1 00:00:05,840 --> 00:00:11,080 Speaker 1: Tonight, why market volatility sure can hit everyone differently depending 2 00:00:11,160 --> 00:00:13,520 Speaker 1: on your stage of life, and how to make sure 3 00:00:13,560 --> 00:00:17,200 Speaker 1: your retirement plan is built to handle it. You're listening 4 00:00:17,239 --> 00:00:19,440 Speaker 1: to Simply Money, presented about all Worth Financial on Bob 5 00:00:19,520 --> 00:00:23,360 Speaker 1: spond Seller along with Brian James. If you're within five 6 00:00:23,440 --> 00:00:27,400 Speaker 1: years of retirement, or maybe you just stepped into retirement recently, 7 00:00:27,600 --> 00:00:31,560 Speaker 1: market volatility matters more to you than at any other 8 00:00:31,640 --> 00:00:34,600 Speaker 1: time in your life, and tonight we're gonna explain why 9 00:00:34,760 --> 00:00:38,239 Speaker 1: those first five years can literally make or break a 10 00:00:38,280 --> 00:00:44,360 Speaker 1: retirement plan and what smart investors do to protect themselves. Brian, 11 00:00:44,479 --> 00:00:45,320 Speaker 1: let's get into this. 12 00:00:45,640 --> 00:00:48,200 Speaker 2: Well, Bob, we're talking about setting a pattern here. Whatever 13 00:00:48,200 --> 00:00:51,000 Speaker 2: you do in your first five years may or may 14 00:00:51,040 --> 00:00:54,120 Speaker 2: not match the remaining years of your life, but they 15 00:00:54,160 --> 00:00:57,200 Speaker 2: can be very very different. So you know, and even 16 00:00:57,240 --> 00:00:59,080 Speaker 2: at their start of retirement, things are you know, things 17 00:00:59,160 --> 00:01:01,880 Speaker 2: are just different because you're going to be spending time differently. 18 00:01:01,920 --> 00:01:04,600 Speaker 2: You have more time than you've had, just just different, 19 00:01:04,680 --> 00:01:08,759 Speaker 2: not really necessarily emotionally different, not philosophically or mathematically different, 20 00:01:09,280 --> 00:01:11,560 Speaker 2: but you know, just different because you've been in a 21 00:01:11,600 --> 00:01:13,560 Speaker 2: groove for a very long time. So if you're in 22 00:01:13,600 --> 00:01:16,319 Speaker 2: that window. If you've just retired, or you're about to 23 00:01:16,360 --> 00:01:19,679 Speaker 2: hang it up, or you have within somewhere within the 24 00:01:19,720 --> 00:01:22,760 Speaker 2: five years, then volatility is really important to you. It's 25 00:01:22,800 --> 00:01:24,319 Speaker 2: gonna matter a lot more than it did when you 26 00:01:24,319 --> 00:01:27,920 Speaker 2: were forty five. And the reason, the reason behind this 27 00:01:28,080 --> 00:01:30,640 Speaker 2: is something we talk about frequently called sequence of returns risk. 28 00:01:30,680 --> 00:01:32,080 Speaker 2: But I'm gonna go ahead and say that there's a 29 00:01:32,080 --> 00:01:34,920 Speaker 2: bigger reason, which is now not only do you have 30 00:01:35,040 --> 00:01:38,039 Speaker 2: the time to pay more attention to it, ye, you 31 00:01:38,160 --> 00:01:40,640 Speaker 2: also will feel that loss a lot more. And this 32 00:01:40,720 --> 00:01:43,080 Speaker 2: is huge. All of a sudden, when people retire, they've 33 00:01:43,080 --> 00:01:44,760 Speaker 2: got time. All of a sudden, things that have been 34 00:01:44,760 --> 00:01:48,920 Speaker 2: happening for decades suddenly become the focus of the daily headlines. 35 00:01:49,040 --> 00:01:51,200 Speaker 2: And in the past, you know, when the market would 36 00:01:51,240 --> 00:01:53,720 Speaker 2: would take a pullback, people would say, well, no big deal, 37 00:01:53,760 --> 00:01:55,440 Speaker 2: I'm gonna throw money more money in my four oh 38 00:01:55,480 --> 00:01:57,800 Speaker 2: one k I'm just buying at the low and this 39 00:01:57,920 --> 00:01:59,360 Speaker 2: is just part of the cycle. No big deal, and 40 00:01:59,400 --> 00:02:01,960 Speaker 2: I've got others to do today, So moving on. But suddenly, 41 00:02:02,000 --> 00:02:03,960 Speaker 2: when we're faced with a vacuum of time, we tend 42 00:02:04,000 --> 00:02:06,320 Speaker 2: to spend it. We tend to fill that vacuum with 43 00:02:06,400 --> 00:02:10,600 Speaker 2: spending and worry. So therefore these can become a real issue. 44 00:02:10,600 --> 00:02:15,440 Speaker 2: But the reason, mathematically speaking, sequence of returns risk. That 45 00:02:15,760 --> 00:02:17,880 Speaker 2: basically means when do the bad markets happen. Do they 46 00:02:17,880 --> 00:02:20,359 Speaker 2: happen early in my retirement do they happen later when 47 00:02:20,400 --> 00:02:23,600 Speaker 2: you're in accumulation stage? This is thirty forties, fifties, This 48 00:02:23,639 --> 00:02:27,000 Speaker 2: is basically the bulk of your adult life. The order 49 00:02:27,040 --> 00:02:29,400 Speaker 2: of returns doesn't really matter all that much. So like 50 00:02:29,440 --> 00:02:31,359 Speaker 2: I said, if the markets dropped twenty percent, you just 51 00:02:31,440 --> 00:02:33,920 Speaker 2: keep buying that next four toh one K contribution is 52 00:02:33,919 --> 00:02:35,880 Speaker 2: going to go in at a lower market. That works 53 00:02:35,880 --> 00:02:37,079 Speaker 2: out well for you. Matter of fact, you might have 54 00:02:37,160 --> 00:02:39,800 Speaker 2: even noticed this. Some people start to root for it. 55 00:02:39,880 --> 00:02:41,880 Speaker 2: Cool the market's down twenty percent, that means I'm going 56 00:02:41,960 --> 00:02:43,880 Speaker 2: to get that slingshot effect in about a year, year 57 00:02:43,880 --> 00:02:46,280 Speaker 2: and a half, and as that market recovers, because it 58 00:02:46,320 --> 00:02:49,160 Speaker 2: usually happens quickly, time is your ally at that point. 59 00:02:49,160 --> 00:02:52,639 Speaker 2: But once you retire, now you're withdrawing. Now that order 60 00:02:52,680 --> 00:02:55,119 Speaker 2: returns really really matters, because if you get those bad 61 00:02:55,160 --> 00:02:57,560 Speaker 2: returns early, which does happen to some people, if that 62 00:02:57,639 --> 00:03:00,880 Speaker 2: happens while you're pulling money out, you may permanently impair 63 00:03:00,960 --> 00:03:02,919 Speaker 2: the portfolio because you got to take out that four 64 00:03:02,960 --> 00:03:05,120 Speaker 2: or five percent distribution just to pay your bills, and 65 00:03:05,120 --> 00:03:07,440 Speaker 2: then the market might take away ten, twelve, fifteen percent 66 00:03:07,600 --> 00:03:08,200 Speaker 2: or even more. 67 00:03:09,440 --> 00:03:11,680 Speaker 1: Yeah, Brian, as I sit here and listen to you 68 00:03:11,760 --> 00:03:15,680 Speaker 1: explain sequence of return risk, I can picture people out there, 69 00:03:15,760 --> 00:03:19,320 Speaker 1: including some of our clients that are very analytical and 70 00:03:19,360 --> 00:03:21,480 Speaker 1: to your point, when people are retired and they got 71 00:03:21,520 --> 00:03:24,000 Speaker 1: more time on their hands and they're looking for something 72 00:03:24,080 --> 00:03:28,359 Speaker 1: to do to maintain some control, and I'll just say intellectual, 73 00:03:28,720 --> 00:03:32,400 Speaker 1: intellectually curious about, you know, learning more about how all 74 00:03:32,480 --> 00:03:35,040 Speaker 1: this works. We can get sped up in a hurry 75 00:03:35,080 --> 00:03:37,720 Speaker 1: and start running numbers. So the other the thing that 76 00:03:37,760 --> 00:03:40,560 Speaker 1: I want to highlight here too is there's an emotional 77 00:03:42,080 --> 00:03:45,800 Speaker 1: emotional component to this as well, and sometimes that can 78 00:03:46,000 --> 00:03:50,120 Speaker 1: far outweigh you know, these mathematical calculations that we always 79 00:03:50,120 --> 00:03:53,680 Speaker 1: do and simulations and Marty Monte Carlo analysis and all that. 80 00:03:54,080 --> 00:03:56,320 Speaker 1: So for folks that are just getting ready to retire 81 00:03:56,480 --> 00:03:59,960 Speaker 1: or have just retired, keep that in mind, as Brian said, 82 00:04:00,520 --> 00:04:02,840 Speaker 1: now that you've got that time on your hands, and 83 00:04:02,920 --> 00:04:05,680 Speaker 1: let's face it, if you've built a nice net worth 84 00:04:05,720 --> 00:04:08,440 Speaker 1: that didn't happen on accident. You worked very hard. You 85 00:04:08,480 --> 00:04:11,160 Speaker 1: were probably a leader in an organization or maybe owned 86 00:04:11,200 --> 00:04:14,600 Speaker 1: a business. You're very intelligent. You're used to running things, 87 00:04:14,640 --> 00:04:19,080 Speaker 1: controlling things, and measuring outcomes. And the danger here is, 88 00:04:19,279 --> 00:04:23,880 Speaker 1: you know, you move quickly into emotionally trying to outguess 89 00:04:24,080 --> 00:04:27,360 Speaker 1: the market's next move, and that can get that that 90 00:04:27,400 --> 00:04:30,880 Speaker 1: can really derail you and cost you hundreds of thousands 91 00:04:30,960 --> 00:04:33,799 Speaker 1: of dollars if you if you get like I said, 92 00:04:33,800 --> 00:04:37,040 Speaker 1: get a little sped up here and let emotions dictate 93 00:04:37,160 --> 00:04:40,839 Speaker 1: your decisions. Let's get into a couple of hypothetical situations, 94 00:04:41,200 --> 00:04:43,640 Speaker 1: you know, of what we're exactly talking about here, Brian, 95 00:04:43,680 --> 00:04:46,360 Speaker 1: with real numbers and some real case examples. 96 00:04:46,440 --> 00:04:48,560 Speaker 2: Yeah, Bob, I think it can be easier to understand, 97 00:04:48,560 --> 00:04:51,240 Speaker 2: like you said, with real numbers, because people can relate to, 98 00:04:51,360 --> 00:04:53,480 Speaker 2: you know, their own situations. So let's pretend we've got 99 00:04:53,520 --> 00:04:56,200 Speaker 2: to We've got Mark and Susan their early sixties, just 100 00:04:56,279 --> 00:04:58,640 Speaker 2: retired with five million bucks and they spend about two 101 00:04:58,720 --> 00:05:00,680 Speaker 2: hundred fifty thousand dollars a year. That's about a five 102 00:05:00,680 --> 00:05:03,640 Speaker 2: percent withdrawal rate. If they didn't have any of the 103 00:05:03,640 --> 00:05:06,160 Speaker 2: resources off their five million. So if they're well diversified 104 00:05:06,160 --> 00:05:09,400 Speaker 2: investment wise, the plan works. You know, they retire and 105 00:05:09,440 --> 00:05:11,039 Speaker 2: then all of a sudden, six months later the market 106 00:05:11,120 --> 00:05:13,320 Speaker 2: drops about twenty five percent. Now, what we're describing here 107 00:05:13,400 --> 00:05:15,640 Speaker 2: is somebody who retired in twenty twenty one, because this 108 00:05:15,680 --> 00:05:17,880 Speaker 2: is pretty much what happened in twenty two. So now 109 00:05:17,920 --> 00:05:20,760 Speaker 2: that five million is suddenly three point seventy five million, 110 00:05:21,240 --> 00:05:23,760 Speaker 2: still a good chunk of change and a good product 111 00:05:23,760 --> 00:05:26,039 Speaker 2: of a life well lived. But they still need that 112 00:05:26,040 --> 00:05:28,640 Speaker 2: two hundred and fifty. That five percent I hinted at 113 00:05:29,080 --> 00:05:31,560 Speaker 2: earlier is now six to seven percent. Well, now what 114 00:05:31,600 --> 00:05:33,960 Speaker 2: do we do. Now We're withdrawing a larger percentage from 115 00:05:33,960 --> 00:05:37,120 Speaker 2: a smaller portfolio, and that that makes compounding work in 116 00:05:37,160 --> 00:05:39,600 Speaker 2: the opposite direction. That's not a good thing. Even if 117 00:05:39,640 --> 00:05:42,760 Speaker 2: mark's recovered later, as they do, inevitably the damage from 118 00:05:42,760 --> 00:05:45,600 Speaker 2: those early withdrawals during that downturn may never come back. 119 00:05:45,960 --> 00:05:49,760 Speaker 2: That's sequence risk. It's not about average returns, it's about timing. 120 00:05:49,960 --> 00:05:53,039 Speaker 2: That doesn't mean their ship has sunk. It does mean 121 00:05:53,080 --> 00:05:55,520 Speaker 2: that maybe it can't work out quite exactly the way 122 00:05:55,560 --> 00:05:57,800 Speaker 2: they planned. Now, the important thing to remember here is, 123 00:05:57,839 --> 00:05:59,640 Speaker 2: like I said, I used a real example. This happened 124 00:05:59,640 --> 00:06:02,599 Speaker 2: to anybody in twenty twenty one who went through twenty 125 00:06:02,640 --> 00:06:05,760 Speaker 2: twenty two. But that doesn't mean that their ship is 126 00:06:05,800 --> 00:06:07,880 Speaker 2: sunk and everybody else is okay and they're screwed. That's 127 00:06:07,920 --> 00:06:10,279 Speaker 2: not the case. Just simply means that we have to 128 00:06:10,320 --> 00:06:13,080 Speaker 2: be paying attention and realizing that these things can happen 129 00:06:13,120 --> 00:06:15,680 Speaker 2: and do happen to people, and you should prepare to 130 00:06:15,720 --> 00:06:18,039 Speaker 2: make sure that you don't take it fully on the gin. Now, 131 00:06:18,080 --> 00:06:20,920 Speaker 2: a lot of people will pivot, right, so let's find 132 00:06:20,920 --> 00:06:23,320 Speaker 2: a way not to spend money. People naturally will say, 133 00:06:23,320 --> 00:06:24,560 Speaker 2: you know what, we said, we were going to do 134 00:06:24,600 --> 00:06:25,880 Speaker 2: the roof and we were going to take the big 135 00:06:26,080 --> 00:06:28,920 Speaker 2: We're around the world trip to celebrate retirement. Let's not 136 00:06:29,000 --> 00:06:30,600 Speaker 2: do any of that, and we are simply going to 137 00:06:30,640 --> 00:06:34,280 Speaker 2: pull in during this slightly scary time and just spend less. 138 00:06:34,360 --> 00:06:37,520 Speaker 2: That's the human reaction. The Monte Carlo analysis and the 139 00:06:37,560 --> 00:06:41,279 Speaker 2: things your financial planning advisors will show you will assume 140 00:06:41,279 --> 00:06:43,640 Speaker 2: that you don't change any of that. So remember there 141 00:06:43,640 --> 00:06:45,120 Speaker 2: are a lot of levers to pool if this does 142 00:06:45,160 --> 00:06:46,480 Speaker 2: happen to you, and it does not have to be 143 00:06:46,520 --> 00:06:49,480 Speaker 2: a ship sinker, but it does to It really should 144 00:06:49,480 --> 00:06:52,400 Speaker 2: be something that you should be prepared to experience just 145 00:06:52,440 --> 00:06:54,960 Speaker 2: in case it does happen to you. Doesn't happen that often, 146 00:06:55,080 --> 00:06:56,080 Speaker 2: but that doesn't mean never. 147 00:06:57,160 --> 00:06:59,520 Speaker 1: And then, just to drive this whole sequence of return 148 00:06:59,640 --> 00:07:02,400 Speaker 1: risk point, you know, home even more, let's talk about 149 00:07:02,480 --> 00:07:06,760 Speaker 1: hypothetical number two, which we'll call the lucky retiree. Let's 150 00:07:06,800 --> 00:07:10,360 Speaker 1: flip this pass script that you just went through, same couple, safe, 151 00:07:10,560 --> 00:07:13,720 Speaker 1: same five million dollars, same two hundred and fifty thousand 152 00:07:13,720 --> 00:07:17,120 Speaker 1: dollars of annual spending, but instead of a drop earlier 153 00:07:17,160 --> 00:07:20,000 Speaker 1: in their retirement years, markets go up by twenty percent 154 00:07:20,000 --> 00:07:22,480 Speaker 1: in the first two years. Now they're sitting on six 155 00:07:22,520 --> 00:07:26,600 Speaker 1: million dollars. They built a cushion, and then volatility hits 156 00:07:26,640 --> 00:07:31,400 Speaker 1: in year three. They're drawing from strength, not weakness. Exact exact, 157 00:07:31,440 --> 00:07:35,920 Speaker 1: same long term average return, but a completely different outcome, 158 00:07:36,360 --> 00:07:41,040 Speaker 1: all because of the sequence or luck, you know, or chance. 159 00:07:41,120 --> 00:07:44,960 Speaker 1: And that's why these first five years matter more than 160 00:07:44,960 --> 00:07:48,480 Speaker 1: the next twenty and Brian, you know it's next to 161 00:07:48,560 --> 00:07:52,880 Speaker 1: impossible to predict or time the market with huge chunks 162 00:07:52,920 --> 00:07:56,000 Speaker 1: of your portfolio. And that's why we need to build 163 00:07:56,040 --> 00:08:01,200 Speaker 1: a financial plan to anticipate volatility, not be surprised when 164 00:08:01,240 --> 00:08:03,840 Speaker 1: it happens, and then react in the rear view mirror. 165 00:08:04,120 --> 00:08:06,600 Speaker 1: So let's get into what we should actually be doing, 166 00:08:07,120 --> 00:08:10,080 Speaker 1: whether we think the markets are unhealthy or whether we're 167 00:08:10,080 --> 00:08:12,160 Speaker 1: in the middle of a roaring bowl market. 168 00:08:12,360 --> 00:08:13,800 Speaker 2: And Bob, I want to point out that what you 169 00:08:14,000 --> 00:08:17,080 Speaker 2: just described that second example is somebody who retired at 170 00:08:17,080 --> 00:08:20,160 Speaker 2: the end of twenty twenty four, So perhaps their portfolio 171 00:08:20,240 --> 00:08:22,800 Speaker 2: took a hit in twenty two, big swing back upward 172 00:08:22,840 --> 00:08:24,880 Speaker 2: in twenty three and twenty four. That's the position of 173 00:08:24,880 --> 00:08:27,880 Speaker 2: strength in which they are retiring, so that can happen too, 174 00:08:27,960 --> 00:08:29,680 Speaker 2: So I don't want to you know, we all tend 175 00:08:29,720 --> 00:08:31,800 Speaker 2: to focus much more on the negative than the positive. 176 00:08:32,320 --> 00:08:36,679 Speaker 2: We're simply suggesting you should understand what the impact might 177 00:08:36,760 --> 00:08:38,839 Speaker 2: be if you happen to retire at a time, you know, 178 00:08:38,880 --> 00:08:40,240 Speaker 2: because we don't get to control of this. If you 179 00:08:40,280 --> 00:08:42,040 Speaker 2: happen to retire in one of these more negative times, 180 00:08:42,080 --> 00:08:43,839 Speaker 2: it doesn't mean you made a mistake, and you really 181 00:08:43,880 --> 00:08:46,319 Speaker 2: shouldn't stress yourself too much over it. However, when you're 182 00:08:46,320 --> 00:08:49,600 Speaker 2: in the planning stage, you really should understand it, understand 183 00:08:49,640 --> 00:08:51,319 Speaker 2: what it could look like. So let's talk about what 184 00:08:51,400 --> 00:08:54,320 Speaker 2: you should actually do so you know what are steps 185 00:08:54,320 --> 00:08:55,720 Speaker 2: you can take. So first off, we're going to talk 186 00:08:55,760 --> 00:08:58,520 Speaker 2: about that cash and that short term bond bucket. If 187 00:08:58,520 --> 00:09:00,760 Speaker 2: you're within maybe five years or retire re hirement, well 188 00:09:01,120 --> 00:09:03,240 Speaker 2: you really shouldn't be relying on stocks to pay next 189 00:09:03,280 --> 00:09:05,120 Speaker 2: to year's bills. Even if the market is going great 190 00:09:05,160 --> 00:09:08,079 Speaker 2: guns as we've had the last several years, the stock 191 00:09:08,080 --> 00:09:10,520 Speaker 2: market should not be our checking account, end of story. 192 00:09:10,920 --> 00:09:13,000 Speaker 2: We usually want to see maybe two to three years 193 00:09:13,040 --> 00:09:15,800 Speaker 2: of spending in cash or short term fixed income or 194 00:09:15,840 --> 00:09:18,079 Speaker 2: maybe laddered CDs. If you know you need to spend 195 00:09:18,120 --> 00:09:20,559 Speaker 2: say five hundred thousand dollars in the first couple of 196 00:09:20,640 --> 00:09:22,880 Speaker 2: years of retirement, well then maybe and I just made 197 00:09:22,920 --> 00:09:25,040 Speaker 2: the math hard for myself, but let's figure out what 198 00:09:25,080 --> 00:09:27,079 Speaker 2: that is on a monthly basis and put it in 199 00:09:27,160 --> 00:09:29,840 Speaker 2: CDs that mature every single month over the next two 200 00:09:29,960 --> 00:09:32,080 Speaker 2: or three years. That way, you know for sure that 201 00:09:32,320 --> 00:09:34,880 Speaker 2: whatever happens to the market is not affecting your ability 202 00:09:34,920 --> 00:09:36,760 Speaker 2: to pay those bills, because that's sitting in a CD 203 00:09:36,840 --> 00:09:38,880 Speaker 2: that's going to come due next month, two months from now, 204 00:09:38,920 --> 00:09:41,000 Speaker 2: three months from now, and that's locked in at whatever 205 00:09:41,040 --> 00:09:43,560 Speaker 2: it is. So let's take our market susan example. If 206 00:09:43,559 --> 00:09:45,560 Speaker 2: they had seven hundred and fifty thousand dollars of that 207 00:09:45,640 --> 00:09:48,280 Speaker 2: five million in safe assets, they're not touching those stocks 208 00:09:48,360 --> 00:09:50,679 Speaker 2: during that twenty five percent drop. They can then let 209 00:09:50,720 --> 00:09:52,880 Speaker 2: the market recover and then go on to greater heights 210 00:09:52,880 --> 00:09:56,120 Speaker 2: as it tends to do. That single structural decision Bob, 211 00:09:56,160 --> 00:10:01,559 Speaker 2: that dramatically reduces sequence risk. Cash isn't laziness, isn't irresponsibility. 212 00:10:01,760 --> 00:10:04,400 Speaker 2: It gives you optionality. It's oil in the engine to 213 00:10:04,480 --> 00:10:06,400 Speaker 2: keep things running smoothly well. 214 00:10:06,400 --> 00:10:08,480 Speaker 1: And just to piggyback on that point, why do we 215 00:10:08,520 --> 00:10:10,760 Speaker 1: say two to three years, Because if you go back 216 00:10:10,800 --> 00:10:14,400 Speaker 1: and look historically, even at some of the huge market 217 00:10:14,400 --> 00:10:19,640 Speaker 1: declines we've experienced, I mean, just since the year two thousand, inevitably, 218 00:10:19,960 --> 00:10:23,920 Speaker 1: after a three year holding period, markets almost always fully 219 00:10:23,920 --> 00:10:28,400 Speaker 1: recover or even higher after the severe volatility. So having 220 00:10:28,440 --> 00:10:32,439 Speaker 1: that cushion in place allows you to emotionally calm down 221 00:10:32,480 --> 00:10:34,800 Speaker 1: a little bit. You're still going to see, you know, 222 00:10:34,920 --> 00:10:37,600 Speaker 1: a big part of your portfolio go down in value, 223 00:10:37,640 --> 00:10:41,319 Speaker 1: and that can be unsettling for people emotionally, and that's 224 00:10:41,440 --> 00:10:44,280 Speaker 1: you know, the job of a financial advisor to you know, 225 00:10:44,480 --> 00:10:46,520 Speaker 1: you know, keep you off the ledge and keep you calm. 226 00:10:46,559 --> 00:10:50,120 Speaker 1: But economically, if you've got those three years of cushion 227 00:10:50,160 --> 00:10:53,720 Speaker 1: in place, you know you financially do not put yourself 228 00:10:53,760 --> 00:10:56,280 Speaker 1: in a bad light. That's that's that's why that two 229 00:10:56,360 --> 00:10:59,000 Speaker 1: to three years makes a lot of sense, Brian. There's 230 00:10:59,040 --> 00:11:02,680 Speaker 1: other strategy out there called a guardrail strategy, where you know, 231 00:11:02,720 --> 00:11:06,800 Speaker 1: if markets are strong, you increase your distribution slightly, and 232 00:11:06,840 --> 00:11:09,400 Speaker 1: if markets are weak, you pull back on your spending. 233 00:11:09,720 --> 00:11:11,880 Speaker 1: I don't know about you, but in my thirty five 234 00:11:11,960 --> 00:11:15,280 Speaker 1: year career, I've never had a retiree come in and say, well, 235 00:11:15,679 --> 00:11:17,640 Speaker 1: the market's down a little bit. I think we're going 236 00:11:17,720 --> 00:11:20,760 Speaker 1: to lower our cost of living a little bit until 237 00:11:20,760 --> 00:11:25,280 Speaker 1: markets recover. I try to avoid that situation, how about you. 238 00:11:25,600 --> 00:11:28,400 Speaker 2: Yeah, and usual, if we've done our job correctly, we've 239 00:11:28,400 --> 00:11:31,080 Speaker 2: already modeled this out, We've done the stress testing up front, 240 00:11:31,120 --> 00:11:32,880 Speaker 2: and it may indicate that, yeah, you know what, if 241 00:11:32,920 --> 00:11:35,160 Speaker 2: this happens to you, it will just suck. It doesn't 242 00:11:35,160 --> 00:11:36,920 Speaker 2: mean you have to change anything. You're just going to 243 00:11:36,960 --> 00:11:39,560 Speaker 2: be grumpy for a little while reading bad headlines. But 244 00:11:39,559 --> 00:11:42,120 Speaker 2: if we've modeled this correctly, it shouldn't be making you 245 00:11:42,280 --> 00:11:46,240 Speaker 2: change how you expect to spend. Another point I want 246 00:11:46,280 --> 00:11:48,040 Speaker 2: to make here is rebalancing. 247 00:11:48,120 --> 00:11:48,240 Speaker 1: Right. 248 00:11:48,240 --> 00:11:51,199 Speaker 2: We talk about this all the time, rebalancing versus reacting. 249 00:11:51,240 --> 00:11:53,520 Speaker 2: So let's say you're seventy percent stocks and the market's 250 00:11:53,520 --> 00:11:55,960 Speaker 2: surge from there, Now you're eighty twenty. Cool, that's a 251 00:11:55,960 --> 00:11:58,839 Speaker 2: good thing, got more money. Rebalance though, lock in those gains, 252 00:11:58,880 --> 00:12:01,320 Speaker 2: and get it back down to seventy. It works in 253 00:12:01,320 --> 00:12:04,160 Speaker 2: the opposite direction too. If markets fall and your stock 254 00:12:04,400 --> 00:12:07,880 Speaker 2: allocation drops from seventy percent to sixty, Okay, that stinks, 255 00:12:07,880 --> 00:12:10,160 Speaker 2: no fun, But let's go ahead and rebalance. That means 256 00:12:10,200 --> 00:12:12,120 Speaker 2: we're going to sell some of the bond side and 257 00:12:12,160 --> 00:12:14,400 Speaker 2: buy some of the stock side, which are down. That's 258 00:12:14,440 --> 00:12:17,320 Speaker 2: how we got down to sixty percent. So a lot 259 00:12:17,360 --> 00:12:19,760 Speaker 2: of people have kind of forgotten about rebalancing because for 260 00:12:19,880 --> 00:12:21,840 Speaker 2: most of our working careers, we're looking at our four 261 00:12:21,840 --> 00:12:24,040 Speaker 2: to one case. Four to one case tend to stay 262 00:12:24,080 --> 00:12:27,120 Speaker 2: pretty well in balance because there is always cash flowing 263 00:12:27,120 --> 00:12:29,520 Speaker 2: into them and so they just don't get that far 264 00:12:29,520 --> 00:12:32,040 Speaker 2: out of whack. That means we spent thirty years being told, hey, 265 00:12:32,080 --> 00:12:33,920 Speaker 2: you got to rebalance, and then looking at our accounts 266 00:12:33,920 --> 00:12:36,360 Speaker 2: and mostly realizing that we kind of don't really have to. Well, 267 00:12:36,400 --> 00:12:39,079 Speaker 2: once you've got a fixed pile of money that will 268 00:12:39,280 --> 00:12:41,560 Speaker 2: need to be rebalanced on occasion, because you'll start to 269 00:12:41,600 --> 00:12:43,400 Speaker 2: notice it gets out of whack as the market does 270 00:12:43,400 --> 00:12:45,560 Speaker 2: what it does because we don't have that inflow of 271 00:12:45,600 --> 00:12:46,320 Speaker 2: cash anymore. 272 00:12:47,000 --> 00:12:49,200 Speaker 1: Here's the all Worth advice. The first five years of 273 00:12:49,240 --> 00:12:53,080 Speaker 1: retirement are when having a structure in place matters the most. 274 00:12:53,520 --> 00:12:58,679 Speaker 1: Build liquidity and flexibility before a volatility event tests you 275 00:12:58,760 --> 00:13:02,640 Speaker 1: both economically and emotionally. Coming up next, how to make 276 00:13:02,679 --> 00:13:05,600 Speaker 1: sure your four oh one k actually dovetails with your 277 00:13:05,679 --> 00:13:09,920 Speaker 1: overall wealth management plan and strategy. You're listening to Simply 278 00:13:09,960 --> 00:13:12,720 Speaker 1: Money presented by all Worth Financial on fifty five KRC 279 00:13:13,200 --> 00:13:20,679 Speaker 1: the talk station. You're listening to Simply Money presented by 280 00:13:20,720 --> 00:13:23,800 Speaker 1: all Worth Financial. I'm Bob Sponseller along with Brian James. 281 00:13:24,280 --> 00:13:26,559 Speaker 1: If you can't listen to Simply Money live every night, 282 00:13:26,640 --> 00:13:30,280 Speaker 1: subscribe and get our daily podcasts. Just search Simply Money 283 00:13:30,280 --> 00:13:33,840 Speaker 1: on the iHeart A excuse me, or wherever you find 284 00:13:34,160 --> 00:13:38,280 Speaker 1: your podcasts. If you get in a situation where you 285 00:13:38,440 --> 00:13:43,400 Speaker 1: just simply couldn't handle financial decisions tomorrow, would your plan 286 00:13:43,559 --> 00:13:48,320 Speaker 1: hold up, especially if you've got some complicated things going on, 287 00:13:48,480 --> 00:13:53,520 Speaker 1: like concentrated stock positions, complex titling, and private investments in 288 00:13:53,559 --> 00:13:57,679 Speaker 1: the mix. We'll talk about that straight ahead. If headlines 289 00:13:57,679 --> 00:14:00,320 Speaker 1: out of the Middle East have you suddenly logging into 290 00:14:00,360 --> 00:14:02,600 Speaker 1: your four oh one K maybe three, four or five 291 00:14:02,640 --> 00:14:05,720 Speaker 1: times a day, you're not alone. But before you start 292 00:14:05,800 --> 00:14:08,839 Speaker 1: moving money based on a performance chart, there are a 293 00:14:08,920 --> 00:14:14,000 Speaker 1: few mistakes that even very successful investors often make inside 294 00:14:14,040 --> 00:14:17,080 Speaker 1: their workplace retirement plan, Brian, So. 295 00:14:17,160 --> 00:14:19,480 Speaker 2: Let's talk about mistake number one. This can be looking 296 00:14:19,520 --> 00:14:23,320 Speaker 2: at a relatively recent return chart and making decisions based 297 00:14:23,320 --> 00:14:25,880 Speaker 2: off what did the best most recently. So you log 298 00:14:25,920 --> 00:14:27,440 Speaker 2: in your four O one K. You see, I've got 299 00:14:27,480 --> 00:14:29,720 Speaker 2: these eighteen mutual funds to choose from. I don't really 300 00:14:29,760 --> 00:14:31,560 Speaker 2: know the difference between them, and I hate this stuff. 301 00:14:31,600 --> 00:14:34,800 Speaker 2: It's boring. Hey, look performance numbers. Let's just find the 302 00:14:34,880 --> 00:14:37,800 Speaker 2: highest performing one and you sort by that five year performance. 303 00:14:38,080 --> 00:14:40,120 Speaker 2: That means the large cap growth fund is at the top. 304 00:14:40,160 --> 00:14:43,720 Speaker 2: It's up seventeen percent annualized large cap value. The blue chips, 305 00:14:43,720 --> 00:14:47,000 Speaker 2: the boring stuff only eleven percent. Why waste my time 306 00:14:47,040 --> 00:14:48,080 Speaker 2: on those tripps like. 307 00:14:48,040 --> 00:14:50,400 Speaker 1: The triple leverage bitcoin account, Brian. 308 00:14:51,000 --> 00:14:52,560 Speaker 2: I would love to see the four oh one K 309 00:14:52,680 --> 00:14:56,000 Speaker 2: that offers triple leverage bitcoin inside of it as an 310 00:14:56,000 --> 00:14:58,200 Speaker 2: option for its employees, and then have a long heart 311 00:14:58,200 --> 00:15:00,520 Speaker 2: to heart talk with the investment committee at that company. 312 00:15:01,480 --> 00:15:04,280 Speaker 2: So the blue chips are no fun. International that's only 313 00:15:04,280 --> 00:15:06,400 Speaker 2: six percent over the last five years. Well, that's obvious. 314 00:15:06,680 --> 00:15:08,360 Speaker 2: Let's just you know, don't waste my time with these 315 00:15:08,360 --> 00:15:10,320 Speaker 2: other two. Clearly I only need the one that gives 316 00:15:10,360 --> 00:15:12,040 Speaker 2: me seventeen percent, so we'll go with that. 317 00:15:12,240 --> 00:15:12,360 Speaker 1: This. 318 00:15:12,480 --> 00:15:14,600 Speaker 2: I also kind of liken this to people who say, 319 00:15:14,720 --> 00:15:17,240 Speaker 2: my four oh one K is paying x percent right now, 320 00:15:17,240 --> 00:15:19,560 Speaker 2: where my investment is paying x percent right now, as 321 00:15:19,560 --> 00:15:21,600 Speaker 2: if it's a slot machine or as if it's a 322 00:15:21,600 --> 00:15:23,560 Speaker 2: CD or something like ray. What it has done for 323 00:15:23,560 --> 00:15:25,680 Speaker 2: the last twelve months has absolutely squat to do with 324 00:15:25,720 --> 00:15:27,280 Speaker 2: what it's going to do in the next twelve months. 325 00:15:27,360 --> 00:15:28,800 Speaker 2: And you don't have to look in too much history 326 00:15:28,800 --> 00:15:31,400 Speaker 2: to see that. So the problem with this scenario, Bob, 327 00:15:31,640 --> 00:15:34,520 Speaker 2: that large cap growth fund is riding the surf that 328 00:15:34,640 --> 00:15:37,440 Speaker 2: is caused by Apple, Microsoft, and VideA, Amazon, all of 329 00:15:37,440 --> 00:15:41,040 Speaker 2: which have had a fantastic five years. However, the last 330 00:15:41,040 --> 00:15:43,440 Speaker 2: two years have been okay, but not as good that 331 00:15:43,520 --> 00:15:45,800 Speaker 2: international fund that that we poo pooed because it was 332 00:15:45,800 --> 00:15:48,280 Speaker 2: only returning six percent. That's been up thirty plus the 333 00:15:48,360 --> 00:15:51,280 Speaker 2: last two years. So make sure you understand it's not 334 00:15:51,400 --> 00:15:54,800 Speaker 2: about sorting by performance. It's about understanding what these different 335 00:15:54,800 --> 00:15:58,280 Speaker 2: funds do in different timeframes. Because if one thing is guaranteed, 336 00:15:58,520 --> 00:16:00,760 Speaker 2: it's that there ain't no guarantees. The world tends to 337 00:16:00,840 --> 00:16:02,520 Speaker 2: change well. 338 00:16:02,560 --> 00:16:05,640 Speaker 1: And then for people that tend to oversimplify this and 339 00:16:05,720 --> 00:16:09,080 Speaker 1: still think they're diversified, now imagine outside your four one 340 00:16:09,160 --> 00:16:12,880 Speaker 1: K plan in maybe your brokerage account and lo and behold, 341 00:16:12,920 --> 00:16:14,440 Speaker 1: you go look at that account and what do you 342 00:16:14,480 --> 00:16:17,480 Speaker 1: own in there? A huge position in an s and 343 00:16:17,520 --> 00:16:21,200 Speaker 1: P five hundred ETF Why because it's quote unquote diversified. 344 00:16:21,280 --> 00:16:23,800 Speaker 1: The fees are low, YadA, YadA, YadA, you know. And 345 00:16:23,840 --> 00:16:28,920 Speaker 1: then a tech heavy direct indexy strategy, maybe concentrated company stock. 346 00:16:29,040 --> 00:16:33,120 Speaker 1: You think you're diversified, but you're actually doubling and in 347 00:16:33,160 --> 00:16:37,840 Speaker 1: some cases tripling down on the same exact exposures that 348 00:16:37,880 --> 00:16:39,600 Speaker 1: you have in your four to one K. And that's 349 00:16:39,640 --> 00:16:43,480 Speaker 1: what we call duplication risk, and you don't really feel it. 350 00:16:43,480 --> 00:16:48,040 Speaker 1: It all feels great until something major shifts, especially in 351 00:16:48,120 --> 00:16:53,480 Speaker 1: these mag seven stocks, tech stocks or growth stocks in general. 352 00:16:53,520 --> 00:16:55,520 Speaker 2: Brad, It's like placing two bets on the SAand on 353 00:16:55,560 --> 00:16:58,680 Speaker 2: the exact same horse and considering yourself diversified because you do, 354 00:16:58,720 --> 00:17:01,080 Speaker 2: indeed have two different tickets in your hand YEP. 355 00:17:02,360 --> 00:17:06,359 Speaker 1: And if geopolitical tensions hit like we're experiencing now, you know, 356 00:17:06,440 --> 00:17:10,680 Speaker 1: the whole energy market comes undone. Inflation expectations change, interest 357 00:17:10,760 --> 00:17:15,960 Speaker 1: rates move, Leadership can rotate quickly, leadership in sectors and companies, 358 00:17:16,240 --> 00:17:19,200 Speaker 1: and what was the top performer last year or the 359 00:17:19,280 --> 00:17:22,440 Speaker 1: last two or three years now suddenly becomes the laggard. 360 00:17:22,880 --> 00:17:25,760 Speaker 1: And now your entire portfolio could be leaning in the 361 00:17:25,760 --> 00:17:27,920 Speaker 1: same direction and not the right one. 362 00:17:28,080 --> 00:17:30,159 Speaker 2: Yeah, and you want to coordinate with your advisor because 363 00:17:30,200 --> 00:17:32,520 Speaker 2: all of this stuff, however you smush it together. You 364 00:17:32,600 --> 00:17:34,879 Speaker 2: do own a pile of things, and that pile is 365 00:17:34,920 --> 00:17:37,879 Speaker 2: your portfolio. That's your asset allocation. It's not just the 366 00:17:38,000 --> 00:17:40,520 Speaker 2: XYZ account. So we're not thinking only about what's the 367 00:17:40,520 --> 00:17:43,320 Speaker 2: asset allocation in this one particular account. It's what's my 368 00:17:43,400 --> 00:17:46,399 Speaker 2: asset allocation across everything I own. So well, give you 369 00:17:46,400 --> 00:17:48,159 Speaker 2: an example, I just talked about this the other day. 370 00:17:48,160 --> 00:17:50,879 Speaker 2: I've got a client who she's in her mid eighties, 371 00:17:51,359 --> 00:17:54,359 Speaker 2: and she is one hundred percent stocks complete equities in 372 00:17:54,400 --> 00:17:56,800 Speaker 2: the account that we manage for her, and every now 373 00:17:56,840 --> 00:17:58,960 Speaker 2: and then I have to remind our compliance department. We'll 374 00:17:58,960 --> 00:18:00,520 Speaker 2: catch onto this and they'll say, hey, what are you 375 00:18:00,560 --> 00:18:04,040 Speaker 2: doing to this this person here, she's obviously in advanced years, 376 00:18:04,040 --> 00:18:06,280 Speaker 2: and you've got a really aggressively position. And I say, yes, 377 00:18:06,600 --> 00:18:08,120 Speaker 2: just like last year when I told you that when 378 00:18:08,119 --> 00:18:11,520 Speaker 2: I explained it, that's because her other assets are in 379 00:18:11,600 --> 00:18:15,639 Speaker 2: a death benefit life insurance cash pile. Her husband passed away, 380 00:18:15,840 --> 00:18:18,359 Speaker 2: the death benefit paid into something that is paid a 381 00:18:18,480 --> 00:18:21,679 Speaker 2: locked five percent and is completely liquid. Can't get that 382 00:18:21,720 --> 00:18:24,880 Speaker 2: anywhere else. So she and I are considering that her 383 00:18:25,240 --> 00:18:28,399 Speaker 2: conservative her bond portion, if you will. And because it 384 00:18:28,440 --> 00:18:30,800 Speaker 2: sits there and it compounds at five percent, therefore the 385 00:18:30,800 --> 00:18:33,800 Speaker 2: stuff we can control. Yes, that's all aggressive, because her 386 00:18:33,800 --> 00:18:37,119 Speaker 2: asset allocation across the whole pile is about fifty to fifty, 387 00:18:37,200 --> 00:18:39,760 Speaker 2: which is perfect for what she's trying to accomplish, which 388 00:18:39,800 --> 00:18:41,520 Speaker 2: is to be able to keep up with inflation to 389 00:18:41,520 --> 00:18:45,000 Speaker 2: some extent, but obviously keep things fairly conservative for her 390 00:18:45,040 --> 00:18:48,159 Speaker 2: longer term needs. So again, look at the entire big picture, 391 00:18:48,280 --> 00:18:50,720 Speaker 2: not just the one account. Don't focus on that one 392 00:18:50,760 --> 00:18:51,840 Speaker 2: tree and ignore the forest. 393 00:18:52,800 --> 00:18:55,440 Speaker 1: Yeah, and then a last mistake we sometimes see people 394 00:18:55,520 --> 00:18:58,440 Speaker 1: make is just reacting to headlines with respect to their 395 00:18:58,440 --> 00:19:01,480 Speaker 1: four to one K plan. You know, for example, you're 396 00:19:01,520 --> 00:19:03,600 Speaker 1: sitting there, you know, you got a busy work day, 397 00:19:03,720 --> 00:19:06,200 Speaker 1: You've got you know, maybe fifteen minutes to sit at 398 00:19:06,200 --> 00:19:08,159 Speaker 1: your desk and eat your lunch at your desk. You 399 00:19:08,240 --> 00:19:11,120 Speaker 1: turn on, you know, some news channel and find out 400 00:19:11,119 --> 00:19:13,600 Speaker 1: what's going on, and it freaks you out, like the 401 00:19:13,760 --> 00:19:16,720 Speaker 1: media headlines always do. So lo and behold. You log 402 00:19:16,760 --> 00:19:18,480 Speaker 1: into your four to one K and say, I'm gonna 403 00:19:18,480 --> 00:19:20,520 Speaker 1: get out ahead of this. I'm gonna be smart, I'm 404 00:19:20,520 --> 00:19:23,359 Speaker 1: gonna move to cash, I'm gonna overweight to oil stocks. 405 00:19:23,359 --> 00:19:27,120 Speaker 1: I'm gonna make some rash decision because I've got thirteen 406 00:19:27,160 --> 00:19:29,920 Speaker 1: minutes in my day to feel like I'm controlling something 407 00:19:30,359 --> 00:19:34,120 Speaker 1: that almost never works. Brian. So again here's our all 408 00:19:34,119 --> 00:19:36,400 Speaker 1: Worth advice. Your four oh one K plan is not 409 00:19:36,560 --> 00:19:39,960 Speaker 1: just a side play account. It's a strategic piece of 410 00:19:40,000 --> 00:19:43,600 Speaker 1: your total wealth plan. So stop picking funds just off 411 00:19:43,600 --> 00:19:47,320 Speaker 1: a performance chart and start coordinating, coordinating your four oh 412 00:19:47,359 --> 00:19:51,800 Speaker 1: one K plan with everything else you own coming up next. 413 00:19:51,880 --> 00:19:56,280 Speaker 1: Success doesn't always equal satisfaction. How to move past a 414 00:19:56,359 --> 00:19:59,440 Speaker 1: career plateau. We'll get into that next. You're listening to 415 00:19:59,440 --> 00:20:02,359 Speaker 1: Simply Money presented by all Worth Financial on fifty five 416 00:20:02,480 --> 00:20:10,359 Speaker 1: KRC the talk station. You're listening to Simply Money presented 417 00:20:10,359 --> 00:20:13,520 Speaker 1: by all Worth Financial on Bob Sponseller along with Brian James. 418 00:20:13,600 --> 00:20:17,520 Speaker 1: Joined tonight by our career expert Julie Balki and Julie, 419 00:20:17,520 --> 00:20:20,400 Speaker 1: thanks as always for taking some time with us tonight 420 00:20:20,920 --> 00:20:24,720 Speaker 1: and interesting topic we're going to cover tonight, career plateaus. 421 00:20:24,880 --> 00:20:28,720 Speaker 1: What to do when we're feeling successful in our job 422 00:20:28,840 --> 00:20:32,760 Speaker 1: or in our career, but we're no longer feeling challenged. 423 00:20:33,080 --> 00:20:35,760 Speaker 1: How do you navigate people through that situation? 424 00:20:35,920 --> 00:20:38,760 Speaker 2: Julie, You know, there are a. 425 00:20:38,680 --> 00:20:41,840 Speaker 3: Lot of pivot points in our careers, like decision points, 426 00:20:41,880 --> 00:20:45,560 Speaker 3: where we feel maybe something is off. We want more, 427 00:20:45,640 --> 00:20:49,600 Speaker 3: we want different, we want less, and those are natural 428 00:20:50,480 --> 00:20:54,160 Speaker 3: moments in our career. The problem is that we've been 429 00:20:54,200 --> 00:20:57,400 Speaker 3: taught to just sort of swallow them down and continue 430 00:20:57,440 --> 00:21:00,280 Speaker 3: on and make the best of what we have. I 431 00:21:00,320 --> 00:21:03,119 Speaker 3: think the most important, smartest thing to do when it 432 00:21:03,160 --> 00:21:05,280 Speaker 3: comes to your career is when you're starting to feel 433 00:21:05,280 --> 00:21:08,360 Speaker 3: like my career is at a plateau. The first thing 434 00:21:08,359 --> 00:21:11,359 Speaker 3: you need to do is figure out why. What is 435 00:21:11,400 --> 00:21:15,520 Speaker 3: it specifically that has plateaued if you are if it's 436 00:21:15,560 --> 00:21:19,840 Speaker 3: things like income, if it's a level of responsibility, if 437 00:21:19,880 --> 00:21:24,639 Speaker 3: it's the depth of the challenging projects or not that 438 00:21:24,680 --> 00:21:28,600 Speaker 3: you get exposed to. You have to really articulate what 439 00:21:28,760 --> 00:21:32,159 Speaker 3: it is that it is plateaued, and before that, you 440 00:21:32,200 --> 00:21:34,080 Speaker 3: have to do that before you can figure out what 441 00:21:34,160 --> 00:21:37,600 Speaker 3: to do next. Once you can identify the source of 442 00:21:38,119 --> 00:21:43,880 Speaker 3: your discomfort, it's much easier to identify and so pinpointing that, Okay, 443 00:21:43,920 --> 00:21:45,560 Speaker 3: you know, I used to like this, This used to 444 00:21:45,600 --> 00:21:48,760 Speaker 3: work for me, it's not now, or I feel like 445 00:21:49,160 --> 00:21:52,600 Speaker 3: something's changed. The most important thing to do at that 446 00:21:52,680 --> 00:21:55,639 Speaker 3: point is to get into self discovery and investigatives mode. 447 00:21:55,680 --> 00:21:58,440 Speaker 3: What has changed. It could be something at work. It 448 00:21:58,560 --> 00:22:01,440 Speaker 3: could be a new leader. It could be the company 449 00:22:01,480 --> 00:22:03,960 Speaker 3: is changing customers or targets and it's not as fun 450 00:22:04,000 --> 00:22:06,840 Speaker 3: for you anymore. But it also could be just a 451 00:22:06,920 --> 00:22:10,600 Speaker 3: yearning from a real career standpoint to do something different. 452 00:22:10,960 --> 00:22:13,520 Speaker 3: Maybe you've reached the end of the rope or the 453 00:22:13,800 --> 00:22:16,280 Speaker 3: top of the ladder in what you do, and it's 454 00:22:16,280 --> 00:22:19,120 Speaker 3: time to do a serious pivot. So before we take 455 00:22:19,160 --> 00:22:22,520 Speaker 3: on big moves like that, it's really important to figure 456 00:22:22,560 --> 00:22:26,120 Speaker 3: out what's not working for me today and what am 457 00:22:26,119 --> 00:22:27,000 Speaker 3: I willing to do about it? 458 00:22:27,080 --> 00:22:29,640 Speaker 2: Hey, Julie, do you find that people get stuck from 459 00:22:29,640 --> 00:22:32,360 Speaker 2: a standpoint of well, this has been a good company, 460 00:22:32,480 --> 00:22:34,320 Speaker 2: and so whatever I do, it's just out of the 461 00:22:34,400 --> 00:22:36,520 Speaker 2: question that I might go somewhere else. I mean, it 462 00:22:36,560 --> 00:22:38,400 Speaker 2: seems like, yeah, people hide behind it all the time, 463 00:22:38,600 --> 00:22:39,720 Speaker 2: and how do you get over that? Home? 464 00:22:40,880 --> 00:22:43,800 Speaker 3: So I have four there's four pillars of career happiness. 465 00:22:43,840 --> 00:22:46,560 Speaker 3: One is you like what you do, second is you're 466 00:22:46,560 --> 00:22:49,439 Speaker 3: good at it. The third is you're getting paid in 467 00:22:49,480 --> 00:22:52,040 Speaker 3: a way that you can live. And the fourth is 468 00:22:52,119 --> 00:22:55,159 Speaker 3: you're you're doing it in the right place. And the 469 00:22:55,280 --> 00:23:00,480 Speaker 3: number one reason people leave their organizations is the fourth month, 470 00:23:00,800 --> 00:23:03,280 Speaker 3: which is it's either I don't like the culture anymore, 471 00:23:03,359 --> 00:23:05,359 Speaker 3: the mission, I don't like my leader. That's actually the 472 00:23:05,440 --> 00:23:08,960 Speaker 3: number one reason in that bucket. And so so when 473 00:23:09,000 --> 00:23:11,159 Speaker 3: you are in a situation when you look around and 474 00:23:11,200 --> 00:23:13,560 Speaker 3: say I really like it here, you know, I like 475 00:23:13,600 --> 00:23:17,720 Speaker 3: what we do I like my colleagues, I'm aligned with 476 00:23:17,760 --> 00:23:21,240 Speaker 3: a mission and it's still great. Then you owe it 477 00:23:21,280 --> 00:23:24,000 Speaker 3: to yourself to figure out to look around and say, 478 00:23:24,080 --> 00:23:27,760 Speaker 3: what is it? What else is available in this organization? 479 00:23:27,840 --> 00:23:30,720 Speaker 3: How am I I contribute? How might I take what's 480 00:23:30,760 --> 00:23:33,000 Speaker 3: on my plate? And you know, showed it up a 481 00:23:33,040 --> 00:23:35,959 Speaker 3: little bit? Maybe that adds something. Maybe it's you know, 482 00:23:35,960 --> 00:23:40,120 Speaker 3: get involved in something that's maybe not typically something you're 483 00:23:40,160 --> 00:23:43,000 Speaker 3: responsible for. Maybe you get involved on a different team. 484 00:23:43,480 --> 00:23:46,200 Speaker 3: Maybe you just sort of add something to your overall plate. 485 00:23:46,280 --> 00:23:49,040 Speaker 3: When you like where you are. I always tell people, 486 00:23:49,240 --> 00:23:52,119 Speaker 3: let's always try to figure out if you can fix 487 00:23:52,160 --> 00:23:56,000 Speaker 3: it where you are before you change into a culture 488 00:23:56,080 --> 00:24:00,439 Speaker 3: in an organization that's completely unknown to you and and 489 00:24:00,520 --> 00:24:02,760 Speaker 3: find that you might be in the same position or worse. 490 00:24:04,680 --> 00:24:07,520 Speaker 1: Julie to me, I think, correct me if I'm wrong. 491 00:24:07,560 --> 00:24:10,199 Speaker 1: But it seems that this comes down to communication. You know, 492 00:24:10,240 --> 00:24:13,000 Speaker 1: in that scenario you just talked about, And I got 493 00:24:13,000 --> 00:24:15,520 Speaker 1: a call yesterday from a young man who's just getting 494 00:24:15,560 --> 00:24:18,040 Speaker 1: started in his career. You know, I happened to coach 495 00:24:18,119 --> 00:24:21,000 Speaker 1: him in high school baseball, so we still have maintained 496 00:24:21,000 --> 00:24:23,520 Speaker 1: a connection, and he was in a place where he's 497 00:24:23,560 --> 00:24:25,720 Speaker 1: just like, Hey, I don't know what to do here, 498 00:24:26,320 --> 00:24:29,159 Speaker 1: and he's afraid to go talk to anybody about it. 499 00:24:29,520 --> 00:24:33,440 Speaker 1: So walk us through the most effective ways to navigate 500 00:24:33,480 --> 00:24:38,160 Speaker 1: this from a communication standpoint, Because people sometimes are afraid 501 00:24:38,160 --> 00:24:41,320 Speaker 1: to approach their boss, you know, if they express any 502 00:24:41,840 --> 00:24:45,720 Speaker 1: displeasure at all, they're afraid of repercussions. How do you 503 00:24:45,840 --> 00:24:49,399 Speaker 1: coach people how to broach the subject with folks in 504 00:24:49,440 --> 00:24:52,760 Speaker 1: the organization If you're trying to stay at the same 505 00:24:52,800 --> 00:24:56,119 Speaker 1: company for all the reasons you just mentioned, but you 506 00:24:56,240 --> 00:24:59,280 Speaker 1: have to have a conversation and because things need to change, 507 00:24:59,280 --> 00:25:00,280 Speaker 1: how do you navigate that? 508 00:25:01,760 --> 00:25:04,240 Speaker 3: And so I would touch it this way. I would 509 00:25:04,240 --> 00:25:07,560 Speaker 3: say something like, I'd like to talk to you about 510 00:25:08,000 --> 00:25:10,840 Speaker 3: the work I'm doing, what might be next, what things 511 00:25:10,880 --> 00:25:13,600 Speaker 3: I'm interested in doing beyond what I'm doing now, can 512 00:25:13,640 --> 00:25:15,720 Speaker 3: we sit down and talk about that? And so you 513 00:25:15,760 --> 00:25:19,120 Speaker 3: want to open it up not as a I'm not happy, 514 00:25:19,480 --> 00:25:21,879 Speaker 3: well can you do for me? Anything that smacks of 515 00:25:21,920 --> 00:25:24,880 Speaker 3: that is when we start calling someone entitled. So it's 516 00:25:24,920 --> 00:25:28,440 Speaker 3: more about how can I have a mutually beneficial conversation 517 00:25:28,960 --> 00:25:32,000 Speaker 3: about my role in this organization than what I see 518 00:25:32,000 --> 00:25:35,960 Speaker 3: myself doing different different things or doing more of or 519 00:25:36,040 --> 00:25:38,520 Speaker 3: less of moving forward, and then go to that meeting, 520 00:25:38,880 --> 00:25:40,840 Speaker 3: go to that comp Once you set it up like that, 521 00:25:41,400 --> 00:25:44,400 Speaker 3: go to the conversation with ideas. Be ready to say 522 00:25:45,240 --> 00:25:47,360 Speaker 3: I really feel like I have You know, I spent 523 00:25:47,440 --> 00:25:49,560 Speaker 3: a lot of time over here on these kinds of projects, 524 00:25:49,760 --> 00:25:51,800 Speaker 3: which has been great. I really feel like I know 525 00:25:51,880 --> 00:25:54,879 Speaker 3: it really really well. What I'd really love to do 526 00:25:55,080 --> 00:25:57,520 Speaker 3: moving forward if we can find an opportunity, I'd like 527 00:25:57,600 --> 00:26:00,680 Speaker 3: to do this, or what marketing is doing is really 528 00:26:00,680 --> 00:26:02,679 Speaker 3: interesting to me. So you want to go in with 529 00:26:02,800 --> 00:26:07,680 Speaker 3: a spirit of how can we work together to help 530 00:26:07,800 --> 00:26:11,440 Speaker 3: me direct my skills and abilities and my experience here 531 00:26:12,000 --> 00:26:16,560 Speaker 3: at something to continue helping this organization versus I'm not happy? 532 00:26:16,800 --> 00:26:20,080 Speaker 3: What should I do? Because that's where you are offloading 533 00:26:20,119 --> 00:26:23,679 Speaker 3: your career management onto somebody else, and that's not fair 534 00:26:23,720 --> 00:26:25,879 Speaker 3: to them, and it's also not realistic. 535 00:26:26,280 --> 00:26:28,119 Speaker 2: Julie, So I want to I want to go slightly 536 00:26:28,160 --> 00:26:30,399 Speaker 2: different direction here because I think a lot there's a 537 00:26:30,400 --> 00:26:32,840 Speaker 2: lot of drum beats out there over the last couple 538 00:26:32,880 --> 00:26:35,160 Speaker 2: decades about you know, pulling yourself up by your own 539 00:26:35,160 --> 00:26:37,600 Speaker 2: bootstraps and being your own boss and all that kind 540 00:26:37,600 --> 00:26:40,800 Speaker 2: of stuff. How often do you run across people for 541 00:26:40,840 --> 00:26:43,200 Speaker 2: whom they're they're may be leaning toward I want to 542 00:26:43,240 --> 00:26:45,520 Speaker 2: break away and start my own thing. You know, we're 543 00:26:45,520 --> 00:26:47,399 Speaker 2: fortunate here in Cincinnati. We have a lot of fortune 544 00:26:47,400 --> 00:26:50,080 Speaker 2: five hundred companies around us, so we're all somebody's employee, 545 00:26:50,080 --> 00:26:52,000 Speaker 2: and that's a wonderful structure that we have. But do 546 00:26:52,080 --> 00:26:54,119 Speaker 2: people often come to you and say, forget it, I 547 00:26:54,160 --> 00:26:55,840 Speaker 2: just want to bust out and do my own thing. 548 00:26:56,119 --> 00:26:57,639 Speaker 2: And what is your advice for them? Because that can 549 00:26:57,680 --> 00:26:59,480 Speaker 2: be an exhilarating and terrifying step. 550 00:27:00,840 --> 00:27:04,400 Speaker 3: It is so picture. You've got two buckets, and one 551 00:27:04,400 --> 00:27:07,280 Speaker 3: of them is everything in that bucket is your career 552 00:27:07,280 --> 00:27:10,040 Speaker 3: and your job right now, and the other bucket is 553 00:27:10,080 --> 00:27:12,159 Speaker 3: what you want to build. First of all, you've got 554 00:27:12,200 --> 00:27:14,440 Speaker 3: to get an attempting You've really got to get clarity 555 00:27:14,560 --> 00:27:17,320 Speaker 3: on what you want to do, what the market is 556 00:27:17,320 --> 00:27:19,439 Speaker 3: for it. All that due diligent stuff, and what we 557 00:27:19,520 --> 00:27:21,880 Speaker 3: counsel people on is once you've figured out that there 558 00:27:21,920 --> 00:27:23,440 Speaker 3: is a market and there is a need for it, 559 00:27:23,520 --> 00:27:25,119 Speaker 3: just know that it's going to take a lot longer 560 00:27:25,160 --> 00:27:27,960 Speaker 3: than you think to do it just because it's a 561 00:27:28,000 --> 00:27:30,919 Speaker 3: good just because there's a demand, just because it's a 562 00:27:30,920 --> 00:27:33,239 Speaker 3: good idea, it doesn't mean people will pay for it. 563 00:27:33,240 --> 00:27:35,199 Speaker 3: And a lot of entrepreneurs coud that out. And so, 564 00:27:35,720 --> 00:27:38,200 Speaker 3: how can you test while you're still keeping one eye 565 00:27:38,240 --> 00:27:41,040 Speaker 3: on keeping your job. How can you test your ideas? 566 00:27:41,320 --> 00:27:44,520 Speaker 3: How can you connect with people in a similar or 567 00:27:44,560 --> 00:27:48,000 Speaker 3: adjacent space to get their ideas, And so that you 568 00:27:48,080 --> 00:27:51,960 Speaker 3: are slowly filling the second bucket, And at that point 569 00:27:52,040 --> 00:27:54,720 Speaker 3: you'll know if you get to the point where you 570 00:27:54,880 --> 00:27:59,119 Speaker 3: gathered knowledge, information resources, you're testing your theory. You're starting 571 00:27:59,160 --> 00:28:01,080 Speaker 3: to get some real interes people who are willing to 572 00:28:01,080 --> 00:28:03,760 Speaker 3: pay you. Then at some point you've got to let go. 573 00:28:03,880 --> 00:28:05,399 Speaker 3: You've got to dump out that other bucket. 574 00:28:05,680 --> 00:28:08,600 Speaker 1: Great advice is always Julie, thanks again for spending time 575 00:28:08,640 --> 00:28:11,040 Speaker 1: with us tonight. You're listening to Simply Money, presented by 576 00:28:11,080 --> 00:28:14,480 Speaker 1: all Worth Financial on fifty five KRC, the talk station. 577 00:28:19,359 --> 00:28:21,640 Speaker 1: You're listening to Simply Money You're presented by all Worth 578 00:28:21,680 --> 00:28:25,040 Speaker 1: Financial on Bob Spondseller along with Brian James. You have 579 00:28:25,080 --> 00:28:27,520 Speaker 1: a financial question you'd like for us to answer. There's 580 00:28:27,560 --> 00:28:30,240 Speaker 1: a red button you can click if you are listening 581 00:28:30,320 --> 00:28:33,119 Speaker 1: to the show on the iHeart app. Simply record your 582 00:28:33,200 --> 00:28:37,040 Speaker 1: question and it will come straight to us, all right, Brian, 583 00:28:37,080 --> 00:28:39,760 Speaker 1: get ready for Tom and Mason. He says, our financial 584 00:28:39,800 --> 00:28:44,080 Speaker 1: life is split between different advisors, investments in one place, 585 00:28:44,640 --> 00:28:48,520 Speaker 1: taxes in another, estate planning somewhere else. How do you 586 00:28:48,640 --> 00:28:51,600 Speaker 1: know if everyone's actually on the same page. What a 587 00:28:51,600 --> 00:28:52,240 Speaker 1: great question. 588 00:28:52,400 --> 00:28:54,080 Speaker 2: That is a great question, and that can be a 589 00:28:54,080 --> 00:28:56,080 Speaker 2: bigger risk than a lot of people realize. And it's 590 00:28:56,080 --> 00:28:58,320 Speaker 2: not market risk, right. Whenever we hear risk in the 591 00:28:58,320 --> 00:29:01,040 Speaker 2: financial planning space, we think of easy stock markets. But 592 00:29:01,160 --> 00:29:03,480 Speaker 2: we're not talking about that. We're talking about coordination risk. 593 00:29:03,800 --> 00:29:06,240 Speaker 2: So when your life is sp split this way where 594 00:29:06,240 --> 00:29:09,120 Speaker 2: you've got everything in every place, it's not really whether 595 00:29:09,240 --> 00:29:13,040 Speaker 2: the strategy is professional or competent. You might have entirely 596 00:29:13,040 --> 00:29:15,960 Speaker 2: perfectly professional people running these various things. It's whether there's 597 00:29:15,960 --> 00:29:19,120 Speaker 2: any integration happening. So here's how to kind of do 598 00:29:19,120 --> 00:29:21,360 Speaker 2: a litmus check for this. Ask yourself this, does your 599 00:29:21,360 --> 00:29:24,560 Speaker 2: investment allocation reflect your tax reality? For example, if you're 600 00:29:24,600 --> 00:29:27,640 Speaker 2: in a high marginal bracket, are you deliberately managing that 601 00:29:27,760 --> 00:29:31,680 Speaker 2: asset location? You might have tax inefficient assets and iras 602 00:29:31,880 --> 00:29:34,720 Speaker 2: Hopefully you do the tax efficient ones you want that 603 00:29:34,800 --> 00:29:38,000 Speaker 2: On the brokerage side, if your tax people are different 604 00:29:38,040 --> 00:29:40,480 Speaker 2: than your investment people and you've never put them together, 605 00:29:40,600 --> 00:29:44,360 Speaker 2: or you don't connect the information, then your investment person 606 00:29:44,440 --> 00:29:46,200 Speaker 2: might have no idea that you're actually in a pretty 607 00:29:46,240 --> 00:29:48,360 Speaker 2: high bracket if they're not asking that question, and they 608 00:29:48,400 --> 00:29:50,440 Speaker 2: might have you in investments that are cranking out capital 609 00:29:50,480 --> 00:29:53,600 Speaker 2: gains and dividend distributions, forcing you to pay higher taxes 610 00:29:53,600 --> 00:29:56,240 Speaker 2: than you're really benefiting from. You know, Second, does that 611 00:29:56,280 --> 00:29:58,440 Speaker 2: a state plan? Does that match how your accounts are 612 00:29:58,480 --> 00:30:02,800 Speaker 2: actually titled? Or may know how everything should be titled, 613 00:30:03,000 --> 00:30:05,240 Speaker 2: they but may not have circled back to you through 614 00:30:05,640 --> 00:30:07,920 Speaker 2: your investment advisor and your bank to make sure that 615 00:30:07,960 --> 00:30:11,120 Speaker 2: your assets are actually titled. A lot of lawyers of 616 00:30:11,280 --> 00:30:13,800 Speaker 2: extremely professional, very good at their jobs, but they don't 617 00:30:13,800 --> 00:30:15,520 Speaker 2: really They'll they'll tell you what you need to do. Well, 618 00:30:15,520 --> 00:30:17,400 Speaker 2: they'll give you a quick brochure that says, here, follow 619 00:30:17,440 --> 00:30:19,800 Speaker 2: these steps and get your counse retitled, but they don't 620 00:30:19,880 --> 00:30:22,880 Speaker 2: tend to push people to actually to actually go do it. 621 00:30:23,160 --> 00:30:25,400 Speaker 2: I would say three out of four of people that 622 00:30:25,440 --> 00:30:28,440 Speaker 2: come in with a trust document when we ask the question, okay, cool, 623 00:30:28,440 --> 00:30:30,680 Speaker 2: this looks good. What does it own? What are you 624 00:30:30,720 --> 00:30:32,920 Speaker 2: talking about? I have a trust. I'm done now you don't. 625 00:30:32,960 --> 00:30:35,680 Speaker 2: If you didn't put anything in the trust, it does nothing. 626 00:30:35,920 --> 00:30:38,640 Speaker 2: So be sure you've got these things coordinated and you 627 00:30:38,880 --> 00:30:42,760 Speaker 2: you'll lower that risk of missing these things where you 628 00:30:42,640 --> 00:30:45,120 Speaker 2: know you should be paying a little more attention. So 629 00:30:45,200 --> 00:30:47,000 Speaker 2: let's move on to a Brian and ken Wood. Brian 630 00:30:47,120 --> 00:30:49,720 Speaker 2: starting to think about what would happen if he or 631 00:30:49,720 --> 00:30:53,479 Speaker 2: his spouse becomes cognitively impaired. What financial safeguards should they 632 00:30:53,480 --> 00:30:54,040 Speaker 2: have in place? 633 00:30:54,040 --> 00:30:57,040 Speaker 1: Bob Well, Brian, good for you for getting out in 634 00:30:57,040 --> 00:30:59,000 Speaker 1: front of this and thinking ahead. A lot of people 635 00:30:59,040 --> 00:30:59,480 Speaker 1: will thank you. 636 00:30:59,560 --> 00:31:00,960 Speaker 2: Thank you. I appreciate that. 637 00:31:00,920 --> 00:31:03,760 Speaker 1: Something actually happens. So, you know, the first thing that 638 00:31:03,800 --> 00:31:06,760 Speaker 1: comes to mind is powers of attorney. And you want 639 00:31:06,800 --> 00:31:09,880 Speaker 1: a power of attorney for financial decisions and a power 640 00:31:09,920 --> 00:31:12,760 Speaker 1: of attorney for health care decisions. And you don't have 641 00:31:12,840 --> 00:31:15,680 Speaker 1: to name the same person because we often find, you know, 642 00:31:15,720 --> 00:31:18,640 Speaker 1: when when talking to clients and thinking about what roles 643 00:31:18,680 --> 00:31:22,400 Speaker 1: their kids should and should not be playing, we often 644 00:31:22,440 --> 00:31:25,120 Speaker 1: come up with having a different power of attorney, you know, 645 00:31:25,320 --> 00:31:29,760 Speaker 1: just based on gifts and abilities, temperament, and then location. 646 00:31:30,040 --> 00:31:32,680 Speaker 1: You know where these kids are located, it matters, and 647 00:31:33,800 --> 00:31:35,840 Speaker 1: you know, so have that power of attorney in place. 648 00:31:35,920 --> 00:31:39,160 Speaker 1: That's the legal authority from a financial standpoint, to act 649 00:31:39,200 --> 00:31:42,160 Speaker 1: on your behalf if you are unable to do so, 650 00:31:42,160 --> 00:31:44,640 Speaker 1: so Brian, in your case, you can start with your 651 00:31:44,640 --> 00:31:48,280 Speaker 1: wife as the primary and then use one of your kids. 652 00:31:48,360 --> 00:31:50,160 Speaker 1: You know, hopefully your kids are able to handle it 653 00:31:50,160 --> 00:31:53,280 Speaker 1: as a backup. Get that in place, because that gives 654 00:31:53,280 --> 00:31:57,600 Speaker 1: your financial institutions the permission to take direction from those 655 00:31:57,640 --> 00:32:01,800 Speaker 1: folks if something happens. And I would say, secondly, away 656 00:32:01,840 --> 00:32:05,000 Speaker 1: from all the legal stuff and the paperwork, have a 657 00:32:05,040 --> 00:32:09,240 Speaker 1: family discussion. Very few people do this, but I think 658 00:32:09,280 --> 00:32:12,160 Speaker 1: it's invaluable to just sit down, get all your kids 659 00:32:12,160 --> 00:32:14,400 Speaker 1: and your spouse in the same room, and say, look, 660 00:32:14,440 --> 00:32:17,040 Speaker 1: if something happens to me, you know, just from a 661 00:32:17,080 --> 00:32:20,320 Speaker 1: practical standpoint, here's what I want to have happen. And 662 00:32:20,480 --> 00:32:23,600 Speaker 1: have a dialogue about that. And make sure that the 663 00:32:23,640 --> 00:32:26,480 Speaker 1: people you think can step in and do these things 664 00:32:26,520 --> 00:32:31,120 Speaker 1: for you are able and willing to do so, things 665 00:32:31,160 --> 00:32:34,720 Speaker 1: like taking over the bank account, paying the bills, meeting 666 00:32:34,760 --> 00:32:38,000 Speaker 1: with the financial advisor. Make sure upfront that people feel 667 00:32:38,040 --> 00:32:40,760 Speaker 1: good about filling those roles that you might think or 668 00:32:40,840 --> 00:32:43,360 Speaker 1: hope they're going to fill and just have an open 669 00:32:43,360 --> 00:32:46,640 Speaker 1: and honest conversation now before you get in a situation 670 00:32:46,720 --> 00:32:50,400 Speaker 1: where something happens. Hope that helps, all right? Greg in 671 00:32:50,480 --> 00:32:55,320 Speaker 1: Westchester says, we've accumulated stock options and restricted stock over 672 00:32:55,520 --> 00:32:58,680 Speaker 1: many years. How do you manage those without letting them 673 00:32:58,760 --> 00:33:01,000 Speaker 1: quietly do your portfolio? 674 00:33:01,040 --> 00:33:04,560 Speaker 2: Brian, Yeah, this is a very common thing we see 675 00:33:04,560 --> 00:33:06,280 Speaker 2: in this area. We have a lot of companies around 676 00:33:06,280 --> 00:33:08,680 Speaker 2: here that are in the fortune five hundred space and 677 00:33:08,720 --> 00:33:10,600 Speaker 2: are probably traded, and so of course a lot of 678 00:33:10,600 --> 00:33:13,440 Speaker 2: those come with stock options or restricted stock options or 679 00:33:13,440 --> 00:33:16,040 Speaker 2: restricted stock grants and so forth. They don't feel like 680 00:33:16,120 --> 00:33:18,680 Speaker 2: traditional investments because they were given to you as part 681 00:33:18,680 --> 00:33:21,440 Speaker 2: of your compensation package. But really, at the end of 682 00:33:21,480 --> 00:33:23,760 Speaker 2: the day, that's no different than if you decided to 683 00:33:23,800 --> 00:33:25,840 Speaker 2: write a check to a brokerage house or something to 684 00:33:25,840 --> 00:33:29,240 Speaker 2: buy those shares. It's still just individual company stock. And 685 00:33:29,320 --> 00:33:31,760 Speaker 2: if you don't manage a delivery that that can overwhelm 686 00:33:31,840 --> 00:33:33,920 Speaker 2: your allocation, usually kind of does and a lot of 687 00:33:33,920 --> 00:33:36,120 Speaker 2: times people are aware of this. You know, my friends 688 00:33:36,120 --> 00:33:38,280 Speaker 2: at P ANDNG get very sensitive to what P and 689 00:33:38,320 --> 00:33:40,760 Speaker 2: G stock does in the last couple of years before retirement, 690 00:33:40,960 --> 00:33:42,800 Speaker 2: because no matter what they do to spread it out, 691 00:33:42,840 --> 00:33:45,080 Speaker 2: they're still going to have too much of it. No 692 00:33:45,120 --> 00:33:47,760 Speaker 2: matter how great any stock is, you know, you can 693 00:33:47,760 --> 00:33:50,600 Speaker 2: still have too much just by just by your company 694 00:33:50,640 --> 00:33:53,160 Speaker 2: being too generous to you quote unquote. So the first 695 00:33:53,160 --> 00:33:55,600 Speaker 2: thing is make sure you understand what your true exposure is. 696 00:33:55,800 --> 00:33:58,520 Speaker 2: Don't only look at the vested shares, look at those 697 00:33:58,600 --> 00:34:02,400 Speaker 2: vested units or the unvested as well, you know, in 698 00:34:02,440 --> 00:34:04,880 Speaker 2: the money options, even all of that stuff. Then add 699 00:34:04,920 --> 00:34:07,480 Speaker 2: your existing company stock. Then you can figure out, all 700 00:34:07,520 --> 00:34:09,320 Speaker 2: of a sudden, I might have thirty fifty percent or 701 00:34:09,360 --> 00:34:11,520 Speaker 2: maybe even more of my net worth tied to one company, 702 00:34:11,680 --> 00:34:14,880 Speaker 2: not to mention the fact that that's where I currently work. Therefore, 703 00:34:14,920 --> 00:34:16,960 Speaker 2: if I lose my job because the company has hit 704 00:34:17,000 --> 00:34:19,400 Speaker 2: the skids, well now, all of a sudden, my entire 705 00:34:19,440 --> 00:34:22,959 Speaker 2: financial life has been severely impacted. So you know, because 706 00:34:22,960 --> 00:34:24,839 Speaker 2: that's where my paycheck comes from. So that's a double 707 00:34:24,920 --> 00:34:27,719 Speaker 2: risk there. Make sure you have a cell discipline and 708 00:34:27,760 --> 00:34:31,080 Speaker 2: make sure that exists before emotion enters the picture. Restricted 709 00:34:31,120 --> 00:34:34,600 Speaker 2: stock units those are usually taxes ordinary income at vesting, 710 00:34:34,880 --> 00:34:37,720 Speaker 2: So from a planning standpoint, that means holding them after 711 00:34:37,800 --> 00:34:41,200 Speaker 2: vesting is an active decision to increase concentration. You could 712 00:34:41,200 --> 00:34:43,560 Speaker 2: sell these, but by ignoring it, you chose not to. 713 00:34:43,920 --> 00:34:46,520 Speaker 2: Therefore you're choosing a higher concentration of stock. So make 714 00:34:46,560 --> 00:34:48,960 Speaker 2: sure that it might be as simple as you know what. 715 00:34:48,960 --> 00:34:50,719 Speaker 2: Whatever the taxes are, they are, they're going to come 716 00:34:50,719 --> 00:34:52,560 Speaker 2: around sooner or later. I'm going to sell these as 717 00:34:52,560 --> 00:34:54,480 Speaker 2: soon as I can, because even after that I will 718 00:34:54,520 --> 00:34:56,800 Speaker 2: still have too much. So you don't have to stay 719 00:34:56,800 --> 00:34:59,560 Speaker 2: married to them just because taxes, as Bob often says, 720 00:34:59,560 --> 00:35:01,239 Speaker 2: don't let the tax tail wag the dog. 721 00:35:01,960 --> 00:35:03,959 Speaker 1: Coming up next, Brian and I are going to tag 722 00:35:04,000 --> 00:35:06,319 Speaker 1: team this one, just talking about with everything going on 723 00:35:06,400 --> 00:35:11,000 Speaker 1: in the Middle East right now this week, what's actually 724 00:35:11,040 --> 00:35:13,520 Speaker 1: going on in the markets, and more importantly what's not 725 00:35:13,680 --> 00:35:16,720 Speaker 1: going on, just so people don't overreact. Here, you're listening 726 00:35:16,760 --> 00:35:19,600 Speaker 1: to Simply Money presented by all Worth Financial on fifty 727 00:35:19,600 --> 00:35:27,399 Speaker 1: five KRC, the talk station. You're listening to Simply Money 728 00:35:27,480 --> 00:35:30,640 Speaker 1: presented by all Worth Financial on Bob's sponseller along with 729 00:35:30,680 --> 00:35:33,320 Speaker 1: Brian James and I want to take a couple of 730 00:35:33,360 --> 00:35:35,360 Speaker 1: minutes tonight just at the end of the show just 731 00:35:35,440 --> 00:35:37,720 Speaker 1: to talk about, you know, because it's top of mind 732 00:35:37,840 --> 00:35:41,319 Speaker 1: right now and for good reason everybody's concerned about what's 733 00:35:41,360 --> 00:35:44,080 Speaker 1: going on here over in the Middle East and concerned 734 00:35:44,080 --> 00:35:47,480 Speaker 1: about not only potential loss of life, but how that 735 00:35:47,520 --> 00:35:50,759 Speaker 1: could potentially rock the markets. And Brian, I just want 736 00:35:50,760 --> 00:35:52,799 Speaker 1: to touch on the fact that, you know, things have 737 00:35:52,880 --> 00:35:57,360 Speaker 1: been relatively calm. I mean, in other words, if you 738 00:35:57,560 --> 00:35:59,960 Speaker 1: just looked at a chart of the broad stock market 739 00:36:00,080 --> 00:36:05,200 Speaker 1: it in terms of performance up or down, you would 740 00:36:05,239 --> 00:36:07,959 Speaker 1: have never known that we even have a conflict going 741 00:36:08,000 --> 00:36:09,560 Speaker 1: on in the Middle East. You know, there's been a 742 00:36:09,640 --> 00:36:12,000 Speaker 1: little bit of volatility. Markets tend to go down in 743 00:36:12,040 --> 00:36:14,399 Speaker 1: the morning up at the end of the day, and 744 00:36:14,960 --> 00:36:18,279 Speaker 1: there is no reason to panic right now. And I 745 00:36:18,320 --> 00:36:21,520 Speaker 1: think part of the reason for that and jump in here. 746 00:36:22,440 --> 00:36:25,040 Speaker 1: It's just all a matter of perspective. But I think 747 00:36:25,120 --> 00:36:28,600 Speaker 1: markets are already pricing in, you know, this whole Strait 748 00:36:28,640 --> 00:36:32,640 Speaker 1: of Hormuz situation, because that's where twenty percent of the 749 00:36:32,680 --> 00:36:36,239 Speaker 1: world's oil and liquid natural gas flows through. And as 750 00:36:36,239 --> 00:36:38,480 Speaker 1: I talked about earlier in the week, there's a lot 751 00:36:38,520 --> 00:36:41,840 Speaker 1: of people concerned about, you know, the flow of oil 752 00:36:41,920 --> 00:36:45,440 Speaker 1: and gas through there, not only the Middle Eastern countries 753 00:36:45,480 --> 00:36:48,120 Speaker 1: and the United States, but China. So I think what 754 00:36:48,280 --> 00:36:51,600 Speaker 1: markets are pricing in here is if you've got you know, 755 00:36:51,800 --> 00:36:55,600 Speaker 1: world rivals and you know enemies here in agreement that 756 00:36:55,640 --> 00:36:58,279 Speaker 1: we got to get that stuff flowing through here asap. 757 00:36:58,600 --> 00:37:01,759 Speaker 1: I think the market's pricing in that sooner or later here, 758 00:37:02,000 --> 00:37:04,600 Speaker 1: And I'm saying sooner we're going to get that stuff 759 00:37:04,640 --> 00:37:07,080 Speaker 1: flowing through the straight of hermoves. And I think that's 760 00:37:07,160 --> 00:37:11,880 Speaker 1: why markets are not panicking here. And then just a reminder, 761 00:37:12,040 --> 00:37:15,880 Speaker 1: are always Chief Investment Officer Andy Stout shared with us 762 00:37:15,920 --> 00:37:18,560 Speaker 1: earlier in the week, we've come out of a very 763 00:37:18,600 --> 00:37:21,640 Speaker 1: good fourth quarter earning season. I mean, going into fourth 764 00:37:21,680 --> 00:37:26,040 Speaker 1: quarter earning season, all the analysts out there were, you know, 765 00:37:26,120 --> 00:37:28,960 Speaker 1: predicting maybe an eight point four percent growth rate in 766 00:37:29,040 --> 00:37:32,080 Speaker 1: terms of earnings. We hit thirteen and a half. So 767 00:37:32,120 --> 00:37:34,920 Speaker 1: the earnings numbers have been very good. And even the 768 00:37:35,000 --> 00:37:38,800 Speaker 1: full year forecast for twenty twenty six are for thirteen 769 00:37:38,880 --> 00:37:41,600 Speaker 1: percent average earnings growth in the S and P five 770 00:37:41,680 --> 00:37:44,800 Speaker 1: hundred stocks. And I'll just tell you historically, if you 771 00:37:44,880 --> 00:37:49,000 Speaker 1: get thirteen percent earnings growth, stock market's not going down, 772 00:37:49,239 --> 00:37:49,960 Speaker 1: it's going up. 773 00:37:50,920 --> 00:37:53,479 Speaker 2: So you're you're tagging me in with thirty seconds to go, okay, 774 00:37:53,520 --> 00:37:55,279 Speaker 2: all right, great, so let me give you my two 775 00:37:55,320 --> 00:37:57,600 Speaker 2: bits here, Bob. The thing I want to point out 776 00:37:57,600 --> 00:38:01,279 Speaker 2: for Miami teasing you my experience is, you know, a 777 00:38:01,320 --> 00:38:02,800 Speaker 2: lot of people will say, again, Bet, you're getting a 778 00:38:02,800 --> 00:38:04,279 Speaker 2: lot of calls, and that's kind of their gauge for 779 00:38:04,320 --> 00:38:06,160 Speaker 2: how crazy are things out there? And I would say, no, 780 00:38:06,400 --> 00:38:09,400 Speaker 2: I've gotten a handful of calls from people that I expect, 781 00:38:09,440 --> 00:38:10,440 Speaker 2: I know who the ones are going to be a 782 00:38:10,440 --> 00:38:12,799 Speaker 2: little more sensitive to things. But what I will say 783 00:38:12,960 --> 00:38:15,760 Speaker 2: is it is the for meetings that are already scheduled, 784 00:38:16,040 --> 00:38:17,840 Speaker 2: these headlines are the very first thing we want to 785 00:38:17,840 --> 00:38:19,880 Speaker 2: talk about. So in other words, it's not really drawing 786 00:38:19,880 --> 00:38:21,880 Speaker 2: people to the phones to be worried about it, but 787 00:38:21,960 --> 00:38:24,000 Speaker 2: it does come up in our meetings. So yeah, And 788 00:38:24,000 --> 00:38:27,360 Speaker 2: in these geopolitical events, they rarely create lasting bear markets. Historically, 789 00:38:27,440 --> 00:38:30,160 Speaker 2: markets are higher three to twelve months following most of 790 00:38:30,200 --> 00:38:32,880 Speaker 2: these geopolitical shocks. So these short term things aren't a 791 00:38:32,880 --> 00:38:34,520 Speaker 2: ton to worry about. We just got to pay attention 792 00:38:34,560 --> 00:38:34,879 Speaker 2: to them. 793 00:38:35,280 --> 00:38:38,400 Speaker 1: And Brian, I do apologize for dominating three minutes of 794 00:38:38,440 --> 00:38:41,759 Speaker 1: time and giving me thirty seconds. You'll get back to 795 00:38:41,800 --> 00:38:45,000 Speaker 1: me next week. I got it. Thanks for listening. You've 796 00:38:45,000 --> 00:38:47,480 Speaker 1: been listening to Simply Money, presented by all Worth Financial 797 00:38:47,520 --> 00:38:50,160 Speaker 1: on fifty five KRC the talk station