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Speaker 1: Should you take advantage of the explosions of alternative investments.

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Speaker 1: Now we'll explore that tonight. You're listening to Simply Money

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Speaker 1: presented by all Worth Financial. I'm Bob Sponseller along with

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Speaker 1: Brian James.

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Speaker 2: Well.

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Speaker 1: Right now, the most exciting stuff in the financial services

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Speaker 1: industry is in investing. Isn't happening in just the stock

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Speaker 1: and bond market. It's happening kind of what we'll call

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Speaker 1: off to the side. Private market investments are booming, and

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Speaker 1: that's stuff that just used to be available for big

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Speaker 1: institutional investors and it's now within reach of everyone, seemingly,

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Speaker 1: and the whole idea of what it means to be

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Speaker 1: diversified is starting to shift just a little bit. And

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Speaker 1: we're not talking just about private equity tonight, the whole

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Speaker 1: alternative investment space.

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Speaker 2: So that's what Brian and I want to jump into

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Speaker 2: for a little.

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Speaker 1: Bit tonight, because there's a lot to talk about here

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Speaker 1: and it can get very complex very quickly.

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Speaker 3: It can everything but stocks, bonds, mutual funds is what

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Speaker 3: we're talking about today. So as we start off twenty

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Speaker 3: twenty six, let's start with data.

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Speaker 2: You know, I love my data, Bob. That's where we're

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Speaker 2: going to start today.

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Speaker 3: So alternative investments have topped over twenty six trillion dollars

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Speaker 3: in total assets under management, private equity and hedge funds.

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Speaker 3: Of course, those are the most commonly known people, most

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Speaker 3: people are most familiar with. This is coming from a

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Speaker 3: website called coin law dot io, which aggregates financial data

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Speaker 3: and trends and things like that. So let's take a

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Speaker 3: look at where all this is playing out and then

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Speaker 3: in the alternative landscape, and how are the more sophisticated

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Speaker 3: investors taking advantage of these opportunities and working these assets

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Speaker 3: in the long term plans? Starting to get more and

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Speaker 3: more questions about whether whether these types of things fit

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Speaker 3: into a more standard financial plan.

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Speaker 1: Yeah, and the whole thing here within a well constructed

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Speaker 1: financial plan, Brian. And that's what the segment like this

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Speaker 1: is difficult.

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Speaker 2: But when you when.

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Speaker 1: You throw out the world the word alternative investments or

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Speaker 1: the term alternative investments, just.

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Speaker 2: Like we're about to throw out another term cryptocurrency. Man,

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Speaker 2: there's a lot.

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Speaker 1: Of stuff packed into those couple of words, and it

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Speaker 1: gets complex, and we're gonna do the best we can

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Speaker 1: to kind of, you.

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Speaker 2: Know, give the overview of this stuff. But yeah, let's

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Speaker 2: start with gold.

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Speaker 1: It's been a classic hedge, not a growth engine over time.

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Speaker 1: But let's face it, Brian, over the last couple of years,

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Speaker 1: the price of gold has just been skyrocketing, and like

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Speaker 1: anything else in the financial world, once we have two

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Speaker 1: or three tremendously good up years, then the questions start coming,

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Speaker 1: should I get into it now? Kind of like buying

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Speaker 1: Navidia stock after it went up a few hundred percent.

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Speaker 3: Yeah, So to me, gold is nothing but market market

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Speaker 3: timing because we only hear about it when people get

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Speaker 3: a little spooked, and we normally really start hearing about it,

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Speaker 3: like you just said, after the horses out of the barn,

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Speaker 3: and gold has run up because there are scary headlines

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Speaker 3: out there, and that's kind of the situation we're in

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Speaker 3: right now. But nobody brings up gold in terms of

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Speaker 3: I should buy this and sit on it for the

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Speaker 3: rest of my life. Some people do that, and they

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Speaker 3: tend to throw it in a safe and let the

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Speaker 3: kids deal with it and they inherit it. But to me,

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Speaker 3: gold is something when people start bringing it up that

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Speaker 3: that don't have much experience with precious metals in those

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Speaker 3: kinds of things. Then what they're thinking is should I

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Speaker 3: put my money into that, into something that I perceive

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Speaker 3: to be more a little safer for the time being

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Speaker 3: until things settle down. That is no different than I

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Speaker 3: should sell all my investments because I read a scary

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Speaker 3: headline this morning, and I will worry about it later

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Speaker 3: when to get back in. That's how most people tend

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Speaker 3: to think about gold. But like you said, gold is

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Speaker 3: not an asset that is that is aligned with a

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Speaker 3: growth philosophy. It does not spit out income. It's not

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Speaker 3: going to invent the next you know, the next iPhone

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Speaker 3: we all have to have. It's not going to find

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Speaker 3: a new market to sell, and it's simply worth what

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Speaker 3: people think it is. So all you're really trying to

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Speaker 3: do is time human emotions. So I'm not saying it's

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Speaker 3: a bad investment. It is a decent hedge against stuff

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Speaker 3: that goes up and down.

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Speaker 2: But if you are not.

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Speaker 3: Somebody who really truly panics between the peaks and valleys

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Speaker 3: of the overall market, then I don't feel like it's

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Speaker 3: got a very significant place in a well balanced portfolio.

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Speaker 1: Yeah, decent inflation hedge for sure. I mean it beats

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Speaker 1: sitting in cash. But what a lot of people don't

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Speaker 1: bargain for when they get into gold is it's a

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Speaker 1: lot more volatile to the upside and the downside than cash.

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Speaker 1: So you know, it's not a CD replacement. So again

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Speaker 1: you've kind of made the point there. Look carefully and

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Speaker 1: make sure let me polish it off there on. Could

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Speaker 1: you just triggered a thought for me too.

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Speaker 3: Remember it's gold is worth what people think it is,

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Speaker 3: so right now gold is worth a lot because a

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Speaker 3: lot of people feel like it's a good part of

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Speaker 3: their portfolio. Sooner or later, the dust will settle, as

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Speaker 3: it has done over the many, many cycles we've had

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Speaker 3: over the decades.

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Speaker 2: You can look at and.

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Speaker 3: Eventually the herd is going to move the other way

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Speaker 3: and it won't feel that cash at all.

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Speaker 2: It will drop.

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Speaker 1: Yeah, it may and and I think a lot of

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Speaker 1: people pile into gold based on this thirty eight trillion

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Speaker 1: dollar and accumulating US debt, which that isn't going away

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Speaker 1: anytime soon. So yeah, it's it's just always an interesting

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Speaker 1: asset class. All right, Let's dive into crypto, because, man, Brian,

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Speaker 1: when we talk about crypto currency, there's a whole lot

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Speaker 1: of stuff out there and we got to try to separate.

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Speaker 1: I guess what's become part of the institutional acid allocation

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Speaker 1: class now, I guess some responsible, responsibly managed, regulated ETFs,

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Speaker 1: for example, versus some of this just garbage out there,

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Speaker 1: these doge coins and coins that are being advertised in

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Speaker 1: social media. There's a wide variety and vast difference between

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Speaker 1: a good, diversified you know, bitcoin ETF and some of this.

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Speaker 2: What I'll call just flat out garbage that's out there.

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Speaker 3: Yeah, and I think we're starting there's a light at

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Speaker 3: the end of the tunnel for the garbage. I mean,

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Speaker 3: I'm hoping we are past the days where the Hawktua

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Speaker 3: girl can release her own crypto for whatever stupid reason,

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Speaker 3: for her twelve minutes of fame. I'm not even gonna

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Speaker 3: give her fifteen minutes of fame, and she's long gone anyway.

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Speaker 3: But I hope we are moving to a part I

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Speaker 3: don't think the big financial institutions we're ever going to

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Speaker 3: buy the Hawktua coin. However, they are starting to build

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Speaker 3: structures around having cryptocurrency as part of a portfolio. This

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Speaker 3: isn't a bad thing. Sophisticated investors are starting to pay

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Speaker 3: attention to this. The good reasons are there is potential

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Speaker 3: for uncorrelated return streams, something that isn't regular stocks and bonds,

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Speaker 3: something else that can command the attention.

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Speaker 2: Of investors for a while.

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Speaker 3: Pretty good liquidity because there are significant markets for these

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Speaker 3: very rapid market responsiveness. Now that goes both ways, right,

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Speaker 3: that's not only a good thing. That just means it

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Speaker 3: moves quickly in either direction. More real world use cases

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Speaker 3: that every time you hear some industry talking about the

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Speaker 3: blockchain that came from cryptocurrency and then the settlement technologies,

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Speaker 3: this means we can move money faster, and we can

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Speaker 3: complete transactions more quickly. Expanded access through all the custodial

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Speaker 3: platforms meaning your fidelities in your schwabs and so on

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Speaker 3: and so forth, and regulated vehicles. It's starting to look

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Speaker 3: more like a tool that the average investor can use.

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Speaker 3: That said, there is still risk, right, There's still going

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Speaker 3: to be extreme volatility. You're never certain of the valuation

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Speaker 3: of these things. There is a commodity aspect to these things. Still,

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Speaker 3: it's still worth what the crowd says. Yeah, and again

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Speaker 3: back to why people use alternative investments in the first place.

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Speaker 3: As part of a well diversified financial plan and strategy.

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Speaker 3: A lot of people are looking for negatively correlated assets,

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Speaker 3: you know, in other words, assets that zig when the

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Speaker 3: rest of their portfolio zags. Brian Cryptocurrency did not behave

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Speaker 3: that way in twenty twenty five when we saw corrections

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Speaker 3: in tech stocks, for example, I mean, the price of

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Speaker 3: bitcoin fell and fell precipitously. So to me, that's not

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Speaker 3: a reason to own cryptocurrency is to kind of hedge

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Speaker 3: or offset any volatility in the rest of your portfolio,

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Speaker 3: because it just isn't It isn't working that way. Yeah,

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Speaker 3: we don't have enough history yet to truly say this

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Speaker 3: is a hedge. This is not, because there just hasn't been,

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Speaker 3: and it's going to take decades really for us to

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Speaker 3: get to that point to truly understand how does cryptocurrency

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Speaker 3: behave in various interest rate cycles. We've seen a few

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Speaker 3: things like that, but we've only seen it for the

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Speaker 3: first time. And the more people get into it, the

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Speaker 3: more differently it will behave as the flock of birds

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Speaker 3: gets bigger and more unpredictable.

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Speaker 1: All right, let's get into an asset class that might

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Speaker 1: actually make a lot of sense for some growth orient

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Speaker 1: in long term investors, folks that can be patient and select,

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Speaker 1: you know, investments appropriately.

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Speaker 2: And that's the whole private equity space.

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Speaker 1: This whole space has really taken off, and I think

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Speaker 1: it will continue to do. So let's talk about what

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Speaker 1: private equity even is. It's where you have the opportunity

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Speaker 1: to invest in companies and these are usually early stage

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Speaker 1: growth companies that are not traded in the public markets.

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Speaker 1: You cannot buy their public stock. It's a good thing

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Speaker 1: to get in early on some of these if you

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Speaker 1: know what you're getting into. I think a lot of

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Speaker 1: people Brian look at this as kind of like the

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Speaker 1: IPO space, where man if I could get in early,

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Speaker 1: like the owners of this company or the senior executives,

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Speaker 1: I'm going to make a killing. They want they want

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Speaker 1: to swing for the fence and make a huge return.

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Speaker 1: You got to know what you're getting into here. And

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Speaker 1: when you're talking to an advisor or somebody in the

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Speaker 1: financial services industry, I'm just telling you're not going to

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Speaker 1: get in to the earth stuff where it's just free money.

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Speaker 1: So you better have somebody that can vet what this

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Speaker 1: stuff really is, evaluate the fees, evaluate the liquidity issues.

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Speaker 1: There's a lot that goes into evaluate, evaluating this whole

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Speaker 1: private equity space.

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Speaker 2: It can be play.

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Speaker 1: A great role in a long term portfolio if you

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Speaker 1: have somebody you know selecting the right place to be

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Speaker 1: or better yet not to be.

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Speaker 2: Yeah, and these things may be closer to you than

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Speaker 2: you think.

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Speaker 3: If you're driving down the street going on your commute

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Speaker 3: for the five billionth time, and you notice that that

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Speaker 3: little vet clinic on the corner that's been there for

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Speaker 3: fifty years, all of a sudden has a new logo

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Speaker 3: and a new name, you can pretty you can be

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Speaker 3: pretty confident that there's a private equity firm behind that.

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Speaker 3: What they're starting to do for those types of small businesses.

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Speaker 3: Whoever that veterinarian is to beat that example to death,

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Speaker 3: wants to retire at some point, and for some of

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Speaker 3: those folks, a private equity exit is how they do it.

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Speaker 3: They sell their practice into a larger entity, and that

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Speaker 3: entity combines, combines expenses, and takes advantage of a kind

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Speaker 3: that means a scale and allows other people to invest

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Speaker 3: in it.

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Speaker 2: Now, it does create a different environment.

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Speaker 3: Sometimes in those four walls you might hear some grumpy

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Speaker 3: people because of the changes that are coming.

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Speaker 2: But if you're standing.

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Speaker 3: Outside those four walls wanting to invest in it, Just

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Speaker 3: beware that's the kind of thing you're investing in. You're

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Speaker 3: not going to see that little vet clinic. Inside a

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Speaker 3: mutual fund or something like that. The returns can be better,

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Speaker 3: but they can go south as well because they're just

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Speaker 3: more volatility, less liquidity. That's for darn shirt. There isn't

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Speaker 3: a publicly traded market. That's literally the difference. Publicly traded

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Speaker 3: means I can see the ticker symbol, I can see

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Speaker 3: the price all day every day. Private means I'll probably

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Speaker 3: hear from an accounting firm a few times a year

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Speaker 3: as to what it's worth.

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Speaker 1: And that's where you want to evaluate. You want to

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Speaker 1: just be in one or two or five companies. Do you

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Speaker 1: really want to spread out your risk and be in

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Speaker 1: a broadly diversified private equity portfolio, maybe a fund to

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Speaker 1: fund approach with several different managers. Again, watch the fees,

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Speaker 1: watch the liquidity terms, Watch how taxes are reported.

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Speaker 2: A lot of people get into.

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Speaker 1: This stuff and they have no idea that they're gonna

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Speaker 1: get k one tax reporting, Brian, you and I talk

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Speaker 1: to clients all the time. You want you want to

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Speaker 1: make somebody unhappy, you know, real, quickly tell them they're

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Speaker 1: not gonna be able to file their tax return until

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Speaker 1: they're October, so you better know what you're getting into

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Speaker 1: in terms of tax reporting.

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Speaker 2: That is a virtual guarantee.

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Speaker 3: If you're gonna get into these types of things, you're

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Speaker 3: done filing in April, You're gonna file an extension, and

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Speaker 3: you're gonna figet about all of it until August.

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Speaker 1: That's a fact, all right, Brian, walk us through real

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Speaker 1: estate because you know, well, we again another term where

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Speaker 1: we throw out, well, real estate.

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Speaker 2: Any more of it, right, Bob.

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Speaker 1: You can either own it yourself or you can have

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Speaker 1: a professionally managed portfolio.

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Speaker 2: Both options come with various pros and cons.

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Speaker 3: Yeah, and then I think we've officially reached that reach

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Speaker 3: the stage where if you are somebody who has never

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Speaker 3: owned it and you're thinking about picking up one or

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Speaker 3: two apartment buildings on the side to run and to

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Speaker 3: have a stream of income, I'm just gonna go ahead

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Speaker 3: and say, don't people who do this for the first

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Speaker 3: time and have never it seems like they cannot wait

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Speaker 3: to get out of it after two or three years

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Speaker 3: maybe being invested in these things. Now if you figured

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Speaker 3: out the game and you know how to make a

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Speaker 3: scalable business out of it. That's a whole different environment.

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Speaker 3: But if you just want to have something, if you

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Speaker 3: refer to it as passive income, rest assured. It ain't passive.

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Speaker 3: It's very active income, unless you're going to hire a property

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Speaker 3: management firm, in which case you're probably going to get

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Speaker 3: more like CD level returns out of an interpet.

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Speaker 2: Yeah.

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Speaker 1: And then if you go the institutional side and get

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Speaker 1: into a professionally managed rate, that comes with some complexities,

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Speaker 1: you know, different set of complexities. A lot of times

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Speaker 1: these scenes have high fees, high commissions, you know, some

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Speaker 1: liquidity constraints. So again, buyer beware when you're evaluating this,

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Speaker 1: and in the best case, work with a good fiduciary advisor.

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Speaker 1: Here's the all Worth advice. Alternatives can add real value

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Speaker 1: to a well constructed portfolio, but only when they're thoughtfully

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Speaker 1: integrated into a plan that fits your unique goals, risk

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Speaker 1: and liquidity needs. So make sure you're working with a

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Speaker 1: fiduciary who truly puts your interests first.

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Speaker 2: Well.

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Speaker 1: Five of the nation's biggest banks just reported their fourth

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Speaker 1: quarter earnings, and we've got them all for you. We'll

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Speaker 1: break it down and what it could mean for investors.

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Speaker 1: Coming up next, you're listening to Simply Money presented by

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Speaker 1: all Worth Financial on fifty five KRC, the Talk station.

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Speaker 1: You'll look the Money presented by all Worth Financial on

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Speaker 1: Bob Sponsella along with Brian James. Straight ahead at six

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Speaker 1: forty three, we're diving into the questions that hit home

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Speaker 1: for many of you, from how to help aging parents

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Speaker 1: without drailing your own retirement plan, to the right way

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Speaker 1: to prioritize experiences over things plus Medicare IRMA surprises, and

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Speaker 1: why outdated retirement projections might be leading you off track. Brian,

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Speaker 1: sharpen your pencil here because we got a lot to

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Speaker 1: talk about coming up here at six forty three. All right,

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Speaker 1: the big banks continue to report fourth quarter earnings and

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Speaker 1: the news seems to be mixed depending on which bank

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Speaker 1: we're looking at. And remember, big bank earnings can be

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Speaker 1: somewhat significant to how everybody's viewing the broader market because

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Speaker 1: they do kind of act like a pulse check on

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Speaker 1: the broader economy and the overall financial system. So let's

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Speaker 1: get into it. We got a few banks that have

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Speaker 1: already reported for the most part. The news has been

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Speaker 1: pretty good. Nothing to really, you know, cause anyone to

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Speaker 1: lose any sleep though.

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Speaker 3: Yeah, I think we're in a solid position here. But

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Speaker 3: just I want to reiterate why you said what you

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Speaker 3: did about that bank earnings are Banks aren't the sexiest

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Speaker 3: things to look at. That's not the most exciting industry

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Speaker 3: to pay attention to. However, like you said, it's just

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Speaker 3: the pulse. If banks are doing well, that means other companies,

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Speaker 3: other businesses are probably borrowing money so they can expand

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Speaker 3: and grow and so forth.

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Speaker 2: That's a great sign for the economy.

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Speaker 1: Yeah, and you hit the magic word borrow. I mean

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Speaker 1: this whole lot of these gross companies function on access

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Speaker 1: to credit, access to money, liquidity, So we got to

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Speaker 1: have our banking system healthy or else a lot of

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Speaker 1: things can shut down in a hurry. But let's get

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Speaker 1: into some of these major bank and their fourth year.

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Speaker 3: So some of the headlines, and we've been talking about

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Speaker 3: this all week because it's bank week. So Goldman Sacks,

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Speaker 3: Goldman Sacks had a great earnings report here. They blew

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Speaker 3: through their expectations. And again, as we always say, remember

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Speaker 3: it's not about what they did, it's about whether the

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Speaker 3: analysts were right or not, so they blew through the

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Speaker 3: analyst expectations for their equities trading revenue. Golden Sacks is

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Speaker 3: a slightly different bank than what you might be thinking

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Speaker 3: of on the Street corner. All time Wall Street record

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Speaker 3: of four point three billion dollars in the final three

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Speaker 3: months of last year.

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Speaker 2: I know I sleep better knowing those Goldman.

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Speaker 3: Sachs folks are going to get giant bonuses here in

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Speaker 3: the next few months. Anyway, they increased their targets and

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Speaker 3: this is this is really what the market can care about.

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Speaker 3: They also increase their own internal targets for their asset

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Speaker 3: and wealth management businesses, and those those themselves posted a

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Speaker 3: quarterly record for fees. They're now targeting a thirty percent

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Speaker 3: pre tax margin and the medium term, so in the

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Speaker 3: intermediate term, which was up from the mid twenties, and

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Speaker 3: returns in the high teens.

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Speaker 2: Blah blah blah. These are all numbers.

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Speaker 3: Basically, they're saying, we thought we were going to do good,

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Speaker 3: now we think we're going to do better. That's a

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Speaker 3: good sign from for at least one bank.

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Speaker 1: Yeah, and I'd say Morgan Stanley's report was almost identical.

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Speaker 1: I mean, they hi the highlight in the report was

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Speaker 1: how well their wealth management and asset management business is doing.

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Speaker 1: Let's face it, Brian, we've all heard the TV commercials.

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Speaker 1: You do better when we do better, when you do better, right,

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Speaker 1: I mean, if the markets go up fifteen, eighteen, twenty percent,

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Speaker 1: you know a few years in a row, guess what,

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Speaker 1: wealth managers are going to make more money because there's

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Speaker 1: more assets under management, and that is.

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Speaker 2: Playing itself out in the earnings report. All right.

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Speaker 1: Wells Fargo, however, missed analytics analyst profit estimates in the

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Speaker 1: fourth quarter.

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Speaker 2: There.

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Speaker 1: They got some other issues going on over there at

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Speaker 1: Wells Fargo, but you know, they missed expectations. A stock

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Speaker 1: guid hit a little bit. Bank of America, City Group,

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Speaker 1: you know, on and on. Bank of America had an

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Speaker 1: earnings beat. City Group had a little hiccup here, taking

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Speaker 1: a little bit of a loss related to its plan

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Speaker 1: to sell some assets in Russia. Brian, Without getting into

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Speaker 1: the weeds here, Russia is probably not the best place

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Speaker 1: to be trying to operate right now.

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Speaker 3: So yeah, Russia has always been a little bit of

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Speaker 3: the wild West, but I'm not sure right now that

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Speaker 3: I'd want to be partnering out there. But in any case,

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Speaker 3: let's get local, right, So we got a big bank

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Speaker 3: right here in town.

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Speaker 2: How are they looking?

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Speaker 3: Fifth Third Bank just got approval to merge with Comerica Bank,

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Speaker 3: which is mostly up in Michigan. Federal Reserve finally approved.

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Speaker 3: It's about almost an eleven billion dollar deal. And I

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Speaker 3: know Fifth Third has been on the hunt for a

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Speaker 3: long time for a move like this. This goes back,

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Speaker 3: you know, more than a decade in terms of their

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Speaker 3: desires because of the banking industry for these sort of

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Speaker 3: mid level and Fifth Third is a little more than

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Speaker 3: a mid level bank. But these regional banks, it's it's

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Speaker 3: very much acquire or be acquired, and they still want

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Speaker 3: to be the hunter.

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Speaker 2: And so far, so good. But the Federal Reserve finally approved.

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Speaker 3: That deal and that that will allow Fifth Third to

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Speaker 3: become one of the largest banks combined. It's going to

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Speaker 3: be the ninth largest bank in the United States, two

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Speaker 3: hundred and ninety billion dollars in total assets, reaching seventeen

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Speaker 3: of the twenty fastest growing US markets now Texas, California, Florida,

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Speaker 3: and across the southeast. A lot of us think is

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Speaker 3: Fifth Third to someplace that Uncle Charlie worked a million

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Speaker 3: years ago. Now it's becoming a national bank. A little bit,

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Speaker 3: a little bit different.

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Speaker 1: Now, all right, Well, let's turn our attention to the

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Speaker 1: broader economy and a new report that suggests, well, like always,

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Speaker 1: we continue to spend no matter what's going on, Brian

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Speaker 1: and I will maintain this until I die. The average American,

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Speaker 1: if we have a dollar in our pocket, we're going

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Speaker 1: to spend a dollar about a dollar and five cents.

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Speaker 1: That's a lump in my pocket.

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Speaker 2: I want to get rid of. Yeah, I'm American, aren't

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Speaker 2: it Exactly so?

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Speaker 1: US retail sales rose in November by the highest mark

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Speaker 1: since July, fueling a rebound in auto purchases and very

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Speaker 1: resilient holiday shopping. Consumers spent a record breaking amount online

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Speaker 1: during the holiday season that should probably come as no surprise,

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Speaker 1: and spending at restaurants and bars, the only service sector

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Speaker 1: category in the retail report, gained zero point six percent

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Speaker 1: after falling the prior month. I always go back to

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Speaker 1: my personal you know, anecdotal evidence of how the economy doing.

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Speaker 1: Look at a average Applebee's parking lot on a Tuesday night.

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Speaker 1: If that place is packed, People have jobs, have money,

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Speaker 1: they're out spending.

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Speaker 2: Life is good, Brian, but unlimited appetizers.

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Speaker 3: So they're making smart financial decisions right and bringing doggy bags.

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Speaker 2: I'm sure.

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Speaker 3: Now I want to throw out here the data we're

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Speaker 3: sharing here, This is not adjusted for inflation, so a

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Speaker 3: lot of this can can indicate that people are simply

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Speaker 3: doing what they've always done. It's just costing more because

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Speaker 3: this report is simply telling telling us how many dollars

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Speaker 3: we're spending these various categories.

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Speaker 2: Yeah, and the fact that people are spending doesn't necessarily mean.

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Speaker 1: That the retailers that are offering those goods are growing

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Speaker 1: their profits. I mean they'll they'll price it to move it,

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Speaker 1: so we'll see how the earnings shakeout for the real tale.

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Speaker 2: Good news is it's not a decline, yep, for sure.

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Speaker 2: All right. Coming up next, a look at the Lozel

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Speaker 2: local housing market. When to take advantage of buying or selling?

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Speaker 2: Coming up next, you're listening to Simply Money, presented by

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Speaker 2: all Worth Financial on fifty five KRC.

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Speaker 1: The talk station. You're listening to Simply Money, said of

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Speaker 1: by all Worth Financial. I'm Bob sponsorer along with Brian James,

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Speaker 1: joined tonight by our Real Estate expert Michelle Sloan, owner

442
00:20:12,200 --> 00:20:15,840
Speaker 1: of Remax Time and Michelle, it's twenty twenty six, Happy

443
00:20:15,920 --> 00:20:18,320
Speaker 1: new year to you. And as we turn the page

444
00:20:18,359 --> 00:20:21,560
Speaker 1: and turn the page on a new calendar year, we

445
00:20:21,640 --> 00:20:23,760
Speaker 1: really need to get into what's going on with the

446
00:20:23,800 --> 00:20:26,760
Speaker 1: real estate market here in January of twenty twenty six,

447
00:20:27,320 --> 00:20:30,439
Speaker 1: now that the temperatures are subfreezing. What's going on in

448
00:20:30,480 --> 00:20:32,840
Speaker 1: the real estate market? How busy are you right now?

449
00:20:34,560 --> 00:20:38,159
Speaker 4: Not too crazy yet, We're not in that frenzy of

450
00:20:38,200 --> 00:20:41,440
Speaker 4: the season. But there are good deals to be had

451
00:20:41,520 --> 00:20:45,320
Speaker 4: if for buyers out there in the world. And the biggest,

452
00:20:46,160 --> 00:20:50,960
Speaker 4: absolutely best thing that could happen is our mortgage rates

453
00:20:51,400 --> 00:20:56,520
Speaker 4: have dipped below six percent, so as of today, we're

454
00:20:56,560 --> 00:21:00,880
Speaker 4: at five point nine four for a thirty year fixed

455
00:21:00,920 --> 00:21:03,920
Speaker 4: strate mortgage. Now, obviously it's going to depend on your

456
00:21:03,960 --> 00:21:08,160
Speaker 4: credit and that information, but you know, if we're seeing

457
00:21:08,240 --> 00:21:12,240
Speaker 4: the trend going down and if we're in the fives,

458
00:21:12,440 --> 00:21:16,800
Speaker 4: I personally think that, in my expert opinion, that that

459
00:21:17,000 --> 00:21:20,880
Speaker 4: is the sweet spot for buyers to get back on

460
00:21:20,960 --> 00:21:24,000
Speaker 4: the horse and ride towards their new home.

461
00:21:25,480 --> 00:21:28,480
Speaker 3: So, Michelle, what is it like We always talk about

462
00:21:28,480 --> 00:21:30,600
Speaker 3: the buying season, and you know, we talk about it

463
00:21:30,600 --> 00:21:31,359
Speaker 3: on the radio.

464
00:21:31,119 --> 00:21:31,640
Speaker 2: All the time.

465
00:21:31,880 --> 00:21:34,200
Speaker 3: This is not the buying season because, as Bob hinted at,

466
00:21:34,200 --> 00:21:36,040
Speaker 3: the weather kind of stinks and people don't want to

467
00:21:36,040 --> 00:21:38,280
Speaker 3: deal with it. Is there like a period of time

468
00:21:38,520 --> 00:21:40,800
Speaker 3: where your phone just stops ringing and it just goes

469
00:21:40,800 --> 00:21:42,439
Speaker 3: over the cliff and it's quiet for a while, then

470
00:21:42,480 --> 00:21:43,080
Speaker 3: it ramps up.

471
00:21:43,080 --> 00:21:44,400
Speaker 2: Does it really work like that.

472
00:21:46,359 --> 00:21:50,639
Speaker 5: In a certain sort of sort of You know, I

473
00:21:50,680 --> 00:21:54,080
Speaker 5: still get calls, but certainly not as many calls as

474
00:21:54,119 --> 00:21:56,720
Speaker 5: I get during the peak season.

475
00:21:57,240 --> 00:22:00,879
Speaker 4: And really the peak season starts around to March and

476
00:22:01,040 --> 00:22:04,480
Speaker 4: April because it takes thirty to sixty days to close

477
00:22:04,520 --> 00:22:07,680
Speaker 4: on a property if you find a property. So I

478
00:22:07,720 --> 00:22:11,760
Speaker 4: always recommend, like everybody asks, when's the best time to

479
00:22:12,080 --> 00:22:14,800
Speaker 4: list my home for sale? When they're going to be

480
00:22:14,880 --> 00:22:19,120
Speaker 4: the most eyeballs looking at it. And honestly, I do

481
00:22:19,160 --> 00:22:20,920
Speaker 4: think there are a lot of people that are right

482
00:22:20,960 --> 00:22:24,040
Speaker 4: now that are looking at the market. They're watching the

483
00:22:24,280 --> 00:22:27,000
Speaker 4: realtor dot com and the different websites.

484
00:22:27,680 --> 00:22:28,320
Speaker 2: There's a lot of.

485
00:22:28,240 --> 00:22:32,960
Speaker 4: People just looking online, but they're not looking in person

486
00:22:33,200 --> 00:22:37,639
Speaker 4: just yet. So once March hits, and that's really again,

487
00:22:37,840 --> 00:22:41,960
Speaker 4: I find that I end up listening and getting under

488
00:22:42,000 --> 00:22:46,639
Speaker 4: contract more homes in March and April, and then they

489
00:22:46,640 --> 00:22:50,840
Speaker 4: close in May and June, and then by the time

490
00:22:50,880 --> 00:22:52,760
Speaker 4: we get to July we see a little bit of

491
00:22:52,800 --> 00:22:55,720
Speaker 4: a fall off again. So if we're looking at our

492
00:22:56,480 --> 00:23:00,879
Speaker 4: upcoming year, this is the planning season. So if you know,

493
00:23:00,920 --> 00:23:03,200
Speaker 4: if you're thinking about buying a home, now, it's an

494
00:23:03,240 --> 00:23:06,359
Speaker 4: awesome time to get with your real estate agent, find

495
00:23:06,359 --> 00:23:08,719
Speaker 4: a real estate agent that you want to hire, that

496
00:23:08,800 --> 00:23:12,480
Speaker 4: you want to work with, and you know, get under

497
00:23:12,640 --> 00:23:14,800
Speaker 4: You will have to get under contract, because that's the

498
00:23:14,880 --> 00:23:17,720
Speaker 4: new rule. If you're a buyer, you have to be

499
00:23:17,840 --> 00:23:20,679
Speaker 4: under contract with a real estate agent in order to

500
00:23:20,720 --> 00:23:24,359
Speaker 4: even view homes on the market. So that's something that

501
00:23:24,440 --> 00:23:27,800
Speaker 4: happened last year. It's a change from a lot of

502
00:23:27,800 --> 00:23:31,080
Speaker 4: people are like, I just want to look. Well, that's fine,

503
00:23:31,280 --> 00:23:33,960
Speaker 4: you can put you can go find an open house maybe,

504
00:23:34,359 --> 00:23:36,320
Speaker 4: but if you want to seriously look at a home

505
00:23:36,359 --> 00:23:38,280
Speaker 4: and you want to take an agent with you, you're

506
00:23:38,320 --> 00:23:41,600
Speaker 4: going to have to be have a contract with that agent.

507
00:23:42,000 --> 00:23:44,560
Speaker 2: Okay, so what if it did does then yeah, I

508
00:23:44,560 --> 00:23:46,560
Speaker 2: actually went through that last In other words, the tire

509
00:23:46,680 --> 00:23:47,400
Speaker 2: kicking is over.

510
00:23:47,520 --> 00:23:51,240
Speaker 3: Yeah, exactly, when you're curious.

511
00:23:51,280 --> 00:23:53,679
Speaker 4: You gotta be serious, yeah.

512
00:23:53,240 --> 00:23:55,320
Speaker 3: Miche, What if I'm a seller, So if I'm if

513
00:23:55,320 --> 00:23:57,600
Speaker 3: I'm in a situation where maybe my job changed or

514
00:23:57,640 --> 00:23:59,399
Speaker 3: something like that, I just got to sell my house,

515
00:23:59,440 --> 00:24:00,920
Speaker 3: maybe at the not the ideal time.

516
00:24:01,080 --> 00:24:03,880
Speaker 2: What are those folks doing during this time of the year.

517
00:24:03,880 --> 00:24:05,320
Speaker 3: Are they saying, you know what, we will just tough

518
00:24:05,359 --> 00:24:07,320
Speaker 3: it out until spring when the prices will be better.

519
00:24:07,680 --> 00:24:09,480
Speaker 2: Or do they hang on or do they pull it

520
00:24:09,480 --> 00:24:10,800
Speaker 2: off the market? How does that work?

521
00:24:12,160 --> 00:24:15,480
Speaker 4: Well? I recommend that you go ahead and put your

522
00:24:15,480 --> 00:24:18,080
Speaker 4: home on the market. If you're in a situation where

523
00:24:18,119 --> 00:24:20,560
Speaker 4: you need to sell because you're moving, or there is

524
00:24:20,640 --> 00:24:25,200
Speaker 4: some other circumstance personally that you have to sell your home.

525
00:24:25,520 --> 00:24:28,920
Speaker 4: You can't really sell your home unless it's on the market.

526
00:24:29,400 --> 00:24:31,760
Speaker 4: So yes, if you put your home on the market

527
00:24:31,800 --> 00:24:36,479
Speaker 4: in January or February, we may have fewer buyers looking

528
00:24:36,520 --> 00:24:39,560
Speaker 4: at it. I try to set the tone and you

529
00:24:39,920 --> 00:24:44,959
Speaker 4: have everybody just ready to understand that you're not going

530
00:24:45,040 --> 00:24:48,840
Speaker 4: to have ten showings on the first day. You're likely

531
00:24:48,920 --> 00:24:51,960
Speaker 4: to have maybe one showing a week. And if you're

532
00:24:52,000 --> 00:24:55,040
Speaker 4: getting one showing a week, that's good. And so we

533
00:24:55,119 --> 00:24:59,320
Speaker 4: have to set those expectations. Again, if I were in

534
00:24:59,359 --> 00:25:01,560
Speaker 4: a perfect way world and you don't have to sell

535
00:25:01,600 --> 00:25:04,520
Speaker 4: and you have a little bit of time, I recommend

536
00:25:04,680 --> 00:25:06,359
Speaker 4: you go ahead and put your home on the market

537
00:25:06,400 --> 00:25:09,920
Speaker 4: in March. That way, you're beating the rush of other

538
00:25:10,000 --> 00:25:12,639
Speaker 4: properties going on the market, and you're going to have

539
00:25:12,680 --> 00:25:15,119
Speaker 4: more eyeballs on it. You're going to have more potential

540
00:25:15,160 --> 00:25:18,159
Speaker 4: buyers looking at the home. It might be a little

541
00:25:18,200 --> 00:25:20,840
Speaker 4: slow to start, but again, you're going to get your

542
00:25:20,920 --> 00:25:23,959
Speaker 4: professional photos. It takes a minute to get your house ready,

543
00:25:24,200 --> 00:25:26,479
Speaker 4: and I want to make sure now is the time

544
00:25:27,040 --> 00:25:30,040
Speaker 4: and we're not in the same time frame as we

545
00:25:30,040 --> 00:25:32,520
Speaker 4: were a few years ago. That homes will sell no

546
00:25:32,560 --> 00:25:35,520
Speaker 4: matter what it looks like. You have to do the

547
00:25:35,520 --> 00:25:39,359
Speaker 4: prep work again, and being in the business for twenty years,

548
00:25:39,760 --> 00:25:43,439
Speaker 4: I think it's so very, very very important to have

549
00:25:43,560 --> 00:25:48,320
Speaker 4: your home ready, staged, decluttered, all of those things that

550
00:25:48,359 --> 00:25:50,720
Speaker 4: we talk about if you're planning to sell your home.

551
00:25:51,640 --> 00:25:55,119
Speaker 1: Yeah, Michelle, you almost anticipated exactly my next question. And

552
00:25:55,160 --> 00:25:57,960
Speaker 1: it goes back to, you know, if March and April

553
00:25:58,080 --> 00:26:00,720
Speaker 1: or kind of go time for listing the prop it

554
00:26:00,720 --> 00:26:04,200
Speaker 1: would seem to me January and February are prep time,

555
00:26:04,400 --> 00:26:08,320
Speaker 1: so you know, I know you're very thorough in helping

556
00:26:08,400 --> 00:26:11,840
Speaker 1: people get their home actually ready to market in the

557
00:26:11,880 --> 00:26:13,560
Speaker 1: best condition at the best price.

558
00:26:13,680 --> 00:26:16,240
Speaker 2: And that doesn't take that's not just a forty eight

559
00:26:16,240 --> 00:26:17,080
Speaker 2: hour process.

560
00:26:17,640 --> 00:26:20,160
Speaker 1: Walk people through what they need to be thinking about

561
00:26:20,280 --> 00:26:23,280
Speaker 1: now if they're going to work with a real estate

562
00:26:23,320 --> 00:26:26,520
Speaker 1: professional like yourself to really have the best outcome.

563
00:26:27,160 --> 00:26:30,120
Speaker 2: You know, when the calendar does flip around March.

564
00:26:29,800 --> 00:26:32,200
Speaker 1: April, May, June, and when you really want to sell

565
00:26:32,240 --> 00:26:34,080
Speaker 1: your house, what do we need to be doing now

566
00:26:34,119 --> 00:26:34,840
Speaker 1: to get ready?

567
00:26:35,960 --> 00:26:39,520
Speaker 4: Yeah? Absolutely, now is the time to really, like I said,

568
00:26:39,680 --> 00:26:44,439
Speaker 4: lock in your real estate agents, have them talk to you,

569
00:26:44,720 --> 00:26:47,480
Speaker 4: talk to a couple different real estate agents. Here's the thing.

570
00:26:48,000 --> 00:26:52,320
Speaker 4: If you are a seller, you have an opportunity. You know,

571
00:26:52,400 --> 00:26:54,840
Speaker 4: you may call me and say, Michelle Sloane, I'd like

572
00:26:54,840 --> 00:26:56,960
Speaker 4: you to come look at my house I'm thinking about selling.

573
00:26:57,240 --> 00:26:59,280
Speaker 4: And then you're going to call another agent with a

574
00:26:59,320 --> 00:27:02,560
Speaker 4: different broker and they're going to come over and maybe

575
00:27:02,600 --> 00:27:04,840
Speaker 4: you get along with me better, and you you like

576
00:27:04,920 --> 00:27:08,080
Speaker 4: what I have to say, and you know, we think

577
00:27:08,119 --> 00:27:11,560
Speaker 4: that we have a good working relationship because it is

578
00:27:11,640 --> 00:27:14,639
Speaker 4: a relationship after all, and it's one that you really

579
00:27:14,680 --> 00:27:17,359
Speaker 4: have to trust the agent is going to do what's

580
00:27:17,359 --> 00:27:20,840
Speaker 4: in your best interest. So talk to a couple of agents.

581
00:27:20,880 --> 00:27:23,199
Speaker 4: I wouldn't say that you necessarily need to talk to

582
00:27:23,240 --> 00:27:26,400
Speaker 4: more than two, but if the first two are does,

583
00:27:27,520 --> 00:27:29,879
Speaker 4: go ahead talk to another one. That's something that you

584
00:27:29,960 --> 00:27:33,479
Speaker 4: can be doing right now. The other thing is listen

585
00:27:33,520 --> 00:27:36,920
Speaker 4: to the advice. I know you think your house is beautiful.

586
00:27:37,280 --> 00:27:38,960
Speaker 4: I know that you think your house is worth a

587
00:27:38,960 --> 00:27:42,080
Speaker 4: million dollars. Listen to your real estate agent because it

588
00:27:42,119 --> 00:27:44,120
Speaker 4: may not be beautiful for everybody.

589
00:27:44,760 --> 00:27:47,119
Speaker 1: You mean, you might not like my shag carpeting in

590
00:27:47,160 --> 00:27:49,880
Speaker 1: the third bedroom. That might actually have to be replaced.

591
00:27:50,000 --> 00:27:50,600
Speaker 2: Nobody likes it.

592
00:27:50,680 --> 00:27:52,840
Speaker 4: Don't have that in there. I told you to get

593
00:27:52,920 --> 00:27:53,359
Speaker 4: rid of that.

594
00:27:53,800 --> 00:27:55,359
Speaker 2: You've been telling me that for months.

595
00:27:55,840 --> 00:27:59,800
Speaker 1: All right, Hey, great advice, Great advice as always tonight

596
00:27:59,840 --> 00:28:03,879
Speaker 1: for our real estate expert, Michelle Sloan, owner of Remax Time.

597
00:28:04,200 --> 00:28:06,920
Speaker 1: You're listening to Simply Money presented by all Worth Financial

598
00:28:07,000 --> 00:28:14,800
Speaker 1: on fifty five KRC the talk station. You're listening to

599
00:28:14,800 --> 00:28:17,639
Speaker 1: Simply Money presented by all Worth Financial on Bob Sponsller

600
00:28:17,680 --> 00:28:20,840
Speaker 1: along with Brian James. You have a financial question you'd

601
00:28:20,880 --> 00:28:22,679
Speaker 1: like for us to answer. There's a red button. You

602
00:28:22,680 --> 00:28:25,200
Speaker 1: can click while you're listening to the show. If you're

603
00:28:25,240 --> 00:28:28,199
Speaker 1: listening to the show on the iHeart app, simply record

604
00:28:28,240 --> 00:28:31,800
Speaker 1: your question and as always, it will come straight to us.

605
00:28:32,400 --> 00:28:35,560
Speaker 1: All right, Brian, Mark and Mason says, I'm considering a

606
00:28:35,600 --> 00:28:40,160
Speaker 1: second home mainly for lifestyle reasons, not return. How should

607
00:28:40,160 --> 00:28:44,400
Speaker 1: I think about that decision without forcing it to just

608
00:28:44,400 --> 00:28:47,840
Speaker 1: justify it financially. I love this question because this is

609
00:28:47,880 --> 00:28:50,360
Speaker 1: what a lot of people do. They buy something because

610
00:28:50,360 --> 00:28:52,160
Speaker 1: they want to buy it, and then they walk in

611
00:28:52,200 --> 00:28:54,320
Speaker 1: here and try to talk us into why it's a

612
00:28:54,360 --> 00:28:58,440
Speaker 1: great quote unquote investment. It's great to see Mark walking

613
00:28:58,480 --> 00:28:59,960
Speaker 1: in here with his eyes wide open.

614
00:29:00,080 --> 00:29:02,560
Speaker 2: Yeah, this is good. So this is a good instinct,

615
00:29:02,560 --> 00:29:03,720
Speaker 2: Mark that you're thinking about here.

616
00:29:03,800 --> 00:29:06,040
Speaker 3: And by the way, my job and I don't know

617
00:29:06,080 --> 00:29:08,360
Speaker 3: if you feel this way, but over the decades it

618
00:29:08,400 --> 00:29:10,920
Speaker 3: has evolved into begging people to spend their own money.

619
00:29:11,040 --> 00:29:14,560
Speaker 3: So this isn't necessarily a bad thing that somebody's considering this.

620
00:29:14,840 --> 00:29:16,440
Speaker 3: I think we have to go in like you said, Bob,

621
00:29:16,480 --> 00:29:17,320
Speaker 3: eyes wide open.

622
00:29:17,840 --> 00:29:20,920
Speaker 1: So this is why all the wives you know in

623
00:29:21,360 --> 00:29:25,680
Speaker 1: our couple's client relationships love you more and more each year, Brian,

624
00:29:25,800 --> 00:29:28,120
Speaker 1: you give them permission to go to the mall and

625
00:29:28,120 --> 00:29:30,400
Speaker 1: buy new cars, and it's wonderful.

626
00:29:30,640 --> 00:29:32,440
Speaker 3: I got I have plenty of wives who don't want

627
00:29:32,440 --> 00:29:34,800
Speaker 3: their husbands thinking that way on the spending side, so

628
00:29:34,920 --> 00:29:37,240
Speaker 3: I think that has balanced out a bit. But in

629
00:29:37,280 --> 00:29:40,120
Speaker 3: any case, but if it fits the planet, something you

630
00:29:40,120 --> 00:29:41,720
Speaker 3: want to do. We are not on this planet to

631
00:29:41,760 --> 00:29:43,800
Speaker 3: look at at a growing pile of money, right when

632
00:29:43,840 --> 00:29:45,640
Speaker 3: nobody's going to sit on their deathbed and talk about

633
00:29:45,640 --> 00:29:48,040
Speaker 3: that time they didn't spend that money. So if this

634
00:29:48,200 --> 00:29:51,720
Speaker 3: is truly something that your family would enjoy and it

635
00:29:51,760 --> 00:29:53,720
Speaker 3: fits the financial plan, right, that's of course, that, of

636
00:29:53,720 --> 00:29:55,800
Speaker 3: course is very important. We need to make sure it's

637
00:29:55,840 --> 00:29:57,560
Speaker 3: not going to disrupt your ability to pay your bills

638
00:29:57,560 --> 00:29:59,640
Speaker 3: in the short run. But if those things are all

639
00:29:59,680 --> 00:30:01,400
Speaker 3: true and by all means, let's figure out a way

640
00:30:01,440 --> 00:30:04,000
Speaker 3: to do it. What I would say the first thing,

641
00:30:04,480 --> 00:30:05,840
Speaker 3: if you know you really want to do it, but

642
00:30:05,880 --> 00:30:08,440
Speaker 3: you're feeling your responsible on spending the money, first I

643
00:30:08,440 --> 00:30:11,200
Speaker 3: would say, redefine your terms. Buying a second home is

644
00:30:11,240 --> 00:30:13,960
Speaker 3: not spending. It is investing in an ill liquid asset

645
00:30:14,000 --> 00:30:15,760
Speaker 3: that's not going to be all that productive financially.

646
00:30:15,760 --> 00:30:17,040
Speaker 2: But you've already referenced that mark.

647
00:30:17,080 --> 00:30:19,400
Speaker 3: You've already said that I don't want this to justify

648
00:30:19,440 --> 00:30:21,640
Speaker 3: itself financially. I just want to be in a good place.

649
00:30:22,120 --> 00:30:24,760
Speaker 3: But the eyes wide open part. If you're thinking Florida,

650
00:30:24,840 --> 00:30:27,000
Speaker 3: as many people in this area tend to think over

651
00:30:27,000 --> 00:30:30,000
Speaker 3: the decades, be looking at those homeowners association fees, be

652
00:30:30,080 --> 00:30:33,280
Speaker 3: looking at property taxes and all the different whatever it

653
00:30:33,360 --> 00:30:35,600
Speaker 3: is that you have to pay just for the privilege

654
00:30:35,600 --> 00:30:37,880
Speaker 3: of owning it. I'm not even talking about the mortgage.

655
00:30:38,400 --> 00:30:38,959
Speaker 2: That said.

656
00:30:39,080 --> 00:30:42,120
Speaker 3: Also, speaking of mortgages, be open to it. Right just

657
00:30:42,160 --> 00:30:44,600
Speaker 3: because you have signed on for a thirty year mortgage

658
00:30:44,680 --> 00:30:46,680
Speaker 3: for a second home that maybe you didn't have to,

659
00:30:46,760 --> 00:30:48,920
Speaker 3: doesn't mean you're going to have a mortgage for thirty years.

660
00:30:49,080 --> 00:30:52,120
Speaker 3: You may simply be buying yourself time. So, for example,

661
00:30:52,520 --> 00:30:55,040
Speaker 3: if you were looking at this right now, then you

662
00:30:55,080 --> 00:30:58,080
Speaker 3: could sign up for a thirty year mortgage and that

663
00:30:58,120 --> 00:31:00,720
Speaker 3: will buy you time over the next three, say four

664
00:31:00,760 --> 00:31:04,200
Speaker 3: years to slowly liquidate other assets and pay taxes on them,

665
00:31:04,200 --> 00:31:06,920
Speaker 3: and then pay off that mortgage over time. But again,

666
00:31:07,040 --> 00:31:09,480
Speaker 3: just be open to more creative ideas. Then I'll just

667
00:31:09,520 --> 00:31:12,280
Speaker 3: sell everything and write a check. But again, first and foremost,

668
00:31:12,400 --> 00:31:14,480
Speaker 3: if This is truly a lifestyle decision. Make sure it

669
00:31:14,480 --> 00:31:18,720
Speaker 3: doesn't disrupt your other bill paying abilities. That's the important part. Okay,

670
00:31:18,800 --> 00:31:21,160
Speaker 3: we're gonna move on to Rachel and Anderson. Rachel says

671
00:31:21,320 --> 00:31:23,520
Speaker 3: she's helping her parents out part of that sandwich generation.

672
00:31:23,600 --> 00:31:26,240
Speaker 3: I'm guessing our parents are starting to need more help,

673
00:31:26,280 --> 00:31:28,440
Speaker 3: she says, and it's affecting our own plans. How do

674
00:31:28,520 --> 00:31:32,440
Speaker 3: families support aging parents without quietly sacrificing their own future.

675
00:31:32,480 --> 00:31:34,560
Speaker 2: This is a tough one, Bob. Yeah, it is a

676
00:31:34,560 --> 00:31:35,080
Speaker 2: tough one.

677
00:31:35,120 --> 00:31:37,520
Speaker 1: And this is a situation I'm going through with you

678
00:31:37,960 --> 00:31:40,080
Speaker 1: more than a few of my clients right now in

679
00:31:40,120 --> 00:31:40,880
Speaker 1: their families.

680
00:31:40,920 --> 00:31:41,480
Speaker 2: It's tough.

681
00:31:41,640 --> 00:31:44,760
Speaker 1: So I'd say the two words that jump out to

682
00:31:44,800 --> 00:31:48,800
Speaker 1: me is setting some boundaries, you know, so boundaries.

683
00:31:48,760 --> 00:31:51,240
Speaker 2: And then communication. And here's what I mean.

684
00:31:51,320 --> 00:31:53,480
Speaker 1: What you don't want to do is just open up

685
00:31:53,520 --> 00:31:56,640
Speaker 1: the checkbook and pour out funds after funds and put

686
00:31:56,680 --> 00:32:00,600
Speaker 1: yourself in a situation twenty years from now that you're

687
00:32:00,600 --> 00:32:02,520
Speaker 1: trying to help your parents deal with today.

688
00:32:02,680 --> 00:32:03,720
Speaker 2: That goes for kids too.

689
00:32:03,840 --> 00:32:05,880
Speaker 1: Yeah, you got you got to put some boundaries or

690
00:32:05,920 --> 00:32:09,280
Speaker 1: limits around what you can really responsibly afford to do

691
00:32:09,360 --> 00:32:12,760
Speaker 1: in this area. Without derailing your own long term plan.

692
00:32:13,360 --> 00:32:15,160
Speaker 1: And then a lot of times this is both a

693
00:32:15,200 --> 00:32:18,360
Speaker 1: money decision and just a you know, how much stamina

694
00:32:18,440 --> 00:32:21,440
Speaker 1: and time do I have every day to deal with this?

695
00:32:21,600 --> 00:32:24,440
Speaker 1: And sometimes and we deal with this, Brian all the time.

696
00:32:24,560 --> 00:32:27,040
Speaker 1: Some of the kids don't live in the same city

697
00:32:27,040 --> 00:32:29,920
Speaker 1: as their parents, a couple do, and the ones that

698
00:32:30,040 --> 00:32:32,760
Speaker 1: do tend to take on a huge amount of the burden,

699
00:32:33,200 --> 00:32:35,440
Speaker 1: you know, going over there and taking care of things,

700
00:32:35,440 --> 00:32:39,000
Speaker 1: buying groceries, cleaning the house, you know, making sure mom.

701
00:32:38,800 --> 00:32:41,240
Speaker 2: And dad are safe. It's a tough situation.

702
00:32:41,520 --> 00:32:44,240
Speaker 1: So I would say sit down, first of all, and

703
00:32:44,880 --> 00:32:48,360
Speaker 1: update your financial plan, Rachel, and just put some boundaries

704
00:32:48,400 --> 00:32:51,920
Speaker 1: around what you can really afford to do financially, and

705
00:32:51,960 --> 00:32:56,440
Speaker 1: then proactively communicate with both your parents and your siblings

706
00:32:56,440 --> 00:32:58,960
Speaker 1: if you have them, and try to develop a team

707
00:32:59,040 --> 00:33:02,520
Speaker 1: approach here where everybody is doing what they can do

708
00:33:03,080 --> 00:33:06,280
Speaker 1: to protect the long term dignity and care for your

709
00:33:06,320 --> 00:33:10,360
Speaker 1: parents without putting any one of the siblings in either

710
00:33:10,440 --> 00:33:15,200
Speaker 1: financial jeopardy or just you know, emotional exhaustion as you

711
00:33:15,240 --> 00:33:17,640
Speaker 1: go through the process. I hope that helps, all right,

712
00:33:17,720 --> 00:33:21,160
Speaker 1: Chris and fort Thomas says, I want to prioritize experiences

713
00:33:21,200 --> 00:33:24,000
Speaker 1: over things. I love this, but I'm not sure how

714
00:33:24,040 --> 00:33:27,400
Speaker 1: to plan for that without losing structure. How do I

715
00:33:27,480 --> 00:33:29,400
Speaker 1: budget for what truly matters?

716
00:33:29,480 --> 00:33:31,280
Speaker 2: Brian? This is right in your wheelhouse.

717
00:33:31,440 --> 00:33:34,360
Speaker 3: Yeah, I love this stuff because I'm not a person

718
00:33:34,400 --> 00:33:36,160
Speaker 3: who wants to go to that same beach I've been

719
00:33:36,200 --> 00:33:38,360
Speaker 3: going to for the last fifty years of my life.

720
00:33:38,400 --> 00:33:41,760
Speaker 3: Beaches are great, and margarita's are awesome, but that stuff

721
00:33:41,800 --> 00:33:42,640
Speaker 3: kind of has its limit.

722
00:33:43,160 --> 00:33:44,800
Speaker 2: I'm the same way. I want different experiences too.

723
00:33:44,880 --> 00:33:46,640
Speaker 1: So what I would suggest you want to have your

724
00:33:46,680 --> 00:33:51,040
Speaker 1: McDonald's breakfast at like six or seven different McDonald's exactly.

725
00:33:51,040 --> 00:33:53,520
Speaker 2: I want to see if it's different anywhere else. Yes, exactly.

726
00:33:53,920 --> 00:33:55,400
Speaker 2: But now think of it this way.

727
00:33:55,480 --> 00:33:58,160
Speaker 3: Maybe define, define the experiences you want to have, and

728
00:33:58,160 --> 00:33:59,720
Speaker 3: then assign a budget to each of them. So you

729
00:33:59,800 --> 00:34:01,920
Speaker 3: might have that two week summer family trip that's where

730
00:34:01,920 --> 00:34:03,720
Speaker 3: you are going to hit the margarita in the beach

731
00:34:03,720 --> 00:34:05,360
Speaker 3: and get sand in your underwear and all that kind

732
00:34:05,400 --> 00:34:05,720
Speaker 3: of stuff.

733
00:34:05,720 --> 00:34:07,520
Speaker 2: That's great, go do it. That's one of them.

734
00:34:08,000 --> 00:34:11,400
Speaker 3: And then monthly local experiences so there's maybe there's plenty

735
00:34:11,440 --> 00:34:13,560
Speaker 3: of things right around to your hometown that.

736
00:34:13,840 --> 00:34:16,160
Speaker 2: You've never done. We'll come up with a budget for that.

737
00:34:16,840 --> 00:34:18,560
Speaker 3: You can also look at you know, some people will

738
00:34:18,600 --> 00:34:21,719
Speaker 3: categorize an annual learning or enrichment trip, you know, something

739
00:34:21,760 --> 00:34:23,320
Speaker 3: where I'm going to go somewhere, but it's going to

740
00:34:23,360 --> 00:34:25,879
Speaker 3: be much more focused on, you know, putting my brain

741
00:34:25,960 --> 00:34:28,319
Speaker 3: in a place that's never been. Maybe that's museums, maybe

742
00:34:28,360 --> 00:34:31,000
Speaker 3: it's art, whatever it is, rather than sitting on my

743
00:34:31,000 --> 00:34:33,000
Speaker 3: rear end on the beach and drinking margaretas. And again

744
00:34:33,040 --> 00:34:34,520
Speaker 3: I'm still a fan of that. Don't don't let me,

745
00:34:34,800 --> 00:34:37,160
Speaker 3: I can tell don't let me get that wrong. And

746
00:34:37,160 --> 00:34:39,359
Speaker 3: then also maybe you're hosting friends and family, if you've

747
00:34:39,360 --> 00:34:41,120
Speaker 3: got people coming in from elsewhere and you want to

748
00:34:41,200 --> 00:34:43,720
Speaker 3: entertain them around town. So the point would be figure

749
00:34:43,719 --> 00:34:46,080
Speaker 3: out what the categories of the experiences you want to

750
00:34:46,120 --> 00:34:49,160
Speaker 3: have are and then assign different things you might do

751
00:34:49,239 --> 00:34:51,560
Speaker 3: within that, and then you can start to put price

752
00:34:51,560 --> 00:34:52,280
Speaker 3: tags on everything.

753
00:34:52,719 --> 00:34:55,600
Speaker 1: All right, Coming up next, Brian has his bottom line,

754
00:34:55,640 --> 00:34:58,160
Speaker 1: and stay tuned for this segment. Brian's going to help

755
00:34:58,200 --> 00:35:02,440
Speaker 1: all you procrastinators out there by telling you what you

756
00:35:02,480 --> 00:35:06,200
Speaker 1: could still do to help your twenty twenty five tax bill,

757
00:35:06,360 --> 00:35:09,320
Speaker 1: even though you've waited till twenty twenty six to get started.

758
00:35:09,520 --> 00:35:12,000
Speaker 1: You're listening to Simply Money presented by all Worth Financial

759
00:35:12,040 --> 00:35:19,680
Speaker 1: on fifty five KRC the talk station. You're listening to

760
00:35:19,680 --> 00:35:22,839
Speaker 1: Simply Money presented by all Worth Financial, umbop sponsorer along

761
00:35:22,880 --> 00:35:25,919
Speaker 1: with Brian James, and Brian's got some good stuff for us,

762
00:35:25,920 --> 00:35:27,839
Speaker 1: For all of us that like to put off tax

763
00:35:27,880 --> 00:35:31,560
Speaker 1: planning for twenty twenty five until January or February of

764
00:35:31,560 --> 00:35:32,520
Speaker 1: twenty twenty.

765
00:35:32,239 --> 00:35:34,759
Speaker 2: Six, this is good stuff. There's some real nuggets in here.

766
00:35:34,800 --> 00:35:38,000
Speaker 3: Hey, procrastinators, You've still got some time to do some stuff.

767
00:35:38,040 --> 00:35:39,960
Speaker 3: Even though New Year's Eve has come and gone. There

768
00:35:39,960 --> 00:35:43,480
Speaker 3: are still things that you can do before tax time

769
00:35:43,520 --> 00:35:46,040
Speaker 3: comes here in April. So, first off, a lot of

770
00:35:46,040 --> 00:35:48,000
Speaker 3: people know this, but some people are new to it.

771
00:35:48,040 --> 00:35:50,680
Speaker 3: You can still contribute to an IRA for last year

772
00:35:50,680 --> 00:35:53,759
Speaker 3: all the way up until the tax filing deadline. Anybody

773
00:35:53,880 --> 00:35:56,440
Speaker 3: can contribute up to seven thousand dollars to an IRA.

774
00:35:56,840 --> 00:35:57,000
Speaker 2: Right.

775
00:35:57,000 --> 00:36:01,080
Speaker 3: There are income limitations. Let's not forget that. Your deductibility

776
00:36:01,120 --> 00:36:04,040
Speaker 3: may or may may or may not happen. But don't

777
00:36:04,080 --> 00:36:06,839
Speaker 3: forget about the back door wroth. But that's a little

778
00:36:06,840 --> 00:36:08,759
Speaker 3: bit of a different Radio segment. We'll get into that

779
00:36:08,800 --> 00:36:10,360
Speaker 3: another time, but the point is, if you want to

780
00:36:10,400 --> 00:36:12,719
Speaker 3: do these things, you can still do them up until

781
00:36:12,760 --> 00:36:14,920
Speaker 3: tax time. If you are fifty year older, there's a

782
00:36:15,000 --> 00:36:17,760
Speaker 3: catch up provision that allows up to eight thousand dollars.

783
00:36:18,120 --> 00:36:18,319
Speaker 2: Now.

784
00:36:18,640 --> 00:36:21,640
Speaker 3: If on the traditional side, of course, you're looking at

785
00:36:21,680 --> 00:36:24,120
Speaker 3: reducing your taxable income, that's a deduction that will help

786
00:36:24,160 --> 00:36:26,480
Speaker 3: you this year. Or on the rosside, if you make

787
00:36:26,520 --> 00:36:28,200
Speaker 3: too much money, you may only have the choice of

788
00:36:28,239 --> 00:36:31,040
Speaker 3: doing a straight up wroth IRA contribution, or you may

789
00:36:31,080 --> 00:36:33,480
Speaker 3: have to do a backdoor WROTH, which means you're literally

790
00:36:34,120 --> 00:36:36,399
Speaker 3: going through the back door to do it because your

791
00:36:36,400 --> 00:36:37,719
Speaker 3: income is too high.

792
00:36:37,760 --> 00:36:39,200
Speaker 2: But that would be a decision. It's going to help

793
00:36:39,200 --> 00:36:39,680
Speaker 2: you in the future.

794
00:36:39,719 --> 00:36:41,480
Speaker 3: You don't get a deduction on the WROTH, but you'll

795
00:36:41,480 --> 00:36:43,160
Speaker 3: never pay taxes on whatever it grows to.

796
00:36:43,400 --> 00:36:45,000
Speaker 2: Don't stick the stuff in a ced folks.

797
00:36:45,000 --> 00:36:47,360
Speaker 3: If you're going to do a roth IRA, invested in

798
00:36:47,400 --> 00:36:49,360
Speaker 3: something that has the ability to grow, because it doesn't

799
00:36:49,360 --> 00:36:52,920
Speaker 3: help you at all until it has grown somewhere. Second,

800
00:36:53,000 --> 00:36:55,920
Speaker 3: Health savings Accounts HSA is one of the most powerful

801
00:36:56,000 --> 00:36:58,960
Speaker 3: and most overlooked tax tools that's out there. If you're

802
00:36:59,000 --> 00:37:01,279
Speaker 3: covered by a high deductible health plan. This has to

803
00:37:01,320 --> 00:37:03,600
Speaker 3: be something that you chose back in the November December

804
00:37:03,640 --> 00:37:06,720
Speaker 3: timeframe when your company was chasing you for your benefit decisions.

805
00:37:07,080 --> 00:37:09,680
Speaker 3: But a high deductible health care plan comes along with

806
00:37:09,719 --> 00:37:12,120
Speaker 3: an HSA account that you can be funding with your

807
00:37:12,120 --> 00:37:15,359
Speaker 3: own money. So the limits here for four and fifty

808
00:37:15,360 --> 00:37:18,440
Speaker 3: bucks for individual coverage, eighty three hundred per year for

809
00:37:18,520 --> 00:37:21,239
Speaker 3: family coverage. If you're fifty five or older, you can

810
00:37:21,280 --> 00:37:24,520
Speaker 3: add an extra thousand dollars catch up contribution. But the

811
00:37:24,600 --> 00:37:26,880
Speaker 3: reason we love these is because you can get a

812
00:37:26,960 --> 00:37:29,680
Speaker 3: triple tax benefit out of this. You can get deductions

813
00:37:29,680 --> 00:37:32,520
Speaker 3: on the way in if you invest it properly, which

814
00:37:32,520 --> 00:37:34,040
Speaker 3: is a huge step a lot of people miss. Don't

815
00:37:34,120 --> 00:37:35,640
Speaker 3: just throw it in there and ignore it. Make sure

816
00:37:35,640 --> 00:37:38,040
Speaker 3: it's invested in something, and you can move these dollars.

817
00:37:38,080 --> 00:37:40,239
Speaker 3: You do not have to stay with the bank that

818
00:37:40,280 --> 00:37:42,320
Speaker 3: your company has set you up with, but if you

819
00:37:42,440 --> 00:37:44,120
Speaker 3: invested in some kind of mutual fund, any of that

820
00:37:44,160 --> 00:37:46,759
Speaker 3: growth is tax free, and then withdrawals down the road

821
00:37:46,800 --> 00:37:49,520
Speaker 3: for qualified medical expenses themselves are tax free.

822
00:37:49,560 --> 00:37:51,960
Speaker 2: Now here's the big bullet that few people get. You

823
00:37:52,040 --> 00:37:52,560
Speaker 2: can if you.

824
00:37:52,560 --> 00:37:54,920
Speaker 3: Hang onto your receipts for twenty twenty six and you

825
00:37:55,600 --> 00:37:58,400
Speaker 3: cash them in in twenty thirty five. That means you

826
00:37:58,480 --> 00:38:01,560
Speaker 3: got ten years worth of free tax free growth and

827
00:38:01,640 --> 00:38:05,040
Speaker 3: you'll be taking that distribution out pay any bill you

828
00:38:05,080 --> 00:38:07,040
Speaker 3: want with it. But you're basing it off of something

829
00:38:07,040 --> 00:38:08,719
Speaker 3: that happened in twenty twenty five. So hang on to

830
00:38:08,760 --> 00:38:10,719
Speaker 3: those receipts, let it grow, then withdraw it.

831
00:38:10,800 --> 00:38:13,600
Speaker 1: Yeah, most people never think of that, and that's a

832
00:38:13,640 --> 00:38:16,520
Speaker 1: great idea, great way to kill two birds with one stone,

833
00:38:16,520 --> 00:38:20,680
Speaker 1: maximum tax deferral, tax deduction and then investing.

834
00:38:20,320 --> 00:38:23,360
Speaker 2: That money and using it later. There's nothing else quite like.

835
00:38:23,480 --> 00:38:25,439
Speaker 2: And you can still contribute for last year up until

836
00:38:25,480 --> 00:38:27,320
Speaker 2: tax time. All right, thanks for listening tonight.

837
00:38:27,320 --> 00:38:29,440
Speaker 1: You've been listening to Simply Money, presented by all Worth

838
00:38:29,480 --> 00:38:32,360
Speaker 1: Financial on fifty five KRC, the talk station