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Speaker 1: Tonight. Are you ready for a market that ziggs when

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Speaker 1: it should zag? Why volatility could be the name of

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Speaker 1: the game in twenty twenty six, and how to position

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Speaker 1: your portfolio so it not only survives but thrives. You're

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Speaker 1: listening to Simply Money, presented by all Worth Financial and

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Speaker 1: Bob Sponseller, along with Brian James, Hedge funds, institutional investors,

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Speaker 1: and even some of the biggest state backed funds around

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Speaker 1: the globe. They're all making one big assumption about twenty

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Speaker 1: twenty six. There will be volatility not just in the market,

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Speaker 1: but across economies, policy, and geopolitical events. Obviously, we're heading

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Speaker 1: into mid term elections in twenty twenty six. Walk us

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Speaker 1: through some of this, Brian.

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Speaker 2: Well, why is this happening? Bib Well, first, it's the economy.

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Speaker 2: Let's talk about that. We're in this kind of strange

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Speaker 2: environment where the economy, yes, it is still expanding, but

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Speaker 2: corporate earnings are coming across okay, but they're not predictable.

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Speaker 2: That doesn't bother you too much. They're never all that predictable.

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Speaker 2: But then we got this inflation situation that.

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Speaker 3: Just won't go away.

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Speaker 2: It's not quite high, but it's not down where we

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Speaker 2: want it, and it's been stuck for a long time.

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Speaker 2: We would very much prefer to be to be down

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Speaker 2: closer to the lower twos, but we're kind of stuck

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Speaker 2: in the threes right now, and the FED is walking

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Speaker 2: a tightrope. We haven't talked about this soft landing in

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Speaker 2: a long time. Sometimes I think like when a successful

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Speaker 2: soft landing is when we just stop talking about it.

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Speaker 2: We're not going to declare, you know, victory over it.

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Speaker 2: It just hasn't been a headline in a while. And

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Speaker 2: our soft landing has survived a lot of crazy with

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Speaker 2: tariffs and all these kinds of things. So though that

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Speaker 2: itself and brings in questions, So throw in some geopolitical

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Speaker 2: tension speaking of tariffs and even things like energy prices

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Speaker 2: or extreme weather.

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Speaker 3: Of course, bird flew all this other crazy stuff.

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Speaker 2: You've got a recipe for these daily markets wings that

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Speaker 2: tend to make people panic about their money.

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Speaker 1: Yeah, Brian. Rather than try to worry about or predict

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Speaker 1: what's going to cause volatility, I want to share a

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Speaker 1: little bit of data that I actually heard this morning.

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Speaker 1: Listen to an interview from a pretty well respected money manager,

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Speaker 1: and he just threw out data He wasn't sharing predictions

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Speaker 1: or political thoughts or anything. He just said, Hey, if

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Speaker 1: you look back over time, regardless of whether the Republics

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Speaker 1: or Democrats are in control or what have you, Historically,

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Speaker 1: in non midterm years, the average downside movement, you know,

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Speaker 1: intra year in the stock market is about twelve percent.

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Speaker 1: During years where we have midterm elections, that number spikes

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Speaker 1: up to nineteen percent. And I think that's really the

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Speaker 1: message here, you know, rather than trying to predict what's

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Speaker 1: going to cause the volatility, that's a fool's game and

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Speaker 1: no one's very good at doing that. I think it's

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Speaker 1: just you know, putting the data out there, making people

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Speaker 1: aware of how this generally works. As we head into

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Speaker 1: twenty twenty six. So with that being said, how should

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Speaker 1: investors be thinking a little differently or planning ahead for

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Speaker 1: potential volatility just given what's happened historically to the markets

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Speaker 1: in midterm election years.

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Speaker 2: Well, because we've always got chaos. The market doesn't care

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Speaker 2: who is in control. It just wants to know which

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Speaker 2: flavor is it right. The market basically has a blue

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Speaker 2: playbook and a red playbook. Companies will make decisions on

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Speaker 2: who they support based on whoever will bring home the

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Speaker 2: most profits that year. That's not great for a democratic

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Speaker 2: society because it does drive a lot of decisions that

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Speaker 2: maybe aren't necessarily the best that is, they could be

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Speaker 2: for the society as a whole.

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Speaker 3: But at the same time, that is how it works.

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Speaker 2: And as long as you understand that and are comfortable

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Speaker 2: with it, then we don't have to worry too much

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Speaker 2: about how the politics are going to affect things as

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Speaker 2: long as the companies themselves are able to or are

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Speaker 2: able to make a profit. And again I'm limiting to

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Speaker 2: this to what do I do about my portfolio if

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Speaker 2: X happens in the political realm, The answer is usually nothing.

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Speaker 2: Just understand what to expect based on one outcome versus

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Speaker 2: the other, because they're really just I don't have a

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Speaker 2: whole lot of concern that either political party is going

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Speaker 2: to make decisions that are going to permanently ruin the

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Speaker 2: stock market and sink four in case, because that's a

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Speaker 2: sure way to not get reelected for those people who

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Speaker 2: are making those types of decisions.

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Speaker 1: All right, well, let's talk about a couple of hypothetical examples.

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Speaker 1: We'll call number one the what we'll call the happy

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Speaker 1: but exposed growth investor. You know, say you got a

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Speaker 1: few million bucks and it's been a great year because

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Speaker 1: you were overweight in big tech. You're winning. You can

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Speaker 1: go to your holiday parties and talk about the performance

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Speaker 1: in your Navidia stock or your growth ETF performance. Maybe

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Speaker 1: you added AI stocks last year and you're killing it

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Speaker 1: this year. You stayed invested, You're not doing anything to

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Speaker 1: make any changes because you're up and you're feeling great.

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Speaker 1: But now your portfolio, whether you realize it or not,

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Speaker 1: is more concentrated than ever. Forty percent of your net

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Speaker 1: worth if you're just in the s and P five

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Speaker 1: hundred is writing on just about six stocks. That's a

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Speaker 1: lot of risk tied to a handful of earnings calls.

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Speaker 1: And if that AI bubble cools at all, even a little,

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Speaker 1: those gains can disappear fast. And Brian, you and I

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Speaker 1: have been talking about this, it seems like every night

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Speaker 1: for weeks and weeks. Now, well, you know, consider, just

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Speaker 1: consider a little bit of rebalancing in a tax efficient way.

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Speaker 1: Maybe harvest some gains, shift some risk towards some non

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Speaker 1: correlated asset classes, something to mitigate the risks so you

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Speaker 1: don't end up being shocked if and when, And I

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Speaker 1: always say this, it's not a matter of if, it's

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Speaker 1: when we get a correction in the market. You just

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Speaker 1: don't want to be caught off guard here just because

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Speaker 1: everything has just been going swimmingly for the last couple

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Speaker 1: of years now without a whole lot of volatility.

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Speaker 2: Yeah, any any investor with any amount of experience knows

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Speaker 2: that when we've had, you know, these these three years

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Speaker 2: of really strong growth, especially following a really scary twenty two,

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Speaker 2: that you know something is coming.

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Speaker 3: We don't know when.

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Speaker 2: And I'm not remotely saying you should rush out and

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Speaker 2: do something today, but be ready because something's gonna happen.

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Speaker 3: So the right thing to do.

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Speaker 2: You know, maybe you're looking at harvesting gains and that

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Speaker 2: might mean yeah, pulling trigger and paying some taxes. But

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Speaker 2: if things have gotten out of whack from a balance standpoint,

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Speaker 2: that might be something you're going to want to look into,

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Speaker 2: making that sacrific tax wise to go ahead and get

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Speaker 2: your portfolio back to where it should be from a

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Speaker 2: balance standpoint. You might look at alternative income, infrastructure, some

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Speaker 2: other types of things that are a little less correlated.

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Speaker 3: So right, Brian.

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Speaker 1: Walk through another investor, somebody we're going to call the

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Speaker 1: underperforming diversifier, right.

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Speaker 2: So this is this is a situation where let's say

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Speaker 2: we've got two and a half million dollars and then

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Speaker 2: try to be diversified, so we've got small caps, international,

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Speaker 2: maybe some value in there.

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Speaker 3: Didn't really chase AI stocks.

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Speaker 2: Only up five percent of the for the year, you know,

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Speaker 2: in a year where the market is up double digits

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Speaker 2: for the for the third year in a row, and

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Speaker 2: you're wondering, did I miss something? What am I doing wrong?

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Speaker 2: That maybe my portfolio is not keeping up with things.

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Speaker 2: So the answer is, you know, not necessarily up is up.

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Speaker 2: We always like up better than down, but you might

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Speaker 2: need to rethink how you're diversifying that portfolio. Some diversification

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Speaker 2: hasn't worked this year, but other strategies could help smooth

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Speaker 2: the right ahead. And I would throw out here, you know,

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Speaker 2: more recently, if you're somebody who abandoned bonds or international

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Speaker 2: stocks over the past couple of decades when it was

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Speaker 2: nothing but the S and P five hundred, that's part

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Speaker 2: of your problem because those two asset classes have rotated

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Speaker 2: back around into too being more in favor than they

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Speaker 2: used to be. Matter of fact, international stocks are leading

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Speaker 2: or have been leading the pack all year long. Really

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Speaker 2: since we started goof around in this country with tariffs,

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Speaker 2: international companies kind of rose to the forefront for investors.

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Speaker 2: So if you don't have any international exposure, that is

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Speaker 2: currently costing you.

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Speaker 3: So what's the solution here.

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Speaker 2: Bob, Well, we'll add some assets that behave Differently, you

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Speaker 2: might look at private credit, maybe bufferdtfs to help kind

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Speaker 2: of help us smooth things out.

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Speaker 3: Real estate tactically manage funds.

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Speaker 2: Don't just diversify only by geography or size, diversify also

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Speaker 2: by the return behavior that those underlying investments have.

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Speaker 1: Yeah, and I think this is a good time to

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Speaker 1: call out, you know, for the person out there that

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Speaker 1: has under you know, underperformed quote unquote underperformed because they

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Speaker 1: didn't have a whole ton of exposure to AI stocks. Uh,

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Speaker 1: you know. Eventually, and again like you, Brian, I'm not predicting,

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Speaker 1: you know, the sky's gonna fall here, but you know,

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Speaker 1: we are going to have to see some actual revenue

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Speaker 1: and earning growth from these companies that have invested so

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Speaker 1: heavily into AI, and valuations can get out of whack

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Speaker 1: on these stocks and sooner or later. You know, there's

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Speaker 1: a lot of sets in the economy where the if

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Speaker 1: you look at the price earnings ratio, you know there's

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Speaker 1: just some boring stuff like healthcare and bank stocks and

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Speaker 1: you know, some other things that haven't been flying high

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Speaker 1: this year. You know, even if you're feeling like you're

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Speaker 1: underperforming this year, we do get sector rotations into more

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Speaker 1: value oriented stocks. Money is always going to look for

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Speaker 1: a home where it's treated best. So don't give up

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Speaker 1: on what you've been doing. Just make make sure you

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Speaker 1: are fully diversified, You've got all sectors covered, and just

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Speaker 1: ride this thing out and don't get overweighted to any

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Speaker 1: one sector. That'd be my advice because things do and

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Speaker 1: often change quickly, and you don't want to chase yesterday's returns.

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Speaker 1: Just assuming you know, using that recency bias, that what

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Speaker 1: worked in twenty three, twenty four, and twenty five is

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Speaker 1: just going to continue to pound its way higher on

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Speaker 1: steroids in twenty twenty six, it's not likely to happen.

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Speaker 3: Yeah, let's talk about another emotion.

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Speaker 2: I don't know if this is an emotion or what,

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Speaker 2: but a more of a mental state, and that can

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Speaker 2: be complacency. This is a trap, and we want to

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Speaker 2: help a lot of people avoid because a lot of

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Speaker 2: people will come to the conclusion that, you know, kind

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Speaker 2: of like Bob, what you just said, not necessarily with

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Speaker 2: regard to specific investments, just but just the overall idea

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Speaker 2: that the market was good last year. So I don't

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Speaker 2: have to pay attention anymore because we've had three good

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Speaker 2: years in a row. Maybe we're out of the craziness,

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Speaker 2: and I can promise, and this is one of the

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Speaker 2: few guarantees I get to give. We're never out of

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Speaker 2: the crazy. It's gonna come out of left field. It

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Speaker 2: always does. So let's make sure you know we were

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Speaker 2: not assuming that the storm has passed simply because it's

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Speaker 2: quiet right now. We might just be in the eye

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Speaker 2: of it. All signs point to continued choppiness in twenty

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Speaker 2: twenty six. That means this year's leaders could become next

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Speaker 2: year's laggers. But that was true a year ago, so

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Speaker 2: don't confuse a good year with a calm year.

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Speaker 3: They're not the same thing.

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Speaker 2: The best portfolios always built for what's next, not just

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Speaker 2: what worked last quarter.

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Speaker 1: On Yeah, and regardless of what sectors of this economy,

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Speaker 1: you're in love with just good famental financial planning is

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Speaker 1: make darn sure that emergency fund or short term liquidity needs,

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Speaker 1: either for cash flow or for a major purchase, make

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Speaker 1: sure you carve out those assets and have that in

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Speaker 1: for lack of a better term, just a safe bucket,

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Speaker 1: and that'll give you the cash flow and the liquidity

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Speaker 1: you need and also give you time to ride out

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Speaker 1: whatever volatility might be coming down the pike in twenty

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Speaker 1: twenty six. Here's the all Worth advice. Don't let a

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Speaker 1: good year lull you into complacency, because thriving in twenty

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Speaker 1: twenty six will take more than just riding last year's winners.

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Speaker 1: Coming up next, the best places to retire right now,

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Speaker 1: plus a powerful look at what retirement can and should

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Speaker 1: look like thanks to help from Total Strangers. You're listening

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Speaker 1: to Simply Money, presented by Allworth Financial on fifty five

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Speaker 1: k R see the talk station. You're listening to Simply

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Speaker 1: Money presented by Allworth Financial on Bob Spondseller along with

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Speaker 1: Brian James. Are you falling for costly money myths? We'll

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Speaker 1: play some financial planning fact or fiction straight ahead at

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Speaker 1: six forty three. A new list of retirement destinations is out, Brian. Unsurprisingly,

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Speaker 1: places like Naples, Florida and Sarasota, Florida still dominate those

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Speaker 1: top warm weather no state income tax destinations. But it's

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Speaker 1: not just sunshine states getting attention. A newer trend, cooler

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Speaker 1: climate and midwestern or more temperate areas are making strong

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Speaker 1: showings now thanks to lower cost of living, solid access

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Speaker 1: to healthcare, and relaxed lifestyles. Walk us through some of

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Speaker 1: the new retirement destinations, Brian.

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Speaker 2: Well, we're looking at different things nowadays. It's not just

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Speaker 2: those those beat states that we've talked about forever. So

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Speaker 2: the kinds of things we're looking for, you know, have

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Speaker 2: just simply changed. So for example, Rochester, Minnesota, this is

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Speaker 2: near the Mayo Clinic, right. Obviously, if you've got some

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Speaker 2: health issues or loved ones with those types of things,

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Speaker 2: you might want to be close to something like that.

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Speaker 3: Or just parts of the heartland appeal to people who.

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Speaker 2: Care as much about tax efficiency and access to good

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Speaker 2: healthcare as they do about palm trees and beat sunsets.

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Speaker 3: This has become more fittant recently than it used to be.

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Speaker 1: Brian. I know you like to pound away on chat

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Speaker 1: pt during the show, even sometimes to do your research.

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Speaker 1: When's the last time we saw a hurricane roll through Rochester, Minnesota?

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Speaker 1: Can you look that up for us?

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Speaker 3: You know, I'm gonna go ahead and say that has

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Speaker 3: not happened.

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Speaker 2: However, I will say that we did have a hurricane

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Speaker 2: here and good old Cincinnati in two thousand and eight.

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Speaker 2: It happened right before, right before I believe it was,

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Speaker 2: Bear Stearns went under. Right, we had that weird hurricane

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Speaker 2: way back then, Hurricane Ike I believe it was, And

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Speaker 2: immediately the next day bear Stearns went under. I remember

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Speaker 2: that being just the weird, the weirdest weeks in my

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Speaker 2: entire life. So it does happen out there. But again,

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Speaker 2: you're just kind of looking at the odds of how

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Speaker 2: much am I going to have to deal with? So

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Speaker 2: lets let's talk about some of these other examples. Let's

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Speaker 2: talk about the Greenville, South Carolina. That's a newly popular one.

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Speaker 2: They've They've done a lot to revitalize their downtown. Of course,

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Speaker 2: there's a pretty mild climate South Carolina, not going to

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Speaker 2: get an extreme heat and extreme cold in western South Carolina.

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Speaker 2: Big time art scene down there, moderate cost of living.

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Speaker 3: Another one. This then this kind of surprised me.

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Speaker 2: Bentonville, Arkansas, of all places, A lot of money flown

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Speaker 2: around Bentonville, Arkansas. You may not have heard of it,

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Speaker 2: but that's where Walmart is based. So the Walton family,

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Speaker 2: of course has thrown a lot of money around that town,

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Speaker 2: and that has now made it an unexpected hub for hiking, cycling, museums,

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Speaker 2: food culture, things like that. And then another one last

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Speaker 2: one here Traverse City, Michigan. If you like the northern climates,

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Speaker 2: retirees who actually want to experience those four seasons, including

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Speaker 2: about a month worth of summer living on the lake

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Speaker 2: in a slower pace, strong food, wine culture, and growing

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Speaker 2: health care capacity, I would just throw just look beyond

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Speaker 2: the beaten path. Just because your family always went to

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Speaker 2: Hilton Head every year doesn't mean you have to buy

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Speaker 2: a condo down there. I always advise my clients go

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Speaker 2: to some other places, use some of that money you

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Speaker 2: budgeted to maybe buy a place to potentially look at

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Speaker 2: it it staying in nicer places and areas you haven't been.

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Speaker 2: Make sure that whatever you decided on thirty years ago

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Speaker 2: is truly truly what you want before you actually pull

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Speaker 2: the trigger.

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Speaker 1: In those types of yeah, and a lot of times, Brian,

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Speaker 1: And we see this all the time. People go out

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Speaker 1: and look and they want to move and retirement, retire somewhere,

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Speaker 1: and they conclude, after a bunch of iterations, I'm buying

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Speaker 1: and selling real estate or running all over the country.

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Speaker 1: That good old Cincinnati, Ohio and northern Kentucky, Southeast Indiana

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Speaker 1: not too bad of a place to set up shop

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Speaker 1: for all the reasons that we just mentioned. We've got

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Speaker 1: great health care here, cost of living is good. Yeah,

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Speaker 1: the weather's kind of iffy between January and April, but

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Speaker 1: you know, there's no utopia on earth, so you know,

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Speaker 1: make sure you look at all the factors that are

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Speaker 1: going to impact your life before just pulling the trigger

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Speaker 1: on a so called retirement destination. All right, This next

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Speaker 1: story has spread like wildfire, and it's always good to

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Speaker 1: share some good news out there, especially as we head

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Speaker 1: into a weekend. If you haven't heard or seen it yet,

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Speaker 1: this is a pretty awesome story. A viral fundraiser raised

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Speaker 1: over one point seven million dollars to help an eighty

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Speaker 1: eight year old Army veteran finally be able to retire

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Speaker 1: with some dignity. Brian, this is a great story.

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Speaker 2: Yeah, this gentleman's name is ed Bombas and he's a veteran,

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Speaker 2: so we certainly thank him for his service. And then,

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Speaker 2: of course, after his service, he worked for a full

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Speaker 2: career of forty years at General Motors, which this is kind

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Speaker 2: of ancient history. I'm reminded of this now, but General

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Speaker 2: Motors did actually declare bankruptcy in two thousand and nine,

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Speaker 2: so it still exists, of course, but it did go

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Speaker 2: through a big bankruptcy and that's where we lost Pontiac, Saturn,

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Speaker 2: Hummer and SOB and a lot of.

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Speaker 3: Factories and dealerships closed.

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Speaker 2: Forty days later, it re emerged as the new GM

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Speaker 2: with a fixed balance sheet. But anybody who was holding

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Speaker 2: the original GM shares, yeah, you lost all those dollars.

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Speaker 2: November twenty ten, GM came back to the public markets.

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Speaker 2: It was through an IPO, so it was a very

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Speaker 2: very intense, fast period of kind of crazy from one

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Speaker 2: of the old venerable brands there. But anyway, the point

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Speaker 2: is that affected this gentleman and he lost his pension.

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Speaker 2: After his wife passed away, the bill started to pile

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Speaker 2: up and he lost those benefits. He ended up working

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Speaker 2: full time at a grocery store. Well, into his eighties. Well,

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Speaker 2: that story hit social media, of course, so there's a

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Speaker 2: content creator by the name of Samuel Weidenhoffer posted a

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Speaker 2: video of him doing his job there at the grocery

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Speaker 2: store and asking him what his dream was, and he

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Speaker 2: simply said, I just want to live a little the

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Speaker 2: life I was hoping for. How heartrending of a statement

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Speaker 2: is that from an eighty year old who fought for us.

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Speaker 2: It worked a full, long, honest career and lost his

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Speaker 2: pension anyway, and was still stuck working at a grocery

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Speaker 2: store instead of having retired.

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Speaker 1: Yeah, and I think these stories come up often. I mean,

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Speaker 1: the American people are still very generous, very easy, eager

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Speaker 1: to help their neighbors. They just want to know that

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Speaker 1: the money is going to a good place. And wow,

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Speaker 1: one point seven million dollars was raised by total strangers

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Speaker 1: in a very short amount of time. Donations poured in

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Speaker 1: from everywhere, and lo and behold, this guy's now set up.

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Speaker 1: Mister Bombas who fought, like you said, to protect our freedom.

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Speaker 1: He's never lived in a large home. He actually had

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Speaker 1: to sell his house and go work in this grocery store.

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Speaker 1: And now he's going to be able to live with

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Speaker 1: dignity into his final years here, and I think that

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Speaker 1: is wonderful news and it really speaks to the just

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Speaker 1: the wonderful heart of most American people out there. They

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Speaker 1: see a need, they fill it quickly and strip all

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Speaker 1: the political bs out of it. We still our friends

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Speaker 1: and neighbors out there from all over the country are

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Speaker 1: always eager to do good and this is a great

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Speaker 1: story to share, ye.

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Speaker 2: So yeah, so let's wrap up the story here. So

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Speaker 2: why are we talking about this? Well, that video that

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Speaker 2: was out there struck a chord. It almost instantly, people

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Speaker 2: from around the country mobilized and donations came in through

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Speaker 2: through a crowdfunding effort. Just a few days that total

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Speaker 2: climb passed one point seven million dollars and he wound

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Speaker 2: up with a nest egg that he pretty much lost

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Speaker 2: when General Motors went under. So this is the person

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Speaker 2: who really never lived all that large, ended up, you know,

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Speaker 2: having to rechange everything about his life just to make

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Speaker 2: the math work.

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Speaker 3: So this is huge.

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Speaker 2: Now he's got financial security and his twilight years doesn't

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Speaker 2: have to spend every day at the grocery store. And again,

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Speaker 2: this was all simply because the American people looked at

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Speaker 2: a story and said, you know what, that's not right?

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Speaker 3: What can we do to fix it? All?

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Speaker 1: Right, every Sunday you'll find our all Worth Advice in

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Speaker 1: the Cincinnati Inquire and here's a preview. Brian walk us through.

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Speaker 1: You know Veronica's question and independent she says, can you

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Speaker 1: just simply help me better understand donor advice funds? What

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Speaker 1: are they and how do they work?

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Speaker 3: Yeah?

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Speaker 2: So donor advice funds all day, every day right now

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Speaker 2: because it's the end of the year and people are

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Speaker 2: trying to get their tax moves done here by the

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Speaker 2: end of.

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Speaker 3: Before the before the clock strikes zero.

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Speaker 2: So with a donor advice fund, of effectively, what you're

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Speaker 2: doing is you are if you are already charitably inclined anyway,

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Speaker 2: that's very important. If you were already giving let's say

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Speaker 2: ten thousand dollars over a year to your church or

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Speaker 2: whatever charity, then what you can do. You know, that

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Speaker 2: much is not enough to get you to itemize deductions,

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Speaker 2: so you're not getting any tax benefit out of it.

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Speaker 2: But a donor advice fund will allow you to lump

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Speaker 2: say five years, that's just made up number, but five years,

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Speaker 2: that's fifty thousand dollars one time this year and then.

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Speaker 3: Dole it out as you see fit to the to

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Speaker 3: the charity so that they don't understand it.

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Speaker 2: They don't come to the conclusion that something has changed

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Speaker 2: and you've got more money than you do. You're still

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Speaker 2: giving them the money on the same kid as you

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Speaker 2: were before, but you lumped all of the donation and

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Speaker 2: the taxable part of it, the tax deduction part of

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Speaker 2: it into one year, so you actually did get a

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Speaker 2: tax benefit.

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Speaker 3: So yeah, more on that in the future. We'll be

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Speaker 3: talking about that a lot. This decemmer good stuff, all right.

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Speaker 1: Wealth can open many doors, but it could also make

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Speaker 1: it harder to say no. We'll help you set clear,

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Speaker 1: confident boundaries without guilt. Coming up next, you're listening to

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Speaker 1: Simply Money presented by all Worth Financial on fifty five

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Speaker 1: KRC the talk station. You're listening to Simply Money presented

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Speaker 1: by all Worth Financial Lambob Sponseller along with Brian James.

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Speaker 1: When you've achieved financial success, it often comes with some

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Speaker 1: unspoken expectations, perhaps from friends, extended family, even distant acquaintances.

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Speaker 1: Whether it's a request cost sign alone for example, or

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Speaker 1: invest in a business idea or fund of family members.

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Speaker 1: Emergency saying no can feel awkward at best and guilt

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Speaker 1: inducing at worst. Brian, I've had situations like this come

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Speaker 1: up several times over the years and years I've been

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Speaker 1: doing this.

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Speaker 3: What about you?

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Speaker 2: Oh yeah, absolutely, it comes up all the time within

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Speaker 2: family dynamics. So we all want to support our children

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Speaker 2: and our our siblings and our extended families when we can.

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Speaker 2: Stuff happens, life happens to everybody, and it's good to

435
00:20:51,200 --> 00:20:53,359
Speaker 2: have that family network around you that can kind of

436
00:20:53,359 --> 00:20:56,080
Speaker 2: step in. However, it can totally backfire.

437
00:20:56,119 --> 00:20:56,440
Speaker 3: Of course.

438
00:20:56,480 --> 00:20:58,439
Speaker 2: We all run into these horror stories every now and then.

439
00:20:58,480 --> 00:21:00,439
Speaker 2: I think, I think, really the one that off the

440
00:21:00,440 --> 00:21:02,040
Speaker 2: page to me is co signing alone.

441
00:21:02,080 --> 00:21:04,160
Speaker 3: I have I have just never heard of a situation

442
00:21:04,200 --> 00:21:04,920
Speaker 3: where this ended.

443
00:21:04,920 --> 00:21:07,080
Speaker 2: Well, if you're asked to co sign alone, that means

444
00:21:07,119 --> 00:21:09,080
Speaker 2: whoever is asking you has been turned down by the

445
00:21:09,080 --> 00:21:12,199
Speaker 2: banks unless someone else's credit can back them up. That

446
00:21:12,320 --> 00:21:14,800
Speaker 2: means that the banks out there think that this person

447
00:21:14,840 --> 00:21:16,040
Speaker 2: is not gonna be able to pay these bills. And

448
00:21:16,080 --> 00:21:18,080
Speaker 2: if you're co signing alone, then you are you are

449
00:21:18,119 --> 00:21:19,920
Speaker 2: on that loan as if you were borrowing the money

450
00:21:19,960 --> 00:21:22,080
Speaker 2: yourself that you don't have any more protection than if

451
00:21:22,119 --> 00:21:24,640
Speaker 2: you were literally borrowing or signing for that mortgage your

452
00:21:24,680 --> 00:21:27,000
Speaker 2: absolute self. So just know that if you if you

453
00:21:27,160 --> 00:21:29,080
Speaker 2: agree with the bank that maybe this person isn't going

454
00:21:29,160 --> 00:21:30,720
Speaker 2: to be good for it, then you are probably gonna

455
00:21:30,720 --> 00:21:31,520
Speaker 2: get stuck with that bill.

456
00:21:32,119 --> 00:21:35,720
Speaker 1: Well, maybe without getting too off on a religious tangent,

457
00:21:35,880 --> 00:21:39,760
Speaker 1: maybe that maybe that's illustrative of why in the Bible

458
00:21:39,880 --> 00:21:43,040
Speaker 1: it warns us against co signing for other people's loans. Right,

459
00:21:43,080 --> 00:21:46,800
Speaker 1: maybe God, even Jesus pretty smart after all. All right, Hey,

460
00:21:47,160 --> 00:21:49,399
Speaker 1: but the point we're trying to make here is constantly

461
00:21:49,520 --> 00:21:52,480
Speaker 1: saying yes to other people when they know you've got

462
00:21:52,520 --> 00:21:55,440
Speaker 1: some money and they think, well, he's he or she's

463
00:21:55,440 --> 00:21:57,760
Speaker 1: got a lot of money. It doesn't matter they can

464
00:21:57,840 --> 00:22:02,639
Speaker 1: quote unquote afford it. It can set unsustainable expectations and

465
00:22:02,800 --> 00:22:07,359
Speaker 1: quietly erode your own autonomy over your own money, and

466
00:22:07,600 --> 00:22:12,600
Speaker 1: that emotional weight that you carry around could be exhausting,

467
00:22:12,800 --> 00:22:17,520
Speaker 1: leading to resentment or burnout or just fracture relationships if

468
00:22:17,520 --> 00:22:18,920
Speaker 1: it's not managed correctly.

469
00:22:19,040 --> 00:22:21,000
Speaker 2: Yeah, and so I think, so get creative, right, It

470
00:22:21,040 --> 00:22:22,880
Speaker 2: doesn't have to be a hard no. It can first

471
00:22:22,920 --> 00:22:25,440
Speaker 2: of all, be not right now, or let let's pretend you.

472
00:22:25,440 --> 00:22:27,480
Speaker 2: I'll give an example of this from a real client.

473
00:22:27,560 --> 00:22:29,760
Speaker 2: So how we found the solution. So let's say that

474
00:22:30,040 --> 00:22:31,760
Speaker 2: you know, the client's kid wants to buy a house

475
00:22:31,760 --> 00:22:33,399
Speaker 2: and the banks aren't willing to lend at a at

476
00:22:33,440 --> 00:22:35,879
Speaker 2: a reasonable rate. So the client says, well, I'll step in,

477
00:22:36,040 --> 00:22:38,520
Speaker 2: I'll co sign the mortgage and we'll go from there. Well, then,

478
00:22:38,640 --> 00:22:41,080
Speaker 2: obviously we've talked about what exposure that lead. So what

479
00:22:41,560 --> 00:22:44,200
Speaker 2: if the compromise point is, Okay, you're not happy in

480
00:22:44,920 --> 00:22:46,880
Speaker 2: your apartment right now, it's not big enough or whatever.

481
00:22:46,960 --> 00:22:49,000
Speaker 2: What if I gave you an extra few hundred dollars

482
00:22:49,040 --> 00:22:51,639
Speaker 2: every month actually making an investment versus taking on a

483
00:22:51,720 --> 00:22:54,240
Speaker 2: much more massive risk, buy you some time, get you

484
00:22:54,240 --> 00:22:56,280
Speaker 2: in a nicer place, and then I will work with you,

485
00:22:56,440 --> 00:22:59,000
Speaker 2: child of mind, to get your finances looking better so

486
00:22:59,040 --> 00:23:00,520
Speaker 2: that maybe the next two or three years you can

487
00:23:00,560 --> 00:23:02,320
Speaker 2: do it without my help. That's kind of a middle ground,

488
00:23:02,320 --> 00:23:04,880
Speaker 2: and it's actually an investment of dollars that you won't

489
00:23:04,880 --> 00:23:06,280
Speaker 2: see again. But at the same time, it might be

490
00:23:06,359 --> 00:23:08,200
Speaker 2: a lot better than putting yourself a risk for several

491
00:23:08,280 --> 00:23:10,119
Speaker 2: hundred thousand dollars should your kid not be able to

492
00:23:10,119 --> 00:23:10,720
Speaker 2: make that payment.

493
00:23:11,040 --> 00:23:12,960
Speaker 1: I like where you're going there, because there's there's a

494
00:23:13,000 --> 00:23:16,920
Speaker 1: big difference between just saying flat out no and never

495
00:23:17,080 --> 00:23:19,639
Speaker 1: helping a loved one or a child or what have you,

496
00:23:19,920 --> 00:23:24,199
Speaker 1: versus partnering with that loved one to help, you know,

497
00:23:24,280 --> 00:23:27,440
Speaker 1: whether you say, coach them or counsel them, or assist

498
00:23:27,480 --> 00:23:32,880
Speaker 1: them in becoming financially responsible and you know, help them

499
00:23:32,960 --> 00:23:37,280
Speaker 1: bridge that gap between just learning about money and getting

500
00:23:37,280 --> 00:23:39,520
Speaker 1: them to where they can manage their own affairs. And

501
00:23:39,560 --> 00:23:43,040
Speaker 1: that's really what we're talking about here, coaching people to

502
00:23:43,080 --> 00:23:48,359
Speaker 1: be responsive, responsible versus just enabling them to have what

503
00:23:48,400 --> 00:23:51,240
Speaker 1: they feel they want or deserve. That that's what we're

504
00:23:51,240 --> 00:23:52,440
Speaker 1: really trying to get into here.

505
00:23:52,640 --> 00:23:54,840
Speaker 2: Yeah, for sure, and again you are not rejecting the

506
00:23:54,880 --> 00:23:57,119
Speaker 2: person and you're not saying no. You're saying no, but

507
00:23:57,359 --> 00:23:58,840
Speaker 2: and then come up with a solution that could get

508
00:23:58,880 --> 00:23:59,960
Speaker 2: them across the finish line.

509
00:24:00,160 --> 00:24:02,479
Speaker 1: You're listening to simply money presented by All with Financial

510
00:24:02,520 --> 00:24:05,600
Speaker 1: on Bob Sponseller along with Brian James. Let's get into

511
00:24:05,600 --> 00:24:09,000
Speaker 1: how to maybe prepare to say no in a in

512
00:24:09,040 --> 00:24:13,480
Speaker 1: a dignified way for everyone. And this comes down to

513
00:24:13,560 --> 00:24:17,720
Speaker 1: some communication and advanced planning. I like things like this.

514
00:24:17,880 --> 00:24:21,520
Speaker 1: Try some responses like, Hey, I care deeply about you,

515
00:24:21,600 --> 00:24:24,640
Speaker 1: but I've made a commitment to keep financial matters separate

516
00:24:25,080 --> 00:24:28,080
Speaker 1: from personal relationships. I think that's a good line to

517
00:24:28,200 --> 00:24:31,719
Speaker 1: use when we're dealing with maybe parties outside of our family,

518
00:24:31,800 --> 00:24:35,040
Speaker 1: where we just get we get bombarded with requests from

519
00:24:35,160 --> 00:24:39,159
Speaker 1: charities and other people coming at us asking for money.

520
00:24:38,880 --> 00:24:40,320
Speaker 2: And I think what you're really talking about there is

521
00:24:40,320 --> 00:24:42,720
Speaker 2: just just have a policy, sit down and think in advance.

522
00:24:42,760 --> 00:24:45,720
Speaker 2: If you think this is coming, then then then give

523
00:24:45,760 --> 00:24:47,840
Speaker 2: yourself some time to figure out what do I really

524
00:24:47,840 --> 00:24:50,440
Speaker 2: believe here? What is my policy as to whether I

525
00:24:50,440 --> 00:24:52,280
Speaker 2: would do this? And I'm not talking about something necessarily

526
00:24:52,280 --> 00:24:53,919
Speaker 2: if for write down unless that works for you to

527
00:24:54,240 --> 00:24:56,520
Speaker 2: kind of cement it into your brain. But just give

528
00:24:56,600 --> 00:24:58,960
Speaker 2: some forethought and then then you'll know how to respond

529
00:24:59,080 --> 00:25:01,040
Speaker 2: rather than stuttering and stafmmering when the question arises.

530
00:25:01,520 --> 00:25:02,840
Speaker 3: Here's another good response.

531
00:25:03,040 --> 00:25:05,840
Speaker 1: You could say something like, Hey, this isn't something I

532
00:25:05,840 --> 00:25:09,800
Speaker 1: can support financially, but I'm happy to help brainstorm other

533
00:25:09,960 --> 00:25:13,359
Speaker 1: solutions with you. You're inviting that person into more of

534
00:25:13,400 --> 00:25:17,480
Speaker 1: a relationship to coach them through helping them solve some

535
00:25:17,560 --> 00:25:21,359
Speaker 1: of their financial problems versus just pulling out the checkbook

536
00:25:21,440 --> 00:25:23,800
Speaker 1: and writing a check and hoping it all works out.

537
00:25:24,000 --> 00:25:26,560
Speaker 1: And you shouldn't feel pressure to answer right away. Right

538
00:25:26,640 --> 00:25:28,639
Speaker 1: And I think of a quick yes or a quick no.

539
00:25:29,080 --> 00:25:32,400
Speaker 1: Tells this person one of two things. A quick guess says, well, hey.

540
00:25:32,200 --> 00:25:32,760
Speaker 3: This is easy.

541
00:25:32,760 --> 00:25:34,200
Speaker 2: This, I guess, is just how the world works, and

542
00:25:34,240 --> 00:25:36,880
Speaker 2: it's just easy to get money. A no will tell

543
00:25:36,880 --> 00:25:39,080
Speaker 2: them this person doesn't care about me, so tell them,

544
00:25:39,119 --> 00:25:40,800
Speaker 2: even if you already know your answer, tell them, I

545
00:25:40,800 --> 00:25:42,760
Speaker 2: need to think about this. This is a huge decision

546
00:25:42,840 --> 00:25:44,880
Speaker 2: and both of us are going to be impacted by

547
00:25:44,920 --> 00:25:46,480
Speaker 2: it one way or another. And I really have got

548
00:25:46,480 --> 00:25:48,080
Speaker 2: to put some thought into this. Then you can come

549
00:25:48,119 --> 00:25:49,840
Speaker 2: back with your response even if you already knew what

550
00:25:49,840 --> 00:25:51,280
Speaker 2: it was. Give it some time to percolate.

551
00:25:52,000 --> 00:25:53,800
Speaker 1: Yeah, and one other thing to point out here, you

552
00:25:53,840 --> 00:25:58,600
Speaker 1: don't owe anyone more than maybe a few second explanation.

553
00:25:58,680 --> 00:26:01,199
Speaker 1: If you get into a twenty mins an explanation on

554
00:26:01,280 --> 00:26:03,800
Speaker 1: why you don't want to give them money. The longer

555
00:26:03,880 --> 00:26:06,480
Speaker 1: you just drivel on and talk and talk and talk,

556
00:26:07,040 --> 00:26:10,600
Speaker 1: you know it quickly comes across. As you're rationalizing, you

557
00:26:10,680 --> 00:26:14,840
Speaker 1: feel guilty and uncomfortable and the way you're managing yourself

558
00:26:14,880 --> 00:26:17,440
Speaker 1: through this is just by talking and talking and talking

559
00:26:17,520 --> 00:26:20,560
Speaker 1: about all the reasons why you're gonna say no. That

560
00:26:20,600 --> 00:26:23,159
Speaker 1: can make that other person feel very uncomfortable as well.

561
00:26:23,200 --> 00:26:23,960
Speaker 1: And there's no need to.

562
00:26:23,960 --> 00:26:25,560
Speaker 2: Go there, and we can find out that there's a

563
00:26:25,600 --> 00:26:27,639
Speaker 2: lot more to a relationship like that. Suddenly it becomes

564
00:26:27,640 --> 00:26:29,879
Speaker 2: not about money, it becomes about interpersonal stuff.

565
00:26:30,080 --> 00:26:30,240
Speaker 3: Yeah.

566
00:26:30,240 --> 00:26:32,840
Speaker 1: And then lastly, and I tell clients all this all

567
00:26:32,880 --> 00:26:37,080
Speaker 1: the time, Brian, blame me, Blame your financial advisor. For

568
00:26:37,160 --> 00:26:39,879
Speaker 1: those that work with a financial advisor, they can serve

569
00:26:40,040 --> 00:26:43,080
Speaker 1: as a helpful buffer in these conversations as well.

570
00:26:43,320 --> 00:26:44,919
Speaker 3: You heard it here, folks, it's Bob's fault.

571
00:26:45,680 --> 00:26:50,240
Speaker 1: Well, but referring financial request to your advisor, you know,

572
00:26:50,359 --> 00:26:53,560
Speaker 1: puts that buffer if it needs to be there between

573
00:26:53,680 --> 00:26:57,200
Speaker 1: you and your money. And yeah, you can blame somebody else,

574
00:26:57,240 --> 00:27:00,239
Speaker 1: someone your fiduciary advisor that's looking out for you. You

575
00:27:00,760 --> 00:27:03,520
Speaker 1: and let the financial advisor come up with that quick

576
00:27:03,560 --> 00:27:06,320
Speaker 1: twenty second response on why we can't go there where

577
00:27:06,320 --> 00:27:09,600
Speaker 1: we all know we're being asked to make a decision

578
00:27:09,600 --> 00:27:11,840
Speaker 1: that might not be in the best interest of all parties.

579
00:27:11,880 --> 00:27:14,879
Speaker 1: Here's the all worth advice protecting your well starts with

580
00:27:14,960 --> 00:27:18,560
Speaker 1: setting boundaries that align with your values, because saying no

581
00:27:19,400 --> 00:27:22,560
Speaker 1: is sometimes the smartest financial decision.

582
00:27:22,160 --> 00:27:22,680
Speaker 3: You can make.

583
00:27:23,119 --> 00:27:26,480
Speaker 1: Coming up next, see if you can separate fact from

584
00:27:26,520 --> 00:27:29,680
Speaker 1: fiction before it costs you big time. You're listening to

585
00:27:29,720 --> 00:27:32,520
Speaker 1: Simply Money presented by all Worth Financial on fifty five

586
00:27:32,600 --> 00:27:41,280
Speaker 1: KRC the talk station. You're listening to Simply Money presented

587
00:27:41,280 --> 00:27:44,640
Speaker 1: by all Worth Financial. I'm Bob Sponseller along with Brian James.

588
00:27:45,160 --> 00:27:48,000
Speaker 1: You have a financial question for us. There's a red

589
00:27:48,000 --> 00:27:50,320
Speaker 1: button you can click while you're listening to the show

590
00:27:50,440 --> 00:27:53,520
Speaker 1: right there on the iHeart app. Simply record your question

591
00:27:54,080 --> 00:27:56,720
Speaker 1: and it will come straight to us. All right, Brian,

592
00:27:56,760 --> 00:28:00,280
Speaker 1: it's time to play financial planning fact or fiction, and

593
00:28:00,320 --> 00:28:02,040
Speaker 1: I'll let you have the easy one.

594
00:28:02,119 --> 00:28:04,040
Speaker 3: First fact factor fiction.

595
00:28:04,840 --> 00:28:08,000
Speaker 1: You don't need bonds in your portfolio once you retire.

596
00:28:08,040 --> 00:28:10,080
Speaker 3: Brian, I don't know about easy. I'm gonna call that

597
00:28:10,119 --> 00:28:11,760
Speaker 3: one faction, right.

598
00:28:11,840 --> 00:28:15,000
Speaker 2: It's a little of both, So bonds in your portfolio normally,

599
00:28:15,160 --> 00:28:17,440
Speaker 2: Historically we've recognized that bonds can be kind of the

600
00:28:17,520 --> 00:28:20,600
Speaker 2: rudder for the portfolio to smooth out the tougher times.

601
00:28:20,800 --> 00:28:23,239
Speaker 2: Over the past couple decades, the behavior of bonds has

602
00:28:23,280 --> 00:28:25,639
Speaker 2: kind of shifted. Everything gets speculated on no matter what

603
00:28:25,680 --> 00:28:27,960
Speaker 2: it is, bond moves, bonds move with interest rates, and

604
00:28:28,000 --> 00:28:31,159
Speaker 2: we have absolutely had very different interest rate environments over

605
00:28:31,200 --> 00:28:33,880
Speaker 2: the prior couple decades than we had for the century

606
00:28:33,920 --> 00:28:36,639
Speaker 2: prior to that. So the way I here's I don't know,

607
00:28:36,640 --> 00:28:38,280
Speaker 2: you tell me, Here's how I talked to my clients

608
00:28:38,320 --> 00:28:40,880
Speaker 2: about it. I don't really want to necessarily make a

609
00:28:40,920 --> 00:28:44,000
Speaker 2: portfolio conservative simply because someone is now fits under the

610
00:28:44,040 --> 00:28:46,720
Speaker 2: definition of retire. That's not the trigger for me. The

611
00:28:46,720 --> 00:28:49,280
Speaker 2: trigger for me is when do we need these specific dollars.

612
00:28:49,360 --> 00:28:51,480
Speaker 2: Some people are in a situation where they don't. They've

613
00:28:51,520 --> 00:28:53,479
Speaker 2: got income coming in from I don't know, rental properties,

614
00:28:53,560 --> 00:28:55,040
Speaker 2: or maybe they still own a chunk of the business

615
00:28:55,040 --> 00:28:57,520
Speaker 2: they used to run, whatever, and maybe they don't need

616
00:28:57,520 --> 00:28:59,920
Speaker 2: these investments. So that means or they have a pension, yeah,

617
00:29:00,040 --> 00:29:02,000
Speaker 2: you know, pensions, so scary. Maybe that pays the bills.

618
00:29:02,080 --> 00:29:04,760
Speaker 2: That's fine to me. That pushes out the need for

619
00:29:04,840 --> 00:29:08,240
Speaker 2: these particular invested dollars out you know, ten twenty. Sometimes

620
00:29:08,280 --> 00:29:10,520
Speaker 2: it really isn't even an horizon where it's needed. So

621
00:29:10,520 --> 00:29:12,560
Speaker 2: in that case, sure, let's stay aggressive and continue to grow.

622
00:29:12,560 --> 00:29:14,520
Speaker 2: Why wouldn't we Otherwise we're taking it out of our kids'

623
00:29:14,520 --> 00:29:18,720
Speaker 2: mouths ultimately, So that situation itself means I don't necessarily

624
00:29:18,720 --> 00:29:20,440
Speaker 2: need bonds because it's just something different.

625
00:29:20,520 --> 00:29:22,360
Speaker 3: And if I do want a rudder, there are other

626
00:29:22,400 --> 00:29:23,080
Speaker 3: options out there.

627
00:29:23,080 --> 00:29:26,120
Speaker 2: I can do book chiefs, I can do some I

628
00:29:26,120 --> 00:29:29,360
Speaker 2: can arrange my investments in another way and create that rudder.

629
00:29:30,040 --> 00:29:31,760
Speaker 3: No, I think you hit the nail on the head there.

630
00:29:31,800 --> 00:29:34,920
Speaker 1: It comes down to a the individual client's financial plan

631
00:29:35,000 --> 00:29:39,080
Speaker 1: and retirement income plan. And then second they're emotional tolerance

632
00:29:39,120 --> 00:29:42,400
Speaker 1: for risk. It's not a one size fits all situation. Yeah,

633
00:29:42,400 --> 00:29:44,160
Speaker 1: all right, here coming at you. Now, it's your turn

634
00:29:44,240 --> 00:29:45,800
Speaker 1: for what I think is an easy one. But let's

635
00:29:45,800 --> 00:29:48,760
Speaker 1: see what Bob says. Buying municipal bonds is a better

636
00:29:48,840 --> 00:29:49,680
Speaker 1: move when you're in a.

637
00:29:49,680 --> 00:29:50,680
Speaker 3: High tax bracket.

638
00:29:50,680 --> 00:29:54,360
Speaker 1: Factor fiction, Bob, I would say, fact here, it certainly

639
00:29:54,440 --> 00:29:56,480
Speaker 1: can be, but you got to run the numbers. And

640
00:29:56,880 --> 00:30:00,120
Speaker 1: I had a client where we actually did that here recently,

641
00:30:00,240 --> 00:30:04,400
Speaker 1: and they're sitting on a boatload of cash, and they

642
00:30:04,480 --> 00:30:08,440
Speaker 1: feel great about the gross marginal interest rate they're getting

643
00:30:08,480 --> 00:30:11,600
Speaker 1: on that cash, and they've got a bunch of municipal

644
00:30:11,640 --> 00:30:14,280
Speaker 1: bonds elsewhere in their portfolio. And I just had the

645
00:30:14,280 --> 00:30:17,920
Speaker 1: conversation like, hey, do you understand what you're actually netting

646
00:30:18,000 --> 00:30:22,120
Speaker 1: here net of taxes and inflation by sitting on all

647
00:30:22,120 --> 00:30:26,400
Speaker 1: this cash. And this was a very smart person, very

648
00:30:26,480 --> 00:30:31,040
Speaker 1: numbers oriented, and their answer to me was, yes, I understand.

649
00:30:31,520 --> 00:30:34,360
Speaker 3: I just like holding all that cash. It makes me

650
00:30:34,480 --> 00:30:36,320
Speaker 3: feel better just knowing I can get to it.

651
00:30:36,440 --> 00:30:39,240
Speaker 1: So it's just you got to look at the gross

652
00:30:39,400 --> 00:30:42,600
Speaker 1: you know, the gross yield versus the net yield, look

653
00:30:42,600 --> 00:30:45,160
Speaker 1: at your tax situation, and make sure you're going in

654
00:30:45,240 --> 00:30:48,320
Speaker 1: with your eyes wide open on what you actually own.

655
00:30:48,880 --> 00:30:51,479
Speaker 1: And if you feel okay with it, fine, but at

656
00:30:51,560 --> 00:30:52,560
Speaker 1: least know what you've got.

657
00:30:52,600 --> 00:30:53,640
Speaker 2: So I want to weigh in on this a little

658
00:30:53,640 --> 00:30:55,320
Speaker 2: bit because this is another thing I've been given some

659
00:30:55,360 --> 00:30:57,440
Speaker 2: thought to, and this is this could affect me personally,

660
00:30:57,480 --> 00:30:59,680
Speaker 2: and sometime I'm starting talking to clients about if I

661
00:30:59,720 --> 00:31:01,800
Speaker 2: want better. You know, the whole point of municipal is

662
00:31:02,120 --> 00:31:04,280
Speaker 2: tax free, right, that's what we want, But you can

663
00:31:04,320 --> 00:31:06,040
Speaker 2: do that a couple of ways. One thing I'm thinking

664
00:31:06,080 --> 00:31:07,560
Speaker 2: about doing when I get to that point, I've got

665
00:31:07,560 --> 00:31:10,280
Speaker 2: another ten years or so. I'm thinking of overstuffing my

666
00:31:10,320 --> 00:31:13,640
Speaker 2: wroth IRA with megaback door four and K contributions, backdoor

667
00:31:13,640 --> 00:31:16,200
Speaker 2: contributions or whatever, and just knowing that that money I'm

668
00:31:16,200 --> 00:31:19,120
Speaker 2: carving out is my emergency fund, and I'll stick it

669
00:31:19,360 --> 00:31:21,080
Speaker 2: in a you know, in a money market fund that

670
00:31:21,120 --> 00:31:22,480
Speaker 2: a bank might have. I could be getting four or

671
00:31:22,480 --> 00:31:24,440
Speaker 2: five percent on my wroth IRA if in my brain

672
00:31:24,480 --> 00:31:26,360
Speaker 2: I know that's my emergency fund, and I could quickly

673
00:31:26,400 --> 00:31:28,240
Speaker 2: move money to my checking account. Now I got the

674
00:31:28,240 --> 00:31:30,280
Speaker 2: best of both worlds. I get high rates of return

675
00:31:30,560 --> 00:31:31,600
Speaker 2: but no taxes.

676
00:31:32,040 --> 00:31:34,160
Speaker 1: The key there, and what you said is you're getting

677
00:31:34,240 --> 00:31:36,120
Speaker 1: out in front of it, you know, ten years in

678
00:31:36,160 --> 00:31:38,680
Speaker 1: advance and doing some you know, advanced planning.

679
00:31:38,720 --> 00:31:39,920
Speaker 3: Not everybody does that.

680
00:31:40,320 --> 00:31:42,640
Speaker 1: And for folks that sell a business and get a

681
00:31:42,680 --> 00:31:46,400
Speaker 1: big whopping paycheck, they don't have that option available to them.

682
00:31:46,400 --> 00:31:49,840
Speaker 1: But no great discussion, all right, Brian Factor. Fiction, having

683
00:31:50,000 --> 00:31:54,600
Speaker 1: multiple financial advisors is a smart way to diversify your advice.

684
00:31:55,240 --> 00:31:56,480
Speaker 3: Yeah, this one again.

685
00:31:56,680 --> 00:31:58,800
Speaker 2: I'm gonna go with fiction on this one because I

686
00:31:58,960 --> 00:32:02,480
Speaker 2: just feel like, you know, whenever somebody has multiple advisors,

687
00:32:02,480 --> 00:32:04,920
Speaker 2: they're never happy because they're hearing from they have to

688
00:32:04,920 --> 00:32:08,520
Speaker 2: babysit two different people they're hearing slightly differing points of view.

689
00:32:08,520 --> 00:32:10,640
Speaker 2: Even if both advisors are really stronger, sometimes there's three

690
00:32:10,720 --> 00:32:13,560
Speaker 2: or four, but it just seems to cloud all the

691
00:32:13,640 --> 00:32:16,640
Speaker 2: decision making and they can't commit, and it just really

692
00:32:16,720 --> 00:32:18,960
Speaker 2: drags everything out that they want to do. So find

693
00:32:19,000 --> 00:32:21,760
Speaker 2: one that you trust and move on. So think of

694
00:32:21,760 --> 00:32:23,760
Speaker 2: this way. You might get a second opinion from a doctor,

695
00:32:23,880 --> 00:32:26,560
Speaker 2: but you don't have both doctors perform the actual You

696
00:32:26,600 --> 00:32:28,360
Speaker 2: pick one to do the actual procedu You're not going

697
00:32:28,440 --> 00:32:30,400
Speaker 2: to get the procedure done twice. With financial planning, you

698
00:32:30,440 --> 00:32:32,040
Speaker 2: can have everything done twice if you really want to,

699
00:32:32,200 --> 00:32:33,840
Speaker 2: but it's really going to throw an anchor in your

700
00:32:33,880 --> 00:32:37,200
Speaker 2: overall comfort. It makes you your own financial advisor because

701
00:32:37,240 --> 00:32:38,840
Speaker 2: you're responsible to decide who's right.

702
00:32:39,400 --> 00:32:41,080
Speaker 3: I don't think that could be said any better. That

703
00:32:41,200 --> 00:32:42,840
Speaker 3: is spot on, all right.

704
00:32:43,280 --> 00:32:46,320
Speaker 1: Factor fiction Brian, A five twenty nine plan can be

705
00:32:46,400 --> 00:32:48,600
Speaker 1: converted into a raw ira.

706
00:32:48,680 --> 00:32:49,640
Speaker 3: Fact fact fact fact fact.

707
00:32:49,720 --> 00:32:52,760
Speaker 2: This is my favorite new cool rule here. So so

708
00:32:52,960 --> 00:32:55,320
Speaker 2: the new rule came out five nine. Plans, as we know,

709
00:32:55,400 --> 00:32:58,560
Speaker 2: are tax free if they're pulled out, used for college tuition, books,

710
00:32:58,600 --> 00:32:59,000
Speaker 2: room board.

711
00:32:59,000 --> 00:33:00,000
Speaker 3: That's the way it's been for decades.

712
00:33:00,760 --> 00:33:03,040
Speaker 2: But The concern in the past has been that I

713
00:33:03,040 --> 00:33:04,800
Speaker 2: don't want to put money in my five twenty nine

714
00:33:04,840 --> 00:33:06,840
Speaker 2: because I don't know if this newborn baby, or perhaps

715
00:33:06,880 --> 00:33:08,360
Speaker 2: this child who doesn't even exist yet.

716
00:33:08,560 --> 00:33:09,400
Speaker 3: That's another thing you can do.

717
00:33:10,160 --> 00:33:12,280
Speaker 2: I don't know if this person's gonna be gonna go

718
00:33:12,280 --> 00:33:13,720
Speaker 2: to college, maybe they're gonna go a full ride. I

719
00:33:13,720 --> 00:33:15,520
Speaker 2: won't need these dollars. So then aren't I losing out?

720
00:33:15,800 --> 00:33:17,959
Speaker 2: The answer is now not at all, because there are

721
00:33:18,000 --> 00:33:20,040
Speaker 2: new rules in place as of twenty twenty four that

722
00:33:20,080 --> 00:33:22,160
Speaker 2: will allow you to As long as the account, the

723
00:33:22,200 --> 00:33:24,440
Speaker 2: five to nine has been in existence for fifteen years,

724
00:33:24,720 --> 00:33:27,520
Speaker 2: you can contribute over time up to thirty five thousand

725
00:33:27,600 --> 00:33:30,360
Speaker 2: dollars from the five twenty nine two year wroth just

726
00:33:30,520 --> 00:33:33,120
Speaker 2: using that thirty five thousand dollars over three four years

727
00:33:33,360 --> 00:33:36,719
Speaker 2: as the annual contribution to the roth IRA. So if

728
00:33:36,760 --> 00:33:38,880
Speaker 2: you think about this, I love this thought, Bob. So

729
00:33:38,920 --> 00:33:40,480
Speaker 2: if I fund this, Let's say I find out my

730
00:33:41,160 --> 00:33:43,360
Speaker 2: adult child is pregnant, and now I know within the

731
00:33:43,400 --> 00:33:45,360
Speaker 2: next year something I'm gonna have a baby. I can

732
00:33:45,400 --> 00:33:48,240
Speaker 2: fund that account now, and that money could grow for

733
00:33:48,480 --> 00:33:52,200
Speaker 2: sixty five years until my grandchild actually retires. That is

734
00:33:52,240 --> 00:33:55,160
Speaker 2: an absolutely enormous amount of money. If you want to

735
00:33:55,160 --> 00:33:57,400
Speaker 2: think lump sums, you could put twelve in now, it'll

736
00:33:57,400 --> 00:33:59,600
Speaker 2: be worth thirty five by the time they're eighteen. And

737
00:33:59,640 --> 00:34:02,680
Speaker 2: now you funded wroth irate contributions for until they're in

738
00:34:02,720 --> 00:34:04,640
Speaker 2: their mid twenties and hopefully really really stable.

739
00:34:04,720 --> 00:34:06,640
Speaker 3: I love that rule. Now, it's a great rule.

740
00:34:06,680 --> 00:34:09,759
Speaker 1: And I think this just the overall arching theme here

741
00:34:09,920 --> 00:34:13,799
Speaker 1: is never give up those wrath dollars until you absolutely

742
00:34:13,920 --> 00:34:18,400
Speaker 1: have to, because that compounded long term growth is a powerful,

743
00:34:18,560 --> 00:34:22,359
Speaker 1: powerful thing. All right, factor fiction, and I'll take this one.

744
00:34:22,400 --> 00:34:25,759
Speaker 1: An inheritance plan is more important than in a state plan, Brian,

745
00:34:25,960 --> 00:34:28,359
Speaker 1: I don't. I don't think I even understand the question here,

746
00:34:28,400 --> 00:34:29,480
Speaker 1: but I think what they're so.

747
00:34:29,560 --> 00:34:30,919
Speaker 3: I let you take that. I don't get that either,

748
00:34:30,920 --> 00:34:32,080
Speaker 3: so go to Well, the.

749
00:34:32,040 --> 00:34:34,680
Speaker 1: Only way I can interpret this is an estate plan.

750
00:34:34,760 --> 00:34:37,240
Speaker 1: I think when people think of an a state plan,

751
00:34:37,400 --> 00:34:39,960
Speaker 1: I think they're talking about illegal documents, you know, and

752
00:34:40,040 --> 00:34:42,719
Speaker 1: a lot of times people don't read them. There's a

753
00:34:42,719 --> 00:34:46,560
Speaker 1: lot of boiler plate legal eese in them. The difference

754
00:34:46,560 --> 00:34:50,360
Speaker 1: in an inheritance plan is you're actually communicating and making

755
00:34:50,360 --> 00:34:54,279
Speaker 1: it very clear to your heirs. And your beneficiaries what

756
00:34:54,440 --> 00:34:56,680
Speaker 1: you want this money to do for them and win.

757
00:34:56,760 --> 00:35:01,319
Speaker 1: And I think that comes down to actual communication rather

758
00:35:01,400 --> 00:35:06,160
Speaker 1: than just drafting and leaving to someone this complicated document

759
00:35:06,520 --> 00:35:08,880
Speaker 1: that just appears out of the desk drawer after you

760
00:35:08,920 --> 00:35:09,439
Speaker 1: pass away.

761
00:35:09,520 --> 00:35:09,719
Speaker 3: Yeah.

762
00:35:09,719 --> 00:35:12,000
Speaker 2: I think this might be referring to an unfunded trust,

763
00:35:12,000 --> 00:35:13,920
Speaker 2: which happens when you run across a lawyer who may

764
00:35:13,960 --> 00:35:16,279
Speaker 2: be perfectly well meaning and they want it. They want

765
00:35:16,280 --> 00:35:17,800
Speaker 2: to have you write up trust document. That could be

766
00:35:17,800 --> 00:35:20,560
Speaker 2: perfectly fine, but if you never put anything in the trust,

767
00:35:20,600 --> 00:35:22,759
Speaker 2: meaning you've literally gone to your investment firms you've named

768
00:35:22,760 --> 00:35:25,120
Speaker 2: the trust as beneficiary or even as the owner, that

769
00:35:25,120 --> 00:35:28,719
Speaker 2: trust doesn't do squat Bob until something til it owns something.

770
00:35:29,080 --> 00:35:32,000
Speaker 1: Coming up next, you'll get my two cents on some

771
00:35:32,040 --> 00:35:35,840
Speaker 1: additional estate planning considerations. You're listening to Simply Money presented

772
00:35:35,880 --> 00:35:39,640
Speaker 1: by all Worth Financial on fifty five KRC the talk station.

773
00:35:44,760 --> 00:35:47,120
Speaker 1: You're listening to Simple Money presented by all Worth Financial.

774
00:35:47,360 --> 00:35:50,279
Speaker 1: Bob Sponsorer along with Brian James and Brian I want

775
00:35:50,320 --> 00:35:52,920
Speaker 1: to take a couple seconds here and just talk about

776
00:35:53,280 --> 00:35:57,040
Speaker 1: an actual store a client story I ran across here recently,

777
00:35:57,640 --> 00:36:00,360
Speaker 1: and I think it illustrates something that a lot of

778
00:36:00,360 --> 00:36:03,280
Speaker 1: people should be doing and rarely do, and that's actually

779
00:36:03,440 --> 00:36:07,640
Speaker 1: review your estate planning documents every so often. And here's

780
00:36:07,719 --> 00:36:10,880
Speaker 1: why Brian. I had a client and this is an

781
00:36:10,960 --> 00:36:14,279
Speaker 1: elderly woman that actually lived down in Alabama, and she

782
00:36:14,719 --> 00:36:18,200
Speaker 1: left her nephew as her power of attorney. Okay, everything

783
00:36:18,440 --> 00:36:22,200
Speaker 1: good so far. However, the power of attorney document did

784
00:36:22,239 --> 00:36:26,280
Speaker 1: not allow this nephew to make any changes to beneficiaries

785
00:36:26,760 --> 00:36:29,520
Speaker 1: in any of her accounts. Well, what he did was

786
00:36:29,600 --> 00:36:33,319
Speaker 1: he set up the account for him to run, you know,

787
00:36:33,400 --> 00:36:35,720
Speaker 1: the account, and he named.

788
00:36:36,040 --> 00:36:39,879
Speaker 3: Transferrun death beneficiaries and that's fun.

789
00:36:40,120 --> 00:36:44,399
Speaker 1: Well, this this lady ended up passing away, and we're

790
00:36:44,440 --> 00:36:46,440
Speaker 1: trying to get the estate settled and get all the

791
00:36:46,480 --> 00:36:49,080
Speaker 1: money moving around where it needs to go. And the

792
00:36:49,160 --> 00:36:55,400
Speaker 1: custodio firm, you know, rejected moving this to that nephew's account,

793
00:36:55,440 --> 00:36:58,880
Speaker 1: you know, per the beneficiaries that were set up because

794
00:36:59,440 --> 00:37:02,920
Speaker 1: the power of attorney document did not allow this individual

795
00:37:03,000 --> 00:37:06,719
Speaker 1: to name beneficiaries. And this is something that should have

796
00:37:06,880 --> 00:37:09,799
Speaker 1: and could have been caught years and years ago and

797
00:37:09,920 --> 00:37:14,120
Speaker 1: made provisions for that. Instead, we had to help the

798
00:37:14,160 --> 00:37:16,919
Speaker 1: client get an attorney down in Alabama, take the thing

799
00:37:16,960 --> 00:37:21,040
Speaker 1: through probate court, and it took about two months.

800
00:37:20,640 --> 00:37:23,000
Speaker 3: To get all this sorted out, and it.

801
00:37:22,920 --> 00:37:27,799
Speaker 1: Was just an unnecessary delay in probating and settling this

802
00:37:27,920 --> 00:37:31,319
Speaker 1: woman's estate that could have been avoided if those documents

803
00:37:31,320 --> 00:37:35,680
Speaker 1: had not been reviewed periodically and make the necessary adjustments.

804
00:37:35,719 --> 00:37:38,600
Speaker 1: I just call that out as a reminder, review what

805
00:37:38,719 --> 00:37:41,440
Speaker 1: you've got, don't just set it and forget it, and

806
00:37:41,480 --> 00:37:43,200
Speaker 1: pull these things out down the road.

807
00:37:43,040 --> 00:37:44,640
Speaker 3: Because you could be in for a surprise.

808
00:37:44,719 --> 00:37:46,400
Speaker 2: So I got a little war story from the trenches too,

809
00:37:46,400 --> 00:37:48,360
Speaker 2: from last week. So that's a client of mine that

810
00:37:48,880 --> 00:37:53,160
Speaker 2: passed away. Unfortunately, and at some point we had asked

811
00:37:53,320 --> 00:37:55,280
Speaker 2: multiple times to get a hold of the trust document.

812
00:37:55,320 --> 00:37:57,640
Speaker 2: They could never locate it. The trust in this case

813
00:37:57,719 --> 00:38:00,719
Speaker 2: was only the beneficiary. Didn't own anything is the beneficiary,

814
00:38:00,760 --> 00:38:02,279
Speaker 2: so we didn't really need it, but obviously we like

815
00:38:02,320 --> 00:38:04,759
Speaker 2: to have it on file for this exact reason. No

816
00:38:04,800 --> 00:38:07,319
Speaker 2: one knows where this trust document is, so all we

817
00:38:07,360 --> 00:38:08,680
Speaker 2: know is that the name of it and the date

818
00:38:08,719 --> 00:38:10,600
Speaker 2: of it, but we can't figure out who we need

819
00:38:10,640 --> 00:38:12,960
Speaker 2: to legally be talking to to retitle these assets. So

820
00:38:13,160 --> 00:38:15,279
Speaker 2: the moral of that story is make sure that your

821
00:38:15,280 --> 00:38:17,520
Speaker 2: financial advisors, your banks make sure that they have something

822
00:38:17,560 --> 00:38:19,280
Speaker 2: on file. They should have asked you for the trust

823
00:38:19,280 --> 00:38:22,720
Speaker 2: document itself, or what's called a trustee certification, which basically

824
00:38:23,040 --> 00:38:25,200
Speaker 2: pulls out the important details and you sign a form

825
00:38:25,280 --> 00:38:26,640
Speaker 2: saying yes, it was dated this date.

826
00:38:26,680 --> 00:38:27,120
Speaker 3: Here are the.

827
00:38:27,040 --> 00:38:29,480
Speaker 2: Trustees, here's the success or trustee, and here's how to

828
00:38:29,520 --> 00:38:31,400
Speaker 2: get a hold of us. So make sure you've done that,

829
00:38:31,480 --> 00:38:33,680
Speaker 2: otherwise you don't have much of a plan at place. Well.

830
00:38:34,120 --> 00:38:36,239
Speaker 1: I don't know about you, Brian, but sometimes when I

831
00:38:36,360 --> 00:38:39,960
Speaker 1: ask clients or prospective clients to review this stuff, they

832
00:38:40,080 --> 00:38:42,239
Speaker 1: look at me like, are you really gonna make me

833
00:38:42,320 --> 00:38:44,879
Speaker 1: dig this stuff out? And I'm like, yes, I am.

834
00:38:45,360 --> 00:38:48,959
Speaker 1: I mean that's our job, and some people don't initially

835
00:38:49,040 --> 00:38:51,360
Speaker 1: want to think of that as our job. But boy,

836
00:38:51,920 --> 00:38:53,800
Speaker 1: if you can get out in front of this stuff,

837
00:38:53,960 --> 00:38:57,080
Speaker 1: you know, people thank us after the fact, because this

838
00:38:57,120 --> 00:39:00,000
Speaker 1: stuff really does need to be reviewed every two, three,

839
00:39:00,239 --> 00:39:03,080
Speaker 1: four years, just to make sure this estate plan is

840
00:39:03,120 --> 00:39:06,680
Speaker 1: actually set up to do what you actually intended for

841
00:39:06,760 --> 00:39:09,759
Speaker 1: it to do when you had the documents drafted. It's

842
00:39:10,120 --> 00:39:13,040
Speaker 1: very very important in something that we stress with our

843
00:39:13,080 --> 00:39:14,200
Speaker 1: clients all the time.

844
00:39:14,719 --> 00:39:15,480
Speaker 3: Thanks for listening.

845
00:39:15,520 --> 00:39:17,919
Speaker 1: You've been listening to simply money, presented by all Worth

846
00:39:17,920 --> 00:39:21,440
Speaker 1: Financial on fifty five KRC the talk station