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Speaker 1: Tonight, why the fundamentals of investing stayed true despite the

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Speaker 1: curveballs twenty twenty five through at us you're listening to

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Speaker 1: Simple Money, presented by all Worth Financial Umbops fond Seller

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Speaker 1: along with Brian James Well. Twenty twenty five started with

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Speaker 1: a new presidential administration, a trade war that shook markets

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Speaker 1: a bit in April, a federal Reserve trying to calibrate

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Speaker 1: inflation and growth in a rally that tested investor confidence.

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Speaker 1: We're going to break it all down. What moved markets

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Speaker 1: this year, what mattered most of your portfolio, and more importantly,

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Speaker 1: what you should take with you into twenty twenty six.

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Speaker 1: Brian take us through the beginning of a walk through

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Speaker 1: twenty twenty five.

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Speaker 2: Well, it's hard not to start with this administration, so

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Speaker 2: let's start with Trump and tariffs. Twenty twenty five first

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Speaker 2: kicked off with, of course, the return of Donald Trump

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Speaker 2: for his second term to the White House back in January.

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Speaker 2: And this definitely, of course, wasn't just a political headline.

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Speaker 2: The markets felt it. Markets moved with with the the

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Speaker 2: kind of the changing winds of a new administration, uh

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Speaker 2: so America first early on, and that turned into tariffs

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Speaker 2: in April that hit hit our trading partners, and that

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Speaker 2: shifted a whole lot of economic expectations around the world.

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Speaker 3: It wasn't just here, basically reshuffled a lot of.

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Speaker 2: Relationships that that had existed for a long time, kind

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Speaker 2: of with the assumption and nothing would ever change. So

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Speaker 2: we saw tariffs slapt on goods from India other countries.

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Speaker 2: And then April second, remember remember Liberation Day, Well that was.

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Speaker 3: Yeah, I remember, it was kind of a big headline.

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Speaker 2: And uh and we may or may or may not

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Speaker 2: have had answered a few questions on from the clients who.

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Speaker 3: Were worried about the market activity there.

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Speaker 2: Global markets were rattled and markets hit hit, but were

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Speaker 2: hit pretty hard at that time.

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Speaker 1: Well, and let's go back to what we were talking

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Speaker 1: about at that time. I mean, shoot, people were talking

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Speaker 1: about all kinds of things, going back to a history

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Speaker 1: lesson on the smooth Holly tariffs, thinking that this was

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Speaker 1: gonna be economic arm again. And yes, it was certainly

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Speaker 1: unsettling there for a few days and weeks. But you

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Speaker 1: know what we priests at the time, you know, and

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Speaker 1: and and it it it has at least to now

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Speaker 1: born out to be true that you know, the president

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Speaker 1: used this as a negotiating tactic, as he often does

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Speaker 1: and has done. The markets, as we all know, they

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Speaker 1: hate uncertainty. They didn't know what to think of that

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Speaker 1: big long list of tear the tariff board and the

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Speaker 1: percentages and all that. And when the market is uncertain,

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Speaker 1: when people don't know what to expect, the impulse is

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Speaker 1: to just sell, sell, sell, and wait for things to

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Speaker 1: quote unquote calm down, and Brian. For folks that did that,

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Speaker 1: sell first and not stick with a you know, long term, diversified,

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Speaker 1: well constructed plan. They paid a price here because markets

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Speaker 1: recovered as they always do, you know, irrespective of which

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Speaker 1: parties in the White House and all that. Because at

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Speaker 1: the end of the day, corporate growth profits is the

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Speaker 1: mother's milk of the stock market, and it has proven

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Speaker 1: that yet again to be the case in twenty twenty five.

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Speaker 2: Yeah, and I feel like we have so many examples

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Speaker 2: of that, you know, over the last several decades.

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Speaker 3: My feeling, Bob, after all of this.

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Speaker 2: You know, I've been doing this since the late nineties,

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Speaker 2: and the market period that I was raised on was

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Speaker 2: more like the eighties and nineties when I was a

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Speaker 2: kid paying attention to what my grandparents and my parents

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Speaker 2: were doing with investments and things, and that, to me,

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Speaker 2: that was a period the eighties and the nineties was

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Speaker 2: that was a period where really nothing bad happened, and

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Speaker 2: I think a lot of people got to the point

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Speaker 2: where where we assumed that that was the norm, the

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Speaker 2: really nothing bad is ever supposed to happen, and we

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Speaker 2: just go on and things grow and we don't have

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Speaker 2: to worry about anything.

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Speaker 3: And then all of a sudden we got slapped in

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Speaker 3: the face with.

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Speaker 2: The original Internet bubble bursting the nine to eleven, the

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Speaker 2: recession related to that, and so forth, and then ever

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Speaker 2: since then, every few years it's been some kind of

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Speaker 2: absolutely chaotic situation with two thousand and eight and then

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Speaker 2: we had COVID and a lot of other things in

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Speaker 2: between there, but it was very, very different from the

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Speaker 2: eighties and the nineties. I think that was just the

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Speaker 2: last several decades have just been a reminder that there

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Speaker 2: is going to be chaos. The market can handle it right.

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Speaker 2: So over the shorter term periods during those years, the

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Speaker 2: right thing was never to go run away and hide, right,

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Speaker 2: because that's a two step transaction. If you're going to

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Speaker 2: try to time it, you got to get out at

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Speaker 2: the right time, but then you got to get back in,

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Speaker 2: so you basically got to be back in a thousand

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Speaker 2: on those decisions, otherwise you wind up wasting your time.

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Speaker 2: And that's what happened to anybody who panicked in April

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Speaker 2: when we had this new regime come in and new

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Speaker 2: thoughts on tariffs, good, bad, or indifferent, and the world

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Speaker 2: had to get used to that idea, and the market

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Speaker 2: immediately took about a fifteen percent hit, very very quickly,

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Speaker 2: very hard, and eventually the dust settled. And this reminds

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Speaker 2: me a little bit of COVID, because COVID came out

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Speaker 2: of the blue when February of twenty twenty came completely

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Speaker 2: out of left field and had everybody panicked.

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Speaker 3: But nobody's really paying attention to the market.

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Speaker 2: But the market took the biggest hit over the shortest

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Speaker 2: period of time that it ever had. But obviously, eventually

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Speaker 2: the dust settled and people calmed down and realized that

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Speaker 2: at the end of the day, profits still matter, and

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Speaker 2: the world still turns, and I still have to run

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Speaker 2: to the grocery store at the end of the day,

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Speaker 2: and those grocery store workers are going to get paid

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Speaker 2: because I was there. They're going to go deal with

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Speaker 2: their families and things that they need to do, and

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Speaker 2: dollars keep moving in a circle, and the market and

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Speaker 2: the economy keep moving forward.

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Speaker 1: Now that's an excellent historical perspective. I mean, going back

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Speaker 1: to the eighties and nineties too, Remember that interest rates

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Speaker 1: were just in a nice steady drop for twenty to

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Speaker 1: thirty years. There was really no disruption there, you know,

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Speaker 1: to speak of, and that game has certainly changed. We've had,

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Speaker 1: you know, movements up and rates, and then now we're

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Speaker 1: moving back down a lot of that in response to

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Speaker 1: COVID and other shocks to the system. So yeah, I mean,

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Speaker 1: corporate profits always find a way. The way capital gets

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Speaker 1: injected into the market is always a little bit different.

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Speaker 1: Sometimes it's government stimulus, sometimes it's cheap money. Sometimes it's speculation.

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Speaker 1: But just a couple of other historical points, and this

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Speaker 1: is stuff we drive home all the time, Brian, going

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Speaker 1: back to nineteen twenty six. These are for folks on

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Speaker 1: either side of the aisle that think that one party

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Speaker 1: or another is going to absolutely destroy this economy. Going

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Speaker 1: back to nineteen twenty six, Republicans have had control of

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Speaker 1: the White House and Congress in thirteen of those years.

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Speaker 1: The Democratic Party has had total control again White House,

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Speaker 1: both houses of Congress for thirty four years, which party

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Speaker 1: coincided with greater returns from the S and P five

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Speaker 1: hundred neither And according to Dimensional Fund Advisors, who does

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Speaker 1: this research and updates it every year, average returns when

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Speaker 1: either party has complete control of the government is about

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Speaker 1: fourteen percent average rate of returns for both scenarios. And

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Speaker 1: the lesson here is we got to leave our politics

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Speaker 1: at the door, whether or not we agree with certain

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Speaker 1: policy decisions. As you've already stated and stated very well, Brian,

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Speaker 1: the markets always find a way, human beings find a way.

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Speaker 1: We continue to grow, we continue to work, and the

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Speaker 1: economy marches on. In twenty twenty five was yet another

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Speaker 1: example of that happening in space.

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Speaker 2: Yeah, publicly traded companies have a red playbook and a

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Speaker 2: blue playbook. They don't care who is in office. They

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Speaker 2: just want to know what place to run. And I

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Speaker 2: think back to the inauguration and looking right behind President

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Speaker 2: Trump and who was sitting there in the front row.

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Speaker 2: It was all the leaders of the tech companies, which

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Speaker 2: are the drivers of the universe. The universe's economy right now,

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Speaker 2: in all of which had been labeled for a long

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Speaker 2: time to be rather left leaning and only supporting of

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Speaker 2: democratic presidents and so forth, and then that's obviously not true.

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Speaker 3: They support themselves.

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Speaker 2: Let's just be super cynical about this and realize that

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Speaker 2: they are there to support their companies and they're there

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Speaker 2: to find opportunities.

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Speaker 3: What's the thing we can do.

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Speaker 2: Well, if it's a Republican president, good, let's go kiss

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Speaker 2: his butt for a while and we'll get what we need.

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Speaker 2: And then if we got to pull out the blue

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Speaker 2: playbook after the midterm, so be it.

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Speaker 3: That's what we'll do.

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Speaker 2: I don't like that, but that is how things run,

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Speaker 2: and that's that helps me sleep at night and exhale

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Speaker 2: when the market gets a little great.

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Speaker 1: That's exactly right. All right, Well, let's talk about the

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Speaker 1: federal reserve. A whole lot of discussion about the Federal

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Speaker 1: reserve in twenty twenty five. You know, in this ongoing

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Speaker 1: discussion about Fed independence and dual mandate between inflation and growth,

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Speaker 1: the Fed obviously is always trying to do something that's

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Speaker 1: never easy, and that's balance inflation or bring inflation down,

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Speaker 1: and then also look at employment numbers, and you know,

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Speaker 1: with with tariff uncertainty, policy uncertainty, they were just really

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Speaker 1: didn't know. Speaking of having a playbook, they really hadn't

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Speaker 1: had a playbook to go off of in a scenario

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Speaker 1: with these ongoing trade negotiations for decades, and you know,

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Speaker 1: they sat on their hands a little bit, and and

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Speaker 1: for good reason. I mean, they try to be data dependent.

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Speaker 1: They try to make decisions based on data, and when

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Speaker 1: you don't know what data is coming around the corner,

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Speaker 1: it's awfully hard to make FED decisions about interest rates.

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Speaker 1: It was an interesting year in.

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Speaker 2: Fedland, for sure, you know, and it almost always is

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Speaker 2: anymore because but this was interesting because the FED almost

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Speaker 2: became and kind of is almost became kind of the

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Speaker 2: enemy of the White House. And we've seen a lot

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Speaker 2: of arguments play out in the media as things got

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Speaker 2: very political, and that's a new situation that we hadn't

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Speaker 2: seen before. What would let's let's go over what were

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Speaker 2: we talking about in twenty twenty five as it relates

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Speaker 2: to inflation. So really can't say how many times we've

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Speaker 2: talked about emergency funds. Right, make sure you've got emergency

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Speaker 2: savings in a high yield savings account. Interest rates are

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Speaker 2: still higher than they've been in decades. Yes, they've pulled

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Speaker 2: back a little bit, but just make sure you've got

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Speaker 2: a pile, you have oil in the engine. There needs

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Speaker 2: to be cash out there. Should something come out of

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Speaker 2: the blue and affect you your family and you'll need,

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Speaker 2: you know, a job loss or healthcare expenses, that kind

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Speaker 2: of thing, then you don't want that money invested because

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Speaker 2: the market can do anything at once at any given time,

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Speaker 2: and you want to make sure you've got that out there.

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Speaker 2: And again that high yield Daving's account that maybe you

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Speaker 2: were getting four and a half percent, even close to

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Speaker 2: five for a brief period there, it's now might be

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Speaker 2: under four because of where interest rates have moved sincent

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Speaker 2: that is still better. But regardless, don't worry about where

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Speaker 2: that money sits as long as you're getting some kind

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Speaker 2: of interest rate in and it does not need to

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Speaker 2: be invested. It should not be invested like your longer

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Speaker 2: your longer term investments as well.

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Speaker 1: Now, excellent point and going back to your you know

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Speaker 1: prior points about just the volatility during twenty twenty five,

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Speaker 1: I me, we know we're going to have a return

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Speaker 1: to volatility at some point for some reason. We just

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Speaker 1: don't know when, and we don't know the fundamental cause.

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Speaker 1: And as a reminder, this is a mid term election year.

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Speaker 1: We have threats of an another government shut down potentially

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Speaker 1: coming in you know, less than sixty days. So there's

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Speaker 1: always a reason to your point, have fresh oil in

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Speaker 1: the tank here to allow yourself the time and the

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Speaker 1: flexibility to get through a period of short term volatility,

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Speaker 1: so you're not having to make decisions based on fear

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Speaker 1: or greed. And yeah, whether the interest rate on your

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Speaker 1: safe money is three point seven or four point one,

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Speaker 1: it's really immaterial. What we're talking about here is the

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Speaker 1: fundamental financial planning point of making sure that emergency fund

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Speaker 1: is filled for whatever your short term cash flow needs

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Speaker 1: and wants are in the event that we do get

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Speaker 1: some volatility in the markets, because as we talk about

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Speaker 1: all the time, Brian, it's not a matter of if,

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Speaker 1: it's a matter of when exactly.

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Speaker 2: So let's always talk about the you know, the market,

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Speaker 2: of course, to kind of wrap this up. So barring

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Speaker 2: a catastrophe here in the next couple days, the S

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Speaker 2: and P five hundred is going to finish up for

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Speaker 2: the third year in a row. If you stayed in

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Speaker 2: the market after twenty twenty two, which was one of

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Speaker 2: the five worst years we've ever had, congratulations. If you

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Speaker 2: are able to ride that out, then you've seen, you know,

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Speaker 2: just about the worst the market can behave. Matter of fact,

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Speaker 2: the last five years have been a microcosm of what

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Speaker 2: the of the best of times and the worst of

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Speaker 2: times in terms of the market getting hammered and then recovering.

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Speaker 2: So you've got some You should be sitting at the

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Speaker 2: highest level of networth that you've ever had in your life.

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Speaker 2: So we always will offer this word of caution. Right,

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Speaker 2: Let's never get comfortable. There will be recessions, there will

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Speaker 2: be another market downturn. This stuff is coming. We just

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Speaker 2: don't know when. This is why you need a financial

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Speaker 2: plan and you need to have stress tested it. Here's

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Speaker 2: what it looks like if nothing bad ever happens again.

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Speaker 2: Here's what it looks like if I take a twenty

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Speaker 2: percent shot to the mouth here in the next few months,

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Speaker 2: is my plan still Okay?

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Speaker 1: Here's the all Worth advice. The headlines will always change,

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Speaker 1: but long term market growth stays remarkably consistent. Stay invested,

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Speaker 1: stay disciplined, and trust the power of compounding economic growth

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Speaker 1: over the pull of short term emotion. As we look

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Speaker 1: toward twenty twenty six, more people are making financial resolutions

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Speaker 1: and this year it doesn't peer to just be taught.

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Speaker 1: We'll explain that next. You're listening to Simply Money, presented

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

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Speaker 4: All Worth Financial a registered investment advisory firm. Any ideas

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Speaker 4: presented during this program are not intended to provide specific

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Speaker 4: financial advice. You should consult your own financial advisor, tax consultant,

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Speaker 4: or a state planning attorney to conduct your own due diligence.

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

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Speaker 1: pop spond seller along with Brian Chains. If you can't

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

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

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Speaker 1: app or wherever you find your podcast. Retiring in stages,

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Speaker 1: turning off dividend reinvestments and a do it yourself investor

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Speaker 1: wondering if it's time to maybe get a little bit

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Speaker 1: of help. Your questions are answered straight ahead at six

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Speaker 1: forty three. Well, Brian, this is the time of year

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Speaker 1: where everybody starts thinking about New Year's resids. But here's

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Speaker 1: what's interesting this year, financial resolutions are surging. According to

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Speaker 1: a recent survey or annual study done by our good

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Speaker 1: friends at Fidelity.

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Speaker 2: Growing nom American's Bob, about sixty four percent are contemplating

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Speaker 2: a financial resolution for twenty twenty six. Now that's not shocking,

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Speaker 2: of course we're going to talk about resolutions. It's it's

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Speaker 2: pretty much New Years, that's the next holiday coming up.

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Speaker 2: That's up compared with last year. But the difference is

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Speaker 2: they're not just saying I want to manage money better.

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Speaker 2: They're really starting to think intentionally about what that means.

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Speaker 2: And so Vanguard has noticed this too. They're calling it

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Speaker 2: a financial resolution rebat because a lot of folks fell

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Speaker 2: short in twenty twenty five, Inflation hung around people spending

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Speaker 2: habitts slip. Maybe we're sticking to that budget from our

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Speaker 2: prior resolution, but instead of giving up those now coming

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Speaker 2: into twenty twenty six with a purpose and a plan,

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Speaker 2: at least according to Vanguard in Fidelity, even for individuals

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Speaker 2: more earning more than a quarter million dollars or you know,

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Speaker 2: with significant portfolios, this focus on intentional plans really echoes

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Speaker 2: what we've been preaching for decades now. Formally identified financial

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Speaker 2: goals drive real behavior. If I know the target that

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Speaker 2: I'm shooting at, I know exactly how to load my weapon.

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Speaker 2: And so what are these people focusing on. Well, for

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Speaker 2: a lot of people, according to the survey, it's just

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Speaker 2: the basics, right, These aren't shocking things. Emergency savings, you know,

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Speaker 2: making sure I've got my six, nine, maybe twelve months

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Speaker 2: worth of expenses saved up in a bank account, liquid investing,

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Speaker 2: in budgeting, and all this stuff matters at every wealth level,

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Speaker 2: especially budgeting. It's not just for getting by, it's for

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Speaker 2: keeping that margin in your plan, making sure you've got

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Speaker 2: room for err or room for things to happen, you

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Speaker 2: know that affect everybody, like the economy and the market

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Speaker 2: not cooperating, or things that might happen just just to

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Speaker 2: you and your family. We've got to make sure we've

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Speaker 2: got that buffer zone in there while still accomplishing all

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Speaker 2: those goals. And that's why it's great to hear that

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Speaker 2: these people are putting these resolutions in place to really

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Speaker 2: finally put some some skin in the game, really to

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Speaker 2: make sure their plans go the way they want.

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Speaker 1: Well, Brian, you want to talk about starting with the basics,

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Speaker 1: just basic blocking and tackling. I'll give you a story

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Speaker 1: that happened been yesterday at a little Christmas family gathering

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Speaker 1: my one of my nephews, who if you saw that,

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Speaker 1: you you would not think this guy had the least

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Speaker 1: bit of interest in the stock market whatsoever. Uh plays

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Speaker 1: in a rock and roll band, you know, works odd

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Speaker 1: jobs to kind of support himself so he can chase

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Speaker 1: his dreams musically. And he walks up to me and says,

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Speaker 1: uncle Bob, I'm thinking about getting started with some investing.

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Speaker 1: He starts talking about day trading and crypto and all that,

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Speaker 1: and I'm like, dude, just let's let's focus on just

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Speaker 1: a broad diversified ETF exchange traded fund. Explained to him

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Speaker 1: in about thirty seconds what that is. And then I

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Speaker 1: explained to him in another thirty seconds where a wroth

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Speaker 1: ira is. And I said, just put put some money

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Speaker 1: in a broad based, one hundred percent stock ETF broadly

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Speaker 1: diversified and learn about what a wroth ira is, and

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Speaker 1: keep doing that, uh for about thirty years and you'll

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Speaker 1: thank me later. And he looked at me and he says,

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Speaker 1: that sounds like great advice. I'm gonna I'm gonna do that.

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Speaker 1: So you know, to the point we're bringing up, people

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Speaker 1: are looking at this stuff, and I think it's good

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Speaker 1: that folks are starting to get educated and to your point,

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Speaker 1: if they actually sit down and do a financial plan

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Speaker 1: and attach some meaningful goals to what they're trying to do.

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Speaker 1: And as we talk about all the time, know your why.

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Speaker 1: If you know your why, you're more prone to follow

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Speaker 1: a more disciplined approach. So there's a little anecdotal evidence

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Speaker 1: for you yesterday of just the conversation I had with

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Speaker 1: a young lad at a Christmas party.

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Speaker 2: You know, And I have a feeling you're not the

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Speaker 2: only one, because obviously lots of families are spending time

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Speaker 2: together over the holiday season, and these topics come up

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Speaker 2: at the dinner table, and they come up, you know,

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Speaker 2: just just in the course of normal conversation. I did

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Speaker 2: have a meeting myself with the with a young lady

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Speaker 2: last week who was the college age's daughter of a

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Speaker 2: client of mine, and it was just time for her

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Speaker 2: to start. She had some investments they had set up

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Speaker 2: for a while ago for but she's caught caught wind

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Speaker 2: of roth IRA's and maybe that's a good idea now

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Speaker 2: that she's got earned income, you know, sporadically throughout the

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Speaker 2: year as she's in school, of course. But we had

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Speaker 2: a long conversation about why is roth important and why,

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Speaker 2: you know, one of the things I told her was,

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Speaker 2: you're probably you probably should banish the notion of doing

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Speaker 2: anything but ROTH in your retirement plans for at least

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Speaker 2: probably the first ten years of your career. Hopefully you

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Speaker 2: get to a point where you're in a you're in

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Speaker 2: an income tax bracket where it becomes prohibitive.

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Speaker 3: I hope that happens for you, But.

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Speaker 2: I'm going to throw out there that that doesn't kick

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Speaker 2: in really till you're making a quarter million dollars a year.

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Speaker 2: If I'm being honest, you know that that that that's

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Speaker 2: kind of a pulled out of the air number. But

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Speaker 2: the point is it's a lot higher than people think.

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Speaker 2: When you're talking about somebody who's in their twenties with

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Speaker 2: forty years of potential tax free growth, I'd be plowing

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Speaker 2: money into that roth Ira.

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Speaker 3: This is what I told her.

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Speaker 2: You know, even if you never do it again, well

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Speaker 2: maybe once you hit thirty, you're married. You're both making

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Speaker 2: a high income. Maybe you maybe you're kind of forced

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Speaker 2: to do pre tax Well, you will have spent your

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Speaker 2: twenties that entire decade building up a core of tax

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Speaker 2: free money that's never going to be taxed again. And

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Speaker 2: you may never afford you may never put another dime

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Speaker 2: into that, but that will grow for forty years, and

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Speaker 2: that's going to put you in a great position. And

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Speaker 2: she did go down the path, of course, and I

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Speaker 2: understand why she went down, briefly, the path of crypto

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Speaker 2: and all this speculative stuff.

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Speaker 3: It's hard to get away from it.

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Speaker 2: And it really does seem like I can take a

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Speaker 2: small pile of money and turn it into a giant

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Speaker 2: pile of money very quickly.

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Speaker 1: Well, let's face it, because just like weight loss or

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Speaker 1: you know, ozempic drugs or anything else, that's all these

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Speaker 1: kids see on social media. They see quick hits, quick results,

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Speaker 1: you know, get get me there tomorrow, and you know

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Speaker 1: when in reality, it's just spend less than you make

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Speaker 1: do it for several years. And the great thing about

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Speaker 1: the evolution of our industry buying is people can put

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Speaker 1: money into broadly diversified funds with very low season expenses,

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Speaker 1: and to your point, really leverage that you know what

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Speaker 1: out of those raw thiras and get a great early

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Speaker 1: start and really accumulate some serious wealth in a pretty

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Speaker 1: short period of time.

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Speaker 3: Yeah, that's absolutely true.

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Speaker 1: And no.

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Speaker 2: Now the thing I did find encouraging about this too though,

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Speaker 2: And I've had a couple of interactions like this. Some

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Speaker 2: people come in talking about that stuff be for the

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Speaker 2: reasons you mentioned, but it doesn't take much. A lot

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Speaker 2: of them are coming in going it doesn't smell right.

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Speaker 2: Please explain to me why it doesn't. And I'm not

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Speaker 2: saying crypto is a bad investment. It's a real thing.

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Speaker 2: It's out there. It just doesn't have a clear place

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Speaker 2: in a predictable portfolio type of thing. So build the core,

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Speaker 2: play with that stuff on the outside.

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Speaker 1: Here's the all Worth Advice resolutions, fade real plans stick.

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Speaker 1: Start the year not with wishful thinking, but with a measurable,

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Speaker 1: intentional financial strategy. Did your money do what it needed

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Speaker 1: to do in twenty twenty five? We'll explore that question next.

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

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Speaker 1: on fifty five KRCE the talk station. You're listening to

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Speaker 1: Simply Money presented by all Worth Financial on Bob Sponseller

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Speaker 1: along with Brian James. All most people, especially folks in

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Speaker 1: the media, look back at twenty twenty five and say,

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Speaker 1: how did the market perform? But here's a better question,

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Speaker 1: how do your money? Because unless you're one hundred percent

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Speaker 1: invested in the S and P five hundred and living

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Speaker 1: off of headlines, your money has a job to do.

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Speaker 1: Maybe that's income, maybe that's growth, Maybe that's a balance

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Speaker 1: of both. Maybe it's protection, charitable giving, or setting up

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Speaker 1: the next generation for success. And then this comes back

435
00:21:19,600 --> 00:21:24,760
Speaker 1: to focusing on your financial plan, not just data spewed

436
00:21:24,800 --> 00:21:27,760
Speaker 1: out from the financial media. So Brian, let's talk about it.

437
00:21:28,240 --> 00:21:31,320
Speaker 1: You know, how do we evaluate if our portfolio actually

438
00:21:31,400 --> 00:21:34,800
Speaker 1: delivered what it needed to in twenty twenty five.

439
00:21:35,480 --> 00:21:36,840
Speaker 2: Yeah, a lot of people get hung up as we

440
00:21:36,880 --> 00:21:39,520
Speaker 2: spend thirty forty years of our working careers wanting to

441
00:21:39,560 --> 00:21:42,240
Speaker 2: watch the pile grow because we haven't planned on tapping

442
00:21:42,240 --> 00:21:44,359
Speaker 2: into it yet. It's just not that time of life,

443
00:21:45,000 --> 00:21:47,000
Speaker 2: and so we get ingrained in us that it's all

444
00:21:47,000 --> 00:21:49,800
Speaker 2: about growth, growth, growth, that's all that ever matters. Well,

445
00:21:49,880 --> 00:21:52,040
Speaker 2: you know, people who are retired to start to think

446
00:21:52,040 --> 00:21:53,919
Speaker 2: about that a little bit differently. And the question is

447
00:21:53,920 --> 00:21:56,600
Speaker 2: did my portfolio deliver the income I need it? So

448
00:21:56,960 --> 00:22:00,000
Speaker 2: let's kind of start with something basic but often gets overlooked,

449
00:22:00,040 --> 00:22:01,639
Speaker 2: which is just income. That's what we're trying to do

450
00:22:01,680 --> 00:22:04,320
Speaker 2: here in the first place. And in the first place,

451
00:22:04,320 --> 00:22:06,200
Speaker 2: I would also say, do you know what you need

452
00:22:06,600 --> 00:22:08,720
Speaker 2: to begin with a lot of people don't even have

453
00:22:08,760 --> 00:22:11,760
Speaker 2: that idea of what their budget is, what their actual

454
00:22:11,760 --> 00:22:14,560
Speaker 2: expenses are, so they can't really tell whether their portfolio

455
00:22:14,600 --> 00:22:16,080
Speaker 2: is going to do what they needed to do. They

456
00:22:16,119 --> 00:22:18,960
Speaker 2: just know whether it got bigger or smaller. So if

457
00:22:19,000 --> 00:22:20,960
Speaker 2: you are in retirement or close to it, the goal,

458
00:22:21,000 --> 00:22:23,760
Speaker 2: of course, isn't just returns, it's reliability of that stream

459
00:22:23,760 --> 00:22:26,040
Speaker 2: of income. Did you get the income you need? Did

460
00:22:26,040 --> 00:22:27,920
Speaker 2: you get the income you planned for? And again I'll

461
00:22:27,920 --> 00:22:29,040
Speaker 2: go back to did you plan for it in the

462
00:22:29,040 --> 00:22:32,959
Speaker 2: first place. So finally, this year we're talking about bond yields.

463
00:22:32,960 --> 00:22:33,200
Speaker 1: Again.

464
00:22:33,240 --> 00:22:35,760
Speaker 2: It's been decades since that was a thing, but bond

465
00:22:35,800 --> 00:22:38,600
Speaker 2: yields finally gave invassadors a chance to earn actual, real

466
00:22:38,680 --> 00:22:41,240
Speaker 2: interest off actual real bonds and CDs that they could

467
00:22:41,240 --> 00:22:43,240
Speaker 2: look at and go all right, this doesn't stink anymore.

468
00:22:43,480 --> 00:22:45,399
Speaker 2: It used to be that we ignored these things for

469
00:22:45,400 --> 00:22:47,520
Speaker 2: a very long time. When I started in this industry

470
00:22:47,520 --> 00:22:49,040
Speaker 2: in the late nineties, you could get six and a

471
00:22:49,080 --> 00:22:52,040
Speaker 2: half percent on a money market fund and that was

472
00:22:52,080 --> 00:22:53,919
Speaker 2: something you could actually build, you know. So if I

473
00:22:53,920 --> 00:22:56,040
Speaker 2: got you know, a couple hundred thousand dollars, I can

474
00:22:56,080 --> 00:22:58,360
Speaker 2: generate twelve to you know, a thousand bucks a month off,

475
00:22:58,560 --> 00:23:01,000
Speaker 2: just an income stream that I don't have to really

476
00:23:01,040 --> 00:23:03,959
Speaker 2: worry about the ups and downs. But the problem is,

477
00:23:04,280 --> 00:23:06,359
Speaker 2: you know, you might have been sitting in outdated funds

478
00:23:06,400 --> 00:23:09,400
Speaker 2: or maybe too much cash because you're you're accustomed to, well,

479
00:23:09,440 --> 00:23:11,520
Speaker 2: we just can't earn money on cash, it just sits there.

480
00:23:11,960 --> 00:23:14,199
Speaker 2: Then you might have missed an opportunity. So you know,

481
00:23:14,240 --> 00:23:16,160
Speaker 2: maybe that's something to take a look at. Make sure

482
00:23:16,200 --> 00:23:18,320
Speaker 2: that your portfolio is set for the interest rates we

483
00:23:18,400 --> 00:23:20,600
Speaker 2: currently have, not the ones we had ten years ago.

484
00:23:21,600 --> 00:23:23,840
Speaker 1: Yeah, Brian, when you were getting that nine point sixty

485
00:23:23,880 --> 00:23:26,600
Speaker 1: five percent, I mean, inflation had to be pretty close

486
00:23:26,600 --> 00:23:28,200
Speaker 1: to that, right, And I think that's what a lot

487
00:23:28,200 --> 00:23:31,280
Speaker 1: of people, you know, fail to realize, is these interest

488
00:23:31,359 --> 00:23:33,359
Speaker 1: rates tend to move up and down based on the

489
00:23:33,359 --> 00:23:36,840
Speaker 1: inflation rate. So you got to look at real, real

490
00:23:36,920 --> 00:23:40,359
Speaker 1: rates of return meaning gross minus the inflation rate to

491
00:23:40,359 --> 00:23:42,959
Speaker 1: see if your money's you know, moving forward at all.

492
00:23:43,000 --> 00:23:46,520
Speaker 1: And that's even before we factor in taxes. But you know,

493
00:23:46,560 --> 00:23:49,480
Speaker 1: as I look here at the Bloomberg Aggregate Bond Index

494
00:23:49,520 --> 00:23:52,320
Speaker 1: for twenty twenty five, Now this is total return, not

495
00:23:52,520 --> 00:23:55,680
Speaker 1: just yield. I mean we're up over seven percent, which

496
00:23:55,720 --> 00:23:59,040
Speaker 1: is roughly twice the inflation rate for twenty twenty five.

497
00:23:59,160 --> 00:24:03,080
Speaker 1: So bond investors did pretty well this year. And it's

498
00:24:03,080 --> 00:24:04,639
Speaker 1: been a long time semple of years.

499
00:24:04,760 --> 00:24:07,000
Speaker 2: Yeah, yeah, since we could say that for bond investors.

500
00:24:07,000 --> 00:24:09,040
Speaker 2: Actually was a good year to be in bonds. For one,

501
00:24:09,440 --> 00:24:11,440
Speaker 2: we remember why we own them.

502
00:24:11,840 --> 00:24:14,879
Speaker 1: Yeah, And I think the overall point you're making, and

503
00:24:14,920 --> 00:24:16,960
Speaker 1: it's a good one, is, you know, you got to

504
00:24:16,960 --> 00:24:20,879
Speaker 1: ask yourself, does your financial plan still fit your life

505
00:24:21,080 --> 00:24:24,600
Speaker 1: in twenty twenty five and in twenty twenty six. A

506
00:24:24,640 --> 00:24:27,719
Speaker 1: plan made in back in twenty twenty one or twenty

507
00:24:27,800 --> 00:24:31,320
Speaker 1: eleven or what have you might be totally outdated now

508
00:24:31,400 --> 00:24:33,600
Speaker 1: because let's face it, and we've already talked about this

509
00:24:33,680 --> 00:24:37,639
Speaker 1: a lot today, a lot has changed. Did you switch jobs,

510
00:24:37,680 --> 00:24:39,920
Speaker 1: did you sell a business, did your kids move out

511
00:24:40,080 --> 00:24:43,360
Speaker 1: or move back in? Did you use more money than

512
00:24:43,400 --> 00:24:45,760
Speaker 1: you thought you were going to use and are you

513
00:24:45,880 --> 00:24:49,000
Speaker 1: sitting on a lot of extra cash that you don't need?

514
00:24:49,119 --> 00:24:51,919
Speaker 1: And the point here is your plans should evolve with

515
00:24:52,000 --> 00:24:54,959
Speaker 1: your life and your money should move with it. And

516
00:24:55,000 --> 00:24:58,880
Speaker 1: that could mean anything from rebalancing, checking the overall risk

517
00:24:59,000 --> 00:25:03,320
Speaker 1: level of your portfolio, maybe doing some slight shifting from

518
00:25:03,520 --> 00:25:07,920
Speaker 1: growth to income, uh, whatever matches your phase of life.

519
00:25:07,960 --> 00:25:11,160
Speaker 1: And that's really what you know. At least an annual

520
00:25:11,160 --> 00:25:16,120
Speaker 1: review of your comprehensive financial plan should help dictate moving forward.

521
00:25:16,600 --> 00:25:18,920
Speaker 2: Yeah, and and again that's why this is a great

522
00:25:18,960 --> 00:25:21,320
Speaker 2: time of year. You know, don't don't spend the whole uh,

523
00:25:21,359 --> 00:25:24,200
Speaker 2: you know, a couple of weeks of lessoned activity watching

524
00:25:24,240 --> 00:25:27,080
Speaker 2: old Hallmark Christmas movies, Stop and think about what did

525
00:25:27,119 --> 00:25:29,160
Speaker 2: we accomplish this year? And really, where do I want

526
00:25:29,160 --> 00:25:30,720
Speaker 2: to go next year? This doesn't have to be a

527
00:25:30,800 --> 00:25:34,000
Speaker 2: huge production. If nothing else. If you're married, then sit

528
00:25:34,080 --> 00:25:36,240
Speaker 2: down with your spouse and just go over the big picture.

529
00:25:36,320 --> 00:25:38,280
Speaker 2: And then because every now and then we just have

530
00:25:38,359 --> 00:25:41,199
Speaker 2: to review, make sure everybody knows all the players know

531
00:25:41,280 --> 00:25:44,119
Speaker 2: exactly where the stuff is and and we are we

532
00:25:44,200 --> 00:25:45,960
Speaker 2: on a good path? Are we not on a good path?

533
00:25:46,200 --> 00:25:48,159
Speaker 2: And then what do we want going forward? You know,

534
00:25:48,160 --> 00:25:50,800
Speaker 2: set aside with what is actually happening maybe different than

535
00:25:50,800 --> 00:25:52,679
Speaker 2: what we want, and are we taking the right steps

536
00:25:52,720 --> 00:25:54,879
Speaker 2: now to get where we need? So your plan should

537
00:25:54,920 --> 00:25:57,800
Speaker 2: be moving with your life and it should be you know,

538
00:25:58,080 --> 00:26:01,080
Speaker 2: looking looking forward and in terms of where do we

539
00:26:01,119 --> 00:26:02,960
Speaker 2: want to go with this? And then for now you know,

540
00:26:03,119 --> 00:26:04,920
Speaker 2: another question to be looking at for this past year,

541
00:26:04,960 --> 00:26:06,800
Speaker 2: did we leave any money on the table? From a

542
00:26:06,840 --> 00:26:09,800
Speaker 2: tax perspective, this one is huge and you've pretty much

543
00:26:09,800 --> 00:26:12,239
Speaker 2: got about forty eight hours to do anything about it,

544
00:26:12,280 --> 00:26:13,680
Speaker 2: which is not a lot of.

545
00:26:13,640 --> 00:26:16,919
Speaker 3: Time for this this current tax here. But if you're

546
00:26:16,920 --> 00:26:18,640
Speaker 3: a high earner, you're you're you're an.

547
00:26:18,560 --> 00:26:20,959
Speaker 2: Investor with a large tax bile account. There are tools

548
00:26:20,960 --> 00:26:23,320
Speaker 2: out there that will help you reduce that tax burden. Right,

549
00:26:23,359 --> 00:26:25,680
Speaker 2: so we're talking about roth conversions. When the market fell

550
00:26:25,720 --> 00:26:27,879
Speaker 2: apart in April, that that should be a trigger and

551
00:26:27,960 --> 00:26:29,359
Speaker 2: let this let this be a lessoned if it didn't

552
00:26:29,400 --> 00:26:31,199
Speaker 2: occur to you, right, if you're somebody who you're a

553
00:26:31,200 --> 00:26:33,040
Speaker 2: turtle who pulled your head and in your shell and

554
00:26:33,080 --> 00:26:35,400
Speaker 2: didn't and just ignored the market, First of all, that's good,

555
00:26:35,440 --> 00:26:38,320
Speaker 2: lisha didn't panic, But remember there are opportunities. The silver

556
00:26:38,400 --> 00:26:41,080
Speaker 2: lining to a down market is an opportunity. For example,

557
00:26:41,080 --> 00:26:42,919
Speaker 2: in the roth conversion space. If I'm going to do

558
00:26:42,920 --> 00:26:46,160
Speaker 2: a Roth conversion, that's time of year, there is no seasonality.

559
00:26:46,160 --> 00:26:48,159
Speaker 2: It's when the market is down because we know the

560
00:26:48,160 --> 00:26:50,359
Speaker 2: market is going to recover as it always has. So

561
00:26:50,400 --> 00:26:52,760
Speaker 2: when it comes down, do the Roth conversion then, and

562
00:26:52,800 --> 00:26:54,880
Speaker 2: then you will when when the recovery does occur, that'll

563
00:26:54,880 --> 00:26:56,640
Speaker 2: be happening in a tax free space. But you got

564
00:26:56,640 --> 00:26:58,080
Speaker 2: to do the math, you got to do the numbers,

565
00:26:58,359 --> 00:27:00,200
Speaker 2: learn about it now so that you're prepared to pull

566
00:27:00,240 --> 00:27:01,920
Speaker 2: the trigger. You're not going to get two three weeks

567
00:27:01,960 --> 00:27:05,080
Speaker 2: to think and learn when that moment actually happens. Another

568
00:27:05,119 --> 00:27:07,960
Speaker 2: one at tax loss harvesting. If you have positions in

569
00:27:08,000 --> 00:27:11,040
Speaker 2: the red, then there are charitable giving strategies out there

570
00:27:11,040 --> 00:27:14,560
Speaker 2: like donor advised funds. In addition, you can take those

571
00:27:14,560 --> 00:27:16,760
Speaker 2: losses just sell them. On the other hand, if you

572
00:27:16,800 --> 00:27:19,640
Speaker 2: have gains, you can also move those dollars of appreciated

573
00:27:19,640 --> 00:27:22,360
Speaker 2: securities into donor advised funds. You're really under the gun

574
00:27:22,359 --> 00:27:23,480
Speaker 2: if you're going to try to do this by the

575
00:27:23,560 --> 00:27:25,359
Speaker 2: end of this tax here and you don't already have

576
00:27:25,359 --> 00:27:27,439
Speaker 2: an account set up. That's been a scramble for us

577
00:27:27,440 --> 00:27:30,600
Speaker 2: for these last couple as it always is, the holidays

578
00:27:30,600 --> 00:27:32,719
Speaker 2: are donor advised fund season. We end up setting those

579
00:27:32,800 --> 00:27:34,440
Speaker 2: up the second half of December. It seems like every

580
00:27:34,440 --> 00:27:37,960
Speaker 2: single year, if you're over seventy and a half, you

581
00:27:38,000 --> 00:27:40,960
Speaker 2: can do something called a qualified charitable distribution out of

582
00:27:41,000 --> 00:27:41,600
Speaker 2: your IRA.

583
00:27:42,040 --> 00:27:43,520
Speaker 3: This will cover your RMD.

584
00:27:43,720 --> 00:27:46,280
Speaker 2: And yes, as we always say, these ages don't match up,

585
00:27:46,320 --> 00:27:49,200
Speaker 2: you're eligible to do a qualified charitable distribution at the

586
00:27:49,240 --> 00:27:51,919
Speaker 2: age of seventy and a half, even though nowadays the

587
00:27:52,080 --> 00:27:56,200
Speaker 2: RMD age is now seventy three. So but regardless either way,

588
00:27:56,200 --> 00:27:57,959
Speaker 2: if there are charities that you support out there, there

589
00:27:58,000 --> 00:27:59,640
Speaker 2: are ways to do it. And the neatest thing about

590
00:27:59,640 --> 00:28:03,439
Speaker 2: a QUS it does not factor into your overall income.

591
00:28:03,480 --> 00:28:05,439
Speaker 2: I know that's kind of hard to grasp, but it

592
00:28:05,480 --> 00:28:07,239
Speaker 2: does not push you even though you took those net

593
00:28:07,280 --> 00:28:09,600
Speaker 2: money out. You get the deduction, but it also doesn't

594
00:28:09,640 --> 00:28:11,440
Speaker 2: count towards your income in terms of pushing you into

595
00:28:11,520 --> 00:28:12,200
Speaker 2: higher brackets.

596
00:28:12,960 --> 00:28:16,480
Speaker 1: Yeah, and unfortunately, Brian, if that qualified charitable distribution is

597
00:28:16,520 --> 00:28:19,399
Speaker 1: a strategy, I see. You know, way too many people

598
00:28:19,560 --> 00:28:22,760
Speaker 1: not use and not even be aware of and it's

599
00:28:22,800 --> 00:28:25,800
Speaker 1: something we continue to talk about with clients and get

600
00:28:25,840 --> 00:28:29,040
Speaker 1: them off that habit. Folks over seventy seventy and a

601
00:28:29,080 --> 00:28:31,800
Speaker 1: half of just writing that check and putting it in

602
00:28:31,840 --> 00:28:34,360
Speaker 1: the offering plate at church, there's there's a way more

603
00:28:34,400 --> 00:28:37,000
Speaker 1: strategic and tax efficient way to go about it. Here's

604
00:28:37,040 --> 00:28:39,280
Speaker 1: the all Worth advice. The market doesn't know what you

605
00:28:39,440 --> 00:28:43,080
Speaker 1: need from your money, but your plans should. Don't just

606
00:28:43,240 --> 00:28:47,280
Speaker 1: measure performance in percentages of in terms of market returns.

607
00:28:47,720 --> 00:28:52,880
Speaker 1: Measure it in how well your money served your goals well,

608
00:28:52,920 --> 00:28:56,280
Speaker 1: from part time retirement to buffer ets. We're tackling your

609
00:28:56,360 --> 00:28:59,760
Speaker 1: smart money questions from across the tri State and it's

610
00:28:59,760 --> 00:29:02,479
Speaker 1: come up next. You're listening to Simply Money, presented by

611
00:29:02,480 --> 00:29:10,600
Speaker 1: all Worth Financial on fifty five KRC, the talk station.

612
00:29:11,840 --> 00:29:15,000
Speaker 1: You are listening to Simply Money because that by Allworth Financial.

613
00:29:15,040 --> 00:29:18,480
Speaker 1: I'm Bob's fondseller along with Brian James. Give a financial

614
00:29:18,560 --> 00:29:20,560
Speaker 1: question you'd like for us to answer. There's a red

615
00:29:20,600 --> 00:29:22,720
Speaker 1: button you can click while you're listening to the show.

616
00:29:22,880 --> 00:29:25,960
Speaker 1: If you're listening to the show on the iHeart app,

617
00:29:26,480 --> 00:29:29,720
Speaker 1: simply record your question and it will come straight to us.

618
00:29:30,600 --> 00:29:33,560
Speaker 1: Brad In Milford leads us off tonight, Brian. He says,

619
00:29:33,600 --> 00:29:37,400
Speaker 1: We've always focused on returns, but lately I'm worried about

620
00:29:37,400 --> 00:29:41,280
Speaker 1: how those returns show up. They come from dividends, interest,

621
00:29:41,320 --> 00:29:44,360
Speaker 1: capital gains. How do you design a portfolio around after

622
00:29:44,520 --> 00:29:49,920
Speaker 1: tax cash flow instead of just headline gross performance? Great question?

623
00:29:49,960 --> 00:29:52,280
Speaker 2: Well, yeah, this is a great question and it's an

624
00:29:52,280 --> 00:29:54,000
Speaker 2: important one for a lot of people to understand. So

625
00:29:54,360 --> 00:29:58,360
Speaker 2: designing that portfolio around the after tax tax cash flow

626
00:29:58,800 --> 00:30:01,120
Speaker 2: that never requires we're kind of flipping the script here

627
00:30:01,160 --> 00:30:03,600
Speaker 2: a little bit in terms of thinking out performance, in

628
00:30:03,680 --> 00:30:06,280
Speaker 2: terms of thinking what did I earn? That the question

629
00:30:06,360 --> 00:30:08,120
Speaker 2: really should be what did I keep? And when did

630
00:30:08,120 --> 00:30:11,520
Speaker 2: the irs get paid on this? So there's really four

631
00:30:11,520 --> 00:30:14,600
Speaker 2: components here to a discipline framework for this. So first off,

632
00:30:14,600 --> 00:30:17,440
Speaker 2: classify your income by tax treatment, not asset class.

633
00:30:17,560 --> 00:30:19,000
Speaker 3: There's really three flavors.

634
00:30:19,040 --> 00:30:21,880
Speaker 2: There's pre tax income meaning you're going to pay ordinary

635
00:30:21,880 --> 00:30:23,800
Speaker 2: taxes on it, you've got tax free that's your WROTH,

636
00:30:24,000 --> 00:30:27,120
Speaker 2: and then anything else might be capital gains, which you

637
00:30:27,200 --> 00:30:29,560
Speaker 2: might be paying fifteen percent, maybe twenty if you're a

638
00:30:29,600 --> 00:30:33,160
Speaker 2: high income earner. The next thing is intentional asset location.

639
00:30:33,240 --> 00:30:34,920
Speaker 2: So now that we've talked about the different types of

640
00:30:34,920 --> 00:30:37,680
Speaker 2: tax treatment. Figure out what types of assets you have

641
00:30:38,040 --> 00:30:40,320
Speaker 2: that are a subject to those different treatments. You know,

642
00:30:40,360 --> 00:30:43,240
Speaker 2: if you've got tax efficient growth assets such as low

643
00:30:43,240 --> 00:30:46,720
Speaker 2: turnover equities, exchange traded funds, those kinds of things, then

644
00:30:46,760 --> 00:30:49,920
Speaker 2: those put you can safely put in a taxable account

645
00:30:50,600 --> 00:30:52,400
Speaker 2: if it's a If you have some investments out there

646
00:30:52,440 --> 00:30:55,680
Speaker 2: that are much more active, then we'll need to make

647
00:30:55,680 --> 00:30:58,080
Speaker 2: sure that we've got that in a sheltered account such

648
00:30:58,080 --> 00:31:01,520
Speaker 2: as a WROTH or a traditional where that activity is

649
00:31:01,560 --> 00:31:05,080
Speaker 2: not tacked. Also separate in your mind cash flow generation

650
00:31:05,240 --> 00:31:08,120
Speaker 2: from total return. We've spent we usually have spent thirty

651
00:31:08,160 --> 00:31:09,920
Speaker 2: forty years just looking at my pile of money.

652
00:31:09,960 --> 00:31:11,520
Speaker 3: Did my pile grow? Did my pile grow?

653
00:31:11,560 --> 00:31:14,240
Speaker 2: When we're going to start switching to income based investments,

654
00:31:14,640 --> 00:31:16,640
Speaker 2: then you need to kind of change your expectations and

655
00:31:16,720 --> 00:31:18,800
Speaker 2: understand that I'm not trying to grow my pile anymore.

656
00:31:18,800 --> 00:31:20,000
Speaker 2: I'm trying to use it to pay the bills. That

657
00:31:20,120 --> 00:31:24,040
Speaker 2: just changes the overall goals. And then finally figure out

658
00:31:24,080 --> 00:31:26,320
Speaker 2: the timing, not just the level of income. What time

659
00:31:26,360 --> 00:31:28,200
Speaker 2: of year do these do these things need to happen?

660
00:31:28,480 --> 00:31:30,360
Speaker 2: When should I take out that money. And the answer

661
00:31:30,400 --> 00:31:32,200
Speaker 2: is usually, if it's a lump sum, let's try to

662
00:31:32,200 --> 00:31:34,000
Speaker 2: do it when the market's at a peak. But as

663
00:31:34,000 --> 00:31:36,440
Speaker 2: Bob and I always say, if we know bills are

664
00:31:36,440 --> 00:31:38,920
Speaker 2: coming due and the markets at a peak, carve it out,

665
00:31:38,960 --> 00:31:41,760
Speaker 2: protect it from the market, and worry about the distribution later.

666
00:31:41,880 --> 00:31:44,000
Speaker 2: But if we're at a time where the market is

667
00:31:44,040 --> 00:31:45,800
Speaker 2: cooperating and we know we've got to pay that bill

668
00:31:45,840 --> 00:31:47,800
Speaker 2: in the next six to twelve months, pull the trigger

669
00:31:47,800 --> 00:31:49,880
Speaker 2: and get it out. Okay, So now we're going to

670
00:31:49,960 --> 00:31:52,880
Speaker 2: move on to Ron in Florence. Ron says they're planning

671
00:31:52,920 --> 00:31:55,400
Speaker 2: to retire in stages, you know, first some part time

672
00:31:55,440 --> 00:31:58,080
Speaker 2: work and then fully retire. So how do we just

673
00:31:58,120 --> 00:32:01,400
Speaker 2: investment risk when that income fail kind of gradually instead

674
00:32:01,400 --> 00:32:02,560
Speaker 2: of stopping all at once.

675
00:32:02,600 --> 00:32:04,240
Speaker 3: That's a great question. This is kind of the very

676
00:32:04,240 --> 00:32:04,960
Speaker 3: thoughtful of run.

677
00:32:05,800 --> 00:32:07,520
Speaker 1: Now. That's a good one, and Ron, I would my

678
00:32:07,600 --> 00:32:11,960
Speaker 1: first answer is listen closely to Brian's answer to Brad's

679
00:32:12,040 --> 00:32:14,360
Speaker 1: question that he just gave, because he gave a lot

680
00:32:14,400 --> 00:32:18,560
Speaker 1: of good points there to consider when when doing portfolio construction.

681
00:32:18,680 --> 00:32:22,880
Speaker 1: But your question, specifically, I think relates to risk, and

682
00:32:22,920 --> 00:32:25,560
Speaker 1: again it comes back to when you need that money.

683
00:32:26,000 --> 00:32:28,600
Speaker 1: And I love the fact that you're retiring in stages

684
00:32:28,680 --> 00:32:31,880
Speaker 1: part time work all that, I think it's important to

685
00:32:31,920 --> 00:32:35,160
Speaker 1: just have a good cash flow plan in place, make

686
00:32:35,200 --> 00:32:38,080
Speaker 1: sure you and your spouse are aware of what your

687
00:32:38,120 --> 00:32:41,400
Speaker 1: income needs and wants are and when, and then factor

688
00:32:41,440 --> 00:32:43,840
Speaker 1: in as much as you can you know what your

689
00:32:43,880 --> 00:32:46,800
Speaker 1: part time income is gonna be, and then adjust that

690
00:32:46,920 --> 00:32:50,320
Speaker 1: emergency fund accordingly. And then to the extent that that

691
00:32:50,400 --> 00:32:56,040
Speaker 1: portfolio needs to deliver you know, regular monthly return or income,

692
00:32:56,120 --> 00:32:59,440
Speaker 1: even if that income is going to change, and adjust

693
00:32:59,760 --> 00:33:04,280
Speaker 1: in stages. Make sure that the asset allocation is adjusted

694
00:33:04,320 --> 00:33:06,520
Speaker 1: as well. Because what we're talking what I think you're

695
00:33:06,520 --> 00:33:10,080
Speaker 1: talking about here without seeing your entire picture, is it's

696
00:33:10,120 --> 00:33:12,920
Speaker 1: time to just gradually take the gas off a little

697
00:33:12,920 --> 00:33:15,840
Speaker 1: bit in terms of being one hundred percent in accumulation

698
00:33:16,080 --> 00:33:19,320
Speaker 1: mode and start to shift things a little bit to

699
00:33:19,440 --> 00:33:23,320
Speaker 1: some things that can both serve as an emergency fund

700
00:33:23,560 --> 00:33:29,600
Speaker 1: and deliver some consistent monthly income without being subjected to

701
00:33:29,680 --> 00:33:34,440
Speaker 1: huge market volatility. Hope that helps Sam in Batesville, Indiana,

702
00:33:34,560 --> 00:33:39,480
Speaker 1: says Brian. We've always reinvested dividends automatically. At what point

703
00:33:39,520 --> 00:33:43,440
Speaker 1: does it make sense to start using portfolio income instead.

704
00:33:44,600 --> 00:33:48,000
Speaker 3: Well, I think that this will be all of a sudden.

705
00:33:47,760 --> 00:33:49,960
Speaker 1: This is a lot of income questions, a lot of

706
00:33:50,000 --> 00:33:51,200
Speaker 1: everybody's thinking about income.

707
00:33:51,240 --> 00:33:51,320
Speaker 4: This.

708
00:33:51,520 --> 00:33:53,680
Speaker 2: I wonder if these people all meet for breakfast at

709
00:33:53,680 --> 00:33:56,440
Speaker 2: a Bob Evans somewhere, agree, what questions are we setting

710
00:33:56,480 --> 00:33:56,880
Speaker 2: in today?

711
00:33:57,000 --> 00:33:59,800
Speaker 3: Anyway? Yeah, I mean, first off, I would all I

712
00:33:59,800 --> 00:34:00,720
Speaker 3: would say, you don't.

713
00:34:00,760 --> 00:34:03,360
Speaker 2: You don't have to it just because you need a

714
00:34:03,440 --> 00:34:06,360
Speaker 2: steady stream of injection into your checking account to pay

715
00:34:06,400 --> 00:34:06,640
Speaker 2: the bills.

716
00:34:06,680 --> 00:34:08,319
Speaker 3: You've reached that point, you don't.

717
00:34:08,360 --> 00:34:11,560
Speaker 2: It doesn't have to come from dividends, so at least

718
00:34:11,560 --> 00:34:13,080
Speaker 2: not right away, you know.

719
00:34:13,160 --> 00:34:14,879
Speaker 3: There, I would say, at.

720
00:34:14,800 --> 00:34:17,160
Speaker 2: The point is when you need to pay the bills,

721
00:34:17,200 --> 00:34:18,719
Speaker 2: when you get to a point where you say, I'm

722
00:34:18,760 --> 00:34:23,239
Speaker 2: backing off on my work and I'm therefore gonna need to,

723
00:34:23,360 --> 00:34:25,279
Speaker 2: you know, to kind of come up with another income stream,

724
00:34:25,280 --> 00:34:26,319
Speaker 2: I would look at it as an option.

725
00:34:26,640 --> 00:34:27,080
Speaker 3: First off.

726
00:34:27,080 --> 00:34:29,160
Speaker 2: First option is, okay, what if I leave everything alone

727
00:34:29,160 --> 00:34:32,440
Speaker 2: and I simply, as Sam mentions, I simply stop reinvesting

728
00:34:32,520 --> 00:34:35,040
Speaker 2: my dividends and have them sent directly electronically to my

729
00:34:35,120 --> 00:34:37,800
Speaker 2: checking account. That is a function that your broker should

730
00:34:37,800 --> 00:34:40,400
Speaker 2: be able to handle for you, which simply means flipping

731
00:34:40,440 --> 00:34:42,759
Speaker 2: a couple of switches inside your account to sport it

732
00:34:42,800 --> 00:34:45,040
Speaker 2: over into your checking account whenever those dividends pay. Might

733
00:34:45,080 --> 00:34:48,359
Speaker 2: be monthly, might be quarterly, but whatever, and see if

734
00:34:48,400 --> 00:34:50,799
Speaker 2: that will pay the bills. Some people do that, you know,

735
00:34:50,840 --> 00:34:52,640
Speaker 2: at least in the first year or two of retirement,

736
00:34:52,760 --> 00:34:55,440
Speaker 2: especially when maybe I'm not fully retired, but I've just

737
00:34:55,480 --> 00:34:58,280
Speaker 2: backed off a little bit, I'm working less or whatever,

738
00:34:58,520 --> 00:35:00,600
Speaker 2: and I need to fill a gap a little while.

739
00:35:00,960 --> 00:35:03,040
Speaker 2: It might be as easy as just having that extra

740
00:35:03,280 --> 00:35:06,040
Speaker 2: bit of injection of cash into the account. Try that

741
00:35:06,080 --> 00:35:07,759
Speaker 2: for a while, and then beyond that you can start

742
00:35:07,760 --> 00:35:10,719
Speaker 2: to look at systematic sales of investments because you may

743
00:35:10,760 --> 00:35:12,960
Speaker 2: need that when you completely You probably will at some point,

744
00:35:13,800 --> 00:35:15,520
Speaker 2: and that allows you to maintain a little bit of

745
00:35:15,560 --> 00:35:18,120
Speaker 2: a growth stance, but also taking advantage of dividends. So

746
00:35:19,480 --> 00:35:22,680
Speaker 2: let's see if David and Zena has a question about income,

747
00:35:22,719 --> 00:35:25,880
Speaker 2: he's talking about he's a DIY investor, but the decisions

748
00:35:25,880 --> 00:35:27,879
Speaker 2: are getting bigger. So, Bob, how do you know when

749
00:35:27,920 --> 00:35:31,000
Speaker 2: complexity has crossed the line from being manageable in the

750
00:35:31,040 --> 00:35:34,080
Speaker 2: DIY space to kind of risky Because the questions got bigger.

751
00:35:35,440 --> 00:35:38,200
Speaker 1: Well, David, and I'll say Brian as well. You know,

752
00:35:38,239 --> 00:35:40,640
Speaker 1: I don't know about you, but over the years, you know,

753
00:35:40,760 --> 00:35:44,040
Speaker 1: folks that are successful do it yourself investors, they tend

754
00:35:44,040 --> 00:35:47,920
Speaker 1: to come in looking for some health help under either

755
00:35:48,080 --> 00:35:51,520
Speaker 1: one or both scenarios. One is, they know their portfolio

756
00:35:51,800 --> 00:35:56,040
Speaker 1: is really growth oriented because that's what's fueled the tremendous

757
00:35:56,040 --> 00:35:59,080
Speaker 1: growth in wealth, and they don't have the means or

758
00:35:59,120 --> 00:36:02,040
Speaker 1: the way to do a good stress test of the

759
00:36:02,160 --> 00:36:04,760
Speaker 1: risk of their portfolio. That tends to be one reason

760
00:36:04,800 --> 00:36:07,239
Speaker 1: people come in, and then they don't they know that

761
00:36:07,320 --> 00:36:10,160
Speaker 1: if they just you know, start turning over pieces of

762
00:36:10,200 --> 00:36:13,840
Speaker 1: their portfolio, they're just going to expose their portfolio capital gains.

763
00:36:14,200 --> 00:36:16,560
Speaker 1: The other reason people come in is when they you know,

764
00:36:16,600 --> 00:36:18,920
Speaker 1: perhaps they listen to the show and we talk all

765
00:36:18,960 --> 00:36:21,719
Speaker 1: the time about some of these tax strategies and they're

766
00:36:21,760 --> 00:36:24,160
Speaker 1: sitting there thinking, I've never done any of that, I've

767
00:36:24,160 --> 00:36:26,719
Speaker 1: not even thought of that. I'm probably missing the boat

768
00:36:26,960 --> 00:36:29,799
Speaker 1: in terms of tax efficiencies. So, you know, those would

769
00:36:29,800 --> 00:36:32,560
Speaker 1: be the two things, the overall risk exposure of your

770
00:36:32,600 --> 00:36:36,799
Speaker 1: portfolio and then really taking maximum advantage of some of

771
00:36:36,840 --> 00:36:39,600
Speaker 1: the tax strategies that are out there all right. Coming

772
00:36:39,680 --> 00:36:41,840
Speaker 1: up next, I've got my two cents. A couple of

773
00:36:41,960 --> 00:36:45,480
Speaker 1: factoids about gold. You're listening to Simply Money, presented by

774
00:36:45,520 --> 00:36:48,839
Speaker 1: all Worth Financial on fifty five KRC, the talk station.

775
00:36:54,640 --> 00:36:56,759
Speaker 1: You're listening to Simply Money, You've said by all Worth

776
00:36:56,800 --> 00:37:01,040
Speaker 1: Financial Bobs Fonseeller along with Brian Jane. Well, Brian, I

777
00:37:01,120 --> 00:37:03,279
Speaker 1: know you're a bit of a history buff and I

778
00:37:03,360 --> 00:37:05,640
Speaker 1: am as well. I came across a couple of fun

779
00:37:05,719 --> 00:37:08,200
Speaker 1: facts here about gold. I mean, let's face it, gold's

780
00:37:08,200 --> 00:37:11,360
Speaker 1: been in the headlines this year. It's up almost seventy percent,

781
00:37:11,880 --> 00:37:14,440
Speaker 1: you know here in five in twenty twenty five. But

782
00:37:14,520 --> 00:37:16,239
Speaker 1: I thought it'd be interesting to take a look at

783
00:37:16,280 --> 00:37:18,960
Speaker 1: what does that actually mean. You know, when we take

784
00:37:19,000 --> 00:37:22,160
Speaker 1: a look at our national debt. As we all know,

785
00:37:22,239 --> 00:37:24,880
Speaker 1: we're about thirty eight trillion dollars in debt in the

786
00:37:24,960 --> 00:37:26,040
Speaker 1: United States and that.

787
00:37:26,040 --> 00:37:28,080
Speaker 3: Number one we owe money?

788
00:37:28,120 --> 00:37:30,359
Speaker 1: Wait what, yeah, we we do. You know it's up

789
00:37:30,360 --> 00:37:33,480
Speaker 1: to you to pay it. But anyway, I found this,

790
00:37:33,680 --> 00:37:35,719
Speaker 1: I found this a little bit interesting. And this is

791
00:37:35,760 --> 00:37:38,879
Speaker 1: assuming that we're able to track where all the gold is.

792
00:37:39,440 --> 00:37:42,719
Speaker 1: But supposedly the US government is sitting on almost two

793
00:37:42,840 --> 00:37:48,200
Speaker 1: hundred and sixty two million troy ounces of gold. We're

794
00:37:48,200 --> 00:37:51,279
Speaker 1: the largest gold holder by a bunch, you know, of

795
00:37:51,320 --> 00:37:54,959
Speaker 1: any country in the world, next to Germany, which which

796
00:37:55,000 --> 00:37:57,440
Speaker 1: holds less than half as much gold as the United

797
00:37:57,440 --> 00:37:59,879
Speaker 1: States does. But here's the point I want to make.

798
00:38:00,640 --> 00:38:04,880
Speaker 1: Due to a statutory you know law going back to

799
00:38:05,000 --> 00:38:09,720
Speaker 1: nineteen seventy three, the government has to value the book

800
00:38:09,840 --> 00:38:13,120
Speaker 1: value of that gold at only forty two dollars and

801
00:38:13,160 --> 00:38:16,800
Speaker 1: twenty two cents an ounce, meaning that I just found

802
00:38:16,840 --> 00:38:20,799
Speaker 1: a trillion dollars. Brian. If you value our current gold holdings,

803
00:38:21,360 --> 00:38:25,799
Speaker 1: it's worth over a trillion dollars when the government's only

804
00:38:25,880 --> 00:38:28,360
Speaker 1: carrying it a book value of forty two billion. We

805
00:38:28,520 --> 00:38:32,040
Speaker 1: just reduced the national debt by over a trillion dollars, Brian.

806
00:38:32,040 --> 00:38:34,359
Speaker 3: Look at you. It's own rate news.

807
00:38:34,080 --> 00:38:37,400
Speaker 2: Going into its twenty six day too, Bob, good job.

808
00:38:38,640 --> 00:38:44,000
Speaker 2: What's only Monday, You're early in the week. I'm quick contest.

809
00:38:44,280 --> 00:38:46,440
Speaker 2: The federal government has to value it at forty two

810
00:38:46,480 --> 00:38:51,120
Speaker 2: dollars of per ounce. That translates to forty five hundred dollars,

811
00:38:51,160 --> 00:38:54,160
Speaker 2: which is the actual price about now. So we are

812
00:38:54,320 --> 00:38:57,040
Speaker 2: well well well under in terms of how we value

813
00:38:57,040 --> 00:38:58,480
Speaker 2: that now why this isn't a bigger headline.

814
00:38:58,480 --> 00:38:59,960
Speaker 3: Maybe it will be after Bob mentioned it.

815
00:39:02,000 --> 00:39:05,400
Speaker 1: Thanks for listening tonight Tomorrow we help you ensure that

816
00:39:05,520 --> 00:39:08,400
Speaker 1: you own your money and not the other way around.

817
00:39:08,440 --> 00:39:10,359
Speaker 1: You've been listening to. Simply money, was noted by all

818
00:39:10,400 --> 00:39:13,479
Speaker 1: Worth Financial on fifty five KRC, the talk station