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Speaker 1: Tonight, we are perhaps living through yet another example of

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Speaker 1: why it is a fool's errand to try to time

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Speaker 1: this market in the short term. You're listening to Simply Money,

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

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Speaker 1: Brian James. Boy, it sure has been a while since

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Speaker 1: we've said that word correction. And as we like to

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Speaker 1: do on this show, we want to provide some perspective

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Speaker 1: and some headline news that we were all reading going

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Speaker 1: into the weekend and even into today. Brian, I mean,

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Speaker 1: let's get into some of the headlines and then let's

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Speaker 1: pivot to what seems to be happening today. And boy,

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Speaker 1: a lot of things can change in a hurry in

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Speaker 1: the short term. But let's get into what's been going

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Speaker 1: on in the markets as we ended last week and

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Speaker 1: headed into this week.

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Speaker 2: Well, let's talk about that C word, Bob. So there

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Speaker 2: is one index now we got to I want everybody

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Speaker 2: to promise we're going to listen to this all the

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Speaker 2: way through before we just hear the words we want

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Speaker 2: to hear and then react to it. So let me

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Speaker 2: get through this and then we'll react. So on Friday,

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Speaker 2: the Russell two thousand, that's a lesser known index, but

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Speaker 2: still a pretty common one that entered in correction territory.

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Speaker 2: That's a drop of ten percent or more. Here's the

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Speaker 2: key point, though from a recent high. None of these

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Speaker 2: indices are down ten percent year to date. Right, we

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Speaker 2: tend to think in terms of in terms of what

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Speaker 2: has it done so far this year? That is not

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Speaker 2: the RaSE point. Yeah, I mean, we climbed a mountain.

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Speaker 2: All of the indussees climbed a mountain until March February

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Speaker 2: twenty fourth or so somewhere around that, and that was

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Speaker 2: kind of the peak. And then we've had this latest pullback.

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Speaker 2: Of course, a lot of it related to the war,

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Speaker 2: just some other concerns that are always around interest rates

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Speaker 2: and inflation and all that other stuff. So we've had

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Speaker 2: this significant pullback. Russell two thousand has dropped ten percent

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Speaker 2: from its recent high. Now this morning or this morning,

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Speaker 2: things were up, and that was a good feeling and

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Speaker 2: to kind of see to prove to Bob's point, which is,

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Speaker 2: you know, we never want to look at what happened

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Speaker 2: last week, and that that is the path going forward.

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Speaker 2: We'll see what happens later this week, next week, so on,

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Speaker 2: and so forth. Right now. We are very, very, very

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Speaker 2: much headline driven. So the last time the Russell two

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Speaker 2: thousand was in correction territory was January of twenty five,

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Speaker 2: so a little more than a year ago. There was

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Speaker 2: a brief bear market right after Liberation Day, if you

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Speaker 2: remember that from the start of the second Trump administration,

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Speaker 2: and Liberation Day was all about tariffs. The market didn't

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Speaker 2: like that, and so we had a little bit of

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Speaker 2: a panic there at that point. The tech heavy NASDAC

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Speaker 2: that's also in a similar situation in correction territory. And

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Speaker 2: so the last Thursday, here's some other headlines. S and

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Speaker 2: P five hundred finished below its two hundred day moving average,

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Speaker 2: and that snapped a run of two hundred and fourteen

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Speaker 2: trading sessions above it, which is almost a full year.

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Speaker 2: So again to Bob's point though, that none of this

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Speaker 2: is anything to react to. As of this morning, we

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Speaker 2: had a complete turnaround from that attitude. We'll see if

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Speaker 2: that holds throughout the week and so forth, or even tomorrow,

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Speaker 2: but at this point we're simply seeing the kind of

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Speaker 2: volatility that is driven when we react to headlines.

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Speaker 1: Brian, I want to pick up your point on Thursday

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Speaker 1: with the S and P five hundred, you know, closing

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Speaker 1: below the two hundred day moving average. I can just

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Speaker 1: tell you that a lot of short term traders and

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Speaker 1: algorithmic trading systems and all that they focus on that

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Speaker 1: two hundred day moving average, and once things break below that,

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Speaker 1: people will put on bearess trades and they will leverage

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Speaker 1: to do that. And man, you better have your finger

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Speaker 1: on the trigger when you get involved with that kind

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Speaker 1: of stuff, because you're when you're using borrowed money leverage

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Speaker 1: downside trading, things can reverse in a hurry. And that

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Speaker 1: leads us to this morning. You know, I think with

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Speaker 1: people were concerned going into the weekend. I mean, let's

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Speaker 1: let's be real here. The Trump administration had imposed kind

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Speaker 1: of a forty eight hour deadline that was scheduled to

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Speaker 1: end tonight Monday, saying Hey, Aaron, if we don't make

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Speaker 1: some progress here on a negotiation front, you know, I'm

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Speaker 1: gonna bomb the Jesus out of you know a bunch

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Speaker 1: of more energy infrastructure. Well you go and do that. Now,

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Speaker 1: you're really impacting the global oil supply for much longer term.

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Speaker 1: You're really impacting the Iranian people. Now, the Iranian economy

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Speaker 1: because let's face it, their whole economy is based on oil.

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Speaker 1: I don't think President Trump wanted to do that, but

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Speaker 1: as we should all be used to by now, this

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Speaker 1: guy likes to negotiate on social media and then the

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Speaker 1: media in general, and so that threat was out there.

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Speaker 1: People were trading off of that and then lo and

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Speaker 1: behold it around. I don't know, seven thirty seven forty

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Speaker 1: five this morning, he calls that whole thing off, based

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Speaker 1: on supposedly some productive conversations with the Iranian regime and said, Hey,

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Speaker 1: I'm gonna do a five day moratorium on all this

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Speaker 1: bombing of Iranian energy infrastructure. Brian, you know, as of

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Speaker 1: eight o'clock this morning, you know, the Dow futures were

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Speaker 1: going going from down over three hundred points to up

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Speaker 1: over eleven hundred points. And what that does is people

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Speaker 1: that have these short term, you know, short trades on

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Speaker 1: especially in a leverage fashion, they gotta buy, they gotta

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Speaker 1: cover the shorts immediately, and that's where you get this

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Speaker 1: massive volatility. I think, another fancy.

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Speaker 2: On the wrong side of the bet, right, that's right, Yeah,

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Speaker 2: they're hoping the market goes down. That's the position you're

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Speaker 2: in right now. But when they see a headline night

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Speaker 2: like this, they have to go cover it. So it's

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Speaker 2: excuse me, it's not It's not really this raging passion

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Speaker 2: for all of a sudden everything is wonderful. It's somebody

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Speaker 2: going whoops, I'm on the wrong side of the fence here.

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Speaker 1: Yeah, it's a difference between going with a longer term

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Speaker 1: trend versus trying to game the system on a one

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Speaker 1: or two day trade. And that's what a lot of

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Speaker 1: these Wall Street talking heads get on the air and

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Speaker 1: talk about every day, which is completely the opposite of

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Speaker 1: what you know, most sane, rational people are doing. What

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Speaker 1: you and I are advising to do is to build

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Speaker 1: a longer term financial plan. And you know, I probably

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Speaker 1: sound a little energized by all this today because I am.

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Speaker 1: I mean again, this is exhibit A for anyone that's

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Speaker 1: paying attention on why you do not move massive amounts

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Speaker 1: of money. You know, get overly aggressive in an upmarket

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Speaker 1: and get overly pessimistic in a down market, because things

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Speaker 1: do turn on a dime. I want to bring up

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Speaker 1: one more thing, Brian, And you know, it's been fascinating

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Speaker 1: to watch the price of gold over the last week

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Speaker 1: or so you know that that's been the raging bull

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Speaker 1: trade over the last twelve, eighteen, twenty four months. And

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Speaker 1: you know, when liquidity is scares, people have to go

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Speaker 1: sell anything they can sell at a profit to raise liquidity.

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Speaker 1: And boy, have gold stocks just gotten hammered. You know

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Speaker 1: over the last three or four trading sessions. It's just

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Speaker 1: fascinating to watch how short term money moves around. And

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Speaker 1: that's kind of the point that I'm trying to make here.

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Speaker 1: We need to keep our eye on the ball here,

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Speaker 1: the long game, the stuff you and I talk about

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Speaker 1: every day on this show. Have a financial plan, allocate

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Speaker 1: your long term capital in a diversified in manner for

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Speaker 1: the long term, and yeah, have some cash and liquidity,

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Speaker 1: uh you know available that's not in risk related assets

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Speaker 1: to help you weather through volatility storms like we're seeing

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Speaker 1: right now.

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Speaker 2: Yeah, I think that's absolutely true. And on the on

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Speaker 2: the topic of gold there, I think the general public

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Speaker 2: has a belief that gold is a safe haven. I

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Speaker 2: don't think that I know that everybody knows that that's

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Speaker 2: not That's not exactly a big commitment on my part.

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Speaker 2: Gold is felt to be a safe haven, But at

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Speaker 2: the end of the day, it's just a commodity like

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Speaker 2: anything else. It's simply worth what what the investing public

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Speaker 2: thinks that it is. And so anybody, yeah, anybody who

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Speaker 2: bought gold over the past couple of weeks when it

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Speaker 2: was when it was at an all time high and

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Speaker 2: felt like it would go up forever, Well you're kind

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Speaker 2: of sitting on the wrong side of that trade right

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Speaker 2: now too, for because and the reason is because there's

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Speaker 2: risk all the time. Markets won't react to the headlines

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Speaker 2: and we'll get panicky and things will pull back. But unfortunately,

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Speaker 2: nobody puts that, you know, everybody back in the pool

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Speaker 2: light on and you don't get a heads up that

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Speaker 2: that's coming out. But unfortunately, when whenever the brokers out there,

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Speaker 2: who are the ones selling gold, right they don't care

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Speaker 2: what gold does. They want to create activity. They're not

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Speaker 2: if they were, if if there were people out there

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Speaker 2: sitting on piles of gold, why would they want to

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Speaker 2: sell it to you in TV commercials? If gold is

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Speaker 2: going up and it's a great thing to have, well,

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Speaker 2: then they would save all the money they spend on

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Speaker 2: all those commercials and all the social media advertising and

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Speaker 2: just buy more gold. But instead they're trying to convert,

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Speaker 2: encourage you to buy it. Well, the would the gold

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Speaker 2: as an investment doesn't matter to them. It's it's the

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Speaker 2: activity they need because they're taking their brokers, they're taking

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Speaker 2: a cut of the profits, right, And that's that's the

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Speaker 2: American way. It's just just the thing. Figure out where

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Speaker 2: the demand is and deliver on it. You can make

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Speaker 2: a lot of money. So but we're seeing in real

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Speaker 2: time why that can be a dangerous thing. You know,

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Speaker 2: you put money in something that you felt was supposed

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Speaker 2: to be a safe haven, and you immediate lose a

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Speaker 2: chunk of it. Unfortunately, it's not like it was fifty

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Speaker 2: sixty years ago. There there's almost nowhere, Bob anywhere where

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Speaker 2: you can anywhere where you can put your money and

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Speaker 2: not worry about it. If I'm gonna stick it in

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Speaker 2: something that is truly truly safe, you know, like treasury bond,

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Speaker 2: CD's that kind of thing. Now I'm fighting with inflation

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Speaker 2: and that's gonna sneak up on me overtime. If I

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Speaker 2: throw in the stock market, that's gonna be a roller

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Speaker 2: coaster ride. And so the right answer is a mix

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Speaker 2: of all of these things. The wrong answer is choosing

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Speaker 2: any one thing and saying this is my safe Hey,

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Speaker 2: nothing works that way anymore because of all the speculation

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Speaker 2: that happens out there.

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Speaker 1: Exactly, Brian, and I, as I listened to you go

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Speaker 1: through all that, I remember sitting at the dinner table

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Speaker 1: when with my parents when I was about ten or twelve,

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Speaker 1: and I can remember my dad telling me this all

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Speaker 1: the time, Bobby, there ain't no free lunch. And I

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Speaker 1: remembered that. So hey, pivoting off of the stock market

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Speaker 1: and goalten, let's talk. You want to talk about a

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Speaker 1: foolish bet, try betting on the direction and timing of

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Speaker 1: interst rates move. We had a Federal Reserve meeting last week, which,

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Speaker 1: to no one's surprise, they made no move in interest rates.

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Speaker 1: We went into this year expecting I don't know, Brian,

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Speaker 1: maybe two to three rate cuts, you know, toward the

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Speaker 1: second half of the year.

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Speaker 2: Talk through as.

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Speaker 1: A Friday according to Bloomberg data, you know what the

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Speaker 1: market's pricing in right now relative to interst rates and

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Speaker 1: fed to FED reductions or now the whispers have even

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Speaker 1: Federal reserve hikes in interest right now.

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Speaker 2: You stole my thunder there, but yeah, that's exactly what's happening.

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Speaker 2: We went from we went from raid cuts. Right, there's

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Speaker 2: this sort of steady downward movement coming off of the

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Speaker 2: inflation battle over the last five six years, triggered by COVID,

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Speaker 2: and now we've made a quit pretty quick pivot. No

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Speaker 2: change last week. But according to Bloomberg Data, and as always,

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Speaker 2: you can look at the bond markets and figure out

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Speaker 2: what the overall investing public things is going to happen

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Speaker 2: interest rates. According to Bloomberg Data, there's about sixty percent

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Speaker 2: chance the Fed is going to start raising rates by October.

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Speaker 2: That says, as we're sitting here right now, now right

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Speaker 2: next month could be different, could be higher, could be lower, whatever,

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Speaker 2: But as we're sitting here right now, the general thought

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Speaker 2: is the current trajectory has us needing to raise rates

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Speaker 2: by October to fight off inflation. And this is not

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Speaker 2: inflation driven by economic activity, right. That's the inflation that

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Speaker 2: we had over the last five six years was driven

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Speaker 2: by accelerated economic activity. That was the sort of the

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Speaker 2: tail end of our extremely low interest rates, as well

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Speaker 2: as COVID being a catalyst that drove investment opportunities as

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Speaker 2: people adjusted how to work from home and all those

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Speaker 2: kinds of things. What's created a bunch of opportunities for

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Speaker 2: the technology industry. That inflation was driven by economic activity,

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Speaker 2: this is a little different. This is being driven by

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Speaker 2: a war that is causing a bottleneck in a place

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Speaker 2: where they're quite literally is a bottleneck in the strait

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Speaker 2: of horror moves. That's the core of all this, That's

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Speaker 2: what has triggered it. But that's how quickly we've turned

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Speaker 2: on this one conflict in the Middle East. So the

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Speaker 2: idea that of higher interest rates kind likely is going

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Speaker 2: to come as a shock to a lot of people

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Speaker 2: because wait a minute, aren't we We thought we were

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Speaker 2: doing Okay, we're on a good run, that's true, but

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Speaker 2: we do have some catalysts out there that are pushing

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Speaker 2: prices of things higher, and so obviously inflation rates are

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Speaker 2: a big tool that we use to fight that.

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Speaker 1: Yeah, And depending on who you listen to, the talking

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Speaker 1: heads in the media, and I've listened to several of

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Speaker 1: them just over the weekend. Boy, the bets on where

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Speaker 1: interest rates are headed are all over the board. Some

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Speaker 1: are still predicting cuts, some are predicting raises. You do

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Speaker 1: not want to time the movement of interest structs.

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Speaker 2: I'm glad you listened to all those talking heads because

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Speaker 2: I get bored after I realized that really nobody knows

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Speaker 2: what's happening and they all have a different opinion.

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Speaker 1: Here's the all Worth advice. Market corrections and higher rates

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Speaker 1: are not signals to panic. They're reminders, like we've hopefully

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Speaker 1: done tonight, to stay discipline and invested and have a

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Speaker 1: long term financial plan coming up next. What a judge

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Speaker 1: in Texas just did that could endanger people looking for

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Speaker 1: trusted financial advice. You're listening to Simply Money presented by

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Speaker 1: all Worth Financial on fifty five KRC the talk station.

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Speaker 1: You're listening to Simply Money presented by all Worth Financial

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Speaker 1: on Bob Sponseller along with Brian James. If you can't

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Speaker 1: listen to Simply Money alive every night, subscribe and get

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Speaker 1: our daily podcast. Just search Simply Money on the iHeart

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Speaker 1: app or wherever you find your podcast. Well, a big

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Speaker 1: gain had to be trimmed. Was it the right move

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Speaker 1: at the right time? Plus what to do with a

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Speaker 1: five hundred thousand dollars cash hoard sitting on the sidelines,

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Speaker 1: and how to make sense of multiple income streams in retirement?

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Speaker 1: All of that straight ahead? Well, it just got a

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Speaker 1: little harder to decipher who is a trusted financial advisor

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Speaker 1: in who might not be Brian some news from down

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Speaker 1: in Texas.

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Speaker 2: Well. This is with regards to the fiduciary rule, right.

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Speaker 2: Fiduciary is one of our favorite words, because I mean,

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Speaker 2: that's what we are all day, every day at all

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Speaker 2: Worth Financial. And there's a lot of other the financial

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Speaker 2: advisor out there in the same boat. There were special

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Speaker 2: rules put in place right there. First off, there already

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Speaker 2: were rules about how a fiduciary can and has to

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Speaker 2: market itself. And if you are a fiduciary firm, for example,

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Speaker 2: then you have to have something called a form adv

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Speaker 2: which is a phone book that basically lays out every

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Speaker 2: possible thing that could happen, and it has a lot

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Speaker 2: of background. And I don't mean to poopoo it. It's

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Speaker 2: important all that information is out there. I am poop

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Speaker 2: pooing are the belief that people actually read those things. However,

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Speaker 2: any fiduciary organization has been under that requirement for decades

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Speaker 2: upon decades. As a matter of fact, there's three chunks

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Speaker 2: to it. Now. We usually we add a chunk to

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Speaker 2: it whenever there's a thing so but that's not what

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Speaker 2: we're talking about today. We're talking about the fiduciary rule

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Speaker 2: with regards specifically to retirement plans, so and within that,

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Speaker 2: we're basically talking about rollovers from four oh one k's

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Speaker 2: two iras, which, of course that's part of the investment world.

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Speaker 2: That's something that happens very commonly and the engagement between

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Speaker 2: a client and an advisor. Clients tend to usually want

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Speaker 2: somebody else to worry about the day to day investment management.

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Speaker 2: Therefore they roll their four A way or four or

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Speaker 2: three b's or what have you to an IRA, and

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Speaker 2: that gives the advisor access to move that money around.

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Speaker 2: Some of the advisors are salespeople first and foremost, which

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Speaker 2: means they only have to adhere to something called suitability,

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Speaker 2: which is just a general, very basic understanding of someone's income,

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Speaker 2: assets and risk tolerance, and then they can recommend with

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Speaker 2: where they want and be compensated you roughly however they want,

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Speaker 2: frequently with commissions that kind of thing. The fiduciary rule

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Speaker 2: adds the element of I must be able to justify

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Speaker 2: as the advisor in a court of law. Here's why

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Speaker 2: we bought this and sold that, because I understand my

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Speaker 2: client situation. That's why a lot of financial advisors worth

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Speaker 2: their salt, including all Worth Financial, we build financial plans first.

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Speaker 2: That way I can say I understand the Johnson family situation.

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Speaker 2: Here are their resources, here's what they're trying to do

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Speaker 2: with it. Therefore, our portfolio managers bought this and sold that.

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Speaker 2: That's not just an all Worth thing. That's just kind

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Speaker 2: of the definition of the fiduciary rule. Why are we

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Speaker 2: talking about this today, Bob, because federal courts in Texas

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Speaker 2: vacated a Biden era deduciary rule which basically said that anybody,

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Speaker 2: whether they're on the sales side or they're on the

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Speaker 2: traditionally fiduciary side, everybody has to act as a fiduciary

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Speaker 2: for one time advice such as yes, you should roll

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Speaker 2: your four oh one k over or know you should not.

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Speaker 2: And then this was geared toward tamping down the abuse

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Speaker 2: of these types of transactions to drive commission based business

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Speaker 2: and just being people doing things for the wrong reason.

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Speaker 2: So this is important because we expect about a trillion

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Speaker 2: dollars per year by twenty thirty is going to move

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Speaker 2: from four oh one ks to iras because of where

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Speaker 2: we are, so the one thing in it it did

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Speaker 2: kill a major loophole, but that advisors could give one

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Speaker 2: time rollover advice and still earn commissions without any fiduciary duty.

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Speaker 2: And so where we're at right now, that rule has

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Speaker 2: been removed, struck down by the federal courts. Not sure why.

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Speaker 2: I don't know why this was the focus now, but a.

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Speaker 1: Time it's called industry lobbying.

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Speaker 2: Well I was being more friendly, but sure, all right,

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Speaker 2: let's cut.

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Speaker 1: Let's cut the crap here and get down to what's

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Speaker 1: going on, because this has been going on for you

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Speaker 1: and I have both been in this industry for over

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Speaker 1: thirty years. I mean, here's how the game's played everybody.

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Speaker 1: People you mentioned sales related advisors. Let's just put the

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Speaker 1: cheese on the cracker here. Commission based people earning a

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Speaker 1: front end commission for this one time rollover transaction. Where

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Speaker 1: if you can justify saying it was quote unquote in

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Speaker 1: somebody's best interest to do this, you could justify that

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Speaker 1: big fat commission and oftentimes the big surrender charge that

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Speaker 1: comes with it. You've got no tie to this client

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Speaker 1: moving forward, you may not ever see them again. And

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Speaker 1: in some cases, people hope you don't see them again

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Speaker 1: because you got paid and you're moving on to the

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Speaker 1: next victim. I am a big fan of the fiduciary rule, Brian.

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Speaker 1: You and I both got started in this industry myself

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Speaker 1: on the insurance it's broker dealers side. Correct me if

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Speaker 1: I'm wrong. You spend a lot of time in the

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Speaker 1: bank side of the business, also having the opportunity to

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Speaker 1: use commission based product, and Brian, this is just human nature.

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Speaker 1: When there's a big fat commission check staring you in

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Speaker 1: the face, human beings are going to respond to incentives

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Speaker 1: and not always in all cases do what's in the

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Speaker 1: best long term interest of their client. And companies and businesses,

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Speaker 1: you know, their profits are based on being able to

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Speaker 1: move this stuff, and that's why you know in this case,

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Speaker 1: you know you can always go judge shopping for some

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Speaker 1: jurisdiction that's going to rule in your behavior. I see

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Speaker 1: the Department of Labor has penciled in a May of

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Speaker 1: twenty twenty six target for issuing an updated rule. Brian,

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Speaker 1: I hope, I hope that we stick with the Biden

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Speaker 1: era rule on the fiduciary rule, because I think it's

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Speaker 1: right for clients, and it's right for our business. It's

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Speaker 1: a win for everybody. I would hate to see us

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Speaker 1: move backwards to where we've been in the past, and.

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Speaker 2: For those out there who may be confused as to

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Speaker 2: how they should be reacting to this, or confused that

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Speaker 2: it was even a thing. So the way to deal

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Speaker 2: with this is you should be asking this question anyway.

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Speaker 2: Just ask, point blank, are you a fiduciary for me

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Speaker 2: or not? When you're considering another advisor, you'll be able.

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Speaker 2: You'll probably sense it some good signs that an advisor

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Speaker 2: is on the right side of this. What kind of

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Speaker 2: questions are they asking you? If they're asking you a

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Speaker 2: lot of detail about your financial situation before they provide

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Speaker 2: you with provide you with solutions, then chances are they're

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Speaker 2: a fiduciary, and even if not, that's still a better approach.

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Speaker 2: On the other hand, if they lead with all the

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Speaker 2: products and the features and benefits of the X, Y

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Speaker 2: Z whatever product, then that can be a sign that

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Speaker 2: they're trying to sell you something. So again, ask the

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Speaker 2: question point blank. But you can you can exhale a

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Speaker 2: little bit if you get the impression that they're trying

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Speaker 2: to get to know your situation before they provide any solutions.

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Speaker 2: That's really the definition of a fiduciary. But ask the

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Speaker 2: question point blank anyway, and.

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Speaker 1: It's also more than appropriate to ask any advisor you're

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Speaker 1: working with, hey, how do you get paid? That should

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Speaker 1: open up an important dialogue before you engage with anybody.

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Speaker 1: Here's the all Worth advice. It is on you to

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Speaker 1: do the homework. Choose an advisor who's committed to acting

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Speaker 1: as a fiduciary all the time, not just when it's convenient.

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Speaker 1: Coming up next, all Worth Chief Investment Officer Andy Stout

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Speaker 1: is in to help those who want to maximize the

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Speaker 1: amount they have in their five twenty nine plans for

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Speaker 1: their kids or grandkids. You're listening to Simply Money presented

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Speaker 1: by Allworth Financial on fifty five KARC the talk station.

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

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Speaker 2: I'm Bob Sponsler.

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Speaker 1: Along with Brian James and our chief investment officer here

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Speaker 1: at Allworth, Andy Stout joins us again to talk about

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Speaker 1: five twenty nine plans, a super important topic that I

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Speaker 1: know a lot of folks are interest in. Andy, explain

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Speaker 1: to us what five twenty nine plans are and perhaps

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Speaker 1: a couple of stories and ideas on where they really

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Speaker 1: work best for folks.

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Speaker 3: So five twenty nine plans it's a really good tool

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Speaker 3: to help you help your kids essentially, or help maybe

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Speaker 3: a niece, nephew, a grandkid, neighbor's kid if you're really

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Speaker 3: close with your neighbor. But in playing English, it's a

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Speaker 3: special savings account for education purposes, and it's run by

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Speaker 3: the state, so each state has their own. What you

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Speaker 3: do is you invest dollars after tax dollars and what

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Speaker 3: happens is those earnings grow tax free and they'll come

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Speaker 3: out tax free as long as you use the money

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Speaker 3: for approved cost like tuition or books. And this is

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Speaker 3: not just colleges. You can use it at colleges for sure,

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Speaker 3: but you can also use it. You know, in this

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Speaker 3: greater Cincinnati area there's a lot of private schools, so

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Speaker 3: you can use it for private school tuition there as well. Now,

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Speaker 3: one thing is that you also, you know, you stay

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Speaker 3: in charge of the investments. You can choose the investments

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Speaker 3: and switch moneys between one family member to another family member.

433
00:22:19,880 --> 00:22:22,760
Speaker 3: You can even if you happen to save too much

434
00:22:22,760 --> 00:22:24,960
Speaker 3: in these five twenty nine plans, you can even roll

435
00:22:25,000 --> 00:22:29,280
Speaker 3: it out into a roth IRA if it's not needed

436
00:22:29,320 --> 00:22:33,280
Speaker 3: for school. So you have lots of options there. And

437
00:22:33,560 --> 00:22:38,360
Speaker 3: the big takeaway is you start saving early for college

438
00:22:38,440 --> 00:22:40,920
Speaker 3: for someone that you care about or someone you want

439
00:22:41,000 --> 00:22:46,119
Speaker 3: to help. So in my own personal life, I have

440
00:22:46,160 --> 00:22:50,160
Speaker 3: two kids. One is a daughter at the University of Tennessee,

441
00:22:50,440 --> 00:22:54,080
Speaker 3: another is a senior in a local high school here.

442
00:22:54,560 --> 00:22:57,960
Speaker 3: And one thing that I have been doing along with

443
00:22:58,280 --> 00:23:01,080
Speaker 3: my wife and just start finance planning that we do

444
00:23:01,560 --> 00:23:04,960
Speaker 3: is that, you know, we talk about being ready for

445
00:23:05,000 --> 00:23:08,560
Speaker 3: college because those college bills are huge. I mean you

446
00:23:08,640 --> 00:23:11,440
Speaker 3: look at an in state school, I mean even these

447
00:23:11,880 --> 00:23:13,840
Speaker 3: in state schools can be like thirty thousand you go

448
00:23:13,880 --> 00:23:16,680
Speaker 3: out of say you're looking at fifty to eighty thousand,

449
00:23:16,960 --> 00:23:21,400
Speaker 3: and they're tough. It's a lot of money. One thing

450
00:23:21,440 --> 00:23:23,879
Speaker 3: to help with that is just socking away, you know,

451
00:23:24,000 --> 00:23:27,200
Speaker 3: one hundred and fifty bucks a month, you know, starting

452
00:23:27,400 --> 00:23:29,520
Speaker 3: at a very early age for the kids, because then

453
00:23:29,560 --> 00:23:30,960
Speaker 3: you get time on your side.

454
00:23:31,040 --> 00:23:35,080
Speaker 2: Because yeah, and as our chief investment officer, obviously you're

455
00:23:35,119 --> 00:23:37,280
Speaker 2: in charge of worrying about what we own and when,

456
00:23:37,480 --> 00:23:39,240
Speaker 2: and that's what that's your day job. You have a

457
00:23:39,240 --> 00:23:41,440
Speaker 2: whole team underneath you that worries about that. Five twenty

458
00:23:41,520 --> 00:23:43,080
Speaker 2: nine's though, were a little bit different. A lot of

459
00:23:43,160 --> 00:23:45,360
Speaker 2: them have limitations in terms of how often you can

460
00:23:45,400 --> 00:23:48,040
Speaker 2: invest what you invest in. So how do you navigate

461
00:23:48,080 --> 00:23:50,080
Speaker 2: you mentioned, obviously you've got these for your own kids.

462
00:23:51,000 --> 00:23:52,640
Speaker 2: I'm sure you would want to do things a little

463
00:23:52,640 --> 00:23:56,000
Speaker 2: differently if those were you know, those restrictions were removed.

464
00:23:56,000 --> 00:23:58,119
Speaker 2: So how do you navigate that? Knowing what you know

465
00:23:58,240 --> 00:24:00,320
Speaker 2: about investments, given the fact that the can be a

466
00:24:00,320 --> 00:24:01,000
Speaker 2: little bit limited.

467
00:24:01,320 --> 00:24:03,399
Speaker 3: So, you know, I set it up just from a

468
00:24:03,400 --> 00:24:07,679
Speaker 3: plain diversification standpoint, because when you think about how the

469
00:24:07,880 --> 00:24:11,840
Speaker 3: investments are you know, offer to you, some states have

470
00:24:11,960 --> 00:24:16,440
Speaker 3: a pretty good offering you, Ohios isn't bad in all honesty.

471
00:24:16,640 --> 00:24:20,040
Speaker 3: Other states I've seen are pretty poor. So when you

472
00:24:20,080 --> 00:24:21,960
Speaker 3: look at that, you know you want to build it

473
00:24:22,000 --> 00:24:25,639
Speaker 3: out to be prey diversified. You want exposure to different

474
00:24:25,640 --> 00:24:27,240
Speaker 3: areas of the market because you don't want to put

475
00:24:27,240 --> 00:24:29,960
Speaker 3: all of your eggs into one basket, and you want

476
00:24:29,960 --> 00:24:32,639
Speaker 3: to I mean, I don't want to and make this

477
00:24:32,760 --> 00:24:35,200
Speaker 3: sound you know, too easy, but you kind of want

478
00:24:35,240 --> 00:24:37,600
Speaker 3: to just set it and forget it because time is

479
00:24:37,640 --> 00:24:39,439
Speaker 3: on your side. I mean, there's always going to be

480
00:24:39,520 --> 00:24:42,359
Speaker 3: something to worry about, whether it be the trade war,

481
00:24:43,040 --> 00:24:49,480
Speaker 3: whether it be you know, whatever is concerning you, inflation, COVID,

482
00:24:49,680 --> 00:24:54,639
Speaker 3: financial crises and armageddons. But when you look at it

483
00:24:54,720 --> 00:24:57,760
Speaker 3: over a period of time, starting early from when you

484
00:24:57,800 --> 00:25:03,160
Speaker 3: start to save, hopefully to birth, then you can weather

485
00:25:03,240 --> 00:25:06,960
Speaker 3: those storms. And what happens is you have a little

486
00:25:06,960 --> 00:25:10,600
Speaker 3: bit of a nest egg built up to help that

487
00:25:10,640 --> 00:25:14,040
Speaker 3: person was cool. I mean, maybe you've saved enough for

488
00:25:14,480 --> 00:25:17,040
Speaker 3: half a semester or a full year, depending on where

489
00:25:17,080 --> 00:25:19,160
Speaker 3: they go. Maybe you've been able to save a little

490
00:25:19,160 --> 00:25:19,600
Speaker 3: bit more.

491
00:25:20,240 --> 00:25:20,439
Speaker 2: You know.

492
00:25:20,480 --> 00:25:23,719
Speaker 3: The question is, though, how much do you save? How

493
00:25:23,760 --> 00:25:26,600
Speaker 3: much do you put aside? Because there's no one perfect answer,

494
00:25:26,640 --> 00:25:30,359
Speaker 3: because the cost of college is you know, it's rising obviously,

495
00:25:30,800 --> 00:25:33,720
Speaker 3: and it doesn't appear to be following anytime soon, unfortunately,

496
00:25:33,920 --> 00:25:37,080
Speaker 3: and unfortunately for me, especially with a senior in the

497
00:25:37,119 --> 00:25:40,840
Speaker 3: mix looking to go somewhere. So we'll see where he

498
00:25:40,960 --> 00:25:42,920
Speaker 3: ends up. But regardless, you know, I do feel a

499
00:25:43,000 --> 00:25:45,720
Speaker 3: little bit better knowing that I've put some money aside

500
00:25:46,080 --> 00:25:49,240
Speaker 3: that will cover those costs. It's almost like it's like

501
00:25:49,359 --> 00:25:51,760
Speaker 3: money that's not there right now, because when I think

502
00:25:51,760 --> 00:25:53,920
Speaker 3: about it. I don't really think about it because it's

503
00:25:53,960 --> 00:25:56,679
Speaker 3: just there sitting over an account, growing tax free, and

504
00:25:56,680 --> 00:25:58,080
Speaker 3: when I need it, it's going to be there. But

505
00:25:58,160 --> 00:25:59,840
Speaker 3: I don't really think of it as kind of part

506
00:25:59,840 --> 00:26:01,359
Speaker 3: of my net worth because I know I'm going to

507
00:26:01,440 --> 00:26:03,520
Speaker 3: use it really soon and it just provides some peace

508
00:26:03,560 --> 00:26:05,239
Speaker 3: of mind there, all right.

509
00:26:05,280 --> 00:26:07,359
Speaker 1: So in other words, you're not out there day trading

510
00:26:07,480 --> 00:26:10,520
Speaker 1: your five twenty nine plans for your kids. You've you've

511
00:26:10,680 --> 00:26:15,600
Speaker 1: you've put a responsible acid allocation plan uh into effect,

512
00:26:15,680 --> 00:26:17,359
Speaker 1: and you it sounds like you and your wife have

513
00:26:17,440 --> 00:26:19,480
Speaker 1: been contributing a little bit of money to these for

514
00:26:19,640 --> 00:26:22,600
Speaker 1: years and years and years on a discipline basis, and

515
00:26:22,640 --> 00:26:24,000
Speaker 1: that's the way you win. Uh?

516
00:26:24,240 --> 00:26:27,760
Speaker 2: Is that is that summing it? Summing it up pretty correctly?

517
00:26:27,800 --> 00:26:30,600
Speaker 3: Andy, I think you hit the nail on the head there.

518
00:26:31,359 --> 00:26:33,800
Speaker 1: All right, good stuff, Andy, Thanks for joining us today.

519
00:26:33,800 --> 00:26:36,560
Speaker 1: You're listening to Simply Money presented by all Worth Financial

520
00:26:36,600 --> 00:26:44,680
Speaker 1: on fifty five krc V talk station. You're listening to

521
00:26:44,720 --> 00:26:47,840
Speaker 1: Simply Money presented by all Worth Financial on Bob Sponsller

522
00:26:47,840 --> 00:26:51,080
Speaker 1: along with Brian James. You have a financial question you'd

523
00:26:51,160 --> 00:26:53,159
Speaker 1: like for us to cover. There's a red button you

524
00:26:53,160 --> 00:26:55,800
Speaker 1: can click while you're listening to the show. If you're

525
00:26:55,840 --> 00:26:59,879
Speaker 1: listening on the iHeart app, simply record your question and

526
00:27:00,119 --> 00:27:03,280
Speaker 1: it will come straight to us. All right, Brian, get

527
00:27:03,280 --> 00:27:06,040
Speaker 1: ready for Brad and Madeira. He says, I've been investing

528
00:27:06,080 --> 00:27:08,879
Speaker 1: for years and one stock has grown to a pretty

529
00:27:08,880 --> 00:27:12,600
Speaker 1: big piece of our portfolio. I know I should probably

530
00:27:12,720 --> 00:27:15,760
Speaker 1: trim it, but it's hard to pull the trigger. Any

531
00:27:15,840 --> 00:27:17,080
Speaker 1: help would be appreciated.

532
00:27:17,440 --> 00:27:20,120
Speaker 2: Yeah, so this is a really common and it could

533
00:27:20,119 --> 00:27:22,439
Speaker 2: be a tough situation to deal with because of you know,

534
00:27:22,960 --> 00:27:25,199
Speaker 2: when we have an investment that performs like that, it

535
00:27:25,320 --> 00:27:26,840
Speaker 2: kind of becomes a little tough to get rid of it.

536
00:27:26,960 --> 00:27:29,960
Speaker 2: Or perhaps and even more common, it's inherited and there's

537
00:27:30,000 --> 00:27:33,080
Speaker 2: a little bit of sentimental value somehow attached to it. So,

538
00:27:33,400 --> 00:27:35,560
Speaker 2: but of course this does create its own risk. Anytime

539
00:27:35,600 --> 00:27:38,920
Speaker 2: we're overexposed to anyone investment, that's something to be thinking about.

540
00:27:38,960 --> 00:27:41,240
Speaker 2: So I think the first step is reframe the question.

541
00:27:41,320 --> 00:27:43,320
Speaker 2: Don't look at it simply as should I sell the

542
00:27:43,480 --> 00:27:46,280
Speaker 2: stock right cause that's where you are right now. Instead,

543
00:27:46,440 --> 00:27:48,439
Speaker 2: think of it this way. If I had a pile

544
00:27:48,480 --> 00:27:51,240
Speaker 2: of fresh cash, would I put this much into this stock?

545
00:27:51,280 --> 00:27:53,479
Speaker 2: If I didn't already own it. For most people, the

546
00:27:53,480 --> 00:27:56,240
Speaker 2: honest answer is no, right, So they're probably I'm're gonna

547
00:27:56,240 --> 00:27:58,280
Speaker 2: ahead and guess that you probably you know, this isn't

548
00:27:58,320 --> 00:28:00,520
Speaker 2: something you worked for, This isn't something you have intimate

549
00:28:00,520 --> 00:28:02,560
Speaker 2: knowledge of. It's just something that you bought and it

550
00:28:02,560 --> 00:28:05,440
Speaker 2: went the right direction for you. But that gap between

551
00:28:05,480 --> 00:28:07,400
Speaker 2: would I'd be willing to buy it if I didn't

552
00:28:07,400 --> 00:28:09,800
Speaker 2: already own it versus should I stell this pile? That's

553
00:28:09,840 --> 00:28:12,159
Speaker 2: the signal. So and also a second step here is

554
00:28:12,160 --> 00:28:14,760
Speaker 2: that quantify that risk. Don't just you know, make assumptions

555
00:28:14,800 --> 00:28:17,320
Speaker 2: of it. So if that one holding is maybe maybe

556
00:28:17,320 --> 00:28:20,960
Speaker 2: it's a thirty year portfolio, then any company specific problem

557
00:28:21,400 --> 00:28:24,320
Speaker 2: you know that you're now subject to. Your financial success

558
00:28:24,359 --> 00:28:26,480
Speaker 2: is now subject to whatever they say on conference calls.

559
00:28:26,600 --> 00:28:28,920
Speaker 2: Probably not a position that most people want to be in.

560
00:28:29,440 --> 00:28:29,600
Speaker 3: You know.

561
00:28:29,640 --> 00:28:31,400
Speaker 2: This is the market can be doing great, but if

562
00:28:31,400 --> 00:28:33,040
Speaker 2: one company stubs its still well, then all of a

563
00:28:33,040 --> 00:28:35,320
Speaker 2: sudden you got a problem. If that's an issue, figure

564
00:28:35,359 --> 00:28:38,120
Speaker 2: out what a ten twenty thirty percent hit would do

565
00:28:38,360 --> 00:28:40,840
Speaker 2: not only to that stock, but to your overall net worth,

566
00:28:40,840 --> 00:28:42,479
Speaker 2: and what would it do to your confidence and your

567
00:28:42,480 --> 00:28:45,400
Speaker 2: ability to sleep at night? Every great company has its issues.

568
00:28:45,440 --> 00:28:48,320
Speaker 2: General Electric has a fantastic recovery story, but it was

569
00:28:48,440 --> 00:28:51,280
Speaker 2: not for a good decade or so. Cisco fell apart.

570
00:28:51,360 --> 00:28:55,720
Speaker 2: Even a Facebook dropped about seventy percent before recovering. Concentration

571
00:28:55,800 --> 00:28:58,200
Speaker 2: can work right up until it doesn't. So when it breaks,

572
00:28:58,280 --> 00:29:00,960
Speaker 2: it breaks fast. Be sure you understand and how not

573
00:29:01,040 --> 00:29:03,280
Speaker 2: only what the dollar impact of that would be, but

574
00:29:03,400 --> 00:29:05,360
Speaker 2: how your brain would deal with it. So that can

575
00:29:05,400 --> 00:29:07,600
Speaker 2: be a scary thing. Give it some thought. So we're

576
00:29:07,640 --> 00:29:11,880
Speaker 2: gonna we'll move on now to Tim and Addison. Tim

577
00:29:11,920 --> 00:29:13,880
Speaker 2: says he trimed a position last year because it got

578
00:29:13,920 --> 00:29:15,920
Speaker 2: too big. This sounds familiar. Tim and Brad should go

579
00:29:15,920 --> 00:29:18,280
Speaker 2: for beers, but of course they kept going up. Now

580
00:29:18,320 --> 00:29:20,480
Speaker 2: I'm second guessing whether I should have left it alone. Wait,

581
00:29:20,520 --> 00:29:21,959
Speaker 2: I take it back, Tim and Brad should not hang

582
00:29:22,000 --> 00:29:24,800
Speaker 2: out at all. How do you not let that mess

583
00:29:24,840 --> 00:29:29,400
Speaker 2: with your decision making process? Bob? All right, Well, I

584
00:29:29,480 --> 00:29:30,200
Speaker 2: was gonna draw it.

585
00:29:30,280 --> 00:29:32,960
Speaker 1: You know you just answered this question really well in

586
00:29:33,320 --> 00:29:36,840
Speaker 1: addressing Brad's concerns. Tim, I'll just say, and I can

587
00:29:36,880 --> 00:29:39,560
Speaker 1: see Brian clapping in the background, he is all one

588
00:29:39,600 --> 00:29:43,640
Speaker 1: hundred percent in favor of what you did. Tim recognizing

589
00:29:43,680 --> 00:29:49,040
Speaker 1: the over concentration, never apologize for a game, rebalance your portfolio,

590
00:29:49,240 --> 00:29:52,680
Speaker 1: do the right things. So the second guessing part it all.

591
00:29:52,800 --> 00:29:55,240
Speaker 1: It happens to all of us, you know, And I

592
00:29:55,240 --> 00:29:58,000
Speaker 1: would say, do not let that mess with your process.

593
00:29:58,400 --> 00:30:02,960
Speaker 1: Another way that I would explain this might this might land,

594
00:30:03,160 --> 00:30:05,200
Speaker 1: you know, not land at all with people that don't

595
00:30:05,200 --> 00:30:07,480
Speaker 1: care about sports at all. But I'm gonna draw on

596
00:30:07,560 --> 00:30:11,560
Speaker 1: my experience coaching baseball. So I'm gonna give you a

597
00:30:11,600 --> 00:30:14,400
Speaker 1: baseball analogy. Let's say the game is tied three to

598
00:30:14,400 --> 00:30:16,840
Speaker 1: three in the ninth inning, you got first and second

599
00:30:16,920 --> 00:30:19,880
Speaker 1: and nobody out. Whoever comes up to the plate, I'm

600
00:30:19,920 --> 00:30:23,040
Speaker 1: telling them to bunt the runners over to second and third,

601
00:30:23,080 --> 00:30:25,840
Speaker 1: give us a chance to score the winning run. Let's

602
00:30:25,880 --> 00:30:28,400
Speaker 1: say the kid goes up there and he fouls off

603
00:30:28,480 --> 00:30:33,560
Speaker 1: the first two bunts foul, and then goes ahead and

604
00:30:33,680 --> 00:30:36,400
Speaker 1: drives the next pitch into left center for a triple.

605
00:30:36,800 --> 00:30:39,560
Speaker 1: And he comes back into the dugout saying, you see, coach,

606
00:30:39,760 --> 00:30:42,320
Speaker 1: you should have just let me swing away. Well my

607
00:30:42,440 --> 00:30:45,920
Speaker 1: response to that would be, hey, glad it worked out.

608
00:30:46,000 --> 00:30:48,600
Speaker 1: But if that's gonna be your attitude the next time

609
00:30:48,640 --> 00:30:50,840
Speaker 1: you have two strikes. I'm gonna make you bunt a

610
00:30:50,920 --> 00:30:53,800
Speaker 1: third time because the right thing to do right there

611
00:30:54,200 --> 00:30:57,120
Speaker 1: is sacrifice. These guys over to second and third. Give

612
00:30:57,160 --> 00:30:59,960
Speaker 1: yourself a high probability of success of winning the game.

613
00:31:00,160 --> 00:31:03,320
Speaker 1: That's a long winded way of saying, Tim, you probably

614
00:31:03,360 --> 00:31:06,960
Speaker 1: did exactly what you were supposed to do. Good job,

615
00:31:07,400 --> 00:31:11,440
Speaker 1: don't overthink it. Never apologize for a game, and move on.

616
00:31:11,680 --> 00:31:13,720
Speaker 1: How about that for a teaching moment.

617
00:31:13,760 --> 00:31:17,960
Speaker 2: That was some heavy duty inside baseball, upper level knowledge there, Bob.

618
00:31:18,360 --> 00:31:21,560
Speaker 1: All right, let's move on to Rachel and Mason. She says,

619
00:31:21,560 --> 00:31:23,600
Speaker 1: We've got a half a million dollars sitting in a

620
00:31:23,600 --> 00:31:27,400
Speaker 1: brokerage account, and I keep telling myself I'll invest it

621
00:31:27,560 --> 00:31:32,400
Speaker 1: when you guessed it. Things feel better, Brian in two

622
00:31:32,440 --> 00:31:35,200
Speaker 1: years now, at what point do I admit that I

623
00:31:35,240 --> 00:31:38,040
Speaker 1: am just stuck. I'm just stuck and I can't move

624
00:31:38,040 --> 00:31:39,280
Speaker 1: and now it's like paralysis.

625
00:31:39,560 --> 00:31:41,360
Speaker 2: I think you pretty much did admit that you just

626
00:31:41,640 --> 00:31:43,960
Speaker 2: that you're stuck when you sent this question. But again,

627
00:31:43,960 --> 00:31:46,080
Speaker 2: don't feel bad. It's a very common question. This is

628
00:31:46,120 --> 00:31:48,640
Speaker 2: really the same as Tim and Brad. Everybody's got an

629
00:31:48,640 --> 00:31:52,400
Speaker 2: overweight in something. All these questions are about overweight. She's

630
00:31:52,400 --> 00:31:55,520
Speaker 2: got an overweight simply in cash. So Rachel's been sitting

631
00:31:55,520 --> 00:31:56,959
Speaker 2: on this for a while, needs to make a decision

632
00:31:57,280 --> 00:31:59,360
Speaker 2: at the end of the day. Though, this is market timing.

633
00:32:00,040 --> 00:32:02,800
Speaker 2: Timing is timing. Whether we're doing it out of greed

634
00:32:02,840 --> 00:32:04,760
Speaker 2: because we're trying to make a bazillion dollars out of

635
00:32:04,760 --> 00:32:06,520
Speaker 2: a small pile of money, or we're doing it out

636
00:32:06,520 --> 00:32:08,320
Speaker 2: of fear, it's still timing. You're still trying to guess

637
00:32:08,320 --> 00:32:10,280
Speaker 2: when the market's gonna zig and when it's gonna zag.

638
00:32:10,760 --> 00:32:13,480
Speaker 2: Markets will always feel uncertain. If you're waiting for things

639
00:32:13,480 --> 00:32:16,520
Speaker 2: to feel better, you're you're implicitly waiting for these prices

640
00:32:16,560 --> 00:32:18,680
Speaker 2: to be higher and headlines to be calmer, and that's

641
00:32:18,760 --> 00:32:22,000
Speaker 2: historically when expected returns are actually lower. That's basically the peak.

642
00:32:22,360 --> 00:32:24,720
Speaker 2: So think about you know, think about what it feels

643
00:32:24,760 --> 00:32:27,520
Speaker 2: like right now, and that's going to be you know,

644
00:32:27,560 --> 00:32:29,800
Speaker 2: you're always going to have that feeling out there. So

645
00:32:30,040 --> 00:32:32,120
Speaker 2: you'd also need to quantify the cost of being stuck.

646
00:32:32,160 --> 00:32:34,240
Speaker 2: You said, you've been sitting in cash, sitting on this

647
00:32:34,360 --> 00:32:37,080
Speaker 2: much cash for two years, and yes, that might feel

648
00:32:37,080 --> 00:32:39,280
Speaker 2: good over the last several weeks because we've had some

649
00:32:39,280 --> 00:32:41,520
Speaker 2: pretty bumpy markets with what's going on in the world.

650
00:32:41,680 --> 00:32:43,360
Speaker 2: But on the other hand, the prior two years to

651
00:32:43,400 --> 00:32:44,920
Speaker 2: that have been some of the best we've ever seen.

652
00:32:45,000 --> 00:32:46,840
Speaker 2: So I don't want to be too rough on you,

653
00:32:46,880 --> 00:32:49,400
Speaker 2: but I'm gonna say that, head you invested that, depending

654
00:32:49,400 --> 00:32:51,560
Speaker 2: on how you invested it, you should be up twenty

655
00:32:51,600 --> 00:32:54,480
Speaker 2: twenty five percent by now, even if invested conservatively over

656
00:32:54,480 --> 00:32:56,760
Speaker 2: the last two years. Don't kick yourself too hard, but

657
00:32:56,840 --> 00:33:00,120
Speaker 2: obviously don't keep torturing yourself either. So some solutions here.

658
00:33:00,200 --> 00:33:03,160
Speaker 2: Let's systematize it, right, So maybe you can if the

659
00:33:03,200 --> 00:33:05,440
Speaker 2: concern is that I'm really worried, I'm gonna invest my

660
00:33:05,480 --> 00:33:08,080
Speaker 2: half million dollars and We're immediately going to go over

661
00:33:08,080 --> 00:33:10,080
Speaker 2: the cliff because the market has a target on my back.

662
00:33:10,320 --> 00:33:12,800
Speaker 2: Is that possible? Yeah, it could happen that way, but

663
00:33:12,920 --> 00:33:15,400
Speaker 2: also it might not usually does it. That's it. If

664
00:33:15,400 --> 00:33:17,360
Speaker 2: you're worried about it, break it up. Maybe you invest

665
00:33:17,520 --> 00:33:19,400
Speaker 2: You can said a half million, maybe one hundred thousand

666
00:33:19,400 --> 00:33:21,960
Speaker 2: dollars invested every month for the next five months, or

667
00:33:22,000 --> 00:33:24,600
Speaker 2: fifty thousand for the next twelve, or however that works

668
00:33:24,640 --> 00:33:27,440
Speaker 2: for you. Or you can just do two large chunks

669
00:33:27,480 --> 00:33:30,480
Speaker 2: that way, you're guaranteeing yourself and no matter what happens next,

670
00:33:30,760 --> 00:33:33,280
Speaker 2: I will still have some cash. If the market does fall, well,

671
00:33:33,280 --> 00:33:35,760
Speaker 2: then it's unfortunate that that hit what I already invested.

672
00:33:35,760 --> 00:33:37,400
Speaker 2: But hey, look at this, I got a big pile

673
00:33:37,400 --> 00:33:38,920
Speaker 2: of cast still sitting here that I can use to

674
00:33:38,920 --> 00:33:41,360
Speaker 2: buy at the low. That's called a dollar cost averaging,

675
00:33:41,400 --> 00:33:43,400
Speaker 2: and it can be a good way to piece meal

676
00:33:43,480 --> 00:33:46,440
Speaker 2: into the market without having to make one big, scary decision.

677
00:33:46,800 --> 00:33:49,320
Speaker 1: Yeah, Brian, because you can be wrong in the short

678
00:33:49,440 --> 00:33:52,640
Speaker 1: term technically, and if you do it on a disciplined basis,

679
00:33:52,640 --> 00:33:54,840
Speaker 1: you're going to be right over the long term. And

680
00:33:54,880 --> 00:33:57,640
Speaker 1: that's what we're shooting for here. I think that's great advice.

681
00:33:57,680 --> 00:34:00,600
Speaker 1: Coming up next, how people are using the line to

682
00:34:00,720 --> 00:34:04,960
Speaker 1: reshape their relationship with money. You're listening to Simply Money,

683
00:34:04,960 --> 00:34:07,920
Speaker 1: presented by all Worth Financial on fifty five KARC the

684
00:34:08,320 --> 00:34:16,000
Speaker 1: talk station. You're listening to Simply Money presented by all

685
00:34:16,040 --> 00:34:19,879
Speaker 1: Worth Financial on Bob Sponsller along with Brian James. Well,

686
00:34:19,920 --> 00:34:23,320
Speaker 1: you might be giving up chocolate, wine or maybe social

687
00:34:23,400 --> 00:34:27,040
Speaker 1: media for lent this year, but there's a growing number

688
00:34:27,080 --> 00:34:30,840
Speaker 1: of people giving up something else, and that's spending Brian,

689
00:34:30,920 --> 00:34:31,719
Speaker 1: This is interesting.

690
00:34:32,280 --> 00:34:35,160
Speaker 2: It's called financial fasting, Bob, and they're starting to gain

691
00:34:35,200 --> 00:34:38,360
Speaker 2: real traction. So go figure where this came from social media.

692
00:34:38,840 --> 00:34:41,920
Speaker 2: So on TikTok alone, there's about fifteen hundred videos that

693
00:34:41,960 --> 00:34:44,440
Speaker 2: are tagged with it with the hashtag no Bay twenty

694
00:34:44,440 --> 00:34:48,440
Speaker 2: twenty six, and people who are into this lifestyle even briefly.

695
00:34:48,480 --> 00:34:50,359
Speaker 2: What they're doing is they're committing to cutting out non

696
00:34:50,480 --> 00:34:53,719
Speaker 2: essential spending during the forty days heading into Easter. So

697
00:34:54,280 --> 00:34:57,520
Speaker 2: what does this actually look like? What are we truly sacrificing? Well,

698
00:34:57,600 --> 00:34:59,440
Speaker 2: some people, at least according to what they put on

699
00:34:59,440 --> 00:35:01,439
Speaker 2: social media. Whether we're sticking to this, well that's another

700
00:35:01,440 --> 00:35:03,080
Speaker 2: headline we'll have to look at. But what are they

701
00:35:03,120 --> 00:35:05,799
Speaker 2: saying online? Some people are saying that they're not gonna

702
00:35:05,840 --> 00:35:08,400
Speaker 2: have any discretionary spending at all. That means no Amazon,

703
00:35:08,840 --> 00:35:12,080
Speaker 2: no dining out, no impulse buys. Other folks taking more

704
00:35:12,080 --> 00:35:16,360
Speaker 2: targeted explo the targeted targeted approach, you know, moving just

705
00:35:16,400 --> 00:35:19,279
Speaker 2: the online shopping, or maybe they're canceling subscriptions, shutting off

706
00:35:19,280 --> 00:35:22,000
Speaker 2: the Netflix subscription for a few months or something like that.

707
00:35:22,480 --> 00:35:24,239
Speaker 2: So a lots of different ways you can slice it,

708
00:35:24,280 --> 00:35:25,680
Speaker 2: and I think this is a good thing. The next

709
00:35:25,680 --> 00:35:27,719
Speaker 2: opportunity I hope these folks are doing is I hope

710
00:35:27,719 --> 00:35:30,200
Speaker 2: they've calculated how much they're gonna save by doing this

711
00:35:30,600 --> 00:35:33,279
Speaker 2: and then using those safe dollars and applying them to

712
00:35:33,320 --> 00:35:35,560
Speaker 2: something else the credit card bill, you know, maybe even

713
00:35:35,600 --> 00:35:38,319
Speaker 2: the mortgage or sticking in an IRA whatever. But do

714
00:35:38,440 --> 00:35:40,719
Speaker 2: something different with that money, because if you're just letting

715
00:35:40,760 --> 00:35:42,200
Speaker 2: it pile up in the bank, you're just going to

716
00:35:42,239 --> 00:35:46,360
Speaker 2: turn around and spend it immediately after Eastern kind of

717
00:35:46,400 --> 00:35:46,920
Speaker 2: not the point.

718
00:35:47,880 --> 00:35:50,560
Speaker 1: All right, Well, you know what, I think anything that

719
00:35:51,040 --> 00:35:54,800
Speaker 1: allows people to examine their life and draw closer to

720
00:35:55,280 --> 00:35:58,080
Speaker 1: God is a good thing, especially during this time of year.

721
00:35:58,200 --> 00:36:01,319
Speaker 1: So hopefully this is all working out for people on

722
00:36:01,360 --> 00:36:03,680
Speaker 1: a positive end. But it is a part of a

723
00:36:03,719 --> 00:36:07,240
Speaker 1: bigger trend that we're seeing overall. We're seeing a growing

724
00:36:07,320 --> 00:36:12,680
Speaker 1: intersection between faith and financial decision making. So called faith

725
00:36:12,760 --> 00:36:16,640
Speaker 1: based investing, for example, has surged in recent years. In fact,

726
00:36:17,040 --> 00:36:21,560
Speaker 1: assets in US based faith based mutual funds and ETFs

727
00:36:22,480 --> 00:36:26,640
Speaker 1: crossed over one hundred billion dollars in twenty twenty four. Brian,

728
00:36:26,680 --> 00:36:27,520
Speaker 1: that's a lot of money.

729
00:36:27,800 --> 00:36:29,960
Speaker 2: That's a lot of money, and it means you're you

730
00:36:30,000 --> 00:36:32,840
Speaker 2: know that that is there's that's a legitimate approach. If that,

731
00:36:32,920 --> 00:36:34,680
Speaker 2: if those are the things that are important to folks,

732
00:36:35,040 --> 00:36:37,520
Speaker 2: then you need to prioritize your beliefs over and above

733
00:36:37,880 --> 00:36:40,280
Speaker 2: the financial size of the things. Absolutely nothing wrong with that.

734
00:36:40,280 --> 00:36:42,319
Speaker 2: That does mean you're you're avoiding companies that are tied

735
00:36:42,320 --> 00:36:45,799
Speaker 2: to gambling, tobacco, certain types of weapons, those kinds of things,

736
00:36:46,040 --> 00:36:47,920
Speaker 2: or you know, it's for some people, it means actively

737
00:36:47,920 --> 00:36:51,880
Speaker 2: supporting businesses that do align with specific religious or ethical principles.

738
00:36:51,880 --> 00:36:54,560
Speaker 2: Lots of way to slice that. That does have an impact.

739
00:36:55,520 --> 00:36:59,560
Speaker 2: Oftentimes when we look at, you know, the faith based investing,

740
00:36:59,560 --> 00:37:02,600
Speaker 2: I would contrast it with compared to the ESG type

741
00:37:02,640 --> 00:37:05,239
Speaker 2: of approach or any other thing. Right, So if you're

742
00:37:05,280 --> 00:37:08,839
Speaker 2: adding an element of belief to it, are that means

743
00:37:08,920 --> 00:37:12,719
Speaker 2: you are necessarily eliminating some chunk of the market for good, bad,

744
00:37:12,760 --> 00:37:14,719
Speaker 2: or and different. This isn't an opinion at all on

745
00:37:15,320 --> 00:37:17,560
Speaker 2: whether this is something anyone should do. Everybody needs to

746
00:37:17,560 --> 00:37:19,840
Speaker 2: make their own decision, and any advisor can work with

747
00:37:19,920 --> 00:37:23,239
Speaker 2: any of these convictions. However, I would discount or at

748
00:37:23,320 --> 00:37:25,440
Speaker 2: least put a little further down the list, comparing it

749
00:37:25,520 --> 00:37:27,520
Speaker 2: endlessly to whatever the S and P. Five hundred does,

750
00:37:27,560 --> 00:37:29,759
Speaker 2: because you will have eliminated a chunk of what is

751
00:37:29,800 --> 00:37:31,440
Speaker 2: in the S and P. Five hundred that's going to

752
00:37:31,480 --> 00:37:34,399
Speaker 2: have an impact, and more frequently it tends to be

753
00:37:34,719 --> 00:37:36,440
Speaker 2: it tends to pull it down. So you know, if

754
00:37:36,480 --> 00:37:38,600
Speaker 2: you're looking at a stock based portfolio that is either

755
00:37:38,600 --> 00:37:42,120
Speaker 2: face based or ESG based, most of those frankly underperformed

756
00:37:42,160 --> 00:37:44,120
Speaker 2: the S and P. Five hundred. That's not a bad thing.

757
00:37:44,560 --> 00:37:48,479
Speaker 1: Are you saying then, that sinfully managed companies do better

758
00:37:48,520 --> 00:37:50,360
Speaker 1: than faith faith companies.

759
00:37:50,640 --> 00:37:52,400
Speaker 2: All I'm saying is that they are included in the

760
00:37:52,440 --> 00:37:54,840
Speaker 2: S and P. Five hundred and those numbers will filter

761
00:37:54,920 --> 00:37:57,959
Speaker 2: through versus they won't in the other side of things.

762
00:37:57,960 --> 00:37:59,880
Speaker 2: So just just be mindful of what you're asking for this,

763
00:38:00,000 --> 00:38:02,160
Speaker 2: there's absolutely nothing wrong with it. Any financial plan can

764
00:38:02,200 --> 00:38:04,480
Speaker 2: be built around any set of beliefs, but you have

765
00:38:04,560 --> 00:38:07,160
Speaker 2: to be mindful of the different elements that you are

766
00:38:07,200 --> 00:38:09,640
Speaker 2: adding in or subtracting and what those impacts are. It's

767
00:38:09,680 --> 00:38:11,919
Speaker 2: really just like any other component of your financial plan.

768
00:38:12,040 --> 00:38:13,080
Speaker 2: Know what the outcome is going to be.

769
00:38:13,560 --> 00:38:15,640
Speaker 1: Yeah, and I'll add one more thing to this. Sometimes

770
00:38:15,680 --> 00:38:19,879
Speaker 1: people just are attracted these rappers, these marketing schemes called

771
00:38:19,960 --> 00:38:22,600
Speaker 1: faith based or whatever, and they never take the time

772
00:38:22,640 --> 00:38:24,919
Speaker 1: to really look under the hood on how these things

773
00:38:24,960 --> 00:38:27,839
Speaker 1: are managed. If you're going to go this route, make

774
00:38:27,880 --> 00:38:31,040
Speaker 1: sure you spend the time to actually know what you're

775
00:38:31,080 --> 00:38:34,400
Speaker 1: buying and owning. Thanks for listening tonight. You've been listening

776
00:38:34,400 --> 00:38:37,080
Speaker 1: to Simply Money, presented by all Worth Financial on fifty

777
00:38:37,120 --> 00:38:39,200
Speaker 1: five KARC, the talk station