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Speaker 1: Tonight, the Supreme Court rules against a major part of

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Speaker 1: President Trump's global economic strategy. You're listening to Simply Money,

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Speaker 1: presented by all Worth Financial on Bob Sponseller along with

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Speaker 1: Brian James. Well. By now, you've probably heard that the

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Speaker 1: United States Supreme Court rejected the president's global tariff policy,

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Speaker 1: saying that the President exceeded the powers of the executive

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Speaker 1: branch by imposing tariffs without congressional approval. What the ruling

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Speaker 1: did not say is what will happen to the money

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Speaker 1: that's already been collected during twenty twenty five and twenty

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Speaker 1: twenty six. That all remains to be seen. Our focus,

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Speaker 1: obviously on this show is not to get into the

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Speaker 1: political quagmire. It's to provide context on what this actually

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Speaker 1: means for the economy, the markets, and ultimately your portfolio.

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Speaker 1: So with that, let's bring in all Worth Chief Investment

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Speaker 1: Officer Andy Stalle. Andy manages more than thirty five billion

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Speaker 1: dollars of assets for our clients across the country from

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Speaker 1: right here in Cincinnati. Andy, as always, thank you for

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Speaker 1: making time for us tonight. Let's start with this, what

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Speaker 1: was your reaction to how the markets did or didn't

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Speaker 1: react to the announcement when it came out, you know,

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Speaker 1: in the middle of the morning on Friday.

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Speaker 2: I wasn't too surprised by that knee jerk reaction to

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Speaker 2: the upside when you saw the Supreme Court, you know,

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Speaker 2: six to three ruling saying that the tariffs were not constitutional, essentially,

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Speaker 2: because you know, what that means to investors is that

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Speaker 2: the companies that they're investing in in theory now all

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Speaker 2: of a sudden have more earnings to keep for themselves.

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Speaker 2: So that's why you saw that pop in the markets.

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Speaker 2: So I wasn't too shocked at all, But from a

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Speaker 2: bigger picture perspective, probably it doesn't changed too much right now.

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Speaker 3: So what about you know, there's things we don't know.

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Speaker 3: What are the big questions that you have.

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Speaker 4: Obviously, you know, we don't know how refunds are gonna happen,

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Speaker 4: if they're going to happen, other things. So what is

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Speaker 4: Andy Stout thinking of in terms of Okay, what questions

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Speaker 4: have not been answered yet about this?

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Speaker 2: Yeah, the refunds are an interesting one. And to address that,

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Speaker 2: you have importers who were paying the tariffs and in

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Speaker 2: theory they could have charged more to the exports to

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Speaker 2: bring him in, exporters to bring him in from like

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Speaker 2: outside the country. Really, what you ended up seeing is

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Speaker 2: that importers kind of bore the brunt of those costs

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Speaker 2: they passed on some of those two consumers. But you know,

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Speaker 2: they did certainly take their more than their fair share

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Speaker 2: along the way. And when you think about it from

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Speaker 2: that perspective, you could say, well, if they're unconstitutional, then

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Speaker 2: these importers might say, I should not have been paying

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Speaker 2: those fees. I should essentially get a refund for that right. However,

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Speaker 2: that may be easier said than done, So the Supreme

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Speaker 2: Court didn't rule one way or another about refunds or

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Speaker 2: anything like that. It's gonna be left up to the

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Speaker 2: lower course to kind of hash all of that out.

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Speaker 2: That said, in order to essentially get the refund, it'll

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Speaker 2: probably be very complex and paperwork intensive, where you have

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Speaker 2: to prove essentially every single purchase and a lot of

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Speaker 2: you know, I'm sure there'll be a lot of regulatory

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Speaker 2: requirements along the way, and also it's probably going to

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Speaker 2: take a few years in the court system kind of

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Speaker 2: hash all that out. So if you're an importer, probably

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Speaker 2: wouldn't be expecting a refund anytime soon. Uh Now, not

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Speaker 2: to say that they won't still go through the process,

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Speaker 2: because if you can get you know, a few million

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Speaker 2: dollars back, depending on the size of the company, you know,

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Speaker 2: obviously you might want to pursue that. But there obviously

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Speaker 2: there's going to be legal fees along the way, so

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Speaker 2: you're not getting everything back. So if you're an importer,

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Speaker 2: probably not expecting to get your money back to maybe.

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Speaker 3: Where are where are these dollars sitting right now?

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Speaker 2: Well, the treasury has collected about one hundred and thirty

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Speaker 2: three billion of that, and where are they sitting right now?

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Speaker 2: I mean the government runs a deficeit regardless of you know,

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Speaker 2: whoever been in power, whether it's left or right. We've

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Speaker 2: been in a deficit for quite a long time. So

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Speaker 2: it's really kind of like an in very simple terms,

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Speaker 2: it's kind of offsetting that and minimizing it to a degree.

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Speaker 2: But it's one hundred and thirty three billion out there

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Speaker 2: that the Treasury can be using for in one way

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Speaker 2: or another to help fund government operations. So that's where

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Speaker 2: it's at. But if you're an importer, don't expect anything

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Speaker 2: to change either. I mean, right after that six to

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Speaker 2: three ruling by the Supreme Court. President Trump imposed a

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Speaker 2: ten percent tariff globally, which you know he has the

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Speaker 2: power to do under this other section. So another tariffs

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Speaker 2: option that the President had, and then on Saturday he

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Speaker 2: ramped that up from ten percent to fifteen percent globally.

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Speaker 5: Now when you look at.

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Speaker 2: What the President did there, that's about all he can

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Speaker 2: do when it comes to that way to impose terris

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Speaker 2: because there's there's essentially I'm not going to get int

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Speaker 2: the week because it'd be super boring, but like five

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Speaker 2: different ways that Trump could impose tariffs. The one that

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Speaker 2: he did essentially has fifteen percent cap and is only

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Speaker 2: for one hundred and fifty days. It can't be extended

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Speaker 2: with congressional approval, but that's where it's at. And so

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Speaker 2: what they're also looking to do, and that's under what's

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Speaker 2: called Section one twenty two, but they're looking to other

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Speaker 2: ways to extend it and also to be more company

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Speaker 2: country specific. So there's a lot of moving pieces. But

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Speaker 2: I think the bottom line here is that nothing is

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Speaker 2: really going to change from a tariff perspective. You're still

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Speaker 2: going to have these importers paying tariffs. In the meantime,

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Speaker 2: it really just kind of makes things maybe a little

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Speaker 2: bit more unclear and muddies the waters.

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Speaker 1: Andy, I heard an in for you earlier this morning

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Speaker 1: with Treasury Secretary Scott Bessant, who's really you know, want

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Speaker 1: to folks, you know, on the ground in the weeds

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Speaker 1: here actually implementing these policies. He went on record as

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Speaker 1: saying he expects no change in tariff revenue in twenty

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Speaker 1: twenty six to the federal government, you know, citing all

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Speaker 1: of these sections that you've already cited on. Hey, they're

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Speaker 1: just going to plan BCD and E, which I think

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Speaker 1: have been in the works for a long time now. Now,

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Speaker 1: I think the chances of Congress approving these tariffs after

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Speaker 1: one hundred and fifty days expire is probably slim and none.

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Speaker 1: So that being said, are you expecting Well, I'll back

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Speaker 1: up and say, I think also the President has largely

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Speaker 1: used these tariff policies as a negotiating tool to arrive

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Speaker 1: at trade deals with different countries. If we assume that, hey,

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Speaker 1: they slap these tariffs on for one hundred and fifty

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Speaker 1: days and we don't get any legislation pass to extend them,

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Speaker 1: do you see any impact to the market or any

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Speaker 1: additional volatility or disruption to supply Chaine or anything that

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Speaker 1: could drastically impact the market.

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Speaker 2: Short answered no, because even if they expire one hundred

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Speaker 2: and fifty day, there are four other options that the

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Speaker 2: president has on tariffs, and that's what they're already moving to.

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Speaker 2: So it's not as if the Supreme Court, rolling while

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Speaker 2: disappointing before the Trump administration, UH, should have done anything

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Speaker 2: to essentially, you know, cause them to panic, because I'm

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Speaker 2: sure they were already looking into the backup plans and

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Speaker 2: getting everything in place, and that's why they're already moving

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Speaker 2: in these this direction. So the short answer, I don't

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Speaker 2: really see it, you know, being an impact even if

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Speaker 2: Congress doesn't improve the current tariffs that are imposed, because

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Speaker 2: they're already moving on to plans B, C, D, E,

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Speaker 2: and F.

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Speaker 1: All Right, we've already gone We've already gone a little

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Speaker 1: bit into the weeds here. So just let me ask

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Speaker 1: the basic question. You know that the you know what

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Speaker 1: I would say, the average listener is out there wondering

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Speaker 1: is how does this impact my portfolio or asset allocation

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Speaker 1: or anything else over the next three to six months.

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Speaker 1: Is there are there any other things I should be

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Speaker 1: watching for U that have changed since Friday's ruling as it.

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Speaker 2: Relates to the tariffs directly, No, the story does not change. However,

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Speaker 2: you mentioned a second ago the trade talks with our

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Speaker 2: other trading partners how to use as a negotiating tool.

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Speaker 5: So you have the EU who came out on.

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Speaker 2: A couple of days ago saying that we're going to

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Speaker 2: pause our agreement that we were about to approve, which

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Speaker 2: would have essentially eliminated all tariffs on US products going

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Speaker 2: into the EU. Now there are other costs trading with

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Speaker 2: the EU, which is part of the costs that need

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Speaker 2: to be considered. That said, the EU exports would be

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Speaker 2: getting a fifteen percent teriff ry, but it also maintains

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Speaker 2: the fifty percent teriff y on European steel and aluminum.

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Speaker 2: So that agreement is on hold until the EU gets

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Speaker 2: more clarity from Washington. So that's something to watch you,

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Speaker 2: I think to watch for US. At the end of March,

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Speaker 2: the President Trump was heading to Beijing for the first

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Speaker 2: time in a few years and was going to meet

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Speaker 2: with Chinese President Jijing. P All of a sudden, because

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Speaker 2: of this ruling, China got a lot more leverage in

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Speaker 2: these trait in these talks between the two countries. So

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Speaker 2: that's going to be something that's very fluid and very

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Speaker 2: dynamic that investors will need to play close attention to.

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Speaker 2: But does it really change a long term picture of things?

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Speaker 2: Probably not. I mean, really what matters in the longer

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Speaker 2: run is recession risk corporate profits which are impacted by

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Speaker 2: terris But nothing is really changing.

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Speaker 5: From where we are or where we were. Excuse me.

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Speaker 2: So when you look at recession risks still being all

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Speaker 2: called load to medium earning still growing at a pretty

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Speaker 2: healthy clip, it doesn't really change too much for equity investors.

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Speaker 4: So, Andy, speaking of recession risk, you're obviously talking about

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Speaker 4: the overall economy. We got some new numbers about that

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Speaker 4: too that are reflecting the October shutdown, not the shutdown

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Speaker 4: that we're currently kind of sorted in, but the big

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Speaker 4: one from October. Can you talk a little bit about

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Speaker 4: your view point on these new numbers that came out.

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Speaker 5: Yeah, So we got GDP for the fourth quarter finally.

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Speaker 2: Uh, by the way, we probably should have got that

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Speaker 2: about three weeks earlier, but that everything got pushed back

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Speaker 2: for or because of the shutdown, and we saw that

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Speaker 2: the economy grew at a pretty tepid pace. So when

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Speaker 2: you look at that overall economic growth rate, you know

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Speaker 2: where we are essentially is a two point four or

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Speaker 2: i'm sorry, a one point four percent GDP growth Economists

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Speaker 2: we're looking for about a two point eight percent, So

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Speaker 2: about half of what we were expecting is what actually materialized. Now,

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Speaker 2: a good portion of that was from government spending, shaving

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Speaker 2: off about nine tenths of a percent from that, so

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Speaker 2: that obviously related the shutdown. Now what I would say is, yeah,

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Speaker 2: GDP one point four percent, that's not a strong number.

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Speaker 2: That's much less than where we were expecting, less than

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Speaker 2: the q the third quarter is four point four percent reading. However,

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Speaker 2: what I find to be more informative is what we

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Speaker 2: call core GDP, which is really just consumer spending, business spending,

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Speaker 2: excluding inventories. Those are your too big a one biggest one.

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Speaker 2: Housing is a factor there. What we're removing are things

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Speaker 2: that are not sustainable and not really indicative of the

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Speaker 2: underlying economic growth situation. So let's ignore government spending. Let's

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Speaker 2: ignore trade, so imports and exports, and let's ignore inventories

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Speaker 2: business inventories, because that doesn't that's very volatile and not

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Speaker 2: really indicative of the underlying strength. When we look at

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Speaker 2: that core GDP, we're at two point four percent and

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Speaker 2: that's basically about the middle of the range of where

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Speaker 2: we've been.

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Speaker 5: Over the past three years.

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Speaker 2: So when I look at this data, I want to

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Speaker 2: look at what really matters to determine the underlying economic strength,

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Speaker 2: and that's core GDP and that is stable.

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Speaker 1: That is great insight. Thank you, Andy. Here's the all

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Speaker 1: with advice. In a world where trade policy can literally

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Speaker 1: change overnight, this is a great reminder not to build

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Speaker 1: your portfolio around politics. Stay diversified, focus on strong fundamentals,

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Speaker 1: and keep your eyes on your long term goals. That's

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Speaker 1: how you tune out the policy noise and keep your

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Speaker 1: plan on track. The push to add private equity to

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Speaker 1: four oh one ks is it new, but now we

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Speaker 1: know what some voters actually think about it. The numbers

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Speaker 1: are in our analysis. Is next. You're listening to Simply

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Speaker 1: Money presented by all Worth Financial on fifty five KRC

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Speaker 1: the talk station. You're listening to Simply Money presented by

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Speaker 1: all Worth Financial on Bob Sponsller along with Brian James

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Speaker 1: straight ahead A six forty three. We'll talk about inherited money,

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Speaker 1: anxiety exiting a twenty five employee business, managing a spike

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Speaker 1: in required minimum distributions, and whether delaying Social Security really

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Speaker 1: pays off. Brian, that's a lot to talk about. We're

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Speaker 1: going to do our best to tackle all of that

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Speaker 1: and maybe even more.

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Speaker 4: Told you, but you already told you about President Trump's

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Speaker 4: desire to expand what Americans can invest it inside four

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Speaker 4: oh one k's specifically opening that door to private equity

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Speaker 4: and other alternative investments. But we're wondering if Americans think

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Speaker 4: this is a good idea. It's coming up today because

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Speaker 4: there's a new survey out there from January from our

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Speaker 4: friends at Blackrock. About a thousand registered voters were asked

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Speaker 4: to weigh in on their opinions on these types of options,

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Speaker 4: and about two thirds of them support expanding access to

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Speaker 4: private investments like private equity and retirement plans.

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Speaker 3: This is private equity, private debt.

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Speaker 4: And the reason this is coming up is because we

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Speaker 4: are now at six months past the initial executive order

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Speaker 4: from the Trump administration that four toh one K plans

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Speaker 4: should begin to look into these options. The six month

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Speaker 4: period was not about making it available in six months,

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Speaker 4: it was about that the governing authorities should have some

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Speaker 4: kind of guidance out there. So we're starting to hear

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Speaker 4: from the Department of Labor and the SEC now as

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Speaker 4: to what this might look like in the future. But

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Speaker 4: the interesting thing, or Bob, is that it looks like

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Speaker 4: about two thirds of the voters. And this is bipartisan, right, Republicans, independence, Democrats.

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Speaker 4: Doesn't really matter about.

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Speaker 3: Two thirds of people.

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Speaker 1: These are participants. These are just regular old people, right exactly.

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Speaker 4: And it's not split along political lines that people do

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Speaker 4: support the idea of alternative investments inside their retirement plans.

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Speaker 1: All right, well here here's what I think these numbers say.

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Speaker 1: I mean again, people people like freedom, Brian. They like

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Speaker 1: choices and whether regardless of which you know, side of

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Speaker 1: the political aisle you camp out on. You know, it's

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Speaker 1: kind of an American concept here, embedded in how we

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Speaker 1: just operate as Americans. It's in our DNA. We like choices,

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Speaker 1: we like freedom. People also feel like, hey, if institutional

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Speaker 1: investors and quote unquote rich people can get access to

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Speaker 1: this stuff, why can't I in our in our four

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Speaker 1: to one case. So I think it's all about, you know,

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Speaker 1: having choices and access uh, And like a lot of

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Speaker 1: things in life, Brian, just because it's legal to do

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Speaker 1: it or we have the opportunity to do it, and

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Speaker 1: we can list a long list of things that fall

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Speaker 1: into that category, it doesn't mean you should do it.

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Speaker 1: And before you engage in it, you better get educated

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Speaker 1: on how to use it. And that's really the point

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Speaker 1: of the segment. I think tonight is like a lot

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Speaker 1: of things in this world, it's buyer beware, get educated,

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Speaker 1: make sure you know what you're getting into before you

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Speaker 1: pull the trigger, especially with your retirement money.

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Speaker 4: Yeah, so the important question that this survey did not

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Speaker 4: ask is do you understand what private equity is and

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Speaker 4: private debt and alternative investment? And so we want to

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Speaker 4: make sure let's talk about that. That doesn't make these bad things.

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Speaker 4: But these are very different types of investment vehicles than

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Speaker 4: what people are accustomed to with the low cost index

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Speaker 4: funds that dominate four O one ks today.

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Speaker 1: So there are.

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Speaker 4: Issues with illiquidity, lock up periods, higher fee structures, very

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Speaker 4: complex methods, and frequency of valuation. In other words, you

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Speaker 4: may not know what it's worth nearly as often as

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Speaker 4: you've become accustomed to with a traditional mutual fund, and

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Speaker 4: you know in the fact that private equity returns can

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Speaker 4: vary dramatically from manager to manager. None of this says

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Speaker 4: don't invest, these are bad things. Don't invest. But we're

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Speaker 4: simply saying, don't compare apples and oranges by looking at

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Speaker 4: the standard mutual funds that you've got in your four

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Speaker 4: to one case and then looking at these alternatives and

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Speaker 4: wondering why are they so much more expensive? Why are

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Speaker 4: there all kinds of rules. This is truly apples and oranges.

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Speaker 4: Public investments are one thing. Private is very, very, very different.

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Speaker 4: So in general, you know, like Bob said, people want choice.

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Speaker 4: We want the ability to invest in the different things

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Speaker 4: that larger financial institutions have access to. That's a good

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Speaker 4: thing that this is going to be available, most likely

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Speaker 4: in a four to one k near you, sometime in

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Speaker 4: the near future.

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Speaker 3: But again, don't walk into this blind.

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Speaker 4: Don't just assume that this is the greatest thing since

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Speaker 4: sliced bread. Most likely you're going to be limited. I

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Speaker 4: can't imagine that the fiduciaries who govern these individual plans,

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Speaker 4: which by the way, they represent your company, not some

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Speaker 4: government entity. There's an investment committee at your company that

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Speaker 4: decides what the plan is going to offer. That's who

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Speaker 4: will dictate whether you can put money in this at all,

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Speaker 4: and how much you can put in, what percentage of

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Speaker 4: your four O one K, those kinds of things. Those

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Speaker 4: are decisions that all still have to be hashed out.

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Speaker 4: That's why we're saying, don't look, you know right now

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Speaker 4: for this type of a choice in your four to

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Speaker 4: one K. It's not going to be there, but it's

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Speaker 4: still on the horizon a little bit.

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Speaker 1: Yeah, it's just an example of some things to look

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Speaker 1: at here, you know, bringing this down to what's going

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Speaker 1: on right now in the in the debt markets in

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Speaker 1: this country. You know, Brian, I've come across stories here

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Speaker 1: in recent days and weeks where with all this AI

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Speaker 1: investment out there, just trillions of dollars going into AI investments,

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Speaker 1: some of these companies are having to go to the

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Speaker 1: private capital markets to access capital because some of the

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Speaker 1: more traditional lenders are kind of tapped out they don't

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Speaker 1: want to be involved in this anymore. My point in

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Speaker 1: that is that if we start to have some winners

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Speaker 1: and losers in this AI space, which is very likely,

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Speaker 1: private credit investors could get left holding the bag. In

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Speaker 1: some cases, you know, and that can introduce more volatility

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Speaker 1: to your portfolio. If the particular private equity fund that

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Speaker 1: you might invest in is overweighted to a particular sector

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Speaker 1: of the economy, you know, you layer on top of that.

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Speaker 1: As you've already pointed out, Brian, that these things are

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Speaker 1: not priced every day or every minute like or every

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Speaker 1: second like an ETF is. You know, people could just

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Speaker 1: be getting into venturing into some things that might not

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Speaker 1: really be a good fit. And most folks that are

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Speaker 1: using private you know, debt or private equity, they're doing

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Speaker 1: that in a relatively small slice of their portfolio, more

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Speaker 1: of a satellite holding. And this is where I come

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Speaker 1: back to. You know, I've talked about this often on

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Speaker 1: this show as somebody who used to be the advisor

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Speaker 1: to several large four oh one K plans where I

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Speaker 1: have stood in front of those plan participants. The amount

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Speaker 1: of time that is given to educate people on the

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Speaker 1: inner workings of all these investments is minimal. And I

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Speaker 1: feel for the person that just and they do they

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Speaker 1: look at recent return and contend and contend to just

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Speaker 1: allocate too much money into something that has performed quote

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Speaker 1: unquote the best over the last twelve or eighteen months

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Speaker 1: not understanding what they're getting into or what kind of

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Speaker 1: volatility could be down the horizon. So you know, I've

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Speaker 1: been pretty vocal about this. Yeah, I love choice and

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Speaker 1: I love freedom, but you just don't want to introduce

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Speaker 1: a bunch of stuff to folks that don't know what

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Speaker 1: they're getting involved in. And so, like a lot of things,

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Speaker 1: education is important and that tends not to happen a

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Speaker 1: lot of times.

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Speaker 3: On the and I completely agree with that. The pros

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Speaker 3: and cons everything we do. Now. One of the things

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Speaker 3: I heard an interesting point.

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Speaker 4: Of view last week about this, which is that your

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Speaker 4: traditional asset allocators are speaking with a portfolio manager about

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Speaker 4: private equity and the role they feel at play in

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Speaker 4: asset allocation. And one of the comments you made, and

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Speaker 4: I hadn't thought about this, was that it is harder

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Speaker 4: nowadays for them to allocate to the small cap side

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Speaker 4: because a lot of companies that would otherwise maybe trade

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Speaker 4: publicly on the as a small cap stock now are

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Speaker 4: looking at the private equity markets and realizing that that

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Speaker 4: might be a better solution for them. So if we

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Speaker 4: want a small cap allocation, you know, this is really

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Speaker 4: a major issue right now, where they can see on

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Speaker 4: the horizon where we might be using private equity to

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Speaker 4: get into those smaller spaces to fill that small portion

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Speaker 4: of the portfolio.

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Speaker 1: Just time to think about No, it's a great point,

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Speaker 1: and this gets into another topic that we don't have

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Speaker 1: time to cover, and that's just regulation and what it

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Speaker 1: costs to be a publicly traded company in terms of

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Speaker 1: filing reports and all that. Now, some of that stuff

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Speaker 1: is needed and good, but yeah, to your point, it

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Speaker 1: can companies have to make a decision what's the best

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Speaker 1: course of action for us to raise capital? And you know,

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Speaker 1: like a lot of things in life, money is going

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Speaker 1: to move to where it is treated best. Here's the

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Speaker 1: Allworth advice. Just because you can invest in something inside

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Speaker 1: your four and one K doesn't mean you should make

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Speaker 1: sure complexity actually improves your plan, not just your list

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Speaker 1: of options. Are you obsessing over shaving a quarter point

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Speaker 1: percentage point in taxes while ignoring six figure lifestyle creep?

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Speaker 1: Coming up next, the hidden danger of over optimizing your money.

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Speaker 1: You're listening to Simply Money presented by all Worth Financial

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Speaker 1: on fifty five KRC the talk station. You're listening to

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Speaker 1: Simply Money presented by Allworth Financial I'm Bob Sponseller along

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Speaker 1: with Brian James. We want to talk about something that

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Speaker 1: might make some of you uncomfortable, because if you're listening

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Speaker 1: to this show, there's probably a pretty good chance you

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Speaker 1: care about getting things right. You care about your asset allocation,

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Speaker 1: you care about wroth conversion timing, you care about tax

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Speaker 1: loss harvesting, you care about expense ratios on funds and

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Speaker 1: ETFs down to the second or third decimal point, and

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Speaker 1: those things do matter. But here's the question, are you

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Speaker 1: overthinking or over optimizing your money? And that's what we

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Speaker 1: want to get into tonight.

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Speaker 4: So we're gonna do this as we like to do,

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Speaker 4: with files pulled straight from all Worth financial real situations,

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Speaker 4: with the names changed to protect the innocent.

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Speaker 3: So first off, we're gonna stop.

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Speaker 4: With John and Susan, who are in their early sixties

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Speaker 4: and they've been a little bit obsessed with taxes. They've

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Speaker 4: got a net worth of about six and a half

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Speaker 4: million dollars. Half of that is tax sheltered in retirement accounts,

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Speaker 4: two million in a taxable investment account, about a million

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Speaker 4: and a half in their home, and some some other

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Speaker 4: real estate. And they come in they know that they've

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Speaker 4: got require minimum distributions on the horizon when they get

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Speaker 4: into their seventies early mid seventies, and they're wanting to know,

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Speaker 4: how do we fix that. Well, the answer to that

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Speaker 4: is roth conversions. And their question is should they convert

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Speaker 4: up to the top of the twenty four percent bracket?

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Speaker 4: Should we maybe fill that irma gap but not cross

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Speaker 4: it that references that point at which your Medicare premiums

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Speaker 4: start to go up because of what you're income was

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Speaker 4: two years ago. Maybe they're thinking they should accelerate some income,

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Speaker 4: you know, before some of these rules change, and it

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Speaker 4: should be harvest losses quarterly instead of anyway. Lots of

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Speaker 4: questions to make their head spin, and they're all good.

435
00:23:12,680 --> 00:23:16,280
Speaker 4: But while we're talking through this, we've discovered that, of course,

436
00:23:16,280 --> 00:23:18,480
Speaker 4: we're building a financial plan to make all this work.

437
00:23:18,640 --> 00:23:21,119
Speaker 4: They're spending about thirty eight thousand dollars a year on

438
00:23:21,160 --> 00:23:24,160
Speaker 4: a club membership that they barely ever use. They've got

439
00:23:24,160 --> 00:23:27,119
Speaker 4: two SUVs leased at fourteen hundred dollars a month, twenty

440
00:23:27,160 --> 00:23:29,359
Speaker 4: five thousand dollars a year to adult children, you know,

441
00:23:29,440 --> 00:23:31,719
Speaker 4: just to help them make ends meet. And they're arguing

442
00:23:31,720 --> 00:23:35,000
Speaker 4: over an eight thousand dollars roth conversion tax strategy while

443
00:23:35,080 --> 00:23:37,000
Speaker 4: spending one hundred and fifty thousand dollars a year in

444
00:23:37,040 --> 00:23:39,399
Speaker 4: lifestyle creep because they've never stepped back to look at

445
00:23:39,400 --> 00:23:42,160
Speaker 4: what the expenses need to be and let alone.

446
00:23:42,240 --> 00:23:44,400
Speaker 3: You know, what they need to keep a ship afloat.

447
00:23:44,440 --> 00:23:47,000
Speaker 1: So that Brian, Brian, I want to know what happened

448
00:23:47,000 --> 00:23:49,399
Speaker 1: when you told them to cancel that thirty eight thousand

449
00:23:49,400 --> 00:23:52,320
Speaker 1: dollars a year country club membership. How'd that conversation go?

450
00:23:52,800 --> 00:23:55,040
Speaker 4: Well, I mean, nobody wants to change their lifestyle, but

451
00:23:55,320 --> 00:23:58,080
Speaker 4: it's just all about reframing in terms of what really

452
00:23:58,119 --> 00:24:00,359
Speaker 4: matters to you. And the whole point of this kind versation,

453
00:24:00,480 --> 00:24:02,800
Speaker 4: as we said, is we're agonizing about a little bit

454
00:24:02,840 --> 00:24:07,520
Speaker 4: more in taxes paid over a conversion possible conversion strategy

455
00:24:07,560 --> 00:24:10,080
Speaker 4: for a relatively small amount of money. When we've identified

456
00:24:10,119 --> 00:24:12,399
Speaker 4: you're spending you know, close to one hundred thousand dollars

457
00:24:13,320 --> 00:24:15,440
Speaker 4: a year in things that you don't really seem to

458
00:24:15,560 --> 00:24:18,240
Speaker 4: value all that much. So we're kind of reframing the

459
00:24:18,280 --> 00:24:21,400
Speaker 4: discussion from let's maybe not let's worry a little less

460
00:24:21,400 --> 00:24:24,000
Speaker 4: about taxes and figure out what do you need. We

461
00:24:24,080 --> 00:24:26,040
Speaker 4: have to start with what do you absolutely need for

462
00:24:26,119 --> 00:24:29,320
Speaker 4: your plan to be functional? Then we can worry about optimizing.

463
00:24:29,400 --> 00:24:32,480
Speaker 4: You can't optimize before you've got the right plan in

464
00:24:32,480 --> 00:24:33,119
Speaker 4: place to begin with.

465
00:24:34,000 --> 00:24:36,520
Speaker 1: Yeah, In other words, how much money you spend and

466
00:24:36,560 --> 00:24:38,800
Speaker 1: where you spend it is really going to move the

467
00:24:38,840 --> 00:24:42,479
Speaker 1: needle more than worrying about the expense ratio on an

468
00:24:42,480 --> 00:24:46,040
Speaker 1: ETF or whether you do an eight thousand or eighty

469
00:24:46,080 --> 00:24:49,239
Speaker 1: seven hundred dollars wroth conversion. Good point, Brian. All right,

470
00:24:49,320 --> 00:24:52,240
Speaker 1: let's get into hypothetical number two. We'll call this the

471
00:24:52,320 --> 00:24:56,920
Speaker 1: perfect portfolio guy Mark. He's fifty two years old, he's

472
00:24:56,960 --> 00:24:59,840
Speaker 1: worth a little under five million dollars. He already has

473
00:25:00,080 --> 00:25:03,520
Speaker 1: direct indexing strategy is in place for tax loss harvesting.

474
00:25:03,920 --> 00:25:07,960
Speaker 1: He's got a responsible sleeve of private credit in his portfolio.

475
00:25:08,520 --> 00:25:12,200
Speaker 1: He's even got some bufferdts Brian, for downside protection in

476
00:25:12,280 --> 00:25:16,240
Speaker 1: his higherra he's got some municipal bonds for tax efficiency,

477
00:25:16,720 --> 00:25:20,600
Speaker 1: and as separately managed to count for international stocks. This

478
00:25:21,040 --> 00:25:26,520
Speaker 1: whole thing has been put together beautifully, it's engineered, it's optimized,

479
00:25:27,000 --> 00:25:30,080
Speaker 1: and he's contributing another two hundred thousand dollars a year

480
00:25:30,440 --> 00:25:34,360
Speaker 1: toward his plan. But here's the issue. He's working sixty

481
00:25:34,400 --> 00:25:38,439
Speaker 1: five hours a week, his health is deteriorating, he hasn't

482
00:25:38,440 --> 00:25:42,119
Speaker 1: taken a real vacation in five years. He doesn't need

483
00:25:42,240 --> 00:25:45,800
Speaker 1: another one percent return. He needs to put some margins

484
00:25:45,880 --> 00:25:46,879
Speaker 1: in his life. Brian.

485
00:25:47,119 --> 00:25:50,040
Speaker 4: Yeah, and we're not talking about investment return margin. We're

486
00:25:50,040 --> 00:25:51,320
Speaker 4: talking about time margin.

487
00:25:51,400 --> 00:25:51,800
Speaker 3: He needs.

488
00:25:52,080 --> 00:25:54,040
Speaker 4: He needs to take control of his life. And this

489
00:25:54,080 --> 00:25:56,359
Speaker 4: is a trap that a lot of high earners fall into.

490
00:25:56,560 --> 00:25:58,919
Speaker 4: When you're in that accumulation phase and you've reached the

491
00:25:59,000 --> 00:26:01,520
Speaker 4: age of you know that in your early fifties, the

492
00:26:01,600 --> 00:26:03,520
Speaker 4: kids are kind of starting to get out on their own,

493
00:26:03,680 --> 00:26:05,600
Speaker 4: and you know, maybe the debt is paid down, the

494
00:26:05,600 --> 00:26:08,240
Speaker 4: house could be paid off, and you start to think, really,

495
00:26:08,280 --> 00:26:10,880
Speaker 4: these are my highest earning years, and I've just blown

496
00:26:10,960 --> 00:26:13,000
Speaker 4: up a lot of debt that I don't really need

497
00:26:13,040 --> 00:26:13,520
Speaker 4: to have anymore.

498
00:26:13,760 --> 00:26:14,600
Speaker 3: Think about it anymore.

499
00:26:14,680 --> 00:26:16,520
Speaker 4: So if I can just get this a little more efficient,

500
00:26:16,520 --> 00:26:20,440
Speaker 4: I'll feel secure. But at five million dollars, another Bob

501
00:26:20,480 --> 00:26:23,000
Speaker 4: just said, another one percent rate of return doesn't really

502
00:26:23,080 --> 00:26:25,359
Speaker 4: change your life. It's not going to make you any

503
00:26:25,400 --> 00:26:29,199
Speaker 4: more financial state, financially stable. But what we should be

504
00:26:29,240 --> 00:26:31,320
Speaker 4: thinking about this, if we've accomplished this kind of a

505
00:26:31,320 --> 00:26:34,399
Speaker 4: structure of a portfolio in a financial situation, don't forget

506
00:26:34,400 --> 00:26:37,600
Speaker 4: to look at the stress side of things. If it's unnecessary, right,

507
00:26:37,600 --> 00:26:39,720
Speaker 4: if you've got enough to make it, then you don't

508
00:26:39,760 --> 00:26:43,200
Speaker 4: necessarily need to take on all that extra work at work.

509
00:26:44,200 --> 00:26:45,120
Speaker 3: Look at your life.

510
00:26:44,920 --> 00:26:47,399
Speaker 4: And make sure that it matches the ability that you've

511
00:26:47,480 --> 00:26:50,560
Speaker 4: got to provide for yourself, and make sure the outputs

512
00:26:50,560 --> 00:26:53,359
Speaker 4: are matching the inputs. It's not all about making sure

513
00:26:53,400 --> 00:26:55,280
Speaker 4: that pile of money grows more and more and more.

514
00:26:56,000 --> 00:26:59,280
Speaker 1: In other words, ask yourself or with your advisor, ask

515
00:26:59,400 --> 00:27:03,040
Speaker 1: this question, and if I improve this particular decision by

516
00:27:03,160 --> 00:27:07,399
Speaker 1: ten percent, let's say, would it meaning meaningfully move the

517
00:27:07,440 --> 00:27:11,320
Speaker 1: needle on my financial plan or change my long term outcome?

518
00:27:11,720 --> 00:27:16,440
Speaker 1: If the answers know, you're probably overoptimizing, overthinking in one

519
00:27:16,560 --> 00:27:19,920
Speaker 1: area and ignoring some of the elephants in the room

520
00:27:20,000 --> 00:27:22,720
Speaker 1: that really could make a difference in your not only

521
00:27:22,720 --> 00:27:26,240
Speaker 1: your financial plan, but your life in general. Here's the

522
00:27:26,240 --> 00:27:29,639
Speaker 1: all Worth advice. Don't let financial fine tuning distract you

523
00:27:29,760 --> 00:27:35,439
Speaker 1: from the big decisions that actually determine your future. Are

524
00:27:35,480 --> 00:27:38,000
Speaker 1: you worried about running out of money like maybe your

525
00:27:38,040 --> 00:27:41,879
Speaker 1: parents did? Thinking about selling your business in five years,

526
00:27:41,920 --> 00:27:45,840
Speaker 1: and what happens when your RMD's nearly double. We're here

527
00:27:45,880 --> 00:27:47,680
Speaker 1: to help out on all of that. Coming up next.

528
00:27:47,720 --> 00:27:50,320
Speaker 1: You're listening to Simply Money presented by all Worth Financial

529
00:27:50,359 --> 00:27:59,040
Speaker 1: on fifty five KRC, the talk station. You're listening to

530
00:27:59,040 --> 00:28:02,480
Speaker 1: Simply Money by all Worth Financial on Bob Sponseller along

531
00:28:02,520 --> 00:28:05,440
Speaker 1: with Brian James. Do you have a financial question you'd

532
00:28:05,480 --> 00:28:07,520
Speaker 1: like for us to cover. There's a red button you

533
00:28:07,560 --> 00:28:09,920
Speaker 1: can click while you're listening to the show. If you're

534
00:28:09,960 --> 00:28:13,639
Speaker 1: listening on the iHeart app, simply record your question and

535
00:28:13,760 --> 00:28:16,840
Speaker 1: it will come straight to us. All right, Brian Kevin

536
00:28:16,880 --> 00:28:19,520
Speaker 1: and Mason leads us off tonight. He says, I'm sixty one.

537
00:28:19,600 --> 00:28:22,480
Speaker 1: I'm planning to retire at sixty four. We've got a

538
00:28:22,520 --> 00:28:25,480
Speaker 1: little over two million dollars saved. If we need roughly

539
00:28:25,680 --> 00:28:28,200
Speaker 1: say one hundred and ten thousand dollars a year. What's

540
00:28:28,240 --> 00:28:33,600
Speaker 1: the cleanest way to test whether that's truly sustainable long term? Well?

541
00:28:33,640 --> 00:28:36,439
Speaker 4: I think the big thing here, First off, congratulations for

542
00:28:36,440 --> 00:28:38,880
Speaker 4: putting yourself in that situation. But the big thing here

543
00:28:38,920 --> 00:28:41,320
Speaker 4: is to stop thinking in terms of averages and start

544
00:28:41,400 --> 00:28:43,880
Speaker 4: stress testing. That's what you're really talking about do the

545
00:28:43,920 --> 00:28:46,080
Speaker 4: math on the raw withdrawal rates. So one hundred and

546
00:28:46,080 --> 00:28:49,040
Speaker 4: ten thousand dollars per year numbers there divided by two

547
00:28:49,080 --> 00:28:52,320
Speaker 4: point one million is just over five percent. Historically, a

548
00:28:52,400 --> 00:28:55,160
Speaker 4: five percent withdraw over thirty years. That works if we

549
00:28:55,240 --> 00:28:57,520
Speaker 4: have strong markets early in retirement, but it's gonna be

550
00:28:57,520 --> 00:29:01,040
Speaker 4: a little weaker if we have a poorer, weaker markets early.

551
00:29:01,640 --> 00:29:04,160
Speaker 4: That's that's what we refer to often as the sequence

552
00:29:04,200 --> 00:29:07,000
Speaker 4: of returns issue. That's a starting signal. It's not necessarily

553
00:29:07,040 --> 00:29:08,760
Speaker 4: the answer, and it's not a ship sinker, but it's

554
00:29:08,760 --> 00:29:11,840
Speaker 4: something to pay attention to. Second step then, to subtract

555
00:29:11,840 --> 00:29:15,120
Speaker 4: out your reliable income. What's social Security going to cover

556
00:29:15,200 --> 00:29:17,120
Speaker 4: for you? And if you're married your spouse as well,

557
00:29:17,240 --> 00:29:19,840
Speaker 4: what will that be at sixty seven and seventy maybe

558
00:29:19,840 --> 00:29:22,800
Speaker 4: maybe that's forty five to fifty five thousand dollars combined. Well,

559
00:29:22,840 --> 00:29:24,880
Speaker 4: then your portfolio doesn't have to fund one hundred and

560
00:29:24,920 --> 00:29:28,280
Speaker 4: ten thousand dollars forever, just until that social security stream

561
00:29:28,360 --> 00:29:31,800
Speaker 4: kicks in. So that's going to dramatically improve your sustainability.

562
00:29:31,840 --> 00:29:35,800
Speaker 4: So don't don't always use that withdrawal rate bet ignore

563
00:29:35,920 --> 00:29:38,640
Speaker 4: your your your streams of income that will kick in later.

564
00:29:38,920 --> 00:29:40,840
Speaker 4: And then finally you're gonna want to stress test that

565
00:29:40,920 --> 00:29:43,960
Speaker 4: bad timing. What happens if the market drops twenty percent

566
00:29:43,960 --> 00:29:46,480
Speaker 4: in year one? That is something that does occur to people.

567
00:29:46,920 --> 00:29:51,040
Speaker 4: Can your plan recover without permanent spending cuts sequence risk

568
00:29:51,120 --> 00:29:53,360
Speaker 4: in those first five to seven years. That matters a

569
00:29:53,400 --> 00:29:56,360
Speaker 4: lot more than long run averages. So to answer your question,

570
00:29:56,480 --> 00:29:59,200
Speaker 4: focus more on stress testing and worry a little less

571
00:29:59,240 --> 00:30:00,680
Speaker 4: about the rate of rech and you're getting out of

572
00:30:00,680 --> 00:30:03,120
Speaker 4: your portfolio to understand things. All right, Let's move on

573
00:30:03,160 --> 00:30:05,880
Speaker 4: to Rachel in Newport. Rachel says she's worried about her

574
00:30:05,920 --> 00:30:09,280
Speaker 4: parents or worried about experiencing what her parents did. She

575
00:30:09,280 --> 00:30:11,320
Speaker 4: says her parents ran out of money late in life.

576
00:30:11,400 --> 00:30:13,880
Speaker 4: Even though their numbers look good, I still worry about that.

577
00:30:14,160 --> 00:30:16,840
Speaker 4: How do you plan around this inherited anxiety?

578
00:30:18,080 --> 00:30:20,600
Speaker 1: Well, Rachel, I think one of the main benefits of

579
00:30:20,640 --> 00:30:24,920
Speaker 1: working with a good, responsible fiduciary financial advisor is to

580
00:30:25,080 --> 00:30:28,480
Speaker 1: help eliminate that anxiety. Because if any of us are

581
00:30:28,480 --> 00:30:32,400
Speaker 1: walking around with financial anxiety of one, you know, one

582
00:30:32,480 --> 00:30:37,040
Speaker 1: form or another, that's what leads to making impulse based

583
00:30:37,040 --> 00:30:40,200
Speaker 1: decisions largely on fear. And we want to avoid that.

584
00:30:40,640 --> 00:30:43,840
Speaker 1: So my advice is get with a good advisor who

585
00:30:43,880 --> 00:30:48,520
Speaker 1: can run some different scenarios and be free and open

586
00:30:48,520 --> 00:30:52,600
Speaker 1: about what your anxieties are. For example, you can run

587
00:30:52,640 --> 00:30:56,320
Speaker 1: a plan assuming you live to eighty nine, ninety two,

588
00:30:56,480 --> 00:30:59,160
Speaker 1: ninety seven or one hundred and six, you know, run

589
00:30:59,400 --> 00:31:03,600
Speaker 1: out of plan and factoring in longevity risk. What if

590
00:31:03,640 --> 00:31:05,600
Speaker 1: we live for a long time, how is that going

591
00:31:05,640 --> 00:31:08,640
Speaker 1: to impact our plan? Another thing that you can model

592
00:31:08,680 --> 00:31:12,680
Speaker 1: into different scenarios, what if you and or your husband

593
00:31:12,720 --> 00:31:15,840
Speaker 1: have a long term care event that's going to require

594
00:31:15,880 --> 00:31:19,200
Speaker 1: some auto pocket spending. Model that out how would that

595
00:31:19,280 --> 00:31:22,600
Speaker 1: impact the plan. So when you actually stress test your

596
00:31:22,640 --> 00:31:27,200
Speaker 1: financial plan with different scenarios, you know of events that

597
00:31:27,280 --> 00:31:31,880
Speaker 1: you hope to avoid. Oftentimes that will help people eliminate

598
00:31:32,000 --> 00:31:36,560
Speaker 1: that anxiety. And because you've factored in some of those

599
00:31:36,600 --> 00:31:40,360
Speaker 1: things that we can't control, and hopefully that gives you

600
00:31:40,600 --> 00:31:43,400
Speaker 1: the peace of mind to move forward in your retirement

601
00:31:43,560 --> 00:31:47,480
Speaker 1: knowing that you've discussed it, you've run scenarios, and you

602
00:31:47,600 --> 00:31:50,040
Speaker 1: know your plan's going to work. And if if some

603
00:31:50,120 --> 00:31:52,240
Speaker 1: of those scenarios, you know, just to put a little

604
00:31:52,280 --> 00:31:55,840
Speaker 1: more margin into things, you know cause you to need

605
00:31:55,880 --> 00:31:58,360
Speaker 1: to maybe spend a little less or work a little longer.

606
00:31:58,520 --> 00:32:01,080
Speaker 1: Those are the trade offs if you want to avoid

607
00:32:01,160 --> 00:32:03,880
Speaker 1: some of that anxiety you know that you're walking around

608
00:32:03,880 --> 00:32:06,920
Speaker 1: with right now. Hope that helps all right. Larry in

609
00:32:06,960 --> 00:32:09,760
Speaker 1: der Park says, I'm fifty eight and own a company

610
00:32:09,800 --> 00:32:12,320
Speaker 1: with about twenty five employees. If I want to exit

611
00:32:12,360 --> 00:32:16,560
Speaker 1: in five years, what financial moves should I be making

612
00:32:16,680 --> 00:32:17,120
Speaker 1: right now?

613
00:32:17,160 --> 00:32:19,880
Speaker 4: Brian, Well, I think the most important thing you've done

614
00:32:19,920 --> 00:32:22,200
Speaker 4: for yourself is to start thinking about this five years

615
00:32:22,200 --> 00:32:24,440
Speaker 4: before you might sell, rather than what a lot of

616
00:32:24,440 --> 00:32:26,200
Speaker 4: people do, which is wow, I got an offer on

617
00:32:26,200 --> 00:32:27,760
Speaker 4: the table. I guess I better think about whether I

618
00:32:27,760 --> 00:32:29,560
Speaker 4: want to take this offer for my business or not.

619
00:32:30,200 --> 00:32:32,520
Speaker 4: So in these next five years this is the value

620
00:32:32,560 --> 00:32:35,840
Speaker 4: optimization window. So obviously you can do a lot of

621
00:32:35,840 --> 00:32:38,640
Speaker 4: things to the business that'll make it look more attractive

622
00:32:38,640 --> 00:32:40,440
Speaker 4: potential buyers five years from now. You got a lot

623
00:32:40,440 --> 00:32:43,040
Speaker 4: of runway to do it. But don't start there. Start

624
00:32:43,080 --> 00:32:46,560
Speaker 4: with your own personal situation. Make sure that your own

625
00:32:46,560 --> 00:32:49,080
Speaker 4: personal household is shored up financially, and you might be

626
00:32:49,120 --> 00:32:51,680
Speaker 4: in fine shape now, but the concern would be that

627
00:32:51,840 --> 00:32:54,600
Speaker 4: maybe you're ready to sell and the economy is not cooperating.

628
00:32:54,600 --> 00:32:56,280
Speaker 4: Five years from now, you're ready to hang it up,

629
00:32:56,680 --> 00:32:58,400
Speaker 4: and you may wind up who knows, you may wind

630
00:32:58,480 --> 00:33:01,320
Speaker 4: up taking a little less than you thought. So worst

631
00:33:01,360 --> 00:33:04,160
Speaker 4: case scenario, you might start focusing on your own personal

632
00:33:04,160 --> 00:33:07,640
Speaker 4: balance sheet a little more. Build liquidity outside that business

633
00:33:07,680 --> 00:33:09,720
Speaker 4: if that's most of your Like a lot of people,

634
00:33:09,760 --> 00:33:11,840
Speaker 4: that might be most of your net worth, so max

635
00:33:11,880 --> 00:33:14,160
Speaker 4: out those retirement plans. You might even look into whether

636
00:33:14,200 --> 00:33:17,640
Speaker 4: a cash balance plan allows you to shelter larger dollars

637
00:33:17,640 --> 00:33:19,760
Speaker 4: in these final high income years. That can make sense

638
00:33:19,760 --> 00:33:22,400
Speaker 4: if you've got a lot of younger employees, a lot

639
00:33:22,440 --> 00:33:24,720
Speaker 4: of moving parts. Can't get into it right now, but

640
00:33:24,920 --> 00:33:27,080
Speaker 4: at the same time, that is something worth looking into.

641
00:33:27,680 --> 00:33:30,680
Speaker 4: Figure out what your financials look like, Normalize your compensation,

642
00:33:30,800 --> 00:33:34,120
Speaker 4: get rid of any discretionary expenses in the business, document

643
00:33:34,160 --> 00:33:38,040
Speaker 4: recurring revenue, and reduce any customer concentration where you can.

644
00:33:38,440 --> 00:33:42,080
Speaker 4: Buyers are very interested in predictable, transferable cash flow. That's

645
00:33:42,080 --> 00:33:44,720
Speaker 4: where the pricing is going to come out most advantageous

646
00:33:44,720 --> 00:33:46,880
Speaker 4: to you. Lots of things to be thinking about in

647
00:33:46,880 --> 00:33:48,840
Speaker 4: these remaining five years, So good for you for giving

648
00:33:48,840 --> 00:33:49,880
Speaker 4: yourself the time to do it.

649
00:33:51,120 --> 00:33:53,880
Speaker 1: What if you didn't have to pay property taxes on

650
00:33:53,920 --> 00:33:56,920
Speaker 1: your home. You might have an opportunity to vote on

651
00:33:56,960 --> 00:34:00,440
Speaker 1: that exact policy in November. We'll explain where we're talking

652
00:34:00,440 --> 00:34:03,239
Speaker 1: about next. You're listening to Simply Money presented by all

653
00:34:03,280 --> 00:34:11,359
Speaker 1: Worth Financial on fifty five KRC, the talk station. You're

654
00:34:11,400 --> 00:34:14,239
Speaker 1: listening to Simply Money presented by Allworth Financial on Bob

655
00:34:14,320 --> 00:34:17,719
Speaker 1: spon Seller along with Brian James. What if you never

656
00:34:17,760 --> 00:34:21,279
Speaker 1: had to pay property taxes again on your home. There's

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00:34:21,320 --> 00:34:25,560
Speaker 1: a proposal to actually abolish property taxes in the state

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00:34:25,600 --> 00:34:29,839
Speaker 1: of Ohio. Right now. Volunteers are out there amassing enough

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00:34:29,920 --> 00:34:34,640
Speaker 1: signatures to actually put this issue on the ballot for

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00:34:34,840 --> 00:34:38,000
Speaker 1: voters in November of this year. Brian, what are we

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00:34:38,080 --> 00:34:39,080
Speaker 1: talking about.

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00:34:38,840 --> 00:34:41,239
Speaker 4: Here, Well, there are there's an effort right now, so

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00:34:41,360 --> 00:34:44,440
Speaker 4: volunteers are out there collecting signatures to put a constitutional

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00:34:44,440 --> 00:34:47,480
Speaker 4: amendment before the Ohio voters that's going to abolish property

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00:34:47,520 --> 00:34:50,839
Speaker 4: taxes entirely. This would be very historic because no other

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00:34:50,880 --> 00:34:54,759
Speaker 4: state has ever fully eliminated property taxes at this scale. Now,

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00:34:54,760 --> 00:34:57,160
Speaker 4: the elephant in the room here, and this isn't something

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00:34:57,200 --> 00:35:00,000
Speaker 4: that the people purport supporting this really like to talk about.

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Speaker 4: Ohio Local governments do collect about twenty four billion dollars

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00:35:03,560 --> 00:35:08,000
Speaker 4: from property taxes. This covers schools, fire, police, libraries, parks,

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00:35:08,040 --> 00:35:11,319
Speaker 4: other essential services. And so obviously those dollars are going

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00:35:11,400 --> 00:35:13,080
Speaker 4: to have to come from somewhere or those different things

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00:35:13,120 --> 00:35:16,000
Speaker 4: are going to have to be eliminated. So Governor DeWine

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00:35:16,600 --> 00:35:19,000
Speaker 4: has basically said that if we abolish this revenue, we

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00:35:19,000 --> 00:35:22,040
Speaker 4: could have a massive funding shortfall, because, like always, we

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00:35:22,320 --> 00:35:24,360
Speaker 4: really want to focus on getting rid of the taxes

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00:35:24,480 --> 00:35:27,440
Speaker 4: without worrying about what those taxes actually pay for, which

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00:35:27,480 --> 00:35:29,640
Speaker 4: means we just have to borrow the money from somewhere,

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00:35:29,880 --> 00:35:33,000
Speaker 4: which basically making a federal problem kind of a state

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00:35:33,000 --> 00:35:33,960
Speaker 4: problem here in Ohio.

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Speaker 1: All right, Brian, I'm just gonna come out right now

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00:35:38,160 --> 00:35:42,080
Speaker 1: and say I think this proposal is borderline asinine, and

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00:35:42,120 --> 00:35:45,720
Speaker 1: I think, you know, and anybody that probably has listened

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00:35:45,719 --> 00:35:48,560
Speaker 1: to this show knows that I tend to fall, you know,

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00:35:48,680 --> 00:35:51,520
Speaker 1: on the conservative side of the aisle. But you know,

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00:35:51,680 --> 00:35:54,680
Speaker 1: like anything in life, let's take this down to running

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00:35:54,680 --> 00:35:59,440
Speaker 1: a family budget. Whether we have disagreements and tax policy

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00:35:59,600 --> 00:36:02,560
Speaker 1: or where revenue comes from, at the end of the day,

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00:36:02,719 --> 00:36:04,719
Speaker 1: we got to look at what are the things that

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00:36:04,760 --> 00:36:08,160
Speaker 1: are important to pay for in our society, and how

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00:36:08,200 --> 00:36:11,080
Speaker 1: are we going to pay for them? And where's the

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00:36:11,080 --> 00:36:14,480
Speaker 1: tax money going to come from? And I recognize that politicians,

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00:36:14,920 --> 00:36:17,200
Speaker 1: you know, want to get votes and you know, throw

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00:36:17,280 --> 00:36:20,560
Speaker 1: bombs around here and and and shake things up. But

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00:36:20,719 --> 00:36:22,759
Speaker 1: you know, Brian, I I look at my I just

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00:36:22,760 --> 00:36:25,000
Speaker 1: looked at my property tax bill here. I live in

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00:36:25,040 --> 00:36:29,040
Speaker 1: the city of Cincinnati. The vast majority of that property

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00:36:29,080 --> 00:36:32,160
Speaker 1: tax bill goes to pay for the local school system.

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00:36:32,560 --> 00:36:36,279
Speaker 1: So if you eliminate that all together in one fell

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00:36:36,360 --> 00:36:41,880
Speaker 1: scoop with no other policy prescriptions at all, you're basically

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00:36:41,920 --> 00:36:46,040
Speaker 1: putting the public school system out of business overnight. And

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00:36:46,040 --> 00:36:50,520
Speaker 1: and that just causes massive disruption to so many people.

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00:36:50,719 --> 00:36:55,160
Speaker 1: I think it's irresponsible. I'd rather see these people get together,

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00:36:55,360 --> 00:36:58,680
Speaker 1: which never happens, and just say, look, let's let's even

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00:36:58,719 --> 00:37:01,040
Speaker 1: though we're not going to agree on every let's look

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00:37:01,080 --> 00:37:03,320
Speaker 1: at the things that are important to pay for. And

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00:37:03,600 --> 00:37:05,520
Speaker 1: if we think we could come up with a fairer

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00:37:06,040 --> 00:37:09,880
Speaker 1: tax distribution strategy to pay for it, great, But just

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00:37:10,040 --> 00:37:13,479
Speaker 1: you know, throwing these bombs out here to totally disrupt things,

710
00:37:13,680 --> 00:37:14,879
Speaker 1: I think is irresponsible.

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00:37:14,960 --> 00:37:17,560
Speaker 4: Yeah, I made the mistake of reading some comments on

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00:37:17,600 --> 00:37:19,960
Speaker 4: social media, not just the article, but the comments.

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00:37:20,000 --> 00:37:21,839
Speaker 3: And this is something I promised myself I.

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00:37:21,800 --> 00:37:23,719
Speaker 4: Would rarely do because it just gets me worked up.

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00:37:23,719 --> 00:37:26,840
Speaker 4: But anyway, the original poster of this it was the

716
00:37:26,880 --> 00:37:29,799
Speaker 4: same story. The original poster wait because somebody said, well,

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00:37:29,800 --> 00:37:31,239
Speaker 4: how do you plan on paying for if you want

718
00:37:31,239 --> 00:37:33,200
Speaker 4: property taxes gone, how do you plan on paying for

719
00:37:33,239 --> 00:37:35,759
Speaker 4: all these services that we need? And his answer was

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00:37:35,880 --> 00:37:37,960
Speaker 4: ridiculous and one of the stupidest things I've ever read

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00:37:37,960 --> 00:37:40,160
Speaker 4: on the internet. That's not my problem. I just want

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00:37:40,200 --> 00:37:42,279
Speaker 4: to get rid of property taxes. The smart people can

723
00:37:42,280 --> 00:37:45,360
Speaker 4: figure all that out. That's how asinine and stupid these concepts,

724
00:37:45,400 --> 00:37:48,040
Speaker 4: truly are. Not that we shouldn't be looking to make

725
00:37:48,080 --> 00:37:50,600
Speaker 4: sure that we can afford ourselves. But at the end

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00:37:50,640 --> 00:37:53,120
Speaker 4: of the day, these the needs for the things that

727
00:37:53,160 --> 00:37:55,480
Speaker 4: property taxes cover are not going to go away. So

728
00:37:55,520 --> 00:37:58,200
Speaker 4: we need a better plan than simply throwing infantile temper

729
00:37:58,280 --> 00:38:00,000
Speaker 4: tantrums to say I don't want to pay tax.

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Speaker 3: That's not going to get us anywhere.

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Speaker 1: Yep, probably enough said on that topic. Believe it or not,

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00:38:07,920 --> 00:38:10,279
Speaker 1: even though it would save me thousands of dollars a year,

733
00:38:10,360 --> 00:38:12,719
Speaker 1: I will vote no on this if this gets put

734
00:38:12,760 --> 00:38:15,240
Speaker 1: in my lap for you know, reasons I've already stated.

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Speaker 1: I mean, we do have a mutual responsibility to our

736
00:38:18,680 --> 00:38:21,880
Speaker 1: fellow citizens in the state and communities in which we

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00:38:21,960 --> 00:38:26,000
Speaker 1: live to take care of one another. So we'll leave

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Speaker 1: it there. Thanks for listening tonight. You've been listening to

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Speaker 1: Simply Money, presented by all Worth Financial on fifty five KRC,

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00:38:31,960 --> 00:38:32,880
Speaker 1: the talk station