1 00:00:05,880 --> 00:00:09,080 Speaker 1: Tonight, how the biggest risk to your wealth right now 2 00:00:09,280 --> 00:00:13,600 Speaker 1: isn't inflation itself, it's how you respond to it. You're 3 00:00:13,600 --> 00:00:16,000 Speaker 1: listening to Simply Money, presented by all Worth Financial. I'm 4 00:00:16,040 --> 00:00:20,560 Speaker 1: Bob's sponseller along with Brian James. Well, obviously, inflation is 5 00:00:20,600 --> 00:00:23,200 Speaker 1: in the headlines. We all know that. It seems like 6 00:00:23,200 --> 00:00:25,759 Speaker 1: it's been in the headlines Brian for about six or 7 00:00:25,800 --> 00:00:28,840 Speaker 1: seven years now. We all feel it every time we 8 00:00:28,880 --> 00:00:31,440 Speaker 1: fill up our tank, every time we go out to dinner, 9 00:00:31,680 --> 00:00:35,600 Speaker 1: every time we look at what things cost today versus 10 00:00:35,880 --> 00:00:38,880 Speaker 1: just several years ago. I'll say, you know, back before 11 00:00:39,040 --> 00:00:43,360 Speaker 1: we had COVID. Our conversation tonight is what investors are 12 00:00:43,440 --> 00:00:48,559 Speaker 1: doing about it, and whether investors' reactions is helping or 13 00:00:48,600 --> 00:00:50,120 Speaker 1: actually setting them back. 14 00:00:51,280 --> 00:00:54,560 Speaker 2: So the real risk here, Bob, it's not inflation, it's behavior. 15 00:00:54,680 --> 00:00:56,880 Speaker 2: It's the people. If we can get the people out 16 00:00:56,880 --> 00:00:58,440 Speaker 2: of the mix, and get all the humans out of 17 00:00:58,440 --> 00:01:01,160 Speaker 2: the mix, that everything would be wonderful. So every time 18 00:01:01,400 --> 00:01:04,200 Speaker 2: inflation becomes a concern, investors tend to react the same 19 00:01:04,200 --> 00:01:08,480 Speaker 2: way we get defensive. We raise cash, reduce exposure to equities, 20 00:01:08,560 --> 00:01:11,320 Speaker 2: just being very reactive, and they convince themselves that playing 21 00:01:11,360 --> 00:01:14,880 Speaker 2: it safe is the smart move, but unfortunately, financially, we 22 00:01:14,920 --> 00:01:17,119 Speaker 2: have many, many, many examples over the years of how 23 00:01:17,120 --> 00:01:21,399 Speaker 2: that instinct backfires on us. Inflation doesn't just punish bad investments, 24 00:01:21,400 --> 00:01:24,520 Speaker 2: it punishes inactivity. It punishes the money that isn't working 25 00:01:24,560 --> 00:01:26,960 Speaker 2: hard enough, and that's what gets us into trouble, Bob. 26 00:01:27,000 --> 00:01:30,440 Speaker 2: People think they're avoiding risk, when in reality they're locking 27 00:01:30,480 --> 00:01:32,560 Speaker 2: into a completely different kind of risk, which is the 28 00:01:32,600 --> 00:01:35,680 Speaker 2: guaranteed loss of purchasing power. So we've talked a lot 29 00:01:35,720 --> 00:01:38,039 Speaker 2: of these airwaves about the nineteen seventies, and guess what, 30 00:01:38,040 --> 00:01:39,480 Speaker 2: we're going to do it again, because this is an 31 00:01:39,480 --> 00:01:41,959 Speaker 2: important thing for people to understand. We can learn a 32 00:01:42,000 --> 00:01:44,360 Speaker 2: lot from history, even if it doesn't repeat itself. It 33 00:01:44,440 --> 00:01:47,200 Speaker 2: tends to rhyme. So it's good to know that we 34 00:01:47,319 --> 00:01:49,720 Speaker 2: have seen these things before, we have recovered from them. 35 00:01:49,840 --> 00:01:51,760 Speaker 2: But we need to recognize what might be happening. 36 00:01:51,840 --> 00:01:52,760 Speaker 3: So let's talk about it. 37 00:01:52,800 --> 00:01:54,560 Speaker 2: Let tellus a little bit about what happened in the seventies, 38 00:01:54,600 --> 00:01:55,520 Speaker 2: what we learned from it, Bob. 39 00:01:56,480 --> 00:01:59,920 Speaker 1: Well, Brian, I'm looking right now at a chart or 40 00:02:00,280 --> 00:02:04,520 Speaker 1: list of you know, annual CPI UH that's the most 41 00:02:04,520 --> 00:02:08,480 Speaker 1: common measure of inflation every year going back from nineteen 42 00:02:08,600 --> 00:02:12,360 Speaker 1: seventy through twenty twenty five, and yes, we had you know, 43 00:02:12,440 --> 00:02:14,840 Speaker 1: you think the last few years were bad back in 44 00:02:15,280 --> 00:02:17,960 Speaker 1: nineteen well you go back to the oil shock and 45 00:02:18,000 --> 00:02:22,120 Speaker 1: all that nineteen seventy four inflation was eleven percent, followed 46 00:02:22,120 --> 00:02:25,320 Speaker 1: by a nine point one percent inflation year in seventy five, 47 00:02:26,000 --> 00:02:29,160 Speaker 1: five point eight, and seventy six, six point five, and 48 00:02:29,200 --> 00:02:32,480 Speaker 1: seventy seven and on and on eleven point three and 49 00:02:32,600 --> 00:02:37,160 Speaker 1: seventy nine in nineteen eighty thirteen and a half percent inflation. 50 00:02:37,600 --> 00:02:42,239 Speaker 1: That is a whale of a decade of just cumulative inflation. 51 00:02:42,440 --> 00:02:45,760 Speaker 1: And that's the key word here, is cumulative, because I 52 00:02:45,800 --> 00:02:48,640 Speaker 1: also looked at a chart here on CPI, you know 53 00:02:48,720 --> 00:02:51,120 Speaker 1: again going back to nineteen seventy and you know what, 54 00:02:51,200 --> 00:02:55,959 Speaker 1: we've only had one year where the CPI actually went down, 55 00:02:56,440 --> 00:02:59,200 Speaker 1: and that was a blip, you know, down point four 56 00:02:59,280 --> 00:03:02,400 Speaker 1: percent in two thousand and nine, right in the middle 57 00:03:02,400 --> 00:03:05,040 Speaker 1: of the housing crisis that we all remember so well, 58 00:03:05,280 --> 00:03:08,240 Speaker 1: where the stock market got cut in half. So the 59 00:03:08,320 --> 00:03:13,280 Speaker 1: point here is this inflation, and this is where politicians 60 00:03:13,360 --> 00:03:17,440 Speaker 1: of both stripes never really leftl with us and remind 61 00:03:17,520 --> 00:03:21,000 Speaker 1: people that hey, yes, the rate of inflation can move 62 00:03:21,120 --> 00:03:24,720 Speaker 1: up and down and sideways, but it is cumulative. It 63 00:03:24,800 --> 00:03:28,560 Speaker 1: never goes away. It's a permanent increase in prices. So 64 00:03:28,600 --> 00:03:32,680 Speaker 1: we have to align our affairs accordingly to have our 65 00:03:32,720 --> 00:03:36,840 Speaker 1: assets invested in such a way that we can outpace 66 00:03:37,600 --> 00:03:41,240 Speaker 1: inflation and taxes. And that's the only way. This is 67 00:03:41,280 --> 00:03:44,560 Speaker 1: just a mathematical fact. That's the only way to build 68 00:03:44,880 --> 00:03:48,440 Speaker 1: positive net worth. And I think sometimes people forget that, 69 00:03:48,800 --> 00:03:51,760 Speaker 1: you know, they just plow it into a bank account 70 00:03:51,800 --> 00:03:54,680 Speaker 1: or CD and say, well, my money is not going 71 00:03:54,760 --> 00:03:58,200 Speaker 1: down in value. Yep, on paper, you're right, but it 72 00:03:58,280 --> 00:04:01,720 Speaker 1: is eroding purchasing power or by just you know, sticking 73 00:04:01,760 --> 00:04:03,920 Speaker 1: it in the in the coffee can, so to speak. 74 00:04:04,320 --> 00:04:07,640 Speaker 2: I just learned something about Bob Spawd seller that he 75 00:04:07,680 --> 00:04:11,280 Speaker 2: spends a decent amount of time downloading charts to look at. 76 00:04:11,600 --> 00:04:13,560 Speaker 2: And I'm just kind of wondering if maybe you need 77 00:04:13,600 --> 00:04:15,920 Speaker 2: a hobby, maybe some model trains, or I don't know, 78 00:04:15,960 --> 00:04:17,960 Speaker 2: civil war reenactment, those kinds of things. 79 00:04:18,040 --> 00:04:20,039 Speaker 1: I'm just trying to keep up with you, Brian, because 80 00:04:20,080 --> 00:04:22,560 Speaker 1: you always come loaded for bear on these shows with 81 00:04:22,680 --> 00:04:25,680 Speaker 1: data and history. I'm just trying to remain relevant. 82 00:04:25,360 --> 00:04:27,440 Speaker 2: So I don't mean I'm trying to hide that by 83 00:04:27,279 --> 00:04:29,120 Speaker 2: by lashing out of you right now. All right, we're 84 00:04:29,120 --> 00:04:30,839 Speaker 2: both nerds, we've confirmed, but we both need to be 85 00:04:30,839 --> 00:04:34,200 Speaker 2: Civil War reenactors. So let's talk about the numbers behind this. Uh, 86 00:04:34,640 --> 00:04:36,800 Speaker 2: what's the high net worth version of this problem? If 87 00:04:36,960 --> 00:04:39,880 Speaker 2: I'm if I'm somebody who can afford my bills, then 88 00:04:39,960 --> 00:04:42,760 Speaker 2: I'm somebody who you know, probably has the flexibility. And 89 00:04:42,760 --> 00:04:44,200 Speaker 2: there's a lot of people out there in the situation. 90 00:04:44,279 --> 00:04:46,640 Speaker 2: Not everybody, but there are people out there who who 91 00:04:46,680 --> 00:04:49,040 Speaker 2: can handle the inflation. Doesn't mean I'm happy about it, 92 00:04:49,200 --> 00:04:51,039 Speaker 2: but but it does mean you know that that that 93 00:04:51,400 --> 00:04:53,080 Speaker 2: you know, if I'm in that situation, that I can 94 00:04:53,080 --> 00:04:55,000 Speaker 2: pay my bills and I just grumble at the grocery 95 00:04:55,000 --> 00:04:57,640 Speaker 2: store and swipe my credit card. Anyway, but let's talk 96 00:04:57,680 --> 00:04:59,920 Speaker 2: about the math from it. So you know, if you're 97 00:05:00,080 --> 00:05:02,920 Speaker 2: if you're drawing two hundred thousand, maybe three hundred from 98 00:05:02,920 --> 00:05:05,600 Speaker 2: a portfolio, well, inflation isn't just a line item that's 99 00:05:05,600 --> 00:05:07,919 Speaker 2: a moving target that keeps raising the bar on you. 100 00:05:08,240 --> 00:05:10,520 Speaker 2: Something that costs two hundred and fifty thousand today, well 101 00:05:10,560 --> 00:05:12,240 Speaker 2: that's going to be three hundred and fifty or four 102 00:05:12,279 --> 00:05:15,640 Speaker 2: hundred thousand down the road. Again just putting numbers to 103 00:05:16,000 --> 00:05:18,600 Speaker 2: the reality here. So if that portfolio isn't keeping up 104 00:05:18,640 --> 00:05:22,320 Speaker 2: with it, perhaps you've invested to conservatively. You know, people 105 00:05:22,360 --> 00:05:25,280 Speaker 2: who have built a sizeable nest egg oftentimes will get 106 00:05:25,400 --> 00:05:27,800 Speaker 2: very focused on it is my job now to protect 107 00:05:27,839 --> 00:05:30,600 Speaker 2: this pile, not to grow it, and inflation can get 108 00:05:30,640 --> 00:05:33,040 Speaker 2: lost in the mix in terms of a boogeyman out 109 00:05:33,040 --> 00:05:34,800 Speaker 2: there that we have to keep an eye on. So 110 00:05:35,000 --> 00:05:39,680 Speaker 2: even if it isn't keeping up, then you're slowly compressing 111 00:05:39,720 --> 00:05:41,240 Speaker 2: your future, and you want to make sure that you 112 00:05:41,320 --> 00:05:43,200 Speaker 2: have the ability to withstand this even if it's not 113 00:05:43,200 --> 00:05:45,280 Speaker 2: happening now. Maybe inflation is not a problem now, but 114 00:05:45,279 --> 00:05:47,599 Speaker 2: that's the nasty thing about it. Eventually it becomes a 115 00:05:47,640 --> 00:05:50,039 Speaker 2: problem if not addressed, and we address it by not 116 00:05:50,160 --> 00:05:52,760 Speaker 2: panicking and by realizing that the pendulum does swing back 117 00:05:52,800 --> 00:05:55,160 Speaker 2: and forth. And while there is risk in anything we do, 118 00:05:55,400 --> 00:05:58,040 Speaker 2: there is also risk in not taking any risk, if 119 00:05:58,040 --> 00:05:58,799 Speaker 2: that makes any sense. 120 00:05:59,320 --> 00:06:02,160 Speaker 1: Yeah, exactly. You know. In other words, if your portfolio 121 00:06:02,440 --> 00:06:06,680 Speaker 1: returns four percent or five percent, meaning and inflation is 122 00:06:06,720 --> 00:06:10,640 Speaker 1: four percent, you didn't really make five percent, even though 123 00:06:10,680 --> 00:06:13,760 Speaker 1: your statement said you did. You made one percent, and 124 00:06:13,839 --> 00:06:17,320 Speaker 1: after you factor in taxes, your money might have moved 125 00:06:17,440 --> 00:06:20,599 Speaker 1: actually backwards in terms of purchaseing power. And I think 126 00:06:20,640 --> 00:06:23,120 Speaker 1: a lot of people forget about that, Brian, because, as 127 00:06:23,160 --> 00:06:27,159 Speaker 1: you just said, it's an awfully safe feeling to just 128 00:06:27,320 --> 00:06:30,680 Speaker 1: look at those numbers on your statement not move, you know, 129 00:06:30,760 --> 00:06:36,200 Speaker 1: in the midst of market volatility, geopolitical volatility like we're 130 00:06:36,240 --> 00:06:40,440 Speaker 1: experiencing right now, and the default can be, Hey, I 131 00:06:40,520 --> 00:06:43,080 Speaker 1: want one thing in my life that's not gonna move, 132 00:06:43,160 --> 00:06:47,160 Speaker 1: that's very predictable, and we tend to get too conservative 133 00:06:47,200 --> 00:06:49,880 Speaker 1: with our money and we miss out, not only miss 134 00:06:49,880 --> 00:06:52,520 Speaker 1: out on growth opportunities when things go back to quote 135 00:06:52,600 --> 00:06:57,080 Speaker 1: unquote normal, but while we're sitting there in these safe assets, 136 00:06:57,320 --> 00:07:01,280 Speaker 1: our money is actually moving backwards into terms of purchasing power. 137 00:07:01,600 --> 00:07:05,239 Speaker 1: And that might feel good over one, two, three years, 138 00:07:05,520 --> 00:07:08,240 Speaker 1: But if you let that, just if that situation just 139 00:07:08,360 --> 00:07:12,800 Speaker 1: continues to percolate for ten, twelve, fifteen years, your financial 140 00:07:12,840 --> 00:07:15,800 Speaker 1: plan might you know, not actually work down the road 141 00:07:15,840 --> 00:07:19,600 Speaker 1: in terms of, you know, making sure your portfolio can 142 00:07:19,640 --> 00:07:21,160 Speaker 1: deliver the paycheck that you need. 143 00:07:21,840 --> 00:07:23,480 Speaker 3: So we like to do this with example. 144 00:07:23,560 --> 00:07:27,280 Speaker 2: So let's let's walk through some human beings here fake people, 145 00:07:27,320 --> 00:07:30,280 Speaker 2: of course, but you know, not that common. Uncommon of 146 00:07:30,320 --> 00:07:33,280 Speaker 2: scenarios here, So two investors with five million dollars. The 147 00:07:33,280 --> 00:07:36,000 Speaker 2: first one gets a little nervous about inflation, reacts to 148 00:07:36,040 --> 00:07:38,440 Speaker 2: that and moves a large chunk to cash dials back 149 00:07:38,440 --> 00:07:40,960 Speaker 2: on the equities and now playing defense instead of offense 150 00:07:41,000 --> 00:07:41,840 Speaker 2: for the next five years. 151 00:07:41,840 --> 00:07:42,360 Speaker 3: That's the plan. 152 00:07:43,440 --> 00:07:46,480 Speaker 2: So the second investor stays disciplined, right, realizes that the 153 00:07:46,520 --> 00:07:49,800 Speaker 2: pendulum swings back and forth, sticks with the balanced allocation. 154 00:07:49,920 --> 00:07:50,080 Speaker 3: Right. 155 00:07:50,120 --> 00:07:52,880 Speaker 2: So this was a portfolio that was already had taken 156 00:07:52,920 --> 00:07:55,160 Speaker 2: some of the risk off the table by not being 157 00:07:55,160 --> 00:07:56,960 Speaker 2: completely in the stock market to begin with. So just 158 00:07:57,040 --> 00:07:59,400 Speaker 2: kind of accepting volatility, understanding that we do need to 159 00:07:59,480 --> 00:08:01,679 Speaker 2: ride the waves a little bit. So in a negative 160 00:08:01,720 --> 00:08:05,400 Speaker 2: scenario here, that first defensive investor, that portfolio is going 161 00:08:05,440 --> 00:08:08,400 Speaker 2: to grow more slowly, maybe three to four percent annually 162 00:08:08,440 --> 00:08:11,760 Speaker 2: if we're lucky. Inflation runs close to that, maybe even 163 00:08:11,840 --> 00:08:14,800 Speaker 2: sometimes above it. So after taxes they're barely keeping up. 164 00:08:15,120 --> 00:08:18,440 Speaker 2: That's going to cause withdrawals to increase because the checkout 165 00:08:18,480 --> 00:08:19,840 Speaker 2: line at the grocery store is going to get a 166 00:08:19,840 --> 00:08:21,880 Speaker 2: little more expensive. So we need to and as well 167 00:08:21,880 --> 00:08:24,080 Speaker 2: as other things so we need to increase what's coming 168 00:08:24,120 --> 00:08:27,720 Speaker 2: out of that portfolio. Now we're away from spending. We're 169 00:08:27,760 --> 00:08:30,080 Speaker 2: spending down into the principle, not just the growth that 170 00:08:30,160 --> 00:08:33,400 Speaker 2: is a cat that occurred on the portfolio ten fifteen years. 171 00:08:33,480 --> 00:08:36,040 Speaker 2: Now you're forced to make adjustments, spend less and that 172 00:08:36,080 --> 00:08:39,000 Speaker 2: comes along with more worry. Got to recalculate that financial 173 00:08:39,000 --> 00:08:41,560 Speaker 2: plan that used to feel really solid. And remember we're 174 00:08:41,559 --> 00:08:45,080 Speaker 2: well into this. This is how inflation can be. Like 175 00:08:45,120 --> 00:08:47,920 Speaker 2: that old story about what happens if you boil a frog, Well, 176 00:08:47,920 --> 00:08:49,440 Speaker 2: if you're throw them into hot water, you jumps out 177 00:08:49,520 --> 00:08:51,400 Speaker 2: right away. We know what it feels like, right, we 178 00:08:51,480 --> 00:08:53,040 Speaker 2: know what it feels like when the market takes away 179 00:08:53,080 --> 00:08:56,920 Speaker 2: a chunk on a bad day. We don't know. It's 180 00:08:56,960 --> 00:08:59,719 Speaker 2: harder to identify the impact of inflation. It's not really 181 00:08:59,720 --> 00:09:02,000 Speaker 2: what it inflation does now. It's what it's going to 182 00:09:02,080 --> 00:09:04,760 Speaker 2: compound to over the next decade or the next decade 183 00:09:04,760 --> 00:09:08,840 Speaker 2: and a half. And the problem of defending ourselves from 184 00:09:09,360 --> 00:09:11,920 Speaker 2: from inflation. It's the things we do now that it's 185 00:09:11,960 --> 00:09:13,959 Speaker 2: going to protect us over the next ten fifteen years, 186 00:09:14,200 --> 00:09:15,880 Speaker 2: not the thing that we do as soon as we 187 00:09:15,920 --> 00:09:17,760 Speaker 2: read it. In terms of a headline of the newspaper. 188 00:09:18,559 --> 00:09:22,000 Speaker 1: Yeah, Brian, and going back to asset allocation and really 189 00:09:22,200 --> 00:09:25,800 Speaker 1: you know, lifestyle and spending plans. This is why we 190 00:09:25,840 --> 00:09:30,080 Speaker 1: talk about all the time, Brian, having different buckets of money. 191 00:09:30,480 --> 00:09:33,000 Speaker 1: You know, we got to have the long term money, 192 00:09:33,400 --> 00:09:36,599 Speaker 1: stay invested in things like stocks that are going to 193 00:09:36,679 --> 00:09:42,000 Speaker 1: outpace inflation for decades and during periods of volatility, you know, 194 00:09:42,520 --> 00:09:45,360 Speaker 1: we talk about you know, having some cash, having some 195 00:09:45,600 --> 00:09:49,400 Speaker 1: non risk assets set aside so that we can weather 196 00:09:49,520 --> 00:09:52,880 Speaker 1: these short term storms and not have to sell things 197 00:09:52,960 --> 00:09:56,560 Speaker 1: like stocks during a down market. So again, we're not 198 00:09:56,800 --> 00:10:00,840 Speaker 1: anti cash, We're not anti safety is which just you know, 199 00:10:00,960 --> 00:10:05,000 Speaker 1: sometimes people can that pendulum can swing too far in 200 00:10:05,080 --> 00:10:09,040 Speaker 1: either direction. When things feel good, everybody wants to be 201 00:10:09,360 --> 00:10:11,480 Speaker 1: you know, one hundred percent in on the market, and 202 00:10:11,559 --> 00:10:14,600 Speaker 1: the minute things start to feel a little bumpy, they 203 00:10:14,640 --> 00:10:17,440 Speaker 1: want to move too much money to cash in. Either 204 00:10:17,480 --> 00:10:20,800 Speaker 1: of those scenarios don't tend to work very well, and 205 00:10:20,800 --> 00:10:23,439 Speaker 1: that's why we have to stay disciplined, know what our 206 00:10:23,440 --> 00:10:26,400 Speaker 1: money needs to do for us over what period of time, 207 00:10:26,720 --> 00:10:29,199 Speaker 1: and that's what tends to work here. You know, when 208 00:10:29,240 --> 00:10:32,280 Speaker 1: we build a portfolio that is going to outpace inflation 209 00:10:32,920 --> 00:10:34,880 Speaker 1: over the next several decades. 210 00:10:35,520 --> 00:10:37,319 Speaker 2: Now, these are things that obviously I have to pay 211 00:10:37,360 --> 00:10:39,920 Speaker 2: a lot of attention to. So just just make sure 212 00:10:39,960 --> 00:10:42,520 Speaker 2: we understand market history. There's so much to be said 213 00:10:42,520 --> 00:10:46,240 Speaker 2: for simply looking down and looking through the ups and 214 00:10:46,320 --> 00:10:48,560 Speaker 2: downs we've had over the decades and just understand what 215 00:10:48,679 --> 00:10:50,679 Speaker 2: happened in two thousand, two thousand and one, two thousand 216 00:10:50,720 --> 00:10:53,240 Speaker 2: and two, Well, the tech bubble burst, we had a recession, 217 00:10:53,240 --> 00:10:55,240 Speaker 2: We of course had nine to eleven. All of that 218 00:10:55,320 --> 00:10:57,440 Speaker 2: had an impact. We don't want to repeat any of 219 00:10:57,440 --> 00:10:59,440 Speaker 2: those things, but we also don't get any control over that. 220 00:10:59,480 --> 00:11:02,280 Speaker 2: The best thing we can do is understand what impact 221 00:11:02,320 --> 00:11:04,640 Speaker 2: that had, what would it have done to my portfolio. 222 00:11:04,679 --> 00:11:06,480 Speaker 2: There are tools out there where you can plug in 223 00:11:06,520 --> 00:11:08,480 Speaker 2: the ticker symbols of whatever it is that you own, 224 00:11:08,760 --> 00:11:11,000 Speaker 2: and you can get a feel for exactly what that's 225 00:11:11,040 --> 00:11:13,160 Speaker 2: going to do or what that would have done in 226 00:11:13,200 --> 00:11:15,560 Speaker 2: those scary time periods two thousand and eight of courses 227 00:11:15,559 --> 00:11:18,840 Speaker 2: on everybody's minds, and then of course years like twenty 228 00:11:18,920 --> 00:11:22,520 Speaker 2: twenty two. There are ways to understand what should I expect, 229 00:11:22,559 --> 00:11:24,560 Speaker 2: and then I can start to think about, okay, if 230 00:11:24,559 --> 00:11:27,120 Speaker 2: that happens, how will I react to it? I know me, 231 00:11:27,280 --> 00:11:28,959 Speaker 2: Am I going to panic and run for the hills 232 00:11:29,280 --> 00:11:31,120 Speaker 2: or am I going to uh? Or am I going 233 00:11:31,160 --> 00:11:32,480 Speaker 2: to be able to say, you know what, I get it. 234 00:11:32,480 --> 00:11:33,920 Speaker 2: This kind of stinks, but I know it's not going 235 00:11:33,960 --> 00:11:38,000 Speaker 2: to be permanent. And make sure we've taken those defensive 236 00:11:38,000 --> 00:11:40,080 Speaker 2: steps such as make sure we have cash. Bob and 237 00:11:40,080 --> 00:11:41,280 Speaker 2: I talk about this all the time. Make sure you've 238 00:11:41,280 --> 00:11:43,480 Speaker 2: got cash available to pay those bills in the short term. 239 00:11:43,520 --> 00:11:45,320 Speaker 2: But the important thing is when it's time to pull 240 00:11:45,360 --> 00:11:47,800 Speaker 2: the trigger. You know, the time to stress test is 241 00:11:47,800 --> 00:11:50,520 Speaker 2: not when it's happening real live in front of your 242 00:11:50,520 --> 00:11:52,960 Speaker 2: face on your financial statements. It's when the market is 243 00:11:52,960 --> 00:11:55,880 Speaker 2: doing relatively well. Well, let's take some time. Let's not 244 00:11:55,920 --> 00:11:57,880 Speaker 2: ignore the portfolio because we feel like it doesn't need 245 00:11:57,920 --> 00:12:00,559 Speaker 2: any attention. That's the time to focus on our right 246 00:12:00,800 --> 00:12:03,120 Speaker 2: and pretend what if bad things happen? What does that 247 00:12:03,160 --> 00:12:05,160 Speaker 2: look like, what does it feel like? And therefore, how 248 00:12:05,200 --> 00:12:06,240 Speaker 2: do I react to it. 249 00:12:06,880 --> 00:12:10,680 Speaker 1: Here's the r Worth advice. Inflation itself doesn't destroy wealth. 250 00:12:11,160 --> 00:12:15,760 Speaker 1: Failing to outpace it certainly does could a major change 251 00:12:15,760 --> 00:12:20,040 Speaker 1: in how often companies report earnings, shake up the transparent 252 00:12:20,240 --> 00:12:24,320 Speaker 1: the transparency investors rely upon. We're going to break down 253 00:12:24,360 --> 00:12:27,800 Speaker 1: what the SEC is considering right now and what it 254 00:12:27,840 --> 00:12:31,280 Speaker 1: could mean for your portfolio. You're listening to Simply Money 255 00:12:31,400 --> 00:12:34,800 Speaker 1: presented by all Worth Financial on fifty five KRC the 256 00:12:34,840 --> 00:12:42,600 Speaker 1: talk station. You're listening to Simply Money presented by all 257 00:12:42,600 --> 00:12:45,679 Speaker 1: Worth Financial on Bob's fond Seller along with Brian James 258 00:12:46,240 --> 00:12:50,200 Speaker 1: straight ahead at six forty three RMD surprises, how to 259 00:12:50,240 --> 00:12:53,920 Speaker 1: handle stock options, some tax traps, and what to do 260 00:12:54,240 --> 00:12:57,080 Speaker 1: with an inherited home, all of those coming up in 261 00:12:57,120 --> 00:13:02,280 Speaker 1: the Ask the Advisor segment. Right ahead, Well, Brian, the 262 00:13:02,360 --> 00:13:06,960 Speaker 1: Securities in Exchange Commission, your favorite people. They're preparing a 263 00:13:07,080 --> 00:13:11,960 Speaker 1: proposal to eliminate the requirement to report earnings quarterly and 264 00:13:12,120 --> 00:13:16,480 Speaker 1: instead give companies the option to share results twice a year. 265 00:13:16,840 --> 00:13:20,079 Speaker 1: According to people familiar with the matter, I've seen this 266 00:13:20,160 --> 00:13:23,880 Speaker 1: story talked about here in recent weeks. Now this is 267 00:13:23,960 --> 00:13:27,600 Speaker 1: not just a one day thing. This this is actually getting 268 00:13:27,600 --> 00:13:32,439 Speaker 1: talked about within the SEC. Why is this even being considered? Brian? 269 00:13:33,160 --> 00:13:35,560 Speaker 2: Well, so let's a little bit of background here. So 270 00:13:35,640 --> 00:13:38,679 Speaker 2: publicly traded companies in the US have been reporting results 271 00:13:38,720 --> 00:13:42,640 Speaker 2: every quarter for about fifty fifty plus years. President Trump 272 00:13:43,080 --> 00:13:45,440 Speaker 2: recently looked at the idea of moving to a semi 273 00:13:45,440 --> 00:13:48,560 Speaker 2: annual earnings report season during his first term. That didn't 274 00:13:48,559 --> 00:13:50,040 Speaker 2: get any to get anywhere off the ground, so it 275 00:13:50,120 --> 00:13:52,160 Speaker 2: kind of got shelved at that point. You know, I 276 00:13:52,240 --> 00:13:54,000 Speaker 2: really want to hear what Andy Stout has to say 277 00:13:54,040 --> 00:13:56,360 Speaker 2: about this, so maybe we should. As a matter of fact, 278 00:13:56,400 --> 00:13:58,679 Speaker 2: I think after we after we get done here, I'm 279 00:13:58,679 --> 00:14:00,640 Speaker 2: going to let them know that we need to talk 280 00:14:00,640 --> 00:14:02,520 Speaker 2: about this. What is his opinion, Because what we're referring 281 00:14:02,520 --> 00:14:05,040 Speaker 2: to here is earning season. We talk about it all 282 00:14:05,080 --> 00:14:07,280 Speaker 2: the time in terms of what's the percentage of companies 283 00:14:07,280 --> 00:14:10,400 Speaker 2: who have reported, and are the earnings looking good? Are 284 00:14:10,400 --> 00:14:12,480 Speaker 2: we coming out ahead of estimates or behind or whatever. 285 00:14:12,720 --> 00:14:14,520 Speaker 2: So what what is being proposed here is that we 286 00:14:14,559 --> 00:14:17,560 Speaker 2: wouldn't be doing that four times a year, but not 287 00:14:17,640 --> 00:14:21,960 Speaker 2: necessarily impacting the whole market because some companies may choose 288 00:14:22,000 --> 00:14:22,920 Speaker 2: to continue. 289 00:14:22,520 --> 00:14:24,840 Speaker 3: To report on a quarterly basis, So. 290 00:14:24,880 --> 00:14:29,920 Speaker 2: We'd only be getting a subset, a strange subset of 291 00:14:30,320 --> 00:14:31,960 Speaker 2: you know, what we have gotten in the past. And 292 00:14:32,040 --> 00:14:34,280 Speaker 2: since everything is based off of history, I just that's 293 00:14:34,320 --> 00:14:35,640 Speaker 2: why I want to talk to Andy. I just want 294 00:14:35,640 --> 00:14:38,360 Speaker 2: to see if we're getting you know, this industry reports 295 00:14:38,360 --> 00:14:41,120 Speaker 2: every quarter, and then these companies of that industry are 296 00:14:41,200 --> 00:14:44,160 Speaker 2: choosing to only choosing to only report twice a year, well, 297 00:14:44,200 --> 00:14:46,040 Speaker 2: then that's going to color the different you know, that 298 00:14:46,120 --> 00:14:48,760 Speaker 2: might actually affect decision making here. So but anyway, so 299 00:14:48,800 --> 00:14:50,840 Speaker 2: let's talk about the Well, you know what, I can 300 00:14:50,880 --> 00:14:52,360 Speaker 2: see that you have an opinion share. 301 00:14:52,360 --> 00:14:54,200 Speaker 3: What are your thoughts on this, Bob, I see it. 302 00:14:54,240 --> 00:14:58,400 Speaker 1: Well, my thoughts are this. I understand why they're talking 303 00:14:58,400 --> 00:15:02,120 Speaker 1: about this because it's very defensive for publicly traded companies 304 00:15:02,520 --> 00:15:05,680 Speaker 1: to comply with all these reporting requirements and all that. 305 00:15:05,760 --> 00:15:09,520 Speaker 1: And we're seeing a fewer and fewer percentage of total 306 00:15:09,600 --> 00:15:13,160 Speaker 1: companies trading on public markets. In other words, we're seeing 307 00:15:13,160 --> 00:15:17,400 Speaker 1: more and more companies choosing to stay private or go private. 308 00:15:17,800 --> 00:15:19,520 Speaker 1: And a lot of that has to do with the 309 00:15:19,520 --> 00:15:23,000 Speaker 1: cost of regulation. Now, on the flip side, if that, 310 00:15:23,400 --> 00:15:27,440 Speaker 1: if that regulation pendulum swings too far in the other direction. 311 00:15:27,960 --> 00:15:30,960 Speaker 1: And Brian, you and I both remember the housing crisis 312 00:15:31,040 --> 00:15:33,920 Speaker 1: where you know, our wonderful friends in Wall Street were 313 00:15:34,000 --> 00:15:38,440 Speaker 1: peddling these absolute garbage, you know, mortgage backed securities to 314 00:15:38,480 --> 00:15:41,600 Speaker 1: the unknowing general public. Well, that's where we didn't have 315 00:15:41,720 --> 00:15:45,080 Speaker 1: enough regulation and a lot of people got left holding 316 00:15:45,120 --> 00:15:47,680 Speaker 1: the bag and losing a ton of money. So, you know, 317 00:15:47,720 --> 00:15:49,960 Speaker 1: if we don't have any bad actors out there in 318 00:15:50,000 --> 00:15:53,440 Speaker 1: the world, I can understand why, you know, we can 319 00:15:53,560 --> 00:15:55,840 Speaker 1: have a little bit of a relaxed you know, more 320 00:15:55,840 --> 00:15:58,800 Speaker 1: of a choice based you know, and let the market decide. 321 00:15:58,800 --> 00:16:02,200 Speaker 1: The market will decide where whether they like companies that 322 00:16:02,280 --> 00:16:06,440 Speaker 1: report every quarterly or semi annually, and companies will tend 323 00:16:06,480 --> 00:16:09,880 Speaker 1: to react to how the market treats their stocks. But 324 00:16:09,920 --> 00:16:12,200 Speaker 1: on the other hand, like I just said, if we 325 00:16:12,320 --> 00:16:14,840 Speaker 1: let the cat out of the bag too much here, 326 00:16:15,360 --> 00:16:17,880 Speaker 1: you know, we all know there's plenty of bad actors 327 00:16:17,880 --> 00:16:20,640 Speaker 1: out here in the world that are waiting to pray 328 00:16:20,840 --> 00:16:23,560 Speaker 1: on poor innocent you know, people that are just trying 329 00:16:23,560 --> 00:16:26,120 Speaker 1: to retire. And that's why, you know, we got to 330 00:16:26,160 --> 00:16:29,160 Speaker 1: find the right sweet spot here in terms of how 331 00:16:29,240 --> 00:16:33,080 Speaker 1: much regulation from the SEC is the right amount. And 332 00:16:33,440 --> 00:16:34,760 Speaker 1: that's more of an art than a. 333 00:16:34,840 --> 00:16:37,680 Speaker 2: Science's next steps on this well, we'll be sure to 334 00:16:37,720 --> 00:16:38,840 Speaker 2: report any updates on it. 335 00:16:38,920 --> 00:16:40,040 Speaker 3: But where we are, the. 336 00:16:39,960 --> 00:16:42,680 Speaker 2: SEC could publish this proposal as soon as next month, 337 00:16:43,440 --> 00:16:45,920 Speaker 2: So in preparation, the regulators have been talking to officials 338 00:16:45,960 --> 00:16:47,920 Speaker 2: at the major exchanges, you know, the all the all 339 00:16:47,960 --> 00:16:50,120 Speaker 2: the the head hon shows are talking to each other 340 00:16:50,280 --> 00:16:53,960 Speaker 2: about how they need to adjust their rules. Whatever gets published, 341 00:16:53,960 --> 00:16:56,800 Speaker 2: it'll be subject to a public comment period. That period 342 00:16:56,880 --> 00:16:58,920 Speaker 2: usually lasts about a month or so. Then the SEC 343 00:16:59,040 --> 00:17:00,800 Speaker 2: votes on it. So there are no guarantees that anything 344 00:17:00,840 --> 00:17:04,200 Speaker 2: actually changes. It's just gone farther than the last time 345 00:17:04,240 --> 00:17:07,560 Speaker 2: the Trump administration brought it up in the first Trump administration. 346 00:17:07,640 --> 00:17:11,440 Speaker 2: So quarterly reporting again would be optional, not eliminate quarterly reports. 347 00:17:11,720 --> 00:17:13,800 Speaker 2: That's all that's being discussed right now. So something to 348 00:17:13,840 --> 00:17:16,040 Speaker 2: pay attention to, but not to react to at the moment. 349 00:17:16,920 --> 00:17:19,840 Speaker 1: All Right, Every Sunday you'll find our all Worth Advice 350 00:17:19,960 --> 00:17:23,040 Speaker 1: in the Cincinnati Inquire. Here's a preview of what you'll 351 00:17:23,040 --> 00:17:27,000 Speaker 1: see in the Sunday paper. Question from gr in Loveland. 352 00:17:27,000 --> 00:17:29,280 Speaker 1: He says, I work full time and I have a 353 00:17:29,320 --> 00:17:32,000 Speaker 1: four to one K, but I also just started an 354 00:17:32,000 --> 00:17:35,399 Speaker 1: online business. How does this all work in terms of 355 00:17:35,680 --> 00:17:40,200 Speaker 1: saving for retirement? Can I save more now somehow that 356 00:17:40,320 --> 00:17:43,159 Speaker 1: I've got this side online business? Brian, this is an 357 00:17:43,200 --> 00:17:46,480 Speaker 1: excellent question, and I know you're well prepared to answer it. 358 00:17:46,760 --> 00:17:49,199 Speaker 2: Yeah, So this is a fun situation for GR so 359 00:17:49,600 --> 00:17:51,320 Speaker 2: full time have a four oh one K, so he's 360 00:17:51,320 --> 00:17:53,199 Speaker 2: got a nine to five he she We don't know 361 00:17:53,200 --> 00:17:55,520 Speaker 2: who this is full time, full time job that has 362 00:17:55,520 --> 00:17:58,840 Speaker 2: a four to one K. And then also, so quick 363 00:17:58,880 --> 00:18:01,320 Speaker 2: answer to this is, yes, you have a second business, 364 00:18:01,359 --> 00:18:03,960 Speaker 2: you have a second source of income. You can set 365 00:18:04,040 --> 00:18:06,879 Speaker 2: up a retirement plan for that business. However, it's not 366 00:18:06,920 --> 00:18:10,760 Speaker 2: that simple. So everybody is limited to the twenty three 367 00:18:11,119 --> 00:18:13,800 Speaker 2: five hundred dollars contributions might be twenty four to check 368 00:18:13,800 --> 00:18:15,840 Speaker 2: what year it is. Regardless, there is a limit to 369 00:18:15,880 --> 00:18:17,800 Speaker 2: how much can flow into a four oh one K 370 00:18:18,440 --> 00:18:20,960 Speaker 2: of your own dollars. If you are of if you're 371 00:18:21,000 --> 00:18:22,879 Speaker 2: over age fifty, you can put a little more in. 372 00:18:22,960 --> 00:18:25,000 Speaker 2: And there is another catch up on top of that 373 00:18:25,040 --> 00:18:26,919 Speaker 2: for people who a little bit older. That applies to 374 00:18:26,960 --> 00:18:30,200 Speaker 2: every single four oh one k. Those rules, however, doesn't 375 00:18:30,240 --> 00:18:32,800 Speaker 2: They don't care how many four oh one ks you have. 376 00:18:32,880 --> 00:18:37,520 Speaker 2: So in this case for your own employee contributions, mister gr, 377 00:18:37,640 --> 00:18:41,560 Speaker 2: missus gr, you are limited to that dollar amount. So 378 00:18:42,200 --> 00:18:44,520 Speaker 2: there's that total exists no matter how many four oh 379 00:18:44,520 --> 00:18:47,080 Speaker 2: one k's you have, so you can't double up on it. However, 380 00:18:47,160 --> 00:18:51,439 Speaker 2: what can happen is the employee your contribution. So, for example, 381 00:18:51,520 --> 00:18:53,320 Speaker 2: you might set up a so what's called a solo 382 00:18:53,400 --> 00:18:55,400 Speaker 2: four oh one K if you are the only employee 383 00:18:55,400 --> 00:18:58,719 Speaker 2: of your own business there and that means that I mean, 384 00:18:58,760 --> 00:19:02,240 Speaker 2: technically it's a solo for can allow for employee contributions 385 00:19:02,280 --> 00:19:04,600 Speaker 2: the deductions out of your paycheck, but it also allows 386 00:19:04,640 --> 00:19:08,399 Speaker 2: for employer contributions in terms of matches or profit sharing 387 00:19:08,480 --> 00:19:12,040 Speaker 2: or those kinds of things. The employer contribution is a 388 00:19:12,040 --> 00:19:14,760 Speaker 2: little different from that limit, so you could potentially benefit 389 00:19:14,800 --> 00:19:17,320 Speaker 2: from that. That is definitely something worth looking into. That 390 00:19:17,400 --> 00:19:19,520 Speaker 2: you've got these two sources of income. So yes, the 391 00:19:19,520 --> 00:19:22,280 Speaker 2: answer is you can save more now somehow. But it's 392 00:19:22,280 --> 00:19:24,000 Speaker 2: not as simple as saying, cool, I got two four 393 00:19:24,040 --> 00:19:26,160 Speaker 2: oh one k's, let's fill them both up. You probably 394 00:19:26,200 --> 00:19:28,080 Speaker 2: want to a hire professional and make sure you coordinate 395 00:19:28,119 --> 00:19:28,680 Speaker 2: these things. 396 00:19:29,400 --> 00:19:32,000 Speaker 1: Here's a question you might have asked yourself, should I quit, 397 00:19:32,359 --> 00:19:35,680 Speaker 1: retire or go part time in terms of my career 398 00:19:35,720 --> 00:19:39,400 Speaker 1: coming up next? Decision making tools for when you're financially 399 00:19:39,480 --> 00:19:44,040 Speaker 1: ready but professionally maybe unsure to make a career change 400 00:19:44,200 --> 00:19:47,520 Speaker 1: or retire completely. You're listening to simply money presented by 401 00:19:47,520 --> 00:19:50,960 Speaker 1: all Worth Financial on fifty five KRC. The talk station 402 00:19:56,160 --> 00:19:58,920 Speaker 1: you're listening to Simply Money, present up by all Worth Financial. 403 00:19:59,040 --> 00:20:02,440 Speaker 1: I'm Bob sponsor along with Brian James, joined tonight by 404 00:20:02,480 --> 00:20:06,399 Speaker 1: our career expert Julie Bauki. Julie on the job, Julie, 405 00:20:06,440 --> 00:20:08,920 Speaker 1: first of all, thanks for making time for us tonight, 406 00:20:09,600 --> 00:20:12,679 Speaker 1: and we've got an interesting topic to cover with you. You know, 407 00:20:12,760 --> 00:20:16,040 Speaker 1: some open ended question here here for you just to start. 408 00:20:17,600 --> 00:20:19,680 Speaker 1: And I know you deal with a lot of people 409 00:20:19,880 --> 00:20:22,080 Speaker 1: that are going through this question. You know, should I 410 00:20:22,160 --> 00:20:25,359 Speaker 1: retire altogether, meaning just quit and hang it up and 411 00:20:25,440 --> 00:20:29,280 Speaker 1: retire or go part time? And how what goes into 412 00:20:29,320 --> 00:20:32,560 Speaker 1: making those kinds of decisions. So we're interested in your 413 00:20:32,600 --> 00:20:36,520 Speaker 1: thoughts on that, Julie, as you navigate these complex questions 414 00:20:36,600 --> 00:20:39,560 Speaker 1: with your clients all the time in your practice. 415 00:20:40,440 --> 00:20:42,720 Speaker 4: The first thing, the analogy I always like to use 416 00:20:42,760 --> 00:20:44,520 Speaker 4: when it comes to this is you know how we 417 00:20:44,560 --> 00:20:48,320 Speaker 4: all use Google maps or ways. So when you think 418 00:20:48,359 --> 00:20:50,840 Speaker 4: about when you're trying to get when you want to 419 00:20:50,880 --> 00:20:54,320 Speaker 4: get where you're trying to go with those with those apps, 420 00:20:54,400 --> 00:20:57,080 Speaker 4: you put a destination in and you know exactly where 421 00:20:57,119 --> 00:20:59,960 Speaker 4: you're trying to go. The problem with So I like 422 00:21:00,000 --> 00:21:02,600 Speaker 4: I can use that analogy to say, to really be 423 00:21:02,680 --> 00:21:06,520 Speaker 4: successful getting someplace, you've got to have some general idea 424 00:21:06,600 --> 00:21:08,600 Speaker 4: of where you're trying to go. So the first question 425 00:21:08,720 --> 00:21:12,080 Speaker 4: I would ask someone is, if you're financially ready, If 426 00:21:12,080 --> 00:21:14,919 Speaker 4: that's not an issue, how do you feel about the 427 00:21:15,000 --> 00:21:17,879 Speaker 4: work you do right now? If you say I absolutely 428 00:21:18,000 --> 00:21:20,880 Speaker 4: hate it and I can't wait to get out, then 429 00:21:20,920 --> 00:21:22,879 Speaker 4: I think I think you throw the baby and the 430 00:21:22,920 --> 00:21:25,960 Speaker 4: bathwater out and start with a fresh sheet of paper 431 00:21:25,960 --> 00:21:28,719 Speaker 4: and say, Okay, I'm going to create something for the 432 00:21:28,760 --> 00:21:31,600 Speaker 4: next stage of my life. The next option be like, Okay, 433 00:21:31,680 --> 00:21:33,760 Speaker 4: I like parts of it, there's parts of what I'd 434 00:21:33,760 --> 00:21:37,080 Speaker 4: love to keep doing. And in that case, I recommend 435 00:21:37,160 --> 00:21:40,200 Speaker 4: you talk to your leaders about is there a way 436 00:21:40,240 --> 00:21:43,800 Speaker 4: that you could go part time maybe just doing the 437 00:21:43,880 --> 00:21:48,080 Speaker 4: things that you're uniquely qualified and skilled at doing. Just 438 00:21:48,160 --> 00:21:50,359 Speaker 4: make sure you don't accept part time pay for full 439 00:21:50,359 --> 00:21:54,480 Speaker 4: time work. So what pieces of what I do now 440 00:21:54,480 --> 00:21:57,280 Speaker 4: can I carve out in order to make that transition 441 00:21:58,320 --> 00:22:01,600 Speaker 4: from forty plus hours a week zero hours a week 442 00:22:02,040 --> 00:22:06,280 Speaker 4: much smoother? And then there are times when we can't. 443 00:22:06,359 --> 00:22:08,080 Speaker 4: We say, you know what I want to keep doing? 444 00:22:08,119 --> 00:22:10,439 Speaker 4: What I'm doing now, but I only want to do 445 00:22:10,480 --> 00:22:13,040 Speaker 4: it for another year or so. And so in that case, 446 00:22:13,080 --> 00:22:15,240 Speaker 4: what can you start doing to start filling up that 447 00:22:15,359 --> 00:22:20,240 Speaker 4: other life bucket let's call it, so getting clear on 448 00:22:20,440 --> 00:22:24,480 Speaker 4: what your situation is today and what your possibilities are. 449 00:22:24,520 --> 00:22:26,840 Speaker 4: You might work for a company that says, naw, we 450 00:22:26,920 --> 00:22:29,160 Speaker 4: need you full time or not at all. Okay, well 451 00:22:29,160 --> 00:22:31,080 Speaker 4: that's going to tell you what you need to do, 452 00:22:31,760 --> 00:22:34,720 Speaker 4: and you at that point it's like, Okay, now I 453 00:22:34,760 --> 00:22:38,200 Speaker 4: need to start planning for the day when the retirement party. 454 00:22:38,240 --> 00:22:41,000 Speaker 4: They've taken the streamers and balloons down and now it's 455 00:22:41,040 --> 00:22:44,760 Speaker 4: time for me to go do something else. It is 456 00:22:44,800 --> 00:22:53,640 Speaker 4: a wildly underestimated, under talked about stressful process to retirement. 457 00:22:54,160 --> 00:22:56,399 Speaker 2: So okay, let's talk about that. So yeah, yeah, it 458 00:22:56,480 --> 00:22:58,760 Speaker 2: is very stressful, and you get to hear a lot 459 00:22:58,760 --> 00:22:59,159 Speaker 2: of stories. 460 00:22:59,160 --> 00:23:00,000 Speaker 3: So bub Bob and I have. 461 00:23:00,040 --> 00:23:02,679 Speaker 2: Our own war stories from the financial side, right, So 462 00:23:02,720 --> 00:23:04,399 Speaker 2: how do we make the numbers work from all this? 463 00:23:04,680 --> 00:23:07,280 Speaker 2: What are some of the stories that you hear? But 464 00:23:07,320 --> 00:23:09,960 Speaker 2: you're more on the day to day career side. So 465 00:23:10,880 --> 00:23:13,560 Speaker 2: let's say you sense that somebody is they're really kind 466 00:23:13,560 --> 00:23:15,600 Speaker 2: of ready to go, but maybe there's not a little bit. 467 00:23:15,640 --> 00:23:17,880 Speaker 2: What if somebody pulls the trigger a little bit too soon. 468 00:23:18,200 --> 00:23:20,280 Speaker 2: What are the biggest regrets you tend to hear from 469 00:23:20,280 --> 00:23:21,720 Speaker 2: people who may be hung it up too early. 470 00:23:23,160 --> 00:23:27,040 Speaker 4: Yeah, the biggest regrets come from people who hung it 471 00:23:27,160 --> 00:23:31,560 Speaker 4: up too early because they've not jumped to something that 472 00:23:31,600 --> 00:23:34,840 Speaker 4: they're excited about. In other words, the dislike for what 473 00:23:34,960 --> 00:23:39,800 Speaker 4: they were doing overrode their patients. So they might say, 474 00:23:39,840 --> 00:23:41,880 Speaker 4: you know what, I'm going to go be a volunteer 475 00:23:41,920 --> 00:23:45,119 Speaker 4: full time, or I'm going to go play golf until 476 00:23:45,160 --> 00:23:47,680 Speaker 4: I can't stand it anymore, or I'm going to go 477 00:23:47,840 --> 00:23:50,159 Speaker 4: do more, you know, spend more time on a hobby. 478 00:23:50,200 --> 00:23:52,960 Speaker 4: I actually had a client several years ago who was 479 00:23:53,040 --> 00:23:55,320 Speaker 4: on the road so much, and when he got to 480 00:23:55,359 --> 00:23:57,640 Speaker 4: the point that he could retire, he quit cold Turkey 481 00:23:58,240 --> 00:24:03,480 Speaker 4: and he went moved to Florida. Golf, pickleball, tennis, racketball. 482 00:24:04,400 --> 00:24:06,560 Speaker 4: He said so much of it that he hurt his shoulder. 483 00:24:07,160 --> 00:24:09,960 Speaker 4: And he's like, now, I said, I jumped from one 484 00:24:10,040 --> 00:24:11,760 Speaker 4: hundred and twenty percent at one thing to one hundred 485 00:24:11,760 --> 00:24:14,080 Speaker 4: and twenty percent at another. And he realized at that 486 00:24:14,160 --> 00:24:17,600 Speaker 4: point that that life of one hundred percent leisure while 487 00:24:17,640 --> 00:24:21,719 Speaker 4: pantilizing in concept was not only not good for his body, 488 00:24:22,080 --> 00:24:23,840 Speaker 4: but it also wasn't good for his mind. And so 489 00:24:23,920 --> 00:24:28,000 Speaker 4: he went back to work doing some consulting. And so 490 00:24:28,040 --> 00:24:32,440 Speaker 4: it's you know, you have to know if your identity 491 00:24:32,560 --> 00:24:34,800 Speaker 4: is tied up in your job, then you are going 492 00:24:34,840 --> 00:24:37,119 Speaker 4: to have a harder part. You're going to have a 493 00:24:37,119 --> 00:24:40,040 Speaker 4: harder time of this, or if you don't have anything 494 00:24:40,160 --> 00:24:42,520 Speaker 4: that you're interested in. I've been talking about this with 495 00:24:42,560 --> 00:24:48,800 Speaker 4: people recently, and with men it's especially hard because they 496 00:24:48,920 --> 00:24:53,240 Speaker 4: generally don't have the friend and support network that women do. 497 00:24:53,560 --> 00:24:56,600 Speaker 4: And so now you're sixty some years old and you're 498 00:24:56,640 --> 00:24:59,960 Speaker 4: trying to find people to do stuff with and why 499 00:25:00,200 --> 00:25:02,000 Speaker 4: are saying we don't really want to be your one 500 00:25:02,040 --> 00:25:04,720 Speaker 4: hundred percent entertainment. 501 00:25:04,400 --> 00:25:07,879 Speaker 2: And so how my wife would never say that she 502 00:25:08,080 --> 00:25:09,720 Speaker 2: loves every minute. 503 00:25:10,640 --> 00:25:12,720 Speaker 4: She just spit her coffee out right now she's looking 504 00:25:12,720 --> 00:25:20,400 Speaker 4: at But yeah, you have to get realistic about all 505 00:25:20,440 --> 00:25:23,760 Speaker 4: the pieces of your life. If things are really, really, 506 00:25:23,840 --> 00:25:25,800 Speaker 4: really bad and you feel like you're being pushed out, 507 00:25:25,800 --> 00:25:27,880 Speaker 4: and then it can be worth it to just stop, 508 00:25:28,000 --> 00:25:32,320 Speaker 4: pullter teeth, take up her rest and then rebuild something new. 509 00:25:32,600 --> 00:25:35,080 Speaker 4: But if you generally like what you do a portions 510 00:25:35,080 --> 00:25:37,840 Speaker 4: of what you do. The smarter play can be a 511 00:25:37,880 --> 00:25:40,800 Speaker 4: slower exit, or you get a chance to pry some 512 00:25:40,880 --> 00:25:42,600 Speaker 4: things on the other end and to build on the 513 00:25:42,640 --> 00:25:46,040 Speaker 4: other end before before you go full time, because some 514 00:25:46,080 --> 00:25:47,720 Speaker 4: of the things you think you're going to enjoy doing 515 00:25:47,720 --> 00:25:50,560 Speaker 4: in retirement you won't, and you're going to discover some 516 00:25:50,680 --> 00:25:54,440 Speaker 4: new things once you allow yourself to be really open 517 00:25:54,480 --> 00:25:58,159 Speaker 4: minded around that that you do choose to pursue. It's 518 00:25:57,800 --> 00:26:00,960 Speaker 4: it's it can be a really wonderful time, but it's 519 00:26:01,000 --> 00:26:03,679 Speaker 4: not an easy time because you're also dealing with the 520 00:26:03,840 --> 00:26:07,320 Speaker 4: mental piece, which is, oh my gosh, this is that 521 00:26:07,520 --> 00:26:11,320 Speaker 4: last portion of my life, which is really quite you know, 522 00:26:11,800 --> 00:26:14,679 Speaker 4: quite sobering, and so you're dealing with a lot of 523 00:26:14,680 --> 00:26:17,280 Speaker 4: that kind of stuff as well, maybe some regret, maybe 524 00:26:17,440 --> 00:26:19,880 Speaker 4: you know, all that stuff that comes with a major transition. 525 00:26:20,160 --> 00:26:25,760 Speaker 4: And so be realistic, be realistic about who you are, 526 00:26:26,320 --> 00:26:29,160 Speaker 4: what your support systems are, which your hobbies and interests are, 527 00:26:29,840 --> 00:26:32,400 Speaker 4: and you have to get out there and be bold 528 00:26:32,400 --> 00:26:35,399 Speaker 4: and vulnerable a little bit and know that you're really, 529 00:26:35,640 --> 00:26:37,800 Speaker 4: in a lot of ways building a brand new stage 530 00:26:37,800 --> 00:26:38,400 Speaker 4: of life. 531 00:26:39,080 --> 00:26:41,280 Speaker 1: All right, Julie in the minute we got left here. 532 00:26:41,320 --> 00:26:43,879 Speaker 1: One of the best ideas I've heard on this topic, 533 00:26:43,920 --> 00:26:46,359 Speaker 1: and I think the idea actually came from you in 534 00:26:46,400 --> 00:26:48,560 Speaker 1: one of the prior segments we've done with you. And 535 00:26:48,600 --> 00:26:51,240 Speaker 1: that's once you get to that point where you know 536 00:26:51,359 --> 00:26:53,399 Speaker 1: you're going to probably retire in a year or a 537 00:26:53,440 --> 00:26:55,480 Speaker 1: year and a half or what have you, that's the 538 00:26:55,520 --> 00:26:58,560 Speaker 1: time to maybe take that one or two week vacation 539 00:26:59,320 --> 00:27:03,840 Speaker 1: and actually trial run retirement. Now that takes some planning, right, Julie, 540 00:27:03,840 --> 00:27:07,560 Speaker 1: But pretend that you're retired on your vacation and actually 541 00:27:07,640 --> 00:27:09,600 Speaker 1: plan out what you think you're going to want to 542 00:27:09,640 --> 00:27:12,399 Speaker 1: do to make sure that that's really what you're going 543 00:27:12,440 --> 00:27:14,240 Speaker 1: to enjoy. Am I on the right track there? 544 00:27:15,000 --> 00:27:18,080 Speaker 4: Yeah? Absolutely, you've got to try things out. You've got 545 00:27:18,119 --> 00:27:19,160 Speaker 4: to get out of your head. 546 00:27:19,760 --> 00:27:20,320 Speaker 2: You've got to. 547 00:27:20,280 --> 00:27:24,280 Speaker 4: Say, look, if my goal is to give back or 548 00:27:24,359 --> 00:27:27,280 Speaker 4: contribute more in my community, maybe you take time to 549 00:27:27,359 --> 00:27:29,720 Speaker 4: figure out what is it, what is the way you 550 00:27:29,760 --> 00:27:34,240 Speaker 4: want to contribute, Then start researching organizations that do that 551 00:27:34,359 --> 00:27:36,399 Speaker 4: and figure out what your role might be. And so 552 00:27:36,520 --> 00:27:39,199 Speaker 4: you have to take this on like a project and 553 00:27:39,280 --> 00:27:42,520 Speaker 4: you're the project. And that's the stuff that's really really 554 00:27:42,560 --> 00:27:45,399 Speaker 4: uncomfortable for us because it causes us. It causes a 555 00:27:45,400 --> 00:27:47,600 Speaker 4: bunch of other stuff to surface, but maybe we. 556 00:27:47,680 --> 00:27:50,359 Speaker 1: Have to deal with Thanks for listening. You've been listening 557 00:27:50,359 --> 00:27:53,040 Speaker 1: to Simply Money presented by all Worth Financial on fifty 558 00:27:53,040 --> 00:28:02,080 Speaker 1: five KRC, the talk station. You're listening to Simply Money 559 00:28:02,080 --> 00:28:04,879 Speaker 1: presented by all Worth Financial. I'm Bob Sponseller along with 560 00:28:04,920 --> 00:28:07,879 Speaker 1: Brian James. Do you have a financial question you'd like 561 00:28:07,920 --> 00:28:09,919 Speaker 1: for us to answer. There's a red button you can 562 00:28:09,960 --> 00:28:12,399 Speaker 1: click while you're listening to the show right on the 563 00:28:12,440 --> 00:28:16,200 Speaker 1: iHeart app. Simply record your question and it will come 564 00:28:16,280 --> 00:28:20,119 Speaker 1: straight to us. All right, Brian, John and Madeira says, 565 00:28:20,280 --> 00:28:23,800 Speaker 1: our required minimum distributions are going to be much larger 566 00:28:23,800 --> 00:28:27,720 Speaker 1: than our actual spending needs. What strategies can help us 567 00:28:27,760 --> 00:28:30,240 Speaker 1: avoid a huge tax bite? 568 00:28:30,480 --> 00:28:32,919 Speaker 2: We have very common question, John, Thanks for sending it 569 00:28:32,960 --> 00:28:34,919 Speaker 2: in and thanks for trusting us with to provide you. 570 00:28:34,960 --> 00:28:35,600 Speaker 3: Some feedback there. 571 00:28:35,640 --> 00:28:38,320 Speaker 2: Well, we we don't know John's age. He talks about 572 00:28:38,400 --> 00:28:41,120 Speaker 2: RMD's requirement of distributions in the future tents, so we're 573 00:28:41,120 --> 00:28:43,280 Speaker 2: assuming he's not quite there yet. That's the case, and 574 00:28:43,360 --> 00:28:45,960 Speaker 2: he's got a couple alternatives. John, you can be looking 575 00:28:46,000 --> 00:28:48,560 Speaker 2: at roth conversions. And the window for this is the 576 00:28:49,000 --> 00:28:51,040 Speaker 2: most ideal window for this is when you're in the 577 00:28:51,080 --> 00:28:53,920 Speaker 2: lowest bracket you'll ever see. So perhaps you're retired, maybe 578 00:28:53,920 --> 00:28:56,560 Speaker 2: you haven't turned on social Security or pension benefits yet, 579 00:28:56,600 --> 00:29:00,120 Speaker 2: so there's no income generating tax taxation there I and 580 00:29:00,280 --> 00:29:03,400 Speaker 2: obviously you're not at requirement of distribution age, so those 581 00:29:03,440 --> 00:29:06,120 Speaker 2: are That's probably the lowest bracket that you've seen in decades, 582 00:29:06,120 --> 00:29:08,760 Speaker 2: So you might want to look at roth conversions here, 583 00:29:08,880 --> 00:29:11,480 Speaker 2: or even if maybe that's not on the table, or 584 00:29:11,480 --> 00:29:13,080 Speaker 2: maybe you got other things going on. Another thing you 585 00:29:13,120 --> 00:29:16,280 Speaker 2: can do is just start accelerating withdraws. Don't rule out 586 00:29:16,480 --> 00:29:18,840 Speaker 2: the IRA when you do need money for that vacation, 587 00:29:18,960 --> 00:29:21,360 Speaker 2: the next car or whatever. Remember you're in the lowest 588 00:29:21,360 --> 00:29:23,800 Speaker 2: bracket of your life. If you take a chunk out, 589 00:29:24,280 --> 00:29:26,240 Speaker 2: you can calculate what the bracket will be and get 590 00:29:26,240 --> 00:29:29,080 Speaker 2: an idea for how you'll stay below whatever bracket you want. 591 00:29:29,200 --> 00:29:31,880 Speaker 2: You want to avoid, but don't always avoid the IRA 592 00:29:32,000 --> 00:29:35,000 Speaker 2: because you know it's income taxable. Spread that out more 593 00:29:35,040 --> 00:29:37,920 Speaker 2: distributions over a longer period of time is going to 594 00:29:37,920 --> 00:29:41,280 Speaker 2: stretch it out into more tax years, therefore less taxes percentagewise. 595 00:29:41,360 --> 00:29:44,960 Speaker 2: So we will move on then to our next question here, 596 00:29:45,000 --> 00:29:47,640 Speaker 2: which comes from Jerry and Levin, and Jerry says he's 597 00:29:47,680 --> 00:29:52,440 Speaker 2: the executor for his father's estate and he's got business interestsmoll, congratulations, Jerry, 598 00:29:52,440 --> 00:29:54,080 Speaker 2: that's going to be a couple curve balls for you 599 00:29:54,120 --> 00:29:56,360 Speaker 2: to go chase down. What steps does he need to 600 00:29:56,360 --> 00:29:58,880 Speaker 2: take Bob to avoid some personal liability as he's selling 601 00:29:58,960 --> 00:29:59,360 Speaker 2: this a state. 602 00:29:59,400 --> 00:30:00,560 Speaker 3: That's a tough one. 603 00:30:01,240 --> 00:30:04,160 Speaker 1: Well, it is a tough one, Jerry, and with you know, 604 00:30:04,520 --> 00:30:07,680 Speaker 1: with I take these questions literally and based on the 605 00:30:07,760 --> 00:30:10,960 Speaker 1: lack of information contained in the question. That's not your fault, 606 00:30:10,960 --> 00:30:13,800 Speaker 1: that's just the way you ask the question. Here's my advice. 607 00:30:14,640 --> 00:30:19,680 Speaker 1: Hit the pause button immediately, don't do anything and go 608 00:30:19,840 --> 00:30:24,440 Speaker 1: network around a little bit and find a good qualified attorney, 609 00:30:24,560 --> 00:30:29,080 Speaker 1: someone that specializes in both business planning and estate planning. 610 00:30:29,200 --> 00:30:32,239 Speaker 1: They're out there. Just network around a little bit and 611 00:30:32,360 --> 00:30:35,920 Speaker 1: find one and don't take any action. Don't do anything 612 00:30:36,600 --> 00:30:40,680 Speaker 1: until you have consulted with a good attorney. Perhaps it's 613 00:30:40,720 --> 00:30:43,800 Speaker 1: your father's attorney, you know, who might be well skilled 614 00:30:43,840 --> 00:30:46,320 Speaker 1: in these things. And if that person has retired or 615 00:30:46,360 --> 00:30:49,760 Speaker 1: moved on or is no longer active, talk to your 616 00:30:49,960 --> 00:30:53,120 Speaker 1: your friends and colleagues, and find a good attorney. That's 617 00:30:53,240 --> 00:30:58,360 Speaker 1: my best advice because if you're involved in making decisions 618 00:30:58,400 --> 00:31:01,880 Speaker 1: on behalf of the business or operating the business in 619 00:31:02,000 --> 00:31:04,640 Speaker 1: any way after your father's passing, you want to be 620 00:31:04,880 --> 00:31:08,040 Speaker 1: real careful, you know, to protect yourself. So get some 621 00:31:08,120 --> 00:31:11,480 Speaker 1: good legal counsel here. I know it'll cost a little 622 00:31:11,840 --> 00:31:15,320 Speaker 1: bit of money to do that, but my experience has 623 00:31:15,360 --> 00:31:18,480 Speaker 1: been you know, a good attorney is worth his or 624 00:31:18,520 --> 00:31:21,280 Speaker 1: her weight in gold and can help you avoid some 625 00:31:21,600 --> 00:31:24,880 Speaker 1: possibly significant problems. That's the best advice I could give, 626 00:31:25,520 --> 00:31:29,360 Speaker 1: all right, Kevin and Erlinger Brian He says, I've accumulated 627 00:31:29,440 --> 00:31:33,240 Speaker 1: stock options through work. What's the smartest way to exercise 628 00:31:33,360 --> 00:31:37,240 Speaker 1: them without triggering a massive tax bill all at once? 629 00:31:37,920 --> 00:31:41,320 Speaker 2: Okay, so this is another good one here, some complicated 630 00:31:41,760 --> 00:31:45,400 Speaker 2: features here to a very popular benefit plan that some 631 00:31:45,440 --> 00:31:48,440 Speaker 2: employers share with their employees. So your stock options are 632 00:31:48,480 --> 00:31:51,000 Speaker 2: gonna fall in one of two categories. They're either ISOs 633 00:31:51,040 --> 00:31:55,160 Speaker 2: incentive stock options, or they're nqsos non qualified stock options, 634 00:31:55,160 --> 00:31:57,400 Speaker 2: big differences between them. If they happen to be of 635 00:31:57,440 --> 00:32:00,400 Speaker 2: the incentive variety, then you can a little bit of 636 00:32:00,400 --> 00:32:02,800 Speaker 2: a tax benefit there. If you hold those shares exercise 637 00:32:02,840 --> 00:32:06,280 Speaker 2: and hold the shares one year from the exercise in 638 00:32:06,320 --> 00:32:08,640 Speaker 2: two years from the grant, then you should qualify for 639 00:32:08,680 --> 00:32:11,040 Speaker 2: long term capital gains tax, which is the most favorable 640 00:32:11,120 --> 00:32:12,920 Speaker 2: kind of tax. If we got to pay it, that's 641 00:32:12,960 --> 00:32:14,760 Speaker 2: the one we want, But you want to watch out 642 00:32:14,800 --> 00:32:17,800 Speaker 2: for alternative minimum tax. We can do a whole fascinating, 643 00:32:17,920 --> 00:32:20,720 Speaker 2: boring show on the alternative minimum tax. We can't get 644 00:32:20,720 --> 00:32:22,720 Speaker 2: into that here, but just be aware that if it's 645 00:32:22,720 --> 00:32:24,960 Speaker 2: an incentive stock options, that's something you're going to want 646 00:32:24,960 --> 00:32:26,840 Speaker 2: to be paying attention to. On the other hand, if 647 00:32:26,880 --> 00:32:29,160 Speaker 2: it's non qualified, those are going to be taxed as 648 00:32:29,280 --> 00:32:32,800 Speaker 2: income at exercise, so you're going to pay ordinary income 649 00:32:32,840 --> 00:32:35,200 Speaker 2: tax on the spread, which is the difference between the 650 00:32:35,240 --> 00:32:37,360 Speaker 2: market price whatever everybody would pay for it on the 651 00:32:37,360 --> 00:32:39,840 Speaker 2: open market, and whatever the strike price was which you 652 00:32:39,840 --> 00:32:41,880 Speaker 2: were given the time of the grant, and then any 653 00:32:41,920 --> 00:32:45,680 Speaker 2: further appreciation after you exercise. This that's taxes capital gains 654 00:32:45,720 --> 00:32:48,120 Speaker 2: when you sell. So if you want to, if you 655 00:32:48,160 --> 00:32:49,800 Speaker 2: want to avoid this, you can spread it out over 656 00:32:49,880 --> 00:32:52,720 Speaker 2: multiple years, try to wagh or if you can wait 657 00:32:52,800 --> 00:32:54,800 Speaker 2: until you have a lower income year. For example, let's 658 00:32:54,800 --> 00:32:57,240 Speaker 2: say you're planning on retiring at the end of this year, awesome, 659 00:32:57,280 --> 00:33:00,160 Speaker 2: don't exercise anything now, wait until January if you've got 660 00:33:00,160 --> 00:33:03,640 Speaker 2: that ability through your employer. And also there may be 661 00:33:03,760 --> 00:33:07,080 Speaker 2: options for cash less exercises, which basically means that you 662 00:33:07,160 --> 00:33:08,920 Speaker 2: liquidate the whole thing. You don't have to lay out 663 00:33:08,920 --> 00:33:11,960 Speaker 2: any cash. They'll they'll pull the purchase value right out 664 00:33:12,000 --> 00:33:14,640 Speaker 2: of the proceeds. And also, as always, you can consider 665 00:33:14,680 --> 00:33:17,800 Speaker 2: some charitable giving to offset taxes. If you're already doing 666 00:33:17,840 --> 00:33:19,640 Speaker 2: some of that anyway, then there may be a way 667 00:33:19,640 --> 00:33:21,840 Speaker 2: to combine these things. So get with a fiduciary financial 668 00:33:21,880 --> 00:33:22,800 Speaker 2: advisor and they'll. 669 00:33:22,600 --> 00:33:24,160 Speaker 3: Help you put these puzzle pieces together. 670 00:33:25,520 --> 00:33:28,680 Speaker 2: Next question, This one comes from Mark and Indian Hill, 671 00:33:29,120 --> 00:33:31,720 Speaker 2: and Mark says they've saved steadily, but they've mostly used 672 00:33:31,800 --> 00:33:35,080 Speaker 2: mutual funds and he's wondering if exchange traded funds ETFs 673 00:33:35,160 --> 00:33:37,560 Speaker 2: or direct indexing might be a better option for them 674 00:33:37,600 --> 00:33:38,360 Speaker 2: at this stage. 675 00:33:39,480 --> 00:33:42,200 Speaker 1: Well, Mark, I would say, all things being equal, of 676 00:33:42,280 --> 00:33:46,360 Speaker 1: course ETFs and direct indexing are more tax efficient than 677 00:33:46,400 --> 00:33:49,680 Speaker 1: having everything in mutual funds. But you know, first of all, 678 00:33:49,720 --> 00:33:53,920 Speaker 1: congratulations for saving steadily and building a nice portfolio of 679 00:33:54,000 --> 00:33:57,320 Speaker 1: mutual funds because you know, I'm assuming you've done this 680 00:33:57,400 --> 00:34:00,200 Speaker 1: over years and decades and that that was the only 681 00:34:00,240 --> 00:34:03,080 Speaker 1: game in town. So you did you did right, You saved, 682 00:34:03,200 --> 00:34:07,560 Speaker 1: you accumulated. The industry has evolved over the years to 683 00:34:07,680 --> 00:34:11,799 Speaker 1: have these ETFs and direct indexing and tax loss harvesting strategies, 684 00:34:12,360 --> 00:34:14,919 Speaker 1: so it's good that you're aware that those are out there. 685 00:34:15,080 --> 00:34:19,040 Speaker 1: My advice would be, have a good fiduciary advisor sit down, 686 00:34:19,080 --> 00:34:23,080 Speaker 1: look at your portfolio, and there might be spots where 687 00:34:23,560 --> 00:34:26,280 Speaker 1: you can gradually move into some of these more tax 688 00:34:26,320 --> 00:34:30,640 Speaker 1: efficient strategies without causing you to just dump all your 689 00:34:30,719 --> 00:34:34,120 Speaker 1: mutual funds or most of them and pay a huge 690 00:34:34,160 --> 00:34:37,680 Speaker 1: capital gain tax bill in the process. So it's important 691 00:34:37,719 --> 00:34:40,879 Speaker 1: to look at the details, have a good advisor sit 692 00:34:40,960 --> 00:34:43,640 Speaker 1: down with you that could give you good fiduciary advice 693 00:34:43,680 --> 00:34:49,320 Speaker 1: and help you transition responsibly into some more tax efficient strategies, 694 00:34:49,360 --> 00:34:52,120 Speaker 1: you know, moving down the road. Coming up next, I've 695 00:34:52,160 --> 00:34:56,200 Speaker 1: got my two cents on how maybe to evaluate what 696 00:34:56,320 --> 00:35:00,279 Speaker 1: kind of financial advice you really need based on your situation. 697 00:35:00,800 --> 00:35:03,320 Speaker 1: You're listening to Simply Money presented by all Worth Financial 698 00:35:03,360 --> 00:35:11,120 Speaker 1: on fifty five KRC the talk station. You're listening to 699 00:35:11,120 --> 00:35:14,279 Speaker 1: Simply Money, presented by all Worth Financial on Bob Sponsller 700 00:35:14,320 --> 00:35:17,920 Speaker 1: along with Brian James all Right. We started off tonight's 701 00:35:17,920 --> 00:35:21,560 Speaker 1: show by giving four or five different examples of you know, 702 00:35:21,600 --> 00:35:24,719 Speaker 1: fairly well to do families that had gotten some bad 703 00:35:24,760 --> 00:35:27,520 Speaker 1: advice and kind of went to sleep on not doing 704 00:35:27,560 --> 00:35:31,840 Speaker 1: some important things. I want to bring this back, Brian, 705 00:35:31,880 --> 00:35:35,560 Speaker 1: to kind of real world how should these people? How 706 00:35:35,600 --> 00:35:39,000 Speaker 1: should these people be evaluating their situation and what I'm 707 00:35:39,040 --> 00:35:42,400 Speaker 1: talking about here? And I run into this quite often. 708 00:35:42,800 --> 00:35:46,160 Speaker 1: A lot of times people don't need or want a 709 00:35:46,200 --> 00:35:50,720 Speaker 1: professional advisor to help them with everything. They might already 710 00:35:50,719 --> 00:35:53,880 Speaker 1: have a good estate plan, they might be very comfortable 711 00:35:54,000 --> 00:35:58,080 Speaker 1: self managing their portfolio, but there's some of these things 712 00:35:58,280 --> 00:36:03,480 Speaker 1: like tax efficiency or more complex estate planning or distribution 713 00:36:03,640 --> 00:36:07,359 Speaker 1: strategies that they haven't even thought of, and it can 714 00:36:07,560 --> 00:36:12,120 Speaker 1: really move the needle in their overall financial plan from 715 00:36:12,160 --> 00:36:16,200 Speaker 1: a tax standpoint and from a legacy standpoint to their 716 00:36:16,280 --> 00:36:20,360 Speaker 1: families and chosen charities. And so my message tonight is 717 00:36:20,600 --> 00:36:24,040 Speaker 1: be open to sitting down with somebody and be a 718 00:36:24,080 --> 00:36:27,799 Speaker 1: little self aware about what you haven't covered or you 719 00:36:27,920 --> 00:36:32,360 Speaker 1: might not know or might not want to do because oftentimes, Brian, 720 00:36:32,440 --> 00:36:35,680 Speaker 1: we don't do every single thing for clients, but there's 721 00:36:35,840 --> 00:36:39,640 Speaker 1: one or two value added things we can add to 722 00:36:39,680 --> 00:36:43,919 Speaker 1: somebody's situation, really move the needle for them, and they 723 00:36:43,960 --> 00:36:47,680 Speaker 1: walk away feeling glad that they worked with us or 724 00:36:47,719 --> 00:36:51,960 Speaker 1: with another good fiduciary advisor. That's my message tonight is 725 00:36:52,200 --> 00:36:55,759 Speaker 1: have an open mind, you know, as you evaluate comprehensive 726 00:36:55,800 --> 00:36:57,480 Speaker 1: advice and comprehensive planning. 727 00:36:57,880 --> 00:36:59,920 Speaker 3: Yeah, and I would add to that, I would add this. 728 00:37:01,239 --> 00:37:03,600 Speaker 2: One of my favorite times as an advisor is when 729 00:37:03,640 --> 00:37:06,640 Speaker 2: I come across something where I can educate somebody using 730 00:37:06,680 --> 00:37:09,480 Speaker 2: an actual, real example, because I think people are very 731 00:37:09,520 --> 00:37:12,480 Speaker 2: comfortable knowing that they're not alone in whatever weirdness they're facing. 732 00:37:12,480 --> 00:37:15,280 Speaker 2: And sometimes it can be good weirdness, right, just unfortunately, 733 00:37:15,280 --> 00:37:16,680 Speaker 2: I've got a lot of money that provides a lot 734 00:37:16,680 --> 00:37:19,200 Speaker 2: of opportunities. What do other people do in my situation? 735 00:37:19,600 --> 00:37:22,719 Speaker 2: And sometimes it's terrifying stuff, you know, where maybe there's 736 00:37:22,719 --> 00:37:24,560 Speaker 2: a healthcare problem or something in the mix. And I 737 00:37:24,600 --> 00:37:27,000 Speaker 2: think the value that any advisor brings is the ability 738 00:37:27,040 --> 00:37:29,160 Speaker 2: to say, I've been through this before. Here's how other 739 00:37:29,160 --> 00:37:30,560 Speaker 2: people who look just like you have. 740 00:37:30,560 --> 00:37:31,239 Speaker 3: Responded to it. 741 00:37:31,239 --> 00:37:33,839 Speaker 2: Here's the techniques they used, here's the results that they 742 00:37:34,080 --> 00:37:35,880 Speaker 2: that they got out of it, here's the pros and 743 00:37:35,880 --> 00:37:38,080 Speaker 2: cons of all the decision options that they had, and 744 00:37:38,120 --> 00:37:40,800 Speaker 2: then everybody can move forward having made a confident decision. 745 00:37:41,239 --> 00:37:43,399 Speaker 2: But it helps an awful lot to have somebody who 746 00:37:43,440 --> 00:37:46,920 Speaker 2: is an independent bystander on arms length away who can 747 00:37:46,960 --> 00:37:49,440 Speaker 2: kind of guide you, sort of the docent in the museum, 748 00:37:49,480 --> 00:37:51,200 Speaker 2: if you will, of here's how things have worked for 749 00:37:51,239 --> 00:37:53,839 Speaker 2: other people historically, and here's how it can work for you. 750 00:37:54,800 --> 00:37:57,600 Speaker 1: Yeah, it doesn't mean that you have to do what 751 00:37:57,680 --> 00:38:00,319 Speaker 1: everyone else does. But to your point, Brian, and just 752 00:38:00,440 --> 00:38:03,880 Speaker 1: knowing what some of your options are and maybe hearing 753 00:38:03,920 --> 00:38:07,120 Speaker 1: some real life examples, three or four ways to possibly 754 00:38:07,200 --> 00:38:11,520 Speaker 1: skin the cat. Oftentimes you know the bells and whistles 755 00:38:11,560 --> 00:38:14,480 Speaker 1: go off in people's brains and say, yeah, I never thought. 756 00:38:14,239 --> 00:38:15,160 Speaker 3: About it that way. 757 00:38:16,120 --> 00:38:20,080 Speaker 1: I like that idea, let's explore how that might impact 758 00:38:20,160 --> 00:38:23,279 Speaker 1: my plan. So yeah, keep an open mind, keep an 759 00:38:23,320 --> 00:38:27,920 Speaker 1: open mind to working with advisors, but pick advisors properly 760 00:38:28,120 --> 00:38:32,560 Speaker 1: so that they're actually operating in a fiduciary role, operating 761 00:38:32,600 --> 00:38:36,160 Speaker 1: in your best interest, not theirs. Thanks for listening. You've 762 00:38:36,200 --> 00:38:38,800 Speaker 1: been listening to simply money, presented by all Worth Financial 763 00:38:38,840 --> 00:38:41,479 Speaker 1: on fifty five KARC, the talk station