, the world did not end. We are 31 00:01:44,000 --> 00:01:46,600 Speaker 2: still here. It is twenty twenty six. We were able 32 00:01:46,640 --> 00:01:49,120 Speaker 2: to make it through the year. And inflation during that 33 00:01:49,160 --> 00:01:52,520 Speaker 2: time period, it was elevated, it was sticky, but it 34 00:01:52,560 --> 00:01:57,080 Speaker 2: was nowhere near the fear that the levels that people 35 00:01:57,160 --> 00:02:00,880 Speaker 2: feared about. And when you look back at economic growth, yeah, 36 00:02:00,920 --> 00:02:02,800 Speaker 2: you saw some front running on those terraffs. 37 00:02:02,840 --> 00:02:02,960 Speaker 1: Right. 38 00:02:03,000 --> 00:02:05,760 Speaker 2: If you remember, we actually had negative GDP and Q 39 00:02:05,880 --> 00:02:09,120 Speaker 2: one we did not have a recession last year, but 40 00:02:09,200 --> 00:02:12,280 Speaker 2: we did see about half a percent negative. But we 41 00:02:12,320 --> 00:02:15,160 Speaker 2: saw a massive rebound in Q two where the second 42 00:02:15,240 --> 00:02:17,720 Speaker 2: quarter of GDP went up to about three point eight percent. 43 00:02:18,080 --> 00:02:21,720 Speaker 2: So for the entire year, we obviously don't have the 44 00:02:21,919 --> 00:02:24,120 Speaker 2: fourth quarter data yet, but we'll probably end up somewhere 45 00:02:24,120 --> 00:02:26,120 Speaker 2: around two and a half to three percent for the 46 00:02:26,280 --> 00:02:29,640 Speaker 2: entire year. So despite those big concerns on the terror 47 00:02:29,680 --> 00:02:31,480 Speaker 2: side of the world, you. 48 00:02:31,440 --> 00:02:33,960 Speaker 1: Know, we progressed, we moved forward. 49 00:02:34,800 --> 00:02:36,960 Speaker 2: We also had the other big concern in last year 50 00:02:37,240 --> 00:02:39,880 Speaker 2: because people you know, may have they probably didn't forget 51 00:02:39,880 --> 00:02:41,720 Speaker 2: this one because it's still top of mind. It says 52 00:02:41,720 --> 00:02:43,000 Speaker 2: AI evaluations. 53 00:02:43,080 --> 00:02:43,240 Speaker 1: Right. 54 00:02:43,360 --> 00:02:45,480 Speaker 2: When we think about the stock market, we think about 55 00:02:46,360 --> 00:02:50,239 Speaker 2: the gains being concentrated in a few names as artificial 56 00:02:50,320 --> 00:02:55,520 Speaker 2: intelligence names. Uh, and really we'll probably see a little 57 00:02:55,520 --> 00:02:57,000 Speaker 2: bit of a shift and we'll talk about that when 58 00:02:57,000 --> 00:02:58,919 Speaker 2: we get into twenty twenty six on the AI side 59 00:02:58,919 --> 00:03:03,760 Speaker 2: of the world. But those companies, the capital expenditures or 60 00:03:03,760 --> 00:03:07,920 Speaker 2: that business spending that they were doing continued and that 61 00:03:08,000 --> 00:03:11,360 Speaker 2: did actually help with the overall economy. You know, it 62 00:03:11,400 --> 00:03:13,760 Speaker 2: wasn't just something to talk about on the margin. It's 63 00:03:13,800 --> 00:03:17,000 Speaker 2: the investment in these data centers that these large companies 64 00:03:17,040 --> 00:03:20,400 Speaker 2: are doing, and the reinvestment in themselves to help foster 65 00:03:20,520 --> 00:03:24,960 Speaker 2: AI overall growth really did help the broad economy and 66 00:03:25,280 --> 00:03:27,600 Speaker 2: did help the stock market too. So if you're an investor, 67 00:03:28,120 --> 00:03:29,880 Speaker 2: I know, AI might be a little scaries sometimes but 68 00:03:30,639 --> 00:03:32,160 Speaker 2: most likely benefitted from it. 69 00:03:32,480 --> 00:03:32,919 Speaker 3: Hey, Eddie. 70 00:03:32,919 --> 00:03:35,200 Speaker 4: One of the big headlines all year long and twenty 71 00:03:35,200 --> 00:03:38,040 Speaker 4: twenty five was interest rates, which in looking back now 72 00:03:38,080 --> 00:03:40,120 Speaker 4: that you know hindsight of course being twenty twenty, would 73 00:03:40,120 --> 00:03:44,320 Speaker 4: you say the Fed's rate decisions were proactive meaning they 74 00:03:44,320 --> 00:03:47,160 Speaker 4: were trying to affect the future direction or were they 75 00:03:47,160 --> 00:03:50,520 Speaker 4: more reactive waiting for news to appear and then making 76 00:03:50,560 --> 00:03:51,520 Speaker 4: a decision based on that. 77 00:03:52,680 --> 00:03:57,960 Speaker 2: I think they wanted to appear data dependent, but when 78 00:03:58,520 --> 00:04:01,160 Speaker 2: push came to shove, I think they were really just 79 00:04:01,240 --> 00:04:03,560 Speaker 2: kind of listening to the market and following the market's 80 00:04:03,640 --> 00:04:06,280 Speaker 2: lead up. I mean, they're trying to be trying to 81 00:04:06,280 --> 00:04:07,800 Speaker 2: be data pended. But then we had to shut down 82 00:04:07,840 --> 00:04:09,720 Speaker 2: and then there was like not much data to actually 83 00:04:09,920 --> 00:04:12,400 Speaker 2: be data that depended on and still the FED cut 84 00:04:12,480 --> 00:04:15,120 Speaker 2: rates during that time period. So a little bit of 85 00:04:15,160 --> 00:04:19,320 Speaker 2: irony right there. But from the FEDS overall perspective, you know, 86 00:04:19,320 --> 00:04:22,480 Speaker 2: I think they did a decent job of trying to 87 00:04:22,520 --> 00:04:25,240 Speaker 2: be proactive. I mean, I mean, let's just flate face it. 88 00:04:25,320 --> 00:04:28,640 Speaker 2: Inflation hasn't gone away. It's still elevated, and at the 89 00:04:28,640 --> 00:04:31,200 Speaker 2: same time we've seen the job market. You know, we 90 00:04:31,279 --> 00:04:34,720 Speaker 2: can there's cracks. It's not crashing, but there are certainly cracks. 91 00:04:34,720 --> 00:04:36,600 Speaker 2: And we'll talk about that slowing momentum in the bit 92 00:04:36,960 --> 00:04:40,120 Speaker 2: that said that puts the FED in a tough position, 93 00:04:40,200 --> 00:04:43,080 Speaker 2: right because of inflation's eye, interest rates should be high 94 00:04:43,120 --> 00:04:45,719 Speaker 2: to fight that, but if the job market's weak, interest 95 00:04:45,760 --> 00:04:47,800 Speaker 2: rates should be low. They can't have both at the 96 00:04:47,800 --> 00:04:50,480 Speaker 2: same time. So, you know, they're trying to navigate this 97 00:04:50,600 --> 00:04:52,960 Speaker 2: transition period and I think they're doing an okay job 98 00:04:53,000 --> 00:04:55,159 Speaker 2: as far as that goes, because it's not a perfect 99 00:04:55,560 --> 00:04:58,160 Speaker 2: situation for them by any stretch of the imagination, but 100 00:04:58,200 --> 00:05:01,360 Speaker 2: they're they're navigating it. Not a basis I would say. 101 00:05:01,440 --> 00:05:01,840 Speaker 3: Well, okay. 102 00:05:01,880 --> 00:05:05,760 Speaker 4: So with regard to asset allocation diversification, there's always, you know, 103 00:05:05,760 --> 00:05:08,160 Speaker 4: there's always if you're going to spread your risk out, 104 00:05:08,200 --> 00:05:10,160 Speaker 4: there's always one asset class that does really well and 105 00:05:10,240 --> 00:05:11,279 Speaker 4: one that kind of lags. 106 00:05:11,880 --> 00:05:13,919 Speaker 3: What would you say, let's talk about the laggards. 107 00:05:13,960 --> 00:05:15,760 Speaker 4: What would you say, was the some of our weaker 108 00:05:15,800 --> 00:05:17,720 Speaker 4: asset classes that we saw and then do you see 109 00:05:17,720 --> 00:05:20,960 Speaker 4: that continuing or do you feel like maybe it's, uh, 110 00:05:21,160 --> 00:05:22,760 Speaker 4: we're gonna see things that rotate a little bit. 111 00:05:23,760 --> 00:05:25,680 Speaker 2: Yeah, Well, last year. I mean, we saw a lot 112 00:05:25,680 --> 00:05:29,080 Speaker 2: of winners in all honesty, whether you're looking at large caps, 113 00:05:29,240 --> 00:05:33,040 Speaker 2: mid caps, or small caps. It happened in spurts. I mean, 114 00:05:33,040 --> 00:05:35,240 Speaker 2: at the beginning of last year, small caps were the 115 00:05:35,240 --> 00:05:38,760 Speaker 2: big lagger, but they certainly made up some ground near 116 00:05:38,920 --> 00:05:41,320 Speaker 2: the end of the year. So you know, from that perspective, 117 00:05:42,560 --> 00:05:46,200 Speaker 2: the returns weren't materially different in all honesty when you 118 00:05:46,200 --> 00:05:48,279 Speaker 2: look at it at the sector level. I mean, what 119 00:05:48,360 --> 00:05:51,800 Speaker 2: you saw you saw Tex essentially on telecom, which is 120 00:05:52,440 --> 00:05:54,920 Speaker 2: you know, some tech companies in there as well. Those 121 00:05:54,960 --> 00:05:59,039 Speaker 2: were the big winners. And again similarly to just large 122 00:05:59,040 --> 00:06:00,839 Speaker 2: cap space in general, you know a lot of their 123 00:06:00,880 --> 00:06:03,160 Speaker 2: games that come in the i'll call it the first 124 00:06:03,160 --> 00:06:05,280 Speaker 2: two to three quarters of last year. The fourth quarter 125 00:06:05,640 --> 00:06:09,440 Speaker 2: wasn't nearly as strong for tech compared to some other areas, 126 00:06:09,920 --> 00:06:13,240 Speaker 2: but you know, they were the leaders. Now, whether or 127 00:06:13,240 --> 00:06:15,280 Speaker 2: not they continue to be the leaders, that's where it's 128 00:06:15,279 --> 00:06:18,640 Speaker 2: going to be really interesting, because they essentially had a 129 00:06:18,680 --> 00:06:20,920 Speaker 2: really good twenty twenty five because of the business spending, 130 00:06:20,960 --> 00:06:24,720 Speaker 2: because of the cap X, because of the implied demand 131 00:06:25,080 --> 00:06:27,960 Speaker 2: that other businesses would have. When it comes to AI, 132 00:06:28,279 --> 00:06:30,840 Speaker 2: what we expect to see this year is a bit 133 00:06:30,839 --> 00:06:33,960 Speaker 2: of a transition on the AI side. It's really going 134 00:06:34,000 --> 00:06:37,159 Speaker 2: from who's spending to who's benefiting. So we want to 135 00:06:37,200 --> 00:06:40,480 Speaker 2: be able to see as AI moves from capax and 136 00:06:40,520 --> 00:06:43,760 Speaker 2: paying attention to the business spending to see where that 137 00:06:43,920 --> 00:06:46,560 Speaker 2: margin improvement is coming. So it's not going to be, 138 00:06:46,720 --> 00:06:49,760 Speaker 2: you know, a January or February story, It's going to 139 00:06:49,800 --> 00:06:52,520 Speaker 2: be a full year story where do we see margins 140 00:06:52,520 --> 00:06:56,479 Speaker 2: improving because of artificial intelligence? And it's that bottom line 141 00:06:56,680 --> 00:07:00,440 Speaker 2: benefit to earnings that's really going to support the overall 142 00:07:00,600 --> 00:07:02,720 Speaker 2: market if that is able to progress. 143 00:07:03,560 --> 00:07:05,840 Speaker 1: Well, Andy, listening to those points you just made, and 144 00:07:05,839 --> 00:07:09,320 Speaker 1: then also following up with Brian's question about asset allocation, 145 00:07:09,960 --> 00:07:12,520 Speaker 1: you know that that leads directly into my question, which 146 00:07:12,560 --> 00:07:15,640 Speaker 1: is do you expect a broadening out on where some 147 00:07:15,800 --> 00:07:18,320 Speaker 1: of the growth or returns from stocks are going to 148 00:07:18,360 --> 00:07:21,680 Speaker 1: happen in twenty twenty six? Case in point, when I 149 00:07:21,760 --> 00:07:25,400 Speaker 1: look at a even cap weighted sm P five hundred index, 150 00:07:25,800 --> 00:07:28,360 Speaker 1: we really didn't have a whole lot of movement during 151 00:07:28,360 --> 00:07:31,240 Speaker 1: twenty twenty five. You know, most of the gains that 152 00:07:31,280 --> 00:07:34,760 Speaker 1: we got that sixteen eighteen percent gains in the overall 153 00:07:34,800 --> 00:07:37,440 Speaker 1: market were in these big cap tech stocks. To the 154 00:07:37,480 --> 00:07:40,119 Speaker 1: point that you just made, is this going to start 155 00:07:40,120 --> 00:07:44,280 Speaker 1: to broaden out in terms of return because now hopefully 156 00:07:44,360 --> 00:07:48,680 Speaker 1: the companies that invested wisely in AI technology are going 157 00:07:48,720 --> 00:07:52,680 Speaker 1: to actually see their margins improve irrespective of what industry 158 00:07:52,760 --> 00:07:54,800 Speaker 1: they're in. Is that something to look for in twenty 159 00:07:54,840 --> 00:07:56,640 Speaker 1: twenty six. Yeah. 160 00:07:56,680 --> 00:07:58,640 Speaker 2: I mean if you look at the like an equal 161 00:07:58,640 --> 00:08:02,760 Speaker 2: weight INDEXO as opposed to a market cap index, which 162 00:08:02,760 --> 00:08:05,920 Speaker 2: will have like your apples, your amazons, your metas of 163 00:08:05,960 --> 00:08:09,000 Speaker 2: the world really influencing the overall turns, but instead everybody 164 00:08:09,040 --> 00:08:12,640 Speaker 2: gets treated equally in terms of an allocation perconage. I mean, 165 00:08:12,720 --> 00:08:16,880 Speaker 2: you saw definitely a pick up in the basically the 166 00:08:17,280 --> 00:08:21,480 Speaker 2: last half of the fourth quarter last year. Now will 167 00:08:21,520 --> 00:08:24,520 Speaker 2: that continue? You know, I think there's a good chance 168 00:08:24,560 --> 00:08:27,360 Speaker 2: that it does continue, that we do see and that 169 00:08:27,480 --> 00:08:30,400 Speaker 2: spread out just because you have started to see when 170 00:08:30,440 --> 00:08:32,120 Speaker 2: you look under the hood, a little bit of a 171 00:08:32,200 --> 00:08:36,400 Speaker 2: rotation at the individual equity side. When it comes to that, 172 00:08:36,840 --> 00:08:40,760 Speaker 2: and when you have these types of rotations, they usually 173 00:08:40,840 --> 00:08:42,840 Speaker 2: start for a reason. The question is whether or not 174 00:08:42,880 --> 00:08:46,679 Speaker 2: they'll continue, and that reason is the benefiting on the 175 00:08:46,720 --> 00:08:49,920 Speaker 2: margin side. But it's also valuations, these companies are more 176 00:08:49,960 --> 00:08:53,199 Speaker 2: attractive from a valuation standpoint. I mean, if you look 177 00:08:53,200 --> 00:08:55,360 Speaker 2: at how much you're paying for a dollar of earnings, 178 00:08:55,480 --> 00:08:59,280 Speaker 2: you know they are much much more. You know, they're 179 00:08:59,320 --> 00:09:00,880 Speaker 2: just less expense and so I don't want to say 180 00:09:00,880 --> 00:09:03,679 Speaker 2: they're cheaper, because they're still not cheap by need to 181 00:09:03,720 --> 00:09:08,199 Speaker 2: stretch of imagination, but they are You're paying a lot 182 00:09:08,320 --> 00:09:10,160 Speaker 2: less per dollar earnings when you look at that price 183 00:09:10,200 --> 00:09:12,679 Speaker 2: to earnings ratio. So, you know, without getting too much 184 00:09:12,720 --> 00:09:16,960 Speaker 2: into the weeds, because you know, that's probably not too 185 00:09:17,160 --> 00:09:20,160 Speaker 2: fun for many of the listener listeners out there, you know, 186 00:09:20,200 --> 00:09:22,720 Speaker 2: I would say, you know, the broad exposure, the broad 187 00:09:22,760 --> 00:09:25,080 Speaker 2: participation that we've already seen at the end of last year, 188 00:09:25,200 --> 00:09:27,560 Speaker 2: there's a good chance that it does continue. 189 00:09:27,960 --> 00:09:30,319 Speaker 5: Andy, do you think there's anything looking back again twenty 190 00:09:30,320 --> 00:09:32,840 Speaker 5: twenty five, Is there anything that didn't get the attention 191 00:09:33,080 --> 00:09:35,560 Speaker 5: of the markets that you thought it should have, And 192 00:09:35,600 --> 00:09:37,400 Speaker 5: do you think if there is such a thing, do 193 00:09:37,440 --> 00:09:39,520 Speaker 5: you think that'll resurface here in twenty twenty six. 194 00:09:40,280 --> 00:09:41,640 Speaker 2: You know, one thing I think we're going to see 195 00:09:41,679 --> 00:09:44,520 Speaker 2: resurface early this year that it got the attention it 196 00:09:44,640 --> 00:09:48,640 Speaker 2: deserved early on, but then faded was the big beautiful bill, 197 00:09:49,400 --> 00:09:52,959 Speaker 2: So most people kind of forgot about that because they're like, oh, 198 00:09:52,960 --> 00:09:54,480 Speaker 2: it passed and this is going to be great, but 199 00:09:54,559 --> 00:09:58,719 Speaker 2: then no one really saw much much benefits from it. 200 00:09:58,880 --> 00:10:01,439 Speaker 2: Now people are getting ready to pay their taxes, file 201 00:10:01,440 --> 00:10:03,160 Speaker 2: the taxes, and what you're going to see is you're 202 00:10:03,200 --> 00:10:06,040 Speaker 2: going to see a larger than normal refund and this 203 00:10:06,200 --> 00:10:11,360 Speaker 2: is a fiscal easing, if you will. That's going to 204 00:10:11,440 --> 00:10:14,160 Speaker 2: have a direct impact on GDP in this first quarter. 205 00:10:14,400 --> 00:10:16,960 Speaker 2: So when we look at fiscal support for the US, 206 00:10:17,120 --> 00:10:19,840 Speaker 2: it's essentially front and loaded into the first quarter. So 207 00:10:19,880 --> 00:10:22,079 Speaker 2: what I would expect, I would expect that we actually 208 00:10:22,120 --> 00:10:26,800 Speaker 2: see a pretty decent Q one GDP reading. We'll see 209 00:10:26,800 --> 00:10:30,320 Speaker 2: where this all pans out. But we got the fiscal 210 00:10:30,320 --> 00:10:33,960 Speaker 2: support early on. From a monetary policy perspective of the Fed, 211 00:10:35,480 --> 00:10:37,320 Speaker 2: we have seen that improve right, I mean a year 212 00:10:37,320 --> 00:10:38,520 Speaker 2: and a half ago, we were at five and a 213 00:10:38,520 --> 00:10:40,680 Speaker 2: half percent an hour, about three and three quarters. The 214 00:10:40,760 --> 00:10:43,880 Speaker 2: thing to keep in mind, what people don't appreciate to 215 00:10:43,880 --> 00:10:46,600 Speaker 2: get your exact question, Brian, is that there's a lag 216 00:10:46,720 --> 00:10:49,440 Speaker 2: defect on these things. So when the Fed lowers rate, 217 00:10:49,480 --> 00:10:52,280 Speaker 2: it usually takes about six to nine months for it 218 00:10:52,360 --> 00:10:55,120 Speaker 2: to really impact the broad economy. So we're getting to 219 00:10:55,160 --> 00:10:57,560 Speaker 2: that point in time to where the early part of 220 00:10:57,600 --> 00:11:00,679 Speaker 2: those rate cuts, in the middle part as well are 221 00:11:00,760 --> 00:11:03,920 Speaker 2: going to start to have a positive improven So when 222 00:11:03,960 --> 00:11:07,240 Speaker 2: you look at the fiscal support from the government, you 223 00:11:07,240 --> 00:11:10,199 Speaker 2: look at the monetary easing and the lag effects now 224 00:11:10,240 --> 00:11:14,840 Speaker 2: impacting the economy in addition to continued AI spending at 225 00:11:14,920 --> 00:11:16,719 Speaker 2: least on the front end of things, you know, we're 226 00:11:16,760 --> 00:11:19,440 Speaker 2: looking at a pretty solid setup for twenty twenty six, 227 00:11:19,640 --> 00:11:21,880 Speaker 2: and we do. And what that means is, you know, 228 00:11:21,960 --> 00:11:24,120 Speaker 2: low recess and risk to start the year, probably through 229 00:11:24,120 --> 00:11:28,120 Speaker 2: the next quarter as well, and more broadly, just continue 230 00:11:28,120 --> 00:11:29,440 Speaker 2: to growth. And I do want to sound like some 231 00:11:29,440 --> 00:11:33,400 Speaker 2: sort of you know, eternal optimist if you will, but 232 00:11:33,520 --> 00:11:35,680 Speaker 2: we are set up for twenty twenty six in a 233 00:11:35,720 --> 00:11:39,560 Speaker 2: way that should be broadly positive for the economy. 234 00:11:40,200 --> 00:11:42,120 Speaker 1: Would you say the same thing is going to positively 235 00:11:42,200 --> 00:11:47,240 Speaker 1: potentially impact GDP with all these accelerated depreciation rules as well, 236 00:11:47,320 --> 00:11:50,240 Speaker 1: Is that going to accelerate or maybe pull forward some 237 00:11:50,360 --> 00:11:53,200 Speaker 1: capex spending into the early part of twenty twenty six 238 00:11:53,559 --> 00:11:54,640 Speaker 1: on the part of companies. 239 00:11:55,559 --> 00:11:57,720 Speaker 2: Yeah, So when you're talking about the early depreciation. What 240 00:11:57,760 --> 00:12:02,000 Speaker 2: that means is businesses can spend end on things, big items, 241 00:12:02,000 --> 00:12:04,160 Speaker 2: big ticket items, you know, all of a sudden, they're 242 00:12:04,200 --> 00:12:08,320 Speaker 2: able to essentially you know, expense those overall right away, 243 00:12:08,480 --> 00:12:10,600 Speaker 2: and that's going to lower their tax impact. So that's 244 00:12:10,640 --> 00:12:13,400 Speaker 2: what that's what you mean right there, And yeah, that 245 00:12:13,440 --> 00:12:16,560 Speaker 2: can have a big impact. I think it will be 246 00:12:16,840 --> 00:12:20,400 Speaker 2: very helpful for the overall economy. And that is another 247 00:12:22,040 --> 00:12:24,600 Speaker 2: you know, impact or a lever that we're going to 248 00:12:24,600 --> 00:12:27,840 Speaker 2: see getting pulled here early on. And I think it's 249 00:12:27,880 --> 00:12:30,160 Speaker 2: going to be something that does continue. And I think 250 00:12:30,440 --> 00:12:33,080 Speaker 2: when you think about the big picture side of the world, 251 00:12:33,280 --> 00:12:35,960 Speaker 2: you also have to think about inflation and the labor market. 252 00:12:36,200 --> 00:12:39,560 Speaker 2: But when you put it all together, you know, inflation 253 00:12:39,679 --> 00:12:43,680 Speaker 2: is still sticky for some time, but probably still starts 254 00:12:43,679 --> 00:12:46,480 Speaker 2: to a mediate labor market I'll call it. We're starting 255 00:12:46,480 --> 00:12:49,800 Speaker 2: the year off of some weak momentum, but with a 256 00:12:49,840 --> 00:12:53,320 Speaker 2: strong enough consumer and we got that GDP levers that 257 00:12:53,360 --> 00:12:55,120 Speaker 2: we've just talked about, you know, that should keep the 258 00:12:55,160 --> 00:12:56,000 Speaker 2: labor market aflow. 259 00:12:56,640 --> 00:12:58,440 Speaker 1: All right, We'll have to leave it there for jo 260 00:12:58,520 --> 00:13:00,480 Speaker 1: N and Andy. As always, it's going to be real 261 00:13:00,559 --> 00:13:03,400 Speaker 1: fun to sit back and watch what actually happens this year. 262 00:13:04,000 --> 00:13:06,600 Speaker 1: A lot of people dream of early retirement, But what 263 00:13:06,679 --> 00:13:10,000 Speaker 1: if stopping work too soon actually hurts your health and 264 00:13:10,080 --> 00:13:13,800 Speaker 1: shortens your life. We've got new research to discuss on 265 00:13:13,840 --> 00:13:16,040 Speaker 1: that topic. Next, you're listening to Simply Money, You're said 266 00:13:16,080 --> 00:13:19,600 Speaker 1: of my Allworth Financial on fifty five KRC, the talk station. 267 00:13:24,520 --> 00:13:26,360 Speaker 1: You're listening to Simply Money, You've said of my all 268 00:13:26,400 --> 00:13:29,840 Speaker 1: Worth Financial arm Bob Sponsorer along with Brian James. If 269 00:13:29,880 --> 00:13:33,040 Speaker 1: you can't listen to Simply Money live every night, subscribe 270 00:13:33,040 --> 00:13:36,320 Speaker 1: and get our daily podcasts. Just search Simply Money on 271 00:13:36,360 --> 00:13:40,800 Speaker 1: the iHeart app or wherever you find your podcast. Straight Ahead, 272 00:13:41,040 --> 00:13:44,920 Speaker 1: Eric's wrestling with a big tax hit on new stock appreciation. 273 00:13:45,080 --> 00:13:49,199 Speaker 1: You know, Karen's portfolio just got too complex to manage 274 00:13:49,200 --> 00:13:53,040 Speaker 1: on our own. And Joe's wondering if downsizing makes sense 275 00:13:53,160 --> 00:13:57,640 Speaker 1: Right now, real questions will hopefully provide some smart answers. 276 00:13:57,920 --> 00:14:02,440 Speaker 1: Straight Ahead at six forty three, so many Americans, maybe 277 00:14:02,480 --> 00:14:05,840 Speaker 1: even you, dream of retiring early. Get out of the 278 00:14:05,920 --> 00:14:10,520 Speaker 1: rat race. No more meetings, no more commutes, just absolute freedom. 279 00:14:11,320 --> 00:14:14,640 Speaker 1: But there's a new conversation taking place, Brian, and it's 280 00:14:14,679 --> 00:14:18,000 Speaker 1: not about whether you can retire early, based on whether 281 00:14:18,040 --> 00:14:21,320 Speaker 1: you have enough money. It's about whether you should because 282 00:14:21,360 --> 00:14:24,920 Speaker 1: it might not be as good for you as you think. 283 00:14:25,480 --> 00:14:27,080 Speaker 3: Well, I don't think that's a new conversation. 284 00:14:27,160 --> 00:14:29,240 Speaker 4: That's in a conversation that I have every single day 285 00:14:29,240 --> 00:14:31,000 Speaker 4: in my office, and I'm sure you do too through 286 00:14:31,000 --> 00:14:33,880 Speaker 4: the planning process. But USA Today picked up on it, 287 00:14:33,960 --> 00:14:37,160 Speaker 4: so therefore it's new to them anyway. So so polling 288 00:14:37,400 --> 00:14:40,280 Speaker 4: coming from USA Today, a sixty percent of Americans say 289 00:14:40,280 --> 00:14:43,360 Speaker 4: that their dream is to retire early. But we get 290 00:14:43,400 --> 00:14:46,640 Speaker 4: some figures that from the National Bureau of Economic Research 291 00:14:46,680 --> 00:14:48,840 Speaker 4: that did a study of people in China, a little 292 00:14:48,880 --> 00:14:51,280 Speaker 4: bit of a different mindset over there, but when they 293 00:14:51,320 --> 00:14:54,000 Speaker 4: take early retirement over there, through this new pension program 294 00:14:54,000 --> 00:14:56,640 Speaker 4: they have, they see about a thirteen percent drop in 295 00:14:56,720 --> 00:15:00,240 Speaker 4: cognitive performance, memory, attention span, brain functioning, you know, the 296 00:15:00,320 --> 00:15:02,600 Speaker 4: kind of stuff that actually can make retirement fun if 297 00:15:02,600 --> 00:15:03,360 Speaker 4: it's in good order. 298 00:15:03,400 --> 00:15:04,080 Speaker 3: And that's this is. 299 00:15:04,000 --> 00:15:06,360 Speaker 4: Why we all say we want to retire earlier here 300 00:15:06,560 --> 00:15:09,560 Speaker 4: in the United States. Well, over there it's such a 301 00:15:09,840 --> 00:15:12,400 Speaker 4: work driven economy that as soon as it was going 302 00:15:12,440 --> 00:15:13,480 Speaker 4: to say, on, yeah. 303 00:15:13,360 --> 00:15:15,600 Speaker 1: If I lived in China, Brian, I think I'd want 304 00:15:15,600 --> 00:15:17,040 Speaker 1: to be retired too, but go. 305 00:15:16,920 --> 00:15:19,640 Speaker 4: Ahead, yeah and so, but basically the brain shut off 306 00:15:19,680 --> 00:15:21,360 Speaker 4: and I'm just gonna go out on a limb here 307 00:15:21,360 --> 00:15:22,920 Speaker 4: and say, there just might not be as much of 308 00:15:22,960 --> 00:15:25,120 Speaker 4: a dream of retirement and freedom and all that kind 309 00:15:25,160 --> 00:15:27,960 Speaker 4: of thing over there in China as there is here. 310 00:15:28,040 --> 00:15:30,360 Speaker 4: So the so, how do we compare that to the 311 00:15:30,400 --> 00:15:32,880 Speaker 4: United States? Well, similar results. So there was a study 312 00:15:32,920 --> 00:15:36,280 Speaker 4: published by the Journal of Epidemiology and Community Health found 313 00:15:36,320 --> 00:15:38,240 Speaker 4: that people in the United States who were retired at 314 00:15:38,280 --> 00:15:41,400 Speaker 4: fifty five were twice as likely to die early compared 315 00:15:41,440 --> 00:15:43,760 Speaker 4: to those who are retired at sixty five. Now that 316 00:15:44,040 --> 00:15:46,120 Speaker 4: this don't don't assume that this means that your job 317 00:15:46,200 --> 00:15:48,640 Speaker 4: is the only thing standing between you and the great beyond. 318 00:15:48,720 --> 00:15:51,960 Speaker 4: But what it does suggest, though, is that retirement when 319 00:15:52,000 --> 00:15:53,960 Speaker 4: it's early and unstructured, in other words, a. 320 00:15:53,960 --> 00:15:55,640 Speaker 3: Miserable hate this job. Got to get out of this 321 00:15:55,680 --> 00:15:57,080 Speaker 3: and I'll figure out what I'm going to do later. 322 00:15:57,320 --> 00:15:59,880 Speaker 4: Without a plan, that can lead to a lot of isolation, 323 00:16:00,240 --> 00:16:03,520 Speaker 4: which leads to less daily movement, physical movement, and fewer 324 00:16:03,560 --> 00:16:05,880 Speaker 4: reasons to stay mentally sharp. And all of a sudden, 325 00:16:06,160 --> 00:16:08,680 Speaker 4: the hill, the downhill ride is kind of steepening on 326 00:16:08,680 --> 00:16:09,160 Speaker 4: you a little bit. 327 00:16:10,400 --> 00:16:12,680 Speaker 1: Yeah, Brian, I think you raised a good point before. 328 00:16:12,800 --> 00:16:14,960 Speaker 1: I mean, we when we have people come in and 329 00:16:15,000 --> 00:16:18,400 Speaker 1: talk about retirement now, very few people are saying, Hey, 330 00:16:18,520 --> 00:16:21,320 Speaker 1: I can't wait to just quit my job and do 331 00:16:21,440 --> 00:16:24,120 Speaker 1: nothing and sit in a rocking chair on the front porch, 332 00:16:24,240 --> 00:16:27,960 Speaker 1: or just play golf, you know, sixteen hours a day. 333 00:16:28,120 --> 00:16:31,960 Speaker 1: You know, people are already more thoughtful about this. People 334 00:16:32,000 --> 00:16:34,400 Speaker 1: are talking about what am I gonna do with my 335 00:16:34,560 --> 00:16:37,560 Speaker 1: time and energy and my mind, you know, to your 336 00:16:37,560 --> 00:16:40,800 Speaker 1: prior point in advance. So I think we've seen a 337 00:16:40,880 --> 00:16:46,120 Speaker 1: healthy evolution in this whole retirement processing in advance. But 338 00:16:46,800 --> 00:16:49,280 Speaker 1: for those that maybe are starting to think about this, 339 00:16:49,880 --> 00:16:52,520 Speaker 1: here's three questions to ask yourself. Do you want to 340 00:16:52,560 --> 00:16:56,560 Speaker 1: stop working or just stop doing your current job? And 341 00:16:56,640 --> 00:17:00,280 Speaker 1: how how will you stay mentally and socially active if 342 00:17:00,320 --> 00:17:03,840 Speaker 1: you do retire early? Those are big questions to answer 343 00:17:03,920 --> 00:17:07,520 Speaker 1: and hopefully answer in advance. In other words, is early 344 00:17:07,600 --> 00:17:12,480 Speaker 1: retirement your really your goal? Or is just flexibility having 345 00:17:12,520 --> 00:17:15,720 Speaker 1: more flexibility and freedom in your life your real priority. 346 00:17:15,760 --> 00:17:18,359 Speaker 1: I think those are three wonderful questions to ask. 347 00:17:18,600 --> 00:17:20,119 Speaker 4: Yeah, and I think a lot of times, you know 348 00:17:20,280 --> 00:17:21,720 Speaker 4: it's exactly that, and you know, a lot of people 349 00:17:21,760 --> 00:17:23,920 Speaker 4: wind up frustrating their careers. You know that they've gone 350 00:17:23,960 --> 00:17:25,520 Speaker 4: as far as they want to, or maybe as far 351 00:17:25,560 --> 00:17:27,320 Speaker 4: as they can, or maybe the writing is just on 352 00:17:27,359 --> 00:17:28,919 Speaker 4: the wall and the company is kind of moving on 353 00:17:29,000 --> 00:17:30,640 Speaker 4: beyond there in their level of interest. 354 00:17:30,680 --> 00:17:32,640 Speaker 3: But that doesn't mean they're ready to retire yet either. 355 00:17:32,960 --> 00:17:36,199 Speaker 4: So I think the really, really, really important thing to 356 00:17:36,240 --> 00:17:38,280 Speaker 4: be thinking about is we all tend to hide behind 357 00:17:38,320 --> 00:17:41,720 Speaker 4: the dollars and waiting until I, you know, I think 358 00:17:41,760 --> 00:17:44,399 Speaker 4: I have enough perceived money that I can actually get 359 00:17:44,440 --> 00:17:47,560 Speaker 4: away with retirement, And we tend to focus on that 360 00:17:47,600 --> 00:17:50,480 Speaker 4: to the detriment of the time because once we do 361 00:17:50,600 --> 00:17:52,920 Speaker 4: get that, oh by the way, hey, people who focus 362 00:17:52,960 --> 00:17:55,879 Speaker 4: on that number tend to work too long and they 363 00:17:55,880 --> 00:17:58,359 Speaker 4: wind up surpassing that number because they didn't have a 364 00:17:58,359 --> 00:18:00,359 Speaker 4: plan to begin with, so they might hit that and 365 00:18:00,359 --> 00:18:03,160 Speaker 4: plow right past it because now they don't know exactly 366 00:18:03,240 --> 00:18:05,360 Speaker 4: what they want to do, and retirement just becomes terrifying. 367 00:18:05,600 --> 00:18:07,399 Speaker 4: So start to think about what it is you might do. 368 00:18:07,680 --> 00:18:10,880 Speaker 4: Are there smaller organizations where your skills would be valuable 369 00:18:11,040 --> 00:18:13,280 Speaker 4: and you could potentially go work for them for some 370 00:18:13,480 --> 00:18:15,480 Speaker 4: level of income. But remember the whole point of this 371 00:18:15,600 --> 00:18:18,080 Speaker 4: is you don't need the salary anymore, and you probably 372 00:18:18,119 --> 00:18:21,720 Speaker 4: don't need the benefits as much as you used to either. 373 00:18:22,000 --> 00:18:25,040 Speaker 4: So think big, think outside the box. Go on websites 374 00:18:25,119 --> 00:18:27,760 Speaker 4: like indeed and type in random words of stuff you're 375 00:18:27,760 --> 00:18:30,200 Speaker 4: interested in. Just a keyword search, see what kind of 376 00:18:30,280 --> 00:18:32,280 Speaker 4: jobs that are out there. You'd be shocked at the 377 00:18:32,359 --> 00:18:34,400 Speaker 4: kind of things that people will pay you to do, 378 00:18:35,040 --> 00:18:36,600 Speaker 4: to take advantage of the skills that are in your 379 00:18:36,600 --> 00:18:39,040 Speaker 4: brain that you developed over all those years. But don't 380 00:18:39,040 --> 00:18:41,840 Speaker 4: focus only on the light at the end of the tunnel. 381 00:18:41,840 --> 00:18:43,040 Speaker 4: I got to get out of this job and I'll 382 00:18:43,040 --> 00:18:45,280 Speaker 4: worry about the rest later. That hits like a freight train. 383 00:18:45,320 --> 00:18:47,680 Speaker 4: You really have got to spend some time thinking about 384 00:18:47,720 --> 00:18:49,800 Speaker 4: how you will fill the vacuum of time that you 385 00:18:49,840 --> 00:18:51,800 Speaker 4: will have when you no longer have to work. 386 00:18:52,920 --> 00:18:55,639 Speaker 1: Yeah, the real sweet spot here to me, Brian, is 387 00:18:56,160 --> 00:18:59,240 Speaker 1: being in a position where you can make decisions based 388 00:18:59,240 --> 00:19:01,560 Speaker 1: on what you want, want to do and feel called 389 00:19:01,600 --> 00:19:04,680 Speaker 1: to do, not what you feel like you have to do. 390 00:19:04,800 --> 00:19:07,600 Speaker 1: That that's really retirement freedom, and there's a lot of 391 00:19:07,600 --> 00:19:11,280 Speaker 1: factors that go into that. Obviously, money is won, but 392 00:19:11,800 --> 00:19:14,520 Speaker 1: you got to plan ahead and kind of look around 393 00:19:14,560 --> 00:19:16,919 Speaker 1: here at how you're going to fill your time and energy. 394 00:19:17,000 --> 00:19:19,679 Speaker 1: Because at the end of the day, whether it's your work, 395 00:19:20,320 --> 00:19:25,399 Speaker 1: volunteer work, you know, relationships in the community. Everyone wants 396 00:19:25,440 --> 00:19:28,760 Speaker 1: to have some purpose and meaning in their life and 397 00:19:28,800 --> 00:19:31,280 Speaker 1: they want to have contact with other people. And if 398 00:19:31,320 --> 00:19:35,040 Speaker 1: you don't have those things, some true community in your life, 399 00:19:35,520 --> 00:19:38,000 Speaker 1: I don't care whether you're worth five dollars or fifty 400 00:19:38,040 --> 00:19:40,480 Speaker 1: million dollars, your life's going to be empty. Here's the 401 00:19:40,520 --> 00:19:43,440 Speaker 1: all Worth advice. If you're dreaming of early retirement, that's great, 402 00:19:43,760 --> 00:19:46,959 Speaker 1: but make sure you're planning for more than just financial freedom. 403 00:19:47,280 --> 00:19:50,760 Speaker 1: Plan for purpose too. Coming up next, we've got the 404 00:19:50,880 --> 00:19:54,080 Speaker 1: money makeover for all you empty nesters out there. You're 405 00:19:54,119 --> 00:19:56,520 Speaker 1: listening to Simply Money presented by all Worth Financial on 406 00:19:56,560 --> 00:20:04,960 Speaker 1: fifty five KRC the talk station. You're listening to Simply 407 00:20:05,000 --> 00:20:07,840 Speaker 1: Money presented by all Worth Financial on Bob Sponsor along 408 00:20:07,880 --> 00:20:12,800 Speaker 1: with Brian James. There's this moment every parent eventually hits 409 00:20:13,000 --> 00:20:16,119 Speaker 1: you after the last kid moves out, when you walk 410 00:20:16,240 --> 00:20:20,000 Speaker 1: past that empty bedroom and it just socks you right 411 00:20:20,040 --> 00:20:24,000 Speaker 1: in the mouth. Oh, while it's quiet in there. I've 412 00:20:24,040 --> 00:20:27,920 Speaker 1: experienced that. Brian, my wife has as well, and right 413 00:20:28,000 --> 00:20:31,240 Speaker 1: after that you start thinking, Okay, what do we do 414 00:20:31,320 --> 00:20:34,800 Speaker 1: with all this space and potentially what do we do 415 00:20:34,920 --> 00:20:38,280 Speaker 1: with all this money we've been spending on travel, baseball 416 00:20:38,480 --> 00:20:41,879 Speaker 1: and college tuition and all that. So, you know, the 417 00:20:41,920 --> 00:20:44,000 Speaker 1: point we're trying to make tonight and kind of walk 418 00:20:44,080 --> 00:20:48,680 Speaker 1: through is when you hit that empty nester phase, it's 419 00:20:48,760 --> 00:20:51,680 Speaker 1: not time to just you know, go out and spend 420 00:20:51,720 --> 00:20:54,280 Speaker 1: all that extra money you might have have laying around 421 00:20:54,400 --> 00:20:57,000 Speaker 1: or think you have laying around. It's time to take 422 00:20:57,040 --> 00:21:02,040 Speaker 1: some inventory on where does life actually pan out right now, 423 00:21:02,080 --> 00:21:05,119 Speaker 1: and maybe some some tune up work that needs to 424 00:21:05,119 --> 00:21:07,000 Speaker 1: be done to your overall financial plan. 425 00:21:07,280 --> 00:21:09,720 Speaker 4: Yeah, so an empty nester money makeover, I think, is 426 00:21:09,720 --> 00:21:11,639 Speaker 4: what you're referring to there. So you already refer to 427 00:21:11,680 --> 00:21:14,199 Speaker 4: the expenses that may be gone, all those things that 428 00:21:14,240 --> 00:21:17,080 Speaker 4: the kids were into that you know aren't costing money anymore. 429 00:21:17,560 --> 00:21:18,560 Speaker 3: So let's talk about the house. 430 00:21:18,600 --> 00:21:20,440 Speaker 4: So the structure of the house, of course, is still 431 00:21:20,440 --> 00:21:22,639 Speaker 4: the same in congratulations because it's still standing. 432 00:21:22,640 --> 00:21:23,200 Speaker 3: That's a good thing. 433 00:21:23,760 --> 00:21:25,520 Speaker 4: But you don't need all that space. So what about 434 00:21:25,520 --> 00:21:27,919 Speaker 4: that old bedroom. Maybe it becomes a yoga room or 435 00:21:27,960 --> 00:21:31,280 Speaker 4: a guest suite, or the sports bar, but probably what 436 00:21:31,280 --> 00:21:33,879 Speaker 4: it will become first is a glorified storage unit for 437 00:21:34,119 --> 00:21:36,520 Speaker 4: you know, twenty band, twenty years of marching band trophies 438 00:21:36,560 --> 00:21:38,760 Speaker 4: and old posters, legos. 439 00:21:38,320 --> 00:21:39,040 Speaker 3: And that kind of thing. 440 00:21:39,320 --> 00:21:41,480 Speaker 4: So money works the same way. When the kids are gone. 441 00:21:41,480 --> 00:21:43,400 Speaker 4: It's sort of like you just cleared a giant room 442 00:21:43,440 --> 00:21:45,320 Speaker 4: in your financial house. So what do you want to 443 00:21:45,359 --> 00:21:48,080 Speaker 4: do with those resources that you have next? Well, one 444 00:21:48,080 --> 00:21:50,200 Speaker 4: of the first things to look at is that cash flow. 445 00:21:50,240 --> 00:21:52,280 Speaker 4: So as we mentioned, a lot of those regular expenses 446 00:21:52,320 --> 00:21:55,760 Speaker 4: are gonna disappear. Your grocery bill's gonna drop when they 447 00:21:55,840 --> 00:21:58,480 Speaker 4: hit a certain age. Eventually, your car insurance is gonna drop, 448 00:21:58,760 --> 00:22:01,320 Speaker 4: you'll hand off their cell phone, those college payments go away. 449 00:22:01,880 --> 00:22:05,560 Speaker 4: But without some kind of planning those extra the absence 450 00:22:05,560 --> 00:22:08,359 Speaker 4: of those expenses is going to give you extra spendable money, 451 00:22:09,040 --> 00:22:11,679 Speaker 4: and it could result in we've got this stuff, so 452 00:22:11,680 --> 00:22:13,439 Speaker 4: we might as well blow it on things, and you 453 00:22:13,480 --> 00:22:15,440 Speaker 4: maybe you wind up with a fancy your car, more 454 00:22:15,480 --> 00:22:17,680 Speaker 4: eating out, and then you may wind up regretting that 455 00:22:17,720 --> 00:22:18,919 Speaker 4: you didn't really have a plan for it. 456 00:22:18,960 --> 00:22:21,359 Speaker 3: So just think about it in advance. Think about it 457 00:22:21,440 --> 00:22:21,639 Speaker 3: like this. 458 00:22:21,680 --> 00:22:23,439 Speaker 4: If you take down a wall in your house, you 459 00:22:23,440 --> 00:22:25,960 Speaker 4: could fill that new space with clutter, or you could 460 00:22:25,960 --> 00:22:27,800 Speaker 4: open it up and make it more functional for something 461 00:22:27,840 --> 00:22:29,520 Speaker 4: you actually want to do. But the point is you 462 00:22:29,560 --> 00:22:31,879 Speaker 4: will have fought in advance for what you want to 463 00:22:31,920 --> 00:22:34,840 Speaker 4: do with those new added resources that you have. So 464 00:22:34,840 --> 00:22:37,760 Speaker 4: maybe it's funding those catchup contributions in your four one okay, 465 00:22:37,760 --> 00:22:42,679 Speaker 4: increase that amount, or IRA contributions roth IRA backdoor contributions 466 00:22:42,720 --> 00:22:45,359 Speaker 4: if if that's something that you're familiar with. If you're 467 00:22:45,400 --> 00:22:47,920 Speaker 4: over fifty, you can put in a little extra each year, 468 00:22:47,960 --> 00:22:50,080 Speaker 4: and for those in their early sixties, there's even a 469 00:22:50,119 --> 00:22:53,720 Speaker 4: new catchup So these dollars sometimes aren't present at the moment, 470 00:22:53,920 --> 00:22:56,760 Speaker 4: but remember these opportunities when you do hit this empty 471 00:22:56,760 --> 00:22:57,679 Speaker 4: nest stage of life. 472 00:22:58,800 --> 00:23:01,520 Speaker 1: Well, Brian speaking to take that wall down and having 473 00:23:01,640 --> 00:23:04,720 Speaker 1: the option of just having a bunch of clutter. My 474 00:23:04,800 --> 00:23:07,000 Speaker 1: wife and I are living this right now, so I'm 475 00:23:07,000 --> 00:23:09,680 Speaker 1: giving you a preview of what your life is likely 476 00:23:09,720 --> 00:23:12,080 Speaker 1: going to become. All three of our kids are out 477 00:23:12,119 --> 00:23:14,520 Speaker 1: of college. They're all living on their own now in 478 00:23:14,600 --> 00:23:18,080 Speaker 1: their own separate homes and dwellings, but a lot of 479 00:23:18,080 --> 00:23:20,959 Speaker 1: their crap is still in our house. You know, it's funny. 480 00:23:21,000 --> 00:23:23,600 Speaker 1: We my wife will go through. She does a wonderful 481 00:23:23,680 --> 00:23:26,280 Speaker 1: job of keeping our home clean and clutter free, but 482 00:23:26,359 --> 00:23:28,840 Speaker 1: she'll periodically go through and find all you know. You 483 00:23:28,960 --> 00:23:32,240 Speaker 1: use the analogy of marching band trophies. I mean, whether 484 00:23:32,280 --> 00:23:35,359 Speaker 1: it's that or athletic trophies, are just close, you know, 485 00:23:35,800 --> 00:23:38,640 Speaker 1: stuff laying around and she'll go to the kids and say, hey, 486 00:23:39,080 --> 00:23:40,960 Speaker 1: you moved out. Are you going to take this stuff 487 00:23:41,000 --> 00:23:43,359 Speaker 1: with you? Nope, don't have room for that. Can you 488 00:23:43,520 --> 00:23:48,840 Speaker 1: keep it? So a lot of the stuff never goes away. 489 00:23:49,800 --> 00:23:52,399 Speaker 1: It's a process, all right. Speaking of the house, and 490 00:23:52,760 --> 00:23:56,080 Speaker 1: this is a topic that comes up a lot. People 491 00:23:56,160 --> 00:23:59,480 Speaker 1: talk about wanting to downsize or right size their home. 492 00:23:59,800 --> 00:24:03,120 Speaker 1: This this is a big emotional and financial topic. Some 493 00:24:03,200 --> 00:24:07,359 Speaker 1: people dream about downsizing, while others love their current home 494 00:24:07,640 --> 00:24:10,160 Speaker 1: and plan to stay put, even if they have two 495 00:24:10,200 --> 00:24:13,280 Speaker 1: or three bedrooms that are completely empty. The point I 496 00:24:13,359 --> 00:24:15,840 Speaker 1: make here, Brian, is a lot of times people talk 497 00:24:15,880 --> 00:24:19,119 Speaker 1: about downsizing. I don't know about you. I have yet 498 00:24:19,160 --> 00:24:21,640 Speaker 1: to see the client. And I've been doing this for 499 00:24:21,920 --> 00:24:25,760 Speaker 1: thirty five years. I've yet to see somebody sell their 500 00:24:25,800 --> 00:24:31,560 Speaker 1: primary residence and move somewhere that ends up costing less money. 501 00:24:31,880 --> 00:24:35,200 Speaker 1: It might be smaller, but it ends up being newer 502 00:24:35,440 --> 00:24:39,639 Speaker 1: with you know, with nice, with nice furnishings. It never 503 00:24:39,960 --> 00:24:44,760 Speaker 1: costs less money. People want to rationalize this by making it, 504 00:24:44,920 --> 00:24:48,399 Speaker 1: you know, calling it downsizing. It's really not when it 505 00:24:48,400 --> 00:24:51,960 Speaker 1: comes to finances. So just you know, buyer beware out 506 00:24:52,000 --> 00:24:55,360 Speaker 1: there when you start talking about the whole downsizing conversation. 507 00:24:55,840 --> 00:24:58,480 Speaker 1: Does this ring true with you and your clients as well? 508 00:24:59,160 --> 00:25:01,679 Speaker 4: There's no such thing is a financial downsizing. When it 509 00:25:01,680 --> 00:25:04,520 Speaker 4: comes to your house. There's an effort and work downsizing. 510 00:25:04,560 --> 00:25:06,080 Speaker 4: You can reduce the amount of work you got to 511 00:25:06,080 --> 00:25:07,720 Speaker 4: put into it, but you're not gonna save any money. 512 00:25:07,760 --> 00:25:09,680 Speaker 4: Even if you buy a smaller house, it's most likely 513 00:25:09,720 --> 00:25:12,240 Speaker 4: going to be in a nicer neighborhood or an area 514 00:25:12,280 --> 00:25:13,760 Speaker 4: you always wanted to live in that kind of thing, 515 00:25:13,760 --> 00:25:15,399 Speaker 4: and you're probably not the only one who wanted to 516 00:25:15,440 --> 00:25:18,959 Speaker 4: live there. Therefore, the expense the purchase it goes up. 517 00:25:19,000 --> 00:25:22,000 Speaker 4: So don't think money when you think downsizing. So what 518 00:25:22,000 --> 00:25:24,000 Speaker 4: do we do about this, Well, you can do what's 519 00:25:24,000 --> 00:25:27,159 Speaker 4: called a retirement rehearsal. So once the how you've noticed 520 00:25:27,160 --> 00:25:29,600 Speaker 4: the house is quiet and that budget is a little lighter, 521 00:25:29,800 --> 00:25:31,639 Speaker 4: well that's the time for a test drive. So maybe 522 00:25:31,680 --> 00:25:33,840 Speaker 4: live for six months on what you think your expected 523 00:25:33,880 --> 00:25:36,520 Speaker 4: retirement income is gonna be, and that might be so security, 524 00:25:36,560 --> 00:25:39,400 Speaker 4: pension investment withdraws or rental, real estate income, that kind 525 00:25:39,400 --> 00:25:41,959 Speaker 4: of thing. See how that feels, and you're gonna learn 526 00:25:42,040 --> 00:25:44,240 Speaker 4: quickly if the plan works, because you'll know right away 527 00:25:44,280 --> 00:25:46,119 Speaker 4: when you're dipping into more than what you thought you 528 00:25:46,119 --> 00:25:48,639 Speaker 4: were going to. And then you're gonna be because this 529 00:25:48,680 --> 00:25:50,840 Speaker 4: is you're not making a real sacrifice at this time. 530 00:25:50,840 --> 00:25:53,240 Speaker 4: You're just kind of test driving, so you're gonna you'll 531 00:25:53,280 --> 00:25:54,800 Speaker 4: know if you need a little tune up before that 532 00:25:54,840 --> 00:25:57,040 Speaker 4: paycheck stops. So it's kind of like taking the RV 533 00:25:57,119 --> 00:25:59,520 Speaker 4: on a weekend trip right before you actually buy it 534 00:25:59,560 --> 00:26:01,760 Speaker 4: for real, before you hit the road full time. You're 535 00:26:01,760 --> 00:26:03,680 Speaker 4: gonna want to test it before you're thousand miles from 536 00:26:03,680 --> 00:26:05,440 Speaker 4: home and see if you run across any problems you 537 00:26:05,480 --> 00:26:06,320 Speaker 4: didn't anticipate. 538 00:26:06,720 --> 00:26:09,800 Speaker 1: One more thing. I think that is a wonderful idea 539 00:26:09,800 --> 00:26:12,600 Speaker 1: and I wish more people did this, And I'm in 540 00:26:12,640 --> 00:26:15,280 Speaker 1: the middle of crying to do this right now, you know, 541 00:26:15,359 --> 00:26:19,199 Speaker 1: with my wife actually constructing a budget and looking at 542 00:26:19,240 --> 00:26:22,080 Speaker 1: what this is really gonna look like. If life's gonna 543 00:26:22,119 --> 00:26:25,800 Speaker 1: resemble what we think it might resemble. I think it's 544 00:26:26,000 --> 00:26:29,440 Speaker 1: really good to test drive this in advance. But go on, Yeah, 545 00:26:29,480 --> 00:26:30,679 Speaker 1: and so one more thing to do. 546 00:26:30,760 --> 00:26:32,840 Speaker 4: When you've got this free time you're gonna be Remember 547 00:26:32,880 --> 00:26:34,159 Speaker 4: the whole point of this is that the kids are 548 00:26:34,160 --> 00:26:35,800 Speaker 4: going they're out on their own. You're gonna start paying 549 00:26:35,800 --> 00:26:37,720 Speaker 4: attention to what it is they do and how they 550 00:26:37,760 --> 00:26:39,720 Speaker 4: live their lives. That's gonna be a bit of an 551 00:26:39,840 --> 00:26:42,520 Speaker 4: estate planning tune up for you. So you're gonna need 552 00:26:42,560 --> 00:26:44,879 Speaker 4: help sooner or later. Someday you're probably already in a 553 00:26:44,880 --> 00:26:48,040 Speaker 4: situation where you yourself are helping your own parents, and 554 00:26:48,080 --> 00:26:50,160 Speaker 4: so this is the time to learn which kid might 555 00:26:50,160 --> 00:26:52,560 Speaker 4: make the best executor, who is the one who can 556 00:26:52,600 --> 00:26:54,520 Speaker 4: make decisions on your behalf. This is yes, this is 557 00:26:54,600 --> 00:26:56,359 Speaker 4: years into the future, but you sooner you put this 558 00:26:56,359 --> 00:26:58,760 Speaker 4: stuff into place, the sooner you cannot think about it, 559 00:26:58,880 --> 00:27:01,920 Speaker 4: enjoy and enjoy retirement more. And then you'll be thinking 560 00:27:01,960 --> 00:27:04,040 Speaker 4: about which of my kids are good on their own 561 00:27:04,160 --> 00:27:07,680 Speaker 4: and I can trust them, you know, inheriting money at 562 00:27:07,680 --> 00:27:09,840 Speaker 4: my death, Which of them made me have some more 563 00:27:09,920 --> 00:27:12,800 Speaker 4: challenges and may require a little extra care for which 564 00:27:12,800 --> 00:27:14,720 Speaker 4: I might need a trust and a trustee in place. 565 00:27:14,960 --> 00:27:17,399 Speaker 4: So estate planning isn't just about passing that money. It's 566 00:27:17,400 --> 00:27:20,439 Speaker 4: about making life easier for the family later, especially for 567 00:27:20,480 --> 00:27:22,600 Speaker 4: those of you who have been through a difficult estate 568 00:27:22,680 --> 00:27:25,159 Speaker 4: settlement process, for maybe your own parents. So think of 569 00:27:25,200 --> 00:27:27,560 Speaker 4: it like labeling those boxes in that remodeled home. You're 570 00:27:27,960 --> 00:27:31,119 Speaker 4: saving everyone from chaos down the road by planning ahead. 571 00:27:31,760 --> 00:27:34,040 Speaker 1: Here's the all with advice. An empty nest is your 572 00:27:34,160 --> 00:27:40,119 Speaker 1: chance to reimagine and possibly refill your future. You know 573 00:27:40,560 --> 00:27:44,200 Speaker 1: you should be diversified, but what does being quote unquote 574 00:27:44,280 --> 00:27:47,000 Speaker 1: two diversified look like. It's one of the questions we'll 575 00:27:47,040 --> 00:27:49,479 Speaker 1: answer next. You're listening to Simply Money presented by all 576 00:27:49,480 --> 00:27:58,160 Speaker 1: Worth Financial on fifty five KRC the talk station. You're 577 00:27:58,200 --> 00:28:00,600 Speaker 1: listening to Simply Money presented by all Worth Financial. Um 578 00:28:00,640 --> 00:28:03,879 Speaker 1: Bob Sponsller alone with Brian James. Do you have a 579 00:28:03,880 --> 00:28:06,480 Speaker 1: financial question you'd like for us to answer. There's a 580 00:28:06,520 --> 00:28:08,439 Speaker 1: red button you can click while you're listening to the 581 00:28:08,480 --> 00:28:11,679 Speaker 1: show right on the iHeart app. Simply record your question 582 00:28:11,840 --> 00:28:14,920 Speaker 1: and it will come straight to us. All right, Brian 583 00:28:15,000 --> 00:28:18,360 Speaker 1: tim and Hyde Park says. Our advisor keeps saying we're 584 00:28:18,359 --> 00:28:20,960 Speaker 1: on track. But it doesn't feel that way to us. 585 00:28:21,040 --> 00:28:25,800 Speaker 1: What's the difference between being mathematically fine and being truly 586 00:28:26,000 --> 00:28:28,159 Speaker 1: financially free? This is a great question. 587 00:28:28,560 --> 00:28:31,280 Speaker 4: Yeah, I really think so. So this if you if 588 00:28:31,320 --> 00:28:33,320 Speaker 4: it doesn't feel that way. First of all, that's not 589 00:28:33,520 --> 00:28:35,959 Speaker 4: that's not necessarily a negative thing. That's that you know, 590 00:28:36,119 --> 00:28:38,200 Speaker 4: that's that Jiminy cricket on your shoulder telling you to 591 00:28:38,240 --> 00:28:42,360 Speaker 4: be careful. That's the same voice that that that has 592 00:28:42,400 --> 00:28:44,280 Speaker 4: been telling you all along to save, safe, save. It 593 00:28:44,280 --> 00:28:47,080 Speaker 4: can be hard to tamp that voice down and turn 594 00:28:47,200 --> 00:28:50,280 Speaker 4: that freighter around psychologically, which is a very slow process 595 00:28:50,360 --> 00:28:53,720 Speaker 4: to spending your assets from putting nuts away for the winner. 596 00:28:53,800 --> 00:28:57,440 Speaker 4: So the difference between mathematically fine and being truly financially free, 597 00:28:57,480 --> 00:29:00,120 Speaker 4: tim is confidence. So it sounds like you just need 598 00:29:00,200 --> 00:29:01,680 Speaker 4: to go through your plan some more. And who knows, 599 00:29:01,680 --> 00:29:04,719 Speaker 4: maybe the advisor is missing something. We're all humans. Sometimes 600 00:29:04,720 --> 00:29:07,200 Speaker 4: things don't go well. So if there's something you mathematically 601 00:29:07,200 --> 00:29:10,160 Speaker 4: agree with, pinpoint that for the advisor and ask them 602 00:29:10,160 --> 00:29:13,040 Speaker 4: to explain it again and again until you understand it. 603 00:29:13,120 --> 00:29:16,000 Speaker 4: But again, that's the difference between mathematically fine and financially 604 00:29:16,000 --> 00:29:18,520 Speaker 4: free is confidence. Yes, I see this plan, and I 605 00:29:18,600 --> 00:29:21,480 Speaker 4: understand that things the light doesn't always work out that way. 606 00:29:21,680 --> 00:29:24,800 Speaker 4: But I have stress tested this plan several different times 607 00:29:25,000 --> 00:29:28,200 Speaker 4: for many reasons, and now I feel confident that anything 608 00:29:28,280 --> 00:29:30,200 Speaker 4: crazy that comes out of left field we can handle. 609 00:29:30,320 --> 00:29:33,240 Speaker 4: Confidence is the difference to him. David in Blue Ash. 610 00:29:33,320 --> 00:29:35,200 Speaker 4: David has a question for you, Bob, and he says, 611 00:29:35,400 --> 00:29:37,880 Speaker 4: we always talk about being diversified, but is it possible 612 00:29:37,920 --> 00:29:40,160 Speaker 4: to be too diversified, and if so, what does that 613 00:29:40,200 --> 00:29:40,560 Speaker 4: look like? 614 00:29:40,640 --> 00:29:45,640 Speaker 1: Bob, Well, David, The most common situation we come across is, 615 00:29:45,720 --> 00:29:48,920 Speaker 1: you know, people feel diversified, but they might have you know, 616 00:29:49,040 --> 00:29:53,200 Speaker 1: thirteen to seventeen different large cap mutual funds or ETFs, 617 00:29:53,280 --> 00:29:55,640 Speaker 1: either in their retirement plan or in their broker's account. 618 00:29:55,680 --> 00:30:00,000 Speaker 1: They've just been collecting these products over time, and people 619 00:30:00,200 --> 00:30:02,959 Speaker 1: have the sense of, you know, the more funds or 620 00:30:02,960 --> 00:30:09,360 Speaker 1: investment options I own, I'm automatically diversified. Well, true diversification 621 00:30:09,720 --> 00:30:14,000 Speaker 1: is having some non correlated asset classes to complement, you know, 622 00:30:14,160 --> 00:30:17,760 Speaker 1: in my example, the large cap growth positions. So a 623 00:30:17,800 --> 00:30:19,720 Speaker 1: little bit of bonds, a little bit of small cap, 624 00:30:19,760 --> 00:30:23,400 Speaker 1: a little bit of international, maybe some private equity, maybe 625 00:30:23,440 --> 00:30:26,840 Speaker 1: some bufferdtfs thing, you know, the whole idea behind having 626 00:30:26,920 --> 00:30:31,560 Speaker 1: a long term diversified portfolio is to have a portfolio 627 00:30:31,680 --> 00:30:34,520 Speaker 1: that over time gives you the highest rate of return 628 00:30:35,080 --> 00:30:39,000 Speaker 1: per unit of risk. That's what that modern portfolio theory 629 00:30:39,080 --> 00:30:43,200 Speaker 1: that you know, all financial advisors should be modeling portfolios 630 00:30:43,240 --> 00:30:45,680 Speaker 1: after it. That's what that's how and why it works. 631 00:30:45,760 --> 00:30:50,960 Speaker 1: So we have to define what diversified means, and the 632 00:30:51,000 --> 00:30:52,680 Speaker 1: only way to do that is kind of look under 633 00:30:52,720 --> 00:30:55,840 Speaker 1: the hood and see what you actually own. But that's 634 00:30:55,880 --> 00:31:00,400 Speaker 1: my answer. Oftentimes people feel diversified by having a bunch 635 00:31:00,440 --> 00:31:04,320 Speaker 1: of options in one particular asset class, and that's where 636 00:31:04,360 --> 00:31:07,480 Speaker 1: you might feel like you're diversified, but you're really not. 637 00:31:07,640 --> 00:31:10,760 Speaker 1: Hope that helps, all right, Eric and fort Mitchell says, 638 00:31:10,800 --> 00:31:14,320 Speaker 1: my company just offered me restricted stock units, and I 639 00:31:14,320 --> 00:31:17,280 Speaker 1: don't fully understand how they're taxed. How do I build 640 00:31:17,320 --> 00:31:21,000 Speaker 1: a plan around something like that that fluctuates in value? 641 00:31:21,040 --> 00:31:25,000 Speaker 4: Broum, So, first off, congratulations, because you obviously you work 642 00:31:25,040 --> 00:31:26,920 Speaker 4: for a company it's been successful enough it wants to 643 00:31:26,920 --> 00:31:29,160 Speaker 4: reward its employees by giving them a little piece of 644 00:31:29,160 --> 00:31:29,480 Speaker 4: the action. 645 00:31:29,640 --> 00:31:30,480 Speaker 3: So that's fantastic. 646 00:31:30,560 --> 00:31:33,920 Speaker 4: So those can be an excellent form of compensation, but 647 00:31:33,960 --> 00:31:36,560 Speaker 4: they do have unique tax and planning challenges because their 648 00:31:36,640 --> 00:31:40,040 Speaker 4: value depends on one company's stock price, and there's just 649 00:31:40,120 --> 00:31:42,440 Speaker 4: no way to tell what direction one company is going 650 00:31:42,440 --> 00:31:44,000 Speaker 4: to go or what the market's going to do to it. 651 00:31:44,080 --> 00:31:45,400 Speaker 3: So, but here are the facts. 652 00:31:45,880 --> 00:31:48,960 Speaker 4: When you're granted those restricted stocks units, you don't owe 653 00:31:48,960 --> 00:31:50,760 Speaker 4: any taxes yet because you technically. 654 00:31:50,400 --> 00:31:51,200 Speaker 3: Don't own anything. 655 00:31:51,200 --> 00:31:54,040 Speaker 4: They're restricted until they're not, so they're just a promise, 656 00:31:54,080 --> 00:31:56,080 Speaker 4: so that transaction at the very beginning. 657 00:31:55,800 --> 00:31:57,040 Speaker 3: Is not a taxable one. 658 00:31:57,240 --> 00:32:00,200 Speaker 4: They all have a vesting date, though, and once they 659 00:32:00,400 --> 00:32:01,480 Speaker 4: vest they hit that date. 660 00:32:01,560 --> 00:32:02,200 Speaker 3: Now they're yours. 661 00:32:02,560 --> 00:32:05,120 Speaker 4: Now the value of them is treated as ordinary income, 662 00:32:05,240 --> 00:32:07,400 Speaker 4: just as if they had increased your salary a little bit. 663 00:32:07,640 --> 00:32:09,200 Speaker 4: So the value of those shares are going to be 664 00:32:09,240 --> 00:32:12,760 Speaker 4: added to your W two income. Federal, state, and payroll 665 00:32:12,840 --> 00:32:15,040 Speaker 4: taxes are going to apply, and they will be withheld. 666 00:32:15,680 --> 00:32:18,040 Speaker 4: Oftentimes you'll have a choice though through what they call 667 00:32:18,120 --> 00:32:20,280 Speaker 4: share withholding, or they're going to sell some shares to 668 00:32:20,360 --> 00:32:23,080 Speaker 4: cover and then after those vests, so you've paid income 669 00:32:23,120 --> 00:32:25,840 Speaker 4: taxes for what you're sitting on now, you just don't stock. Now, 670 00:32:25,840 --> 00:32:27,480 Speaker 4: you just don't shares as if you had bought them 671 00:32:27,480 --> 00:32:29,480 Speaker 4: on your own, and if you sell them within a 672 00:32:29,560 --> 00:32:32,360 Speaker 4: year of having been granted them, then if there's any 673 00:32:32,400 --> 00:32:35,720 Speaker 4: gains above what you paid for when when they came unvested, 674 00:32:35,720 --> 00:32:38,760 Speaker 4: then you're going to pay income taxes on that as 675 00:32:38,760 --> 00:32:40,800 Speaker 4: a short term gain. If you sit on them for 676 00:32:40,840 --> 00:32:43,440 Speaker 4: more than a year, now you get the lower capital gains. 677 00:32:43,480 --> 00:32:45,320 Speaker 4: Right now, it's always a crapshoot as to whether you 678 00:32:45,320 --> 00:32:47,560 Speaker 4: should hold or sit on them. Only you'll know your 679 00:32:47,600 --> 00:32:50,280 Speaker 4: company better than anybody else. Treat it like an investment 680 00:32:50,320 --> 00:32:51,920 Speaker 4: hit if you had bought it on your own or 681 00:32:51,960 --> 00:32:54,520 Speaker 4: inherited or whatever, then think about it if that's something 682 00:32:54,560 --> 00:32:56,400 Speaker 4: you want to keep for the long term. But hopefully 683 00:32:56,440 --> 00:32:58,080 Speaker 4: that helps with some of the questions you might have 684 00:32:58,080 --> 00:33:00,240 Speaker 4: had out there. And again, congratulations for the for the 685 00:33:00,520 --> 00:33:03,840 Speaker 4: future windfall. So moving on to Karen and Loveland. Karen 686 00:33:03,880 --> 00:33:06,280 Speaker 4: says they've been careful with money, but now they're in 687 00:33:06,280 --> 00:33:09,040 Speaker 4: that sandwich generation where they're helping they're spending more helping 688 00:33:09,040 --> 00:33:11,240 Speaker 4: their own aging parents, not to mention keeping their own 689 00:33:11,240 --> 00:33:12,160 Speaker 4: situation afloat. 690 00:33:12,440 --> 00:33:14,560 Speaker 3: So how do you how do you spread it all out? Bob? 691 00:33:14,600 --> 00:33:17,520 Speaker 4: How do you support those aging parents without sacrificing their 692 00:33:17,520 --> 00:33:19,160 Speaker 4: own security? 693 00:33:19,520 --> 00:33:22,560 Speaker 1: Great question, Karen here's my answer. Don't just leave it 694 00:33:22,600 --> 00:33:26,080 Speaker 1: to chance. And here's what I mean. First, build build 695 00:33:26,080 --> 00:33:28,680 Speaker 1: a financial plan and update it if you already have one, 696 00:33:29,200 --> 00:33:33,120 Speaker 1: and run some different scenarios. What do our aging parents, 697 00:33:33,120 --> 00:33:34,880 Speaker 1: you know, what are they gonna we think we're gonna 698 00:33:34,920 --> 00:33:38,240 Speaker 1: need and for how long? And put those expenses into 699 00:33:38,280 --> 00:33:41,400 Speaker 1: your plan, and then factor in your own social security. 700 00:33:41,440 --> 00:33:43,960 Speaker 1: As you pointed out your question, have a plan, run 701 00:33:44,040 --> 00:33:48,600 Speaker 1: different scenarios, and stress test that plan and see how 702 00:33:48,640 --> 00:33:52,680 Speaker 1: it's gonna work. And usually one of three things you 703 00:33:52,720 --> 00:33:55,960 Speaker 1: know might need to happen. You know, if you and 704 00:33:56,280 --> 00:33:58,840 Speaker 1: or your spouse might need to work maybe one or 705 00:33:58,840 --> 00:34:01,200 Speaker 1: two or three extra year in order to pull all 706 00:34:01,240 --> 00:34:04,200 Speaker 1: this off. You might have to spend a little bit 707 00:34:04,320 --> 00:34:08,440 Speaker 1: less money in order to help your aging parents. Uh, 708 00:34:08,480 --> 00:34:11,600 Speaker 1: there's a lot of different variables there, and the important 709 00:34:11,600 --> 00:34:14,000 Speaker 1: thing is get out in front of it now, run 710 00:34:14,040 --> 00:34:17,920 Speaker 1: those scenarios so you have more control over those levers 711 00:34:17,920 --> 00:34:19,919 Speaker 1: that you pull. And then i'd say the last thing 712 00:34:20,000 --> 00:34:23,080 Speaker 1: is communication. You know, if you get to the point 713 00:34:23,120 --> 00:34:26,720 Speaker 1: where you can't just bankroll everything for your aging parents, 714 00:34:26,760 --> 00:34:29,480 Speaker 1: the sooner you can sit down and have those tough 715 00:34:29,520 --> 00:34:33,000 Speaker 1: conversations right now, the better everything's going to be you know, 716 00:34:33,120 --> 00:34:35,200 Speaker 1: down the road. I don't know. If you have siblings 717 00:34:35,200 --> 00:34:37,400 Speaker 1: that are in the mix, you know, it might involve 718 00:34:37,440 --> 00:34:41,000 Speaker 1: some communication with them. But that's my answer. Run a 719 00:34:41,000 --> 00:34:45,440 Speaker 1: good financial plan and then communicate. Communicate, communicate. Don't just 720 00:34:45,760 --> 00:34:48,200 Speaker 1: hope all this works out at the end. You know, 721 00:34:48,320 --> 00:34:51,080 Speaker 1: make some adjustments now when you have the ability to 722 00:34:51,120 --> 00:34:55,400 Speaker 1: do so. Next, I've got my two cents on picking 723 00:34:55,400 --> 00:34:58,440 Speaker 1: a financial advisor. You're listening to Simply Money, presented by 724 00:34:58,480 --> 00:35:06,319 Speaker 1: all Worth Financial on fifty KRC, the talk station. You're 725 00:35:06,360 --> 00:35:10,000 Speaker 1: listening to Simple Money, Allworth Financial on Bob Sponsller along 726 00:35:10,000 --> 00:35:13,400 Speaker 1: with Brian James. All Right, Brian, we talk all the 727 00:35:13,480 --> 00:35:18,600 Speaker 1: time about having a properly diversified investment portfolio. But you know, 728 00:35:18,960 --> 00:35:21,839 Speaker 1: from time to time we run into folks that think 729 00:35:22,200 --> 00:35:25,520 Speaker 1: it's a good idea to be diversified in terms of 730 00:35:25,560 --> 00:35:28,920 Speaker 1: the number of quote unquote financial advisors they have, and 731 00:35:28,960 --> 00:35:33,000 Speaker 1: I want to touch on that a little bit. I rarely, 732 00:35:33,080 --> 00:35:36,160 Speaker 1: if ever, find this to be a good idea where 733 00:35:36,200 --> 00:35:39,759 Speaker 1: people are getting ideas from four to five different quote 734 00:35:39,800 --> 00:35:43,480 Speaker 1: unquote advisors, when really all they are is just people 735 00:35:43,520 --> 00:35:47,880 Speaker 1: that they've bought product from over the years. And you know, 736 00:35:47,960 --> 00:35:49,359 Speaker 1: at the end of the day, a lot of these 737 00:35:49,360 --> 00:35:53,000 Speaker 1: clients aren't really looking for an advisor. They're looking for 738 00:35:53,080 --> 00:35:55,440 Speaker 1: a bunch of different ideas and they want to be 739 00:35:55,480 --> 00:35:58,520 Speaker 1: their own advisors. So the analogy I want to use is, 740 00:35:59,239 --> 00:36:02,560 Speaker 1: you know, because of a heart valve, you know thing 741 00:36:02,640 --> 00:36:06,040 Speaker 1: that I was born with. Uh, I've seen a cardiologist 742 00:36:06,160 --> 00:36:10,239 Speaker 1: for shoot thirty years now, and when it comes time 743 00:36:10,280 --> 00:36:14,000 Speaker 1: to having somebody keep me alive, I'm not googling it. 744 00:36:14,200 --> 00:36:18,080 Speaker 1: I'm not talking to six different cardiologists. I asked around. 745 00:36:18,480 --> 00:36:21,480 Speaker 1: I found a good one and then I let him 746 00:36:21,719 --> 00:36:24,719 Speaker 1: manage my care over the long term. And I don't 747 00:36:24,719 --> 00:36:26,640 Speaker 1: need to get into all the details, but he's done 748 00:36:26,680 --> 00:36:31,240 Speaker 1: a wonderful job of keeping my heart healthy. It's because 749 00:36:31,280 --> 00:36:35,120 Speaker 1: I found a good cardiologist. I trusted him, I trusted 750 00:36:35,120 --> 00:36:38,400 Speaker 1: his process. I trusted the fact that he has always 751 00:36:38,960 --> 00:36:43,080 Speaker 1: ordinated my care with my primary physician, and it's been 752 00:36:43,120 --> 00:36:46,480 Speaker 1: a good outcome. The same thing should apply to your 753 00:36:46,520 --> 00:36:50,800 Speaker 1: financial advisor. A big thing that we run into, Brian, 754 00:36:51,040 --> 00:36:55,560 Speaker 1: is there's no coordination from a tax standpoint, you know, 755 00:36:55,719 --> 00:36:59,759 Speaker 1: with a client CPA or even proactive tax strategy. And 756 00:36:59,800 --> 00:37:03,000 Speaker 1: I'll say if even if You've got five different quote 757 00:37:03,080 --> 00:37:07,080 Speaker 1: unquote advisors out there, and no one's doing any proactive 758 00:37:07,160 --> 00:37:10,759 Speaker 1: tax planning and coordinating with your CPA. You do not 759 00:37:10,920 --> 00:37:12,880 Speaker 1: have a good financial plan. You got a couple of 760 00:37:12,920 --> 00:37:15,200 Speaker 1: good ideas, you got a bunch of people trying to 761 00:37:15,680 --> 00:37:19,080 Speaker 1: retain wallet share in terms of your assets under management, 762 00:37:19,320 --> 00:37:21,799 Speaker 1: but you really don't have a good financial plan. So 763 00:37:21,800 --> 00:37:24,120 Speaker 1: I'm yeah, go job, John. 764 00:37:24,080 --> 00:37:25,919 Speaker 4: I want I want to lean on your your your 765 00:37:25,960 --> 00:37:28,880 Speaker 4: your cardiologist example there, because I've had a similar situation 766 00:37:28,960 --> 00:37:30,799 Speaker 4: where I've got a minor thing going on that isn't 767 00:37:30,840 --> 00:37:32,480 Speaker 4: to worry about, but I got to pay attention to it. 768 00:37:32,640 --> 00:37:35,560 Speaker 4: And when it first surfaced about fifteen years ago, I 769 00:37:35,640 --> 00:37:38,360 Speaker 4: went to the closest place because I really wasn't I 770 00:37:38,360 --> 00:37:40,160 Speaker 4: didn't know how to think about this stuff. And it 771 00:37:40,200 --> 00:37:42,600 Speaker 4: took probably about six months before I realized that was 772 00:37:42,640 --> 00:37:44,560 Speaker 4: not their specialty, and they were kind of flailing a 773 00:37:44,600 --> 00:37:47,120 Speaker 4: little bit trying to figure out that this wasn't a 774 00:37:47,160 --> 00:37:50,080 Speaker 4: traditional cardiologist. It was somebody recommended to me by by 775 00:37:50,120 --> 00:37:52,120 Speaker 4: the hospital for the in the er that I went to, 776 00:37:52,440 --> 00:37:54,200 Speaker 4: and I realized that, you know what, I really need 777 00:37:54,239 --> 00:37:57,040 Speaker 4: somebody who does this all day long and that's all 778 00:37:57,080 --> 00:37:59,360 Speaker 4: that they do. And I figured out that that was 779 00:37:59,400 --> 00:38:01,640 Speaker 4: a very different experience, and they got me squared away. 780 00:38:01,680 --> 00:38:03,879 Speaker 4: And I go every few years and they say, go away. 781 00:38:03,920 --> 00:38:05,479 Speaker 4: You're in pretty good health. But let us know anything 782 00:38:05,480 --> 00:38:07,360 Speaker 4: else happens, which is a good thing. Same thing with 783 00:38:07,400 --> 00:38:10,200 Speaker 4: financial advisors. Figure out what your challenges are. If your 784 00:38:10,239 --> 00:38:13,839 Speaker 4: financial advisor isn't teaching you things that you didn't already know, 785 00:38:14,040 --> 00:38:16,000 Speaker 4: they're not doing you any good. They're probably just selling 786 00:38:16,080 --> 00:38:16,919 Speaker 4: you product. 787 00:38:16,800 --> 00:38:18,320 Speaker 3: They should be. It shouldn't. 788 00:38:18,719 --> 00:38:21,640 Speaker 4: A financial advisor should never tell you exactly precisely, here's 789 00:38:21,680 --> 00:38:23,280 Speaker 4: what you need to do in black and white terms. 790 00:38:23,360 --> 00:38:26,040 Speaker 4: If you have built a solid financial situation for yourself, 791 00:38:26,200 --> 00:38:28,560 Speaker 4: that should mean you have options, and options come with 792 00:38:28,640 --> 00:38:31,000 Speaker 4: pros and cons, and it's not for an advisor to 793 00:38:31,040 --> 00:38:33,160 Speaker 4: tell you which to do. It's for the advisor to 794 00:38:33,200 --> 00:38:35,520 Speaker 4: help you clearly understand the pros and cons because they're 795 00:38:35,560 --> 00:38:37,880 Speaker 4: all good ideas. One of them will be better than 796 00:38:37,920 --> 00:38:38,320 Speaker 4: the others. 797 00:38:38,360 --> 00:38:39,239 Speaker 3: That is your call. 798 00:38:39,520 --> 00:38:41,560 Speaker 4: But you need an advisor there to tell you which 799 00:38:41,640 --> 00:38:43,799 Speaker 4: to do. It's never black and white. When you've reached 800 00:38:43,800 --> 00:38:45,400 Speaker 4: a level of financial success. 801 00:38:45,960 --> 00:38:48,600 Speaker 1: Yeah, and to use your example, and it's one that 802 00:38:48,640 --> 00:38:51,160 Speaker 1: I lived through with that cardiologist as well. I mean, 803 00:38:51,200 --> 00:38:53,160 Speaker 1: you get to a certain point where I had a 804 00:38:53,320 --> 00:38:56,160 Speaker 1: high degree of respect for someone that says, hey, I've 805 00:38:56,160 --> 00:38:58,719 Speaker 1: reached the limits of what I'm able to do personally. 806 00:38:59,120 --> 00:39:01,680 Speaker 1: I'm going to refer you to this specialist over here. 807 00:39:02,520 --> 00:39:05,720 Speaker 1: That's good advice. Thanks for listening tonight. You've been listening 808 00:39:05,760 --> 00:39:08,160 Speaker 1: to Simply Money, presented by all Worth Financial on fifty 809 00:39:08,160 --> 00:39:10,080 Speaker 1: five KRC, the talk station