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Speaker 1: Sell button pushed to get all the news you need

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Speaker 1: to keep you informed. Fifty five krs the talk station.

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Speaker 2: Tonight, cleaning up a portfolio mess, a somewhat blurred line

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Speaker 2: now between investing and gambling, and your questions get answered.

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Speaker 2: You're listening to Simple Money, presented by all Worth Financial

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Speaker 2: on Bob spond Seller along with Brian James.

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Speaker 3: You've worked hard, you've.

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Speaker 2: Saved and invested, but your portfolio might not be in

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Speaker 2: as good a place as possible, or might be somewhat

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Speaker 2: pack sufficient. Tonight, we're gonna walk through several scenarios or

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Speaker 2: examples of situations we run across from time to time

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Speaker 2: and attempt to clean some of those up with some

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Speaker 2: good advice.

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Speaker 3: Ryan.

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Speaker 2: Let's start off with scenario one, something we'll call the

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Speaker 2: Frankensign Frankenstein portfolio.

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Speaker 3: Too many accounts and not nearly enough strategy.

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Speaker 4: Just like the monster, this portfolio is made out of

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Speaker 4: the parts box, just a bunch of stuff bolted together

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Speaker 4: with really no strategy, no rhyme or reason in indicating

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Speaker 4: why things are there.

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Speaker 3: So this is an investor who has done a pretty

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Speaker 3: good job saving.

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Speaker 4: Obviously, you got to build that parts box somehow, maybe

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Speaker 4: rolled over some four O one k's open diras along

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Speaker 4: the way at tax time. Got a brokerage account here,

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Speaker 4: another brokege account over there, maybe a robo advisor, are

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Speaker 4: going to try that out for a little while, all

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Speaker 4: over the place, really nothing coordinated. The risk here is

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Speaker 4: that your investments are kind of overlapping and a lot

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Speaker 4: of unintentional overexposure because you might have the same thing

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Speaker 4: across all these accounts, and literally zero tax coordination. Because

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Speaker 4: of all these taxable type accounts, somebody has to be

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Speaker 4: paying attention to which one is doing what, or you

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Speaker 4: run the risk of wash sales and when you're trying

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Speaker 4: to tax loss harvest, as well as again redundant dividends

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Speaker 4: and things paying in more than one place, spinning out

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Speaker 4: multiple ten ninety nine, also often paying more and fees

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Speaker 4: or taxes than necessary. So for example, a fee based

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Speaker 4: account if you got that involved in those roboadvisor type accounts,

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Speaker 4: but generally the more that is managed there, the lower

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Speaker 4: that fee goes. So there's not a whole lot of

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Speaker 4: sense in scattering things all over the countryside. So the

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Speaker 4: fix here for this Frankenstein portfolio is to consolidate as

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Speaker 4: you can figure out where where the different accounts are

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Speaker 4: that are similarly titled. All of your I rays can

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Speaker 4: collapse into one, Your roth irays can collapse into one. Jointly,

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Speaker 4: taxable accounts or tax accounts that are individually titled all

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Speaker 4: can be lumped into one. And think about the whole

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Speaker 4: pile holistically, right, boil it down to specific goals, whether

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Speaker 4: that there might be retirement income, perhaps it's legacy planning,

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Speaker 4: or maybe it's just plain growth if you're in that

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Speaker 4: phase of life. Make sure that allocation across all of

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Speaker 4: them is intentional, not just a bunch.

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Speaker 3: Of stuff all smushed together. So Bob tell us about this.

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Speaker 2: There's a huge difference between having a collection of products

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Speaker 2: and having an actual investment and tax strategy. Huge difference.

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Speaker 2: Sometimes people feel like they're diversified. It feels great having

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Speaker 2: things spread out all over, you know, you know what's

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Speaker 2: half acre, but a lot of strategy can be lacking there,

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Speaker 2: and more importantly, a.

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Speaker 3: Lot of opportunity.

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Speaker 2: It's overlooked in those what we'll call Frankenstein portfolios.

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Speaker 3: Didn't mean to interrupt, Brian.

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Speaker 2: Let's move on to scenario number two, which is the

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Speaker 2: opposite of what we just talked about. That cash drag,

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Speaker 2: too much cash and again too little strategy. Talk about

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Speaker 2: what gets people into this cash drag situation.

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Speaker 3: It's usually a windfall, Bob.

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Speaker 4: So maybe somebody sold a business or inherited a lump sum.

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Speaker 4: Those are the two types of things that cause us

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Speaker 4: to receive a big pilot cash most frequently, or perhaps

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Speaker 4: there's lottery winners that kind of thing. These kinds of

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Speaker 4: things do happen to be out there, and oftentimes this

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Speaker 4: money lands in a bank account, which forces somebody to

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Speaker 4: make a decision that's different from my four oh one K,

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Speaker 4: my iras or whatever, where I had to make an

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Speaker 4: investment choice along the way, and that's been set for years,

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Speaker 4: if not decades. Well, is a pilot cast dropped out

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Speaker 4: of the sky. And the feeling that people tend to

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Speaker 4: get is, Okay, I need to protect this. This has

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Speaker 4: to be hoarded. I need to have that never had

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Speaker 4: this much cash in my life. I should sit on it.

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Speaker 4: And that's never going to be the right answer, right that.

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Speaker 4: The right answer is figure out what your needs are.

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Speaker 4: So because the more you have sitting in cash, the

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Speaker 4: more you're going to lose in purchasing power. I frequently

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Speaker 4: run into people who have this pile of cash, and

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Speaker 4: then their first complaint is about inflation, which nobody's happy

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Speaker 4: with inflation at the moment. But if you're consciously sitting

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Speaker 4: on a pile of cash and you're you're aware that

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Speaker 4: inflation is an issue, well, you are literally shooting yourself

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Speaker 4: in the foot because you are actually proactively pursuing the

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Speaker 4: problem that inflation is, which means the cost of things

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Speaker 4: outgrows your money, so you're missing out on market growth.

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Speaker 4: And also this does bring in emotional decision making. I've

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Speaker 4: got this pile of cash and I'm so scared to

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Speaker 4: lose any of it, so I shouldn't invest it.

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Speaker 3: I should just sit on it.

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Speaker 4: And we wind up with five times the amount we

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Speaker 4: actually need and something that is basically an emergency fund.

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Speaker 4: So what's the fix to this, Well, we want to

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Speaker 4: build a plan to redeploy that strategically. That can mean

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Speaker 4: once you've determined what's the right amount I should invest right,

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Speaker 4: and there's almost always things that's screaming for case, maybe

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Speaker 4: it is your emergency fund that has always needed some attention.

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Speaker 4: Figure out what that should be, carve it out. It's

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Speaker 4: perfectly fine for that to stay in cash or better

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Speaker 4: a high yield savings account, and then beyond that, figure

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Speaker 4: out what bills you have come and do over the

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Speaker 4: next twelve to twenty four months. If you're going to

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Speaker 4: have to buy a car, maybe do something to the house,

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Speaker 4: or there's a wedding coming up for a kid something

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Speaker 4: like that, well that's great. Put that in the CD

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Speaker 4: and timement for whatever whatever's left. Beyond that, figure out

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Speaker 4: the rest of it is just long term money. If

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Speaker 4: you can't identify a goal for it, it must therefore

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Speaker 4: be long term. Now you've figured out how much you

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Speaker 4: can invest, and you can decide how you want to

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Speaker 4: enter the market. Dollar cost averaging is a great way

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Speaker 4: if you're super concerned about getting in right before the

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Speaker 4: market takes a dip. Frequently that doesn't happen, so it

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Speaker 4: can be just as successful to go ahead and pull

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Speaker 4: the trigger on it. But again, figure out which job

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Speaker 4: each individual dollar has in there and act accordingly.

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Speaker 3: All right, let's talk about a third scenario.

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Speaker 2: When DYI turns into so os the do it yourself

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Speaker 2: for and we run into these kind of folks you know,

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Speaker 2: I won't say often, but once in a while, Brian

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Speaker 2: folks that have been managing their own money, maybe for decades,

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Speaker 2: and they've done well. They've stayed disciplined, they've stayed in

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Speaker 2: the market. Market's done well. We talk about that all

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Speaker 2: the time. But now the portfolio is a bit more complex.

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Speaker 2: Maybe you're nearing retirement, maybe you're staring at rmds coming

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Speaker 2: up missing out, or don't know how to properly evaluate

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Speaker 2: roth conversions. You know, sometimes these dy folks have zero

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Speaker 2: state planning considerations in their plan whatsoever. It's no longer

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Speaker 2: just about picking a few good mutual funds. Things have

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Speaker 2: gotten more complex as things have grown.

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Speaker 3: And the risk here is just flat.

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Speaker 2: Out missed planning opportunities, tax inefficiencies, emotional investing, staying tied

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Speaker 2: to things that maybe you inherited or just have owned

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Speaker 2: for forty years. And the fix here is considering at

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Speaker 2: least some professional management, at least a second set of eyes,

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Speaker 2: especially as your wealth grows. Small mistakes or small omissions

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Speaker 2: can get very, very expensive, and a good fiduciary advisor

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Speaker 2: can help you optimize across the board from a tax standpoint,

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Speaker 2: income strategy, charitable get giving, and legacy planning. And Brian,

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Speaker 2: what I want to add here, because I've had several

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Speaker 2: meetings like this over the last couple of years. Folks

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Speaker 2: come into our office or meet with, you know, let's

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Speaker 2: face it, other good fiduciary advisors here in our area,

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Speaker 2: and they come in with the assumption that you won't

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Speaker 2: work with me unless I hand over every penny of

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Speaker 2: my entire net worth, And that's not true. A good

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Speaker 2: fiduciary advisor will will add some of the planning opportunities

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Speaker 2: that we're talking about here and still giving clients the

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Speaker 2: opportunity to still self manage some of the money that

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Speaker 2: they want to continue to manage. And what I always

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Speaker 2: tell people at the beginning of a relationship is, hey,

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Speaker 2: let's date before we get married. Let's let us prove

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Speaker 2: to you, you know, the value add that we can add,

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Speaker 2: you know, to your situation by doing the comprehensive planning.

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Speaker 2: You don't have to hand it all over to us

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Speaker 2: at once. Let us earn our keep over time, and

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Speaker 2: let you be the judge on whether it makes sense

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Speaker 2: to continue to self manage some or all of your money.

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Speaker 2: But a second set of eyes here can really add

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Speaker 2: a ton of value to people's situation.

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Speaker 4: Yeah, and I think going along with what we were

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Speaker 4: talking about earlier with the you know that holistic financial

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Speaker 4: planning approach. And I've had a meeting very recently with

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Speaker 4: somebody who's had a bit of a windfall and there's

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Speaker 4: an enormous amount of money that's kind of dropped out

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Speaker 4: of the sky from a from the sale of a business,

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Speaker 4: and they have never gotten around to doing any financial planning.

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Speaker 4: So all of a sudden, the simple will that they

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Speaker 4: didn't even have isn't enough for their estate plan. But

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Speaker 4: all there's a lot of dollars there that currently are

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Speaker 4: a little bit exposed because there's just nothing in place

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Speaker 4: should one of them get hit by bus. So we're

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Speaker 4: working on that right now. But that's how quickly life

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Speaker 4: is sneaking up on people.

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Speaker 2: Let's let's get into this scenario that i'll call the

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Speaker 2: silent tax leak. You've got dividend paying funds, you know,

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Speaker 2: in taxable accounts. You've got no idea what tax loss

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Speaker 2: harvesting even is, to say nothing of having it deployed

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Speaker 2: in your portfolio. Maybe you're even triggering short term gains

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Speaker 2: without realizing it. And the risk here, obviously is you're

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Speaker 2: giving up more money to Uncle Sam than you need to,

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Speaker 2: not taking advantage of smart tax strategies. So obviously the

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Speaker 2: fix here is revisit your allocation. Put tax inefficient investments

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Speaker 2: in tax sheltered accounts like iras, use things like direct indexing,

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Speaker 2: maybe some municipal bonds or ets to reduce the tax

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Speaker 2: drag on your portfolio. In other words, be intentional about

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Speaker 2: when and what you sell to create the cash flow

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Speaker 2: and income that you need.

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Speaker 3: Yeah, and so here's another one. Let's change the path

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Speaker 3: here a little bit too.

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Speaker 4: So we talked about this a little bit before, inherited

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Speaker 4: wealth and inherited problems. So this is a scenario where

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Speaker 4: you didn't really have any.

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Speaker 3: Control over what you own. It dropped out of the sky.

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Speaker 5: You know.

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Speaker 4: Maybe you've got a portfolio that grandma and grandpa had

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Speaker 4: and they've since passed on, and you've inherited those stocks

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Speaker 4: and those mutual funds and things in kind. Works great

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Speaker 4: for your parents or your grandparents, but it's not what

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Speaker 4: you would have picked. So this is where you got

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Speaker 4: to be kind of careful. People tend to sit on

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Speaker 4: this and they go, well, it's good enough for grandma

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Speaker 4: and grandpa. I'm gonna leave it alone for a little while.

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Speaker 4: And then I'll change it, and then what happens is

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Speaker 4: they'll they'll finally get around a couple of years later,

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Speaker 4: maybe later, maybe longer than that, to figuring out what

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Speaker 4: they want that portfolio look like for themselves. They could

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Speaker 4: have done that years ago when they had just received

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Speaker 4: they step up in cost basis, meaning they could have

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Speaker 4: pulled the trigger to rejigger that portfolio relatively quickly. But

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Speaker 4: now they've waited a few years and there are gains

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Speaker 4: packed into it, and maybe it's a super conservative portfolio

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Speaker 4: that they wouldn't have wanted to own because they are

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Speaker 4: a younger, more growth oriented investor.

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Speaker 3: And that's great, that's fine.

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Speaker 4: But now because they are a little bit of gains,

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Speaker 4: especially with the markets done over the last couple three years,

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Speaker 4: you're gonna have to pay taxes to make that mean

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Speaker 4: you still have a game.

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Speaker 3: More money is just more money.

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Speaker 4: But if that's one thing where I would urge people

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Speaker 4: to move a little more quickly when you inherit in

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Speaker 4: kind a bunch of investments, be thoughtful about earlier on

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Speaker 4: about what you want that to look like. Don't push

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Speaker 4: it out there. Just because it's already invested doesn't mean

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Speaker 4: it was invested for you. It was invested for someone

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Speaker 4: who is not around, and the situation doesn't exist anymore,

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Speaker 4: and if you let it go too long, it may

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Speaker 4: be a little more costly to rejigger it to what

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Speaker 4: you want to see.

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Speaker 2: That's a good segue into the next scenario we want

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Speaker 2: to cover. And Bryan, you and I deal with this

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Speaker 2: all the time, all day every day. You know people

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Speaker 2: that are retiring, but the way their portfolio is constructured,

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Speaker 2: they're still living in the past like they're in their

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Speaker 2: thirties and forties. And here's what we mean by that.

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Speaker 2: A lot of folks, appropriately so, have been all growth

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Speaker 2: all the time in their four oh one k and

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Speaker 2: wealth building and accumulation years for good reason. That's where

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Speaker 2: all the great returns are. And you really don't care

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Speaker 2: about market pullbacks because you don't plan on taking any

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Speaker 2: money out, you know, in the short term, because you're

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Speaker 2: still working.

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Speaker 3: Lo and Behold.

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Speaker 2: These people get ready to retire, and some of them,

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Speaker 2: some of them have the mistaken notion that I can

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Speaker 2: just leave things as they are all growth all the time,

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Speaker 2: and they forget completely about something called sequence of return

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Speaker 2: risk that we talk about all the time on this show.

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Speaker 3: And that's the issue of volatility.

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Speaker 2: Volatility when you start to turn a portfolio into an

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Speaker 2: income stream, that can really draw down your return and

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Speaker 2: draw down your net worth. And it's something you really

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Speaker 2: have to sit down and run numbers and figure out

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Speaker 2: the right strategy from a risk standpoint, and maybe introduce

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Speaker 2: some and we never talk about getting people completely out

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Speaker 2: of growth, you know, but things like bond ladder portfolios

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Speaker 2: or maybe some buffered ETFs something to push in the

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Speaker 2: blow of short term volity. Volatility can really help, you know,

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Speaker 2: a hard somebody that's worked really hard and accumulated a

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Speaker 2: large amount of wealth for years, it can really help

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Speaker 2: them protect that wealth and create the income they need

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Speaker 2: to create at the same time.

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Speaker 3: Here's the all Worth advice.

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Speaker 2: The more complex your financial life becomes, the more important

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Speaker 2: it is to simplify your portfolio. Clarity leads to better decisions,

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Speaker 2: and better decisions lead to much better outcomes. There's a

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Speaker 2: new mortgage idea out there making headlines and it's raising

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Speaker 2: some eyebrows. Plus why one major financial CEO is warning

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Speaker 2: investors about a growing trend that blurs the line between

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Speaker 2: betting and investing.

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Speaker 3: That's all coming up next.

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Speaker 2: You're listening to Simply Money, presented by all Worth Financial

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Speaker 2: on fifty five KRC the Talk Station.

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Speaker 1: The events of the day portle.

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Speaker 4: On five declared War on Chicago are heard every day.

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Speaker 2: Peace deal is closer than every piece fifty five KRC,

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Speaker 2: the Talk Station.

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Speaker 6: All Worth Financial a registered investment advisory firm. Any ideas

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Speaker 6: presented during this program are not intended to provide specific

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Speaker 6: financial advice. You should consult your own financial advisor, tax consultant,

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Speaker 6: or a state planning attorney to conduct your own due diligence.

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Speaker 2: You're listening to Simply Money, presented by all Worth Financial

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Speaker 2: Bob Spondseller along with Brian James. If you can't listen

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Speaker 2: to Simply Money every night, subscribe and get our daily podcasts.

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Speaker 2: Just search Simply Money on the iHeart app or wherever

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Speaker 2: you find your podcast. Bufferdtf's bond Ladders ETF Overlap and

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Speaker 2: Generating Retirement Income with covered Calls, we're answering all of

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Speaker 2: your questions straight ahead of six forty three. A new

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Speaker 2: idea being proposed by President Trump is a fifty year mortgage,

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Speaker 2: and it's starting to gain some attention. The goal here

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Speaker 2: is to make monthly mortgage payments. More affordable, you know,

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Speaker 2: presumably for first time home buyers and folks just trying

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Speaker 2: to get into a home by stretching the loan term

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Speaker 2: from the traditional thirty years out to fifty years. Brian,

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Speaker 2: I've got some opinions on that, but I want to

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Speaker 2: know what you think here. Is this a good idea,

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Speaker 2: bad idea, or is it just all.

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Speaker 3: For more flexibility to focus. I don't like this at all, Bob.

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Speaker 4: I think this is just going to make people do

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Speaker 4: things that they really can't afford.

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Speaker 3: I can't imagine.

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Speaker 4: I mean, and granted, even though I have a fifty

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Speaker 4: year mortgage doesn't mean I have to stay in that

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Speaker 4: house for fifty years. I can always sell it. But

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Speaker 4: here's the problem. The problem is what will I have

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Speaker 4: built up? You know, people don't I don't know what

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Speaker 4: the average time in the house is, but I think

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Speaker 4: it's more like in the ten to twelve year timeframe

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Speaker 4: something like that, before the house gets too small, or

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Speaker 4: it's in the wrong neighborhood, or there's something else wrong

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Speaker 4: with it. So you know, I'm really I'm not a

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Speaker 4: fan of locking this in because remember how alone is amortized.

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Speaker 4: Maybe if they reversed amortized it right, more principal upfront

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Speaker 4: instead of the other way around like it normally works.

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Speaker 4: But you know, it's going to take a very very

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Speaker 4: long time for you to build up. It might take

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Speaker 4: thirty years to build up one hundred thousand dollars worth

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Speaker 4: of equity because of how long and how interest heavy

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Speaker 4: those early payments are going to be. It'll take forever

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Speaker 4: for that seesaw to move in the other direction where

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Speaker 4: you're really truly paying equity. You're paying mostly interest for

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Speaker 4: probably the first fifteen years of that mortgage. This isn't

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Speaker 4: even a third of the timeframe. Not a fan if

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Speaker 4: that wasn't clear.

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Speaker 2: Yeah, it reminds me of you know what what evolved

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Speaker 2: with automobiles, you know, moving from buying a car and

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Speaker 2: paying it off maybe in three years, to just well

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Speaker 2: now we'll lease a car, or we'll stretch out the

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Speaker 2: payments to seven years. And you know, anytime you're get

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Speaker 2: we got to remember we're buying an asset here, We're

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Speaker 2: not buying a monthly payment. But in today's day and age,

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Speaker 2: everything is marketed as a monthly payment. And to your point, Brian,

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Speaker 2: with a fifty year mortgage, it's gonna take you a

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Speaker 2: long time to uh build up any positive equity in

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Speaker 2: that home, and you might as well just rent, you know.

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Speaker 2: And so it'd be interesting to compare the the payment

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Speaker 2: of buying a home with a fifty year mortgage versus

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Speaker 2: just renting a home and see what the difference.

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Speaker 7: Is.

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Speaker 2: But you know, also to your other point, if you

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Speaker 2: get if you have a job change or you gotta

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Speaker 2: you know, transfer and move to a different town, you know,

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Speaker 2: you're gonna you're gonna have to sell that home and

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Speaker 2: you're gonna have to pay that six percent you know,

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Speaker 2: fee to a real estate agent and other costs involved

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Speaker 2: in moving. You know, it's just again the advice here is,

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Speaker 2: don't buy something you can't afford just because someone can

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Speaker 2: make the monthly payment.

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Speaker 4: Look at let me put it. Let me put a

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Speaker 4: dollar amount to that payment real quick. A typical mortgage.

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Speaker 4: Now that might cost twenty three hundred bucks on a

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Speaker 4: on a thirty year. If you move that to a

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Speaker 4: fifty year, you're dropping it to about twenty one hundred dollars.

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Speaker 4: So you're only saving a couple hundred bucks, and you're

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Speaker 4: tacking on an extra couple of decades worth of worth

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Speaker 4: of payments there, So it's.

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Speaker 2: Well and not to you know, harp on this whole story,

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Speaker 2: you know, too long.

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Speaker 3: But let's face it.

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Speaker 2: You know, the banks are going to charge a higher

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Speaker 2: interest rate with a fifty year fixed mortgage than a

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Speaker 2: thirty year fixed more they have to, so they have.

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Speaker 4: They have to protect themselves from from interest rate movements themselves.

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Speaker 4: They're locking themselves into something for half a century and

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Speaker 4: banks are not going to be super excited about doing that.

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Speaker 3: All right. Another story we're following.

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Speaker 2: The CEO of Charles Schwab is sounding the alarm over

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Speaker 2: what he says is the increasing overlap between gambling and

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Speaker 2: investing Brian. At a recent annual RIA or Registered Investment

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Speaker 2: Advisor conference for Schwab Advisors, CEO Rick Worster took the

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Speaker 2: stage and pointed out that younger investors just may not

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Speaker 2: distinguish anymore between placing a bet on a football game

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Speaker 2: or an election outcome versus allocating capital for long term investments.

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Speaker 2: In his own his in his own words and I quote,

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Speaker 2: he said, I just don't want young people in our

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Speaker 2: country to think gambling on a Monday night football game

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Speaker 2: is the same as investing in a stock and bond portfolio.

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Speaker 4: Yeah, and this is being highlighted because a lot of

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Speaker 4: these brokerages brokerage firms out there, especially the newer, flashier ones,

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Speaker 4: are offering these prediction markets, which is basically prop bets

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Speaker 4: on any random is this going to happen? Is this

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Speaker 4: not going to happen type of a thing, And that's

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Speaker 4: not an investment, of course, that is a that's a

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Speaker 4: bet that lasts for a moment in time and it

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Speaker 4: either pays off or a dozen. But these broken firms

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Speaker 4: are making a lot of money off of this, so

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Speaker 4: of course it's going to get more and more obnoxious,

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Speaker 4: you know, and they're they're potentially hopefully using that revenue

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Speaker 4: to build or enhance these investment platforms. So what they're

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Speaker 4: doing ultimately is leveraging these gambling profits into more investment infrastructure.

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Speaker 4: I would hope that's gonna happen. I mean, that's kind

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Speaker 4: of the way it's being pitched. But at the same time,

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Speaker 4: we're the way we're doing this, you know, the the

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Speaker 4: for gamifying investing. Right, If we're just turning this into

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Speaker 4: a you know, a coin toss of in a moment

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Speaker 4: in time, then there's a risk that a lot of

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Speaker 4: people are gonna take what used to be a long term,

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Speaker 4: well constructed portfolio decision and make it more like a bet.

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Speaker 4: I'm gonna put put it this way for just a

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Speaker 4: little bit. If it doesn't work out in six months,

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Speaker 4: I'm gonna change it around. Rather than a disciplined asset allocation,

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Speaker 4: which should be the core of everyone's portfolio. I'm not

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Speaker 4: saying you shouldn't gamble, I'm not saying you shouldn't get

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Speaker 4: into crypto or these speculative type of things, but that's

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Speaker 4: not the core of your portfolio.

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Speaker 3: That is not what you will retire on someday.

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Speaker 2: Yeah, it'll be interesting to see how the SEC governs

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Speaker 2: this whole thing, if they do so at all.

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Speaker 4: Think there's money coming out of the SEC right now? Well,

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Speaker 4: all right, that's a topic for another day.

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Speaker 2: Here's the all Worth adviceiction markets as speculative bets, not

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Speaker 2: serious investments. Real wealth is built through discipline, purpose, and

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Speaker 2: long term strategy. You know, let's face it, you're investing

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Speaker 2: in the long term viability and growth of companies, not

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Speaker 2: just chasing headlines or short term outcomes. Coming up next,

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Speaker 2: how Google makes billions of dollars off of all of

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Speaker 2: us and how we can opt out. You're listening to

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Speaker 2: Simply Money, presented by all Worth Financial on fifty five

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Speaker 2: KRC the Talk station.

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Speaker 1: Some people only hear what they want to hear in

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Speaker 1: the no twenty four hours a day, we only deal

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Speaker 1: in what you need to hear these days.

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Speaker 3: You need to keep an open mind.

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Speaker 1: On fifty five KRC Deed Talkstation.

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Speaker 4: More than a few of our patients have talked to

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Speaker 4: me about iHeartRadio station.

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Speaker 2: You're listening to Simply Money, presented by all Worth Financial

438
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Speaker 2: on Bob Sponsller along with Brian James, joined tonight by

439
00:21:01,160 --> 00:21:06,520
Speaker 2: our good friend, our cybersecurity and technology expert, mister Dave Hatter.

440
00:21:07,080 --> 00:21:09,960
Speaker 3: Dave, thanks as always for carving out some time for

441
00:21:10,080 --> 00:21:10,600
Speaker 3: us tonight.

442
00:21:11,160 --> 00:21:13,760
Speaker 2: And you've got a topic to discuss tonight that I

443
00:21:13,840 --> 00:21:15,480
Speaker 2: think everybody is going.

444
00:21:15,440 --> 00:21:16,399
Speaker 3: To be interested in.

445
00:21:16,880 --> 00:21:20,520
Speaker 2: And it's our good friend Google who's built their entire

446
00:21:20,600 --> 00:21:24,480
Speaker 2: business model to just make billions and billions of dollars

447
00:21:24,560 --> 00:21:27,960
Speaker 2: off of our personal information. And you've got some updates

448
00:21:27,960 --> 00:21:30,360
Speaker 2: here on how to actually opt.

449
00:21:30,200 --> 00:21:32,560
Speaker 3: Out of this whole arrangement. Lay it on as Dave.

450
00:21:33,800 --> 00:21:37,119
Speaker 7: Yeah, So, Google, which is now part of parent company

451
00:21:37,200 --> 00:21:40,639
Speaker 7: Alphabet makes an enormous amount of money off of your data,

452
00:21:40,720 --> 00:21:43,159
Speaker 7: and I'm not saying that's necessarily the various guys. You

453
00:21:43,240 --> 00:21:46,159
Speaker 7: just have to understand the model here. Some people call

454
00:21:46,240 --> 00:21:50,240
Speaker 7: it Savannah capitalism. And the bottom line is, whether it's Google, Meta,

455
00:21:50,320 --> 00:21:54,320
Speaker 7: Facebook's parent company, or other companies that deal primary in

456
00:21:54,400 --> 00:21:57,200
Speaker 7: your data, you are not the customer, you are the product.

457
00:21:57,320 --> 00:21:57,520
Speaker 5: Right.

458
00:21:57,560 --> 00:22:00,480
Speaker 7: If you're not paying with money, you're paying with data. Now,

459
00:22:00,560 --> 00:22:03,520
Speaker 7: again I'm not saying it's necessarily nefarius. You just need

460
00:22:03,560 --> 00:22:05,480
Speaker 7: to understand the trade off. And the good news is

461
00:22:06,040 --> 00:22:08,320
Speaker 7: there are privacy certainly options out there. I'll get to

462
00:22:08,400 --> 00:22:10,119
Speaker 7: that in a minute. But to give you some scale

463
00:22:10,160 --> 00:22:13,000
Speaker 7: of this, so Wired magazine did a really good video

464
00:22:13,080 --> 00:22:15,920
Speaker 7: that explains this in a lot of detail, and they

465
00:22:16,000 --> 00:22:18,479
Speaker 7: show some stats in here and says in twenty twenty four,

466
00:22:18,600 --> 00:22:22,320
Speaker 7: Google made nearly seventy five percent of their revenue off

467
00:22:22,359 --> 00:22:25,760
Speaker 7: of your data, things like YouTube and the videos you watch,

468
00:22:26,560 --> 00:22:30,560
Speaker 7: the Google Chrome, the Google search engine, Google advertised, all

469
00:22:30,600 --> 00:22:33,479
Speaker 7: that sort of stuff. These sell other products like Android

470
00:22:33,560 --> 00:22:36,520
Speaker 7: phones and such, but roughly seventy five percent of their

471
00:22:36,600 --> 00:22:41,600
Speaker 7: revenue is coming from your data. And you know they're

472
00:22:41,720 --> 00:22:45,639
Speaker 7: not looking to protect your privacy despite and you know,

473
00:22:45,720 --> 00:22:48,320
Speaker 7: wanted to side by side comparison that I encourage people

474
00:22:48,359 --> 00:22:50,359
Speaker 7: to do this all the time. If you go to

475
00:22:50,400 --> 00:22:52,720
Speaker 7: the Apple App store. You know, Apple a few years

476
00:22:52,760 --> 00:22:54,760
Speaker 7: ago caused a big shake up in the industry because

477
00:22:54,840 --> 00:22:57,679
Speaker 7: they started requiring people to want to deploy apps like

478
00:22:57,800 --> 00:23:00,320
Speaker 7: the Gmail app for your phone from Google for its sample,

479
00:23:00,920 --> 00:23:03,880
Speaker 7: or the Google Chrome browser or the Brave browser. They

480
00:23:03,960 --> 00:23:07,840
Speaker 7: made developers start putting it together what they call a

481
00:23:07,880 --> 00:23:10,200
Speaker 7: privacy label. Think of it like the nutrition label on

482
00:23:10,280 --> 00:23:12,760
Speaker 7: a can store that tells you the data they want

483
00:23:12,760 --> 00:23:15,399
Speaker 7: to collect. And I just encourage you go take a

484
00:23:15,400 --> 00:23:20,040
Speaker 7: look at the Google Gmail app or the Chrome app

485
00:23:20,320 --> 00:23:22,639
Speaker 7: versus like the Brave browser and see the amount of

486
00:23:22,720 --> 00:23:25,360
Speaker 7: data it collects and then ask yourself, well, why does

487
00:23:25,359 --> 00:23:28,639
Speaker 7: it need all of this incredibly sensitive and granted or

488
00:23:28,760 --> 00:23:31,320
Speaker 7: data about me to do X, y or Z. Now

489
00:23:31,320 --> 00:23:34,360
Speaker 7: how to say this ticktok. There's plenty of egregious examples

490
00:23:34,400 --> 00:23:35,639
Speaker 7: out there. That's one of the reasons why I'm not

491
00:23:35,640 --> 00:23:38,480
Speaker 7: a kiktok fan. But when you look at these things,

492
00:23:38,520 --> 00:23:41,280
Speaker 7: it starts to paint a real clear picture that you know,

493
00:23:41,440 --> 00:23:44,320
Speaker 7: you are their product. They're making enormous amounts of money

494
00:23:44,359 --> 00:23:46,639
Speaker 7: off of you. And my real issue with this is

495
00:23:46,680 --> 00:23:48,960
Speaker 7: not so much the money or the data, even if

496
00:23:49,000 --> 00:23:52,679
Speaker 7: it's how that data can be sold, used downstream and

497
00:23:52,760 --> 00:23:55,360
Speaker 7: out bet every one of you, and probably both of you,

498
00:23:55,440 --> 00:23:58,560
Speaker 7: have recently gotten a letter telling your data's been breached somewhere.

499
00:23:58,920 --> 00:24:01,520
Speaker 7: I just got my latest one of about nine now

500
00:24:01,560 --> 00:24:05,040
Speaker 7: from our good friends of TransUnion. You know, do I

501
00:24:05,080 --> 00:24:07,920
Speaker 7: do business with TransUnion, Not directly, but they're a credit

502
00:24:08,040 --> 00:24:10,080
Speaker 7: union or a credit bureau, so they have all my

503
00:24:10,160 --> 00:24:13,240
Speaker 7: data already, and now it's been leaked yet again. And

504
00:24:13,280 --> 00:24:15,320
Speaker 7: this is not helpful to you as a consumer. So

505
00:24:15,840 --> 00:24:19,879
Speaker 7: the point is, rather than continue to feed the monster

506
00:24:20,160 --> 00:24:22,639
Speaker 7: of these giant companies, the Metas of the world, the

507
00:24:22,640 --> 00:24:24,560
Speaker 7: Googles of the world, because again this isn't just a

508
00:24:24,600 --> 00:24:29,000
Speaker 7: Google slash alphabet issue. There are privately friendly options you

509
00:24:29,000 --> 00:24:32,080
Speaker 7: can use in many cases at low cost or free

510
00:24:32,480 --> 00:24:36,679
Speaker 7: that will provide I would argue functional parity, the same capabilities,

511
00:24:37,119 --> 00:24:40,800
Speaker 7: but are much more focused on your privacy. And now

512
00:24:40,840 --> 00:24:43,000
Speaker 7: you guys know I'm atential hack guy, but I encourage

513
00:24:43,040 --> 00:24:45,040
Speaker 7: every one of your listeners to start to think about

514
00:24:45,040 --> 00:24:48,160
Speaker 7: how can you disconnect from the machine and how can

515
00:24:48,240 --> 00:24:50,960
Speaker 7: you start to focus on limiting the amount of data

516
00:24:51,160 --> 00:24:54,440
Speaker 7: about you that's out there and still get the services

517
00:24:54,440 --> 00:24:55,840
Speaker 7: and features and functions you need.

518
00:24:56,320 --> 00:24:57,399
Speaker 3: Hey, Dave, so's so.

519
00:24:57,480 --> 00:24:59,080
Speaker 4: I think we're talking to a lot of people who

520
00:24:59,119 --> 00:25:01,480
Speaker 4: probably fell in love Google twenty five years ago when

521
00:25:01,520 --> 00:25:03,640
Speaker 4: it became so much better and when it was when

522
00:25:03,680 --> 00:25:05,400
Speaker 4: it became such an easy way to search and get

523
00:25:05,400 --> 00:25:07,200
Speaker 4: the information that you need, and then that kind of

524
00:25:07,240 --> 00:25:09,679
Speaker 4: sucked everybody into the vortex here a little bit. What

525
00:25:09,760 --> 00:25:12,280
Speaker 4: if if you've been doing that for years and your

526
00:25:12,359 --> 00:25:15,119
Speaker 4: data is all as out there, can you do anything

527
00:25:15,160 --> 00:25:15,760
Speaker 4: to unwine that.

528
00:25:15,840 --> 00:25:18,000
Speaker 3: I remember, you know, discussions of the right to be

529
00:25:18,080 --> 00:25:19,720
Speaker 3: forgotten and all that kind of thing. Is that a

530
00:25:19,760 --> 00:25:20,720
Speaker 3: thing in the United States?

531
00:25:20,720 --> 00:25:23,040
Speaker 4: Can I go back and tell them to forget everything

532
00:25:23,080 --> 00:25:24,400
Speaker 4: I've ever told them?

533
00:25:25,119 --> 00:25:27,639
Speaker 7: Well, sort of, it's a good question. Like in Europe,

534
00:25:27,720 --> 00:25:30,920
Speaker 7: you've got the GDPR, the General Data Protection Regulation that's

535
00:25:30,960 --> 00:25:35,119
Speaker 7: got some very stringent privacy regulation. There's a hodgepodge quilt

536
00:25:35,240 --> 00:25:37,840
Speaker 7: of laws in the US. About nineteen states have some

537
00:25:37,960 --> 00:25:41,639
Speaker 7: kind of law. Californias is very stringent relatively speaking, and

538
00:25:41,720 --> 00:25:45,879
Speaker 7: it's tired of similar to the GDPR. You know, I

539
00:25:46,000 --> 00:25:48,080
Speaker 7: like to drive my good friends in Ohio to you know,

540
00:25:48,119 --> 00:25:50,640
Speaker 7: I live in Kentucky. Kentucky actually doesn't consumed the data

541
00:25:50,680 --> 00:25:53,639
Speaker 7: privacy law that goes into effect in January. It's not great,

542
00:25:53,720 --> 00:25:56,320
Speaker 7: but it's a lot better than nothing, which, unless something

543
00:25:56,320 --> 00:25:59,000
Speaker 7: has changed recently, is what you have in Ohio. So,

544
00:25:59,080 --> 00:26:00,960
Speaker 7: believe it or not, Kentucky can actually be to hire

545
00:26:00,960 --> 00:26:03,120
Speaker 7: to serve the useful, probably for the first time ever.

546
00:26:03,680 --> 00:26:06,800
Speaker 7: But that said, you know, it is hard. I mean,

547
00:26:06,840 --> 00:26:09,160
Speaker 7: you know, once your data is in any electronic form,

548
00:26:09,280 --> 00:26:12,359
Speaker 7: it's difficult to scrub. You can go around individually to

549
00:26:12,440 --> 00:26:16,119
Speaker 7: different companies and like gleat your browsing history, delete the

550
00:26:16,200 --> 00:26:18,760
Speaker 7: you know, the location tracking of of the maps apps

551
00:26:18,760 --> 00:26:20,919
Speaker 7: that you're using. You know, Google has the capability to

552
00:26:20,920 --> 00:26:22,840
Speaker 7: get in and see this stuff and turn it off,

553
00:26:23,080 --> 00:26:25,240
Speaker 7: which I have done, by the way, and I recommend

554
00:26:25,280 --> 00:26:28,520
Speaker 7: and in general I try to avoid using anything from Google.

555
00:26:28,880 --> 00:26:31,119
Speaker 7: You know your point though, I mean, Google is almost

556
00:26:31,119 --> 00:26:33,280
Speaker 7: synonymous with search. People don't say I'm going to go

557
00:26:33,320 --> 00:26:35,760
Speaker 7: search the internet or search the web. It's him going

558
00:26:35,760 --> 00:26:38,720
Speaker 7: to Google. Something I had literally become a verb. Despite

559
00:26:38,720 --> 00:26:41,600
Speaker 7: the fact that there are plenty of other more privacy

560
00:26:41,640 --> 00:26:44,879
Speaker 7: friendly search engines out there, like the Brave Start, the

561
00:26:44,920 --> 00:26:47,320
Speaker 7: Brave search engine, or the start page search engine. So

562
00:26:47,359 --> 00:26:50,240
Speaker 7: there there are many options, right, and again I'll come

563
00:26:50,240 --> 00:26:51,960
Speaker 7: back to those in a second. But to your point,

564
00:26:52,640 --> 00:26:55,680
Speaker 7: you know, there's no right to be forgotten per se.

565
00:26:55,800 --> 00:26:57,440
Speaker 7: Or you can just go out and say erase these

566
00:26:57,480 --> 00:26:59,800
Speaker 7: from all of this stuff. You can do it individually,

567
00:27:00,160 --> 00:27:03,320
Speaker 7: super time consuming, and in most cases they use dark

568
00:27:03,320 --> 00:27:05,880
Speaker 7: patterns to make it really difficult for you to even

569
00:27:05,920 --> 00:27:09,040
Speaker 7: figure out how to ask for it and then actually

570
00:27:09,080 --> 00:27:12,800
Speaker 7: say delete my stuff. There are private companies that claim

571
00:27:12,840 --> 00:27:14,560
Speaker 7: to do this. You pay them and they go out

572
00:27:14,600 --> 00:27:18,600
Speaker 7: and erase your data. Know about that. Again, it's not

573
00:27:18,880 --> 00:27:22,199
Speaker 7: in these companies interests to make it easy for you

574
00:27:22,280 --> 00:27:25,199
Speaker 7: to erase your data and or to stop the tracking,

575
00:27:25,280 --> 00:27:28,560
Speaker 7: because again that's where the bulk of their revenue comes from.

576
00:27:29,000 --> 00:27:31,520
Speaker 2: All right, Dave, In the about a minute and a

577
00:27:31,520 --> 00:27:33,399
Speaker 2: half we got left, I'm going to ask a self

578
00:27:33,400 --> 00:27:37,119
Speaker 2: serving question here, just for my own gratification. I started

579
00:27:37,160 --> 00:27:40,800
Speaker 2: about a year ago using a search engine called Duck

580
00:27:40,920 --> 00:27:43,679
Speaker 2: Duck Go. For the reasons that you've already stated is

581
00:27:43,720 --> 00:27:45,919
Speaker 2: that one of the good ones does that keep me

582
00:27:46,000 --> 00:27:46,720
Speaker 2: more secure?

583
00:27:49,240 --> 00:27:52,560
Speaker 7: Let's separate privacy and security very briefly, right, they're not

584
00:27:52,600 --> 00:27:53,480
Speaker 7: the same thing.

585
00:27:53,400 --> 00:27:56,119
Speaker 2: Privacy, privacy, I meant to say privacy.

586
00:27:57,880 --> 00:28:01,680
Speaker 7: Yeah, it's better. You know, there are so I put

587
00:28:01,720 --> 00:28:04,359
Speaker 7: together list, guys, and you know, if folks follow me

588
00:28:04,400 --> 00:28:06,800
Speaker 7: on social media LinkedIn or x in particular, I'm always

589
00:28:06,800 --> 00:28:09,680
Speaker 7: talking about this stuff, trying to share information. I put

590
00:28:09,720 --> 00:28:13,560
Speaker 7: a blog post together on LinkedIn. You can easily find it.

591
00:28:13,560 --> 00:28:16,919
Speaker 7: It's called my Privacy Friendly Personal Technology Stack, and I

592
00:28:16,920 --> 00:28:18,760
Speaker 7: send you guys a link to it. I'll post it

593
00:28:18,760 --> 00:28:20,639
Speaker 7: with the show notes and so forth tonight when you

594
00:28:20,680 --> 00:28:23,320
Speaker 7: guys put this out. But I've got a list of

595
00:28:23,359 --> 00:28:26,520
Speaker 7: all of the tools I use from a personal standpoint, right,

596
00:28:26,600 --> 00:28:31,080
Speaker 7: not business personal like I use proton email, I for

597
00:28:31,200 --> 00:28:33,720
Speaker 7: search engine, I like Brave Best, dut dot Go is

598
00:28:33,760 --> 00:28:37,679
Speaker 7: a better choice than Google than Google. Start page, and

599
00:28:37,720 --> 00:28:39,840
Speaker 7: you'll see in my notes here on the page anything

600
00:28:39,840 --> 00:28:42,640
Speaker 7: except Google web browser. You know, I use the Brave

601
00:28:42,680 --> 00:28:45,520
Speaker 7: browser or the Safari browser. I don't use Google Chrome.

602
00:28:46,000 --> 00:28:49,160
Speaker 7: So I've got a whole list of things here, my recommendations,

603
00:28:49,240 --> 00:28:51,760
Speaker 7: my personal choices. I encourage people to check it out

604
00:28:51,760 --> 00:28:52,760
Speaker 7: and start to make the ship.

605
00:28:53,400 --> 00:28:55,600
Speaker 2: All right, this is great, you've already given us the

606
00:28:55,640 --> 00:28:59,120
Speaker 2: all worth advice for this segment. Follow Dave Hatter on

607
00:28:59,520 --> 00:29:04,080
Speaker 2: x or LinkedIn and take advantage of these free resources.

608
00:29:03,400 --> 00:29:05,920
Speaker 3: He's putting out to everybody. Thanks so much, Dave.

609
00:29:06,480 --> 00:29:09,080
Speaker 2: You're listening to Simply Money, presented by all Worth Financial

610
00:29:09,080 --> 00:29:11,720
Speaker 2: on fifty five KRC, the talk station.

611
00:29:12,520 --> 00:29:15,040
Speaker 3: The Shumer shutdown, Trump shutdown.

612
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Speaker 1: The Democrats will own it.

613
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Speaker 3: Portland is on fire.

614
00:29:17,880 --> 00:29:20,240
Speaker 1: The Ice facility has been under siege.

615
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Speaker 3: The president's declared war on Chicago is a disaster.

616
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Speaker 2: We deserve to be safe in our communities again.

617
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Speaker 3: Thank America, Trump again.

618
00:29:28,680 --> 00:29:30,720
Speaker 1: Israel and Hamas a peace deal is closer than ever.

619
00:29:30,680 --> 00:29:33,320
Speaker 3: Kissing about every nation working on this deal.

620
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Speaker 4: The events of the day clear, transparent information are heard.

621
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Speaker 3: Every day in real time.

622
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Speaker 1: Fifty five KRC The talk station. Share Facts.

623
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Speaker 3: Credit unions are welcome to here. Why do we keep

624
00:29:45,400 --> 00:29:47,840
Speaker 3: letting thousands of people come over and do nothing about it?

625
00:29:48,120 --> 00:29:49,560
Speaker 3: My family's safety is at risk.

626
00:29:49,720 --> 00:29:52,360
Speaker 1: Fifty five KRC, the talk station.

627
00:29:58,680 --> 00:30:01,960
Speaker 2: You're listening to Simply Money all these financial I'm bobsun

628
00:30:02,040 --> 00:30:03,640
Speaker 2: seller along with Brian James.

629
00:30:04,000 --> 00:30:05,760
Speaker 3: Do you have a financial question you'd like for us

630
00:30:05,800 --> 00:30:08,000
Speaker 3: to answer. There's a red button you can click while

631
00:30:08,000 --> 00:30:09,000
Speaker 3: you're listening. To the show.

632
00:30:09,080 --> 00:30:12,080
Speaker 2: If you're listening to the show on the iHeart app,

633
00:30:12,200 --> 00:30:15,400
Speaker 2: simply record your question and it will come straight to us.

634
00:30:16,040 --> 00:30:19,120
Speaker 2: All right, Brian get ready for Chris in New Party says,

635
00:30:19,160 --> 00:30:22,760
Speaker 2: we built a solid ETF portfolio, but our advisor mentioned

636
00:30:22,800 --> 00:30:26,800
Speaker 2: something called tax drag from dividends and rebalancing. How do

637
00:30:26,840 --> 00:30:30,240
Speaker 2: you measure that and decide if it's even something significant

638
00:30:30,280 --> 00:30:31,240
Speaker 2: to worry about?

639
00:30:31,560 --> 00:30:34,920
Speaker 4: Tax drag that can be known as the silent performance killer.

640
00:30:34,960 --> 00:30:37,400
Speaker 4: So what we're referring to here is exchange traded funds

641
00:30:37,600 --> 00:30:39,680
Speaker 4: that are held in a taxable account like a joint

642
00:30:39,680 --> 00:30:42,200
Speaker 4: account or a trust or individual. We're not referring to

643
00:30:42,280 --> 00:30:45,200
Speaker 4: iras roth IRA's four oh one ks that are all

644
00:30:45,240 --> 00:30:45,880
Speaker 4: tax deferred.

645
00:30:45,920 --> 00:30:47,600
Speaker 3: So this this this stuff won't have as much of

646
00:30:47,600 --> 00:30:48,080
Speaker 3: an impact.

647
00:30:48,760 --> 00:30:51,560
Speaker 4: But what's happening here is if you're getting a ten

648
00:30:51,680 --> 00:30:54,480
Speaker 4: ninety nine div or a ten ninety nine b off

649
00:30:54,520 --> 00:30:56,800
Speaker 4: your investments, and you likely are, because this is the

650
00:30:56,800 --> 00:30:59,600
Speaker 4: taxable activity that's happening. Each of those investments in their

651
00:30:59,600 --> 00:31:01,960
Speaker 4: spitz out some kind of a dividend, Maybe you sell

652
00:31:02,000 --> 00:31:04,479
Speaker 4: something at a profit or something like that that passes

653
00:31:04,520 --> 00:31:06,080
Speaker 4: through your ten ninety nine and you've got to pay

654
00:31:06,080 --> 00:31:08,600
Speaker 4: taxes on it. When you add up what you're shelling

655
00:31:08,640 --> 00:31:11,600
Speaker 4: out over from taxes, that can be a half a

656
00:31:11,600 --> 00:31:14,000
Speaker 4: percent of sometimes one and a half percent for a year.

657
00:31:14,000 --> 00:31:15,720
Speaker 4: And again I'm not talking about the taxes. I'm talking

658
00:31:15,720 --> 00:31:18,200
Speaker 4: about the hit that your performance takes. Because you're paying

659
00:31:18,240 --> 00:31:20,280
Speaker 4: taxes through your ten ninety nine. You're not going to

660
00:31:20,320 --> 00:31:22,880
Speaker 4: see this on your on your performance reports or anything

661
00:31:22,920 --> 00:31:25,080
Speaker 4: like that. You would have to really do some heavy duty,

662
00:31:25,120 --> 00:31:27,920
Speaker 4: serious math pulling in your own ten forty, which is

663
00:31:27,960 --> 00:31:30,920
Speaker 4: going to be different from everybody based on your own situation.

664
00:31:31,240 --> 00:31:33,560
Speaker 4: So for example, if that taxable account is earning maybe

665
00:31:33,600 --> 00:31:36,440
Speaker 4: six percent a year, but you're losing one percent or

666
00:31:36,480 --> 00:31:39,640
Speaker 4: more to taxes, that is a seventeen percent reduction in

667
00:31:39,680 --> 00:31:41,640
Speaker 4: net growth. We're not talking about a one percent reduction

668
00:31:41,880 --> 00:31:44,640
Speaker 4: seventeen percent, it's one percent out of six. So a

669
00:31:44,720 --> 00:31:47,840
Speaker 4: high yield ETFs or frequent rebalancing can push you into

670
00:31:47,880 --> 00:31:50,720
Speaker 4: these higher brackets you know, and trigger some state taxes too,

671
00:31:50,760 --> 00:31:52,560
Speaker 4: So make sure you know. We talk all the time

672
00:31:52,560 --> 00:31:55,760
Speaker 4: about asset location. If you've you've got types of investments

673
00:31:55,800 --> 00:31:58,920
Speaker 4: that are spitting out a lot of activity taxable activity,

674
00:31:58,920 --> 00:32:01,600
Speaker 4: you might want to sell out of the taxable account,

675
00:32:01,640 --> 00:32:02,960
Speaker 4: and if you really love it, go buy it in

676
00:32:03,000 --> 00:32:05,640
Speaker 4: an IRA or a rothe where that's not.

677
00:32:05,600 --> 00:32:06,160
Speaker 3: Going to happen.

678
00:32:06,200 --> 00:32:07,600
Speaker 4: Oh and for the ones that you do have in

679
00:32:07,600 --> 00:32:10,880
Speaker 4: those tax and those joint taxable accounts, use tax managed

680
00:32:10,920 --> 00:32:13,600
Speaker 4: ETFs or index funds that are going to minimize the

681
00:32:13,640 --> 00:32:17,200
Speaker 4: activity that causes that pain on your ten forty tax form.

682
00:32:17,520 --> 00:32:19,840
Speaker 4: All right, let's move on to Frank and Marryman. Frank

683
00:32:19,920 --> 00:32:22,520
Speaker 4: is I also got an ETF question. He says, they've

684
00:32:22,560 --> 00:32:24,720
Speaker 4: been pitched some buffer to et there's that p word, Bob,

685
00:32:24,760 --> 00:32:27,720
Speaker 4: we love. We've been pitched buffer to ETFs that limit

686
00:32:27,840 --> 00:32:30,080
Speaker 4: downside but cap the upside. What's the best way to

687
00:32:30,120 --> 00:32:33,200
Speaker 4: analyze whether this trade off is worth it protection versus growth?

688
00:32:34,080 --> 00:32:36,400
Speaker 3: Well, a couple of ways. I want to answer this question, Frank.

689
00:32:36,480 --> 00:32:38,440
Speaker 2: First of all, I think you should sit down with

690
00:32:38,480 --> 00:32:42,840
Speaker 2: your advisor, assuming you have one, and really quantify, you know,

691
00:32:42,880 --> 00:32:45,880
Speaker 2: with you and your spouse if you're married, what your

692
00:32:45,920 --> 00:32:50,320
Speaker 2: overall risk tolerance is, both from an emotional standpoint and

693
00:32:50,400 --> 00:32:53,200
Speaker 2: also you know what's going to work for your financial plan,

694
00:32:53,320 --> 00:32:55,720
Speaker 2: and those might be two different answers.

695
00:32:55,760 --> 00:32:57,760
Speaker 3: And then you've got to reconcile those two answers.

696
00:32:57,760 --> 00:33:00,880
Speaker 2: So there's an economic side of what your portfolio needs

697
00:33:00,880 --> 00:33:02,840
Speaker 2: to return and what it can sustain in the way

698
00:33:02,880 --> 00:33:06,840
Speaker 2: of downside volatility, and then there's that emotional component. You know,

699
00:33:06,920 --> 00:33:09,640
Speaker 2: how bad can things get before we pull the ripcord

700
00:33:09,800 --> 00:33:12,080
Speaker 2: and are prone to move to cash, which is never

701
00:33:12,120 --> 00:33:14,760
Speaker 2: a good idea. So that's the first thing. Then when

702
00:33:14,760 --> 00:33:18,360
Speaker 2: you get into evaluating each buffert etf you're going to

703
00:33:18,400 --> 00:33:22,040
Speaker 2: see the upside and the downside protection, and you and

704
00:33:22,080 --> 00:33:25,040
Speaker 2: your advisor can determine whether it's a good deal or not.

705
00:33:26,120 --> 00:33:29,640
Speaker 2: These things are built, you know, to have different caps

706
00:33:29,680 --> 00:33:34,120
Speaker 2: and different downside buffers. And again once you factor in

707
00:33:34,160 --> 00:33:37,280
Speaker 2: your overall risk profile and your time horizon for how

708
00:33:37,320 --> 00:33:40,200
Speaker 2: long you want that money invested. Usually those are a

709
00:33:40,200 --> 00:33:42,800
Speaker 2: couple steps to take to arrive at whether these things

710
00:33:42,920 --> 00:33:45,960
Speaker 2: make sense at all in your portfolio, how much of

711
00:33:46,000 --> 00:33:49,040
Speaker 2: your portfolio should be in them, and then what type

712
00:33:49,040 --> 00:33:51,840
Speaker 2: of product or strategy makes the most sense for you?

713
00:33:52,600 --> 00:33:55,400
Speaker 2: All right, Tim and Westchester says, we've built a bond

714
00:33:55,480 --> 00:33:57,800
Speaker 2: ladder that pays out of the next five years, but

715
00:33:57,840 --> 00:34:02,120
Speaker 2: if rates drop, should we extend now? Meaning the maturity

716
00:34:02,120 --> 00:34:04,560
Speaker 2: of those bonds are wait for the curve to shift.

717
00:34:05,720 --> 00:34:07,440
Speaker 3: So let let's use a real example for this.

718
00:34:07,520 --> 00:34:10,400
Speaker 4: So suppose you've got a five hundred thousand dollars bond ladder,

719
00:34:10,440 --> 00:34:12,040
Speaker 4: and right for those who may not know what that is,

720
00:34:12,360 --> 00:34:14,719
Speaker 4: let's pretend we've got one hundred thousand dollars coming due

721
00:34:14,760 --> 00:34:17,279
Speaker 4: in five different bonds. One the first one is a

722
00:34:17,280 --> 00:34:19,480
Speaker 4: one year bond, second is a two year bond, three, four,

723
00:34:19,480 --> 00:34:21,200
Speaker 4: and five. So we've always got money come and do

724
00:34:21,520 --> 00:34:24,719
Speaker 4: that will be reinvested on whatever the interest rates at

725
00:34:24,719 --> 00:34:27,520
Speaker 4: the time are, So you know, maybe maybe those aren't

726
00:34:27,520 --> 00:34:29,560
Speaker 4: about four point seven percent on average. I think that's

727
00:34:29,600 --> 00:34:31,560
Speaker 4: a pretty comfortable average for where we are right now

728
00:34:31,560 --> 00:34:33,880
Speaker 4: for a five year ladder. So if the Fed starts

729
00:34:33,880 --> 00:34:37,160
Speaker 4: cutting next year and those rates drop one full percentage point,

730
00:34:37,280 --> 00:34:39,040
Speaker 4: then the new bonds you're going to buy when the

731
00:34:39,080 --> 00:34:41,160
Speaker 4: short ones mature are going to be down to three

732
00:34:41,160 --> 00:34:44,120
Speaker 4: point seven percent. So on a one hundred thousand dollars investment,

733
00:34:44,120 --> 00:34:47,120
Speaker 4: you've just lost one thousand dollars less an annual income

734
00:34:47,160 --> 00:34:50,080
Speaker 4: every single year over five years. That's a potential five

735
00:34:50,120 --> 00:34:53,359
Speaker 4: to six thousand dollars. So if you extended, let's say

736
00:34:53,400 --> 00:34:56,000
Speaker 4: you extend part of your ladder out ten years today

737
00:34:56,040 --> 00:34:58,359
Speaker 4: at roughly four point three percent, you would lock that

738
00:34:58,400 --> 00:35:01,200
Speaker 4: income out even longer. So the key message here is

739
00:35:01,239 --> 00:35:03,640
Speaker 4: you don't have to bet the farm. Maybe extend twenty,

740
00:35:03,719 --> 00:35:06,680
Speaker 4: maybe thirty percent of your ladder now and keep the

741
00:35:06,719 --> 00:35:08,960
Speaker 4: rest short so that so that you can you still

742
00:35:08,960 --> 00:35:10,719
Speaker 4: have some liquidity, but you will have locked in some

743
00:35:10,840 --> 00:35:12,879
Speaker 4: rates now as they continue to decline over the next

744
00:35:12,880 --> 00:35:13,400
Speaker 4: few years.

745
00:35:14,160 --> 00:35:14,840
Speaker 3: Hope that helps.

746
00:35:14,880 --> 00:35:16,240
Speaker 4: And so now we're going to move on to John

747
00:35:16,360 --> 00:35:19,560
Speaker 4: in Sharonville, who's also got an ETF question. Lots of

748
00:35:19,640 --> 00:35:23,320
Speaker 4: ETFs ETFs on the minds today, with so many ETFs

749
00:35:23,360 --> 00:35:25,279
Speaker 4: tracking the same index as Bob, how do you know

750
00:35:25,320 --> 00:35:27,520
Speaker 4: which ones are really efficient and which ones are just

751
00:35:27,840 --> 00:35:30,160
Speaker 4: expensive duplicates, which ones are the copycats?

752
00:35:31,360 --> 00:35:33,640
Speaker 2: Well, John, I think the first thing, assuming you know

753
00:35:33,680 --> 00:35:37,120
Speaker 2: we're talking about equal ets ets designed to do the

754
00:35:37,160 --> 00:35:39,919
Speaker 2: same things, I mean, the obvious answer here is look

755
00:35:39,920 --> 00:35:42,520
Speaker 2: at the internal operating expenses. If you've got a plane

756
00:35:42,600 --> 00:35:46,680
Speaker 2: Vanilla SMP five hundred index or a total US stock

757
00:35:46,719 --> 00:35:51,080
Speaker 2: market index, I mean, the underlying annual expenses should be

758
00:35:51,520 --> 00:35:53,960
Speaker 2: no more than ten basis points. And by the way,

759
00:35:54,000 --> 00:35:56,360
Speaker 2: a basis point means one to one hundreds of a

760
00:35:56,400 --> 00:35:59,439
Speaker 2: percent most of the time the ones that were able

761
00:35:59,480 --> 00:36:01,759
Speaker 2: to find, you know, for for clients, and I know

762
00:36:01,800 --> 00:36:03,640
Speaker 2: we're not the only people that use these. You ought

763
00:36:03,640 --> 00:36:06,520
Speaker 2: to be able to get a good large cap ETF

764
00:36:06,640 --> 00:36:09,360
Speaker 2: for I don't know, three to five base basis points

765
00:36:09,400 --> 00:36:09,719
Speaker 2: a year.

766
00:36:09,840 --> 00:36:12,240
Speaker 3: So Number one, if if an.

767
00:36:12,080 --> 00:36:14,319
Speaker 2: ETF is charging a whole lot more than that, you

768
00:36:14,360 --> 00:36:16,279
Speaker 2: got to look under the hood and say, why are

769
00:36:16,280 --> 00:36:19,319
Speaker 2: they doing anything to add value? Are they are they

770
00:36:19,360 --> 00:36:23,919
Speaker 2: deploying some tax loss harvesting in the background, are they

771
00:36:23,960 --> 00:36:27,480
Speaker 2: actively Is it really an actively managed ETF where they're

772
00:36:27,719 --> 00:36:31,080
Speaker 2: overweighting certain sectors or trying to even weight the S

773
00:36:31,120 --> 00:36:33,920
Speaker 2: and P five hundred from a cap standpoint instead of

774
00:36:34,000 --> 00:36:36,480
Speaker 2: just buying a cap wide and index. So you know,

775
00:36:36,560 --> 00:36:39,080
Speaker 2: compare the fees and if the fees are higher, say

776
00:36:39,200 --> 00:36:42,000
Speaker 2: why is the fee higher? And if you're not getting

777
00:36:42,040 --> 00:36:44,520
Speaker 2: any real value add there, it's a good time to

778
00:36:44,560 --> 00:36:48,399
Speaker 2: look at consolidation, all right. Coming up next, Brian has

779
00:36:48,480 --> 00:36:50,960
Speaker 2: his bottom line where he's going to talk about what

780
00:36:51,080 --> 00:36:54,720
Speaker 2: a financial plan even is and how do you know if.

781
00:36:54,560 --> 00:36:57,160
Speaker 3: You actually have a financial plan. I'm looking forward to

782
00:36:57,160 --> 00:36:57,720
Speaker 3: this segment.

783
00:36:57,800 --> 00:37:00,560
Speaker 2: You're listening to simply Money, presented by all Worth Financial

784
00:37:00,680 --> 00:37:03,120
Speaker 2: on fifty five KRC the Talk station.

785
00:37:03,560 --> 00:37:06,440
Speaker 5: Let me tell you, so, the Internet is breeding evil,

786
00:37:06,640 --> 00:37:07,719
Speaker 5: breeding evil.

787
00:37:07,480 --> 00:37:09,480
Speaker 1: And TikTok is the main culprit.

788
00:37:09,600 --> 00:37:11,680
Speaker 5: And I don't know what's happening with TikTok, but that

789
00:37:11,800 --> 00:37:14,000
Speaker 5: damn thing needs to be sold now and it needs

790
00:37:14,000 --> 00:37:15,560
Speaker 5: to be cleaned up. And I don't want to hear

791
00:37:15,600 --> 00:37:18,760
Speaker 5: about free speech and everything else. It's a private company.

792
00:37:18,880 --> 00:37:21,279
Speaker 5: The company needs to clean it up because this is

793
00:37:21,360 --> 00:37:24,520
Speaker 5: crazy between the communist Chinese and all the crap that

794
00:37:24,600 --> 00:37:25,320
Speaker 5: people put.

795
00:37:25,160 --> 00:37:25,760
Speaker 3: On this stuff.

796
00:37:25,840 --> 00:37:29,520
Speaker 1: Mark Levin tonight at ten oh six on fifty five KRC,

797
00:37:29,960 --> 00:37:30,880
Speaker 1: the Talk station.

798
00:37:34,719 --> 00:37:36,560
Speaker 2: You're listening to Simple Money if he's not about all

799
00:37:36,600 --> 00:37:40,920
Speaker 2: Worth Financial on Bob Sponseller along with Brian James. Brian,

800
00:37:41,040 --> 00:37:43,799
Speaker 2: what is a financial plan? And more importantly, how do

801
00:37:43,880 --> 00:37:45,000
Speaker 2: I know if I have one?

802
00:37:45,880 --> 00:37:47,839
Speaker 4: Well, well, we're talking about with the financial plan is

803
00:37:48,040 --> 00:37:49,919
Speaker 4: it's not a pile of investments. I think that's where

804
00:37:49,960 --> 00:37:52,000
Speaker 4: most people start. If I just get a gigantic pile

805
00:37:52,040 --> 00:37:53,520
Speaker 4: of money, everything.

806
00:37:53,000 --> 00:37:55,120
Speaker 3: Else will fall into place. Well, it doesn't work that.

807
00:37:55,040 --> 00:37:58,600
Speaker 4: Way, but nearly half of US adults, according to recent studies,

808
00:37:58,640 --> 00:38:01,120
Speaker 4: say they do not have a written financial plan, and

809
00:38:01,440 --> 00:38:03,880
Speaker 4: about seventy percent feel confident they're going to meet their

810
00:38:03,880 --> 00:38:06,280
Speaker 4: financial goals, and that is down from eighty three percent

811
00:38:06,440 --> 00:38:07,160
Speaker 4: just a few years ago.

812
00:38:07,200 --> 00:38:08,680
Speaker 3: People a little rattled nowadays.

813
00:38:08,840 --> 00:38:10,800
Speaker 4: So at the same time, about thirty percent of adults

814
00:38:10,800 --> 00:38:13,600
Speaker 4: expect their their personal financial situation to be worse as

815
00:38:13,640 --> 00:38:15,920
Speaker 4: opposed to better. That is twice as high as it

816
00:38:16,040 --> 00:38:18,400
Speaker 4: was the prior year. So obviously there's a lot of

817
00:38:18,400 --> 00:38:20,520
Speaker 4: people worrying about it. About half of people say that

818
00:38:20,560 --> 00:38:23,279
Speaker 4: they worry every single day about some aspect of their

819
00:38:23,320 --> 00:38:26,920
Speaker 4: financial plan. So why does this matter. Well, if you

820
00:38:26,920 --> 00:38:28,920
Speaker 4: don't have a plan, you're likely to drift. You're going

821
00:38:28,960 --> 00:38:32,440
Speaker 4: to make reactive decisions based on emotion, overspend, undersaver, just

822
00:38:32,440 --> 00:38:35,439
Speaker 4: playing misopportunities because you're not looking closely enough.

823
00:38:35,760 --> 00:38:36,960
Speaker 3: So what is right?

824
00:38:37,000 --> 00:38:39,480
Speaker 4: What is a written financial plan? Well, let's make sure

825
00:38:39,520 --> 00:38:42,560
Speaker 4: we've defined our short term goals. What's the emergency fund?

826
00:38:43,239 --> 00:38:45,239
Speaker 4: Is it three to six months of expenses, nine to

827
00:38:45,239 --> 00:38:48,520
Speaker 4: twelve whatever works for you. Pay down your high interest debt.

828
00:38:48,560 --> 00:38:51,000
Speaker 4: Anything that has a double digit interest rate is on

829
00:38:51,080 --> 00:38:53,560
Speaker 4: the front burner. Don't ignore it, don't don't let those

830
00:38:53,640 --> 00:38:56,960
Speaker 4: amounts revolve. Those are short term goals. Beyond that, we

831
00:38:57,040 --> 00:38:58,840
Speaker 4: got medium term goals. You know, this is something you

832
00:38:58,920 --> 00:39:01,560
Speaker 4: might do over the next say, maybe three to five years.

833
00:39:01,680 --> 00:39:04,560
Speaker 4: Maybe it's a home purchase, somebody's wedding, you know, maybe

834
00:39:04,600 --> 00:39:07,040
Speaker 4: there's a vehicle coming up, Got to improve your house,

835
00:39:07,080 --> 00:39:09,520
Speaker 4: that kind of thing. Everything beyond that, that's a long

836
00:39:09,600 --> 00:39:11,640
Speaker 4: term goal. Important thing is you will have written all

837
00:39:11,640 --> 00:39:13,480
Speaker 4: these things down. So now we've got our short or

838
00:39:13,560 --> 00:39:16,080
Speaker 4: medium and our long term retirement goals. And then so

839
00:39:16,280 --> 00:39:19,160
Speaker 4: you know, then we're tracking our cash flow. Right, know

840
00:39:19,239 --> 00:39:21,040
Speaker 4: what comes in and what goes out. That's going to

841
00:39:21,080 --> 00:39:23,719
Speaker 4: tell you a lot about what your lifestyle is like

842
00:39:23,840 --> 00:39:26,640
Speaker 4: before you have to go down and go ahead and

843
00:39:26,640 --> 00:39:29,239
Speaker 4: write out a full budget, analyzing every dollar and how

844
00:39:29,320 --> 00:39:31,640
Speaker 4: much you spend at Applebee's on Saturday night or whatever.

845
00:39:32,480 --> 00:39:34,359
Speaker 4: You have some kind of lifestyle now and you can

846
00:39:34,400 --> 00:39:36,279
Speaker 4: see it in your checking account, in your credit card.

847
00:39:36,360 --> 00:39:38,560
Speaker 4: Figure out and understand what you're spending is like, and

848
00:39:38,600 --> 00:39:40,200
Speaker 4: make sure it's things that are important to you that

849
00:39:40,239 --> 00:39:41,640
Speaker 4: you want to do. And you might be able to

850
00:39:41,680 --> 00:39:45,000
Speaker 4: find some additional investing dollars if you don't have out there.

851
00:39:45,200 --> 00:39:47,400
Speaker 3: So if we don't have this, right, if we don't

852
00:39:47,400 --> 00:39:48,040
Speaker 3: have a plan.

853
00:39:48,440 --> 00:39:51,520
Speaker 4: Spend thirty minutes to draft one, right, Just think about

854
00:39:51,520 --> 00:39:53,440
Speaker 4: what we talked about. What am I and even focused

855
00:39:53,440 --> 00:39:56,479
Speaker 4: on just the short term goals. What's my emergency fund?

856
00:39:56,480 --> 00:39:58,560
Speaker 3: What should it be? Are those assets in place now?

857
00:39:58,800 --> 00:40:00,600
Speaker 3: If not? How can I get them there? And then

858
00:40:00,680 --> 00:40:01,680
Speaker 3: look closely at your debt.

859
00:40:01,719 --> 00:40:03,839
Speaker 4: You've got double digit credit cards out there. Blow those

860
00:40:03,880 --> 00:40:05,520
Speaker 4: up in the short run. That can be enough for

861
00:40:05,560 --> 00:40:07,399
Speaker 4: this week and then a couple of weeks from now.

862
00:40:07,440 --> 00:40:09,239
Speaker 4: Come back and think about the medium term and then

863
00:40:09,280 --> 00:40:10,920
Speaker 4: again the long term. You don't have to do all

864
00:40:11,000 --> 00:40:13,320
Speaker 4: of this at once. Make a commitment to review it

865
00:40:13,360 --> 00:40:15,680
Speaker 4: at least six to twelve months. Take a look at it.

866
00:40:15,680 --> 00:40:17,520
Speaker 4: Here's where I want it to be mine Now? Am

867
00:40:17,600 --> 00:40:17,960
Speaker 4: I there?

868
00:40:18,080 --> 00:40:20,000
Speaker 3: Or if I'm not? What should I be doing? Differently?

869
00:40:20,440 --> 00:40:23,359
Speaker 4: So, whether you're starting out, mid career, nearing retirement, these

870
00:40:23,400 --> 00:40:24,880
Speaker 4: same principles are going to apply.

871
00:40:24,640 --> 00:40:27,960
Speaker 2: By Brian in a perfect world or an ideal world,

872
00:40:28,040 --> 00:40:31,200
Speaker 2: who should be preparing this kind of financial plan for you?

873
00:40:31,239 --> 00:40:35,920
Speaker 4: What kind of advisor? What's the F word? A fiduciary, fiducier.

874
00:40:36,000 --> 00:40:37,719
Speaker 4: That's what I think, what you're thinking, that's where you're going.

875
00:40:38,080 --> 00:40:40,200
Speaker 3: Nailed it all, right, Thanks for listening tonight.

876
00:40:40,239 --> 00:40:42,239
Speaker 2: You've been listening to Simply Money, presented by all Worth

877
00:40:42,280 --> 00:40:45,360
Speaker 2: Financial on fifty five KRC the talk station.

878
00:40:46,719 --> 00:40:49,879
Speaker 1: Some people only hear what they want to hear these days,

879
00:40:49,880 --> 00:40:52,360
Speaker 1: you need to keep an open mind. We only deal

880
00:40:52,360 --> 00:40:55,120
Speaker 1: in what you need to hear. Everybody needs the truth

881
00:40:55,160 --> 00:40:58,000
Speaker 1: of the facts. You need the information that matters. We

882
00:40:58,120 --> 00:41:01,040
Speaker 1: need to know if there were warning signs. You need

883
00:41:01,080 --> 00:41:04,040
Speaker 1: it around the clock today, tomorrow, and for the rest

884
00:41:04,080 --> 00:41:06,200
Speaker 1: of life. In the no twenty four hours a day.

885
00:41:06,320 --> 00:41:08,799
Speaker 1: You don't need to go anywhere else. And that's something

886
00:41:08,880 --> 00:41:17,280
Speaker 1: that people already know for certainly hundredifty five KRZZ Talk Station.

887
00:41:17,920 --> 00:41:19,239
Speaker 3: This is the time of the year most of us

888
00:41:19,239 --> 00:41:19,359
Speaker 3: are