1 00:00:01,400 --> 00:00:06,000 Speaker 1: Tonight the problems your investment portfolio could face if you're 2 00:00:06,080 --> 00:00:09,959 Speaker 1: out there trying to short term trade or move major 3 00:00:10,039 --> 00:00:13,880 Speaker 1: parts of your portfolio around based on headline news that 4 00:00:14,000 --> 00:00:16,799 Speaker 1: obviously is changing on a dime from day to day. 5 00:00:17,079 --> 00:00:19,560 Speaker 1: You're listening to Simply Money, presented by all Worth Financial 6 00:00:19,600 --> 00:00:23,200 Speaker 1: and Bob Sponseller along with Brian James Brian. We talk 7 00:00:23,360 --> 00:00:26,319 Speaker 1: all the time about the challenge of trying to time 8 00:00:26,440 --> 00:00:30,600 Speaker 1: the overall market, but there's also a challenge of trying 9 00:00:30,640 --> 00:00:34,280 Speaker 1: to time which individual sectors of the market will rise 10 00:00:34,479 --> 00:00:38,360 Speaker 1: and fall based on headline news or predicting what's going 11 00:00:38,440 --> 00:00:42,640 Speaker 1: to happen geopolitically around the world. Because that same premise 12 00:00:42,760 --> 00:00:46,960 Speaker 1: applies unless you're a mind reader or you're literally sitting 13 00:00:47,040 --> 00:00:50,920 Speaker 1: in front of your computer day trading major parts of 14 00:00:50,960 --> 00:00:54,600 Speaker 1: your portfolio throughout the day, it's nearly impossible to know 15 00:00:54,880 --> 00:00:58,440 Speaker 1: exactly when events are going to happen and then, just 16 00:00:58,480 --> 00:01:01,400 Speaker 1: as importantly, what to do about it when you see 17 00:01:01,480 --> 00:01:05,720 Speaker 1: the events happen, because you know this new situation and 18 00:01:05,800 --> 00:01:09,039 Speaker 1: right now is a great example, it's very fluid. You know, 19 00:01:09,040 --> 00:01:11,840 Speaker 1: we've got the President, you know, coming on later tonight 20 00:01:11,959 --> 00:01:15,240 Speaker 1: to talk about an update on the war in Iran. 21 00:01:15,440 --> 00:01:19,839 Speaker 1: Things are moving quickly. We saw that happen yesterday. Yep, 22 00:01:19,840 --> 00:01:22,559 Speaker 1: Solute updated on what's going on in Iran. So here's 23 00:01:22,560 --> 00:01:24,880 Speaker 1: the sectors that have that are being impacted. Of course, 24 00:01:24,880 --> 00:01:26,920 Speaker 1: this shouldn't come as a major shock to anybody, but 25 00:01:27,959 --> 00:01:31,040 Speaker 1: energy has been effected in a roundabout way positively depending 26 00:01:31,040 --> 00:01:34,240 Speaker 1: on whether you're the supplier or the consumer on that. So, 27 00:01:34,360 --> 00:01:38,320 Speaker 1: oil majors, energy companies have all served the stock prices 28 00:01:38,520 --> 00:01:40,560 Speaker 1: due to those higher oil prices, which are going to 29 00:01:40,600 --> 00:01:43,959 Speaker 1: filter directly into shareholder value and so forth. And that 30 00:01:44,080 --> 00:01:46,800 Speaker 1: is not, of course why we're doing this, but at 31 00:01:46,800 --> 00:01:47,720 Speaker 1: the same time, that's. 32 00:01:47,560 --> 00:01:50,000 Speaker 2: The reality of it, the way the world works these days. 33 00:01:50,280 --> 00:01:53,120 Speaker 2: And so of course the defense stocks have also done 34 00:01:53,120 --> 00:01:55,800 Speaker 2: well because of all this. Anytime we have wars going 35 00:01:55,840 --> 00:01:57,640 Speaker 2: on anywhere in the world where they're gonna need equipment 36 00:01:57,680 --> 00:02:00,360 Speaker 2: and they're going to need supplies and all that other stuff. 37 00:02:00,400 --> 00:02:03,360 Speaker 2: So obviously that's a that's a reaction we've had there. Uh, 38 00:02:03,560 --> 00:02:07,120 Speaker 2: Consumer discretionary and staples, these are your your your grocery 39 00:02:07,160 --> 00:02:09,639 Speaker 2: stores and all those kinds of things that are directly 40 00:02:09,680 --> 00:02:12,400 Speaker 2: impacted by what we just talked about. Rising energy and 41 00:02:12,440 --> 00:02:16,480 Speaker 2: shipping costs UH and then consumer price pressures, meaning people 42 00:02:16,520 --> 00:02:18,520 Speaker 2: are going to start to buy less if as prices 43 00:02:18,520 --> 00:02:22,320 Speaker 2: are going up. Those sectors have been hurt. Industrials and 44 00:02:22,360 --> 00:02:25,600 Speaker 2: materials have been also been harmed negatively because those are 45 00:02:25,639 --> 00:02:29,280 Speaker 2: concerned about supply chain disruption and inflation is shortly behind 46 00:02:29,280 --> 00:02:32,720 Speaker 2: that as well inflational hit. Those areas pretty hard. Financials, 47 00:02:32,720 --> 00:02:35,440 Speaker 2: real estate, you know your traditional stalwarts of UH of 48 00:02:35,639 --> 00:02:39,120 Speaker 2: large cap value UH, interest rate sensitive sectors. 49 00:02:38,760 --> 00:02:39,440 Speaker 1: There that are there. 50 00:02:39,520 --> 00:02:42,320 Speaker 2: There are a lot of pressure there from inflation. Higher 51 00:02:42,360 --> 00:02:44,639 Speaker 2: bond yields could affect the way we finance those types 52 00:02:44,680 --> 00:02:48,119 Speaker 2: of investments. And then finally, finally, technology is going through 53 00:02:48,120 --> 00:02:51,720 Speaker 2: its own moment here because overall markets have sold off. 54 00:02:52,040 --> 00:02:55,560 Speaker 2: Technology has usually been treated as a relative staven, but 55 00:02:55,600 --> 00:02:58,480 Speaker 2: it's got its own headlines now with your social media 56 00:02:58,520 --> 00:03:01,480 Speaker 2: companies starting to be treated like the tobacco companies of 57 00:03:01,560 --> 00:03:05,840 Speaker 2: years past by losing a couple of lawsuits indicating that 58 00:03:06,120 --> 00:03:08,320 Speaker 2: maybe the public does believe that these are maybe more 59 00:03:08,320 --> 00:03:11,760 Speaker 2: harmful than good. So and of course anything that is 60 00:03:11,800 --> 00:03:15,320 Speaker 2: speculative in nature and technology has been successfully speculative for 61 00:03:15,360 --> 00:03:19,480 Speaker 2: thirty years. But anytime there's any kind of a concern 62 00:03:19,520 --> 00:03:22,880 Speaker 2: among the market for anything, then technology is going to 63 00:03:22,880 --> 00:03:24,600 Speaker 2: take a hit because that's where the bubble is, that's 64 00:03:24,600 --> 00:03:26,200 Speaker 2: where the bubble has been for a few decades. So 65 00:03:26,600 --> 00:03:28,840 Speaker 2: lots of different things going on at the moment, right Bob. 66 00:03:29,560 --> 00:03:31,720 Speaker 1: Yeah, And I'll throw one more sector out there that 67 00:03:31,800 --> 00:03:35,040 Speaker 1: I've just been interestingly watching here over the last couple 68 00:03:35,080 --> 00:03:37,240 Speaker 1: of weeks, and that's gold. I mean, let's face it, 69 00:03:37,280 --> 00:03:39,839 Speaker 1: Gold's been on an absolute tear here for the last 70 00:03:39,920 --> 00:03:42,680 Speaker 1: few years. And you know, a lot of people think 71 00:03:42,720 --> 00:03:45,440 Speaker 1: of gold as a safe haven. This is where we 72 00:03:45,480 --> 00:03:48,160 Speaker 1: want to park money or pile money into, and we 73 00:03:48,240 --> 00:03:52,200 Speaker 1: think there's you know, unrest around the world. Well gold, 74 00:03:52,480 --> 00:03:56,360 Speaker 1: you know, the commodity and gold stocks. Mining stocks really 75 00:03:56,400 --> 00:03:59,040 Speaker 1: took a hit over the last few weeks. So it's 76 00:03:59,320 --> 00:04:02,640 Speaker 1: it's counter intuitive to those folks that think, hey, we've 77 00:04:02,640 --> 00:04:05,920 Speaker 1: got a thirty nine trillion dollar debt, you know, let's 78 00:04:06,000 --> 00:04:09,040 Speaker 1: park money in gold. Gold's the safe haven and it'll 79 00:04:09,120 --> 00:04:12,000 Speaker 1: keep me out of trouble. Boy, those people have you know, 80 00:04:12,080 --> 00:04:14,680 Speaker 1: for the folks that really tried to time and over 81 00:04:14,760 --> 00:04:18,039 Speaker 1: allocate to that sector, they got their you know what 82 00:04:18,200 --> 00:04:21,560 Speaker 1: handed to them big time over the last few weeks. 83 00:04:21,600 --> 00:04:22,000 Speaker 2: As well. 84 00:04:22,160 --> 00:04:24,960 Speaker 1: So you know, what's our point here. If you're heavily 85 00:04:25,120 --> 00:04:29,839 Speaker 1: concentrated or you're trying to time any of these particular sectors, 86 00:04:31,000 --> 00:04:36,000 Speaker 1: it's really you're you're really playing with fire here. Yesterday 87 00:04:36,120 --> 00:04:38,640 Speaker 1: is a great example. Shoot, we had the dial close 88 00:04:38,760 --> 00:04:41,080 Speaker 1: up over a thousand points. I don't know whether it's 89 00:04:41,120 --> 00:04:44,600 Speaker 1: gonna stay there obviously. As I've said before, we've got 90 00:04:44,640 --> 00:04:47,880 Speaker 1: the President coming on tonight to hopefully outline what the 91 00:04:47,920 --> 00:04:50,920 Speaker 1: plan is here in Iran. Over the next few weeks, 92 00:04:51,120 --> 00:04:55,080 Speaker 1: news literally changes by the hour, and it's very hard 93 00:04:55,080 --> 00:04:59,000 Speaker 1: to time this. Brian, Let's look at one sector in particular, 94 00:04:59,440 --> 00:05:02,599 Speaker 1: you know, the travel industry. What's going on just within 95 00:05:03,000 --> 00:05:07,720 Speaker 1: the travel industry with the partial government shut down, TSA lines, 96 00:05:07,800 --> 00:05:10,520 Speaker 1: all that kind of thing, And this will be illustrative 97 00:05:10,560 --> 00:05:11,559 Speaker 1: of what we're talking about. 98 00:05:12,520 --> 00:05:15,720 Speaker 2: Yeah, So anything that happens, you know, anywhere in the 99 00:05:15,720 --> 00:05:18,840 Speaker 2: world with this level of significance, of course, trickles down 100 00:05:18,880 --> 00:05:20,920 Speaker 2: through a lot of different sectors of the economy. You've 101 00:05:20,920 --> 00:05:23,560 Speaker 2: all seen the pictures online and on the news of 102 00:05:23,560 --> 00:05:27,040 Speaker 2: the TSA lines. If you're paying attention to the Cincinnati subreddit, 103 00:05:27,040 --> 00:05:29,280 Speaker 2: it seems like every day there's somebody talking about how 104 00:05:29,279 --> 00:05:30,960 Speaker 2: long the wait was, and it never seems like it's 105 00:05:30,960 --> 00:05:33,720 Speaker 2: been that bad down there, but still the general public 106 00:05:33,839 --> 00:05:35,800 Speaker 2: is concerned and paying a lot of attention to it. 107 00:05:35,880 --> 00:05:39,240 Speaker 2: So this is of course happening with severe staffing shortages, 108 00:05:39,320 --> 00:05:42,040 Speaker 2: partial government shutdown that kept people from getting paid, so 109 00:05:42,080 --> 00:05:43,840 Speaker 2: they just quit going to work, which that seems like 110 00:05:43,880 --> 00:05:45,960 Speaker 2: a fair exchange. If I'm going to work, you should 111 00:05:46,000 --> 00:05:47,479 Speaker 2: probably pay me, or I'm just not going to do 112 00:05:47,520 --> 00:05:50,599 Speaker 2: the work. So Nise of office space where he said, 113 00:05:50,600 --> 00:05:52,039 Speaker 2: you know, I'm just not going to go anymore, just 114 00:05:52,040 --> 00:05:54,599 Speaker 2: not going to go there anymore. But so anyway, so 115 00:05:54,680 --> 00:05:57,000 Speaker 2: this is of course, we're heading into heavy travel time season. 116 00:05:57,000 --> 00:05:59,719 Speaker 2: Spring Break is happening now, and the spring breakers are 117 00:05:59,800 --> 00:06:03,040 Speaker 2: changing their plans to avoid having to deal with airports 118 00:06:03,080 --> 00:06:07,320 Speaker 2: and considering driving to their destinations instead. Hurts go figure. 119 00:06:07,640 --> 00:06:10,680 Speaker 2: Rental car companies said that the surge and search traffic 120 00:06:10,720 --> 00:06:14,120 Speaker 2: to their website is indicative that travelers aren't considering other ways. 121 00:06:14,160 --> 00:06:15,640 Speaker 2: You know, maybe I didn't want to drive to Florida, 122 00:06:15,680 --> 00:06:17,680 Speaker 2: but I still want to go to Florida, so I'm 123 00:06:17,680 --> 00:06:19,240 Speaker 2: going to get there one way or another. And one 124 00:06:19,240 --> 00:06:22,599 Speaker 2: in three customers are currently renting cars, specifically for road 125 00:06:22,640 --> 00:06:25,880 Speaker 2: trips and driving vacations. That's up from what it normally is. 126 00:06:25,960 --> 00:06:30,480 Speaker 1: So yeah, and you look at that TSA situation, I mean, Congress, 127 00:06:30,520 --> 00:06:32,520 Speaker 1: you know, they take off for two weeks and go 128 00:06:32,560 --> 00:06:35,800 Speaker 1: home without solving the problem. From a long term standpoint, 129 00:06:36,240 --> 00:06:40,239 Speaker 1: we've got these TSA agents, most of them, to their credit, 130 00:06:40,279 --> 00:06:43,080 Speaker 1: and thank thanks to all those folks that are hanging 131 00:06:43,120 --> 00:06:45,560 Speaker 1: in there with us that most of them are still 132 00:06:45,600 --> 00:06:48,400 Speaker 1: showing up for work even though they've been wondering whether 133 00:06:48,400 --> 00:06:51,520 Speaker 1: they're going to get paid. Some, however, have said the 134 00:06:51,520 --> 00:06:54,159 Speaker 1: heck with this, I'm going to go find a job elsewhere. 135 00:06:54,279 --> 00:06:57,320 Speaker 1: I'm I'm gone, and I'm never coming back. And then 136 00:06:57,360 --> 00:07:00,200 Speaker 1: you have President Trump step in and sign an execut 137 00:07:00,440 --> 00:07:05,400 Speaker 1: order to pay these folks. Somebody might come along and 138 00:07:05,480 --> 00:07:09,000 Speaker 1: challenge that executive order in courts. Who knows with a 139 00:07:09,040 --> 00:07:13,200 Speaker 1: federal judge, this thing is a fluid situation. I'll agree 140 00:07:13,200 --> 00:07:16,240 Speaker 1: with you. Some of the news headlines around this, you know, 141 00:07:16,720 --> 00:07:19,760 Speaker 1: go figure. They always get sensationalized a little bit. I 142 00:07:20,400 --> 00:07:23,920 Speaker 1: look at just the Cincinnati airport over the last week 143 00:07:24,040 --> 00:07:26,360 Speaker 1: or so, you know, I got stuff coming across my 144 00:07:26,440 --> 00:07:30,520 Speaker 1: phone showing the line at Cincinnati at CVG at five 145 00:07:30,640 --> 00:07:33,160 Speaker 1: thirty in the morning, and I don't think I'm you know, 146 00:07:33,280 --> 00:07:37,880 Speaker 1: breaking news here. A lot of times it's CVG people 147 00:07:37,960 --> 00:07:42,280 Speaker 1: show up early for those flights. The TSA agents generally 148 00:07:42,360 --> 00:07:45,920 Speaker 1: don't show up full staff. You know, somebody will probably 149 00:07:45,920 --> 00:07:48,960 Speaker 1: correct me because I'm wrong here, but usually around six am. 150 00:07:49,520 --> 00:07:51,720 Speaker 1: And you know, I get a social media feed at 151 00:07:51,880 --> 00:07:55,440 Speaker 1: about six oh four am after everybody showed up for work, 152 00:07:55,480 --> 00:07:59,120 Speaker 1: and lo and behold, the line was gone. No big problem. 153 00:07:59,440 --> 00:08:03,000 Speaker 1: But to the people that wanted to over sensationalize this stuff, 154 00:08:03,360 --> 00:08:05,840 Speaker 1: you know, they got their clickbait, they got their stuff, 155 00:08:05,920 --> 00:08:10,840 Speaker 1: and you know it. Yeah, it can be a volatile situation, 156 00:08:11,080 --> 00:08:13,960 Speaker 1: but a lot of times over sensational. 157 00:08:14,080 --> 00:08:16,920 Speaker 2: Yeah, and there's reality to it. There's reality under this. 158 00:08:17,000 --> 00:08:19,200 Speaker 2: I think our report, to be honest, is pretty well run. 159 00:08:19,240 --> 00:08:20,880 Speaker 2: I love when I fly. We have to go back 160 00:08:20,880 --> 00:08:23,920 Speaker 2: and forth to Dallas a lot, and flying out of 161 00:08:24,000 --> 00:08:26,720 Speaker 2: CVG is so much easier. I throw my entire bag 162 00:08:26,760 --> 00:08:28,360 Speaker 2: into the wood chipper thing and I don't have to 163 00:08:28,400 --> 00:08:30,480 Speaker 2: take out the laptop or any of it. I don't 164 00:08:30,520 --> 00:08:31,960 Speaker 2: have to take my shoes off or anything. Now when 165 00:08:32,000 --> 00:08:34,840 Speaker 2: I come back from DFW, very different situation. They don't 166 00:08:34,840 --> 00:08:38,959 Speaker 2: have the same level of technology there for whatever reason. 167 00:08:39,000 --> 00:08:40,560 Speaker 2: But hey, so I want to bring it back to 168 00:08:41,440 --> 00:08:43,080 Speaker 2: because at the end of the day, reason we have 169 00:08:43,160 --> 00:08:45,040 Speaker 2: the show and the reason people are listening is because 170 00:08:45,080 --> 00:08:47,600 Speaker 2: what do I do with my personal finances? Well, this 171 00:08:47,679 --> 00:08:49,439 Speaker 2: is a scary time. So, Bob, you know, I love 172 00:08:49,520 --> 00:08:51,320 Speaker 2: my history. So we're going to go back through a 173 00:08:51,320 --> 00:08:53,240 Speaker 2: couple of times that we thought we maybe should make 174 00:08:53,320 --> 00:08:56,160 Speaker 2: major changes and be scared and run for the hills, 175 00:08:56,240 --> 00:08:59,280 Speaker 2: but then it turned out that we shouldn't. So I'll 176 00:08:59,280 --> 00:09:01,200 Speaker 2: go back to two thousand and nine. Right, this is 177 00:09:01,280 --> 00:09:04,960 Speaker 2: directly after the two thousand and eight downturn, the Great Recession. 178 00:09:05,160 --> 00:09:07,920 Speaker 2: Global financial system in crisis. S and P was down 179 00:09:08,120 --> 00:09:10,760 Speaker 2: peaked to trough close to fifty percent for a brief 180 00:09:10,800 --> 00:09:13,359 Speaker 2: time in two thousand and eight, banks where failing, unemployment 181 00:09:13,440 --> 00:09:15,480 Speaker 2: was surging, and it was tempting to say, you know what, 182 00:09:15,520 --> 00:09:17,680 Speaker 2: I want to wait for things to stabilize before I 183 00:09:17,679 --> 00:09:20,360 Speaker 2: rely on the stock market again. Well, the market bottomed 184 00:09:20,360 --> 00:09:23,400 Speaker 2: in two thousand and nine. March of nine, right just 185 00:09:23,440 --> 00:09:26,000 Speaker 2: about you know, just well, just about a month ago 186 00:09:26,080 --> 00:09:29,760 Speaker 2: was the anniversary. But that happened before the economy improved, 187 00:09:29,760 --> 00:09:32,199 Speaker 2: and certainly before there were any positive headlines. Go look 188 00:09:32,240 --> 00:09:34,400 Speaker 2: for the headlines leading up to March of nine. None 189 00:09:34,440 --> 00:09:36,960 Speaker 2: of them are good. They're all still reflecting the chaos 190 00:09:37,000 --> 00:09:39,880 Speaker 2: that was still happening. So the rally begins, Brian. 191 00:09:40,000 --> 00:09:43,280 Speaker 1: The market bottom the day we dropped the first bomb 192 00:09:43,360 --> 00:09:47,760 Speaker 1: on Iraq, and that was the bottom. You know, I 193 00:09:47,760 --> 00:09:50,400 Speaker 1: think we can all agree, you know, after the fact, 194 00:09:50,400 --> 00:09:53,880 Speaker 1: we spent trillions of dollars over there and really didn't 195 00:09:53,920 --> 00:09:57,800 Speaker 1: get much accomplished, but it bolstered the economy in the 196 00:09:57,800 --> 00:10:00,199 Speaker 1: short term. It got the stock market going. But go ahea, 197 00:10:00,280 --> 00:10:01,400 Speaker 1: go ahead, I love the history. 198 00:10:01,520 --> 00:10:04,560 Speaker 2: Well, eventually people stop worrying about the things that have 199 00:10:04,559 --> 00:10:06,520 Speaker 2: been bugging them and they realize that the market's going 200 00:10:06,559 --> 00:10:08,480 Speaker 2: to turn. And that happened in March. We didn't start 201 00:10:08,480 --> 00:10:11,360 Speaker 2: getting the real good headlines or in the economic numbers 202 00:10:11,440 --> 00:10:14,480 Speaker 2: until about June, but the market turned about three months 203 00:10:14,520 --> 00:10:16,800 Speaker 2: before we started to see the evidence. And that's how 204 00:10:16,840 --> 00:10:20,319 Speaker 2: recessions work. We are always a minimum of three months 205 00:10:20,360 --> 00:10:23,360 Speaker 2: behind what is happening because the recession is, as we know, 206 00:10:23,600 --> 00:10:27,520 Speaker 2: is two consecutive quarters of negative growth. 207 00:10:27,559 --> 00:10:28,640 Speaker 1: Of the lack of growth. 208 00:10:29,240 --> 00:10:30,960 Speaker 2: That's what recession is. And so it takes a while 209 00:10:31,000 --> 00:10:33,560 Speaker 2: for that data to be confirmed. Another one was in 210 00:10:33,600 --> 00:10:36,480 Speaker 2: twenty thirteen. If you remember the term, the word que 211 00:10:36,760 --> 00:10:39,559 Speaker 2: quantitative easing, So there was the FED was printing a 212 00:10:39,559 --> 00:10:41,520 Speaker 2: lot of money. A lot of people believe that the 213 00:10:41,600 --> 00:10:44,400 Speaker 2: rally at that point twenty thirteen was artificial and unsustainable. 214 00:10:44,640 --> 00:10:46,520 Speaker 2: That was five years after two thousand and eight, but 215 00:10:46,559 --> 00:10:49,040 Speaker 2: I remember people were still waiting for the second leg 216 00:10:49,120 --> 00:10:52,360 Speaker 2: down from eight. Nobody believed that anything could be could 217 00:10:52,400 --> 00:10:54,520 Speaker 2: be good ever again, and the temptation was to sit 218 00:10:54,559 --> 00:10:56,559 Speaker 2: out until the Fed stops doing what it's doing, and 219 00:10:56,600 --> 00:10:59,760 Speaker 2: then by after the correction, which never came, market kept 220 00:10:59,760 --> 00:11:02,600 Speaker 2: grinding higher for years and there was no major collapse 221 00:11:02,640 --> 00:11:06,640 Speaker 2: tied to qualitative easing ending. So don't pay attention to 222 00:11:06,679 --> 00:11:08,760 Speaker 2: any of these narratives about though markets shouldn't be going 223 00:11:08,840 --> 00:11:09,600 Speaker 2: up right now. It's fake. 224 00:11:09,640 --> 00:11:10,280 Speaker 1: It's fake. It's fake. 225 00:11:10,320 --> 00:11:12,440 Speaker 2: There's been around for hundreds of years, and they really 226 00:11:12,480 --> 00:11:13,240 Speaker 2: never hold true. 227 00:11:13,600 --> 00:11:16,440 Speaker 1: No excellent point. And the other thing I'll throw on 228 00:11:16,480 --> 00:11:18,079 Speaker 1: top of that, and we talk about this all the 229 00:11:18,120 --> 00:11:21,319 Speaker 1: time because occasionally Brian will get folks to come into 230 00:11:21,360 --> 00:11:23,800 Speaker 1: the office and say, well, I want to take a 231 00:11:23,800 --> 00:11:26,080 Speaker 1: bunch of money and just sit out the market for 232 00:11:26,120 --> 00:11:29,640 Speaker 1: a while until the coast is clear or things seem 233 00:11:29,840 --> 00:11:33,640 Speaker 1: or feel better. And you know, we talk about this often, 234 00:11:33,800 --> 00:11:37,640 Speaker 1: usually about the time that the news media or the 235 00:11:37,720 --> 00:11:41,480 Speaker 1: pundits on TV start to talk about it all feeling better, 236 00:11:42,120 --> 00:11:46,040 Speaker 1: most of the initial recovery has already happened. And that's 237 00:11:46,520 --> 00:11:49,480 Speaker 1: one of the big dangerous timing decisions people can make 238 00:11:50,000 --> 00:11:52,679 Speaker 1: back to you know, this sector trying to overwake the 239 00:11:52,760 --> 00:11:55,440 Speaker 1: individual sectors. This is a good time to remind people 240 00:11:55,480 --> 00:11:58,840 Speaker 1: to check your actual portfolio, even if you have chan 241 00:11:58,960 --> 00:12:02,320 Speaker 1: or fifteen mutual out there. You know, you might think 242 00:12:02,520 --> 00:12:06,120 Speaker 1: if you are diversified, but if those funds are all 243 00:12:06,240 --> 00:12:10,040 Speaker 1: concentrated in gross stocks or what have you, you know, 244 00:12:10,120 --> 00:12:13,600 Speaker 1: you might be subjecting your portfolio to more volatility in 245 00:12:13,679 --> 00:12:16,600 Speaker 1: the short term than you might have bargained for. And 246 00:12:16,640 --> 00:12:19,120 Speaker 1: it's a good reason to have that stuff reviewed by 247 00:12:19,160 --> 00:12:22,840 Speaker 1: somebody that can actually look under the hood and show 248 00:12:22,880 --> 00:12:26,720 Speaker 1: you if your portfolio is really diversified in the manner 249 00:12:26,760 --> 00:12:28,880 Speaker 1: you think it is. Here's the all Worth advice. If 250 00:12:28,920 --> 00:12:34,800 Speaker 1: your financial strategy is reacting to headlines, you're probably already behind. 251 00:12:35,360 --> 00:12:38,679 Speaker 1: Real wealth is built by sticking to a proactive plan, 252 00:12:39,240 --> 00:12:43,160 Speaker 1: not chasing the new cycle. Well, your four oh one 253 00:12:43,280 --> 00:12:47,280 Speaker 1: k could soon look very different. Think crypto, private equity, 254 00:12:47,360 --> 00:12:51,080 Speaker 1: even private credit. But just because you can invest in 255 00:12:51,120 --> 00:12:54,120 Speaker 1: these things, should you our take on that as next, 256 00:12:54,120 --> 00:12:56,920 Speaker 1: you're listening to Simply Money, presented by all Worth Financial 257 00:12:56,960 --> 00:13:02,120 Speaker 1: on fifty five KRC, the talk station. You're listening to 258 00:13:02,120 --> 00:13:04,600 Speaker 1: Simply Money because I'd buy all Worth Financial. I'm Bob' 259 00:13:04,600 --> 00:13:07,839 Speaker 1: sponseller along with Brian James. If you can't listen to 260 00:13:07,920 --> 00:13:11,880 Speaker 1: Simply Money live every night, subscribe and get our daily podcast. 261 00:13:12,120 --> 00:13:13,360 Speaker 2: Just search Simply. 262 00:13:13,080 --> 00:13:17,800 Speaker 1: Money on the iHeart app or wherever you find your podcast. 263 00:13:18,840 --> 00:13:22,000 Speaker 1: What's the smartest way to handle a six hundred thousand 264 00:13:22,080 --> 00:13:25,960 Speaker 1: dollars inheritance? We'll break down what your first moves probably 265 00:13:26,000 --> 00:13:29,680 Speaker 1: should be. Plus, after watching a loved one need long 266 00:13:29,800 --> 00:13:33,720 Speaker 1: term care, how should you be planning ahead? And is 267 00:13:33,840 --> 00:13:36,560 Speaker 1: reinvesting dividends still the right play? 268 00:13:37,000 --> 00:13:37,400 Speaker 2: All that? 269 00:13:37,760 --> 00:13:42,800 Speaker 1: Straight ahead? Brian, we have talked about this several times 270 00:13:42,840 --> 00:13:45,680 Speaker 1: now over the last six or seven months, but the 271 00:13:45,720 --> 00:13:48,400 Speaker 1: Department of Labor is at it again. There's a major 272 00:13:48,440 --> 00:13:51,520 Speaker 1: proposal out there right now that could open the door. 273 00:13:51,840 --> 00:13:55,280 Speaker 1: We've talked about this so many times now to alternative 274 00:13:55,320 --> 00:13:59,679 Speaker 1: investments inside your four oh one k things like private equity, 275 00:14:00,040 --> 00:14:05,320 Speaker 1: ivate credit, even cryptocurrency. What's the latest from the Department 276 00:14:05,360 --> 00:14:07,559 Speaker 1: of Labor, Brian, Yeah, so I wouldn't say this is 277 00:14:07,640 --> 00:14:08,560 Speaker 1: necessarily new. 278 00:14:08,600 --> 00:14:10,079 Speaker 2: As as you just said, we talked. I think it 279 00:14:10,080 --> 00:14:11,960 Speaker 2: was probably about a year ago we started kicking this around. 280 00:14:12,080 --> 00:14:14,559 Speaker 2: It was hitting the headlines and what's really behind this. 281 00:14:14,679 --> 00:14:18,160 Speaker 2: There's twelve trillion dollars in retirement plans that currently has 282 00:14:18,200 --> 00:14:19,840 Speaker 2: a rule a lot of rules around what you can 283 00:14:19,920 --> 00:14:22,520 Speaker 2: and cannot invest in, and of course the powers that 284 00:14:22,680 --> 00:14:24,920 Speaker 2: be and the major financial institutions would very much like 285 00:14:24,960 --> 00:14:28,800 Speaker 2: those rules removed. And what better administration to get that 286 00:14:28,880 --> 00:14:31,240 Speaker 2: done than this current one that really kind of doesn't 287 00:14:31,240 --> 00:14:32,760 Speaker 2: want a whole lot of rules standing in the way. 288 00:14:33,120 --> 00:14:37,400 Speaker 2: So the major financial institutions, you look at the headlines, 289 00:14:37,440 --> 00:14:40,640 Speaker 2: do you tell me what you see? So major financial 290 00:14:40,680 --> 00:14:43,160 Speaker 2: institutions are looking to broker these types of assets. We're 291 00:14:43,160 --> 00:14:45,240 Speaker 2: talking about things you can't currently invest in right now, 292 00:14:45,280 --> 00:14:47,400 Speaker 2: but you're pretty much for the most part limited to 293 00:14:48,320 --> 00:14:51,760 Speaker 2: limited to stocks, bonds, mutual funds. You know, within four 294 00:14:51,760 --> 00:14:54,000 Speaker 2: to one case. What they're looking to do is we've 295 00:14:54,000 --> 00:14:55,800 Speaker 2: been talking about for a while is to expose those 296 00:14:55,840 --> 00:14:58,760 Speaker 2: assets to the ability to invest in private equity, which 297 00:14:58,800 --> 00:15:01,360 Speaker 2: you know, stocks are stock are public, you invest in 298 00:15:01,360 --> 00:15:04,040 Speaker 2: them on a public exchange. Private equity means there's a 299 00:15:04,040 --> 00:15:07,200 Speaker 2: manager out there taking your money in directly to a 300 00:15:07,280 --> 00:15:09,480 Speaker 2: small business. Right, So we talk about this all the time. 301 00:15:09,520 --> 00:15:12,080 Speaker 2: This might be when you notice that little veterinarian clinic 302 00:15:12,080 --> 00:15:14,400 Speaker 2: got down on Main Street suddenly has a new logo 303 00:15:14,480 --> 00:15:16,680 Speaker 2: and a flashy new sign. You can just about bet 304 00:15:16,760 --> 00:15:19,160 Speaker 2: that there's private equity money behind that that has purchased 305 00:15:19,200 --> 00:15:21,920 Speaker 2: that from that probably soon to be retiring veterinary. Not 306 00:15:21,960 --> 00:15:24,040 Speaker 2: a negative thing, but that's why it's happening. 307 00:15:24,080 --> 00:15:26,320 Speaker 1: And there's a whole lot of corners of the industry, 308 00:15:26,440 --> 00:15:28,600 Speaker 1: of many industries where this is occurring. So while we're 309 00:15:28,600 --> 00:15:30,560 Speaker 1: talking about this today, the Department of Labor it wants 310 00:15:30,640 --> 00:15:33,360 Speaker 1: to make it easier or first of all possible, second 311 00:15:33,360 --> 00:15:36,680 Speaker 1: of all easier for companies to offer this. So the 312 00:15:36,720 --> 00:15:39,640 Speaker 1: news today is that the Labor Department wants to create 313 00:15:39,680 --> 00:15:42,160 Speaker 1: a safe harbor rule to shield. 314 00:15:41,840 --> 00:15:44,840 Speaker 2: Plan sponsors from litigation. A lot of planned sponsors, these 315 00:15:44,920 --> 00:15:47,440 Speaker 2: are the companies themselves. Every company that has a four 316 00:15:47,480 --> 00:15:50,960 Speaker 2: oh one K has an investment committee of people who 317 00:15:51,000 --> 00:15:53,360 Speaker 2: are busy usually making widgets all day, but they get 318 00:15:53,400 --> 00:15:55,760 Speaker 2: together once a quarter, once a year to talk about 319 00:15:55,800 --> 00:15:58,560 Speaker 2: the four oh one K that they offer, and so 320 00:15:58,760 --> 00:16:01,000 Speaker 2: that makes them a fiducia. A lot of companies don't 321 00:16:01,040 --> 00:16:04,000 Speaker 2: realize this. They do have risk for allowing their employees 322 00:16:04,000 --> 00:16:05,800 Speaker 2: to invest in certain things, and they do have to 323 00:16:05,880 --> 00:16:07,800 Speaker 2: kind of make sure a not a not too much 324 00:16:07,840 --> 00:16:10,040 Speaker 2: rope is given. Well, Labor Department wants to put a 325 00:16:10,080 --> 00:16:13,600 Speaker 2: safe harbor rule that will protect them from negative outcomes 326 00:16:13,600 --> 00:16:13,880 Speaker 2: from this. 327 00:16:15,000 --> 00:16:17,760 Speaker 1: Brian, You're probably gonna be surprised. I'm going to agree 328 00:16:17,800 --> 00:16:20,160 Speaker 1: with you, you know, and I've said this before on 329 00:16:20,240 --> 00:16:22,560 Speaker 1: the show with you. I am not in favor of 330 00:16:22,600 --> 00:16:25,840 Speaker 1: this whole thing. This is all in response to President 331 00:16:25,920 --> 00:16:31,520 Speaker 1: Trump's executive order released last August, which directed the Department 332 00:16:31,560 --> 00:16:35,760 Speaker 1: of Labor and the sec to, you know, rapidly facilitate 333 00:16:36,240 --> 00:16:40,080 Speaker 1: expanding assets to all these things in Iras. The skeptic 334 00:16:40,120 --> 00:16:43,400 Speaker 1: in me says, well, could that possibly be because the 335 00:16:43,400 --> 00:16:48,120 Speaker 1: president's son owns and operates a large cryptocurrency you know, 336 00:16:48,160 --> 00:16:50,360 Speaker 1: bitcoin company. But I'll leave the I'm not. 337 00:16:50,840 --> 00:16:52,640 Speaker 2: I'm not sure if there's a connection there or not, 338 00:16:53,040 --> 00:16:54,200 Speaker 2: Well we should investigate. 339 00:16:54,720 --> 00:16:58,800 Speaker 1: Well they're there. Yeah, there's always lobbyists, you know. Look 340 00:16:58,920 --> 00:17:02,200 Speaker 1: we can agree on that. And I think you mentioned 341 00:17:02,200 --> 00:17:05,600 Speaker 1: the twelve trillion dollar number. Let's face it, these companies, 342 00:17:05,640 --> 00:17:08,480 Speaker 1: these investment firms, they want to get their hands on 343 00:17:08,560 --> 00:17:11,520 Speaker 1: that money. They want to drive investment management fees from it. 344 00:17:11,560 --> 00:17:14,560 Speaker 1: They want to grow their business. It's it's capitalism, you know, 345 00:17:14,600 --> 00:17:18,240 Speaker 1: it's the way it works. I've also said this several 346 00:17:18,280 --> 00:17:20,639 Speaker 1: times on the show. As somebody who used to be 347 00:17:20,760 --> 00:17:23,760 Speaker 1: the advisor to several large four oh one K plans, 348 00:17:23,880 --> 00:17:25,879 Speaker 1: I know what it's like to actually stand in the 349 00:17:26,000 --> 00:17:30,680 Speaker 1: room and do these thirty minute annual you know, executive 350 00:17:30,760 --> 00:17:34,000 Speaker 1: summaries on how people's four to one k's actually work 351 00:17:34,520 --> 00:17:37,119 Speaker 1: and you look out there. I've looked out there at 352 00:17:37,160 --> 00:17:39,959 Speaker 1: these people and there's just this deer in the headlights 353 00:17:40,040 --> 00:17:43,920 Speaker 1: look because they can't possibly understand all this stuff within 354 00:17:43,960 --> 00:17:47,000 Speaker 1: the twenty to thirty minutes a year that most companies 355 00:17:47,040 --> 00:17:51,000 Speaker 1: give planned participants to understand what's in their four to 356 00:17:51,080 --> 00:17:53,919 Speaker 1: one K. I am not in favor of this, if 357 00:17:54,280 --> 00:17:56,800 Speaker 1: they do it at all, Brian, I'd love your thoughts 358 00:17:56,880 --> 00:17:59,440 Speaker 1: on this. This is to me where a self directed 359 00:17:59,440 --> 00:18:03,040 Speaker 1: brokerage account works within the four to one K. You know, 360 00:18:03,119 --> 00:18:05,439 Speaker 1: if you really want to go off and do this stuff, 361 00:18:05,480 --> 00:18:08,479 Speaker 1: do it in a self directed brokerage account where the 362 00:18:08,520 --> 00:18:12,120 Speaker 1: investor bears all the responsibility, but do not bury all 363 00:18:12,160 --> 00:18:15,960 Speaker 1: this stuff in target date funds and other investments where 364 00:18:16,000 --> 00:18:19,240 Speaker 1: people they just have no idea what they're getting involved with. 365 00:18:19,960 --> 00:18:24,040 Speaker 1: I actually heard an interview yesterday morning with the Labor 366 00:18:24,119 --> 00:18:26,920 Speaker 1: Secretary and she was talking through all this. You know, 367 00:18:26,960 --> 00:18:30,160 Speaker 1: they're going to enter into a sixty day public comment 368 00:18:30,280 --> 00:18:34,120 Speaker 1: period before any rules come out. I put me down 369 00:18:34,160 --> 00:18:37,639 Speaker 1: as being against subjecting all these four to one K 370 00:18:37,800 --> 00:18:40,879 Speaker 1: plans to this stuff, because, yeah, you can shelter the 371 00:18:40,920 --> 00:18:45,399 Speaker 1: companies from liability. Guess who's gonna get left holding the 372 00:18:45,480 --> 00:18:50,080 Speaker 1: bag in all this The rank and file employees that 373 00:18:50,200 --> 00:18:52,360 Speaker 1: are just trying to put some money away and save 374 00:18:52,480 --> 00:18:55,399 Speaker 1: for retirement. I am a no on this stuff. 375 00:18:55,440 --> 00:18:57,000 Speaker 2: In the yes trying to put some money away and 376 00:18:57,119 --> 00:19:00,119 Speaker 2: pretty much the only remaining retirement option people have. We 377 00:19:00,240 --> 00:19:04,000 Speaker 2: changed fifty some years ago. We started switching from a 378 00:19:04,119 --> 00:19:07,560 Speaker 2: pension based retirement existence to a stock market based retirement 379 00:19:07,600 --> 00:19:12,320 Speaker 2: existence because companies stopped offering pension plans and started saying, Hey, 380 00:19:12,320 --> 00:19:13,879 Speaker 2: we're going to take advantage of the tax code the 381 00:19:13,880 --> 00:19:15,760 Speaker 2: way it is. That's what four oink means. By the way, 382 00:19:15,800 --> 00:19:17,879 Speaker 2: it's a section section of the tax code. We're going 383 00:19:17,920 --> 00:19:19,439 Speaker 2: to take advantage of that tax code the way it's 384 00:19:19,440 --> 00:19:21,400 Speaker 2: already written and allow people to invest their own dollars. 385 00:19:21,440 --> 00:19:23,160 Speaker 2: We'll throw a little bit of a match in as 386 00:19:23,200 --> 00:19:27,359 Speaker 2: the employer. That's still cheaper than funding someone's pension, someone's 387 00:19:27,400 --> 00:19:29,639 Speaker 2: retirement for the rest of their lives. That drove the 388 00:19:29,680 --> 00:19:31,640 Speaker 2: stock market over the last fifty years because a lot 389 00:19:31,640 --> 00:19:33,720 Speaker 2: of money shows up every two weeks or every week. 390 00:19:33,760 --> 00:19:36,520 Speaker 2: However often people get paid to flow in there. That's 391 00:19:36,560 --> 00:19:38,800 Speaker 2: again what they're after for this massive amount of money 392 00:19:38,840 --> 00:19:41,080 Speaker 2: that hits the people's paychecks and then can be then 393 00:19:41,160 --> 00:19:42,480 Speaker 2: flowing into these assets. 394 00:19:43,000 --> 00:19:46,040 Speaker 1: Here's the all with advice. Access to more investment options 395 00:19:46,119 --> 00:19:51,920 Speaker 1: does not to not automatically improve outcomes. Discipline, cost control, 396 00:19:52,080 --> 00:19:57,400 Speaker 1: and simplicity still tend to win over time. Well spring 397 00:19:57,480 --> 00:20:00,720 Speaker 1: has sprung. Is that good news for the local house market. 398 00:20:01,160 --> 00:20:03,919 Speaker 1: Our real estate expert is in next to talk about it. 399 00:20:03,960 --> 00:20:06,520 Speaker 1: You're listening to Simply Money, presented by Allworth Financial on 400 00:20:06,600 --> 00:20:12,440 Speaker 1: fifty five KRC. The talk station you're listening to Simply Money, 401 00:20:12,440 --> 00:20:15,840 Speaker 1: presented by Allworth Financial on Bob Sponseller along with Brian James. 402 00:20:15,920 --> 00:20:19,000 Speaker 1: Joined tonight by our good friend and real estate expert 403 00:20:19,119 --> 00:20:24,000 Speaker 1: Michelle Sloan, owner of Remax Time. Michelle, thanks as always 404 00:20:24,000 --> 00:20:27,120 Speaker 1: for making time tonight for us. When I look out 405 00:20:27,160 --> 00:20:32,159 Speaker 1: my window today, I see trees blooming, green grass, lawnmowers running, 406 00:20:32,520 --> 00:20:35,879 Speaker 1: leaf blowers blowing, it can only mean one thing. The 407 00:20:36,080 --> 00:20:40,240 Speaker 1: Spring real estate market in Cincinnati is up and running 408 00:20:40,320 --> 00:20:43,240 Speaker 1: and probably robust. Give us an update here on what's 409 00:20:43,280 --> 00:20:45,719 Speaker 1: going on with the Spring real estate market. 410 00:20:46,280 --> 00:20:49,760 Speaker 3: Absolutely, thank you so much. So we have started. Our 411 00:20:49,800 --> 00:20:53,640 Speaker 3: market started on March first. It was almost like someone 412 00:20:53,760 --> 00:20:58,080 Speaker 3: flipped a switch and the number of buyers were coming 413 00:20:58,200 --> 00:20:59,160 Speaker 3: out of the woodwork. 414 00:20:59,160 --> 00:21:02,359 Speaker 2: And they still are. Sellers are putting their homes on 415 00:21:02,440 --> 00:21:02,919 Speaker 2: the market. 416 00:21:03,000 --> 00:21:06,080 Speaker 3: There's a lot of activity out there, which is very 417 00:21:06,200 --> 00:21:09,760 Speaker 3: very exciting for those of us who rely on a 418 00:21:09,800 --> 00:21:13,680 Speaker 3: really busy real estate market. The one thing a little 419 00:21:13,720 --> 00:21:15,800 Speaker 3: story to tell you, and I can tell that there 420 00:21:15,800 --> 00:21:18,920 Speaker 3: are a lot more buyers out there just during our 421 00:21:19,000 --> 00:21:22,960 Speaker 3: open houses. I hosted a one hour open house last 422 00:21:22,960 --> 00:21:26,919 Speaker 3: weekend and I had six sets of buyers in that 423 00:21:27,080 --> 00:21:31,040 Speaker 3: property in one hour. I mean it was like a parade. 424 00:21:31,240 --> 00:21:34,600 Speaker 3: It was a home Arama parade of people through this 425 00:21:34,720 --> 00:21:38,280 Speaker 3: home and so that to me is very exciting. A 426 00:21:38,320 --> 00:21:41,040 Speaker 3: lot of those buyers did have real estate agents, at 427 00:21:41,119 --> 00:21:44,000 Speaker 3: least they said they had real estate agents, which is great. 428 00:21:44,119 --> 00:21:46,720 Speaker 3: You want to connect with an agent so that you 429 00:21:47,200 --> 00:21:51,679 Speaker 3: are on top of what's going on and the specific 430 00:21:51,720 --> 00:21:55,639 Speaker 3: home that you're looking for in this specific area is 431 00:21:56,160 --> 00:21:59,960 Speaker 3: very important to connect with a real estate agent who 432 00:22:00,080 --> 00:22:01,640 Speaker 3: will help you through the process. 433 00:22:02,600 --> 00:22:04,560 Speaker 2: Michelle, what kind of buyers are you seeing? 434 00:22:04,640 --> 00:22:04,760 Speaker 1: Right? 435 00:22:04,760 --> 00:22:07,280 Speaker 2: Because we've had the seller's market for so long that 436 00:22:07,440 --> 00:22:10,240 Speaker 2: was spooking and stressing the buying market. But that sounds 437 00:22:10,560 --> 00:22:13,080 Speaker 2: the people you just described don't sound like that at all. 438 00:22:13,119 --> 00:22:16,240 Speaker 2: They sound like they're raring to go. And price is 439 00:22:16,240 --> 00:22:18,240 Speaker 2: always a concern, but it's not that much of a concern. 440 00:22:18,320 --> 00:22:19,919 Speaker 2: Is that we're still where we are or are we 441 00:22:19,960 --> 00:22:22,439 Speaker 2: seeing sellers have to come down in price a little bit? 442 00:22:22,520 --> 00:22:22,879 Speaker 1: Yeah. 443 00:22:22,920 --> 00:22:27,280 Speaker 3: In the national media, there's the big scare in the 444 00:22:27,320 --> 00:22:30,160 Speaker 3: headlines that the mortgage rates are up, and they have. 445 00:22:30,280 --> 00:22:31,480 Speaker 2: The mortgage rates. 446 00:22:31,240 --> 00:22:33,520 Speaker 3: Have gone up to about six and a half percent 447 00:22:34,200 --> 00:22:36,880 Speaker 3: about a month ago. We were at six percent. So 448 00:22:37,359 --> 00:22:40,919 Speaker 3: mortgage rates are a concern because that's your buying power 449 00:22:41,119 --> 00:22:42,120 Speaker 3: as a buyer. 450 00:22:42,280 --> 00:22:45,200 Speaker 2: You have to know how much that's going to cost. 451 00:22:44,960 --> 00:22:48,320 Speaker 3: You, you know, monthly, annually, those kinds of things. You 452 00:22:48,359 --> 00:22:50,960 Speaker 3: want to make sure a lot of the new buyers 453 00:22:51,000 --> 00:22:53,679 Speaker 3: are just starting to look because they have this pens up. 454 00:22:53,720 --> 00:22:57,560 Speaker 3: Everybody's been stuck inside. We had the worst winter that 455 00:22:57,680 --> 00:23:01,000 Speaker 3: I can remember where we were all uck inside for 456 00:23:01,040 --> 00:23:04,960 Speaker 3: so long. We had so much snow, so much cold weather. 457 00:23:05,640 --> 00:23:08,320 Speaker 3: That I think people are like, Okay, I need a 458 00:23:08,359 --> 00:23:11,359 Speaker 3: new place to live, and now's the best time. 459 00:23:11,400 --> 00:23:12,960 Speaker 2: And I will tell you that. 460 00:23:13,080 --> 00:23:17,560 Speaker 3: For sellers, if you're thinking about selling your home, do 461 00:23:17,800 --> 00:23:21,680 Speaker 3: not wait. Get in front of this wave and get 462 00:23:21,720 --> 00:23:23,720 Speaker 3: your home on the market as soon as possible. 463 00:23:24,680 --> 00:23:27,879 Speaker 1: All right, speaking of sellers, Michelle, you know, because you 464 00:23:27,880 --> 00:23:30,240 Speaker 1: said get out in front of the wave, demands starting to. 465 00:23:30,160 --> 00:23:31,040 Speaker 2: Pick up all that. 466 00:23:32,119 --> 00:23:35,280 Speaker 1: If you compare twenty twenty six to maybe twenty twenty four, 467 00:23:35,400 --> 00:23:39,520 Speaker 1: twenty twenty five, how should sellers be thinking about things 468 00:23:39,640 --> 00:23:43,240 Speaker 1: perhaps a little bit differently, if at all, from what 469 00:23:43,359 --> 00:23:46,080 Speaker 1: they were needing to do, you know, one two three 470 00:23:46,160 --> 00:23:49,119 Speaker 1: years ago in terms of getting their property ready to 471 00:23:49,280 --> 00:23:52,040 Speaker 1: move at the best possible price. 472 00:23:52,720 --> 00:23:56,840 Speaker 3: Absolutely, so at this point you do have to do. 473 00:23:57,000 --> 00:23:58,840 Speaker 3: You have to have your home ready. You have to 474 00:23:58,880 --> 00:24:02,080 Speaker 3: have it not necessarily staged, but you want to have 475 00:24:02,160 --> 00:24:05,399 Speaker 3: it clean, presentable. You want to make sure that you 476 00:24:05,560 --> 00:24:09,240 Speaker 3: have great curb appeal, especially now that the spring has sprung. 477 00:24:09,800 --> 00:24:11,919 Speaker 3: You have to do that yard work. You need to 478 00:24:11,920 --> 00:24:14,760 Speaker 3: make sure that the exterior of your home looks great. 479 00:24:15,200 --> 00:24:17,480 Speaker 3: You need to make sure the interior of your home 480 00:24:17,520 --> 00:24:20,760 Speaker 3: looks great too. It's nice and neutral. If you listen 481 00:24:20,800 --> 00:24:24,159 Speaker 3: to your real estate agent and do what they say, 482 00:24:24,720 --> 00:24:28,200 Speaker 3: your home will sell quickly for the highest price possible. 483 00:24:28,880 --> 00:24:32,159 Speaker 3: I have had some sellers who don't listen to me, 484 00:24:33,560 --> 00:24:36,840 Speaker 3: and it has taken a lot longer or once you 485 00:24:36,960 --> 00:24:39,760 Speaker 3: start to get that feedback coming in from buyers where 486 00:24:39,760 --> 00:24:42,639 Speaker 3: they say, oh my gosh, I just the colors in 487 00:24:42,720 --> 00:24:46,480 Speaker 3: this house are not my style. The wallpaper in this 488 00:24:46,560 --> 00:24:48,919 Speaker 3: home is not my style. It's going to take me 489 00:24:49,000 --> 00:24:51,760 Speaker 3: forever to fix it, and blah blah blah. 490 00:24:52,000 --> 00:24:55,440 Speaker 1: Here's the thing. I hope your husband's listening to this segment, Michelle, 491 00:24:55,480 --> 00:24:58,320 Speaker 1: because he probably needs to be reminded that, Hey, if 492 00:24:58,359 --> 00:25:01,280 Speaker 1: I listen to Michelle, life's going to work out pretty 493 00:25:01,280 --> 00:25:01,800 Speaker 1: well for me. 494 00:25:01,880 --> 00:25:04,879 Speaker 3: But go ahead, it's absolutely the way to go. You 495 00:25:05,000 --> 00:25:07,159 Speaker 3: listen to your real estate agent. And if I am 496 00:25:07,200 --> 00:25:10,440 Speaker 3: your real estate agent, after doing this for about for 497 00:25:10,520 --> 00:25:14,760 Speaker 3: a little over twenty years, actually, at this point, I 498 00:25:14,880 --> 00:25:18,600 Speaker 3: do know what buyers are looking for, and a little 499 00:25:18,640 --> 00:25:21,520 Speaker 3: bit of work before you put your home on the 500 00:25:21,560 --> 00:25:26,960 Speaker 3: market will pay two three times what we expect that 501 00:25:27,000 --> 00:25:29,119 Speaker 3: you're going to be putting into it. So you know, 502 00:25:29,160 --> 00:25:31,840 Speaker 3: if you spend three or four thousand dollars, let's say, 503 00:25:31,880 --> 00:25:36,399 Speaker 3: to update the landscaping and do some interior cosmetic work, 504 00:25:37,119 --> 00:25:40,960 Speaker 3: that's going to absolutely increase the price of your home 505 00:25:41,400 --> 00:25:45,080 Speaker 3: and the efficiency and the quickness of it selling. 506 00:25:46,600 --> 00:25:48,960 Speaker 2: So I think I've shared the story before, Michelle, but 507 00:25:49,359 --> 00:25:53,000 Speaker 2: very recently I was helping a friend who is preparing 508 00:25:53,000 --> 00:25:55,560 Speaker 2: in a state one of their parents home actually down 509 00:25:55,560 --> 00:25:57,199 Speaker 2: in the villages down in Florida, where they all kind 510 00:25:57,240 --> 00:26:00,440 Speaker 2: of nice, lovely homes all look the same. I guess 511 00:26:00,440 --> 00:26:02,600 Speaker 2: what you're trying to do in a case like that, 512 00:26:02,880 --> 00:26:04,640 Speaker 2: if that's the kind of situation you're in, is you're 513 00:26:04,640 --> 00:26:07,680 Speaker 2: trying not to make yours look too unique. And the 514 00:26:07,720 --> 00:26:09,359 Speaker 2: reason I say is because I spent most of my 515 00:26:09,440 --> 00:26:11,800 Speaker 2: time up on a ladder, replacing their ceiling fans that 516 00:26:11,800 --> 00:26:13,720 Speaker 2: were a little dated, in a little nineties looking, but 517 00:26:13,760 --> 00:26:17,560 Speaker 2: worked fine otherwise with very bland, very white ceiling fans, 518 00:26:17,760 --> 00:26:19,040 Speaker 2: And I thought, well, this is kind of These are 519 00:26:19,080 --> 00:26:21,800 Speaker 2: perfectly good working fans. The frugal person in me didn't 520 00:26:21,800 --> 00:26:23,640 Speaker 2: want to donate them or throw them in a landfill 521 00:26:23,760 --> 00:26:26,439 Speaker 2: and replace them with other perfectly good working fans. But 522 00:26:26,520 --> 00:26:28,720 Speaker 2: I guess that kind of thing can really be a distraction. 523 00:26:28,800 --> 00:26:30,840 Speaker 2: If you have a mismatch fan in a room and 524 00:26:30,880 --> 00:26:33,119 Speaker 2: all the houses otherwise look the same, you're going to 525 00:26:33,359 --> 00:26:35,520 Speaker 2: kind of drop down the list of desirability. 526 00:26:35,560 --> 00:26:36,520 Speaker 1: Is that why I did that? 527 00:26:36,600 --> 00:26:37,600 Speaker 2: I just did what I was told? 528 00:26:37,760 --> 00:26:38,600 Speaker 1: But is that true? 529 00:26:38,720 --> 00:26:39,399 Speaker 2: Is that why I did that? 530 00:26:39,600 --> 00:26:39,879 Speaker 1: Very good? 531 00:26:39,920 --> 00:26:45,240 Speaker 3: Whoever, you did the right that is exactly why I 532 00:26:45,280 --> 00:26:48,200 Speaker 3: did it. That's right, you absolutely did the right thing. 533 00:26:48,240 --> 00:26:51,719 Speaker 3: I mean, there are some properties and I work with 534 00:26:51,720 --> 00:26:54,920 Speaker 3: a lot of sellers who are very frugal, and I say, 535 00:26:54,960 --> 00:26:58,119 Speaker 3: you know, you have all of your appliances in your kitchen. 536 00:26:58,440 --> 00:27:01,800 Speaker 3: You know they're they have they're older now, the white 537 00:27:01,880 --> 00:27:05,280 Speaker 3: is now really yellow. You could stand to put all 538 00:27:05,320 --> 00:27:07,640 Speaker 3: new appliances in this kitchen, and you're going to get 539 00:27:07,680 --> 00:27:11,479 Speaker 3: a ton more back on that. And I have sellers 540 00:27:11,480 --> 00:27:15,160 Speaker 3: say why would I replace a perfectly good working stove 541 00:27:16,080 --> 00:27:19,399 Speaker 3: for one that just because it's prettier. Is because that's 542 00:27:19,400 --> 00:27:22,200 Speaker 3: what buyers are looking for. They want everything to match, 543 00:27:22,280 --> 00:27:26,040 Speaker 3: especially in the kitchen. It's the focal point of your home. 544 00:27:26,600 --> 00:27:30,520 Speaker 3: So spending a little minute money up front, whether it 545 00:27:30,600 --> 00:27:34,440 Speaker 3: hurts that pocketbook or not, it is going to help 546 00:27:34,480 --> 00:27:35,359 Speaker 3: you in the long run. 547 00:27:35,800 --> 00:27:38,600 Speaker 2: Yeah, those fans cost about five hundred bucks and probably 548 00:27:38,640 --> 00:27:40,520 Speaker 2: I'm going to guess we'll generate at least an extra 549 00:27:40,560 --> 00:27:42,680 Speaker 2: five ten thousand. Maybe they wouldn't have gotten in terms 550 00:27:42,680 --> 00:27:44,960 Speaker 2: of selling price because people didn't walk away and rule 551 00:27:44,960 --> 00:27:45,600 Speaker 2: it out right away. 552 00:27:45,880 --> 00:27:48,680 Speaker 1: Are you getting your cut from that five or ten grand? Though, Brian? 553 00:27:48,720 --> 00:27:50,520 Speaker 2: That's what my reward will be in heaven. 554 00:27:50,640 --> 00:27:52,080 Speaker 1: Bob, there you go. 555 00:27:52,240 --> 00:27:53,160 Speaker 2: What a what a guy? 556 00:27:53,680 --> 00:27:56,760 Speaker 1: All right? Hey, thanks as always for the great advice tonight, Michelle. 557 00:27:56,840 --> 00:27:59,440 Speaker 1: You're listening to Simply Money presented by all Worth Financial 558 00:27:59,440 --> 00:28:05,760 Speaker 1: on fifty The talk station you're listening to Simple Money 559 00:28:05,840 --> 00:28:08,280 Speaker 1: is that if by all Worth Financial on Bob Spondseller 560 00:28:08,320 --> 00:28:11,320 Speaker 1: along with Brian James. Do you have a financial question 561 00:28:11,400 --> 00:28:13,600 Speaker 1: you'd like for us to answer. There's a red button 562 00:28:13,600 --> 00:28:16,120 Speaker 1: you could click while you're listening to the show. If 563 00:28:16,119 --> 00:28:19,600 Speaker 1: you're listening on the iHeart app, simply record your question 564 00:28:20,080 --> 00:28:23,320 Speaker 1: and it'll come straight to us. All right, Brian, Jim 565 00:28:23,440 --> 00:28:27,280 Speaker 1: and Nancy in terras Park say, Hey, we're both executives 566 00:28:27,320 --> 00:28:30,720 Speaker 1: with a lot of deferred compensation. How do we coordinate 567 00:28:30,760 --> 00:28:34,560 Speaker 1: withdrawals with the rest of our retirement income strategy? 568 00:28:35,440 --> 00:28:37,919 Speaker 2: Well, yeah, this is great. First off, congratulations for being 569 00:28:37,960 --> 00:28:40,520 Speaker 2: in a situation where you've got one of these wonderful problems. 570 00:28:40,520 --> 00:28:44,240 Speaker 2: But when you've got significant deferred compensation, the mistake people 571 00:28:44,280 --> 00:28:46,400 Speaker 2: make most frequently is just treating that like its own 572 00:28:46,440 --> 00:28:49,120 Speaker 2: little bubble. In reality, it's one of the one of 573 00:28:49,160 --> 00:28:51,760 Speaker 2: the most powerful and rigid pieces of your tax puzzle. 574 00:28:51,840 --> 00:28:55,520 Speaker 2: So coordination is everything. Start here. Deferd comp is not 575 00:28:55,680 --> 00:28:58,200 Speaker 2: flexible income. That election you made years ago is going 576 00:28:58,280 --> 00:29:00,640 Speaker 2: to dictate when it shows up. You probably didn't even 577 00:29:00,680 --> 00:29:02,520 Speaker 2: know you were filling out so many forms when this 578 00:29:02,560 --> 00:29:04,960 Speaker 2: plan came out or when you hired into the company. 579 00:29:05,160 --> 00:29:06,760 Speaker 2: It was just that I don't know what I'm going to. 580 00:29:06,720 --> 00:29:07,800 Speaker 1: Just pick a date, right. 581 00:29:07,840 --> 00:29:10,640 Speaker 2: So the point you're deferring your compensation that you're otherwise 582 00:29:10,760 --> 00:29:12,320 Speaker 2: entitled to, which means you got to pick a year 583 00:29:12,560 --> 00:29:14,440 Speaker 2: that you're going to defer it too. At some point 584 00:29:14,440 --> 00:29:16,360 Speaker 2: in the past, you made a decision that made sense 585 00:29:16,400 --> 00:29:19,640 Speaker 2: in the moment, and so now you might be coming 586 00:29:19,720 --> 00:29:22,120 Speaker 2: up with that. So with lands as ordinary income, a 587 00:29:22,160 --> 00:29:24,200 Speaker 2: lot of times big chunks that you don't get to 588 00:29:24,200 --> 00:29:26,160 Speaker 2: turn off. So this is almost I don't know if 589 00:29:26,160 --> 00:29:28,000 Speaker 2: you see this, Bob, but when this comes up for people, 590 00:29:28,000 --> 00:29:30,880 Speaker 2: it's almost oftentimes a negative because they're already you know, 591 00:29:30,920 --> 00:29:33,440 Speaker 2: this is ten fifteen years into the future, they're earning 592 00:29:33,480 --> 00:29:36,400 Speaker 2: more than they did before, and then all of a sudden, 593 00:29:36,400 --> 00:29:37,920 Speaker 2: this extra pile of money's going to drop out of 594 00:29:37,920 --> 00:29:39,520 Speaker 2: the sky and add on to their ordinary income. 595 00:29:39,800 --> 00:29:42,280 Speaker 1: Yeah. My answer to that all the time, Brian, For 596 00:29:42,360 --> 00:29:44,600 Speaker 1: people that want to treat this as a negative, is hey, 597 00:29:44,960 --> 00:29:48,480 Speaker 1: if somebody offered to give you one thousand dollars, would 598 00:29:48,480 --> 00:29:50,800 Speaker 1: you turn it down because you're only going to net 599 00:29:50,840 --> 00:29:53,520 Speaker 1: eight hundred after taxes? The answer that's. 600 00:29:53,440 --> 00:29:56,520 Speaker 2: No, right, Exactly what I'm saying is it's the initial 601 00:29:56,520 --> 00:29:58,640 Speaker 2: oh yeah, I do have this coming up. What, oh 602 00:29:58,680 --> 00:30:00,600 Speaker 2: my gosh, where what deductions can I get? What else 603 00:30:00,640 --> 00:30:00,960 Speaker 2: can I do? 604 00:30:01,000 --> 00:30:01,440 Speaker 1: What can I do? 605 00:30:01,480 --> 00:30:03,520 Speaker 2: And the answer is usually start a business and have 606 00:30:03,600 --> 00:30:07,200 Speaker 2: it hemorrhage money because you're probably already doing everything you can. 607 00:30:07,480 --> 00:30:09,960 Speaker 2: So map out this timeline, lay out year by year. 608 00:30:10,000 --> 00:30:12,320 Speaker 2: What are your deferred comp payouts? Win a Social Security 609 00:30:12,400 --> 00:30:13,960 Speaker 2: going to kick in? Is there a pension in the mix? 610 00:30:14,160 --> 00:30:16,200 Speaker 2: Winter rm D is going to kick in? And try 611 00:30:16,200 --> 00:30:18,720 Speaker 2: to find that window. Right, you're looking for tax spikes, 612 00:30:18,800 --> 00:30:21,720 Speaker 2: years where your income stacks up. That's when the problems happen. 613 00:30:21,880 --> 00:30:24,280 Speaker 2: Then go find the years where there are no tax spikes, 614 00:30:24,320 --> 00:30:25,560 Speaker 2: go find the tax valleys. 615 00:30:25,840 --> 00:30:27,120 Speaker 1: Those are the years you want to choose. 616 00:30:27,120 --> 00:30:29,920 Speaker 2: But you have to understand what income is coming and 617 00:30:30,160 --> 00:30:31,680 Speaker 2: how much it's going to be in that given year. 618 00:30:31,800 --> 00:30:35,160 Speaker 2: Hope that helps Larry and Levin and Larry's a charitable guy. 619 00:30:35,280 --> 00:30:38,360 Speaker 2: They typically typically give ten to fifteen thousand dollars a 620 00:30:38,440 --> 00:30:41,080 Speaker 2: year to charity. And he's wondering at what level does 621 00:30:41,080 --> 00:30:45,520 Speaker 2: a donor advice fund actually start to make some sense Bob, Well, Larry, 622 00:30:45,600 --> 00:30:46,200 Speaker 2: here's where. 623 00:30:46,000 --> 00:30:48,680 Speaker 1: It could make some sense. It depends, you know, and 624 00:30:48,720 --> 00:30:51,400 Speaker 1: you said, we so I'm assuming you and your spouse here, 625 00:30:51,440 --> 00:30:55,000 Speaker 1: and I'm and I'm also assuming you're filing jointly. You know, 626 00:30:55,080 --> 00:30:59,280 Speaker 1: you want to look at whether your total itemized deductions 627 00:30:59,360 --> 00:31:02,320 Speaker 1: are above of the standard deduction amount. There's a lot 628 00:31:02,360 --> 00:31:04,920 Speaker 1: of people out there that still don't realize that that 629 00:31:05,080 --> 00:31:07,760 Speaker 1: standard deduction and I'll just give you the number for 630 00:31:07,840 --> 00:31:11,560 Speaker 1: twenty twenty six. It's thirty two two hundred dollars. So 631 00:31:11,640 --> 00:31:15,480 Speaker 1: if you add up all of your deductions, thank, charitable contributions, 632 00:31:15,520 --> 00:31:18,560 Speaker 1: real estate taxes, things like that, if you're not hitting 633 00:31:18,600 --> 00:31:23,280 Speaker 1: a number that's above that charitable or that standard deduction amount, 634 00:31:23,640 --> 00:31:27,160 Speaker 1: you're not getting any tax benefit from the charitable giving 635 00:31:27,200 --> 00:31:29,480 Speaker 1: you're currently doing. I'm sure you're giving a lot of 636 00:31:29,560 --> 00:31:33,360 Speaker 1: heartfelt benefit and good for you forgiving to charity. But 637 00:31:33,440 --> 00:31:36,200 Speaker 1: here's where a donor advise fund makes sense. What will 638 00:31:36,280 --> 00:31:39,400 Speaker 1: often times do is we'll say, hey, if you're gonna 639 00:31:39,400 --> 00:31:41,720 Speaker 1: plan to give that ten to fifteen thousand dollars a 640 00:31:41,840 --> 00:31:45,040 Speaker 1: year to charity anyway, it is just part of your normal, 641 00:31:45,440 --> 00:31:48,360 Speaker 1: you know, lifestyle, and it's important to you and all that. 642 00:31:48,440 --> 00:31:51,160 Speaker 1: This is where you can bunch two, three, four years 643 00:31:51,160 --> 00:31:54,800 Speaker 1: worth of giving into one year where we have eclipse. 644 00:31:54,920 --> 00:31:58,840 Speaker 1: Now the married filing joint lead standard deduction amount, and 645 00:31:58,880 --> 00:32:01,800 Speaker 1: now you'll get some tax benefits from that, and then 646 00:32:02,040 --> 00:32:05,080 Speaker 1: once that money is in the Donor Advice Fund, you 647 00:32:05,200 --> 00:32:08,120 Speaker 1: do not actually have to part ways with it. It 648 00:32:08,120 --> 00:32:11,280 Speaker 1: could stay in that fund and you can dole that 649 00:32:11,480 --> 00:32:15,360 Speaker 1: out to whatever charities in ten to fifteen thousand dollars increments, 650 00:32:15,520 --> 00:32:18,400 Speaker 1: like you're already doing over time. That's a way to 651 00:32:18,440 --> 00:32:21,600 Speaker 1: get some tax benefit out of your charitable giving. And 652 00:32:21,640 --> 00:32:25,960 Speaker 1: then to improve the situation even more, if you're using 653 00:32:26,520 --> 00:32:30,640 Speaker 1: appreciated ets, mutual funds, or stocks with which to make 654 00:32:30,680 --> 00:32:34,320 Speaker 1: your charitable gifts, you could avoid all the capital gains 655 00:32:34,360 --> 00:32:39,000 Speaker 1: taxes on those instruments by putting those instruments directly into 656 00:32:39,040 --> 00:32:41,720 Speaker 1: the Donor Advice Fund. So just something to think about 657 00:32:41,920 --> 00:32:46,400 Speaker 1: as part of your overall plan. Julian Merrimont says, we 658 00:32:46,480 --> 00:32:50,080 Speaker 1: inherited about six hundred thousand dollars from a parent. What 659 00:32:50,120 --> 00:32:52,760 Speaker 1: are the smartest moves to make with that money in 660 00:32:52,800 --> 00:32:53,720 Speaker 1: the first year? 661 00:32:53,800 --> 00:32:57,320 Speaker 2: Brian, So, as we say, very often, the smartest move 662 00:32:57,440 --> 00:33:00,440 Speaker 2: to any to make with any windfall. This might have 663 00:33:00,480 --> 00:33:04,000 Speaker 2: been slightly expected, but still somewhat unexpected. The smartest move 664 00:33:04,040 --> 00:33:05,920 Speaker 2: to make as soon as anything like that happens is 665 00:33:05,960 --> 00:33:09,440 Speaker 2: to breathe, don't rush into anything. Right, it's tempting to say, Okay, 666 00:33:09,480 --> 00:33:11,120 Speaker 2: we've got a pile of money that's got to be invested, 667 00:33:11,160 --> 00:33:12,880 Speaker 2: or this debt has to be paid off, or the 668 00:33:12,920 --> 00:33:14,520 Speaker 2: answer might be a little bit of all those things. 669 00:33:14,760 --> 00:33:16,960 Speaker 2: But think more about what decisions you might make that 670 00:33:17,080 --> 00:33:19,920 Speaker 2: can't be undone. Just with an inheritance, there's a lot 671 00:33:19,960 --> 00:33:22,760 Speaker 2: of one time opportunities, but they also come along with 672 00:33:22,800 --> 00:33:25,520 Speaker 2: permanent mistakes that you'll want to avoid if possible. So 673 00:33:25,600 --> 00:33:28,840 Speaker 2: first off, understand what you actually did inherit Was it 674 00:33:28,880 --> 00:33:31,320 Speaker 2: a taxable broker's account, meaning it has a step up 675 00:33:31,360 --> 00:33:34,720 Speaker 2: in cost basis, this is a joint account, or maybe 676 00:33:34,720 --> 00:33:37,560 Speaker 2: it's the proceeds of a trust. You know, anything that 677 00:33:37,840 --> 00:33:40,080 Speaker 2: spits out a ten ninety nine on an annual basis, 678 00:33:40,280 --> 00:33:42,720 Speaker 2: no matter what, or was it a retirement asset, a 679 00:33:42,720 --> 00:33:46,200 Speaker 2: traditional ira, or maybe even a roth ira, that question 680 00:33:46,320 --> 00:33:48,040 Speaker 2: right there is going to dictate, you know, how should 681 00:33:48,080 --> 00:33:50,920 Speaker 2: this be invested. If this happens to be a traditional ira, Okay, 682 00:33:50,960 --> 00:33:52,840 Speaker 2: you've got ten years to take that out and pay 683 00:33:52,840 --> 00:33:55,240 Speaker 2: the income taxes on it. If it's a roth ira, 684 00:33:55,440 --> 00:33:59,200 Speaker 2: guess what you've got ten years of basically an additional 685 00:33:59,280 --> 00:34:01,840 Speaker 2: tax free growth growth. It still has to be liquidated 686 00:34:01,880 --> 00:34:03,920 Speaker 2: within ten years of the death of the individual who 687 00:34:03,920 --> 00:34:06,120 Speaker 2: bequeathed it to you, but until then it can grow 688 00:34:06,160 --> 00:34:08,560 Speaker 2: tax free, so treat it as it. Most people treat 689 00:34:08,560 --> 00:34:10,680 Speaker 2: those like a long term asset and let it continue 690 00:34:10,719 --> 00:34:13,719 Speaker 2: to grow unless there's something in their financial situation. So 691 00:34:14,280 --> 00:34:16,520 Speaker 2: also you have that ten year plan, make sure you 692 00:34:16,600 --> 00:34:19,240 Speaker 2: understand how that's going to coordinate with your other sources 693 00:34:19,280 --> 00:34:21,080 Speaker 2: of income as well. 694 00:34:21,120 --> 00:34:23,680 Speaker 1: Coming up next for those who have already filed their 695 00:34:23,719 --> 00:34:27,160 Speaker 1: twenty twenty five tax return and have that actual return 696 00:34:27,560 --> 00:34:30,799 Speaker 1: in their hot little hands, Brian has his bottom line 697 00:34:30,840 --> 00:34:33,600 Speaker 1: advice on some things you should be looking at and 698 00:34:33,680 --> 00:34:37,319 Speaker 1: potentially doing heading into twenty twenty six. You're listening to 699 00:34:37,320 --> 00:34:40,040 Speaker 1: Simply Money presented by all Worth Financial on fifty five 700 00:34:40,120 --> 00:34:45,480 Speaker 1: KRC the talk station. You're listening to Simply Money presented 701 00:34:45,480 --> 00:34:50,080 Speaker 1: by all Worth Financial on Bob's Sponsorller along with Brian James. Well, 702 00:34:50,360 --> 00:34:54,040 Speaker 1: proactive tax advice is always a good thing, Brian, what 703 00:34:54,120 --> 00:34:55,160 Speaker 1: do you have for us tonight? 704 00:34:55,920 --> 00:34:58,080 Speaker 2: Well, this is the time of year, Bob where everybody's 705 00:34:58,080 --> 00:35:00,560 Speaker 2: getting their tax returns back and people will bring them 706 00:35:00,600 --> 00:35:04,439 Speaker 2: to us to talk through during our annual reviews, and 707 00:35:05,080 --> 00:35:07,359 Speaker 2: we will literally be opening the envelope. What that tells 708 00:35:07,400 --> 00:35:09,080 Speaker 2: us is that they haven't looked at it. They paid 709 00:35:09,080 --> 00:35:10,920 Speaker 2: somebody to do their tax return, which is good, so 710 00:35:10,920 --> 00:35:13,600 Speaker 2: their taxes are done. They've fulfilled that obligation, but they 711 00:35:13,640 --> 00:35:16,520 Speaker 2: haven't actually looked at it to see what there is 712 00:35:16,560 --> 00:35:19,160 Speaker 2: to learn from it. And that's a record of what 713 00:35:19,200 --> 00:35:21,200 Speaker 2: you did to yourself in twenty twenty five, good, bad, 714 00:35:21,239 --> 00:35:23,279 Speaker 2: or in different If there are things in there that 715 00:35:23,360 --> 00:35:25,279 Speaker 2: happen in twenty twenty five you'd like to avoid in 716 00:35:25,320 --> 00:35:28,160 Speaker 2: twenty six, well let's maybe open that envelope and see 717 00:35:28,160 --> 00:35:30,080 Speaker 2: where we are. One of the first things I like 718 00:35:30,200 --> 00:35:32,719 Speaker 2: to point out to people is to understand what your 719 00:35:32,760 --> 00:35:35,759 Speaker 2: effective tax rate is. So the look game I like 720 00:35:35,840 --> 00:35:37,279 Speaker 2: to play with my clients, and they bring me their 721 00:35:37,280 --> 00:35:39,759 Speaker 2: tax returns before we ever even look at it, I 722 00:35:39,800 --> 00:35:41,880 Speaker 2: ask them, what do you think you're paying in taxes? 723 00:35:42,000 --> 00:35:43,919 Speaker 2: Give me a fat round percentage, what do you oh, 724 00:35:44,000 --> 00:35:46,080 Speaker 2: it's got to be twenty five thirty percent or something 725 00:35:46,200 --> 00:35:48,960 Speaker 2: like that. And these are people who just did They're 726 00:35:48,960 --> 00:35:50,960 Speaker 2: perfectly intelligent people. They know how the world works. They 727 00:35:51,000 --> 00:35:54,359 Speaker 2: just haven't sat down to think about things, and they 728 00:35:54,400 --> 00:35:56,560 Speaker 2: happen to be retired and living off savings, and maybe 729 00:35:56,600 --> 00:35:58,480 Speaker 2: just so security haven't turned on the spigots of the 730 00:35:58,480 --> 00:36:01,279 Speaker 2: IRA's and certainly aren't in r D territory. And what 731 00:36:01,320 --> 00:36:03,440 Speaker 2: we'll do is a real quick mass. So we can 732 00:36:03,440 --> 00:36:06,839 Speaker 2: divide line twenty four their total tax by line nine 733 00:36:07,000 --> 00:36:09,520 Speaker 2: their total income, and that will tell them every nickel 734 00:36:09,560 --> 00:36:12,880 Speaker 2: of tax they've ever paid for twenty twenty five percentage 735 00:36:12,880 --> 00:36:16,120 Speaker 2: wise against their income, and oftentimes it's nowhere near twenty 736 00:36:16,120 --> 00:36:19,320 Speaker 2: five thirty percent. It's very frequently only eight or nine percent. 737 00:36:19,400 --> 00:36:22,759 Speaker 2: But people are trained now to just object to tax 738 00:36:22,800 --> 00:36:24,880 Speaker 2: at any and all levels and are simply assuming that 739 00:36:24,880 --> 00:36:27,359 Speaker 2: they're getting gouged at the twenty five and thirty percent bracket, 740 00:36:27,400 --> 00:36:29,719 Speaker 2: which doesn't kick in until you're really in the three, 741 00:36:29,800 --> 00:36:32,359 Speaker 2: four or five hundred thousand dollars range. So be paying 742 00:36:32,360 --> 00:36:35,319 Speaker 2: attention to that, understand what the real impact is, and 743 00:36:35,360 --> 00:36:37,719 Speaker 2: then understand you know that though of course those tax 744 00:36:37,760 --> 00:36:39,640 Speaker 2: brackets can change a little bit. We had to change 745 00:36:39,640 --> 00:36:41,440 Speaker 2: this year should have gone in your favor. Maybe you've 746 00:36:41,440 --> 00:36:42,840 Speaker 2: noticed you got a little bit more back from the 747 00:36:42,880 --> 00:36:46,360 Speaker 2: one Big Beautiful bill. Contribution limits are up for twenty 748 00:36:46,400 --> 00:36:48,080 Speaker 2: six that means you can put more in your four 749 00:36:48,120 --> 00:36:49,799 Speaker 2: oh and k and ira. For those people who are 750 00:36:49,840 --> 00:36:54,520 Speaker 2: still working, you can increase those account the amounts flowing in. 751 00:36:54,719 --> 00:36:58,240 Speaker 2: Make sure you're taking advantage of that. The expiration clock 752 00:36:58,400 --> 00:37:01,239 Speaker 2: is ticking though, so these a lot of the things 753 00:37:01,280 --> 00:37:02,719 Speaker 2: that are in the tax code are not going to 754 00:37:02,719 --> 00:37:05,800 Speaker 2: be around forever. For example, that there's an extra deduction 755 00:37:05,920 --> 00:37:10,000 Speaker 2: going on for senior citizens that is constant that occasionally 756 00:37:10,040 --> 00:37:13,399 Speaker 2: gets referred to as the tax Free Social Security Act, 757 00:37:13,480 --> 00:37:15,720 Speaker 2: which it definitely is not. It's just an extra deduction. 758 00:37:15,840 --> 00:37:18,120 Speaker 1: It's the one big beautiful bill Brian. 759 00:37:18,360 --> 00:37:21,480 Speaker 2: Fixed everything all in one swo. Nothing bad ever happening 760 00:37:21,520 --> 00:37:24,960 Speaker 2: again here, but that particular one, that little extra deduction 761 00:37:25,280 --> 00:37:28,880 Speaker 2: that again they permitted to be connected to Social Security, 762 00:37:28,880 --> 00:37:30,680 Speaker 2: which again it is not nothing to do with it. 763 00:37:31,280 --> 00:37:33,280 Speaker 2: But that goes away in twenty twenty eight. It's timed 764 00:37:33,320 --> 00:37:36,440 Speaker 2: when this administration's term is over. So be paying attention 765 00:37:36,480 --> 00:37:39,080 Speaker 2: to those types of things in ros conversions. If this 766 00:37:39,200 --> 00:37:41,440 Speaker 2: is the thing where now you realize, let's say you 767 00:37:41,480 --> 00:37:43,560 Speaker 2: do that calculation and you realize, oh my gosh, we 768 00:37:43,600 --> 00:37:46,120 Speaker 2: are only paying about seven or eight percent, don't spike 769 00:37:46,200 --> 00:37:49,200 Speaker 2: the football. That is not something to celebrate, because our 770 00:37:49,320 --> 00:37:52,840 Speaker 2: MD time is coming for you. The train is going 771 00:37:52,920 --> 00:37:55,480 Speaker 2: to arrive about age seventy three or seventy five, and 772 00:37:55,520 --> 00:37:57,040 Speaker 2: you're going to be in a higher bracket then. So 773 00:37:57,120 --> 00:38:00,560 Speaker 2: these low bracket times, these are the times to purposely 774 00:38:00,600 --> 00:38:03,279 Speaker 2: pull money out, pay taxes and convert to wroth and 775 00:38:03,360 --> 00:38:06,239 Speaker 2: never pay taxes again on growth from here on out. 776 00:38:06,360 --> 00:38:09,160 Speaker 2: So understand those different techniques and figure out whether they 777 00:38:09,200 --> 00:38:10,120 Speaker 2: can apply to you. 778 00:38:11,400 --> 00:38:14,000 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 779 00:38:14,000 --> 00:38:18,160 Speaker 1: presented by all Worth Financial on fifty five KRCV talk 780 00:38:18,239 --> 00:38:18,520 Speaker 1: station