1 00:00:05,680 --> 00:00:09,039 Speaker 1: Tonight a rather stunning statistic about the S and P 2 00:00:09,160 --> 00:00:12,120 Speaker 1: five hundred that should serve as a warning or maybe 3 00:00:12,160 --> 00:00:16,880 Speaker 1: a wake up call about potential lack of diversification. You're 4 00:00:16,880 --> 00:00:19,280 Speaker 1: listening to Simply Money, presented by all Worth Financial. I'm 5 00:00:19,280 --> 00:00:23,239 Speaker 1: Bob Sponseller here with Brian James and Brian we talk 6 00:00:23,280 --> 00:00:26,239 Speaker 1: about it all the time, the S and P five hundred, 7 00:00:26,320 --> 00:00:30,560 Speaker 1: the bellweather, so to speak, of the broad US market 8 00:00:31,000 --> 00:00:34,080 Speaker 1: And as I think most people know, the index contains 9 00:00:34,120 --> 00:00:38,760 Speaker 1: the five hundred largest US based companies, and we know 10 00:00:38,840 --> 00:00:41,000 Speaker 1: that there are a handful of companies that make up 11 00:00:41,120 --> 00:00:43,479 Speaker 1: much of the market cap of this index. You and 12 00:00:43,560 --> 00:00:46,320 Speaker 1: I have been talking about this all year now, but 13 00:00:46,880 --> 00:00:49,880 Speaker 1: listen to this. Two companies now dominate the S and 14 00:00:49,920 --> 00:00:53,800 Speaker 1: P five hundred is up about seventeen percent this year. 15 00:00:54,600 --> 00:00:59,160 Speaker 1: But Alphabet otherwise known as Google and Navidia are responsible 16 00:00:59,200 --> 00:01:02,240 Speaker 1: for one third of that gain of that broad index, 17 00:01:02,400 --> 00:01:05,720 Speaker 1: just two companies. And remember there's five hundred companies in 18 00:01:05,760 --> 00:01:06,320 Speaker 1: that index. 19 00:01:06,520 --> 00:01:08,080 Speaker 2: Yeah, I think a lot of people were well aware 20 00:01:08,120 --> 00:01:11,040 Speaker 2: that the S and P five hundred means five hundred companies. 21 00:01:11,520 --> 00:01:13,399 Speaker 2: The tougher part of it is, I think our brains 22 00:01:13,400 --> 00:01:14,960 Speaker 2: want to say, well, okay, that must mean you add 23 00:01:15,040 --> 00:01:16,920 Speaker 2: up the prices of all those and then you divide 24 00:01:16,920 --> 00:01:18,959 Speaker 2: it by five hundred and boom, there's your index. That 25 00:01:19,040 --> 00:01:21,000 Speaker 2: is not how it works. The S and P five 26 00:01:21,080 --> 00:01:23,880 Speaker 2: hundred is what's known as capitalization weighted. The bigger you 27 00:01:24,000 --> 00:01:26,600 Speaker 2: are the bigger of a portion of the S and 28 00:01:26,640 --> 00:01:29,560 Speaker 2: P five hundred you make. So that's why alphabet and 29 00:01:29,680 --> 00:01:32,320 Speaker 2: Video two of the biggest companies in the universe. Therefore 30 00:01:33,040 --> 00:01:36,400 Speaker 2: they their moves swing a bigger bat than everybody else's. 31 00:01:36,400 --> 00:01:39,240 Speaker 2: So big tech stocks are representing generally represent about half 32 00:01:39,280 --> 00:01:42,319 Speaker 2: of the S and P five hundreds gains historically. And 33 00:01:42,400 --> 00:01:44,720 Speaker 2: guess what, Bob, I did some historical research. I know 34 00:01:44,760 --> 00:01:46,119 Speaker 2: you love when I do this, so. 35 00:01:46,080 --> 00:01:49,200 Speaker 1: I do love it and we joke about it. But 36 00:01:49,240 --> 00:01:50,320 Speaker 1: it's very valuable. 37 00:01:50,680 --> 00:01:53,720 Speaker 2: Well good, because I got some cool ones for you today. 38 00:01:53,720 --> 00:01:56,400 Speaker 2: So let's go through history. How has this happened before? 39 00:01:56,440 --> 00:01:59,480 Speaker 2: And the answer is kinda. So in the nineteen seventies 40 00:01:59,520 --> 00:02:01,400 Speaker 2: we had what was called the nifty fifty and these 41 00:02:01,400 --> 00:02:03,960 Speaker 2: were there. These are industrial names out of blast from 42 00:02:04,000 --> 00:02:07,440 Speaker 2: the past, so IBM, Xerox, and Polaroid. You know, remember 43 00:02:07,440 --> 00:02:09,239 Speaker 2: the days when those are the ones you talked about 44 00:02:09,240 --> 00:02:12,960 Speaker 2: at the water cooler. Even then, though, concentration levels were 45 00:02:13,040 --> 00:02:15,639 Speaker 2: way below because the economy just didn't have the scale 46 00:02:15,639 --> 00:02:17,640 Speaker 2: effects that came with the technology boom. 47 00:02:17,720 --> 00:02:20,600 Speaker 1: All right, before you go any further, you mentioned polaroid. 48 00:02:20,680 --> 00:02:23,280 Speaker 1: I have to ask you're probably young enough. Have you 49 00:02:23,360 --> 00:02:27,359 Speaker 1: ever taken a photograph with a polaroid camera where that, 50 00:02:27,560 --> 00:02:30,840 Speaker 1: you know, the actual picture spits out the film and 51 00:02:30,919 --> 00:02:33,600 Speaker 1: the picture or you wait too young to have seen that. 52 00:02:33,680 --> 00:02:35,480 Speaker 2: I'm not even I'm not as young as you might think, 53 00:02:35,520 --> 00:02:37,440 Speaker 2: but I have an aunt in law who still has 54 00:02:37,480 --> 00:02:39,760 Speaker 2: one and breaks it out, you know, over the holidays. 55 00:02:40,000 --> 00:02:42,200 Speaker 2: I anticipate seeing that thing over the next. 56 00:02:42,000 --> 00:02:42,880 Speaker 1: Film, isn't it here? 57 00:02:42,960 --> 00:02:44,840 Speaker 2: Yeah? I'm not sure where she gets the film for 58 00:02:44,880 --> 00:02:47,399 Speaker 2: this stuff anymore. Imagine it's got a little pricey. Can't 59 00:02:47,440 --> 00:02:51,840 Speaker 2: run down to Walmart for it anymore. But anyway, Yeah, So, 60 00:02:51,840 --> 00:02:54,160 Speaker 2: so then that that was the nifty to fifty. Those 61 00:02:54,160 --> 00:02:55,920 Speaker 2: were the three big names, and there were forty seven 62 00:02:55,919 --> 00:02:58,720 Speaker 2: other ones. Those were the ones that drove that entire index. 63 00:02:59,040 --> 00:03:01,520 Speaker 2: Nineteen nineties and the tech boom began, and then at 64 00:03:01,520 --> 00:03:05,799 Speaker 2: the beginning it was all Microsoft, Cisco, General Electric, and Intel, 65 00:03:06,080 --> 00:03:08,840 Speaker 2: but even at that point, the top five stocks only 66 00:03:08,880 --> 00:03:11,480 Speaker 2: made up twenty percent, actually less than twenty percent back 67 00:03:11,480 --> 00:03:13,600 Speaker 2: in nineteen ninety nine. And then all of a sudden 68 00:03:13,680 --> 00:03:16,280 Speaker 2: after the two thousand and eight financial crisis, once the 69 00:03:16,320 --> 00:03:19,520 Speaker 2: initial panic had subsided, money began to flow into these 70 00:03:19,560 --> 00:03:22,920 Speaker 2: index funds and low volatility winners. We were focused on 71 00:03:22,960 --> 00:03:25,720 Speaker 2: companies with strong balance sheets because of the PTSD that 72 00:03:25,760 --> 00:03:27,720 Speaker 2: two thousand and eight gave us, and this gave a 73 00:03:28,000 --> 00:03:30,480 Speaker 2: kind of a steady, winner take all environment. The bigger 74 00:03:30,520 --> 00:03:33,600 Speaker 2: companies got the more money they saw because people were 75 00:03:33,639 --> 00:03:36,840 Speaker 2: kind of chasing performance after that. So Ever, since then, 76 00:03:36,880 --> 00:03:39,760 Speaker 2: it's become for a while it was the Magnificent seven. 77 00:03:39,760 --> 00:03:42,480 Speaker 2: We've talked about them until you know, somewhat recently and 78 00:03:42,600 --> 00:03:46,200 Speaker 2: most recently it's been the mag three Apple, Microsoft, in Nvidia, 79 00:03:47,160 --> 00:03:49,520 Speaker 2: which are now at the highest concentration in S and 80 00:03:49,560 --> 00:03:52,600 Speaker 2: P history. Those top three alone account for about twenty 81 00:03:52,600 --> 00:03:54,800 Speaker 2: to twenty two percent of the index. We have not 82 00:03:54,920 --> 00:03:57,560 Speaker 2: seen that since AT and T was the monopoly in 83 00:03:57,600 --> 00:03:58,640 Speaker 2: the nineteen thirties. 84 00:03:58,680 --> 00:04:03,160 Speaker 1: Bob, that is great research, and seriously, all joking aside, 85 00:04:03,320 --> 00:04:07,520 Speaker 1: very healthful, you know, helpful. I think hope our listeners 86 00:04:07,520 --> 00:04:09,360 Speaker 1: feel the same. Now, what do we do about it? 87 00:04:09,400 --> 00:04:12,680 Speaker 1: What are the risks out here? We talk about over 88 00:04:12,760 --> 00:04:16,600 Speaker 1: concentration all the time, you know, especially folks locally here 89 00:04:16,640 --> 00:04:19,159 Speaker 1: that have a boatload of money and stocks like Procter 90 00:04:19,240 --> 00:04:22,920 Speaker 1: and Gamble and Kroger and ge. But you know when 91 00:04:23,040 --> 00:04:25,440 Speaker 1: when it starts to get overweighted, you know, in the 92 00:04:25,440 --> 00:04:27,800 Speaker 1: index like this, a lot of people have a false 93 00:04:27,800 --> 00:04:30,960 Speaker 1: sense of security thinking that they're diversified. And they are, 94 00:04:31,760 --> 00:04:35,760 Speaker 1: but volatility can creep up in a hurry if any 95 00:04:35,800 --> 00:04:38,520 Speaker 1: of these big companies have an earnings blip or some 96 00:04:38,839 --> 00:04:42,800 Speaker 1: kind of you know, regulation or litigation come down the pike. 97 00:04:42,880 --> 00:04:45,560 Speaker 1: There are a number of things that can take even 98 00:04:45,600 --> 00:04:48,560 Speaker 1: a great company for the long term off track and 99 00:04:48,720 --> 00:04:52,039 Speaker 1: really inject a lot of short term volatility into a 100 00:04:52,080 --> 00:04:56,200 Speaker 1: portfolio that most people never saw coming and more importantly, 101 00:04:56,320 --> 00:04:59,279 Speaker 1: they don't want to have in their portfolio. I think 102 00:04:59,279 --> 00:05:01,360 Speaker 1: the good news on this, you know, when I look 103 00:05:01,360 --> 00:05:03,440 Speaker 1: at and I like to study stocks, I think, as 104 00:05:03,480 --> 00:05:06,640 Speaker 1: you know, Brian, I mean on a valuation basis, I 105 00:05:06,680 --> 00:05:09,560 Speaker 1: think the good news is Google and na Video by 106 00:05:09,640 --> 00:05:14,919 Speaker 1: no sense, are dramatically overvalued on a pe basis and 107 00:05:15,000 --> 00:05:18,240 Speaker 1: growth basis when you compare it to companies let's say, 108 00:05:18,279 --> 00:05:21,440 Speaker 1: like a Palenteer or something like that. But you know, 109 00:05:22,920 --> 00:05:25,080 Speaker 1: put all that aside. I mean, and we talk about 110 00:05:25,080 --> 00:05:27,679 Speaker 1: this all the time. Anything can happen in the short 111 00:05:27,760 --> 00:05:31,080 Speaker 1: term to really add a lot of volatility to any 112 00:05:31,120 --> 00:05:32,880 Speaker 1: of these stocks, and I think we just need to 113 00:05:32,880 --> 00:05:35,320 Speaker 1: be aware of it, so talk about what we should 114 00:05:35,320 --> 00:05:36,039 Speaker 1: do about it. 115 00:05:36,640 --> 00:05:39,479 Speaker 2: So, yeah, we want to make sure that we're taking 116 00:05:39,520 --> 00:05:41,919 Speaker 2: advantage of what the what the index gives us in 117 00:05:42,000 --> 00:05:44,520 Speaker 2: terms of it's one investment we can make that will 118 00:05:44,520 --> 00:05:47,320 Speaker 2: spread out the spread out the risks. But at the 119 00:05:47,360 --> 00:05:50,000 Speaker 2: same time, you know, we can see some suffering in 120 00:05:50,240 --> 00:05:52,719 Speaker 2: one one part while the other parts are performing very well, 121 00:05:52,720 --> 00:05:56,640 Speaker 2: but the capitalization the effect kind of mutes that a 122 00:05:56,680 --> 00:05:58,760 Speaker 2: little bit. So I'm thinking back to twenty twenty two, Bob, 123 00:05:58,800 --> 00:06:00,640 Speaker 2: when we had we actually had an end boom. Most 124 00:06:00,640 --> 00:06:03,120 Speaker 2: people just remember that the market fell apart in twenty 125 00:06:03,160 --> 00:06:05,560 Speaker 2: twenty two. Tech got hammered, a lot of things got 126 00:06:05,560 --> 00:06:08,680 Speaker 2: completely pounded. Energy, believe it or not, was up fifty 127 00:06:08,720 --> 00:06:11,400 Speaker 2: percent in twenty twenty two. That was the best performing 128 00:06:11,480 --> 00:06:15,280 Speaker 2: S and P five hundred sector in decades. Industrials and 129 00:06:15,360 --> 00:06:18,240 Speaker 2: utilities also held up well, but because the technology side 130 00:06:18,279 --> 00:06:20,080 Speaker 2: was getting so hammered. Remember this is when they were 131 00:06:20,120 --> 00:06:23,320 Speaker 2: literally laying off tens of thousands of people that the 132 00:06:23,920 --> 00:06:26,760 Speaker 2: good things that were happening in other sectors completely disappeared 133 00:06:26,760 --> 00:06:28,760 Speaker 2: and faded into the woodwork just didn't have an impact. 134 00:06:29,120 --> 00:06:31,520 Speaker 1: Well. And a lot of these companies that are these 135 00:06:31,640 --> 00:06:35,040 Speaker 1: high flyer growth companies, especially in the small cap space, 136 00:06:35,160 --> 00:06:39,000 Speaker 1: they are dependent on cheap access to money. And when 137 00:06:39,000 --> 00:06:42,080 Speaker 1: the Federal Reserve raised interest rates like they did seven 138 00:06:42,160 --> 00:06:44,680 Speaker 1: times in twenty twenty two, that makes the cost of 139 00:06:44,720 --> 00:06:49,279 Speaker 1: doing business go up significantly and profits tank as a result. 140 00:06:49,279 --> 00:06:52,000 Speaker 2: But go ahead, Yeah, so let's go through some examples 141 00:06:52,000 --> 00:06:54,719 Speaker 2: here and what happens and what does it feel like, 142 00:06:54,760 --> 00:06:56,599 Speaker 2: and what we should we be doing about it. So 143 00:06:57,320 --> 00:07:00,200 Speaker 2: example one here is what we call a windfall. Ye, 144 00:07:00,320 --> 00:07:02,320 Speaker 2: So imagine at the start of twenty twenty five, you've 145 00:07:02,360 --> 00:07:05,279 Speaker 2: got this broadly diversified portfolio, got a little bit of everything, 146 00:07:05,320 --> 00:07:08,400 Speaker 2: sixty percent S and P five hundred, twenty percent bonds, 147 00:07:08,440 --> 00:07:12,280 Speaker 2: maybe twenty percent in alternatives or maybe cash. Because Alphabet 148 00:07:12,280 --> 00:07:14,760 Speaker 2: and Nvidia have done what they've what they've done, then 149 00:07:14,800 --> 00:07:17,520 Speaker 2: you see the index portion jump about twenty five percent, 150 00:07:17,520 --> 00:07:20,280 Speaker 2: and that makes your overall, and that, honestly, Bob, that 151 00:07:20,280 --> 00:07:22,680 Speaker 2: takes people's eyes off the off the road because you 152 00:07:22,800 --> 00:07:25,240 Speaker 2: just see that your dollar amounts of your statements are 153 00:07:25,240 --> 00:07:27,160 Speaker 2: going up. Therefore, I've got other things to do today. 154 00:07:27,160 --> 00:07:29,120 Speaker 2: I just know I'm making money. You know, overall, you 155 00:07:29,200 --> 00:07:31,680 Speaker 2: might be looking at a fifteen eighteen percent return. That 156 00:07:31,720 --> 00:07:34,840 Speaker 2: feels great, patch yourself on the back. But at the 157 00:07:34,880 --> 00:07:36,880 Speaker 2: same time, remember what we're talking about here. Thirty four 158 00:07:36,920 --> 00:07:39,080 Speaker 2: percent came out of two stocks. The rest of these 159 00:07:39,080 --> 00:07:41,800 Speaker 2: companies barely moved, meaning that those two stocks could drag 160 00:07:41,840 --> 00:07:42,640 Speaker 2: everything back under. 161 00:07:42,720 --> 00:07:44,840 Speaker 1: Yeah, a third of that growth, a third of your 162 00:07:44,880 --> 00:07:48,520 Speaker 1: total return in this you know diversified index fund came 163 00:07:48,560 --> 00:07:51,520 Speaker 1: from two companies. That's really what we're trying to highlight here. 164 00:07:51,720 --> 00:07:54,640 Speaker 2: Yeah. So then let's fast forward a few years, right, 165 00:07:54,720 --> 00:07:57,240 Speaker 2: so maybe there could be you know, regulatory crackdowns on 166 00:07:57,280 --> 00:08:00,960 Speaker 2: big technology or perhaps AI high hype cools. That's what's 167 00:08:01,040 --> 00:08:03,640 Speaker 2: driving the market right now, is this AI is brand 168 00:08:03,680 --> 00:08:05,480 Speaker 2: new and we don't know, you know yet what the 169 00:08:05,560 --> 00:08:07,560 Speaker 2: impact is going to be. Well, that could lead to 170 00:08:07,560 --> 00:08:10,680 Speaker 2: a forty percent drop in megacap tech names oversay a 171 00:08:10,720 --> 00:08:14,160 Speaker 2: couple of years. Why would that happen? Because the market 172 00:08:14,200 --> 00:08:17,360 Speaker 2: will have perceived that perhaps these things aren't quite as 173 00:08:17,400 --> 00:08:19,360 Speaker 2: baked as we thought they were in terms of AI, 174 00:08:19,640 --> 00:08:22,200 Speaker 2: or maybe the rules change on how much freedom technology 175 00:08:22,240 --> 00:08:25,440 Speaker 2: has to just keep running, running wild, and that's going 176 00:08:25,480 --> 00:08:27,840 Speaker 2: to drag your index to portion down in a huge, 177 00:08:27,920 --> 00:08:30,320 Speaker 2: huge way. So that could be down twenty percent. Other 178 00:08:30,320 --> 00:08:32,439 Speaker 2: parts of your portfolio could be doing okay. So then 179 00:08:32,440 --> 00:08:35,360 Speaker 2: if this is something that's happening while you are in 180 00:08:35,400 --> 00:08:37,439 Speaker 2: the run run up to retirement, now all of a 181 00:08:37,480 --> 00:08:39,600 Speaker 2: sudden you need cash just because it's time to draw 182 00:08:39,640 --> 00:08:41,840 Speaker 2: off the next egg you've been building. That could force 183 00:08:41,880 --> 00:08:43,840 Speaker 2: you to sell after a big drop, which is what 184 00:08:43,880 --> 00:08:46,400 Speaker 2: we call sequence of returns risk. We don't get to 185 00:08:46,440 --> 00:08:48,839 Speaker 2: control that. We have to prepare for it because I 186 00:08:48,960 --> 00:08:51,400 Speaker 2: might retire at a time just before the market's going 187 00:08:51,480 --> 00:08:53,280 Speaker 2: to take a big dip. Doesn't happen often, but it 188 00:08:53,320 --> 00:08:54,800 Speaker 2: does happen, so we should prepare for it. 189 00:08:55,440 --> 00:08:59,120 Speaker 1: Yeah. Absolutely, let's talk about missed opportunities if we don't 190 00:08:59,600 --> 00:09:03,920 Speaker 1: really diversify our portfolio. And Brian, going back to the 191 00:09:03,920 --> 00:09:06,520 Speaker 1: whole AI conversation, I mean, if we go back to 192 00:09:06,559 --> 00:09:09,920 Speaker 1: when the Internet became ubiquitous here in the late nineties, 193 00:09:09,920 --> 00:09:14,800 Speaker 1: early two thousands, all the early money rushed into the 194 00:09:14,840 --> 00:09:19,319 Speaker 1: internet infrastructure names, and it took some time for companies 195 00:09:19,360 --> 00:09:24,840 Speaker 1: to actually make profits from using the Internet gathering efficiencies 196 00:09:24,920 --> 00:09:28,200 Speaker 1: from the Internet. And I believe, just an opinion, I 197 00:09:28,240 --> 00:09:31,199 Speaker 1: think that the same thing's going to apply to alternative 198 00:09:31,240 --> 00:09:35,280 Speaker 1: investments or AI stocks. Meaning if this thing really is 199 00:09:35,320 --> 00:09:37,360 Speaker 1: a thing, and I do believe it is, you're going 200 00:09:37,440 --> 00:09:41,319 Speaker 1: to start to see over time, all companies in all sectors, 201 00:09:41,360 --> 00:09:44,120 Speaker 1: whether they're quote unquote AI or not, they're going to 202 00:09:44,240 --> 00:09:47,520 Speaker 1: use AI tools and use that to be more efficient 203 00:09:47,600 --> 00:09:50,760 Speaker 1: in the operation of their business. And that should, you know, 204 00:09:51,000 --> 00:09:54,800 Speaker 1: raise all boats over time. My point being, now might 205 00:09:54,920 --> 00:09:57,760 Speaker 1: be a good time to look at a truly more 206 00:09:57,800 --> 00:10:01,760 Speaker 1: diversified strategy. I'll throw one on ETF out there. The 207 00:10:01,880 --> 00:10:05,760 Speaker 1: symbol is r SP. It's just an equal weight S 208 00:10:05,800 --> 00:10:08,840 Speaker 1: and P five hundred fund. I'm not this is not 209 00:10:09,080 --> 00:10:12,440 Speaker 1: a recommendation. I'm just saying there are things out there 210 00:10:12,880 --> 00:10:16,280 Speaker 1: where you could just equalize your diversification and risk a 211 00:10:16,280 --> 00:10:19,680 Speaker 1: little bit by spreading things out, and that really does 212 00:10:19,760 --> 00:10:24,560 Speaker 1: give you a more diversified group of holdings that would 213 00:10:24,640 --> 00:10:27,320 Speaker 1: take some certainly some volatility out of the equation. 214 00:10:27,800 --> 00:10:29,640 Speaker 2: Yeah, for sure, And I think that's a great suggestion 215 00:10:29,760 --> 00:10:32,360 Speaker 2: to consider. And again, what what Bob's talking about there 216 00:10:32,440 --> 00:10:34,240 Speaker 2: is the opposite of what the S and P five 217 00:10:34,320 --> 00:10:36,800 Speaker 2: hundred is. We just got done talking about how it's 218 00:10:37,640 --> 00:10:40,319 Speaker 2: how the S and P five hundred is capitalization weighted, 219 00:10:40,400 --> 00:10:42,280 Speaker 2: meaning the bigger you are, the more of a percentage 220 00:10:42,320 --> 00:10:45,040 Speaker 2: you make up of the index that that that take 221 00:10:45,040 --> 00:10:48,000 Speaker 2: your symbol Bob gave is is one where you literally 222 00:10:48,080 --> 00:10:50,520 Speaker 2: do take the price of all five hundred and divide 223 00:10:50,559 --> 00:10:53,520 Speaker 2: it by five hundred and that that's your index. So 224 00:10:54,120 --> 00:10:55,800 Speaker 2: the difference is you're not going to see the same 225 00:10:55,840 --> 00:10:58,600 Speaker 2: performance is if you look at it historically, you're not 226 00:10:58,679 --> 00:11:01,200 Speaker 2: going to see as much. So the ten year annualized 227 00:11:01,200 --> 00:11:03,720 Speaker 2: return for the pure S and P five hundred cap 228 00:11:03,760 --> 00:11:07,480 Speaker 2: weighted is about fourteen percent versus eleven percent for the 229 00:11:07,520 --> 00:11:11,240 Speaker 2: S and P. However, there's a lot less volatility in 230 00:11:11,360 --> 00:11:14,040 Speaker 2: terms of the difference of the drawdown between the two 231 00:11:14,080 --> 00:11:16,440 Speaker 2: because of the difference in the calculation of the index. 232 00:11:16,520 --> 00:11:19,160 Speaker 2: So something to consider if that is a concern for you, 233 00:11:19,200 --> 00:11:22,319 Speaker 2: But you have to understand the differences when technology runs. 234 00:11:22,000 --> 00:11:24,319 Speaker 2: The pure S and P five hundred cap weighted is 235 00:11:24,360 --> 00:11:28,960 Speaker 2: going to look fantastic. The more evenly balanced, equal weighted 236 00:11:29,000 --> 00:11:32,079 Speaker 2: one is going to quote unquote underperform, but that should 237 00:11:32,080 --> 00:11:34,040 Speaker 2: be expected. It's going to have less volatility as well. 238 00:11:34,600 --> 00:11:37,280 Speaker 1: Some other things to consider again just to smooth out 239 00:11:37,280 --> 00:11:40,760 Speaker 1: this volatility and get some true diversification in your portfolio 240 00:11:41,160 --> 00:11:45,000 Speaker 1: are maybe some actively managed portfolios in the large cap space. 241 00:11:45,200 --> 00:11:48,280 Speaker 1: No one's wanted to really talk about that for years 242 00:11:48,320 --> 00:11:51,880 Speaker 1: now because of the higher fees and underperformance. I think 243 00:11:51,960 --> 00:11:54,840 Speaker 1: those are starting to at least come into the conversation 244 00:11:55,000 --> 00:11:57,640 Speaker 1: now because you know, a good manager is going to 245 00:11:57,760 --> 00:12:01,960 Speaker 1: recommend they're going to recognize some you know, over allocation 246 00:12:02,320 --> 00:12:07,119 Speaker 1: to maybe some inflated valuations here and spread the exposure 247 00:12:07,160 --> 00:12:11,000 Speaker 1: more broadly, things like private equity. And we've talked about 248 00:12:11,080 --> 00:12:14,400 Speaker 1: bufferdts before, where you you know, put some caps on 249 00:12:14,440 --> 00:12:17,560 Speaker 1: the upside protect yourself on the downside. There's a lot 250 00:12:17,559 --> 00:12:20,160 Speaker 1: of things that you can do to still have the 251 00:12:20,240 --> 00:12:24,000 Speaker 1: exposure we need to have in stocks, but do it 252 00:12:24,040 --> 00:12:28,120 Speaker 1: a little smarter in the in the realm of diversification 253 00:12:28,320 --> 00:12:31,240 Speaker 1: and downside protection. Here's the all Worth advice. In a 254 00:12:31,280 --> 00:12:34,080 Speaker 1: market where two or three stocks can move the needle 255 00:12:34,160 --> 00:12:39,680 Speaker 1: for everyone, the smartest portfolios aren't the most concentrated, they're 256 00:12:39,679 --> 00:12:44,000 Speaker 1: often the most balanced. Should you take social security early 257 00:12:44,080 --> 00:12:47,480 Speaker 1: and invest the money and quote unquote beat the system, 258 00:12:48,160 --> 00:12:51,640 Speaker 1: don't do anything before you hear our next segment on 259 00:12:51,720 --> 00:12:54,040 Speaker 1: this topic. You're listening to Simply Money, presented by all 260 00:12:54,080 --> 00:13:02,240 Speaker 1: Worth Financial on fifty five KRC the talk station. You're 261 00:13:02,280 --> 00:13:04,959 Speaker 1: listening to Simply Money presented by all Worth Financial unbop 262 00:13:05,000 --> 00:13:08,800 Speaker 1: Spondseeller along with Brian James. I think you're too wealthy 263 00:13:08,880 --> 00:13:13,280 Speaker 1: to worry about health insurance premiums. Think again. Even people 264 00:13:13,360 --> 00:13:16,560 Speaker 1: earning one hundred thousand dollars or more are having to 265 00:13:16,600 --> 00:13:20,120 Speaker 1: cut back on other things just to cover medical costs. 266 00:13:20,200 --> 00:13:23,000 Speaker 1: We'll explain why and how to make sure you are 267 00:13:23,000 --> 00:13:27,400 Speaker 1: not getting caught off guard. There's somewhat of a viral 268 00:13:27,480 --> 00:13:31,000 Speaker 1: piece of retirement advice bouncing around social media right now, 269 00:13:31,040 --> 00:13:35,000 Speaker 1: and it goes something like this, take security early at 270 00:13:35,080 --> 00:13:39,360 Speaker 1: sixty two, invest those Social Security checks and you'll come 271 00:13:39,360 --> 00:13:43,080 Speaker 1: out ahead. It sounds clever. Why wait for a bigger 272 00:13:43,160 --> 00:13:46,080 Speaker 1: check later when you just could get that money now, 273 00:13:46,280 --> 00:13:49,160 Speaker 1: put it into the market and potentially grow it, especially 274 00:13:49,160 --> 00:13:52,120 Speaker 1: if the market gives us, let's say, eight percent average 275 00:13:52,440 --> 00:13:55,720 Speaker 1: annual rates of return, which you know, as a reminder, 276 00:13:55,800 --> 00:13:58,960 Speaker 1: doesn't happen every year. So let's walk through the logic 277 00:13:59,120 --> 00:14:01,520 Speaker 1: of this quote unquote strategy. Brian. 278 00:14:01,800 --> 00:14:03,719 Speaker 2: Yeah, So this is something that I've been hearing a 279 00:14:03,760 --> 00:14:06,800 Speaker 2: lot about from clients who have been forwarding me these 280 00:14:06,880 --> 00:14:09,120 Speaker 2: videos of this guy walking in the woods and walking 281 00:14:09,120 --> 00:14:10,760 Speaker 2: through the math of why he feels this is a 282 00:14:10,760 --> 00:14:14,480 Speaker 2: good idea and it's not the worst idea in the world. 283 00:14:14,520 --> 00:14:16,680 Speaker 2: I'm glad that people are out there thinking about these 284 00:14:16,679 --> 00:14:18,240 Speaker 2: what's the right thing to do that that is the 285 00:14:18,320 --> 00:14:20,280 Speaker 2: right thing to do right, consider it and look at 286 00:14:20,280 --> 00:14:23,560 Speaker 2: it and understand it. But as we've gone through, you 287 00:14:23,560 --> 00:14:25,000 Speaker 2: know what I've done for these folks who have sent 288 00:14:25,000 --> 00:14:26,880 Speaker 2: this to me is let's go back to your financial plan, 289 00:14:26,920 --> 00:14:28,640 Speaker 2: which we've had in place for years, and let's play 290 00:14:28,680 --> 00:14:30,600 Speaker 2: with it. The nice thing about having a financial plan 291 00:14:30,680 --> 00:14:32,840 Speaker 2: is that when these questions, these things that make us 292 00:14:32,920 --> 00:14:35,360 Speaker 2: go hmmm, come up, we can model them in a 293 00:14:35,400 --> 00:14:37,200 Speaker 2: plan that we've been running for seven or eight years, 294 00:14:37,240 --> 00:14:39,440 Speaker 2: and you can see directly what the impact is. I 295 00:14:39,480 --> 00:14:41,920 Speaker 2: think a lot of people respond to this because they 296 00:14:41,920 --> 00:14:43,840 Speaker 2: don't have a plan, and now all of a sudden, 297 00:14:43,880 --> 00:14:46,320 Speaker 2: a YouTube video seems to make them think that they do. 298 00:14:46,680 --> 00:14:49,480 Speaker 2: So let's go, let's kind of walk through why are 299 00:14:49,480 --> 00:14:51,360 Speaker 2: we talking about this in the first place. Well, why 300 00:14:51,400 --> 00:14:53,240 Speaker 2: wait for a bigger check later when you could get 301 00:14:53,240 --> 00:14:55,480 Speaker 2: that money now and vast potentially grow it. That just 302 00:14:55,520 --> 00:14:57,560 Speaker 2: makes all the sense in the world, right, especially if 303 00:14:57,560 --> 00:14:59,800 Speaker 2: the market returns eight percent a year. But remember it 304 00:14:59,800 --> 00:15:02,280 Speaker 2: does always and if you start doing this in a 305 00:15:02,360 --> 00:15:04,200 Speaker 2: rough year like twenty two, well then you're never gonna 306 00:15:04,200 --> 00:15:06,760 Speaker 2: get the math to work. So if you take social 307 00:15:06,760 --> 00:15:09,160 Speaker 2: Security at sixty two, Bob, you're gonna get about thirty 308 00:15:09,160 --> 00:15:12,000 Speaker 2: percent less than if you wait until full retirement age, 309 00:15:12,160 --> 00:15:14,760 Speaker 2: which is gonna be sixty six or sixty seven, somewhere 310 00:15:14,760 --> 00:15:17,320 Speaker 2: in between depending on when you were born. So the 311 00:15:17,320 --> 00:15:20,400 Speaker 2: theory says, if you invest those smaller checks aggressively throw 312 00:15:20,440 --> 00:15:22,440 Speaker 2: them all in the stock market, then you can outpace 313 00:15:22,520 --> 00:15:24,640 Speaker 2: that bigger check that you'd get if you waited. So 314 00:15:24,680 --> 00:15:28,200 Speaker 2: that's the claim in a perfect world, that's that where 315 00:15:28,200 --> 00:15:30,960 Speaker 2: markets always go up, nothing bad ever happens. And that's 316 00:15:30,960 --> 00:15:33,320 Speaker 2: the way people do this analysis in a spreadsheet, which 317 00:15:33,520 --> 00:15:36,440 Speaker 2: gives us a nice linear gain. They don't add any 318 00:15:36,520 --> 00:15:38,800 Speaker 2: risk to it. Then that looks great, but all right, 319 00:15:38,800 --> 00:15:39,720 Speaker 2: hey it's that football. 320 00:15:40,080 --> 00:15:42,360 Speaker 1: Before we move forward with the butt I want to 321 00:15:42,400 --> 00:15:44,800 Speaker 1: ask you, because you've been doing this a long time, 322 00:15:44,920 --> 00:15:47,760 Speaker 1: like I have, how many clients do you actually have 323 00:15:48,760 --> 00:15:51,840 Speaker 1: who have ever done this? Actually take these checks and 324 00:15:51,920 --> 00:15:55,120 Speaker 1: invest them. Because the people I've seen that take Social 325 00:15:55,120 --> 00:15:58,800 Speaker 1: Security early they do one of two things. They spend 326 00:15:58,840 --> 00:16:01,480 Speaker 1: that money now, which there's nothing wrong with that, they 327 00:16:01,560 --> 00:16:04,520 Speaker 1: uses it as part of their income stream, or we 328 00:16:04,720 --> 00:16:07,880 Speaker 1: just find that their bank savings account just balloons and 329 00:16:07,960 --> 00:16:10,360 Speaker 1: balloons and balloons. If for people that don't need the 330 00:16:10,400 --> 00:16:13,280 Speaker 1: money and they're sitting there earning a very low rate 331 00:16:13,280 --> 00:16:16,160 Speaker 1: of return on that cash, that's what I actually see 332 00:16:16,280 --> 00:16:18,520 Speaker 1: happen in the real world. How about you. 333 00:16:19,080 --> 00:16:21,680 Speaker 2: Yeah, absolutely, because we're all human, right, It's kind of 334 00:16:21,680 --> 00:16:23,600 Speaker 2: a pain in the buttet to figure out, here's my 335 00:16:23,640 --> 00:16:26,520 Speaker 2: socialecurity check and then I'm going to go set up 336 00:16:26,520 --> 00:16:29,600 Speaker 2: a monthly bank ach or something like that to have 337 00:16:29,680 --> 00:16:32,160 Speaker 2: that money pulled into my investment account. So a lot 338 00:16:32,200 --> 00:16:34,640 Speaker 2: of people simply just don't do this, or some people 339 00:16:34,680 --> 00:16:36,240 Speaker 2: think I'll just do it monthly. I'll write a check 340 00:16:36,280 --> 00:16:36,640 Speaker 2: every month. 341 00:16:36,640 --> 00:16:37,080 Speaker 1: Oh you won't. 342 00:16:37,080 --> 00:16:39,800 Speaker 2: Nobody does that kind of thing. Forever. And I would say, 343 00:16:39,800 --> 00:16:42,640 Speaker 2: you know, as far as that, the break even tends 344 00:16:42,720 --> 00:16:46,240 Speaker 2: to be in the in the early to mid eighties 345 00:16:46,480 --> 00:16:49,520 Speaker 2: between waiting on social Security and filing for it as 346 00:16:49,560 --> 00:16:51,280 Speaker 2: soon as possible. And I'll tell you what the pivot 347 00:16:51,320 --> 00:16:52,880 Speaker 2: point is, Bob. I've done this a number of times. 348 00:16:52,920 --> 00:16:55,720 Speaker 2: Every time we do this analysis. The pivot point tends 349 00:16:55,760 --> 00:16:59,000 Speaker 2: to be, you can benefit more from Social Security if 350 00:16:59,040 --> 00:17:02,280 Speaker 2: your other alternate by filing for sociecurity early. If your 351 00:17:02,360 --> 00:17:05,480 Speaker 2: other alternative is only pre tax dollars. In other words, 352 00:17:05,480 --> 00:17:07,560 Speaker 2: if you're somebody who put away several million dollars in 353 00:17:07,600 --> 00:17:09,040 Speaker 2: a four to oh one k and it was all 354 00:17:09,040 --> 00:17:11,880 Speaker 2: pre tax because that was the only choice, then that means, 355 00:17:11,920 --> 00:17:13,639 Speaker 2: of course, if you need let's say one hundred thousand 356 00:17:13,680 --> 00:17:16,040 Speaker 2: dollars a year out of that to live off of, 357 00:17:16,240 --> 00:17:17,879 Speaker 2: then you're gonna have to pull out more like one 358 00:17:17,920 --> 00:17:19,800 Speaker 2: hundred and twenty five to pay the taxes on it. 359 00:17:20,119 --> 00:17:23,680 Speaker 2: Social Security is taxed more favorably, so it may make 360 00:17:23,760 --> 00:17:26,520 Speaker 2: sense in that case to go ahead and rely on 361 00:17:26,560 --> 00:17:29,400 Speaker 2: Social Security a little earlier and therefore let your investments 362 00:17:29,480 --> 00:17:32,280 Speaker 2: run a little bit longer. Conversely, if you happen to 363 00:17:32,359 --> 00:17:34,560 Speaker 2: have a pile of taxable dollars that aren't going to 364 00:17:34,600 --> 00:17:37,720 Speaker 2: get taxes harshly, then it may make sense to let 365 00:17:37,760 --> 00:17:40,159 Speaker 2: Social Security continue to grow at it's eight percent and 366 00:17:40,200 --> 00:17:42,919 Speaker 2: then start selling off your assets at fifteen percent capital 367 00:17:42,960 --> 00:17:46,720 Speaker 2: gains to live off of to create money to cover 368 00:17:46,760 --> 00:17:48,920 Speaker 2: those expenses. That seems to be to me, that's the 369 00:17:48,960 --> 00:17:52,080 Speaker 2: bigger question than pulling this money out and pretending I'm 370 00:17:52,080 --> 00:17:54,320 Speaker 2: going to invest it systematically over time, which people just 371 00:17:54,320 --> 00:17:54,919 Speaker 2: don't tend to do. 372 00:17:55,400 --> 00:17:57,560 Speaker 1: I could not agree more. And I think that's a 373 00:17:57,720 --> 00:18:00,639 Speaker 1: wonderful explanation of the pros and co that you just 374 00:18:00,680 --> 00:18:03,320 Speaker 1: provide it, because you know, when we do these analyzes 375 00:18:03,359 --> 00:18:05,720 Speaker 1: in our head or even with this software that you 376 00:18:05,800 --> 00:18:07,840 Speaker 1: and I use, I mean, you got to make You've 377 00:18:07,840 --> 00:18:09,720 Speaker 1: got to make a few assumptions, and you've got to 378 00:18:09,760 --> 00:18:13,000 Speaker 1: be right, you know, to quote unquote beat the system. 379 00:18:13,400 --> 00:18:16,080 Speaker 1: You got to assume a rate of return, you got 380 00:18:16,119 --> 00:18:18,439 Speaker 1: to guess on when you're gonna die good luck with that. 381 00:18:19,160 --> 00:18:21,880 Speaker 1: And you got to evaluate your tax situation and where 382 00:18:21,920 --> 00:18:24,359 Speaker 1: your other cash flow is gonna come from. There's a 383 00:18:24,480 --> 00:18:27,439 Speaker 1: lot of things that you need to factor in, and 384 00:18:27,600 --> 00:18:29,680 Speaker 1: none of us are smart enough to get all three 385 00:18:29,720 --> 00:18:32,760 Speaker 1: of those things, right, And that's why I think, to me, 386 00:18:33,080 --> 00:18:36,560 Speaker 1: use social Security for what it's there for, a guaranteed 387 00:18:36,640 --> 00:18:39,840 Speaker 1: source of income, and uh, don't try to get too 388 00:18:39,920 --> 00:18:42,240 Speaker 1: cute with turning it into a you know, short term 389 00:18:42,240 --> 00:18:45,959 Speaker 1: investment vehicle. And like you said, run the numbers and 390 00:18:46,000 --> 00:18:50,240 Speaker 1: look at the taxability of your income sources and hopefully 391 00:18:50,280 --> 00:18:51,760 Speaker 1: you come up with a good solution. 392 00:18:51,920 --> 00:18:53,960 Speaker 2: And I'll also throw out, Bob, the kind of folks 393 00:18:54,000 --> 00:18:55,800 Speaker 2: who are looking for this information, which, first of all, 394 00:18:55,800 --> 00:18:58,320 Speaker 2: it's not it's not bad information. It's fantastic that people 395 00:18:58,359 --> 00:19:00,080 Speaker 2: are thinking of how do I optimize, how do I 396 00:19:00,160 --> 00:19:02,320 Speaker 2: do this, and they're looking to the internet for that information. 397 00:19:02,359 --> 00:19:04,159 Speaker 2: There's nothing wrong with that. These are folks who are 398 00:19:04,200 --> 00:19:07,360 Speaker 2: doing a lot of detailed inspection and trying to make intelligent, 399 00:19:07,520 --> 00:19:09,680 Speaker 2: educated decisions. That is not at all a bad thing. 400 00:19:09,960 --> 00:19:12,040 Speaker 2: But the next thing they're going to run across are 401 00:19:12,040 --> 00:19:16,000 Speaker 2: things such as the required minimum distribution. So if I'm 402 00:19:16,040 --> 00:19:19,240 Speaker 2: in a situation where where later I'm worried about my rmds, 403 00:19:19,280 --> 00:19:20,919 Speaker 2: which is when I'm forced to take money out, then 404 00:19:20,920 --> 00:19:22,879 Speaker 2: I'm going to be wanting to do Roth conversions. If 405 00:19:22,920 --> 00:19:25,680 Speaker 2: I'm going to do Roth conversions, in my early retirement years. 406 00:19:25,840 --> 00:19:28,199 Speaker 2: Then turning on that social security check is going to 407 00:19:28,320 --> 00:19:30,159 Speaker 2: rob me of some of the lower parts of the 408 00:19:30,200 --> 00:19:33,000 Speaker 2: tax brackets that I could otherwise be using to do 409 00:19:33,119 --> 00:19:35,680 Speaker 2: roth conversions. And not to mention, you could run into 410 00:19:35,720 --> 00:19:38,680 Speaker 2: something called IERMA which may drive up your Medicare premiums 411 00:19:38,720 --> 00:19:42,199 Speaker 2: based on your income. So none of these techniques have 412 00:19:42,400 --> 00:19:43,640 Speaker 2: zero impact on anything else. 413 00:19:43,640 --> 00:19:46,840 Speaker 1: It's all connected, and it's getting more and more complicated 414 00:19:46,960 --> 00:19:49,840 Speaker 1: rather than easier to do this analysis. I've talked about 415 00:19:49,840 --> 00:19:52,200 Speaker 1: a couple of recent client meetings I've had in the 416 00:19:52,280 --> 00:19:55,439 Speaker 1: last few weeks, you know, exactly on these topics that 417 00:19:55,480 --> 00:19:58,200 Speaker 1: you just covered. When you start running these cash flows 418 00:19:58,280 --> 00:20:01,160 Speaker 1: through good tax software, yeah, you got to worry about 419 00:20:01,160 --> 00:20:03,960 Speaker 1: the urb attacks on Medicare. You got to worry about 420 00:20:03,960 --> 00:20:07,639 Speaker 1: the phase health of this deduction that the seniors are getting. 421 00:20:08,000 --> 00:20:11,000 Speaker 1: You know, the quote unquote social security is free deduction. 422 00:20:11,320 --> 00:20:13,919 Speaker 1: There's a lot of factors to consider, and it's not 423 00:20:14,119 --> 00:20:17,359 Speaker 1: just a back of the cocktail napkin, you know calculation. 424 00:20:17,680 --> 00:20:20,560 Speaker 1: Here's the all Worth advice. Don't trade a guaranteed income 425 00:20:20,720 --> 00:20:24,000 Speaker 1: stream for life for a risky bet in the markets. 426 00:20:24,000 --> 00:20:26,880 Speaker 1: If you don't need social security at sixty two. Don't 427 00:20:26,960 --> 00:20:32,040 Speaker 1: let social media convince you to sabotaze your long term plan. 428 00:20:32,880 --> 00:20:35,080 Speaker 1: Coming up next, we're going to talk about why cyber 429 00:20:35,280 --> 00:20:40,360 Speaker 1: security crimes against seniors are becoming literally a family emergency 430 00:20:40,480 --> 00:20:42,600 Speaker 1: and what you can do about it. And I think 431 00:20:42,640 --> 00:20:45,080 Speaker 1: this is a timely discussion now that we're entering the 432 00:20:45,119 --> 00:20:48,399 Speaker 1: holiday season and more and more families are together and 433 00:20:48,480 --> 00:20:51,400 Speaker 1: have an opportunity to talk about and help out our 434 00:20:51,520 --> 00:20:54,639 Speaker 1: senior loved ones. You're listening to Simply Money presented by 435 00:20:54,680 --> 00:20:58,000 Speaker 1: all Worth Financial on fifty five KRC the talk station. 436 00:21:04,800 --> 00:21:07,480 Speaker 1: You're listening to Simply Money presided by all Worth Financial. 437 00:21:07,560 --> 00:21:10,879 Speaker 1: I'm Bob sponsor A along with Brian James, joined tonight 438 00:21:10,960 --> 00:21:15,640 Speaker 1: by our technology and cybersecurity guru, mister Dave Hatter. Dave, 439 00:21:15,800 --> 00:21:19,119 Speaker 1: it's always great to have you with us tonight. You 440 00:21:19,200 --> 00:21:22,000 Speaker 1: want to talk about elder scams and this is something 441 00:21:22,040 --> 00:21:25,879 Speaker 1: that seems to be growing and growing in regularity, and 442 00:21:25,920 --> 00:21:28,080 Speaker 1: it's something we all need to be aware of and 443 00:21:28,119 --> 00:21:29,159 Speaker 1: make plans to prevent. 444 00:21:30,400 --> 00:21:33,800 Speaker 3: Yeah, guys, sadly this appreciate you having me on. It's 445 00:21:33,800 --> 00:21:35,919 Speaker 3: always I think this is an important topic because you know, 446 00:21:36,000 --> 00:21:39,159 Speaker 3: I have elderly parents I know many of your listeners do, 447 00:21:39,480 --> 00:21:42,159 Speaker 3: and this is a growing concern. So just one stat 448 00:21:42,240 --> 00:21:44,320 Speaker 3: and this is a great site for folks, by the way, 449 00:21:45,080 --> 00:21:48,840 Speaker 3: just for general stats and information. The Internet Prime Complaints 450 00:21:48,880 --> 00:21:52,720 Speaker 3: Center IC three, which is run by the FBI. They 451 00:21:52,760 --> 00:21:55,000 Speaker 3: put out a fraud report every year that's got all 452 00:21:55,080 --> 00:21:57,000 Speaker 3: kinds of stats in it. And again the site is 453 00:21:57,040 --> 00:21:58,920 Speaker 3: just useful in a lot of ways. I encourage people 454 00:21:58,960 --> 00:22:04,080 Speaker 3: to bookmarkt IC three dot gov. Elderfront losses hit four 455 00:22:04,119 --> 00:22:06,880 Speaker 3: point eight eight billion and twenty twenty four, a staggering 456 00:22:07,000 --> 00:22:09,959 Speaker 3: forty three percent jump from the previous year. The average 457 00:22:10,000 --> 00:22:13,760 Speaker 3: senior victim lost over eighty three thousand dollars. And then 458 00:22:13,800 --> 00:22:16,399 Speaker 3: another good site for some insight into this is the 459 00:22:16,400 --> 00:22:19,720 Speaker 3: Federal Trade Commission FTC FTC dot gov. So here's a 460 00:22:19,800 --> 00:22:23,560 Speaker 3: headline from a public service announcement they put out, business 461 00:22:23,560 --> 00:22:27,639 Speaker 3: and government impersonators go after older adults life savings. And 462 00:22:27,680 --> 00:22:29,960 Speaker 3: then they have some stats in there too they say, 463 00:22:30,000 --> 00:22:33,919 Speaker 3: in fact, reported losses of over one hundred thousand dollars 464 00:22:33,920 --> 00:22:37,400 Speaker 3: increase nearly sevenfold from twenty twenty to twenty twenty four. 465 00:22:38,040 --> 00:22:40,480 Speaker 3: So you know, I hate to always be the doomsday guy, 466 00:22:40,600 --> 00:22:42,840 Speaker 3: the guy with the ten four hat always warning about 467 00:22:42,840 --> 00:22:44,880 Speaker 3: this stuff. But you know, I don't want to see 468 00:22:44,880 --> 00:22:48,600 Speaker 3: people lose their entire life savings. And is we spend 469 00:22:48,600 --> 00:22:52,440 Speaker 3: more time online and every facet of our lives working, education, 470 00:22:52,800 --> 00:22:56,240 Speaker 3: you know, school, you name it, think about it. What 471 00:22:56,400 --> 00:22:58,919 Speaker 3: are you not doing online nowadays? It just creates that 472 00:22:59,000 --> 00:23:01,879 Speaker 3: many more attack vectors for the bad guys. You're throwing 473 00:23:01,920 --> 00:23:05,080 Speaker 3: things like artificial intelligence and the ability to generate, to 474 00:23:05,119 --> 00:23:10,200 Speaker 3: clone someone's voice, to generate incredibly realistic videos, incredibly realistic texts, 475 00:23:10,200 --> 00:23:13,400 Speaker 3: to kind of eliminate all the old school tells like well, 476 00:23:13,440 --> 00:23:15,560 Speaker 3: I got an email asking me to do something weird 477 00:23:15,600 --> 00:23:17,240 Speaker 3: and I need to send gift cards to the hamlet 478 00:23:17,240 --> 00:23:19,879 Speaker 3: and county sheriffs can arrest me, but the grammars all 479 00:23:19,880 --> 00:23:22,760 Speaker 3: weird and so forth, All that's gone. The bad guys 480 00:23:22,800 --> 00:23:25,560 Speaker 3: have access to low cost or free tools that make 481 00:23:25,600 --> 00:23:28,080 Speaker 3: it really easy for them to run these sort of 482 00:23:28,119 --> 00:23:30,840 Speaker 3: scams at scale. And again, you don't have to take 483 00:23:30,880 --> 00:23:32,679 Speaker 3: my word for it. You can see what the FBI 484 00:23:32,840 --> 00:23:35,520 Speaker 3: is saying, you see what the FTC is saying. And 485 00:23:35,560 --> 00:23:37,600 Speaker 3: at one last point, and then I'll let you guys 486 00:23:37,600 --> 00:23:42,119 Speaker 3: start asking some specific questions. Is you know this. Again, 487 00:23:42,200 --> 00:23:45,680 Speaker 3: the documentation is all out there. The scams are increasing, 488 00:23:45,800 --> 00:23:48,280 Speaker 3: They're targeting elderly people in some cases, but you know, 489 00:23:48,320 --> 00:23:51,000 Speaker 3: we're all subject to all kinds of scams, and this 490 00:23:51,119 --> 00:23:53,840 Speaker 3: kind of education is important, as is a healthy dose 491 00:23:54,280 --> 00:23:57,400 Speaker 3: of skepticism and vigilance. You know, the hamlet and Kunty 492 00:23:57,440 --> 00:23:59,760 Speaker 3: sheriff is not going to call you and tell you 493 00:23:59,840 --> 00:24:02,200 Speaker 3: that because of a parking ticket, they're coming. It's three 494 00:24:02,280 --> 00:24:05,199 Speaker 3: to arrest you if you don't buy gift cards or 495 00:24:05,240 --> 00:24:08,440 Speaker 3: send an inmode payment, right, they don't operate that way. 496 00:24:08,240 --> 00:24:10,840 Speaker 2: Hey, hey, Dave, So yeah, and those are those are 497 00:24:10,840 --> 00:24:12,960 Speaker 2: those are all great examples. But you're right, this isn't 498 00:24:13,000 --> 00:24:15,280 Speaker 2: new news anymore. And I think but the one, the 499 00:24:15,280 --> 00:24:17,000 Speaker 2: one that is new is the to me is the 500 00:24:17,040 --> 00:24:19,040 Speaker 2: deep fake stuff. I don't think we've even scratched the 501 00:24:19,080 --> 00:24:21,000 Speaker 2: surface on that. I have yet to hear a story, 502 00:24:21,600 --> 00:24:23,640 Speaker 2: you know, about somebody losing an awful lot of money 503 00:24:23,720 --> 00:24:25,280 Speaker 2: yet to that. But that is coming and it's going 504 00:24:25,359 --> 00:24:28,440 Speaker 2: to be huge. So these articles you said is extremely 505 00:24:28,480 --> 00:24:31,800 Speaker 2: helpful here, but they reference an awful lot about cyber insurance. 506 00:24:31,880 --> 00:24:33,840 Speaker 2: So I don't want to drag you off course here, 507 00:24:33,840 --> 00:24:36,040 Speaker 2: But is this something that we should be considering. I mean, 508 00:24:36,040 --> 00:24:37,920 Speaker 2: maybe we all have home insurance, we have fire insurance, 509 00:24:37,960 --> 00:24:40,119 Speaker 2: we got flood insurance in some case. Is it we 510 00:24:40,240 --> 00:24:42,600 Speaker 2: at a point where we should all consider cyber insurance? 511 00:24:42,640 --> 00:24:43,040 Speaker 2: Do you think? 512 00:24:43,880 --> 00:24:44,200 Speaker 1: Uh? 513 00:24:44,240 --> 00:24:47,320 Speaker 3: I think it's worth it as a business, absolutely, But 514 00:24:47,359 --> 00:24:50,280 Speaker 3: I also find that many small businesses that I talked 515 00:24:50,320 --> 00:24:52,399 Speaker 3: to about this stuff in my real job, I'm now 516 00:24:52,480 --> 00:24:55,959 Speaker 3: talking about this all the time and trying to help business. 517 00:24:55,960 --> 00:24:59,920 Speaker 2: Come on, David, this is your real job. Yeah. 518 00:25:00,280 --> 00:25:02,840 Speaker 3: You know, people will say, well, I've got cyber insurance, 519 00:25:02,840 --> 00:25:04,199 Speaker 3: I don't have to care about this. And I just 520 00:25:04,280 --> 00:25:07,040 Speaker 3: like to remind folks, well, your fire insurance does not 521 00:25:07,119 --> 00:25:09,639 Speaker 3: keep your building from burning down. You know, ideally it 522 00:25:09,640 --> 00:25:12,560 Speaker 3: helps you recover should that happen. So you can't just 523 00:25:12,560 --> 00:25:14,280 Speaker 3: say well, I got insurance, I'm good to go. 524 00:25:14,400 --> 00:25:14,520 Speaker 1: Right. 525 00:25:14,600 --> 00:25:18,080 Speaker 3: You need a strategy where you're trying to parden your environment, 526 00:25:18,280 --> 00:25:21,840 Speaker 3: defend yourself against these kind of attacks. Be smart, be vigilant, 527 00:25:21,920 --> 00:25:25,199 Speaker 3: move slow, and then you know, be resilient. Part of 528 00:25:25,200 --> 00:25:28,359 Speaker 3: that resilience, you know, in addition to backups and so forth, 529 00:25:28,560 --> 00:25:29,400 Speaker 3: might be insurance. 530 00:25:30,119 --> 00:25:31,000 Speaker 1: You know, as an. 531 00:25:30,840 --> 00:25:33,119 Speaker 3: Individual, does it make sense to get some kind of 532 00:25:33,240 --> 00:25:36,480 Speaker 3: personal cyber insurance. Maybe, especially if you have a lot 533 00:25:36,480 --> 00:25:39,040 Speaker 3: of risk, if you're a high net worth person. But 534 00:25:39,080 --> 00:25:40,399 Speaker 3: I think there's a lot of things you can do. 535 00:25:40,480 --> 00:25:40,800 Speaker 1: Guys. 536 00:25:40,800 --> 00:25:43,680 Speaker 3: Again, the first step is always knowledge, right. I mean, 537 00:25:43,680 --> 00:25:48,200 Speaker 3: you can't defend against something you don't know about. Knowledge, skepticism. 538 00:25:48,320 --> 00:25:51,040 Speaker 3: It's doing the simple things we talk about all the time, strong, 539 00:25:51,119 --> 00:25:55,399 Speaker 3: unique passwords, multifacture authentication. It's also doing things like freezing 540 00:25:55,440 --> 00:25:57,520 Speaker 3: your credit. I'm sure you guys would agree. You know 541 00:25:58,320 --> 00:26:02,000 Speaker 3: my card I have frozen, mind, Yeah, and until I 542 00:26:02,080 --> 00:26:05,560 Speaker 3: need to get credit, I keep it frozen. I unlock 543 00:26:05,600 --> 00:26:07,480 Speaker 3: it when I need it, and I lock it back. 544 00:26:07,520 --> 00:26:10,040 Speaker 3: You know, it's not foolproof, but you know you're raising 545 00:26:10,119 --> 00:26:12,639 Speaker 3: the bar. You're making yourself a much more difficult target 546 00:26:12,680 --> 00:26:15,159 Speaker 3: for the bad guys because in most of these cases, 547 00:26:15,280 --> 00:26:19,760 Speaker 3: especially you know, these targeting of elders, they're not specifically 548 00:26:19,800 --> 00:26:23,000 Speaker 3: targeting individuals. They're going for low hanging fruit. And if 549 00:26:23,040 --> 00:26:25,400 Speaker 3: you take the kind of advice we're given out here, 550 00:26:25,920 --> 00:26:29,119 Speaker 3: if you harden yourself, if you do these basic practices, 551 00:26:29,600 --> 00:26:31,640 Speaker 3: you're going to be a much more difficult target. They're 552 00:26:31,720 --> 00:26:34,840 Speaker 3: just going to move on. And again, the skepticism, you know, 553 00:26:35,200 --> 00:26:37,280 Speaker 3: I encourage any of your listeners pick up the phone 554 00:26:37,280 --> 00:26:39,520 Speaker 3: and try to call Microsoft or Google and get help. 555 00:26:40,400 --> 00:26:43,040 Speaker 3: And my point is they are not looking at your 556 00:26:43,040 --> 00:26:45,280 Speaker 3: computer and going, hey, I think you've got a virus. 557 00:26:45,359 --> 00:26:47,160 Speaker 3: I'm going to call you up today and tell you 558 00:26:47,440 --> 00:26:49,960 Speaker 3: let me help you remove this virus. If you get 559 00:26:49,960 --> 00:26:53,320 Speaker 3: a call, an unsolicited call from a company that claims 560 00:26:53,359 --> 00:26:54,920 Speaker 3: you have some kind of virus and they want to 561 00:26:54,920 --> 00:26:58,080 Speaker 3: help you, the likelihood that that is not a scam 562 00:26:58,400 --> 00:27:00,800 Speaker 3: is probably greater than all three of us getting hit 563 00:27:00,840 --> 00:27:03,600 Speaker 3: by a meteor. Right now, it is a scam, right, 564 00:27:04,119 --> 00:27:09,520 Speaker 3: So again, vigilance, knowledge, skepticism, and you know, when you 565 00:27:09,560 --> 00:27:11,760 Speaker 3: look at the numbers. One of these reports say there's 566 00:27:11,800 --> 00:27:13,960 Speaker 3: eighty five trillion dollars in wealth out there in the 567 00:27:14,000 --> 00:27:17,840 Speaker 3: Baby boom and Silent generation. The bad guys know this, right, 568 00:27:18,400 --> 00:27:20,560 Speaker 3: They know there's an enormous amount of money. They know 569 00:27:21,000 --> 00:27:23,760 Speaker 3: in a lot of cases, older people may not even 570 00:27:23,800 --> 00:27:26,879 Speaker 3: be aware that it's possible to create a very you know, 571 00:27:26,960 --> 00:27:29,960 Speaker 3: a perfect deep fake audio or video. And you know, 572 00:27:30,000 --> 00:27:33,840 Speaker 3: you guys mentioned there is documented evidence already more in 573 00:27:33,880 --> 00:27:37,679 Speaker 3: a corporate setting of large scale fraud that's been perpetrated 574 00:27:37,840 --> 00:27:41,119 Speaker 3: using deep fake voice cloning and videos. I encourage your 575 00:27:41,119 --> 00:27:45,000 Speaker 3: folks go look up the story about the Ferrari CFO 576 00:27:45,080 --> 00:27:47,920 Speaker 3: who got a nearly got deep fake voice cloned into 577 00:27:47,920 --> 00:27:50,960 Speaker 3: fraud from the so called Ferrari CEO. 578 00:27:51,160 --> 00:27:53,040 Speaker 1: And these are people that know each other personally. 579 00:27:53,200 --> 00:27:56,080 Speaker 2: This gave us a segment maybe for next week. I'm 580 00:27:56,119 --> 00:27:57,240 Speaker 2: going to write that one now. 581 00:27:58,480 --> 00:28:01,479 Speaker 3: It's why I wouldn't to look into it, well documented. 582 00:28:01,720 --> 00:28:04,240 Speaker 1: Dave, I was going to ask about the whole phone 583 00:28:04,280 --> 00:28:05,600 Speaker 1: thing and voice cloning. 584 00:28:06,440 --> 00:28:08,000 Speaker 2: Yeah, so I'll just ask it this way. 585 00:28:08,080 --> 00:28:10,440 Speaker 1: I mean, are we now at a point where it's 586 00:28:10,560 --> 00:28:13,280 Speaker 1: just because I know what I do. I never answer 587 00:28:13,400 --> 00:28:17,359 Speaker 1: my phone ever, ever, ever, unless I know who's calling me. 588 00:28:17,440 --> 00:28:19,359 Speaker 1: I just don't answer my phone. Are we at the 589 00:28:19,400 --> 00:28:24,000 Speaker 1: point now where our advice to folks, especially elderly and 590 00:28:24,080 --> 00:28:28,679 Speaker 1: maybe vulnerable folks, just give that blanket advice, do not 591 00:28:28,920 --> 00:28:31,960 Speaker 1: answer your phone unless you know who it is. Are 592 00:28:31,960 --> 00:28:33,000 Speaker 1: we at that point? 593 00:28:33,040 --> 00:28:34,719 Speaker 2: Is that the best way to protect folks? 594 00:28:35,760 --> 00:28:37,760 Speaker 3: I think? So I can tell you I do not 595 00:28:37,920 --> 00:28:40,600 Speaker 3: ever answer my phone from a number I don't recognize, 596 00:28:40,640 --> 00:28:43,000 Speaker 3: and I'm even sometimes skeptical if it is an number 597 00:28:43,000 --> 00:28:46,040 Speaker 3: I do recognize. Because keep in mind, guys, spoofing, which 598 00:28:46,080 --> 00:28:47,960 Speaker 3: in my mind is the biggest driver of all this 599 00:28:48,080 --> 00:28:52,000 Speaker 3: creating something that looks realistic but isn't. It's fairly easy 600 00:28:52,040 --> 00:28:55,560 Speaker 3: to do in any digital mechanism. It's really easy to 601 00:28:55,600 --> 00:28:58,040 Speaker 3: send a phone call from any number you want if 602 00:28:58,040 --> 00:28:59,640 Speaker 3: you know what you're doing, and it does not require 603 00:28:59,640 --> 00:29:01,640 Speaker 3: a lot of SI. So you know, if I could 604 00:29:01,680 --> 00:29:03,560 Speaker 3: find one of your two cell phone numbers, or if 605 00:29:03,560 --> 00:29:05,680 Speaker 3: I happen to have it, I could easily spoof a 606 00:29:05,720 --> 00:29:07,720 Speaker 3: call that would look like it came from your cell phone. 607 00:29:08,040 --> 00:29:09,960 Speaker 3: I could easily send a text that looks like it 608 00:29:10,000 --> 00:29:12,080 Speaker 3: comes from you. And you know, same thing with emails. 609 00:29:12,120 --> 00:29:16,760 Speaker 3: So skepticism, vigilance, don't answer the phone if it's important. 610 00:29:16,760 --> 00:29:19,640 Speaker 3: They'll leave a message, or they'll contact you some other way. 611 00:29:20,080 --> 00:29:23,440 Speaker 3: Go read what the government says. You know, IRS, FBI. 612 00:29:23,920 --> 00:29:26,440 Speaker 3: They are not going to call you and tell you 613 00:29:26,480 --> 00:29:28,440 Speaker 3: some terrible thing is going to happen to you if 614 00:29:28,440 --> 00:29:30,680 Speaker 3: you don't make it in when a payment by five PM. 615 00:29:30,720 --> 00:29:33,520 Speaker 3: They don't operate that way, and they state that clearly 616 00:29:33,600 --> 00:29:36,120 Speaker 3: on their own websites. So again there's there's tons of 617 00:29:36,200 --> 00:29:39,160 Speaker 3: useful information out there that can help people avoid these 618 00:29:39,200 --> 00:29:42,360 Speaker 3: kind of scams. FTC, dot gov, IC three dot gov. 619 00:29:43,080 --> 00:29:47,040 Speaker 3: But it all starts with skepticism and caution like don't 620 00:29:47,040 --> 00:29:49,160 Speaker 3: answer your phone. If you don't recognize the number, they'll 621 00:29:49,200 --> 00:29:51,400 Speaker 3: leave a message, and if they don't, must not be important. 622 00:29:52,040 --> 00:29:54,840 Speaker 1: All right, good stuff as always, Dave. You're listening to 623 00:29:54,880 --> 00:29:58,040 Speaker 1: Simply Money presented by all Worth Financial on fifty five KRC, 624 00:29:58,520 --> 00:30:06,240 Speaker 1: the talk station. You're listening to Simply Money presented by 625 00:30:06,280 --> 00:30:10,160 Speaker 1: all Worth Financial. Bob Sponseller along with Brian James. When 626 00:30:10,200 --> 00:30:15,200 Speaker 1: we talk about inflation, most people think groceries, housing, putting 627 00:30:15,240 --> 00:30:18,960 Speaker 1: gas in their car, But lately there's one category that's 628 00:30:19,120 --> 00:30:26,080 Speaker 1: quietly draining wallets, especially for high income earners, and that's healthcare. Brian, 629 00:30:26,240 --> 00:30:30,240 Speaker 1: it really is becoming a topic of conversation, or should 630 00:30:30,280 --> 00:30:34,000 Speaker 1: be for everyone. Share some new data that's just come 631 00:30:34,040 --> 00:30:36,240 Speaker 1: out from our friends at Mercer. 632 00:30:37,400 --> 00:30:39,520 Speaker 2: So new report from this is a Mercer is a 633 00:30:39,520 --> 00:30:43,080 Speaker 2: big global consulting firm. So in twenty twenty six, employees 634 00:30:43,120 --> 00:30:46,480 Speaker 2: could see their total health benefit costs jump nearly seven percent. 635 00:30:46,560 --> 00:30:49,160 Speaker 2: That's the biggest spike we've seen, Bob in fifteen years. 636 00:30:49,480 --> 00:30:52,800 Speaker 2: So that translates to average cost per employee pushing over 637 00:30:52,880 --> 00:30:56,240 Speaker 2: eighteen thy five hundred bucks per year. That's the cost 638 00:30:56,240 --> 00:31:00,360 Speaker 2: at the company level, but of course the total cost 639 00:31:00,400 --> 00:31:03,040 Speaker 2: there and the employees share in that by paying their 640 00:31:03,040 --> 00:31:06,520 Speaker 2: premiums on each and every each and every paycheck. That's 641 00:31:06,560 --> 00:31:09,200 Speaker 2: not just sticker shock though, that's structural, right. This is 642 00:31:09,240 --> 00:31:12,520 Speaker 2: not only the premiums going up. We're using more medical services. 643 00:31:12,520 --> 00:31:15,280 Speaker 2: There are more prescriptions, and we are aging as a population. 644 00:31:15,400 --> 00:31:17,840 Speaker 2: So we're just starting to see the impact of all 645 00:31:17,840 --> 00:31:22,360 Speaker 2: this wonderful technology and advances we've seen extending life expectancy 646 00:31:22,480 --> 00:31:25,200 Speaker 2: are things are just starting to add up now. And 647 00:31:25,280 --> 00:31:27,440 Speaker 2: of course we've got the ever present desire for profit 648 00:31:27,480 --> 00:31:29,640 Speaker 2: from the companies who bring us these wonderful solutions, so 649 00:31:29,680 --> 00:31:31,680 Speaker 2: that of course has to has to maintain a certain 650 00:31:31,720 --> 00:31:35,040 Speaker 2: margin as well. Then there's more chronic issues out there, 651 00:31:35,040 --> 00:31:36,840 Speaker 2: more treatments, just more stuff that we're doing, and it 652 00:31:36,880 --> 00:31:37,360 Speaker 2: adds up. 653 00:31:39,000 --> 00:31:41,200 Speaker 1: Yeah, and it's not just retirees. I mean, if you're 654 00:31:41,240 --> 00:31:43,800 Speaker 1: a fifty five year old executive, say with a four 655 00:31:43,880 --> 00:31:48,080 Speaker 1: hundred thousand dollars annual income, you're still feeling this. According 656 00:31:48,080 --> 00:31:51,880 Speaker 1: to a recent survey from Key Bank, thirty percent of 657 00:31:51,920 --> 00:31:55,640 Speaker 1: people making six figures or more say healthcare is now 658 00:31:55,680 --> 00:31:59,560 Speaker 1: their most impactful cost of living increase more than groceries, 659 00:31:59,600 --> 00:32:02,040 Speaker 1: more than housing, you know, more than a lot of things, 660 00:32:02,080 --> 00:32:05,120 Speaker 1: which tells you something. Even with people with high incomes 661 00:32:05,720 --> 00:32:08,480 Speaker 1: are having to start there, they're starting to have to 662 00:32:08,520 --> 00:32:13,480 Speaker 1: make difficult choices. It we're gonna one way or the other. 663 00:32:13,520 --> 00:32:15,840 Speaker 1: And I don't want to get into a political conversation here, 664 00:32:15,840 --> 00:32:17,720 Speaker 1: but one way or the other, we are going to 665 00:32:17,800 --> 00:32:20,600 Speaker 1: need to bend the cost curve in this country on 666 00:32:21,000 --> 00:32:24,600 Speaker 1: healthcare because it really is getting out of hand. And 667 00:32:25,000 --> 00:32:28,640 Speaker 1: when everybody feeling the pain, you know, not just high 668 00:32:28,640 --> 00:32:31,760 Speaker 1: income earners or low income earners, I think that's the 669 00:32:31,880 --> 00:32:35,560 Speaker 1: time where the phone calls to congressional leaders will go 670 00:32:35,760 --> 00:32:37,600 Speaker 1: up and they'll be forced to get in a room 671 00:32:37,960 --> 00:32:41,440 Speaker 1: and maybe fix some of this. But yeah, it's a 672 00:32:41,480 --> 00:32:43,520 Speaker 1: real issue, and it's coming up more and more in 673 00:32:43,600 --> 00:32:46,160 Speaker 1: the you know, review meetings that we're having with clients. 674 00:32:46,280 --> 00:32:48,280 Speaker 2: Yep. And so here's what we should be doing now. 675 00:32:48,280 --> 00:32:50,000 Speaker 2: We might maybe we're a little late on this segment 676 00:32:50,040 --> 00:32:52,400 Speaker 2: here because I think we're pasted for most people were 677 00:32:52,400 --> 00:32:56,240 Speaker 2: past enrollment period. But if you want to take advantage 678 00:32:56,240 --> 00:32:58,800 Speaker 2: of this and try to protect yourself read in detail 679 00:32:58,920 --> 00:33:01,000 Speaker 2: the stuff you get every November that gives you your 680 00:33:01,040 --> 00:33:03,920 Speaker 2: options for your health care insurance. And really what I'm 681 00:33:03,960 --> 00:33:06,440 Speaker 2: getting at here is look in depth at that high 682 00:33:06,520 --> 00:33:08,920 Speaker 2: deductible plan that's the one that might look don't rule 683 00:33:08,960 --> 00:33:10,800 Speaker 2: it out because it looks more expensive and you might 684 00:33:10,840 --> 00:33:15,000 Speaker 2: have more premium to pay out of your pocket. That 685 00:33:15,080 --> 00:33:17,360 Speaker 2: also comes along with a health savings account and your 686 00:33:17,400 --> 00:33:21,400 Speaker 2: ability to make tech triple tax advantaged investments. The dollars 687 00:33:21,440 --> 00:33:23,880 Speaker 2: that flow in are deductible on the way in if 688 00:33:23,880 --> 00:33:25,800 Speaker 2: you make sure they are invested, and that is a 689 00:33:25,880 --> 00:33:28,080 Speaker 2: huge step that gets overlooked. Make sure it gets invested 690 00:33:28,120 --> 00:33:29,960 Speaker 2: in something, and that may require you to move it 691 00:33:29,960 --> 00:33:32,960 Speaker 2: from one financial institution to another. Then those investments also 692 00:33:33,000 --> 00:33:35,400 Speaker 2: will grow tax deferred, and if it's used for health 693 00:33:35,400 --> 00:33:38,000 Speaker 2: care expenses down the road, then it will come out 694 00:33:38,000 --> 00:33:40,240 Speaker 2: tax free. The fun thing is you do not have 695 00:33:40,280 --> 00:33:43,280 Speaker 2: to use expenses that you had during that current year 696 00:33:43,320 --> 00:33:46,720 Speaker 2: you're taking the distribution. You can pull receipts from fifteen 697 00:33:46,800 --> 00:33:49,720 Speaker 2: years ago and use that claim that to take a distribution, 698 00:33:49,760 --> 00:33:51,560 Speaker 2: So you could be taking tax free dollars out to 699 00:33:51,600 --> 00:33:53,840 Speaker 2: go on vacation as long as you have prior receipts 700 00:33:53,840 --> 00:33:56,560 Speaker 2: you haven't used before to cover those expenses, so give 701 00:33:56,560 --> 00:33:57,160 Speaker 2: that some thought. 702 00:33:57,760 --> 00:34:01,000 Speaker 1: Here's the all with advice. Rising healthcare costs aren't just 703 00:34:01,040 --> 00:34:04,120 Speaker 1: a line item anymore. They are a growing concern and 704 00:34:04,160 --> 00:34:09,200 Speaker 1: growing risk to a sound financial plan. Understand your insurance 705 00:34:09,239 --> 00:34:13,040 Speaker 1: benefits plan, use a tax advantage tool like an HSA 706 00:34:13,239 --> 00:34:16,520 Speaker 1: like Brian's has talked about, and make sure your financial 707 00:34:16,520 --> 00:34:20,799 Speaker 1: plan is built to absorb this kind of cost volatility. 708 00:34:21,560 --> 00:34:24,040 Speaker 1: Coming up next, I've got my two cents on how 709 00:34:24,080 --> 00:34:26,879 Speaker 1: to get out in front early and get a head 710 00:34:26,920 --> 00:34:29,920 Speaker 1: start on retirement. You're listening to Simply Money presented by 711 00:34:29,920 --> 00:34:33,200 Speaker 1: all Worth Financial on fifty five KRC, the talk station. 712 00:34:37,719 --> 00:34:40,280 Speaker 1: You're listening to Simply Money presented by all Worth Financial 713 00:34:40,280 --> 00:34:44,160 Speaker 1: on Bob Sponseller along with Brian James. Hey, Brian, I 714 00:34:44,200 --> 00:34:46,400 Speaker 1: know we were joking around a little bit on yesterday's 715 00:34:46,400 --> 00:34:49,040 Speaker 1: show about some of the conversations I was having with 716 00:34:49,239 --> 00:34:52,640 Speaker 1: you know, a large group of family members over Thanksgiving, 717 00:34:53,160 --> 00:34:55,799 Speaker 1: you know, the younger crowd was sitting around late at night. 718 00:34:55,840 --> 00:34:59,560 Speaker 1: We're all watching football, they're playing cards, and I start 719 00:34:59,560 --> 00:35:02,920 Speaker 1: to get peppered with questions and the one that that 720 00:35:03,040 --> 00:35:06,560 Speaker 1: really is still in my head here is my my niece, 721 00:35:06,600 --> 00:35:09,239 Speaker 1: who I think is I don't know, twenty two years old. 722 00:35:09,719 --> 00:35:11,799 Speaker 1: She's like, Uncle Bob, when am I going to be 723 00:35:11,800 --> 00:35:15,120 Speaker 1: able to retire? This young lady's probably only been working 724 00:35:15,160 --> 00:35:18,319 Speaker 1: for about six months. And I looked at her and 725 00:35:18,360 --> 00:35:21,279 Speaker 1: I said, hey, spend a little bit less money than 726 00:35:21,320 --> 00:35:25,240 Speaker 1: you make and put the difference away in a stock market, 727 00:35:25,320 --> 00:35:27,880 Speaker 1: you know, index fund, and do that for about forty 728 00:35:28,000 --> 00:35:30,880 Speaker 1: years and you'll be absolutely fine. And she looked at me, 729 00:35:31,120 --> 00:35:34,080 Speaker 1: and so did the group of i'll call them youngsters 730 00:35:34,120 --> 00:35:36,759 Speaker 1: in the room, Like I had four heads. And I 731 00:35:37,680 --> 00:35:40,800 Speaker 1: was talking to my son, our middle son, who's twenty 732 00:35:40,840 --> 00:35:43,520 Speaker 1: eight later, about that, and he's like, yeah, Dad. He's 733 00:35:43,600 --> 00:35:46,680 Speaker 1: like when I look at my friends, the average, I 734 00:35:46,719 --> 00:35:50,000 Speaker 1: would say, on average, my friends in peer group, they're 735 00:35:50,040 --> 00:35:53,400 Speaker 1: spending one one hundred and fifty to two hundred dollars 736 00:35:53,480 --> 00:35:57,719 Speaker 1: every weekend just eating out and drinking out. You know, 737 00:35:57,760 --> 00:35:59,640 Speaker 1: that's the kind of money that they're spending on this 738 00:35:59,719 --> 00:36:02,800 Speaker 1: kind of stuff. So I want to throw out one example. 739 00:36:02,880 --> 00:36:06,560 Speaker 1: And here's the other thing. I'm not knocking the younger 740 00:36:06,560 --> 00:36:09,920 Speaker 1: folks or disrespecting them at all at all, because one 741 00:36:09,920 --> 00:36:12,040 Speaker 1: of the things I really admire about a lot of 742 00:36:12,080 --> 00:36:14,839 Speaker 1: them is they work out a lot, they stay in 743 00:36:14,920 --> 00:36:19,040 Speaker 1: tremendously good shape, so there is a lot of discipline 744 00:36:19,040 --> 00:36:21,680 Speaker 1: there and I see that. So I want to throw 745 00:36:21,719 --> 00:36:25,640 Speaker 1: out one mathematical example, just going back to basics here, 746 00:36:26,000 --> 00:36:30,000 Speaker 1: that everyone maybe could share with their young loved ones 747 00:36:30,040 --> 00:36:33,240 Speaker 1: here over the holidays. If you take one hundred dollars 748 00:36:33,280 --> 00:36:36,120 Speaker 1: a month, so you know, this is money that you 749 00:36:36,120 --> 00:36:39,080 Speaker 1: would otherwise spend on a fan duel account or buying 750 00:36:39,120 --> 00:36:41,800 Speaker 1: a few drinks at the bar. One hundred dollars a month, 751 00:36:42,320 --> 00:36:45,319 Speaker 1: throw that into a roth ira and let's just say 752 00:36:45,360 --> 00:36:48,040 Speaker 1: you earn eight percent per year, and you do that 753 00:36:48,160 --> 00:36:51,560 Speaker 1: starting at age twenty five, and do it for forty years, 754 00:36:51,600 --> 00:36:54,680 Speaker 1: so that gets you to sixty five. You want to 755 00:36:54,680 --> 00:36:57,120 Speaker 1: know what you've got at the end of that forty years, Brian, 756 00:36:57,360 --> 00:36:59,680 Speaker 1: I would probably do these It's three hundred and forty 757 00:36:59,680 --> 00:37:03,080 Speaker 1: five dollars. That's just taking a little bit of money 758 00:37:03,440 --> 00:37:06,319 Speaker 1: and diverting that from some of these wasteful ways. Some 759 00:37:06,360 --> 00:37:09,239 Speaker 1: of this money is being spent and that that gets 760 00:37:09,239 --> 00:37:11,600 Speaker 1: people off to a great start. And what I find, 761 00:37:11,640 --> 00:37:14,680 Speaker 1: and I've seen this with my own adult children. Once 762 00:37:14,760 --> 00:37:18,080 Speaker 1: we can get them started and they actually see the 763 00:37:18,160 --> 00:37:20,680 Speaker 1: money go into account, see it start to grow in 764 00:37:20,719 --> 00:37:25,080 Speaker 1: the market. The lightbulb goes off and they start saving 765 00:37:25,400 --> 00:37:26,399 Speaker 1: even a little bit more. 766 00:37:27,320 --> 00:37:29,839 Speaker 2: Yep, couldn't agree more. I think that's great advice and yeah, 767 00:37:29,960 --> 00:37:31,640 Speaker 2: great to share with your families you're going to be 768 00:37:31,640 --> 00:37:32,920 Speaker 2: seeing over the next several weeks. 769 00:37:33,280 --> 00:37:35,719 Speaker 1: Thanks for listening tonight. You've been listening to Simply Money, 770 00:37:35,719 --> 00:37:38,680 Speaker 1: presented by all Worth Financial on fifty five KRC, the 771 00:37:38,960 --> 00:37:39,520 Speaker 1: talk station