1 00:00:05,680 --> 00:00:09,360 Speaker 1: Tonight some of the money myths we tell ourselves that 2 00:00:09,520 --> 00:00:13,119 Speaker 1: could sink a financial future. You're listening to Simply Money, 3 00:00:13,119 --> 00:00:15,760 Speaker 1: presented by all Worth Financial. I'm Bob Sponseller along with 4 00:00:15,800 --> 00:00:19,800 Speaker 1: Brian James. Well, we human beings. Brian, we are really 5 00:00:19,840 --> 00:00:23,599 Speaker 1: good at rationalizing our own behavior, especially when it comes 6 00:00:23,640 --> 00:00:27,080 Speaker 1: to money. We just mentally smooth things over and what 7 00:00:27,400 --> 00:00:30,160 Speaker 1: we say, it'll all be fine, and before you know it, 8 00:00:30,440 --> 00:00:34,120 Speaker 1: you've built your entire retirement plan on a myth. Tonight, 9 00:00:34,159 --> 00:00:37,640 Speaker 1: we're gonna call out some of those most common money 10 00:00:37,680 --> 00:00:40,680 Speaker 1: myths that we run into all the time. Let's get 11 00:00:40,720 --> 00:00:41,120 Speaker 1: into it. 12 00:00:41,479 --> 00:00:42,760 Speaker 2: Bob, I love what I do. 13 00:00:42,800 --> 00:00:44,760 Speaker 3: I love doing this radio show with you, and I'm 14 00:00:44,760 --> 00:00:46,519 Speaker 3: gonna do it till I'm one hundred and fifty. 15 00:00:46,600 --> 00:00:49,040 Speaker 2: How does that sound? That's one of our miss I'm 16 00:00:49,040 --> 00:00:49,760 Speaker 2: gonna work forever. 17 00:00:49,800 --> 00:00:50,040 Speaker 4: I'm in. 18 00:00:50,120 --> 00:00:51,800 Speaker 1: I got bad I got bad news for you. I 19 00:00:51,800 --> 00:00:55,040 Speaker 1: think I'm gonna retire at age one. We're gonna have 20 00:00:55,040 --> 00:00:57,320 Speaker 1: to do this for two years by yourself. But last 21 00:00:57,360 --> 00:00:58,560 Speaker 1: two years are gonna be rough. 22 00:00:58,880 --> 00:01:01,319 Speaker 3: Yeah, but yeah, So maybe you do want to keep working, right, 23 00:01:01,360 --> 00:01:03,200 Speaker 3: Maybe you do love what you do, and that's fantastic. 24 00:01:03,240 --> 00:01:05,560 Speaker 3: That's the dream, by the way, right, enjoying what you 25 00:01:05,640 --> 00:01:07,680 Speaker 3: do and not dreading having to go to that place 26 00:01:07,720 --> 00:01:08,800 Speaker 3: to go do it every day. 27 00:01:09,000 --> 00:01:11,160 Speaker 2: That is what we all should be able to be 28 00:01:11,200 --> 00:01:11,640 Speaker 2: exposed to. 29 00:01:11,640 --> 00:01:13,720 Speaker 3: But here's the reality. Lots of people don't get to 30 00:01:13,760 --> 00:01:17,440 Speaker 3: decide when that career ends. Health issues intervene either you 31 00:01:17,600 --> 00:01:19,400 Speaker 3: or a loved one. Maybe it's a spouse, maybe it's 32 00:01:19,400 --> 00:01:22,160 Speaker 3: your parents. You just can't squeeze it all in, so 33 00:01:22,240 --> 00:01:23,440 Speaker 3: you have to make different decisions. 34 00:01:23,720 --> 00:01:25,880 Speaker 2: Obviously, we can get layoffs, corporate. 35 00:01:25,520 --> 00:01:28,399 Speaker 3: Downsizing, caring for spouses, parents, all that stuff just comes 36 00:01:28,440 --> 00:01:30,679 Speaker 3: out of nowhere and hit suddenly, and suddenly I want 37 00:01:30,680 --> 00:01:32,720 Speaker 3: to work forever becomes I need to get out of 38 00:01:32,720 --> 00:01:34,399 Speaker 3: here so I can take care of these other. 39 00:01:34,280 --> 00:01:37,319 Speaker 2: Things I wasn't planning on. Statistics back this up, too, Bob. 40 00:01:37,400 --> 00:01:40,039 Speaker 3: So the Employee Benefit Research Institute, which we rely on 41 00:01:40,080 --> 00:01:43,360 Speaker 3: all the time for research like this, said they say 42 00:01:43,360 --> 00:01:46,520 Speaker 3: about forty percent of retirees leave the workforce earlier than 43 00:01:46,520 --> 00:01:49,640 Speaker 3: they planned, meaning that only sixty percent of people get 44 00:01:49,680 --> 00:01:51,960 Speaker 3: to call their shot. The other forty are informed by 45 00:01:51,960 --> 00:01:54,120 Speaker 3: something else that they have to make a change, and 46 00:01:54,160 --> 00:01:56,400 Speaker 3: this is usually because of health or a job loss. 47 00:01:56,480 --> 00:01:58,840 Speaker 3: That's almost half of people out there who are thinking 48 00:01:58,840 --> 00:02:00,520 Speaker 3: they get to call their shots in it doesn't work 49 00:02:00,520 --> 00:02:03,440 Speaker 3: out that way. Planning to work forever isn't a plan, 50 00:02:03,520 --> 00:02:05,120 Speaker 3: it's a wish. You may not get to act on it. 51 00:02:05,160 --> 00:02:07,720 Speaker 3: So don't assume that your career is your insurance policy. 52 00:02:07,880 --> 00:02:10,000 Speaker 3: Your portfolio and your financial plan are going to have 53 00:02:10,040 --> 00:02:12,320 Speaker 3: to carry the weight because you may not be employed 54 00:02:12,360 --> 00:02:13,520 Speaker 3: as long as you think you will. 55 00:02:14,280 --> 00:02:17,120 Speaker 1: Yeah, I have to admiss admit that forty percent numbers 56 00:02:17,160 --> 00:02:20,080 Speaker 1: seemed high to me and it surprised me so, but 57 00:02:20,160 --> 00:02:23,399 Speaker 1: it's always good to have research. And yeah, roughly half 58 00:02:23,440 --> 00:02:25,440 Speaker 1: the people don't get to call their own shot. It's 59 00:02:25,440 --> 00:02:27,959 Speaker 1: good to call that out. All right, let's move into 60 00:02:28,000 --> 00:02:30,800 Speaker 1: myth number two, and Brian, this is one of my favorites. 61 00:02:31,120 --> 00:02:35,040 Speaker 1: I'll quote unquote downsize my house and pocket the difference. 62 00:02:35,480 --> 00:02:38,760 Speaker 1: People assume that selling the big house in the suburbs 63 00:02:39,120 --> 00:02:42,560 Speaker 1: and moving to a quote unquote smaller place will unlock 64 00:02:42,600 --> 00:02:46,440 Speaker 1: a windfall. Brian, I don't know about you. Every single 65 00:02:46,480 --> 00:02:49,040 Speaker 1: person I've ever worked with that has come in and 66 00:02:49,120 --> 00:02:54,079 Speaker 1: talked about doing this, invariably, very few, if any, end 67 00:02:54,160 --> 00:02:58,079 Speaker 1: up spending less money. The square footage of the house 68 00:02:58,360 --> 00:03:02,560 Speaker 1: might be smaller, but people don't sell their current home 69 00:03:03,240 --> 00:03:06,040 Speaker 1: and buy a thirty or forty year home. The year 70 00:03:06,040 --> 00:03:09,800 Speaker 1: old home, even if it's quote unquote smaller, it's newer, 71 00:03:10,160 --> 00:03:13,760 Speaker 1: and they want to refurbish it and get new furnishings 72 00:03:13,800 --> 00:03:16,799 Speaker 1: and blinds and drapes, and before you know it, people 73 00:03:16,800 --> 00:03:20,079 Speaker 1: have spent not less, but sometimes more than they were 74 00:03:20,120 --> 00:03:23,480 Speaker 1: spending on their quote unquote big house. Do you find 75 00:03:23,480 --> 00:03:24,639 Speaker 1: the same thing happening? 76 00:03:24,840 --> 00:03:25,520 Speaker 2: Oh, every time. 77 00:03:25,760 --> 00:03:27,800 Speaker 3: So so people who say people who come in with 78 00:03:27,840 --> 00:03:30,000 Speaker 3: that myth are there, I always know they're not that 79 00:03:30,120 --> 00:03:32,560 Speaker 3: close to pulling the trigger on this because obviously they 80 00:03:32,560 --> 00:03:35,400 Speaker 3: haven't at all done any research on what the right 81 00:03:35,720 --> 00:03:38,119 Speaker 3: piece of real estate might be, because they will learn 82 00:03:38,160 --> 00:03:41,120 Speaker 3: in that first fifteen minutes of searching for houses or 83 00:03:41,240 --> 00:03:43,000 Speaker 3: condos or whatever they're looking for, they'll learn that it 84 00:03:43,080 --> 00:03:45,120 Speaker 3: just doesn't work that way. You're gonna you're not gonna 85 00:03:45,160 --> 00:03:47,920 Speaker 3: want to downsize the lifestyle, right, You're gonna want maybe 86 00:03:47,960 --> 00:03:50,800 Speaker 3: a smaller place, but you're gonna want a cooler neighborhood, 87 00:03:50,800 --> 00:03:53,600 Speaker 3: closer to amenities, things like that, or you know, just 88 00:03:53,640 --> 00:03:55,960 Speaker 3: maybe an upgraded facility to live in. All that stuff 89 00:03:56,000 --> 00:03:57,760 Speaker 3: costs money. You're not gonna save a nickelon doesn't mean 90 00:03:57,840 --> 00:04:00,040 Speaker 3: don't do it, but don't bank on pulling up a 91 00:04:00,080 --> 00:04:02,280 Speaker 3: couple hundred thousand dollars out of your housing situation. 92 00:04:02,880 --> 00:04:06,000 Speaker 1: So here's what. Yeah, I just say take your time 93 00:04:06,080 --> 00:04:09,560 Speaker 1: here and don't make an emotional decision because the meetings 94 00:04:09,600 --> 00:04:12,040 Speaker 1: that make me very nervous are when it's say, well, Bob, 95 00:04:12,080 --> 00:04:15,160 Speaker 1: we got to update you on what we did, we 96 00:04:15,440 --> 00:04:18,239 Speaker 1: did this, we're doing this, and they haven't run the numbers. 97 00:04:18,520 --> 00:04:21,159 Speaker 1: They just assume it's all gonna work out. But again, 98 00:04:21,279 --> 00:04:23,600 Speaker 1: not to belabor that point too much, get us send 99 00:04:23,600 --> 00:04:24,839 Speaker 1: a myth number three. 100 00:04:25,120 --> 00:04:27,200 Speaker 3: So myth number three is that if I need long 101 00:04:27,279 --> 00:04:30,040 Speaker 3: term care, that's not a problem because Medicare, the government 102 00:04:30,040 --> 00:04:32,080 Speaker 3: will come along and save me. Well, the reality is, 103 00:04:32,120 --> 00:04:34,200 Speaker 3: and this does get a little confusing, Medicare will cover 104 00:04:34,240 --> 00:04:36,599 Speaker 3: about thirty days of a long term care situation, but 105 00:04:36,720 --> 00:04:38,880 Speaker 3: not because it's long term care. They just classify that 106 00:04:38,920 --> 00:04:41,680 Speaker 3: as short term rehab. So this is we're not talking 107 00:04:41,680 --> 00:04:44,440 Speaker 3: about years of assisted living, memory care, those kinds of things. 108 00:04:44,920 --> 00:04:46,480 Speaker 3: That's for you know, if that's where you're gonna need 109 00:04:46,520 --> 00:04:47,840 Speaker 3: insurance or you're gonna need to be able to cover 110 00:04:47,880 --> 00:04:50,520 Speaker 3: it out of your own portfolio. That's so this is 111 00:04:50,560 --> 00:04:52,720 Speaker 3: a very very dangerous myth for people to believe in. 112 00:04:52,760 --> 00:04:54,600 Speaker 3: You should run your financial plan and know what those 113 00:04:54,600 --> 00:04:57,159 Speaker 3: expenses will look like. Model that out and make sure 114 00:04:57,200 --> 00:04:59,360 Speaker 3: you can cover it. Long term care insurance may or 115 00:04:59,400 --> 00:05:02,160 Speaker 3: may not be some you need to do. Don't instantly 116 00:05:02,200 --> 00:05:04,279 Speaker 3: go there, but you need to understand the math behind it. 117 00:05:04,320 --> 00:05:07,240 Speaker 3: So a strong retirement plan doesn't ignore long term care. 118 00:05:07,400 --> 00:05:09,640 Speaker 3: It takes it head on, look at it, model it out, 119 00:05:09,800 --> 00:05:11,280 Speaker 3: make sure you've got a way to cover it before 120 00:05:11,279 --> 00:05:11,800 Speaker 3: it's too late. 121 00:05:13,000 --> 00:05:13,200 Speaker 4: Yeah. 122 00:05:13,320 --> 00:05:15,359 Speaker 1: Myth number four, and this is a fun one to 123 00:05:15,400 --> 00:05:18,200 Speaker 1: talk about. You know the quote unquote, well, I really 124 00:05:18,200 --> 00:05:21,800 Speaker 1: don't spend that much on travel. In reality, travel is 125 00:05:21,800 --> 00:05:26,440 Speaker 1: one of the biggest retirement line items, especially for wealthier families, 126 00:05:26,480 --> 00:05:29,360 Speaker 1: and there's nothing wrong with that. It's great to travel, 127 00:05:29,680 --> 00:05:31,880 Speaker 1: but you've got to plan for it. And the problem 128 00:05:32,000 --> 00:05:34,919 Speaker 1: is pretending that that number is going to actually be 129 00:05:35,000 --> 00:05:38,480 Speaker 1: smaller than it really is, because if you underbudget for 130 00:05:38,520 --> 00:05:41,360 Speaker 1: it or don't budget for it at all, you might 131 00:05:41,440 --> 00:05:44,520 Speaker 1: run into a problem later on or guilt yourself into 132 00:05:44,560 --> 00:05:47,880 Speaker 1: cutting back on the thing you most love to do. Brian, 133 00:05:48,000 --> 00:05:51,560 Speaker 1: I run into It's usually one of two extremes. Extreme 134 00:05:51,640 --> 00:05:54,320 Speaker 1: number one is we almost have to talk people into 135 00:05:54,360 --> 00:05:57,440 Speaker 1: doing some traveling and having a little fun because they're 136 00:05:57,480 --> 00:06:00,560 Speaker 1: afraid of spending any money. And these are folks that 137 00:06:00,600 --> 00:06:04,640 Speaker 1: are just warehousing a big pile of growing assets that 138 00:06:04,680 --> 00:06:07,080 Speaker 1: they're not having any fun with. Then you got the 139 00:06:07,120 --> 00:06:10,520 Speaker 1: other extreme, where you know, they don't even plan for travel. 140 00:06:10,920 --> 00:06:13,839 Speaker 1: And then again, just like the house downsizing thing, the 141 00:06:13,880 --> 00:06:16,520 Speaker 1: topic comes up in the annual review meetings and they're 142 00:06:16,560 --> 00:06:17,320 Speaker 1: just throwing out. 143 00:06:17,200 --> 00:06:20,080 Speaker 5: Well, I gotta I got a cruise to you know, wherever, 144 00:06:20,279 --> 00:06:22,640 Speaker 5: I got a trip to Australia, and you start adding 145 00:06:22,680 --> 00:06:25,640 Speaker 5: up the numbers and it's huge, and they never even 146 00:06:25,760 --> 00:06:29,000 Speaker 5: put this into their retirement budget and we got to 147 00:06:29,080 --> 00:06:31,440 Speaker 5: kind of walk them off the ledge on that extreme. 148 00:06:31,160 --> 00:06:33,240 Speaker 1: Is that is that similar to what you find. 149 00:06:33,200 --> 00:06:34,280 Speaker 2: Oh, one hundred percent, Bob. 150 00:06:34,520 --> 00:06:36,719 Speaker 3: And then that's mostly when when we sit down people 151 00:06:36,760 --> 00:06:37,839 Speaker 3: and build financial plans. 152 00:06:37,839 --> 00:06:38,880 Speaker 2: If they listen to this. 153 00:06:38,839 --> 00:06:40,560 Speaker 3: Show, if they're aware that we exist, and they are 154 00:06:40,600 --> 00:06:43,760 Speaker 3: already people who have been seeking out financial education information 155 00:06:43,839 --> 00:06:46,200 Speaker 3: for a long time and they've probably got themselves. 156 00:06:46,320 --> 00:06:49,000 Speaker 2: It's much more about efficiency than it is success. Or failure. 157 00:06:49,480 --> 00:06:50,920 Speaker 3: But that tends to me, that tends to mean they 158 00:06:50,920 --> 00:06:52,800 Speaker 3: get themselves bald up over. I don't, I don't, I 159 00:06:52,800 --> 00:06:54,440 Speaker 3: don't want to spad, I can't spend this money. It's 160 00:06:54,480 --> 00:06:56,280 Speaker 3: it's it's for raindy day, for rainey day. Well, that 161 00:06:56,360 --> 00:06:59,200 Speaker 3: rainy day never comes, and they they wind up squeezing 162 00:06:59,200 --> 00:07:01,080 Speaker 3: a lot of us out that could have been a 163 00:07:01,080 --> 00:07:03,839 Speaker 3: lot more enjoyable they had they had a clear picture 164 00:07:03,839 --> 00:07:04,719 Speaker 3: of their financial plan. 165 00:07:04,839 --> 00:07:06,480 Speaker 2: So but yeah, if you want to travel, do it. 166 00:07:06,520 --> 00:07:08,200 Speaker 2: That's your thing. Do it, budget for it, put it 167 00:07:08,240 --> 00:07:09,320 Speaker 2: in your plan and do it. 168 00:07:10,400 --> 00:07:12,920 Speaker 1: You're listening to Simply Money presented by all Worth Financial 169 00:07:12,920 --> 00:07:16,040 Speaker 1: on Bob Sponseller along with Brian James. All Right, the 170 00:07:16,080 --> 00:07:20,120 Speaker 1: next myth the kids will take care of me? We 171 00:07:20,200 --> 00:07:23,920 Speaker 1: talk about, you know, so many of these older baby 172 00:07:23,920 --> 00:07:27,760 Speaker 1: boomer family they're spending money on their kids, helping to 173 00:07:27,880 --> 00:07:31,240 Speaker 1: fund some of these things that cost a lot of 174 00:07:31,240 --> 00:07:33,520 Speaker 1: money for young adult kids. And then in the next 175 00:07:33,560 --> 00:07:36,080 Speaker 1: breath they come and say, well, our kids are going 176 00:07:36,160 --> 00:07:37,960 Speaker 1: to take care of us if we run out of money. 177 00:07:38,200 --> 00:07:40,880 Speaker 1: Let's face it. We love our kids, but relying on 178 00:07:40,960 --> 00:07:45,640 Speaker 1: them financially is risky. Life is expensive for them. Too. 179 00:07:46,160 --> 00:07:48,680 Speaker 1: You know, a lot of them have student loans, trying 180 00:07:48,720 --> 00:07:50,960 Speaker 1: to get a down payment for a house, raising their 181 00:07:50,960 --> 00:07:54,960 Speaker 1: own kids, and even in wealthy families, the expectation the 182 00:07:55,120 --> 00:07:57,960 Speaker 1: kids will foot the bill for mom and dad. That 183 00:07:58,160 --> 00:08:00,840 Speaker 1: is just outdated and can be dangerous. 184 00:08:01,160 --> 00:08:02,600 Speaker 2: Yeah, I definitely wouldn't want to rely on this. 185 00:08:02,720 --> 00:08:04,680 Speaker 3: And and just for the fact that I think the 186 00:08:04,680 --> 00:08:06,640 Speaker 3: bigger part of this is life is just going to 187 00:08:06,640 --> 00:08:08,320 Speaker 3: be a lot more expensive for my kids than it 188 00:08:08,360 --> 00:08:10,160 Speaker 3: was for me. It was more expensive for me than 189 00:08:10,160 --> 00:08:12,080 Speaker 3: my parents. That's just kind of the way things roll, 190 00:08:12,120 --> 00:08:13,400 Speaker 3: and that seems to be accelerating. 191 00:08:13,560 --> 00:08:14,360 Speaker 2: I don't want to burden them. 192 00:08:14,400 --> 00:08:16,120 Speaker 3: I don't want to put them in a position where 193 00:08:16,280 --> 00:08:18,160 Speaker 3: not only do they have to deal with a reality that. 194 00:08:18,160 --> 00:08:20,280 Speaker 2: I never did, they got to worry about me. That's 195 00:08:20,320 --> 00:08:21,040 Speaker 2: not fair to them. 196 00:08:21,480 --> 00:08:26,240 Speaker 3: So, speaking of generational financial issues, the assumption that I'll 197 00:08:26,280 --> 00:08:29,320 Speaker 3: get an inherent inheritance, this can be dangerous because you don't. 198 00:08:29,120 --> 00:08:30,080 Speaker 2: Know when that's going to come. 199 00:08:30,120 --> 00:08:31,760 Speaker 3: A lot of people will come in and as part 200 00:08:31,760 --> 00:08:33,040 Speaker 3: of the plan, they'll say, well, I'm gonna get a 201 00:08:33,040 --> 00:08:33,720 Speaker 3: few million dollars for. 202 00:08:33,760 --> 00:08:36,080 Speaker 2: Mom or dad. Well, okay, how old are mom and dad? Oh, 203 00:08:36,120 --> 00:08:37,800 Speaker 2: they're in their seventies and they're doing pretty good. 204 00:08:37,960 --> 00:08:38,360 Speaker 1: That's great. 205 00:08:38,400 --> 00:08:40,240 Speaker 3: That could be thirty years from now that this money 206 00:08:40,280 --> 00:08:42,439 Speaker 3: is coming, at which point you yourself. 207 00:08:42,040 --> 00:08:44,680 Speaker 2: Will be in your early seventies. So we can't plan 208 00:08:44,760 --> 00:08:44,960 Speaker 2: on that. 209 00:08:45,360 --> 00:08:47,720 Speaker 3: If you're sixty and your parents are eighty five and healthy, 210 00:08:47,880 --> 00:08:49,840 Speaker 3: that's gonna be another fifteen twenty years down the road, 211 00:08:50,200 --> 00:08:52,040 Speaker 3: and you don't know how much is going to be left. 212 00:08:52,120 --> 00:08:54,000 Speaker 3: They might spend more than you think. It's their money, 213 00:08:54,000 --> 00:08:56,559 Speaker 3: not yours. Maybe they need long term care, which means 214 00:08:56,840 --> 00:08:59,560 Speaker 3: it now belongs to a medical facility. They may choose 215 00:08:59,600 --> 00:09:02,319 Speaker 3: to leave part of it to charity. Those plans can change. 216 00:09:02,640 --> 00:09:04,959 Speaker 3: So just treat an inheritance as a bonus, but don't 217 00:09:05,000 --> 00:09:07,080 Speaker 3: count on it. It's a gift, but that should never 218 00:09:07,160 --> 00:09:09,320 Speaker 3: ever be the plan, all right. 219 00:09:09,360 --> 00:09:11,600 Speaker 1: Another myth that we need to dive into is the 220 00:09:11,720 --> 00:09:16,360 Speaker 1: quote unquote, I will spend less in retirement. In reality, Brian, 221 00:09:16,400 --> 00:09:19,400 Speaker 1: in the first ten to fifteen years of retirement, many 222 00:09:19,480 --> 00:09:24,160 Speaker 1: retirees actually spend more because they finally have time to travel, 223 00:09:24,480 --> 00:09:27,720 Speaker 1: get into some of their hobbies, do some home remodeling, 224 00:09:27,880 --> 00:09:31,079 Speaker 1: and then, like we talked about, helping kids and grandkids, 225 00:09:31,400 --> 00:09:34,440 Speaker 1: all that stuff adds up. Let's face it, when people 226 00:09:34,520 --> 00:09:38,400 Speaker 1: have disposable time, they tend to find ways to spend 227 00:09:38,440 --> 00:09:40,679 Speaker 1: money as part of using that time. And you got 228 00:09:40,720 --> 00:09:41,520 Speaker 1: a plan for that. 229 00:09:42,280 --> 00:09:42,520 Speaker 2: Yeah. 230 00:09:42,720 --> 00:09:44,760 Speaker 3: So this is where I always have conversations with people 231 00:09:44,760 --> 00:09:46,120 Speaker 3: that when when a lot of times we have when 232 00:09:46,120 --> 00:09:47,560 Speaker 3: I have a new client come in, they'll come in 233 00:09:47,600 --> 00:09:49,480 Speaker 3: and they'll say, all right, we've got a budget, we're 234 00:09:49,480 --> 00:09:51,559 Speaker 3: gonna we're gonna build a vegetable garden, we're gonna eat 235 00:09:51,559 --> 00:09:52,960 Speaker 3: out of that, and we're never gonna leave the house. 236 00:09:53,000 --> 00:09:54,800 Speaker 3: And my response to that is always that that sounds 237 00:09:54,800 --> 00:09:57,920 Speaker 3: like an absolutely miserable retirement. Let's go the other direction. 238 00:09:58,040 --> 00:10:00,400 Speaker 3: Let's I mean, nothing wrong with vegetable garden, but let's 239 00:10:00,440 --> 00:10:02,360 Speaker 3: not count on that for the next thirty forty years 240 00:10:02,360 --> 00:10:04,880 Speaker 3: of our lives. Retirement is a long time. Let's not 241 00:10:05,080 --> 00:10:08,160 Speaker 3: start it by forcing ourselves into some kind of budget 242 00:10:08,160 --> 00:10:10,319 Speaker 3: they may or may not even be necessary before we've 243 00:10:10,320 --> 00:10:11,400 Speaker 3: put together a financial plan. 244 00:10:11,679 --> 00:10:12,920 Speaker 2: I like to go the other way. 245 00:10:13,400 --> 00:10:15,480 Speaker 3: Since we're just throwing spaghetti at the wall, Let's build 246 00:10:15,480 --> 00:10:19,400 Speaker 3: a financial plan that includes absolutely everything you considered doing. 247 00:10:19,520 --> 00:10:21,679 Speaker 3: You may not actually do. It doesn't matter. We're throwing 248 00:10:21,720 --> 00:10:24,280 Speaker 3: fake expenses together. So let's just see if it works. 249 00:10:24,320 --> 00:10:26,079 Speaker 3: If you can pull it off, great, maybe you'll be 250 00:10:26,080 --> 00:10:29,120 Speaker 3: pleasantly surprised. If you can't pull it off, well, you 251 00:10:29,120 --> 00:10:30,880 Speaker 3: weren't really sold on it to begin with, so then 252 00:10:30,920 --> 00:10:33,520 Speaker 3: it becomes more comfortable to go ahead and pair things 253 00:10:33,600 --> 00:10:35,760 Speaker 3: down that you weren't all that convicted on to begin with, 254 00:10:36,080 --> 00:10:39,360 Speaker 3: rather than let's spend nothing and assume we'll be happy 255 00:10:39,559 --> 00:10:42,000 Speaker 3: and two three years later we'll spend money wildly because 256 00:10:42,000 --> 00:10:44,080 Speaker 3: we kind of made ourselves miserable in the first early 257 00:10:44,160 --> 00:10:47,000 Speaker 3: years and then convinced ourselves that we deserve some things. 258 00:10:47,280 --> 00:10:47,760 Speaker 2: Think through. 259 00:10:47,840 --> 00:10:50,120 Speaker 3: It's okay to want to spend what you've built for yourself. 260 00:10:50,160 --> 00:10:52,400 Speaker 3: You are allowed, all right. 261 00:10:52,440 --> 00:10:54,640 Speaker 1: In the final myth we want to touch on tonight. 262 00:10:54,840 --> 00:10:59,280 Speaker 1: You know folks that say retirement means I'll finally relax ah, 263 00:11:00,000 --> 00:11:03,640 Speaker 1: In reality, many think they'll stop worrying about money or 264 00:11:03,640 --> 00:11:06,720 Speaker 1: anything else once they retire. In reality, without a clear 265 00:11:06,880 --> 00:11:10,559 Speaker 1: plan not only for income and spending, but just your 266 00:11:10,640 --> 00:11:13,680 Speaker 1: overall purpose in life how to spend your time and energy, 267 00:11:13,800 --> 00:11:18,640 Speaker 1: retirement actually increases stress for people if they don't have 268 00:11:18,760 --> 00:11:21,280 Speaker 1: a plan and haven't thought through things. This is a 269 00:11:21,760 --> 00:11:24,720 Speaker 1: critical thing, because let's face it, after people have worked 270 00:11:25,120 --> 00:11:28,560 Speaker 1: thirty five, forty fifty years, I mean they do. I 271 00:11:28,600 --> 00:11:31,560 Speaker 1: hate to use the word deserve, but we want people 272 00:11:31,600 --> 00:11:35,000 Speaker 1: to be able to enjoy their retirement years. But it 273 00:11:35,080 --> 00:11:38,520 Speaker 1: requires doing a little planning and maybe taught, getting some 274 00:11:38,880 --> 00:11:42,840 Speaker 1: objective advice from a good fiduciary advisor so that folks 275 00:11:42,920 --> 00:11:47,199 Speaker 1: can actually relax and take those trips and not focus 276 00:11:47,280 --> 00:11:49,080 Speaker 1: on what the stock market's doing every day. 277 00:11:49,480 --> 00:11:49,720 Speaker 2: Yeah. 278 00:11:49,840 --> 00:11:51,760 Speaker 3: I think this is a really important one because this 279 00:11:51,840 --> 00:11:54,280 Speaker 3: is what I find myself paying attention to the most. 280 00:11:54,320 --> 00:11:56,080 Speaker 3: I always told myself that along the way of my 281 00:11:56,120 --> 00:11:58,080 Speaker 3: thirty forty year career, I was going to pay attention 282 00:11:58,120 --> 00:12:00,319 Speaker 3: to the happiest people are. And these are the ones 283 00:12:00,360 --> 00:12:04,240 Speaker 3: who really had a clear financial plan and also a 284 00:12:04,280 --> 00:12:06,000 Speaker 3: plan to know what they were gonna do, how they're 285 00:12:06,040 --> 00:12:08,280 Speaker 3: gonna spend the time. The most stressed out ones that 286 00:12:08,320 --> 00:12:10,920 Speaker 3: seem to be disappointed in retirement didn't have a plan 287 00:12:11,000 --> 00:12:14,040 Speaker 3: not only for finances, but for all of that huge 288 00:12:14,080 --> 00:12:15,160 Speaker 3: expansive time that they have. 289 00:12:16,040 --> 00:12:19,720 Speaker 1: Here's the allworth advice. The stories we tell ourselves can 290 00:12:19,840 --> 00:12:23,880 Speaker 1: derail even a great nest egg of assets. Swap the 291 00:12:24,080 --> 00:12:28,880 Speaker 1: myths for math, in a clearly constructed plan and your 292 00:12:28,960 --> 00:12:32,480 Speaker 1: future will thank you. Are we in an AI bubble? 293 00:12:32,800 --> 00:12:37,280 Speaker 1: Why investors aren't panicking yet? Just yet? Plus the first 294 00:12:37,440 --> 00:12:41,560 Speaker 1: luxury crew setting sale across the Great Lakes, and we 295 00:12:41,600 --> 00:12:44,120 Speaker 1: answer a big money question before the week's over. You're 296 00:12:44,160 --> 00:12:47,240 Speaker 1: listening to Simply Money, presented by Allworth Financial on fifty 297 00:12:47,240 --> 00:12:55,840 Speaker 1: five KRC the talk station. You're listening to Simply Money 298 00:12:55,920 --> 00:12:59,080 Speaker 1: presented by Allworth Financial on Bob Sponseller along with Brian 299 00:12:59,200 --> 00:13:04,200 Speaker 1: James from Madeira to Mason. You've got questions, We've got answers. 300 00:13:04,240 --> 00:13:07,640 Speaker 1: Don't miss tonight's Ask the Advisor segment coming up at 301 00:13:07,640 --> 00:13:12,119 Speaker 1: six forty three. It's a question many in the financial 302 00:13:12,120 --> 00:13:14,400 Speaker 1: world are asking at this point. Are we in the 303 00:13:14,440 --> 00:13:18,600 Speaker 1: middle of an AI bubble? Well, according to recent data 304 00:13:18,679 --> 00:13:23,360 Speaker 1: from Google Trends, I have to laugh. The speculation might 305 00:13:23,520 --> 00:13:26,840 Speaker 1: have peaked. Brian walked through some of the data that 306 00:13:26,920 --> 00:13:30,760 Speaker 1: Google is tracking, because after all, Google knows everything about 307 00:13:30,800 --> 00:13:34,439 Speaker 1: everything that we do, and that can be a scary proposition. 308 00:13:34,600 --> 00:13:34,800 Speaker 2: Yeah. 309 00:13:34,840 --> 00:13:37,520 Speaker 3: So, Google Trends is a part of the Alphabet owned 310 00:13:37,960 --> 00:13:41,000 Speaker 3: Google metroplex where they just basically say here's what's in 311 00:13:41,040 --> 00:13:44,480 Speaker 3: people's brains that's coming out through their keyboards just basically, 312 00:13:44,559 --> 00:13:44,960 Speaker 3: and if. 313 00:13:44,800 --> 00:13:46,800 Speaker 1: You don't have the right thing, and if you don't 314 00:13:46,840 --> 00:13:49,200 Speaker 1: have the right things in your brains, we will insert 315 00:13:49,240 --> 00:13:50,600 Speaker 1: it into your brain for you. 316 00:13:50,720 --> 00:13:54,120 Speaker 2: But there you go. That's exactly right. Yeah. So so anyway, 317 00:13:54,200 --> 00:13:55,200 Speaker 2: so what they were looking for. 318 00:13:55,240 --> 00:13:59,240 Speaker 3: The number of web searches for the term AI bubble 319 00:13:59,280 --> 00:14:01,600 Speaker 3: has plummeted over the past month. This is this is 320 00:14:01,600 --> 00:14:03,480 Speaker 3: a reaction to what we've been talking about AI for 321 00:14:03,520 --> 00:14:05,920 Speaker 3: it feels like a couple of years now, and it 322 00:14:05,960 --> 00:14:07,839 Speaker 3: came out of nowhere in terms of being a topic 323 00:14:07,880 --> 00:14:09,840 Speaker 3: of daily discussion, but then all of a sudden, everybody's 324 00:14:09,880 --> 00:14:11,760 Speaker 3: quickly gotten up to speed on how it can help them. 325 00:14:11,760 --> 00:14:14,160 Speaker 3: So of course that makes it an investment opportunity, so 326 00:14:14,240 --> 00:14:16,560 Speaker 3: let's pay attention to it. But it seems to be 327 00:14:16,880 --> 00:14:19,640 Speaker 3: the interest in the topic seems to be backing off 328 00:14:19,640 --> 00:14:23,120 Speaker 3: a little bit. Search traffic for the phrase AI bubble 329 00:14:23,200 --> 00:14:25,600 Speaker 3: peaked on August twenty first, and this was right after 330 00:14:25,600 --> 00:14:28,560 Speaker 3: a report from MIT some smart brains out in Massachusetts 331 00:14:28,920 --> 00:14:31,800 Speaker 3: appeared to suggest that they that hardly any organizations were 332 00:14:31,840 --> 00:14:34,480 Speaker 3: truly seeing a return on investment for whatever they're doing 333 00:14:34,480 --> 00:14:38,080 Speaker 3: in AI and at the same time, Open AI CEO 334 00:14:38,200 --> 00:14:41,120 Speaker 3: Sam Altman, he's the guy behind chat GPT, But he 335 00:14:41,200 --> 00:14:43,480 Speaker 3: suggested that investors might be getting a little too excited 336 00:14:43,520 --> 00:14:46,160 Speaker 3: about this to begin with. Although acknowledging you know, this 337 00:14:46,200 --> 00:14:48,480 Speaker 3: technology is going to have a transformational impact, he thinks 338 00:14:48,520 --> 00:14:49,880 Speaker 3: that we might have run a little too far in 339 00:14:49,960 --> 00:14:52,600 Speaker 3: terms of our assumption that things are going to just 340 00:14:52,880 --> 00:14:55,000 Speaker 3: kick off and everything's gonna be wonderful from here forward. 341 00:14:56,280 --> 00:14:59,560 Speaker 1: Well, Brian, I think stories like this I pretty much 342 00:14:59,600 --> 00:15:02,880 Speaker 1: dismiss them entirely. You tell me if I'm flawed here, 343 00:15:02,960 --> 00:15:06,720 Speaker 1: because you know, all searches on the internet and all 344 00:15:06,760 --> 00:15:10,640 Speaker 1: that that has nothing to do whatsoever about the underlying 345 00:15:10,760 --> 00:15:13,560 Speaker 1: fundamentals of these companies. And I think it's safe to 346 00:15:13,600 --> 00:15:18,240 Speaker 1: say that AI is here to stay. It's ubiquitous, it's growing, 347 00:15:18,360 --> 00:15:21,480 Speaker 1: it's going to change the way we live and do business, 348 00:15:21,960 --> 00:15:23,120 Speaker 1: and all that's a good thing. 349 00:15:23,720 --> 00:15:23,840 Speaker 4: Uh. 350 00:15:24,080 --> 00:15:26,040 Speaker 1: The key watch out here is you just got to 351 00:15:26,080 --> 00:15:29,520 Speaker 1: be careful on where you place your money and don't 352 00:15:29,520 --> 00:15:32,480 Speaker 1: be afraid of AI on the one on the one hand, 353 00:15:32,520 --> 00:15:35,880 Speaker 1: but don't get all your eggs in one basket either 354 00:15:36,040 --> 00:15:40,280 Speaker 1: and just pile into everything at the top. Uh, stay diversified, 355 00:15:40,480 --> 00:15:44,160 Speaker 1: ignore some of this noise out here, and just stay 356 00:15:44,200 --> 00:15:47,920 Speaker 1: with a good fundamental discipline investment strategy. 357 00:15:48,400 --> 00:15:50,240 Speaker 2: Yeah, so this is I agree with you. 358 00:15:50,280 --> 00:15:52,440 Speaker 3: But at the same time, there, I think there's room 359 00:15:52,480 --> 00:15:54,240 Speaker 3: for data in here, just just to figure out what 360 00:15:54,240 --> 00:15:56,640 Speaker 3: are people doing. I do like the idea that the 361 00:15:57,280 --> 00:16:00,480 Speaker 3: Google trends ability of knowing what people are thinking about 362 00:16:00,960 --> 00:16:04,040 Speaker 3: that does help, I think with decision making for companies 363 00:16:04,040 --> 00:16:04,480 Speaker 3: and so forth. 364 00:16:04,480 --> 00:16:06,200 Speaker 2: So I think there's some useful tools in here. 365 00:16:06,440 --> 00:16:06,640 Speaker 4: Well. 366 00:16:06,680 --> 00:16:09,400 Speaker 1: The smartest thing I saw from this report and I 367 00:16:09,480 --> 00:16:12,160 Speaker 1: believe this, and we saw this, you know when the 368 00:16:12,240 --> 00:16:15,080 Speaker 1: Internet bubble happened, you know, and this theory and this 369 00:16:15,160 --> 00:16:20,760 Speaker 1: report states that new technology is adopted in stages innovation stage, 370 00:16:21,280 --> 00:16:27,160 Speaker 1: inflated expectation stage, disillusionment stage, I even as deck going down, 371 00:16:27,440 --> 00:16:32,960 Speaker 1: I don't know, seventy percent, enlightenment, and then finally new productivity. 372 00:16:33,040 --> 00:16:35,720 Speaker 1: That's kind of the way things work, and it'll work 373 00:16:35,920 --> 00:16:39,000 Speaker 1: this time with AI two. Am I wrong there, Brian. 374 00:16:39,200 --> 00:16:42,120 Speaker 3: No, Everything that happens, all these kind of tools, these 375 00:16:42,120 --> 00:16:45,440 Speaker 3: become a catalyst for investment. Right, It's an opportunity for 376 00:16:45,840 --> 00:16:49,800 Speaker 3: companies to make things more efficient. I think the assumption 377 00:16:49,840 --> 00:16:52,360 Speaker 3: when we first started talking about artificial intelligence, we thought 378 00:16:52,400 --> 00:16:54,480 Speaker 3: the army of robots was going to show up tomorrow 379 00:16:54,680 --> 00:16:57,200 Speaker 3: to really literally take jobs away and so forth. And 380 00:16:57,240 --> 00:16:59,160 Speaker 3: I do think that's going to happen in certain corners 381 00:16:59,200 --> 00:17:02,320 Speaker 3: of the economy, because there are things AI can do 382 00:17:02,520 --> 00:17:05,520 Speaker 3: simply better than a human being and with less risk 383 00:17:05,560 --> 00:17:07,440 Speaker 3: and so forth. But for the most part, I think 384 00:17:07,480 --> 00:17:09,879 Speaker 3: it's going to simply complement what a human being can 385 00:17:09,920 --> 00:17:12,400 Speaker 3: do and make us more productive. I can speak directly 386 00:17:12,600 --> 00:17:15,240 Speaker 3: to my own daily routine. I do use a chat GPT, 387 00:17:15,359 --> 00:17:18,480 Speaker 3: and I use because it's a much better way to 388 00:17:18,520 --> 00:17:22,120 Speaker 3: put together chunks of information from different places to help 389 00:17:22,200 --> 00:17:24,520 Speaker 3: save me time to come to a conclusion without having 390 00:17:24,520 --> 00:17:27,159 Speaker 3: to go back and do a doctoral research paper on 391 00:17:27,200 --> 00:17:31,159 Speaker 3: some obscure financial planning topic. It does connect points A 392 00:17:31,240 --> 00:17:33,560 Speaker 3: and point B a lot more quickly, but it doesn't 393 00:17:33,600 --> 00:17:36,920 Speaker 3: remove me from the need to deliver advice to another 394 00:17:37,000 --> 00:17:39,160 Speaker 3: human being who wants to look somebody in the eye 395 00:17:39,240 --> 00:17:40,840 Speaker 3: and hear that it's going to be okay. Because of 396 00:17:40,880 --> 00:17:43,280 Speaker 3: these seven reasons, AI is never going to do that 397 00:17:43,480 --> 00:17:46,680 Speaker 3: any more than any other computer based financial planning tools 398 00:17:46,760 --> 00:17:48,280 Speaker 3: or no load index funds or all the other things 399 00:17:48,280 --> 00:17:49,720 Speaker 3: that we're going to end my career over the past 400 00:17:49,760 --> 00:17:50,320 Speaker 3: thirty years. 401 00:17:50,880 --> 00:17:53,520 Speaker 1: All right, switching gears here. If you're decigning what to 402 00:17:53,600 --> 00:17:57,520 Speaker 1: do from a travel planning standpoint next year, this could 403 00:17:57,600 --> 00:18:01,360 Speaker 1: be a cool trip, a cruise around the Great Lakes, Brian, 404 00:18:01,680 --> 00:18:05,199 Speaker 1: I have I have virtually no interest in spending my 405 00:18:05,400 --> 00:18:09,720 Speaker 1: hard earned money getting into a boat and sailing to Cleveland, Ohio. 406 00:18:09,800 --> 00:18:13,439 Speaker 1: But please fill us in on this exciting new travel 407 00:18:13,520 --> 00:18:16,680 Speaker 1: opportunity that's coming in May of twenty twenty six. 408 00:18:16,800 --> 00:18:19,320 Speaker 3: Well, you need to expand your world then, because there's 409 00:18:19,359 --> 00:18:21,560 Speaker 3: more to the Great Lakes than Cleveland, Ohio. 410 00:18:21,640 --> 00:18:23,440 Speaker 2: If you've never been to the Upper Peninsula, then you 411 00:18:23,480 --> 00:18:23,800 Speaker 2: gotta go. 412 00:18:23,880 --> 00:18:26,159 Speaker 1: I've been there, So I've been to the Michigan It's. 413 00:18:26,080 --> 00:18:28,520 Speaker 3: They're just grumpy, Bob. Well, this is for the non 414 00:18:28,560 --> 00:18:30,840 Speaker 3: Bobs out there, for the non grumpy people who like 415 00:18:30,880 --> 00:18:32,640 Speaker 3: to see the world. So this is the cruise lines Aget. 416 00:18:32,680 --> 00:18:35,600 Speaker 3: There's three itinerarias coming. There's a Great Lakes and Thousand 417 00:18:35,600 --> 00:18:38,639 Speaker 3: Islands crews that will go between Syracuse, New York Cleveland. 418 00:18:39,040 --> 00:18:40,760 Speaker 2: Bob won't. Bob won't be on that one because it's 419 00:18:40,760 --> 00:18:41,480 Speaker 2: got Cleveland in it. 420 00:18:42,000 --> 00:18:45,840 Speaker 3: That'll go through Lake, Ontario, Lake Erie Excursions and all 421 00:18:45,840 --> 00:18:48,520 Speaker 3: these other things, a shipwreck cruise to on a glass 422 00:18:48,560 --> 00:18:49,440 Speaker 3: bottom boat. 423 00:18:49,160 --> 00:18:52,480 Speaker 2: And Niagara Falls as well, and then some other ones 424 00:18:52,480 --> 00:18:52,919 Speaker 2: out there too. 425 00:18:52,920 --> 00:18:54,760 Speaker 3: There's a there's a two week long one that runs 426 00:18:54,800 --> 00:18:58,560 Speaker 3: between Cleveland and Milwaukee. So basically these are luxury cruises, right. 427 00:18:58,600 --> 00:19:00,680 Speaker 3: They're putting you in a comfortable spot. It's kind of 428 00:19:00,720 --> 00:19:03,320 Speaker 3: like the idea of going down to the Caribbean, except 429 00:19:03,320 --> 00:19:04,840 Speaker 3: with a little bit different viewpoints. 430 00:19:04,840 --> 00:19:05,640 Speaker 2: So let's talk money. 431 00:19:05,680 --> 00:19:07,760 Speaker 1: How much of the So you mean I can get 432 00:19:07,800 --> 00:19:10,199 Speaker 1: on a glass bottom boat and look at all the 433 00:19:10,240 --> 00:19:13,760 Speaker 1: debris buried in the Cuyahoga River. Is that actually an 434 00:19:13,760 --> 00:19:15,479 Speaker 1: opportunity I can take advantage of. 435 00:19:15,880 --> 00:19:18,680 Speaker 2: Well, open your mind, Bob. These these are things for fun. 436 00:19:18,760 --> 00:19:21,679 Speaker 1: People maybe talk about Mcina Island, talk about. 437 00:19:21,400 --> 00:19:24,800 Speaker 3: That Mcina Island, Mackinac is a lovely place to be. 438 00:19:24,920 --> 00:19:26,800 Speaker 3: So these are a little on the pricey side. That's 439 00:19:26,800 --> 00:19:29,359 Speaker 3: where the word luxury comes in. So these cruises start 440 00:19:29,440 --> 00:19:32,520 Speaker 3: about eighty six seventy five per person eight thousand, six 441 00:19:32,600 --> 00:19:36,119 Speaker 3: seventy five based on double occupancy. So this includes meals, drinks, 442 00:19:36,160 --> 00:19:38,280 Speaker 3: and the typical things you would include. But you're gonna 443 00:19:38,320 --> 00:19:39,760 Speaker 3: wanna budget for it if we're gonna pull the trigger? 444 00:19:41,080 --> 00:19:43,879 Speaker 1: All right? Should you be using AI to just help 445 00:19:43,920 --> 00:19:47,840 Speaker 1: you blindly buy stuff? Our cyber security expert is in 446 00:19:47,920 --> 00:19:50,920 Speaker 1: to discuss that. Next. You're listening to Simply Money presented 447 00:19:50,920 --> 00:19:54,760 Speaker 1: by all Worth Financial on fifty five KRC the talk station. 448 00:20:00,520 --> 00:20:03,080 Speaker 1: You're listening to Simply Money presented by all Worth Financial. 449 00:20:03,160 --> 00:20:07,400 Speaker 1: Launebompspond Seller along with Brian James, joined today by our 450 00:20:07,600 --> 00:20:13,720 Speaker 1: tech and AI and cybersecurity guru, mister Dave Hatter. Dave, 451 00:20:13,800 --> 00:20:16,480 Speaker 1: I can't wait to get your thoughts on this topic. 452 00:20:16,560 --> 00:20:20,720 Speaker 1: We came across an article recently where these AI tools 453 00:20:20,760 --> 00:20:24,560 Speaker 1: now you can tell them, for example, go out and 454 00:20:24,680 --> 00:20:27,960 Speaker 1: find me the best pair of jym shoes for under 455 00:20:27,960 --> 00:20:31,480 Speaker 1: one hundred dollars. Find the best quality pair of GYM shoes, 456 00:20:31,880 --> 00:20:34,639 Speaker 1: find it, buy it, ship it to us, put it 457 00:20:34,680 --> 00:20:37,880 Speaker 1: on my visa card. Dave, I'll tell you right now, 458 00:20:37,920 --> 00:20:40,520 Speaker 1: there's no way in hell I'm gonna let some computer 459 00:20:40,640 --> 00:20:44,200 Speaker 1: do that for me. What say you? And what could 460 00:20:44,240 --> 00:20:47,840 Speaker 1: possibly go wrong with this kind of quote unquote new 461 00:20:47,840 --> 00:20:49,640 Speaker 1: and exciting technology out there? 462 00:20:50,720 --> 00:20:53,119 Speaker 6: Well, guys, as always, thanks for having me on and 463 00:20:53,280 --> 00:20:55,960 Speaker 6: I'm glad you guys came up with this as a 464 00:20:55,960 --> 00:20:59,159 Speaker 6: topy to discuss because it touches on a couple of things. 465 00:20:59,440 --> 00:21:02,720 Speaker 6: There's this whole sort of new ish field and AI 466 00:21:02,920 --> 00:21:06,840 Speaker 6: called agentic AI or a AI agentics. You'll hear people 467 00:21:06,880 --> 00:21:09,919 Speaker 6: say it both ways. And this goes beyond things like 468 00:21:10,040 --> 00:21:15,080 Speaker 6: chat ept or CROC or other chatbot type systems where 469 00:21:15,080 --> 00:21:17,719 Speaker 6: you sit down and type in a prompt. The idea 470 00:21:17,760 --> 00:21:21,399 Speaker 6: of a gentic AI is it essentially can act like 471 00:21:21,480 --> 00:21:24,600 Speaker 6: a human being and take take action on tasks. It 472 00:21:24,600 --> 00:21:29,359 Speaker 6: has agency, right, hence the name agentic And this is 473 00:21:29,400 --> 00:21:31,080 Speaker 6: sort of all the rage and the business. 474 00:21:31,080 --> 00:21:32,800 Speaker 4: Now when you hear people talk. 475 00:21:32,640 --> 00:21:34,720 Speaker 6: About how AI is going to put people out of 476 00:21:34,720 --> 00:21:37,560 Speaker 6: work and so forth, and when they're not talking about 477 00:21:37,600 --> 00:21:40,960 Speaker 6: super intelligence and artificial general intelligence, they're generally talking about 478 00:21:41,000 --> 00:21:43,720 Speaker 6: agentic AI, that these things are going to be set 479 00:21:43,800 --> 00:21:46,000 Speaker 6: up in this AI will talk to that AI and 480 00:21:46,040 --> 00:21:48,199 Speaker 6: it'll do all of this stuff and work and we 481 00:21:48,240 --> 00:21:51,720 Speaker 6: won't need people anymore. Now, will we get there eventually? 482 00:21:52,040 --> 00:21:54,639 Speaker 6: Maybe I'm calling bs on it at the moment. And 483 00:21:54,680 --> 00:21:58,840 Speaker 6: to answer your question specifically, Bob, No, there is absolutely 484 00:21:59,080 --> 00:22:02,200 Speaker 6: not a chance in hell I would give any sort 485 00:22:02,200 --> 00:22:06,240 Speaker 6: of AI agent access to my bank accounts or any 486 00:22:06,320 --> 00:22:10,240 Speaker 6: financial system and then let it act on my behalf 487 00:22:10,840 --> 00:22:13,720 Speaker 6: And I'll tell you why so, guys, I spent twenty 488 00:22:13,760 --> 00:22:16,840 Speaker 6: five years in this business before I sort of transitioned 489 00:22:16,840 --> 00:22:20,199 Speaker 6: into cybersecurity. As a software engineer, I wrote millions of 490 00:22:20,240 --> 00:22:23,000 Speaker 6: lines of code, built every kind of thing you could imagine. 491 00:22:23,560 --> 00:22:26,520 Speaker 6: And how many times do you think I created a 492 00:22:26,520 --> 00:22:30,880 Speaker 6: bug in software and there were unintended consequences? The answer 493 00:22:30,960 --> 00:22:32,640 Speaker 6: is a lot. I don't know how many. How many 494 00:22:32,680 --> 00:22:35,080 Speaker 6: times do you think I did that on purpose? Well, 495 00:22:35,080 --> 00:22:37,280 Speaker 6: the answer is never. But I'm a human being. 496 00:22:37,359 --> 00:22:38,320 Speaker 4: I make mistakes. 497 00:22:38,800 --> 00:22:41,160 Speaker 6: And you know, one of the key problems with AI 498 00:22:41,240 --> 00:22:44,240 Speaker 6: to date is you have this idea of hallucinations or 499 00:22:44,280 --> 00:22:46,879 Speaker 6: confabulations where they just make things up. So the idea 500 00:22:47,280 --> 00:22:50,080 Speaker 6: that I'm going to trust some AI that's a black box. 501 00:22:50,160 --> 00:22:52,000 Speaker 6: I can't know what it does or why it does 502 00:22:52,040 --> 00:22:54,960 Speaker 6: it to control my money and take actions on my 503 00:22:55,040 --> 00:22:58,200 Speaker 6: behalf that involve my finances as far as I'm concerned, 504 00:22:58,200 --> 00:23:00,560 Speaker 6: completely insane, and there is no chance I would do that. 505 00:23:00,880 --> 00:23:03,359 Speaker 1: Kind of like asking Brian how many times he's taking 506 00:23:03,440 --> 00:23:05,679 Speaker 1: a client's money and put it in the stock market 507 00:23:05,760 --> 00:23:08,280 Speaker 1: and implied that there's no way you could lose money, 508 00:23:08,960 --> 00:23:11,080 Speaker 1: and then the stock market goes down eight percent. Is 509 00:23:11,440 --> 00:23:12,680 Speaker 1: that kind of what you're talking about. 510 00:23:13,520 --> 00:23:15,679 Speaker 4: Well, I don't know if i'd put Brian on the 511 00:23:15,720 --> 00:23:17,200 Speaker 4: spot like that, but yeah. 512 00:23:17,040 --> 00:23:17,560 Speaker 1: Be right back. 513 00:23:17,600 --> 00:23:19,000 Speaker 2: I got to cancel a lot of calls here. 514 00:23:21,240 --> 00:23:23,399 Speaker 6: I'm not saying there may not come a time in 515 00:23:23,440 --> 00:23:27,120 Speaker 6: the future. I mean where I might trust something like this, 516 00:23:27,200 --> 00:23:30,120 Speaker 6: although I'm super skeptical and again, spent twenty five years 517 00:23:30,160 --> 00:23:34,160 Speaker 6: writing software right now, not AI software, but writing software, 518 00:23:34,160 --> 00:23:37,720 Speaker 6: and in many cases, despite extensive testing, there were still 519 00:23:37,880 --> 00:23:40,520 Speaker 6: things that didn't work quite right, just miss something over here, 520 00:23:40,640 --> 00:23:43,280 Speaker 6: or someone used the software in a way I did 521 00:23:43,280 --> 00:23:45,960 Speaker 6: not anticipate, and thus it didn't do what I expected 522 00:23:45,960 --> 00:23:49,080 Speaker 6: and something bad happened. So the idea that I'm going 523 00:23:49,119 --> 00:23:51,040 Speaker 6: to have a black box where I can't really know 524 00:23:51,080 --> 00:23:54,479 Speaker 6: how it works and it has known faults, right, So 525 00:23:54,920 --> 00:23:55,320 Speaker 6: from this. 526 00:23:55,400 --> 00:23:56,720 Speaker 4: Article it came from Mark and Watch. 527 00:23:56,800 --> 00:23:59,160 Speaker 6: I encourage people they should go read this from themselves 528 00:23:59,200 --> 00:24:01,359 Speaker 6: if they're thinking this is a good idea. They do 529 00:24:01,440 --> 00:24:03,679 Speaker 6: a really good job of touching on many of the 530 00:24:03,720 --> 00:24:05,240 Speaker 6: problems I would see with something like this. 531 00:24:05,320 --> 00:24:06,439 Speaker 4: But I just want to read this to youa. 532 00:24:06,920 --> 00:24:09,720 Speaker 6: The tendency for AI to makes seemingly confident but potentially 533 00:24:09,800 --> 00:24:12,080 Speaker 6: wrong assumptions is getting worse. And this is the idea 534 00:24:12,119 --> 00:24:15,800 Speaker 6: of hallucination or confabulation, that they just make things up. 535 00:24:16,280 --> 00:24:19,400 Speaker 6: Recent analysis, but the New York Times reveals a troubling paradox. 536 00:24:19,400 --> 00:24:22,640 Speaker 6: The most advanced AI systems are becoming more convincing, yet 537 00:24:22,680 --> 00:24:25,680 Speaker 6: are still more prone to hallucination. Open AI's newest quote 538 00:24:25,720 --> 00:24:30,720 Speaker 6: reasoning models unquote invent facts fifty one to seventy nine 539 00:24:30,760 --> 00:24:33,439 Speaker 6: percent of the time, compared with forty four percent for 540 00:24:33,480 --> 00:24:37,119 Speaker 6: older version, while Google engineers report the reducing hallucination is 541 00:24:37,160 --> 00:24:41,000 Speaker 6: now the quote fundamental blocker unquote to wider AI deployment. 542 00:24:41,400 --> 00:24:44,240 Speaker 6: So when you know this going into it, and you 543 00:24:44,359 --> 00:24:46,879 Speaker 6: know that often it will not only hallucinate, this is 544 00:24:46,880 --> 00:24:49,359 Speaker 6: all well documented. Guys will not only hallucinate, but then 545 00:24:49,480 --> 00:24:51,920 Speaker 6: work hard to convince you what it's telling you, which 546 00:24:51,920 --> 00:24:54,720 Speaker 6: is patently false, is correct. As a problem not to 547 00:24:54,760 --> 00:24:58,320 Speaker 6: mention the privacy issues of this, the issues with these. 548 00:24:58,160 --> 00:24:59,200 Speaker 4: Things being hacked. 549 00:24:59,520 --> 00:25:02,640 Speaker 6: The idea that you know, if a hacker could somehow 550 00:25:02,760 --> 00:25:05,479 Speaker 6: get into your account, whether they hack the back end 551 00:25:05,480 --> 00:25:07,639 Speaker 6: of the agentic AI or they just take over your 552 00:25:07,680 --> 00:25:10,520 Speaker 6: account that suddenly you could have an avalanche of spending. 553 00:25:10,960 --> 00:25:13,320 Speaker 6: You know, are these things really making the best decisions 554 00:25:13,480 --> 00:25:15,280 Speaker 6: on your behalf or is there a bias in the 555 00:25:15,320 --> 00:25:18,199 Speaker 6: models where they're actually picking more expensive things rather than 556 00:25:18,240 --> 00:25:20,320 Speaker 6: buying the thing that would be the best fit for you. 557 00:25:20,920 --> 00:25:23,680 Speaker 6: Hard to say, those are all risks. And again, guys, 558 00:25:23,680 --> 00:25:26,080 Speaker 6: I'm just telling you now. Everyone that knows me knows 559 00:25:26,119 --> 00:25:28,760 Speaker 6: I'm the ten foil hat guy. I'm always the doom 560 00:25:28,840 --> 00:25:32,040 Speaker 6: guy because I know how this stuff works to a 561 00:25:32,119 --> 00:25:35,040 Speaker 6: large extent, I've been doing this for a long time. Again, 562 00:25:35,160 --> 00:25:37,760 Speaker 6: at some point in the future, would there become a 563 00:25:37,800 --> 00:25:40,199 Speaker 6: time where I might trust something like this. Maybe, but 564 00:25:40,240 --> 00:25:43,200 Speaker 6: we are still barely in the infancy of this, and 565 00:25:43,240 --> 00:25:46,359 Speaker 6: I there is absolutely zero chance I would let any 566 00:25:46,359 --> 00:25:49,720 Speaker 6: sort of AI agent act on my behalf with anything financial. 567 00:25:50,160 --> 00:25:51,800 Speaker 3: So first thing I want to say is I do 568 00:25:52,040 --> 00:25:55,240 Speaker 3: use AI. I use chat, GPT, we use copilots sometimes. 569 00:25:55,240 --> 00:25:58,520 Speaker 3: It really is a wonderful tool for like Google on steroids, 570 00:25:58,520 --> 00:26:00,480 Speaker 3: when trying to put a puzzle together for some or 571 00:26:00,480 --> 00:26:02,679 Speaker 3: answer questions about how some works or whatever. It is 572 00:26:02,720 --> 00:26:06,400 Speaker 3: a fantastic tool for that. However, can you imagine choosing 573 00:26:06,440 --> 00:26:10,280 Speaker 3: a surgeon or some kind of medical advisor whose stated 574 00:26:10,400 --> 00:26:13,320 Speaker 3: goal in the short term is to reduce the hallucinations. 575 00:26:13,520 --> 00:26:15,560 Speaker 3: It really seems like not the greatest idea, but I 576 00:26:15,560 --> 00:26:18,280 Speaker 3: want to take this in a slightly different direction. So Dave, 577 00:26:18,119 --> 00:26:20,679 Speaker 3: you've expressed your concerns from the technological standpoint, and that 578 00:26:20,680 --> 00:26:22,679 Speaker 3: makes it like a lot of sense. We appreciate you're 579 00:26:22,720 --> 00:26:25,560 Speaker 3: on this side with us to help us understand that part. 580 00:26:25,920 --> 00:26:29,640 Speaker 3: My brain goes to the regulatory stuff, so I am 581 00:26:29,680 --> 00:26:32,600 Speaker 3: not permitted to send out an email to all of 582 00:26:32,640 --> 00:26:35,840 Speaker 3: my clients without it being having it being reviewed by 583 00:26:35,920 --> 00:26:38,160 Speaker 3: you know a lot of compliance departments and legal people 584 00:26:38,200 --> 00:26:41,119 Speaker 3: who help us protect ourselves and our clients and so forth. 585 00:26:41,520 --> 00:26:43,600 Speaker 3: You know, there are good processes in place for that. 586 00:26:43,880 --> 00:26:46,120 Speaker 3: I have to get I have to take continuing education 587 00:26:46,200 --> 00:26:48,720 Speaker 3: to keep up on my Certify Financial Planet degree and 588 00:26:48,760 --> 00:26:50,800 Speaker 3: all these other things. Some people are licensed, and there's 589 00:26:50,840 --> 00:26:55,119 Speaker 3: lots of requirements there who at some point one regulatory body, 590 00:26:55,520 --> 00:26:57,119 Speaker 3: and there are many of them. The sec or fin 591 00:26:57,400 --> 00:26:59,360 Speaker 3: or whoever is going to have to say, hey, wait 592 00:26:59,400 --> 00:27:02,320 Speaker 3: a minute, these are providing advice and people are apparently 593 00:27:02,359 --> 00:27:04,719 Speaker 3: listening to it. We probably got to have eyeballs on that, 594 00:27:04,760 --> 00:27:06,000 Speaker 3: and then they're going to look under the hood to 595 00:27:06,000 --> 00:27:08,239 Speaker 3: figure out what is the motivation. So I'm looking at 596 00:27:08,240 --> 00:27:10,760 Speaker 3: this part of this article that refers to sponsored results, 597 00:27:11,000 --> 00:27:15,040 Speaker 3: meaning what stops somebody from throwing you know, a language 598 00:27:15,080 --> 00:27:18,200 Speaker 3: model out there that will gear somebody towards certain products. 599 00:27:18,359 --> 00:27:21,960 Speaker 3: That's illegal for a fiduciary advisor to do. But what 600 00:27:22,040 --> 00:27:24,399 Speaker 3: stops a computer? You know, the regulators are going to 601 00:27:24,480 --> 00:27:26,080 Speaker 3: have to step in on this. Have you heard anything 602 00:27:26,080 --> 00:27:28,119 Speaker 3: on the regulatory side of that kind of thing. 603 00:27:29,160 --> 00:27:31,760 Speaker 6: Not specifically, but I'll answer that in a second. You 604 00:27:32,040 --> 00:27:34,440 Speaker 6: brought up a really good point. You know, I use 605 00:27:34,520 --> 00:27:37,359 Speaker 6: this stuff myself. I prefer Rock in general, you know, 606 00:27:37,440 --> 00:27:40,760 Speaker 6: co pilots built into the Microsoft platform. And I would 607 00:27:40,840 --> 00:27:44,960 Speaker 6: tell folks from a chatout perspective again, forget these automated agents. 608 00:27:45,240 --> 00:27:48,160 Speaker 6: You know, if you understand the risks of your data 609 00:27:48,200 --> 00:27:51,520 Speaker 6: being exposed to the model to someone else, of getting 610 00:27:51,880 --> 00:27:54,200 Speaker 6: you know, false answers and things like that, they can 611 00:27:54,359 --> 00:27:57,199 Speaker 6: be like Rocket tool for you. I from a productivity standpoint, 612 00:27:57,480 --> 00:27:59,720 Speaker 6: So I'm not suggesting that people there's no value in 613 00:27:59,760 --> 00:28:01,760 Speaker 6: this they should avoid AI in general. In fact, I 614 00:28:01,880 --> 00:28:04,760 Speaker 6: encourage everyone check it out. For themselves, you'll have a 615 00:28:04,760 --> 00:28:06,640 Speaker 6: better understanding of where this stuff is at. 616 00:28:07,080 --> 00:28:08,720 Speaker 4: But this adentic AI. 617 00:28:08,600 --> 00:28:10,879 Speaker 6: Again, this black box thing that's going to act on 618 00:28:10,920 --> 00:28:13,000 Speaker 6: your behalf. And then to your point, Brian, about the 619 00:28:13,000 --> 00:28:16,600 Speaker 6: fiduciary angle of this, Yeah, I mean, this whole agentic 620 00:28:16,640 --> 00:28:18,560 Speaker 6: thing is still new. I've not heard any sort of 621 00:28:18,640 --> 00:28:23,360 Speaker 6: rumblings about the fiduciary aspect and regulation around the financial 622 00:28:23,400 --> 00:28:25,320 Speaker 6: interface of this. I mean, for the most part, all 623 00:28:25,359 --> 00:28:27,720 Speaker 6: this stuff is still the wild wild West. You know, 624 00:28:27,760 --> 00:28:31,040 Speaker 6: we're kind of in a race with other adversarial nations 625 00:28:31,080 --> 00:28:32,960 Speaker 6: like China to try to be first on some of 626 00:28:32,960 --> 00:28:35,760 Speaker 6: this stuff so that it doesn't become a strategic advantage 627 00:28:35,760 --> 00:28:39,400 Speaker 6: and potentially a military advantage. But you know, there's really 628 00:28:39,480 --> 00:28:41,560 Speaker 6: almost no regulation around any of this. And I think 629 00:28:41,600 --> 00:28:45,120 Speaker 6: you make a really good point. The whole idea in 630 00:28:45,120 --> 00:28:47,280 Speaker 6: that article they call it sponsored results risk. 631 00:28:47,600 --> 00:28:49,240 Speaker 4: Yeah. Again, these things are a black box. 632 00:28:49,240 --> 00:28:52,600 Speaker 6: And even if you didn't have algorithmic bias in the agent, 633 00:28:52,880 --> 00:28:55,520 Speaker 6: there might be bias in the training data or someone 634 00:28:55,600 --> 00:28:58,160 Speaker 6: behind the scenes, because it would be very difficult to 635 00:28:58,160 --> 00:29:00,640 Speaker 6: figure out. I mean, that's one of the risks point out, 636 00:29:00,800 --> 00:29:02,760 Speaker 6: and I think legitimate one and another reason why I 637 00:29:02,800 --> 00:29:04,960 Speaker 6: would never use anything like this in the near future. 638 00:29:05,080 --> 00:29:08,120 Speaker 1: As always from our tech expert Dave Hatter, thanks as 639 00:29:08,120 --> 00:29:11,240 Speaker 1: always for joining us. You're listening to Simply Money presented 640 00:29:11,240 --> 00:29:14,960 Speaker 1: by Allworth Financial on fifty five KARC the talk station. 641 00:29:19,640 --> 00:29:22,360 Speaker 1: You're listening to Simply Money presented by all Worth Financial 642 00:29:22,360 --> 00:29:25,400 Speaker 1: on Bob Sponseller along with Brian James. Do you have 643 00:29:25,440 --> 00:29:27,880 Speaker 1: a financial question you'd like for us to answer? There 644 00:29:27,960 --> 00:29:30,440 Speaker 1: is a big red button you can click while you're 645 00:29:30,440 --> 00:29:33,680 Speaker 1: listening to the show right on the iHeart app. Simply 646 00:29:33,720 --> 00:29:36,600 Speaker 1: record your question and it will come straight to us. 647 00:29:37,160 --> 00:29:40,680 Speaker 1: All right. David in Columbia Tusculum leads us off Brian. 648 00:29:40,800 --> 00:29:43,720 Speaker 1: He asks, how do I avoid being pushed into hire 649 00:29:44,160 --> 00:29:48,320 Speaker 1: Medicare premiums because of my RMD distributions? 650 00:29:48,880 --> 00:29:51,000 Speaker 3: So, David apparently is run into that time of life 651 00:29:51,040 --> 00:29:53,520 Speaker 3: where the financial questions are no longer so simple. I 652 00:29:53,560 --> 00:29:56,080 Speaker 3: always tell my younger clients, Hey, you know, when you're 653 00:29:56,080 --> 00:29:58,080 Speaker 3: twenty and thirty years old, you're just trying not to 654 00:29:58,120 --> 00:30:00,920 Speaker 3: make a mess. Be aggressive with your investments, don't panic 655 00:30:00,920 --> 00:30:02,520 Speaker 3: when the market wobbles, and don't make a mess of 656 00:30:02,560 --> 00:30:04,800 Speaker 3: your credit. Do that for thirty years and you'll be fine. 657 00:30:04,920 --> 00:30:07,040 Speaker 3: Then you run into questions like what David has, where 658 00:30:07,040 --> 00:30:10,360 Speaker 3: obviously there's enough money that's coming out where his rmds 659 00:30:10,440 --> 00:30:12,680 Speaker 3: might be pushing him into a situation where the Medicare 660 00:30:12,800 --> 00:30:14,719 Speaker 3: organization says, hey, you need to pay a little bit 661 00:30:14,720 --> 00:30:17,120 Speaker 3: more for care. So the way this works, there's something 662 00:30:17,120 --> 00:30:20,960 Speaker 3: out there called irma IRMA and that covers that is 663 00:30:21,000 --> 00:30:24,440 Speaker 3: basically a calculation that looks at your Medicare premiums and 664 00:30:24,640 --> 00:30:27,200 Speaker 3: it will look for if you're married, income a two 665 00:30:27,240 --> 00:30:29,400 Speaker 3: hundred six thousand dollars and half of that one hundred 666 00:30:29,400 --> 00:30:29,960 Speaker 3: and three thousand. 667 00:30:30,000 --> 00:30:30,560 Speaker 2: If you're single. 668 00:30:30,680 --> 00:30:34,840 Speaker 3: You go above that income wise, and your rmds, I'm sorry, 669 00:30:34,840 --> 00:30:36,880 Speaker 3: your Medicare premiums are going to start to rise a 670 00:30:36,880 --> 00:30:40,360 Speaker 3: little bit. So required minimum distributions are a whole other concept. 671 00:30:40,600 --> 00:30:42,640 Speaker 3: They this is what happens if you have a pre 672 00:30:42,760 --> 00:30:45,200 Speaker 3: tax IRA or four oh one K, and then the 673 00:30:45,240 --> 00:30:47,440 Speaker 3: IRS eventually is going to force you to start taking 674 00:30:47,440 --> 00:30:49,760 Speaker 3: money out of that. And IRS doesn't care what you 675 00:30:49,840 --> 00:30:51,640 Speaker 3: do with it. They're simply saying you have to remove 676 00:30:51,680 --> 00:30:53,720 Speaker 3: it from the tax shelter, and then some percentage of 677 00:30:53,720 --> 00:30:55,120 Speaker 3: that total amount is going to be taxed. 678 00:30:55,280 --> 00:30:55,720 Speaker 2: It's in the. 679 00:30:55,680 --> 00:30:59,720 Speaker 3: Ballpark of four percent maybe of your prior year end IRA. 680 00:31:00,000 --> 00:31:02,040 Speaker 3: Other words, you've got a million dollar IRA, then yes, 681 00:31:02,080 --> 00:31:04,680 Speaker 3: you have forty thousand dollars worth of taxable income that 682 00:31:04,800 --> 00:31:07,880 Speaker 3: can push those IRMA Medicare premiums up. 683 00:31:07,960 --> 00:31:09,000 Speaker 2: What am I gonna do about it? 684 00:31:09,160 --> 00:31:11,760 Speaker 3: This is where roth conversions in your sixties, right that 685 00:31:11,840 --> 00:31:15,360 Speaker 3: window between when you have really low income. I've retired, 686 00:31:15,440 --> 00:31:17,600 Speaker 3: maybe I'm living off savings best case scenario, or maybe 687 00:31:17,640 --> 00:31:20,120 Speaker 3: it's only Social Security. Therefore I'm in the lowest bracket 688 00:31:20,160 --> 00:31:22,959 Speaker 3: I've seen in forever. Do some ROTH conversions use up 689 00:31:22,960 --> 00:31:25,320 Speaker 3: some of those low brackets. You'll lower your future rm ds. 690 00:31:25,600 --> 00:31:28,440 Speaker 3: You can also do qualified charitable distributions. This is a 691 00:31:28,600 --> 00:31:31,680 Speaker 3: This is your RMD, your requirement of distribution going straight 692 00:31:31,720 --> 00:31:33,200 Speaker 3: to a charity, but it keeps it out of your 693 00:31:33,240 --> 00:31:35,760 Speaker 3: modified adjusted gross income. To help you avoid that, and 694 00:31:35,800 --> 00:31:37,800 Speaker 3: then figure out how to how to do your withdrawals 695 00:31:37,800 --> 00:31:41,080 Speaker 3: tax efficiently. Coordinate your taxable and your ROTH accounts first 696 00:31:41,120 --> 00:31:43,960 Speaker 3: to smooth over that income. All right, long underd answer there, 697 00:31:44,000 --> 00:31:46,280 Speaker 3: but let's move on to Elaine and Madeira Bob's help. 698 00:31:46,880 --> 00:31:50,560 Speaker 1: I feel like David just got a full blown retirement 699 00:31:50,600 --> 00:31:52,080 Speaker 1: seminar in about three minutes. 700 00:31:52,080 --> 00:31:55,600 Speaker 2: But sentiment, all right, come all right. 701 00:31:55,440 --> 00:31:58,200 Speaker 1: Elaine and Madeira, and I'll take this one. Was she says, 702 00:31:58,200 --> 00:32:02,160 Speaker 1: with so many options right now, ET BUFFERDTFS, direct investing, 703 00:32:02,720 --> 00:32:05,320 Speaker 1: how do I or direct indexing? How do I pick 704 00:32:05,400 --> 00:32:11,280 Speaker 1: the best core investment strategy for a three million dollar portfolio? Well, 705 00:32:11,320 --> 00:32:13,280 Speaker 1: you bring up a lot of good stuff here, Elaine. 706 00:32:13,440 --> 00:32:17,960 Speaker 1: You know involving taxes, you know with direct indexing, BUFFERDTS 707 00:32:18,000 --> 00:32:22,120 Speaker 1: has to do with managing investment volatility. We need to 708 00:32:22,160 --> 00:32:25,080 Speaker 1: know how much of that money is in qualified accounts 709 00:32:25,120 --> 00:32:28,200 Speaker 1: iras four oh one k's versus taxable accounts. There's a 710 00:32:28,240 --> 00:32:30,720 Speaker 1: lot to balance here. And I don't want to make 711 00:32:30,760 --> 00:32:34,040 Speaker 1: this sound overwhelming, but you know you need to sit 712 00:32:34,120 --> 00:32:38,000 Speaker 1: down and develop your risk tolerance, your cash flow needs, 713 00:32:38,480 --> 00:32:41,760 Speaker 1: and then have that result in an investment strategy that 714 00:32:41,920 --> 00:32:47,760 Speaker 1: dovetails with a good, solid, tax efficient income distribution strategy. 715 00:32:48,120 --> 00:32:51,360 Speaker 1: And that's where sitting down with a good fiduciary advisor 716 00:32:51,480 --> 00:32:54,240 Speaker 1: that could walk you through all that might be of 717 00:32:54,360 --> 00:32:57,480 Speaker 1: help here. That'd be my recommendation. If this is something 718 00:32:57,560 --> 00:33:00,680 Speaker 1: you don't feel like you want to take on yourself, 719 00:33:01,000 --> 00:33:04,280 Speaker 1: get get some help partner with a good fiduciary advisor. 720 00:33:04,960 --> 00:33:09,400 Speaker 1: All right, Tom and Anderson Township asks, are actively managed 721 00:33:09,480 --> 00:33:12,640 Speaker 1: funds ever worth it if I already own the indexes 722 00:33:13,160 --> 00:33:14,880 Speaker 1: and I'm in a higher tax bracket. 723 00:33:15,360 --> 00:33:17,520 Speaker 2: Yeah, So this is this is a pretty common question. 724 00:33:17,840 --> 00:33:18,000 Speaker 2: You know. 725 00:33:18,120 --> 00:33:20,959 Speaker 3: What we're talking about active versus passive. Active means there's a 726 00:33:21,000 --> 00:33:23,520 Speaker 3: person or a group of persons sitting on top of 727 00:33:23,600 --> 00:33:25,800 Speaker 3: a pile of money saying we like this investment, we 728 00:33:25,840 --> 00:33:27,480 Speaker 3: want we don't like this investment, We're going to buy 729 00:33:27,480 --> 00:33:30,760 Speaker 3: this and sell that, versus a passive investment which simply 730 00:33:30,800 --> 00:33:33,640 Speaker 3: follows an index. So an index such as the S 731 00:33:33,680 --> 00:33:35,600 Speaker 3: and P five hundred, which is nothing more than the 732 00:33:35,640 --> 00:33:37,240 Speaker 3: five hundred largest companies. 733 00:33:36,920 --> 00:33:37,760 Speaker 2: In the United States. 734 00:33:37,920 --> 00:33:40,080 Speaker 3: So I would say, yeah, there are times where active 735 00:33:40,120 --> 00:33:42,400 Speaker 3: management is worth it, but I don't view that in 736 00:33:42,480 --> 00:33:45,400 Speaker 3: terms of beating the market quote unquote. Where where we 737 00:33:45,440 --> 00:33:48,720 Speaker 3: have at times employed active management is in when we 738 00:33:48,760 --> 00:33:51,120 Speaker 3: have kind of unique situations and we want human brains 739 00:33:51,200 --> 00:33:54,120 Speaker 3: versus a blind indexes. So, for example, we have we've 740 00:33:54,160 --> 00:33:56,560 Speaker 3: have a generation and a half of people who have 741 00:33:56,600 --> 00:33:58,920 Speaker 3: really never seen interest rates doing what they're doing over 742 00:33:58,960 --> 00:34:01,360 Speaker 3: the past three years. Prior to that interest rates went 743 00:34:01,440 --> 00:34:03,440 Speaker 3: down and sat on the floor forever. Now, all of 744 00:34:03,480 --> 00:34:05,680 Speaker 3: a sudden, we're in a different situation. We've got fiscal 745 00:34:05,760 --> 00:34:08,560 Speaker 3: policy and monetary policy moving in directions we haven't ever 746 00:34:08,600 --> 00:34:08,960 Speaker 3: had before. 747 00:34:09,000 --> 00:34:10,440 Speaker 2: A lot of politicization of things. 748 00:34:10,680 --> 00:34:13,320 Speaker 3: I want active management sitting on top of some of 749 00:34:13,360 --> 00:34:17,040 Speaker 3: these bonds to basically protect from some risk as opposed 750 00:34:17,040 --> 00:34:18,280 Speaker 3: to just sitting on an index. 751 00:34:18,520 --> 00:34:19,520 Speaker 2: That's how I currently feel. 752 00:34:19,520 --> 00:34:22,240 Speaker 3: I'm happy with that, but I think that's a place, 753 00:34:22,360 --> 00:34:25,000 Speaker 3: you know, again, for very unique situations, for a corner 754 00:34:25,040 --> 00:34:25,719 Speaker 3: of the portfolio. 755 00:34:25,880 --> 00:34:27,279 Speaker 2: I don't need a human brain to tell me it's 756 00:34:27,280 --> 00:34:28,600 Speaker 2: a good idea to own the S and P five 757 00:34:28,640 --> 00:34:29,160 Speaker 2: hundred though. 758 00:34:29,320 --> 00:34:30,680 Speaker 3: All right, we got time for one more, So we're 759 00:34:30,680 --> 00:34:33,080 Speaker 3: gonna throw it to Ken and Mason. Ken's wondering how 760 00:34:33,120 --> 00:34:34,960 Speaker 3: far out he needs to think when it comes to 761 00:34:35,040 --> 00:34:35,680 Speaker 3: tax planning. 762 00:34:35,760 --> 00:34:37,640 Speaker 2: Is tax planning just a this year thing? Or do 763 00:34:37,680 --> 00:34:38,880 Speaker 2: I need to think out into the future? 764 00:34:38,880 --> 00:34:43,040 Speaker 1: Bob, Yeah, I think you need to go out you know, one, five, 765 00:34:43,200 --> 00:34:46,080 Speaker 1: ten years, even twenty or thirty years. And here's what 766 00:34:46,120 --> 00:34:48,319 Speaker 1: I mean by that. We're talking about what is that 767 00:34:48,560 --> 00:34:52,200 Speaker 1: RMD situation going to look like? Going out longer term? 768 00:34:52,280 --> 00:34:55,400 Speaker 1: And this is where the more proactive you can get 769 00:34:55,760 --> 00:35:00,400 Speaker 1: with your actual financial and cash flow plan and tax planning, 770 00:35:00,440 --> 00:35:03,680 Speaker 1: the better off you're gonna be. So definitely sit down 771 00:35:03,760 --> 00:35:06,879 Speaker 1: and map out some strategies and model it out. If 772 00:35:06,920 --> 00:35:10,000 Speaker 1: I do this, how does it look one year, five years, 773 00:35:10,080 --> 00:35:13,560 Speaker 1: ten years, fifteen years from now? And that typically results 774 00:35:13,600 --> 00:35:15,160 Speaker 1: in some pretty good planning. 775 00:35:15,760 --> 00:35:16,200 Speaker 4: All right? 776 00:35:16,719 --> 00:35:20,879 Speaker 1: Are folks choosing love over money or money over love? 777 00:35:21,000 --> 00:35:23,960 Speaker 1: For a growing number of Americans, they're trying to juggle 778 00:35:24,000 --> 00:35:27,680 Speaker 1: both and it gets very complicated. We'll explain what we 779 00:35:27,760 --> 00:35:30,319 Speaker 1: mean next. You're listening to Simply Money presented by all 780 00:35:30,320 --> 00:35:38,840 Speaker 1: Worth Financial fifty five KRZ the talk station. You're listening 781 00:35:38,840 --> 00:35:41,640 Speaker 1: to Simply Money presented by all Worth Financial Onbob Sponseller 782 00:35:41,680 --> 00:35:45,480 Speaker 1: along with Brian James. There are a zillion studies out 783 00:35:45,520 --> 00:35:49,560 Speaker 1: there that show that money is a major stressor in relationships. 784 00:35:49,600 --> 00:35:53,840 Speaker 1: We see it every day, but for some Brian, money 785 00:35:53,960 --> 00:35:59,000 Speaker 1: ends up being the glue that holds marriages or relationships together. 786 00:35:59,480 --> 00:36:03,040 Speaker 1: There's a new survey out you know from Chime and 787 00:36:03,120 --> 00:36:07,279 Speaker 1: Talker research. You, being this sharp gen X gentleman that 788 00:36:07,920 --> 00:36:11,680 Speaker 1: you probably live on chime every day, talk about this study. 789 00:36:11,840 --> 00:36:13,560 Speaker 1: Tell us what we're talking about here. 790 00:36:14,000 --> 00:36:16,520 Speaker 3: I don't know what chime is, but thank you for 791 00:36:16,600 --> 00:36:18,200 Speaker 3: the stereotype there, Bob. 792 00:36:18,400 --> 00:36:19,040 Speaker 2: My goodness. 793 00:36:19,040 --> 00:36:23,719 Speaker 3: Anyway, So yeah, new survey here, This basically is one 794 00:36:23,719 --> 00:36:26,520 Speaker 3: in five Americans say they're staying in a romantic relationship 795 00:36:26,560 --> 00:36:30,960 Speaker 3: because of financial reasons. And there's always loaded guns to this, right. 796 00:36:31,040 --> 00:36:32,759 Speaker 3: This is never as simple as it sounds. So this 797 00:36:32,800 --> 00:36:35,239 Speaker 3: is we're talking about shared bank accounts, a mortgage with 798 00:36:35,239 --> 00:36:37,719 Speaker 3: two names on it. You know, the cost of splitting 799 00:36:37,800 --> 00:36:40,360 Speaker 3: up generally is keeping people together, whether the romance is 800 00:36:40,360 --> 00:36:42,640 Speaker 3: there or not. Now I'm dealing with a situation in 801 00:36:42,680 --> 00:36:46,480 Speaker 3: this case right now, and the sometimes it's the headline 802 00:36:46,520 --> 00:36:48,200 Speaker 3: is it's the finances keeping together. 803 00:36:48,560 --> 00:36:50,400 Speaker 2: But I'm gonna get serious here for a second. It's 804 00:36:50,440 --> 00:36:51,000 Speaker 2: really the kids. 805 00:36:51,239 --> 00:36:53,120 Speaker 3: Because you know, if you're you're trying to make it 806 00:36:53,160 --> 00:36:56,520 Speaker 3: in today's world, life is expensive, and the kids cost 807 00:36:56,560 --> 00:36:57,200 Speaker 3: what they cost. 808 00:36:57,360 --> 00:36:59,040 Speaker 2: And all of a sudden, now we have to split 809 00:36:59,120 --> 00:37:00,120 Speaker 2: up the same amount of in come. 810 00:37:00,160 --> 00:37:02,960 Speaker 3: Because people don't change their jobs over this usually because 811 00:37:02,960 --> 00:37:04,200 Speaker 3: you kind of can't. But now all of a sudden 812 00:37:04,360 --> 00:37:05,840 Speaker 3: that you have to figure out how these two incomes 813 00:37:05,840 --> 00:37:07,960 Speaker 3: are going to support two households in which the same 814 00:37:08,000 --> 00:37:09,600 Speaker 3: group of kids is going to live, and it is 815 00:37:09,719 --> 00:37:12,799 Speaker 3: extremely hard. This is not just struggling young adults. This 816 00:37:12,880 --> 00:37:16,439 Speaker 3: happens at every stage right people with the relationship falls apart. 817 00:37:16,440 --> 00:37:18,840 Speaker 3: Toward the end, it can get even scarier because then 818 00:37:18,840 --> 00:37:22,680 Speaker 3: there's real assets, very complex portfolios out there. So there's 819 00:37:22,719 --> 00:37:24,759 Speaker 3: a lot of things that are that can come out, 820 00:37:24,800 --> 00:37:27,440 Speaker 3: real estate investments, estate plans, all of this stuff. It 821 00:37:27,480 --> 00:37:30,440 Speaker 3: all has to kind of work together over time. Money 822 00:37:30,520 --> 00:37:33,759 Speaker 3: can hide these problems, either if there are too much 823 00:37:33,800 --> 00:37:35,279 Speaker 3: if there's no I don't know if there's any six 824 00:37:35,320 --> 00:37:38,840 Speaker 3: of things. Too much money, but the plenty of assets 825 00:37:38,840 --> 00:37:41,719 Speaker 3: to rely on can mask the fact that the that 826 00:37:41,760 --> 00:37:44,360 Speaker 3: there are holes underneath the surface that we can't see. 827 00:37:44,680 --> 00:37:46,880 Speaker 3: So if you've kind of combined your finances, but you 828 00:37:46,920 --> 00:37:50,040 Speaker 3: have two different, very different financial lifestyles, that's gonna go 829 00:37:50,120 --> 00:37:52,000 Speaker 3: that's gonna surface eventually and be a real problem. 830 00:37:52,040 --> 00:37:53,160 Speaker 2: I'm sure you've seen this too, Bob. 831 00:37:53,800 --> 00:37:56,000 Speaker 1: Yeah, I'm dealing with a situation right now where this 832 00:37:56,120 --> 00:38:00,160 Speaker 1: couple has pretty much been separated for seventy eight eight 833 00:38:00,320 --> 00:38:05,280 Speaker 1: years and they're just now getting around to actually finalizing 834 00:38:05,320 --> 00:38:07,680 Speaker 1: a divorce, and it's everything you just talked about. You know, 835 00:38:07,840 --> 00:38:11,960 Speaker 1: they want to keep the kids stable. There's affordability issues 836 00:38:11,960 --> 00:38:14,560 Speaker 1: with keeping the house, a lot of things that where 837 00:38:14,840 --> 00:38:19,600 Speaker 1: money issues have just caused this relationship not to end, 838 00:38:20,600 --> 00:38:22,800 Speaker 1: probably when it should have. And that comes by I 839 00:38:22,840 --> 00:38:25,719 Speaker 1: guess this comes back to the major point, you know, 840 00:38:25,880 --> 00:38:29,080 Speaker 1: aligning your values, you know when it comes to money 841 00:38:29,280 --> 00:38:31,640 Speaker 1: is a key part of your marriage. And the sooner 842 00:38:31,680 --> 00:38:33,439 Speaker 1: you can do that, the better. Here's the all Worth 843 00:38:33,440 --> 00:38:36,919 Speaker 1: advice is, if money is keeping you together, make sure 844 00:38:36,920 --> 00:38:40,239 Speaker 1: it's also bringing you closer. Thanks for listening. You've been 845 00:38:40,239 --> 00:38:42,719 Speaker 1: listening to Simply Money, presented by all Worth Financial on 846 00:38:42,760 --> 00:38:45,120 Speaker 1: fifty five k R see the talk station