1
00:00:14,360 --> 00:00:14,760
Speaker 1: Tonight.

2
00:00:15,240 --> 00:00:18,840
Speaker 2: Well, a lot of investors probably got wrong this week

3
00:00:18,960 --> 00:00:22,160
Speaker 2: that we hope you didn't get wrong. This is simply

4
00:00:22,200 --> 00:00:25,560
Speaker 2: money presented by all Worth Financial on Bob Sponsller along.

5
00:00:25,280 --> 00:00:26,279
Speaker 1: With Brian James.

6
00:00:27,160 --> 00:00:29,640
Speaker 2: If you listen to this show on a regular basis,

7
00:00:29,720 --> 00:00:32,960
Speaker 2: we hope we have trained you to avoid mistakes that

8
00:00:33,040 --> 00:00:37,559
Speaker 2: we absolutely know many investors made this week, with the

9
00:00:37,600 --> 00:00:41,000
Speaker 2: exception of our executive producer Joe Strecker, who is forced

10
00:00:41,600 --> 00:00:44,040
Speaker 2: Brian to listen to you and I flap our gums

11
00:00:44,080 --> 00:00:46,720
Speaker 2: every night about this stuff, so we know he's fully

12
00:00:46,840 --> 00:00:50,680
Speaker 2: trained and he absolutely printed money this week. You know,

13
00:00:50,760 --> 00:00:54,080
Speaker 2: with our more than three decades of experience each of us,

14
00:00:54,440 --> 00:00:59,920
Speaker 2: we promise the following mistakes likely took place in people's portfolio.

15
00:01:00,400 --> 00:01:01,640
Speaker 2: Let's walk through those tonight.

16
00:01:02,280 --> 00:01:05,240
Speaker 3: Somebody did this stuff out there. So first big one

17
00:01:05,520 --> 00:01:08,959
Speaker 3: chasing headline. So this is a big week. We're at

18
00:01:08,959 --> 00:01:11,520
Speaker 3: the end of another exhausting week of crazy headlines.

19
00:01:11,800 --> 00:01:13,520
Speaker 4: I kind of missed the boring days. Of course.

20
00:01:13,920 --> 00:01:18,080
Speaker 3: We saw headlines of course around geopolitical tension, the overseas conflicts,

21
00:01:18,160 --> 00:01:21,240
Speaker 3: Iran oil moving through the straight Oh Horn moves, and

22
00:01:21,280 --> 00:01:23,520
Speaker 3: we even had some fed speculation. We haven't talked about the

23
00:01:23,520 --> 00:01:25,640
Speaker 3: Federal Reserve a little bit, a little bit because it's

24
00:01:25,640 --> 00:01:28,080
Speaker 3: been so geopolitical lately, but the Fed is still a thing.

25
00:01:28,959 --> 00:01:32,360
Speaker 3: And the headlines there were that there are rumblings that

26
00:01:32,400 --> 00:01:35,679
Speaker 3: maybe we're moving from a declining rate environment where we

27
00:01:35,680 --> 00:01:38,480
Speaker 3: were unwinding from the inflation are years we've had in

28
00:01:38,480 --> 00:01:41,120
Speaker 3: the past, maybe moving back toward we need to raise

29
00:01:41,200 --> 00:01:44,440
Speaker 3: rates to keep inflation under control. So again, pure speculation,

30
00:01:44,560 --> 00:01:47,039
Speaker 3: but these are what the headlines are. So with all

31
00:01:47,040 --> 00:01:49,320
Speaker 3: this stuff out there, you could almost feel investors, you know,

32
00:01:49,360 --> 00:01:51,920
Speaker 3: kind of reacting in real time thinking should I get out,

33
00:01:51,960 --> 00:01:53,640
Speaker 3: Maybe I should move to cash, should I should I

34
00:01:53,640 --> 00:01:56,120
Speaker 3: shift into energy or defense. When we see the market

35
00:01:56,160 --> 00:01:58,640
Speaker 3: bouncing violently like we've had all week long, and then

36
00:01:58,640 --> 00:02:00,280
Speaker 3: you look at the ups and downs of the like

37
00:02:00,280 --> 00:02:02,560
Speaker 3: we talked about yesterday, you can kind of get this

38
00:02:02,640 --> 00:02:05,240
Speaker 3: feel for people are wanting to react to this.

39
00:02:05,480 --> 00:02:07,600
Speaker 4: But the reason we can't do this.

40
00:02:07,960 --> 00:02:10,280
Speaker 3: By the time you're reacting to a headline, the market

41
00:02:10,280 --> 00:02:13,080
Speaker 3: already priced it in. Somebody out there anticipated what that

42
00:02:13,160 --> 00:02:15,560
Speaker 3: headline was going to be. More importantly, you don't know

43
00:02:15,600 --> 00:02:17,040
Speaker 3: what the next headline is going to be.

44
00:02:17,280 --> 00:02:18,960
Speaker 4: We've seen this over and over again.

45
00:02:19,000 --> 00:02:21,760
Speaker 3: Markets get hammered on bad news and then they rally

46
00:02:21,800 --> 00:02:24,840
Speaker 3: before the situation is even resolved because there is anticipation

47
00:02:25,240 --> 00:02:28,440
Speaker 3: of a resolution, and sometimes it's a headfake, right, Sometimes

48
00:02:28,440 --> 00:02:30,560
Speaker 3: that resolution doesn't happen. We've been through that an awful

49
00:02:30,600 --> 00:02:34,600
Speaker 3: lot since since the Iran War started, you know, as

50
00:02:34,639 --> 00:02:36,840
Speaker 3: markets have briefly speculated that maybe it's not going to

51
00:02:36,919 --> 00:02:38,960
Speaker 3: last as long as we thought. And we're still kind

52
00:02:39,000 --> 00:02:41,360
Speaker 3: of in that mode. But the important thing is the

53
00:02:41,360 --> 00:02:44,480
Speaker 3: market does want to come back up when the headline's clear.

54
00:02:45,120 --> 00:02:48,239
Speaker 3: We see that rally and so again, this is why

55
00:02:48,240 --> 00:02:50,120
Speaker 3: it's so important to make sure that you are not

56
00:02:50,200 --> 00:02:52,640
Speaker 3: reacting just to what's right in front of you. Understand

57
00:02:52,680 --> 00:02:55,560
Speaker 3: the history and understand how the market reacts so viscerally

58
00:02:55,600 --> 00:02:56,960
Speaker 3: to these short term swings.

59
00:02:57,840 --> 00:03:00,839
Speaker 2: Yeah, and you mentioned, you know, another topic that we're

60
00:03:00,840 --> 00:03:03,239
Speaker 2: going to talk about next, sector hopping. I mean, it's

61
00:03:03,240 --> 00:03:05,960
Speaker 2: one thing to make broad moves in and out of

62
00:03:06,000 --> 00:03:08,880
Speaker 2: the broad market, but some people want to get cute

63
00:03:08,960 --> 00:03:11,840
Speaker 2: and try to time you know, individual sectors. You mentioned

64
00:03:11,960 --> 00:03:15,600
Speaker 2: energy stocks, defense stocks, technology stocks the other thing, and

65
00:03:15,639 --> 00:03:18,280
Speaker 2: we talked about this yesterday on the show. Something that

66
00:03:18,320 --> 00:03:20,760
Speaker 2: I've followed for the last couple of weeks here with

67
00:03:20,800 --> 00:03:24,360
Speaker 2: all this volatility, the movement of gold up and down

68
00:03:24,440 --> 00:03:28,600
Speaker 2: has been completely counterintuitive to why people A lot of

69
00:03:28,600 --> 00:03:31,079
Speaker 2: people invest in gold in the first place, and that's

70
00:03:31,120 --> 00:03:34,440
Speaker 2: where it is really dangerous to try to pick what

71
00:03:34,560 --> 00:03:36,600
Speaker 2: sectors are going to move in the short term up

72
00:03:36,720 --> 00:03:40,440
Speaker 2: or down based on headline news. I'm sure a lot

73
00:03:40,440 --> 00:03:43,240
Speaker 2: of people were trading in and out of gold and

74
00:03:43,760 --> 00:03:46,560
Speaker 2: are probably wishing they had not, because, like I said,

75
00:03:46,600 --> 00:03:50,640
Speaker 2: gold moved up and down for reasons completely the opposite

76
00:03:50,800 --> 00:03:54,119
Speaker 2: of why gold typically moves up and down. And that's

77
00:03:54,160 --> 00:03:57,880
Speaker 2: a great example of you know, the dangers of sector hopping.

78
00:03:58,200 --> 00:04:02,800
Speaker 2: Brian talk about the dangers just overreacting in general to

79
00:04:02,960 --> 00:04:06,440
Speaker 2: one big day up or down in the overall market.

80
00:04:06,600 --> 00:04:06,800
Speaker 1: You know.

81
00:04:06,920 --> 00:04:08,960
Speaker 3: Yeah, Well, I want to before we get into that,

82
00:04:09,000 --> 00:04:10,920
Speaker 3: I want to just quickly put some numbers behind gold,

83
00:04:10,920 --> 00:04:12,760
Speaker 3: because we have talked about that a lot these last

84
00:04:12,760 --> 00:04:15,480
Speaker 3: couple of weeks, because it's been fascinating. The headlines are

85
00:04:15,520 --> 00:04:17,840
Speaker 3: scarier than they've been in the last month six weeks,

86
00:04:18,400 --> 00:04:19,640
Speaker 3: but gold hasn't helped at all.

87
00:04:19,960 --> 00:04:20,159
Speaker 1: Right.

88
00:04:20,200 --> 00:04:23,279
Speaker 3: The common notion is that people investors run to gold

89
00:04:23,320 --> 00:04:25,360
Speaker 3: when they get scared, and the headlines out there, you know,

90
00:04:25,400 --> 00:04:27,120
Speaker 3: there's kind of blood in the streets, a little bit

91
00:04:27,120 --> 00:04:29,920
Speaker 3: in the headlines. Gold peaked at the end of January.

92
00:04:30,160 --> 00:04:32,520
Speaker 3: That was before we got into all this crazy stuff

93
00:04:32,520 --> 00:04:34,839
Speaker 3: we had now, and it dropped as low as dropped

94
00:04:35,040 --> 00:04:37,440
Speaker 3: more than twenty percent by the by about the end

95
00:04:37,480 --> 00:04:40,120
Speaker 3: of March or so, and then since then we've.

96
00:04:40,000 --> 00:04:40,880
Speaker 4: Had a bit of a pullback.

97
00:04:40,880 --> 00:04:42,960
Speaker 3: But if you bought gold at the end of January

98
00:04:43,000 --> 00:04:45,320
Speaker 3: at its peak, you are not sitting in a safer spot.

99
00:04:45,360 --> 00:04:46,760
Speaker 4: You're down just as much as the market.

100
00:04:46,760 --> 00:04:49,920
Speaker 3: So it's just interesting that, you know, investors react no

101
00:04:49,920 --> 00:04:51,800
Speaker 3: matter what they own, investors are going to react to it.

102
00:04:52,200 --> 00:04:56,080
Speaker 2: And there's liquidity issues out there too, which we've talked about,

103
00:04:56,160 --> 00:04:58,640
Speaker 2: you know this week on the show. People when they

104
00:04:58,720 --> 00:05:02,599
Speaker 2: need liquidity, they're gonna go get that liquidity from wherever

105
00:05:02,640 --> 00:05:04,600
Speaker 2: they can get it. And let's face it, gold's been

106
00:05:04,640 --> 00:05:07,159
Speaker 2: on a good run. Money managers that have a nice

107
00:05:07,200 --> 00:05:10,360
Speaker 2: position in gold, you know, for redemptions or whatever, they're

108
00:05:10,400 --> 00:05:12,360
Speaker 2: going to go sell what's up and what they could

109
00:05:12,400 --> 00:05:14,960
Speaker 2: turn into cash in the short term. But again that's

110
00:05:15,160 --> 00:05:18,200
Speaker 2: that's more on this just sector rotation, talk about the

111
00:05:18,320 --> 00:05:20,720
Speaker 2: overall market because I think that's what most of our

112
00:05:20,760 --> 00:05:22,520
Speaker 2: listeners and clients are thinking about.

113
00:05:22,600 --> 00:05:25,000
Speaker 3: Yeah, we're getting used to these big swings, right every

114
00:05:25,120 --> 00:05:27,000
Speaker 3: day as we're up one and a half two percent,

115
00:05:27,000 --> 00:05:28,760
Speaker 3: we're down one and a half two percent, and it

116
00:05:28,880 --> 00:05:30,680
Speaker 3: just feels like we're on a roller coaster and it

117
00:05:30,960 --> 00:05:32,440
Speaker 3: makes you a little nauseous. So we even had a

118
00:05:32,520 --> 00:05:34,080
Speaker 3: day earlier this week where the Dow was up a

119
00:05:34,160 --> 00:05:34,920
Speaker 3: thousand points.

120
00:05:34,960 --> 00:05:35,599
Speaker 4: That's big day.

121
00:05:36,240 --> 00:05:39,120
Speaker 3: Those days feel meaningful, They feel like, Okay, this was it,

122
00:05:39,240 --> 00:05:41,400
Speaker 3: this is the urn, this is now. Now we're going

123
00:05:41,480 --> 00:05:43,480
Speaker 3: to move in the right direction. The market has decided

124
00:05:43,520 --> 00:05:46,680
Speaker 3: what it wants to do. Now it's safe or it's oh,

125
00:05:46,720 --> 00:05:49,000
Speaker 3: it moved without us, depending on what position you were in,

126
00:05:49,080 --> 00:05:50,599
Speaker 3: right if you were somebody who was trying to time

127
00:05:50,640 --> 00:05:53,200
Speaker 3: the market, whether you liquidated something, or maybe you've been

128
00:05:53,200 --> 00:05:55,360
Speaker 3: sitting on a pile of cash waiting to buy the dip.

129
00:05:55,360 --> 00:05:57,640
Speaker 3: I always love the term buy the dip because nobody says,

130
00:05:57,680 --> 00:05:59,920
Speaker 3: here's the actual dip. The dip is whatever exists in

131
00:06:00,080 --> 00:06:02,640
Speaker 3: your mind as what a dip should be. And my

132
00:06:02,760 --> 00:06:05,479
Speaker 3: question for folks buying the dip is how long exactly

133
00:06:05,680 --> 00:06:07,720
Speaker 3: have you been sitting on all of this cash waiting

134
00:06:07,800 --> 00:06:10,240
Speaker 3: to buy the tip, because for some people it's been

135
00:06:10,320 --> 00:06:11,440
Speaker 3: literally years they've left an.

136
00:06:11,400 --> 00:06:12,680
Speaker 4: Enormous amount of money on the table.

137
00:06:13,120 --> 00:06:16,520
Speaker 3: But anyway, the best and the worst days tend to

138
00:06:16,600 --> 00:06:20,200
Speaker 3: cluster together, right, Normally the market's doing a bunch of nothing, up,

139
00:06:20,200 --> 00:06:21,080
Speaker 3: a little bit, down.

140
00:06:20,880 --> 00:06:21,360
Speaker 1: A little bit.

141
00:06:21,520 --> 00:06:24,480
Speaker 3: It's only a few years out of every year that

142
00:06:24,600 --> 00:06:27,359
Speaker 3: make the return for the year. So if you miss,

143
00:06:27,400 --> 00:06:29,760
Speaker 3: you know, and Andy Stout provides us research on this

144
00:06:29,839 --> 00:06:32,279
Speaker 3: all the time, if you miss, say just even just

145
00:06:32,400 --> 00:06:34,960
Speaker 3: the ten best days of the stock market year because

146
00:06:35,000 --> 00:06:37,440
Speaker 3: you were sitting in cash, then your long term returns

147
00:06:37,480 --> 00:06:41,120
Speaker 3: are severely impacted. It's not just ten days out of

148
00:06:41,120 --> 00:06:44,200
Speaker 3: two hundred possible trading days. It's the magnitude of those

149
00:06:44,240 --> 00:06:46,360
Speaker 3: days that matters. And if you weren't involved, you were

150
00:06:46,360 --> 00:06:48,280
Speaker 3: trying to time it, you're going to leave an enormous

151
00:06:48,279 --> 00:06:50,560
Speaker 3: amount of money on the table, and you will start

152
00:06:50,600 --> 00:06:53,680
Speaker 3: to psychologically figure that the market has targeted you, the

153
00:06:53,680 --> 00:06:56,680
Speaker 3: market doesn't like you, and you're being picked on, and

154
00:06:56,680 --> 00:06:58,640
Speaker 3: therefore you're never going to touch it again. And those

155
00:06:58,640 --> 00:07:00,800
Speaker 3: are the folks that get eaten alive by because they

156
00:07:00,839 --> 00:07:02,760
Speaker 3: didn't have a plan to begin with. And they didn't

157
00:07:02,839 --> 00:07:04,839
Speaker 3: understand market market history.

158
00:07:05,680 --> 00:07:07,599
Speaker 2: Yeah, the flip side of that, Brian, and I know

159
00:07:07,680 --> 00:07:10,080
Speaker 2: you subscribe. I think to what I'm about to say

160
00:07:11,080 --> 00:07:15,280
Speaker 2: is financial advisors in the financial press and magazines always

161
00:07:15,280 --> 00:07:17,760
Speaker 2: talk about well, if you miss, if you miss the

162
00:07:17,760 --> 00:07:20,680
Speaker 2: best ten days of the market over you know, a

163
00:07:20,760 --> 00:07:23,360
Speaker 2: fifty year period of time, this is how much money

164
00:07:23,360 --> 00:07:26,120
Speaker 2: you left on the table. And while that's all true,

165
00:07:26,680 --> 00:07:30,720
Speaker 2: as you already mentioned, the worst days in the market

166
00:07:30,760 --> 00:07:33,880
Speaker 2: history tend to cluster together with the best days. And

167
00:07:34,240 --> 00:07:36,520
Speaker 2: the point I want to make here is, you know,

168
00:07:36,680 --> 00:07:40,320
Speaker 2: for folks that need short term cash, short term liquidity,

169
00:07:40,680 --> 00:07:42,800
Speaker 2: you know, if they're going to replace a vehicle, the

170
00:07:42,960 --> 00:07:46,080
Speaker 2: HVAC system on their house, take a big vacation, anything

171
00:07:46,160 --> 00:07:49,320
Speaker 2: that involves spending a lot of money in the short term,

172
00:07:49,600 --> 00:07:52,280
Speaker 2: you want to avoid some of those worst days in

173
00:07:52,400 --> 00:07:55,360
Speaker 2: the market by having a plan in advance.

174
00:07:55,760 --> 00:07:55,960
Speaker 1: You know.

175
00:07:56,000 --> 00:07:58,120
Speaker 2: The thing I always like to say is tell your

176
00:07:58,200 --> 00:08:00,960
Speaker 2: money in advance what it needs to do and win.

177
00:08:01,440 --> 00:08:04,840
Speaker 2: So this is a reason to have that emergency fund

178
00:08:04,840 --> 00:08:09,400
Speaker 2: in place for days like this where we have outsized volatility,

179
00:08:09,440 --> 00:08:13,120
Speaker 2: and that's what keeps you away from being forced to

180
00:08:13,240 --> 00:08:15,640
Speaker 2: sell something at a loss. Because you need some short

181
00:08:15,760 --> 00:08:19,880
Speaker 2: term liquidity and that's all part of good financial planning.

182
00:08:20,000 --> 00:08:22,520
Speaker 2: And you know, we talk about this all the time too.

183
00:08:22,800 --> 00:08:26,880
Speaker 2: Don't use your growth long term growth portfolio as an

184
00:08:26,880 --> 00:08:29,840
Speaker 2: ATM machine, because boy, on some of these days that

185
00:08:29,880 --> 00:08:32,120
Speaker 2: we've had, you know, in the recent past here, that

186
00:08:32,160 --> 00:08:33,160
Speaker 2: can really sting.

187
00:08:33,800 --> 00:08:34,040
Speaker 1: Yep.

188
00:08:34,240 --> 00:08:35,679
Speaker 3: And I think one of the other things that people

189
00:08:35,720 --> 00:08:40,240
Speaker 3: do is we convince ourselves that inactivity is irresponsibility. Something

190
00:08:40,360 --> 00:08:42,240
Speaker 3: is happening out there, good or different. If I'm not

191
00:08:42,360 --> 00:08:45,080
Speaker 3: doing something about it, then I am not protecting myself.

192
00:08:45,120 --> 00:08:47,320
Speaker 3: I'm not being proactive for myself and my family, and

193
00:08:47,320 --> 00:08:50,000
Speaker 3: then that is a weakness. That's something I have to fix. Therefore,

194
00:08:50,040 --> 00:08:52,360
Speaker 3: I got to do something, because doing anything feels better

195
00:08:52,400 --> 00:08:53,240
Speaker 3: than doing nothing.

196
00:08:53,600 --> 00:08:57,920
Speaker 2: So especially for people that are recently retired, because they've

197
00:08:57,960 --> 00:09:01,120
Speaker 2: gone from working, you know, fifty sixty hour a week,

198
00:09:01,320 --> 00:09:04,840
Speaker 2: very high intense jobs where they're getting things done every day,

199
00:09:05,120 --> 00:09:08,079
Speaker 2: and now they got nothing else to do. Then try

200
00:09:08,120 --> 00:09:11,400
Speaker 2: to guess where the overall economy and the stock market's moving.

201
00:09:11,440 --> 00:09:13,120
Speaker 1: And we run into that sometimes.

202
00:09:13,480 --> 00:09:17,520
Speaker 3: Yeah, and I'll yeah, I think We'll all be subject

203
00:09:17,520 --> 00:09:19,360
Speaker 3: to this, right, We're all human. I'll probably go through

204
00:09:19,360 --> 00:09:22,000
Speaker 3: this too, But I think when people retire suddenly they've

205
00:09:22,040 --> 00:09:24,600
Speaker 3: got more time, and it feels like the market has

206
00:09:24,640 --> 00:09:27,280
Speaker 3: gotten a lot crazier than it has than it's ever

207
00:09:27,320 --> 00:09:28,240
Speaker 3: been in their entire lives.

208
00:09:28,280 --> 00:09:29,199
Speaker 4: And that's never true.

209
00:09:29,480 --> 00:09:32,960
Speaker 3: The market's always had periods of crazy and then relative serenity.

210
00:09:33,520 --> 00:09:36,160
Speaker 3: But the crazy feels a lot more intense because I've

211
00:09:36,160 --> 00:09:39,360
Speaker 3: got time to watch the news and read the headlines

212
00:09:39,600 --> 00:09:41,640
Speaker 3: and all that, and it feels so much closer than

213
00:09:41,640 --> 00:09:43,280
Speaker 3: when I didn't have time because I was going to

214
00:09:43,320 --> 00:09:45,640
Speaker 3: meetings and helping my company or my employer do whatever

215
00:09:45,679 --> 00:09:47,760
Speaker 3: it does, and that consumed all my energy and I

216
00:09:47,760 --> 00:09:49,480
Speaker 3: didn't have the time to absorb the headlines at the

217
00:09:49,559 --> 00:09:51,880
Speaker 3: end of the day. But now I've got the free time,

218
00:09:51,880 --> 00:09:54,280
Speaker 3: I've got the capacity, and it makes my brain want

219
00:09:54,320 --> 00:09:56,040
Speaker 3: to do something about it, because that's what I did

220
00:09:56,120 --> 00:09:57,400
Speaker 3: my entire career well.

221
00:09:57,440 --> 00:10:01,200
Speaker 1: And I do think what has gotten crazier is the news,

222
00:10:01,600 --> 00:10:02,439
Speaker 1: the headlines.

223
00:10:02,760 --> 00:10:05,120
Speaker 2: I mean, let's face it, there's a lot of different

224
00:10:05,200 --> 00:10:08,840
Speaker 2: news sources out there, from social media quote unquote news

225
00:10:09,160 --> 00:10:14,240
Speaker 2: to podcasts quote unquote news. People can go and find

226
00:10:14,320 --> 00:10:17,640
Speaker 2: any kind of news they're looking for, and that can

227
00:10:17,760 --> 00:10:21,560
Speaker 2: lead to a lot of emotional volatility that can lead

228
00:10:21,640 --> 00:10:24,760
Speaker 2: to some irrational decision making. So let's pivot to what

229
00:10:24,840 --> 00:10:28,400
Speaker 2: folks should be doing, Brian, So, yeah, what what the

230
00:10:28,440 --> 00:10:30,400
Speaker 2: important thing is? You know, people who got it right

231
00:10:30,480 --> 00:10:32,840
Speaker 2: this week? What they What did they actually do well?

232
00:10:32,880 --> 00:10:34,839
Speaker 2: The answer not very much, as we've been kind of

233
00:10:34,880 --> 00:10:38,560
Speaker 2: implying here. That's kind of the point. So making sure,

234
00:10:38,600 --> 00:10:40,240
Speaker 2: of course that the allocation is.

235
00:10:40,160 --> 00:10:41,839
Speaker 4: In the right spot. This can be a great time

236
00:10:41,840 --> 00:10:43,400
Speaker 4: to rebalance, you know, if needed.

237
00:10:44,440 --> 00:10:46,600
Speaker 3: And again we're not talking emotions there, we're talking about

238
00:10:46,640 --> 00:10:48,480
Speaker 3: the different things that you own, and do you still

239
00:10:48,480 --> 00:10:50,640
Speaker 3: have the right allocation? You know, Again, if you if

240
00:10:50,640 --> 00:10:53,680
Speaker 3: you had started with a sixty forty, you know, years ago,

241
00:10:53,760 --> 00:10:56,079
Speaker 3: that might have crept up to seventy thirty, sometimes even

242
00:10:56,120 --> 00:10:58,240
Speaker 3: eighty twenty if it's been ignored for for a good

243
00:10:58,280 --> 00:10:58,800
Speaker 3: long time.

244
00:10:59,360 --> 00:10:59,959
Speaker 4: So take a look at that.

245
00:11:00,440 --> 00:11:03,520
Speaker 3: Also, looking for tax opportunities. If you have some positions

246
00:11:03,640 --> 00:11:07,920
Speaker 3: or even individual tax lots within those positions, then look

247
00:11:07,960 --> 00:11:10,080
Speaker 3: for some opportunities to sell some of that stuff off

248
00:11:10,080 --> 00:11:14,640
Speaker 3: and generate some losses. And again that's called tax loss harvesting.

249
00:11:14,800 --> 00:11:17,560
Speaker 3: Take those dollars, reinvest them, but don't just sit in

250
00:11:17,559 --> 00:11:20,120
Speaker 3: cash buy something that is similar or maybe just an

251
00:11:20,160 --> 00:11:22,040
Speaker 3: even even an S and P five hundred index fund.

252
00:11:22,040 --> 00:11:25,240
Speaker 3: If we're talking about stocks that have losses, now that'll

253
00:11:25,240 --> 00:11:28,040
Speaker 3: help you avoid anything the irs might determine as a

254
00:11:28,200 --> 00:11:31,680
Speaker 3: wash sale, which which would wipe out the loss that

255
00:11:31,720 --> 00:11:34,240
Speaker 3: you just took. But you'll still have those dollars reinvested

256
00:11:34,280 --> 00:11:36,600
Speaker 3: in a way they continue to grow, and maybe even

257
00:11:36,679 --> 00:11:39,240
Speaker 3: just take stake stock of the whole long term plan.

258
00:11:39,400 --> 00:11:41,960
Speaker 3: Right If these last couple of weeks got your attention

259
00:11:42,000 --> 00:11:44,400
Speaker 3: and you're thinking about your money anyway, what better time

260
00:11:44,720 --> 00:11:46,680
Speaker 3: than to look at the big picture, step back and

261
00:11:46,679 --> 00:11:49,480
Speaker 3: look at the entire forest, not just the one tree

262
00:11:49,600 --> 00:11:52,319
Speaker 3: of a crazy volatile market. Right now, there's a big

263
00:11:52,360 --> 00:11:54,280
Speaker 3: picture behind it that is your financial plan.

264
00:11:54,360 --> 00:11:55,520
Speaker 4: Make sure you're still on course.

265
00:11:56,360 --> 00:11:58,600
Speaker 2: Yeah, and this is what we're finding right now, Brian,

266
00:11:58,679 --> 00:12:00,640
Speaker 2: with folks that are coming in and meet with us

267
00:12:00,640 --> 00:12:04,160
Speaker 2: for just their annual overall comprehensive plan review. Once we

268
00:12:04,320 --> 00:12:07,480
Speaker 2: sit down and put the whole car up on the rack,

269
00:12:07,559 --> 00:12:10,760
Speaker 2: so to speak, and look at what's still working in

270
00:12:10,800 --> 00:12:13,640
Speaker 2: spite of all the recent volatility. You know a lot

271
00:12:13,720 --> 00:12:17,200
Speaker 2: of times people just getting that update, getting that fresh

272
00:12:17,280 --> 00:12:20,880
Speaker 2: set of non emotional eyes on their financial picture helps

273
00:12:20,920 --> 00:12:23,920
Speaker 2: them walk out of the office feeling much better and

274
00:12:24,000 --> 00:12:27,120
Speaker 2: much more confident about things moving forward. Here's the all

275
00:12:27,160 --> 00:12:31,120
Speaker 2: Worth advice. If your investment strategy change this week because

276
00:12:31,120 --> 00:12:35,040
Speaker 2: of news headlines, it's probably time to revisit your overall plan,

277
00:12:35,120 --> 00:12:37,920
Speaker 2: because successful investing is built.

278
00:12:37,679 --> 00:12:40,360
Speaker 1: On discipline, not headlines.

279
00:12:41,160 --> 00:12:43,600
Speaker 2: Coming up next, we get a little more nuanced and

280
00:12:43,720 --> 00:12:48,760
Speaker 2: discuss the hidden tax mistakes that investors frequently make during

281
00:12:48,880 --> 00:12:52,320
Speaker 2: periods of market volatility. You're listening to Simply Money, presented

282
00:12:52,320 --> 00:12:55,839
Speaker 2: by all Worth Financial on fifty five KRC BET talk station.

283
00:12:59,200 --> 00:13:01,160
Speaker 1: You're listening to el Money's.

284
00:13:01,120 --> 00:13:03,880
Speaker 2: All Worth Financial on Bob spond Seller along with Brian

285
00:13:04,000 --> 00:13:08,040
Speaker 2: James straight ahead at six forty three. Why a set

286
00:13:08,080 --> 00:13:11,840
Speaker 2: it and forget it approach might fail you after the

287
00:13:11,880 --> 00:13:16,400
Speaker 2: age of sixty? Well, Brian, Earlier in this show we

288
00:13:16,679 --> 00:13:19,600
Speaker 2: just talked about. We just covered what investors a lot

289
00:13:19,600 --> 00:13:24,199
Speaker 2: of investors likely got wrong this week, things like chasing headlines,

290
00:13:24,559 --> 00:13:28,400
Speaker 2: trying to jump or time between market sectors, and reacting

291
00:13:28,720 --> 00:13:32,640
Speaker 2: to big market days up or down. Here's the part

292
00:13:32,720 --> 00:13:36,240
Speaker 2: that doesn't get talked about enough. You know, when people

293
00:13:36,280 --> 00:13:39,120
Speaker 2: start moving money around in the short term It's not

294
00:13:39,280 --> 00:13:43,040
Speaker 2: just about how those moves hurt your overall returns. They

295
00:13:43,080 --> 00:13:49,520
Speaker 2: can also dramatically impact your tax return not only now

296
00:13:50,000 --> 00:13:52,480
Speaker 2: but in the future when we talk about IRMA and

297
00:13:52,520 --> 00:13:55,880
Speaker 2: other things that are driven off of you know, modified

298
00:13:55,880 --> 00:13:56,960
Speaker 2: adjusted gross income.

299
00:13:57,960 --> 00:13:59,319
Speaker 3: Yeah, so we want to take a look at you

300
00:13:59,320 --> 00:14:01,840
Speaker 3: know what, what do people tend to focus on when

301
00:14:01,880 --> 00:14:03,800
Speaker 3: they look at their portfolios when they get a little

302
00:14:03,800 --> 00:14:04,360
Speaker 3: bit spooked.

303
00:14:04,360 --> 00:14:05,920
Speaker 4: Well, we tend to look at the extremes.

304
00:14:06,000 --> 00:14:06,120
Speaker 1: Right.

305
00:14:06,160 --> 00:14:08,160
Speaker 3: That means I'm gonna you know, the headline's got my attention.

306
00:14:08,240 --> 00:14:10,880
Speaker 3: Must be time to go monkey with my portfolio. Spoiler alert,

307
00:14:10,920 --> 00:14:13,400
Speaker 3: it's not, but this is how human beings tend to

308
00:14:13,400 --> 00:14:15,880
Speaker 3: react to it. Something crazy happen. Therefore, it must be

309
00:14:15,920 --> 00:14:18,160
Speaker 3: time for me to think about my financial plan. And

310
00:14:18,440 --> 00:14:21,240
Speaker 3: for those without much of a plan, where or where

311
00:14:21,240 --> 00:14:23,960
Speaker 3: the plan is just a pile of investments that does something.

312
00:14:24,440 --> 00:14:27,320
Speaker 3: That's frankly, that's what most people have. There isn't really

313
00:14:27,560 --> 00:14:29,800
Speaker 3: a full plan in place. It's just a pile of

314
00:14:29,880 --> 00:14:31,520
Speaker 3: stuff that moves around does whatever it does on a

315
00:14:31,560 --> 00:14:33,480
Speaker 3: daily basis. But we tend to look at what are

316
00:14:33,520 --> 00:14:35,560
Speaker 3: my winners. Okay, if my winner's the well I've had

317
00:14:35,560 --> 00:14:36,920
Speaker 3: a good run in this one, and the market just

318
00:14:36,920 --> 00:14:38,840
Speaker 3: got a little crazy, So I guess I'll take some

319
00:14:38,920 --> 00:14:40,400
Speaker 3: of that off the table. I'm going to go ahead

320
00:14:40,400 --> 00:14:42,280
Speaker 3: and take some of my profits and walk out of

321
00:14:42,280 --> 00:14:45,160
Speaker 3: the casino with them. Well, of course that's not the

322
00:14:45,160 --> 00:14:48,160
Speaker 3: worst idea, but let's not ignore what comes along with that,

323
00:14:48,480 --> 00:14:51,000
Speaker 3: which is capital gains, taxes, you know, and at the

324
00:14:51,040 --> 00:14:52,880
Speaker 3: other end, you know, a lot of times people will

325
00:14:52,880 --> 00:14:54,360
Speaker 3: look at and this can be a good thing if

326
00:14:54,360 --> 00:14:56,600
Speaker 3: you combine them together. People will look at, well, the

327
00:14:56,600 --> 00:15:00,200
Speaker 3: market is in the toilet this week. Therefore, I'm going

328
00:15:00,200 --> 00:15:02,880
Speaker 3: to go sell my worst losers. And you know, if

329
00:15:02,880 --> 00:15:05,160
Speaker 3: you combine that with selling some of your winners, well,

330
00:15:05,200 --> 00:15:06,760
Speaker 3: then that can be a good thing because now you

331
00:15:07,120 --> 00:15:10,120
Speaker 3: are offsetting the gains with some of those losses, assuming

332
00:15:10,160 --> 00:15:13,440
Speaker 3: you've got losses built in, not just paper losses, meaning

333
00:15:13,720 --> 00:15:16,160
Speaker 3: it's a big gain, it's just less of a gain

334
00:15:16,200 --> 00:15:18,480
Speaker 3: than what than it was last week. Don't mistake your

335
00:15:18,560 --> 00:15:21,320
Speaker 3: high water mark of your portfolio coming down for a

336
00:15:21,320 --> 00:15:22,920
Speaker 3: little bit for tax loss harvesting.

337
00:15:22,920 --> 00:15:24,320
Speaker 4: If you bought something for one.

338
00:15:24,280 --> 00:15:27,400
Speaker 3: Hundred bucks a share and got as high as one

339
00:15:27,480 --> 00:15:28,880
Speaker 3: hundred and fifty, and now you're going to sell it

340
00:15:28,880 --> 00:15:31,320
Speaker 3: for one hundred and forty. You didn't lose ten dollars

341
00:15:31,400 --> 00:15:34,440
Speaker 3: for taxes. You gained forty per share in that case.

342
00:15:34,680 --> 00:15:36,280
Speaker 3: So and again I also want to point out the

343
00:15:36,320 --> 00:15:39,280
Speaker 3: most dangerous thing I think anybody can do is to

344
00:15:39,440 --> 00:15:41,960
Speaker 3: draw a line under the high water mark of their

345
00:15:41,960 --> 00:15:45,160
Speaker 3: portfolio and declare that anything underneath that is some kind

346
00:15:45,200 --> 00:15:47,000
Speaker 3: of aberration or a mistake to be dealt with.

347
00:15:47,200 --> 00:15:49,280
Speaker 4: It's just reality. And if you're going to do.

348
00:15:49,240 --> 00:15:51,800
Speaker 3: That, though, again be careful you understand exactly what the

349
00:15:51,840 --> 00:15:55,920
Speaker 3: capital gains impact is, because you will be taxed. But again,

350
00:15:55,960 --> 00:15:57,800
Speaker 3: don't be afraid of that. Understand how it works. A

351
00:15:57,840 --> 00:15:59,680
Speaker 3: lot of people look at and go capital gains, taxes,

352
00:15:59,680 --> 00:16:01,520
Speaker 3: no thing, thank you. I'll just do nothing. And that's

353
00:16:01,560 --> 00:16:02,800
Speaker 3: all and also not the answer.

354
00:16:03,720 --> 00:16:06,240
Speaker 2: Yeah, I think it's important here to draw the distinction

355
00:16:06,440 --> 00:16:10,200
Speaker 2: between long term capital gains and short term capital gains.

356
00:16:10,280 --> 00:16:13,760
Speaker 2: Just as a reminder, short term capital gains anything that

357
00:16:13,840 --> 00:16:16,080
Speaker 2: you've owned for less than twelve months, those are going

358
00:16:16,160 --> 00:16:20,200
Speaker 2: to be taxed at ordinary income rates. You get much

359
00:16:20,240 --> 00:16:23,800
Speaker 2: better tax treatment on stocks and ETFs and things that

360
00:16:23,840 --> 00:16:26,040
Speaker 2: have been you know, owned for more of a year's

361
00:16:26,360 --> 00:16:29,200
Speaker 2: more than a year sometimes people forget about the impact

362
00:16:29,200 --> 00:16:31,880
Speaker 2: of that, you know, just the tax law when they're

363
00:16:31,880 --> 00:16:35,360
Speaker 2: making short term, emotionally driven decisions. And I guess as

364
00:16:35,400 --> 00:16:38,400
Speaker 2: another reminder here, Brian, what we're talking about right now

365
00:16:38,440 --> 00:16:42,360
Speaker 2: with capital gains taxes in total, this only applies to

366
00:16:42,480 --> 00:16:46,880
Speaker 2: taxable accounts, not your iras four one k's retirement accounts,

367
00:16:46,960 --> 00:16:50,040
Speaker 2: because we don't really have to worry about capital.

368
00:16:49,720 --> 00:16:51,360
Speaker 1: Gains taxes in those vehicles.

369
00:16:51,400 --> 00:16:54,080
Speaker 2: But you know another thing, Brian, let's walk through, you know,

370
00:16:54,080 --> 00:16:57,840
Speaker 2: because sometimes people will say, well, I really love Amazon,

371
00:16:57,960 --> 00:17:00,920
Speaker 2: for example, I'm gonna sell it now and I'm going

372
00:17:01,000 --> 00:17:04,679
Speaker 2: to buy it back. You know, let's say in ten, twelve,

373
00:17:04,800 --> 00:17:08,560
Speaker 2: fourteen days, when it's dropped a little bit more, talk

374
00:17:08,600 --> 00:17:11,880
Speaker 2: about this wash sale trap that rears its ugly head.

375
00:17:12,119 --> 00:17:13,920
Speaker 1: And a lot of times people don't think about that.

376
00:17:14,440 --> 00:17:16,720
Speaker 3: Yeah, Sometimes when we enter into a you know, maybe

377
00:17:16,760 --> 00:17:19,040
Speaker 3: take a speculative position, and maybe we know full well

378
00:17:19,080 --> 00:17:21,359
Speaker 3: it's a speculative position, and then the market moves the

379
00:17:21,400 --> 00:17:23,760
Speaker 3: wrong way on us, and you know, maybe it drops

380
00:17:23,800 --> 00:17:26,280
Speaker 3: ten twenty fifty percent something like that, you can say, well,

381
00:17:26,480 --> 00:17:28,760
Speaker 3: the silver lining is this is a taxable account. Good

382
00:17:28,800 --> 00:17:30,639
Speaker 3: thing I didn't do this in my wrath because I

383
00:17:30,680 --> 00:17:33,200
Speaker 3: get to sell it and do this tax lost harvesting

384
00:17:33,200 --> 00:17:34,960
Speaker 3: thing that I've been hearing Bob and Brian talk about

385
00:17:35,000 --> 00:17:37,679
Speaker 3: so much and cool, I'll sell it and I'll just

386
00:17:37,760 --> 00:17:39,560
Speaker 3: buy it right back because I still want to own it.

387
00:17:39,600 --> 00:17:41,280
Speaker 3: I still believe and I still think it's a good investment.

388
00:17:41,440 --> 00:17:43,320
Speaker 3: It just hit a little bumpy patch here. Well, the

389
00:17:43,359 --> 00:17:46,639
Speaker 3: IRS says, no way, Jose, you can't do that. You

390
00:17:46,760 --> 00:17:49,720
Speaker 3: have to stay out of the position for thirty days.

391
00:17:49,960 --> 00:17:52,399
Speaker 3: If you buy right back into it, then it's considered

392
00:17:52,440 --> 00:17:55,119
Speaker 3: a wash sale and you really accomplish nothing, you know.

393
00:17:55,160 --> 00:17:57,320
Speaker 3: So then the risk is, of course that whatever that

394
00:17:57,359 --> 00:18:01,199
Speaker 3: short term thing is that drove the stock down, perhaps

395
00:18:01,280 --> 00:18:04,240
Speaker 3: that resolves itself while you're sitting out of the stock,

396
00:18:04,600 --> 00:18:06,320
Speaker 3: and perhaps you miss out on the upswing.

397
00:18:06,359 --> 00:18:08,200
Speaker 4: So there's it's not as easy to do as you

398
00:18:08,280 --> 00:18:08,600
Speaker 4: might think.

399
00:18:08,600 --> 00:18:11,480
Speaker 3: But what you might do you generally speaking, you know,

400
00:18:11,720 --> 00:18:15,879
Speaker 3: if one stock is doing well, that usually does not

401
00:18:15,960 --> 00:18:17,520
Speaker 3: happen in the face of the entire s and P

402
00:18:17,560 --> 00:18:19,919
Speaker 3: five hundred falling through the floor. So usually what you

403
00:18:19,960 --> 00:18:22,480
Speaker 3: can do is buy an index fund with those proceeds

404
00:18:22,560 --> 00:18:24,199
Speaker 3: for a brief amount of time, and then if you

405
00:18:24,280 --> 00:18:26,640
Speaker 3: really have to continue to own that other stock then

406
00:18:26,680 --> 00:18:28,480
Speaker 3: buy back in, but it has to be day thirty

407
00:18:28,480 --> 00:18:30,480
Speaker 3: one or later, or use new cash to buy some

408
00:18:30,600 --> 00:18:33,160
Speaker 3: in if you if you've got that ability. But again,

409
00:18:33,280 --> 00:18:36,280
Speaker 3: just remember to understand what a washsale rule is. The

410
00:18:36,280 --> 00:18:39,160
Speaker 3: irs is onto all of our little tricks and things

411
00:18:39,160 --> 00:18:42,520
Speaker 3: that have been developed over the last several centuries. They'll

412
00:18:42,600 --> 00:18:44,080
Speaker 3: catch that too, so just be careful.

413
00:18:44,119 --> 00:18:47,359
Speaker 2: You understand, got to stay out for thirty days. Yeah,

414
00:18:47,359 --> 00:18:50,200
Speaker 2: and these taxes really can layer on top of one another.

415
00:18:50,280 --> 00:18:53,480
Speaker 2: Sometimes people when they make these short term decisions, they're thinking,

416
00:18:53,600 --> 00:18:55,919
Speaker 2: you know, strictly in terms of federal taxes, but just

417
00:18:55,960 --> 00:18:58,680
Speaker 2: as a reminder, you got to pay state income taxes

418
00:18:58,720 --> 00:19:00,840
Speaker 2: on this too if you live in a state that

419
00:19:00,880 --> 00:19:04,520
Speaker 2: has income taxes. And then if your income is high enough,

420
00:19:04,560 --> 00:19:07,680
Speaker 2: now you're getting in potentially that net into that net

421
00:19:07,920 --> 00:19:12,680
Speaker 2: investment income tax that serve tax on excess income.

422
00:19:12,800 --> 00:19:15,600
Speaker 1: And then also what comes with that is.

423
00:19:15,960 --> 00:19:19,840
Speaker 2: Phase outs of certain deductions. So this thing can layer

424
00:19:19,880 --> 00:19:22,080
Speaker 2: on top of one another. And that's why you want

425
00:19:22,080 --> 00:19:25,560
Speaker 2: to have, in a perfect world, a proactive tax strategy

426
00:19:25,800 --> 00:19:29,040
Speaker 2: where you know, advance if I make decision A, here's

427
00:19:29,080 --> 00:19:31,600
Speaker 2: what the real full impact is going to be here

428
00:19:31,680 --> 00:19:35,960
Speaker 2: on tax impact B and that's where good financial planning

429
00:19:36,040 --> 00:19:41,000
Speaker 2: and proactive tax loss harvesting strategies make a lot of sense.

430
00:19:41,400 --> 00:19:43,800
Speaker 2: Here's the all Worth advice in VOLA in the markets,

431
00:19:43,960 --> 00:19:47,160
Speaker 2: smart investing isn't just about what you buy or sell.

432
00:19:47,920 --> 00:19:51,440
Speaker 2: It's about how you manage the tax impact of every

433
00:19:51,520 --> 00:19:54,280
Speaker 2: move you make. Next, we'll show you how to make

434
00:19:54,320 --> 00:19:58,080
Speaker 2: smart spending moves that secure your financial future in the

435
00:19:58,119 --> 00:20:01,439
Speaker 2: first ten years of retirement. You're listening to Simply Money

436
00:20:01,520 --> 00:20:04,520
Speaker 2: presented by all Worth Financial on fifty five krc B

437
00:20:04,920 --> 00:20:13,719
Speaker 2: talk station. You're listening to Simply Money presented by Allworth Financial.

438
00:20:13,760 --> 00:20:16,240
Speaker 5: I'm Bob's fond seller along with Brian James.

439
00:20:16,920 --> 00:20:20,280
Speaker 2: If you're newly retired or planning to retire soon, this

440
00:20:21,400 --> 00:20:25,159
Speaker 2: next segment is for you because how you spend in

441
00:20:25,200 --> 00:20:29,480
Speaker 2: the first ten years of that retirement period can determine.

442
00:20:28,880 --> 00:20:30,640
Speaker 5: How long your money lasts.

443
00:20:31,000 --> 00:20:33,080
Speaker 2: And we're talking about something I think a lot of

444
00:20:33,160 --> 00:20:35,879
Speaker 2: us have heard about or read about. There's been TV

445
00:20:36,040 --> 00:20:39,720
Speaker 2: commercials about it, the retirement red zone.

446
00:20:39,800 --> 00:20:40,760
Speaker 5: Brian, what is that.

447
00:20:41,560 --> 00:20:44,200
Speaker 3: Well, Bob, the retirement red zone is that time, that's

448
00:20:44,240 --> 00:20:46,960
Speaker 3: that couple of years where you start going, huh, pretty soon,

449
00:20:47,000 --> 00:20:48,679
Speaker 3: I'm going to have to turn on this money machine

450
00:20:48,760 --> 00:20:51,399
Speaker 3: and make it work for me so that I can

451
00:20:51,480 --> 00:20:53,840
Speaker 3: quit getting out of bed when I don't want to anymore.

452
00:20:53,880 --> 00:20:56,120
Speaker 3: So this is the most vulnerable stretch of your life.

453
00:20:56,119 --> 00:20:59,560
Speaker 3: And you're making a transition from saving suspending, and that

454
00:20:59,640 --> 00:21:01,840
Speaker 3: is a huge, huge mental shift, Bob. I think that

455
00:21:02,080 --> 00:21:04,960
Speaker 3: you've seen this too, but a lot of clients really

456
00:21:05,000 --> 00:21:08,400
Speaker 3: really struggle with the idea that I have to rely

457
00:21:08,480 --> 00:21:09,199
Speaker 3: on my own savings.

458
00:21:09,240 --> 00:21:10,160
Speaker 4: I've never done that before.

459
00:21:10,200 --> 00:21:13,240
Speaker 3: It's a huge psychological hurdle to get over because we

460
00:21:13,359 --> 00:21:15,760
Speaker 3: all have ground into our heads over decades. I have

461
00:21:15,840 --> 00:21:18,040
Speaker 3: got to save, safe, save. I cannot touch these dollars.

462
00:21:18,080 --> 00:21:20,440
Speaker 3: That's not allowed. It's a failure. If I tap into

463
00:21:20,480 --> 00:21:23,120
Speaker 3: my retirement savings, that is a massive hurdle. We all

464
00:21:23,119 --> 00:21:25,920
Speaker 3: tend to hide behind that in terms of I just

465
00:21:25,960 --> 00:21:27,800
Speaker 3: got to keep working. Got to keep working. And some

466
00:21:27,840 --> 00:21:31,639
Speaker 3: people work well beyond when they could have retired because

467
00:21:31,640 --> 00:21:34,000
Speaker 3: they're too scared to tap into those retirement assets. Again,

468
00:21:34,000 --> 00:21:37,560
Speaker 3: that's where I written financial plan comes in well.

469
00:21:37,400 --> 00:21:40,280
Speaker 2: And there's another risk ca all this and some people

470
00:21:40,320 --> 00:21:42,879
Speaker 2: we don't see this a ton, but some people Brian,

471
00:21:42,960 --> 00:21:47,160
Speaker 2: they retire and they're not working, maybe they're a little bored,

472
00:21:47,240 --> 00:21:49,679
Speaker 2: they're fine looking for something to do. So they're like,

473
00:21:49,720 --> 00:21:52,480
Speaker 2: all right, we're going to splurge on some things, you know,

474
00:21:52,600 --> 00:21:55,680
Speaker 2: three or four big trips, remodel the kitchen, giving money

475
00:21:55,680 --> 00:21:59,840
Speaker 2: to kids, and you know what, before long, they've depleted

476
00:21:59,880 --> 00:22:02,080
Speaker 2: a lot of money in a very in a very

477
00:22:02,080 --> 00:22:04,560
Speaker 2: short amount of time. Again, we don't see that a lot,

478
00:22:05,000 --> 00:22:08,119
Speaker 2: you know, often, but it does happen. And sometimes we

479
00:22:08,240 --> 00:22:10,880
Speaker 2: got to talk people off the ledge from doing too

480
00:22:10,960 --> 00:22:11,960
Speaker 2: much too soon.

481
00:22:12,480 --> 00:22:14,639
Speaker 3: Right, And that's that's an understandable desire.

482
00:22:14,680 --> 00:22:16,200
Speaker 4: I've been working my rear end off.

483
00:22:16,200 --> 00:22:17,880
Speaker 3: If I'm married, my spouse and I have been both

484
00:22:17,920 --> 00:22:20,520
Speaker 3: been you know, just hitting it so hard, and we're

485
00:22:20,520 --> 00:22:22,320
Speaker 3: just tired, and we want to celebrate and do some

486
00:22:22,359 --> 00:22:24,119
Speaker 3: things and we feel like we've been successful.

487
00:22:24,359 --> 00:22:25,520
Speaker 4: And that's great and you should do that.

488
00:22:25,560 --> 00:22:28,160
Speaker 3: And the last person who should be discouraging you from

489
00:22:28,160 --> 00:22:31,080
Speaker 3: doing that is your financial advisor. However, all of you

490
00:22:31,119 --> 00:22:32,600
Speaker 3: need to agree on this is what we can get

491
00:22:32,640 --> 00:22:35,080
Speaker 3: away with, but here's what we can't. And so that's

492
00:22:35,080 --> 00:22:37,960
Speaker 3: where this that's where a full projection will come into play.

493
00:22:37,960 --> 00:22:40,280
Speaker 3: In other words, taking a look at what your resources are,

494
00:22:40,520 --> 00:22:43,199
Speaker 3: which is your streams of income that might be so security,

495
00:22:43,240 --> 00:22:45,679
Speaker 3: it could be pensioned, maybe there's an inheritance or some

496
00:22:45,680 --> 00:22:47,679
Speaker 3: real estate out there, something like that that's spitting out

497
00:22:47,720 --> 00:22:48,280
Speaker 3: income for you.

498
00:22:48,720 --> 00:22:50,200
Speaker 4: And then looking at your.

499
00:22:50,080 --> 00:22:53,000
Speaker 3: Piles of assets. These are your iras and your investments.

500
00:22:53,040 --> 00:22:55,600
Speaker 3: You've got piles of money and streams of income, and

501
00:22:55,640 --> 00:22:58,320
Speaker 3: then a long discussion about what do we actually need

502
00:22:58,320 --> 00:23:01,040
Speaker 3: this to do. That's living expenses, the stuff we have

503
00:23:01,080 --> 00:23:02,320
Speaker 3: to deal with the rest of our lives.

504
00:23:02,560 --> 00:23:03,760
Speaker 4: That's perhaps there's.

505
00:23:03,560 --> 00:23:05,480
Speaker 3: Still a mortgage in the mix, or you're supporting kids,

506
00:23:05,600 --> 00:23:07,600
Speaker 3: or maybe your own parents or whatever. Let's figure out

507
00:23:07,640 --> 00:23:10,840
Speaker 3: what these costs are. Now that we have a combination

508
00:23:10,920 --> 00:23:14,000
Speaker 3: of the resources and the needs, we can run some projections,

509
00:23:14,000 --> 00:23:16,480
Speaker 3: and across those projections we will mix up the rates

510
00:23:16,520 --> 00:23:20,680
Speaker 3: of return on the market, because there's something called sequence

511
00:23:20,720 --> 00:23:24,120
Speaker 3: of returns risk, which simply means that if the market

512
00:23:24,200 --> 00:23:26,720
Speaker 3: takes a hit in early in my retirement, that's going

513
00:23:26,760 --> 00:23:28,560
Speaker 3: to have a bigger impact than if it happens later.

514
00:23:28,800 --> 00:23:30,280
Speaker 3: And this is something that happened to a lot of

515
00:23:30,280 --> 00:23:32,119
Speaker 3: people in twenty twenty one when we went over the

516
00:23:32,119 --> 00:23:34,120
Speaker 3: cliffs for a little while in twenty twenty two.

517
00:23:35,280 --> 00:23:39,320
Speaker 2: Yeah, this sequence of return risk is real and it's counterintuitive.

518
00:23:39,400 --> 00:23:42,399
Speaker 2: I mean, I was shocked to see the impact of

519
00:23:42,440 --> 00:23:44,399
Speaker 2: this when I first started to look at this, you know,

520
00:23:44,480 --> 00:23:50,600
Speaker 2: many years ago, and even very experienced, very intelligent clients

521
00:23:51,200 --> 00:23:54,480
Speaker 2: have a hard time grasping this at first. Blush, because

522
00:23:54,480 --> 00:23:58,320
Speaker 2: when you're accumulating money, you know, saving money, you really don't.

523
00:23:58,040 --> 00:24:00,520
Speaker 5: Care what the year by year return is.

524
00:24:01,160 --> 00:24:03,840
Speaker 2: You care about what the average return is because you're

525
00:24:03,840 --> 00:24:06,000
Speaker 2: not spending any money from your four to one k.

526
00:24:06,840 --> 00:24:07,840
Speaker 1: Once you start to.

527
00:24:07,840 --> 00:24:13,199
Speaker 2: Convert this mass of accumulated wealth into a paycheck, you know,

528
00:24:13,240 --> 00:24:17,760
Speaker 2: to replace your paycheck, volatility matters. And even if your

529
00:24:17,880 --> 00:24:21,640
Speaker 2: long term return is identical to what it was when

530
00:24:21,640 --> 00:24:25,080
Speaker 2: you were saving and investing, if that, if that return

531
00:24:25,160 --> 00:24:28,399
Speaker 2: gets volatile in the short term while you're pulling money

532
00:24:28,400 --> 00:24:32,080
Speaker 2: out every month or every quarter or every year, that money,

533
00:24:32,119 --> 00:24:35,320
Speaker 2: once it's pulled out, cannot be replaced at all. And

534
00:24:35,359 --> 00:24:39,320
Speaker 2: that's why you got to manage this sequence of return risk.

535
00:24:39,480 --> 00:24:41,399
Speaker 2: All while what you were starting to talk about in

536
00:24:41,440 --> 00:24:43,240
Speaker 2: your example of cash flow planning.

537
00:24:43,520 --> 00:24:46,480
Speaker 3: Yeah, a good financial professional and anybody worth their salt

538
00:24:46,480 --> 00:24:48,399
Speaker 3: in this industry is gonna help you come up with

539
00:24:48,400 --> 00:24:51,960
Speaker 3: a spending strategy where everyone agrees upon here's what we

540
00:24:52,040 --> 00:24:54,159
Speaker 3: need and here's where we're gonna get it from. We're

541
00:24:54,160 --> 00:24:56,520
Speaker 3: gonna hit the roth ira first, or maybe we're gonna

542
00:24:56,560 --> 00:24:59,359
Speaker 3: hit the traditional ira first, or perhaps it's something else entirely,

543
00:24:59,560 --> 00:25:01,879
Speaker 3: but we we have a plan. And if something happens,

544
00:25:01,920 --> 00:25:05,120
Speaker 3: as life tends to do, because God has a sense

545
00:25:05,119 --> 00:25:07,879
Speaker 3: of humor, so if something zigs when we wanted to zag,

546
00:25:07,920 --> 00:25:09,560
Speaker 3: well then we know how we're going to handle that.

547
00:25:09,560 --> 00:25:11,560
Speaker 3: That lessens the stress a lot, and it prevents us

548
00:25:11,600 --> 00:25:15,240
Speaker 3: from making bad decisions. Taxes play a massive role in this, Bob,

549
00:25:15,280 --> 00:25:18,400
Speaker 3: because you know, obviously different things get taxed differently, and

550
00:25:19,200 --> 00:25:22,240
Speaker 3: depending on your own situation as well as the overall

551
00:25:22,280 --> 00:25:25,240
Speaker 3: situation we've got in the country, we may want to

552
00:25:25,320 --> 00:25:28,040
Speaker 3: choose from one account versus another so that we can

553
00:25:28,160 --> 00:25:30,800
Speaker 3: maximize the efficiency of those taxable distributions.

554
00:25:31,400 --> 00:25:34,920
Speaker 2: Well, and having that first one to two years of spending,

555
00:25:35,240 --> 00:25:38,040
Speaker 2: one to two years of planed spending completely out of

556
00:25:38,080 --> 00:25:40,879
Speaker 2: harm's way, you know, in a high yield savings account

557
00:25:40,960 --> 00:25:43,120
Speaker 2: or short term bonds or something like that can help

558
00:25:43,160 --> 00:25:45,399
Speaker 2: cushion the blow as well. And It's critical that you

559
00:25:45,520 --> 00:25:49,159
Speaker 2: develop a strategy to get that in place. Here's the

560
00:25:49,200 --> 00:25:52,320
Speaker 2: all Worth advice your early retirement years, set the pace,

561
00:25:52,960 --> 00:25:57,600
Speaker 2: spend smart and your money will last. Next, why automated

562
00:25:57,640 --> 00:26:01,120
Speaker 2: investing can fail you when you need it most. You're

563
00:26:01,160 --> 00:26:03,840
Speaker 2: listening to Simply Money presented by all Worth Financial on

564
00:26:03,920 --> 00:26:13,280
Speaker 2: fifty five KRC the talk station. You're listening to Simply

565
00:26:13,320 --> 00:26:16,320
Speaker 2: Money presented by all Worth Financial. I'm Bob sponsorer along

566
00:26:16,359 --> 00:26:19,240
Speaker 2: with Brian James. Do you have a financial question you'd

567
00:26:19,280 --> 00:26:21,680
Speaker 2: like for us to answer. There's a red button you

568
00:26:21,720 --> 00:26:24,520
Speaker 2: can click while you're listening to the show right there

569
00:26:24,600 --> 00:26:28,320
Speaker 2: on the good old iHeart app. Simply record your question

570
00:26:28,520 --> 00:26:31,760
Speaker 2: and it will come straight to us straight ahead. A

571
00:26:31,880 --> 00:26:36,000
Speaker 2: five minute task that could save you from financial fraud.

572
00:26:36,600 --> 00:26:39,200
Speaker 2: In the good News, it's totally free.

573
00:26:39,840 --> 00:26:40,159
Speaker 1: All right.

574
00:26:40,160 --> 00:26:40,920
Speaker 5: If you're over.

575
00:26:40,840 --> 00:26:43,760
Speaker 2: Sixty and still relying on a set it and forget

576
00:26:43,840 --> 00:26:47,880
Speaker 2: it approach with your investments, we need to talk look

577
00:26:48,000 --> 00:26:53,320
Speaker 2: target date funds, auto rebalancing and low maintenance portfolios.

578
00:26:53,600 --> 00:26:53,919
Speaker 5: Brian.

579
00:26:54,000 --> 00:26:57,120
Speaker 2: They're all great when you're saving, but once you retire,

580
00:26:57,600 --> 00:27:01,280
Speaker 2: it can quickly become an highly different ballgame.

581
00:27:01,800 --> 00:27:02,440
Speaker 4: That's right, Bob.

582
00:27:02,480 --> 00:27:04,960
Speaker 3: And then the reason that happens is because now your

583
00:27:04,960 --> 00:27:08,159
Speaker 3: money has a different job description. Your pile of money's

584
00:27:08,280 --> 00:27:11,119
Speaker 3: job description for probably thirty, maybe even forty years was

585
00:27:11,240 --> 00:27:13,320
Speaker 3: just to grow, just be a bigger pile, and that's

586
00:27:13,359 --> 00:27:15,240
Speaker 3: all I need for the first chunk of my life.

587
00:27:15,320 --> 00:27:18,600
Speaker 3: But now that we've successfully created that pile and transitioned

588
00:27:18,640 --> 00:27:21,760
Speaker 3: into retirement or are transitioning, now, it's about cash flow,

589
00:27:21,760 --> 00:27:24,439
Speaker 3: isn't it, Bob, We need more than just a bigger pile,

590
00:27:24,760 --> 00:27:26,679
Speaker 3: and so it becomes about which accounts are we going

591
00:27:26,720 --> 00:27:30,240
Speaker 3: to hit first, and that triggers certain taxes. Later down

592
00:27:30,240 --> 00:27:32,560
Speaker 3: the road, you'll be dealing with required minimum distributions.

593
00:27:32,560 --> 00:27:33,280
Speaker 5: You have to work that.

594
00:27:33,280 --> 00:27:36,960
Speaker 3: In, and certain methods that you follow to simply pay

595
00:27:36,960 --> 00:27:40,359
Speaker 3: your bills can cause things like medicare to premiums to spike.

596
00:27:40,600 --> 00:27:44,000
Speaker 3: That's something called IRMA, which is our MAAA is one

597
00:27:44,000 --> 00:27:46,920
Speaker 3: of these fancy acronyms that everybody learns about once they retire,

598
00:27:47,040 --> 00:27:48,879
Speaker 3: which simply means that if two years ago I had

599
00:27:48,880 --> 00:27:51,040
Speaker 3: a bunch of income, then I might see a spike

600
00:27:51,040 --> 00:27:53,040
Speaker 3: in my Medicare premiums. And that's never a fun thing.

601
00:27:53,119 --> 00:27:55,960
Speaker 3: Sometimes it's unavoidable, but it's better to see these things

602
00:27:55,960 --> 00:27:59,719
Speaker 3: coming on the horizon. So what about social security, Bob head,

603
00:27:59,720 --> 00:28:02,119
Speaker 3: any with any issues they're getting that settled in.

604
00:28:03,320 --> 00:28:04,920
Speaker 5: Well, we always have to run the number.

605
00:28:05,000 --> 00:28:08,520
Speaker 2: I mean again, people always ask, you know, and it's

606
00:28:08,600 --> 00:28:11,280
Speaker 2: human nature is for as soon as somebody is willing

607
00:28:11,320 --> 00:28:13,639
Speaker 2: to write you a check every month, you know, the

608
00:28:13,640 --> 00:28:15,600
Speaker 2: default position position is.

609
00:28:15,680 --> 00:28:18,000
Speaker 5: Yep, sign me up. I want to take it, send

610
00:28:18,000 --> 00:28:18,639
Speaker 5: me that money.

611
00:28:19,520 --> 00:28:21,720
Speaker 2: But the point you brought up, it's important to run

612
00:28:21,800 --> 00:28:25,920
Speaker 2: some projections on how that's going to impact your income taxes,

613
00:28:26,280 --> 00:28:28,720
Speaker 2: your future medicare premiums, all that.

614
00:28:28,720 --> 00:28:29,320
Speaker 1: Kind of stuff.

615
00:28:29,359 --> 00:28:32,080
Speaker 2: And that's why it's important to do some advanced planning.

616
00:28:32,680 --> 00:28:34,520
Speaker 2: Uh And Brian, I want to get your take on

617
00:28:34,640 --> 00:28:37,080
Speaker 2: target date funds because we we run into a lot

618
00:28:37,080 --> 00:28:39,400
Speaker 2: of folks that come to us, you know, to hire

619
00:28:39,480 --> 00:28:41,720
Speaker 2: us to do this kind of planning for them, and

620
00:28:41,880 --> 00:28:44,920
Speaker 2: it you know, they're always they always come to us,

621
00:28:44,920 --> 00:28:48,240
Speaker 2: are usually come to us with that default you know

622
00:28:48,520 --> 00:28:52,080
Speaker 2: position in their four to one K plan a retirement fund.

623
00:28:52,080 --> 00:28:54,280
Speaker 2: You and I haven't talked a whole lot and kicked

624
00:28:54,320 --> 00:28:57,200
Speaker 2: this back and forth. I'm interested in your thoughts on

625
00:28:57,280 --> 00:29:01,840
Speaker 2: the pros and cons of target date fund especially as

626
00:29:01,880 --> 00:29:03,680
Speaker 2: someone enters these retirement years.

627
00:29:03,960 --> 00:29:07,080
Speaker 3: Now, in contrary to the way we kicked off this segment,

628
00:29:07,120 --> 00:29:08,800
Speaker 3: I do think there are some times where a set

629
00:29:08,800 --> 00:29:10,640
Speaker 3: it and forget it approach is okay. If you're a

630
00:29:10,640 --> 00:29:13,440
Speaker 3: young person and you're just getting started with that four

631
00:29:13,440 --> 00:29:15,240
Speaker 3: to oh one k and it's literally got a few hundred,

632
00:29:15,280 --> 00:29:17,960
Speaker 3: few thousand dollars in it, a target date fund can

633
00:29:18,080 --> 00:29:21,520
Speaker 3: be a perfect solution. However, even in this case, if

634
00:29:21,560 --> 00:29:23,840
Speaker 3: you are if that's what you're looking at, look under

635
00:29:23,840 --> 00:29:25,440
Speaker 3: the hood and just make sure you know what it owns.

636
00:29:25,440 --> 00:29:27,920
Speaker 3: So it may look like a super aggressive fund. It's

637
00:29:27,920 --> 00:29:30,560
Speaker 3: targeted for twenty sixty five, forty years from now. I

638
00:29:30,600 --> 00:29:32,520
Speaker 3: saw one the other day, Bob that had twenty percent

639
00:29:32,560 --> 00:29:34,280
Speaker 3: bonds in it, and that's not something a twenty year

640
00:29:34,320 --> 00:29:36,680
Speaker 3: old needs. Twenty year old needs it. Definitely a set it,

641
00:29:36,680 --> 00:29:39,480
Speaker 3: forget it an aggressive approach. Now, on the other hand,

642
00:29:39,520 --> 00:29:41,520
Speaker 3: when you're on the back end of this, I kind

643
00:29:41,560 --> 00:29:43,640
Speaker 3: of I like to use a golf analogy here. That

644
00:29:43,680 --> 00:29:45,600
Speaker 3: twenty year old is standing on the tee of a

645
00:29:45,640 --> 00:29:48,160
Speaker 3: six hundred yard golf hole, and there is little debate

646
00:29:48,240 --> 00:29:50,160
Speaker 3: about which club they need to pull out of the bag.

647
00:29:50,400 --> 00:29:52,120
Speaker 3: The big fat one and they're gonna swing out of

648
00:29:52,160 --> 00:29:54,720
Speaker 3: their shoes. It's okay, you're gonna be in the rough.

649
00:29:54,760 --> 00:29:56,360
Speaker 3: You're gonna be you know, you'll miss the fairway from

650
00:29:56,360 --> 00:29:58,560
Speaker 3: time to time, but you can recover. Now the closer

651
00:29:58,560 --> 00:30:00,920
Speaker 3: I get to the green. When I'm fifty sixty yards out,

652
00:30:01,040 --> 00:30:03,000
Speaker 3: Now I got a choice. What am I hitting today?

653
00:30:03,440 --> 00:30:05,560
Speaker 3: Which way is the win going? Which club do I hate?

654
00:30:05,560 --> 00:30:07,600
Speaker 3: Which club do I think I do have confidence in.

655
00:30:07,800 --> 00:30:09,800
Speaker 3: You gotta be more specific the closer you get to

656
00:30:09,800 --> 00:30:11,600
Speaker 3: the goal. And so that's what we're talking about here.

657
00:30:11,640 --> 00:30:15,560
Speaker 3: Target date funds don't deliver on that requires for specificity

658
00:30:15,760 --> 00:30:17,560
Speaker 3: when I get super close to that to that goal

659
00:30:17,560 --> 00:30:17,880
Speaker 3: of mine.

660
00:30:18,320 --> 00:30:21,040
Speaker 2: Yeah, I love that golf analogy because it's hitting pretty

661
00:30:21,040 --> 00:30:23,840
Speaker 2: close to home. Now you're talking about my golf game, Brian.

662
00:30:23,880 --> 00:30:25,880
Speaker 2: I mean, I stand out there on the tee with

663
00:30:25,960 --> 00:30:28,360
Speaker 2: a five hundred and some yard par five.

664
00:30:29,000 --> 00:30:30,440
Speaker 5: I pull out the driver.

665
00:30:30,720 --> 00:30:33,880
Speaker 2: Well intentioned, but I hit that little seventy yard worm

666
00:30:33,920 --> 00:30:37,040
Speaker 2: burner and hack it to the left. I got no

667
00:30:37,240 --> 00:30:41,520
Speaker 2: shot of getting to that green anywhere in regulation, and

668
00:30:41,600 --> 00:30:43,800
Speaker 2: it puts me behind the eight ball even before I

669
00:30:43,800 --> 00:30:46,000
Speaker 2: get started. And I think that's a good analogy. To

670
00:30:46,080 --> 00:30:49,200
Speaker 2: use for your twenty five year old client. So let's

671
00:30:49,200 --> 00:30:52,080
Speaker 2: talk about what we do suggest, you know, when we

672
00:30:52,160 --> 00:30:56,120
Speaker 2: talk about a withdrawal strategy and the coordination and everything

673
00:30:56,160 --> 00:30:58,680
Speaker 2: we're talking about to get people set up the right

674
00:30:58,720 --> 00:31:00,600
Speaker 2: way for retirement and income.

675
00:31:01,480 --> 00:31:03,160
Speaker 5: Yeah, so I think a lot of this.

676
00:31:03,160 --> 00:31:05,160
Speaker 4: Has to do with what outcome do I want.

677
00:31:05,200 --> 00:31:07,440
Speaker 3: There are some people out there, Bob, who are in

678
00:31:07,480 --> 00:31:10,200
Speaker 3: a situation where, you know what, I don't really care

679
00:31:10,240 --> 00:31:13,320
Speaker 3: about taxes. Maybe I don't. I don't have kids, and

680
00:31:14,080 --> 00:31:15,600
Speaker 3: taxes are going to be what they are. I would

681
00:31:15,680 --> 00:31:18,480
Speaker 3: rather live my life. I'm not really worried about tax efficiency.

682
00:31:18,480 --> 00:31:20,840
Speaker 3: And that's that's an okay as long as people understand,

683
00:31:20,960 --> 00:31:22,800
Speaker 3: you know, what is the tax impact of your various

684
00:31:22,800 --> 00:31:25,160
Speaker 3: decisions going to be? That is an okay outcome. What

685
00:31:25,200 --> 00:31:27,959
Speaker 3: I would say is not okay is having no idea

686
00:31:28,000 --> 00:31:29,560
Speaker 3: what's going to happen and just saying I really don't

687
00:31:29,600 --> 00:31:30,560
Speaker 3: care and throwing caution to.

688
00:31:30,560 --> 00:31:32,960
Speaker 4: The wind and kind of ignoring all of the impacts.

689
00:31:33,320 --> 00:31:34,760
Speaker 3: But yeah, some people say, you know what, I'm not

690
00:31:34,800 --> 00:31:37,840
Speaker 3: worried about taxation on my require minimum distributions down the road.

691
00:31:37,840 --> 00:31:38,800
Speaker 4: It's just not important to me.

692
00:31:39,080 --> 00:31:41,000
Speaker 3: On the other hand, there are others who will say,

693
00:31:41,000 --> 00:31:43,040
Speaker 3: you know what, I just don't. I don't trust this government.

694
00:31:43,320 --> 00:31:45,120
Speaker 3: I feel like taxes are going to go up, and

695
00:31:45,160 --> 00:31:47,160
Speaker 3: I want to do everything I can to control. So

696
00:31:47,280 --> 00:31:49,120
Speaker 3: in that case, you might be you might be a

697
00:31:49,120 --> 00:31:52,760
Speaker 3: person who chooses to pull your taxation forward. In other words,

698
00:31:53,280 --> 00:31:55,320
Speaker 3: you know a lot of times people will retire in

699
00:31:55,360 --> 00:31:58,080
Speaker 3: their sixties and maybe have some savings or some cash

700
00:31:58,080 --> 00:32:00,360
Speaker 3: to decide they can live off of, and they are

701
00:32:00,440 --> 00:32:03,160
Speaker 3: sitting on some years where they are not in a

702
00:32:03,200 --> 00:32:05,720
Speaker 3: bracket at all. They're literally not paying taxes because there's

703
00:32:05,760 --> 00:32:07,880
Speaker 3: literally no income, maybe a little bit spit out from

704
00:32:07,880 --> 00:32:10,080
Speaker 3: a money market fund or something like that. To me,

705
00:32:10,240 --> 00:32:12,160
Speaker 3: that is not something to be celebrated. That is a

706
00:32:12,160 --> 00:32:14,680
Speaker 3: missed opportunity because we ought to be filling the ten,

707
00:32:14,800 --> 00:32:17,320
Speaker 3: the twenty two, maybe even the twenty four percent bracket

708
00:32:17,560 --> 00:32:20,120
Speaker 3: with roth conversions. And that's what I mean when I

709
00:32:20,120 --> 00:32:23,720
Speaker 3: say pulling taxation forward, not waiting until I'm seventy three

710
00:32:23,800 --> 00:32:26,480
Speaker 3: or seventy five when my require minimum distributions come in

711
00:32:26,520 --> 00:32:30,360
Speaker 3: and I got no choice, but rather converting proactively paying

712
00:32:30,400 --> 00:32:32,400
Speaker 3: taxes now spending some of that money I've got on

713
00:32:32,440 --> 00:32:35,080
Speaker 3: the sidelines to buy the tax freedom of my of

714
00:32:35,120 --> 00:32:38,680
Speaker 3: my pre tax dollars before I have to pay the piper.

715
00:32:39,320 --> 00:32:41,920
Speaker 2: Good stuff, Brian. And here's the thing. This doesn't have

716
00:32:42,000 --> 00:32:44,960
Speaker 2: to be overly complex. It just has to be intentional.

717
00:32:45,440 --> 00:32:48,120
Speaker 2: You don't need twenty different accounts, but you do need

718
00:32:48,240 --> 00:32:51,400
Speaker 2: one cohesive plan, and that plan does need to be

719
00:32:51,520 --> 00:32:56,920
Speaker 2: built to evolve. Because life after sixty isn't static. Things change.

720
00:32:57,040 --> 00:33:00,160
Speaker 2: Your money should be flexible enough to change with it.

721
00:33:00,880 --> 00:33:02,040
Speaker 5: Here's the all Worth advice.

722
00:33:02,160 --> 00:33:05,360
Speaker 2: Retirement isn't the finish line. It's just the next phase,

723
00:33:05,920 --> 00:33:08,880
Speaker 2: and your investments need to graduate along with you.

724
00:33:09,760 --> 00:33:10,080
Speaker 1: Next.

725
00:33:10,240 --> 00:33:12,680
Speaker 2: One of the simplest and smartest things you can do

726
00:33:12,760 --> 00:33:16,720
Speaker 2: today to protect yourself and your family. You're listening to

727
00:33:16,720 --> 00:33:19,560
Speaker 2: Simply Money, presented by all Worth Financial on fifty five

728
00:33:19,640 --> 00:33:28,760
Speaker 2: KARC the talk station. You're listening to Simply Money presented

729
00:33:28,800 --> 00:33:29,640
Speaker 2: by all Worth Financial.

730
00:33:29,760 --> 00:33:32,200
Speaker 5: I'm Bob Sponseller along with Brian James.

731
00:33:32,880 --> 00:33:36,200
Speaker 2: Let's talk about something that could literally take you five

732
00:33:36,360 --> 00:33:40,880
Speaker 2: minutes but save you thousands of dollars potentially.

733
00:33:40,840 --> 00:33:42,840
Speaker 5: And that's freezing your credit.

734
00:33:42,920 --> 00:33:43,240
Speaker 1: Brian.

735
00:33:43,320 --> 00:33:46,760
Speaker 2: This is so simple, it's free to do. This is

736
00:33:46,800 --> 00:33:49,600
Speaker 2: the closest thing to a no brainer. We're probably gonna

737
00:33:49,600 --> 00:33:51,440
Speaker 2: talk about here as far as I know.

738
00:33:52,200 --> 00:33:55,320
Speaker 3: Yeah, freezing your credit simply means ain't nobody going to

739
00:33:55,360 --> 00:33:56,160
Speaker 3: open a credit.

740
00:33:56,000 --> 00:33:57,520
Speaker 4: Line in your name, including you.

741
00:33:57,880 --> 00:34:00,520
Speaker 3: So what this means is you're contacting the very credit

742
00:34:00,560 --> 00:34:03,160
Speaker 3: bureaus and you are jumping through their hoops to have

743
00:34:03,240 --> 00:34:06,480
Speaker 3: your credit frozen, meaning nobody can apply for anything. Obviously,

744
00:34:06,560 --> 00:34:08,040
Speaker 3: you don't want to do this right around when you're

745
00:34:08,040 --> 00:34:10,239
Speaker 3: if you're gonna be you know, actually needing your credit,

746
00:34:10,320 --> 00:34:13,000
Speaker 3: you're gonna have a mortgage or something like that. But

747
00:34:13,040 --> 00:34:15,640
Speaker 3: the good thing is this is not a permanent decision.

748
00:34:15,960 --> 00:34:18,000
Speaker 3: You're simply freezing it for the time being. You also,

749
00:34:18,040 --> 00:34:20,279
Speaker 3: of course have the have the right to unfreeze it

750
00:34:20,320 --> 00:34:22,200
Speaker 3: when you do need it. But it is, like you said,

751
00:34:22,200 --> 00:34:24,440
Speaker 3: it is a very very easy way to protect yourself

752
00:34:24,600 --> 00:34:26,000
Speaker 3: from somebody stealing your identity.

753
00:34:26,520 --> 00:34:29,200
Speaker 2: Yeah, and let's make sure we separate freezing your credit

754
00:34:29,280 --> 00:34:32,920
Speaker 2: from identity theft protection. You know, some service that you

755
00:34:33,040 --> 00:34:35,560
Speaker 2: pay for and subscribe to, And we're not saying don't

756
00:34:35,560 --> 00:34:38,719
Speaker 2: do that too. What we're saying is just freezing your

757
00:34:38,760 --> 00:34:41,319
Speaker 2: credit if you're in a situation where you just know

758
00:34:41,640 --> 00:34:44,400
Speaker 2: you're not gonna need or want to borrow any money

759
00:34:44,400 --> 00:34:48,000
Speaker 2: anymore or for the foreseeable future. This again is a

760
00:34:48,040 --> 00:34:52,479
Speaker 2: no brainer, because most identity theft starts with a new

761
00:34:52,560 --> 00:34:57,360
Speaker 2: credit application. Somebody is trying to impersonate you and borrow

762
00:34:57,480 --> 00:35:00,719
Speaker 2: money in your name, and a credit freeze stops that

763
00:35:00,920 --> 00:35:04,439
Speaker 2: at the source. No lender can approve a new line

764
00:35:04,440 --> 00:35:09,800
Speaker 2: of credit without your explicit permission to unlock your report. Brian,

765
00:35:09,880 --> 00:35:12,480
Speaker 2: I've done this personally, you know, for myself, and it's

766
00:35:12,480 --> 00:35:15,919
Speaker 2: it's beautiful. It's like putting a padlock on your front door.

767
00:35:15,960 --> 00:35:19,120
Speaker 2: It doesn't stop people from trying, but it sure does

768
00:35:19,200 --> 00:35:20,879
Speaker 2: stop them from, you know, getting in.

769
00:35:21,360 --> 00:35:23,160
Speaker 3: Yeah, and I a would throw out there too. Don't

770
00:35:23,160 --> 00:35:25,359
Speaker 3: think of just about yourself. Let's not be uh, let's

771
00:35:25,360 --> 00:35:28,160
Speaker 3: not be selfish here. You've got family and uh people,

772
00:35:28,200 --> 00:35:30,359
Speaker 3: other people you worry about. So if you've got kids

773
00:35:30,400 --> 00:35:32,359
Speaker 3: out there, then dude, here, here's a way to kill

774
00:35:32,360 --> 00:35:35,040
Speaker 3: two birds with one stone. First thing, put them on

775
00:35:35,080 --> 00:35:37,719
Speaker 3: your and put them on as authorized users on your

776
00:35:37,719 --> 00:35:39,720
Speaker 3: credit card. That's going to allow them to start building

777
00:35:39,719 --> 00:35:42,200
Speaker 3: credit because they're gonna inherit your score when they become independent.

778
00:35:42,239 --> 00:35:44,640
Speaker 3: As soon as you've done that, freeze their credit. Don't

779
00:35:44,680 --> 00:35:47,440
Speaker 3: just freeze yours, freeze theirs too, because there they are.

780
00:35:47,480 --> 00:35:49,880
Speaker 3: They they have social Security numbers, they are living beings

781
00:35:49,920 --> 00:35:52,560
Speaker 3: who can have credit as well. Uh, their identities get

782
00:35:52,600 --> 00:35:55,200
Speaker 3: stolen too. And because they're not as connected, of course

783
00:35:55,239 --> 00:35:57,480
Speaker 3: as the adults in this situation, a lot of times

784
00:35:57,480 --> 00:35:59,839
Speaker 3: that can't surface until it's way too late. Kids will

785
00:35:59,840 --> 00:36:01,920
Speaker 3: find out years later when they're applying for you know,

786
00:36:02,120 --> 00:36:04,680
Speaker 3: sometimes student loans or a mortgage down the road, that

787
00:36:04,719 --> 00:36:07,120
Speaker 3: there's been some debt that's been unpaid forever and nobody

788
00:36:07,160 --> 00:36:09,160
Speaker 3: has any idea what it is. So that's why it's

789
00:36:09,160 --> 00:36:11,480
Speaker 3: important to freeze these things. And Bob I would throw

790
00:36:11,520 --> 00:36:15,080
Speaker 3: out there too. Another way that people are stealing identities

791
00:36:15,560 --> 00:36:18,640
Speaker 3: is by by looking at places where you already have

792
00:36:18,800 --> 00:36:20,680
Speaker 3: some kind of a presence. Right if you're a client

793
00:36:20,719 --> 00:36:23,040
Speaker 3: of a bank, then you have the ability to do

794
00:36:23,160 --> 00:36:26,680
Speaker 3: online banking. If you haven't set it up, that means

795
00:36:26,760 --> 00:36:28,719
Speaker 3: anyone can do it who has the right amount of

796
00:36:28,719 --> 00:36:30,440
Speaker 3: information for you. I have a lot of clients that

797
00:36:30,480 --> 00:36:32,400
Speaker 3: will say, you know, I don't trust the Internet. I

798
00:36:32,480 --> 00:36:34,080
Speaker 3: just don't want to do these kinds of things. And

799
00:36:34,080 --> 00:36:35,600
Speaker 3: that's all fine, you don't have to use it, but

800
00:36:35,640 --> 00:36:38,040
Speaker 3: I would still suggest set up the online profile because

801
00:36:38,040 --> 00:36:40,360
Speaker 3: that way, if somebody changes the password, you're going to

802
00:36:40,400 --> 00:36:43,600
Speaker 3: get notified on your phone in the mail, and you

803
00:36:43,600 --> 00:36:45,279
Speaker 3: know a lot of different ways versus if you never

804
00:36:45,320 --> 00:36:47,000
Speaker 3: set it up at all and you'll never hear that

805
00:36:47,080 --> 00:36:49,040
Speaker 3: somebody has done that. You can also do that with

806
00:36:49,120 --> 00:36:51,279
Speaker 3: the federal government. They have a system called id ME.

807
00:36:51,840 --> 00:36:53,680
Speaker 3: That is another way that people that is going to

808
00:36:53,719 --> 00:36:56,040
Speaker 3: be right for you know, for people stealing identity.

809
00:36:56,120 --> 00:36:57,000
Speaker 4: So own those things.

810
00:36:57,000 --> 00:36:58,800
Speaker 3: You don't have to use them, but I would definitely

811
00:36:58,840 --> 00:37:00,400
Speaker 3: own them and get them set up yourself so that

812
00:37:00,480 --> 00:37:00,839
Speaker 3: you know.

813
00:37:00,880 --> 00:37:02,759
Speaker 1: That you did it well.

814
00:37:02,800 --> 00:37:05,640
Speaker 2: And from a practical standpoint, again, this is easy to do,

815
00:37:05,719 --> 00:37:07,839
Speaker 2: but you do have to go online to do this.

816
00:37:08,000 --> 00:37:12,160
Speaker 2: So there are three credit bureaus out there, Equifax, Experience,

817
00:37:12,680 --> 00:37:15,520
Speaker 2: and TransUnion, and you do need to take the steps

818
00:37:15,520 --> 00:37:18,359
Speaker 2: and it's very quick and it's very free. You got

819
00:37:18,360 --> 00:37:21,200
Speaker 2: to freeze your credit at each bureau. And Brian, you know,

820
00:37:21,239 --> 00:37:24,719
Speaker 2: we talk about the Sandwich generation all the time. This

821
00:37:24,800 --> 00:37:27,560
Speaker 2: is a good five to ten minute exercise that we

822
00:37:27,640 --> 00:37:30,120
Speaker 2: should sit down with our kids to do. And then

823
00:37:30,120 --> 00:37:32,720
Speaker 2: maybe at the same time or in a follow up meetings,

824
00:37:32,719 --> 00:37:36,239
Speaker 2: sit down with our parents and do this. People sometimes

825
00:37:36,280 --> 00:37:39,320
Speaker 2: in their seventies or eighties, they and for good reason,

826
00:37:39,840 --> 00:37:42,200
Speaker 2: they don't know what's real and fake out there. We

827
00:37:42,280 --> 00:37:45,600
Speaker 2: counsel them about identity theft all the time. The last

828
00:37:45,640 --> 00:37:47,880
Speaker 2: thing somebody in their mid eighties wants to do is

829
00:37:47,920 --> 00:37:50,920
Speaker 2: sit down, you know, under their own devices, by themselves,

830
00:37:51,320 --> 00:37:54,640
Speaker 2: and navigate through these credit bureau websites. This is a

831
00:37:54,680 --> 00:37:57,359
Speaker 2: good thing to do for our parents and for our

832
00:37:57,440 --> 00:38:00,680
Speaker 2: kids to just lock everything up. At the same time,

833
00:38:00,800 --> 00:38:02,000
Speaker 2: it's quick and easy to do.

834
00:38:02,680 --> 00:38:04,600
Speaker 3: Yeah, simple steps there are there are There are a

835
00:38:04,640 --> 00:38:06,080
Speaker 3: lot of things out there that we can do that

836
00:38:06,160 --> 00:38:07,680
Speaker 3: don't require a whole lot of energy, and.

837
00:38:07,640 --> 00:38:08,920
Speaker 4: This is really an easy one.

838
00:38:09,200 --> 00:38:10,759
Speaker 3: Pour a cup of coffee and jump on these three

839
00:38:10,760 --> 00:38:12,680
Speaker 3: websites and go lock your credit and that of those

840
00:38:12,719 --> 00:38:13,040
Speaker 3: you love.

841
00:38:13,960 --> 00:38:15,000
Speaker 5: Here's the all Worth advice.

842
00:38:15,040 --> 00:38:18,360
Speaker 2: A credit freeze is one of the easiest, smartest ways

843
00:38:18,440 --> 00:38:19,799
Speaker 2: to guard your identity.

844
00:38:20,239 --> 00:38:21,840
Speaker 1: Do it, and do it today.

845
00:38:22,600 --> 00:38:23,400
Speaker 5: Thanks for listening.

846
00:38:23,440 --> 00:38:25,919
Speaker 2: You've been listening to Simply Money, presented by all Worth

847
00:38:25,960 --> 00:38:29,320
Speaker 2: Financial on fifty five KRC, the talk station