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Speaker 1: You.

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Speaker 2: I got a lot today, do you.

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Speaker 1: I do got to put up these Halloween decorations?

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Speaker 2: Will It's time to do it, dude? The rest I

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Speaker 2: do need to know.

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Speaker 3: On fifty five krs the talk station.

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Speaker 4: Tonight, we celebrate an important birthday that has fueled your portfolio.

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Speaker 4: If you made the choice to participate. You're listening to

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Speaker 4: Simply Money, presented by all Worth Financial on Bob Sponseller

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Speaker 4: along with Brian James. October is a very special month.

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Speaker 4: It's the three year birthday or anniversary of the latest

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Speaker 4: bull market hats and horns and loud noise makers for

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Speaker 4: all those who decided to stay in the market back

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Speaker 4: in October of twenty twenty two. Brian, it seems like

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Speaker 4: yesterday we were having a really rough time of it

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Speaker 4: in twenty twenty two, and lo and behold, we're up

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Speaker 4: over sixty six hundred on the s P after falling

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Speaker 4: to a low of a little over thirty five hundred

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Speaker 4: in twenty twenty two. Amazing how that works if you

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Speaker 4: stay invested and play the long game.

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Speaker 2: That's right.

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Speaker 5: So this very day, October fourteenth of twenty twenty two,

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Speaker 5: we were all in the depths of misery because that

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Speaker 5: was the bottom of that bear market of twenty two,

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Speaker 5: and so twenty twenty two was one of the five

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Speaker 5: worst years we've ever had. It doesn't come along with

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Speaker 5: a crazy story, right. It's up there though, with the

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Speaker 5: nineteen thirty sevens, nineteen seventy four, two thousand and two,

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Speaker 5: and two thousand and eight. Twenty twenty two is a

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Speaker 5: fifth worst year we ever had in the stock market.

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Speaker 5: It just doesn't have a you know, a great depression

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Speaker 5: or great recession or any of those kind of crazy headlines.

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Speaker 5: It was just the unwinding of a lot of stuff

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Speaker 5: after the post COVID run up. But the SNP hit

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Speaker 5: a low then of above thirty five eighty three, and now,

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Speaker 5: as you just said, we're over sixty six hundred on

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Speaker 5: the S ANDP. So that's an eighty five percent jump

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Speaker 5: in this three year span. If you panicked in twenty

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Speaker 5: twenty two, then figure out how to not do that again.

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Speaker 5: You ignored it like you should, and you let things

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Speaker 5: come back. Then you were in good shape. You should

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Speaker 5: be sitting at a point where you've got more money

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Speaker 5: than you ever had in your entire life.

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Speaker 4: All right, Brian, let's go back to twenty twenty two,

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Speaker 4: and look at the last three years and that eighty

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Speaker 4: five percent jump. I mean, obviously twenty twenty two, the

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Speaker 4: big reason the market went down is that's when the

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Speaker 4: Federal Reserve raised interest rates seven times in that year,

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Speaker 4: and it just crushed both the stock and the bond market.

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Speaker 4: But who would have thought with all the headlines and

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Speaker 4: noise and political division and turmoil and threats of world

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Speaker 4: war and all this stuff flying around every day, who

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Speaker 4: would have ever guessed that over the last three years

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Speaker 4: the market would be up eighty five percent over that

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Speaker 4: period of time. And that's really what we're trying to

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Speaker 4: drive home here is it's all there's never gonna it's

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Speaker 4: never gonna feel like a good day to put your

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Speaker 4: money at risk in the stock market. I would have

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Speaker 4: never have guessed we'd be where we are today. And

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Speaker 4: I don't know how were you feeling in twenty twenty two,

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Speaker 4: And are you surprised at where we are today?

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Speaker 5: Same as I felt after two thousand and eight and

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Speaker 5: after two thousand and two. Right, the pattern doesn't change.

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Speaker 5: It's time in the market, not timing the market so

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Speaker 5: you did. The idea is not to try to avoid

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Speaker 5: these things. Andy Stout, our chief investment officer, puts together

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Speaker 5: information all the time for us to understand market history,

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Speaker 5: and I think it's an extremely important thing for everybody

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Speaker 5: to understand, just to see how things actually work.

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Speaker 2: So let's go through a little bit of math.

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Speaker 5: Had you invested a million bucks in the S and

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Speaker 5: P five hundred and twenty years ago, that million dollars

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Speaker 5: would now be worth about seven point one million. And

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Speaker 5: that's just sitting there and ignoring it. That's not doing

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Speaker 5: anything cute with it. That's not getting into any of

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Speaker 5: the latest crazes or the meme stocks or crypto or

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Speaker 5: anything like that. That's just the five hundred largest American

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Speaker 5: companies and what they've done for a seven time increase

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Speaker 5: in your portfolio.

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Speaker 4: There.

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Speaker 2: That's if you left it alone.

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Speaker 5: Now, let's say out of those seven six hundred and

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Speaker 5: fifty days or however many days it was, had you

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Speaker 5: missed ten of them, then that million dollars would be

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Speaker 5: worth only about three point three million. I'm literally talking

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Speaker 5: about ten trading days out of thousands upon thousands of

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Speaker 5: trading days in that twenty time or in that twenty

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Speaker 5: year period.

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Speaker 4: So you miss you missed the ten best days and

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Speaker 4: you gave up over half of the return over a

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Speaker 4: twenty year period by missing the ten best that best days.

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Speaker 4: That's really hard to believe, but those are the facts.

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Speaker 4: Those are fact the fact that's right now, let's make

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Speaker 4: it even worse. Had you missed the twenty best days.

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Speaker 4: When we say missed, what I mean is whoops. The

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Speaker 4: market is kind of bumpy right now.

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Speaker 5: I'm gonna get out and stay out until until I

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Speaker 5: feel it's better, which means you've already eaten a little bit.

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Speaker 5: Nobody's gonna nail the you know, the exit point. The

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Speaker 5: market's coming down a little bit. You're gonna permanently lock

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Speaker 5: in that loss, and then you're gonna miss the upswing

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Speaker 5: because you're never gonna You're not gonna hit the upswing

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Speaker 5: anymore than than you missed the downswing. So had you

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Speaker 5: missed the best twenty days, now your million bucks is

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Speaker 5: only worth about two That's doubling over twenty years, which

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Speaker 5: is a really really sad return. If you miss the

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Speaker 5: best thirty days now at this point, you're basically not

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Speaker 5: making any money. You've made one point of your million

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Speaker 5: would now be worth.

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Speaker 2: One point three.

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Speaker 5: So one month out of the last twenty years worth

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Speaker 5: of trading days. That's where all the return has come from.

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Speaker 5: Don't get cute, don't try to time the market. You

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Speaker 5: don't know better than anybody else.

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Speaker 4: Well in that in that thirty days, thirty days over

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Speaker 4: twenty years, missing it that million bucks, like you just said,

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Speaker 4: it's worth one point three million dollars, Brian, that's only

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Speaker 4: a one point three percent annualized gain. That doesn't even

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Speaker 4: keep pace with inflation, to say nothing of taxes.

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Speaker 5: Uh.

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Speaker 4: And Unfortunately people have this kind of experience because they're

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Speaker 4: in and out, in and out, they cave into fear.

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Speaker 4: And you know, at that point, if you're gonna miss

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Speaker 4: those best thirty days over twenty years, you might as

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Speaker 4: well just put it in cash, put it in a CD.

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Speaker 4: These numbers are powerful and it and it lends, you know,

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Speaker 4: to the real point that we're trying to make. Patience

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Speaker 4: is the key here, walk us through some more numbers.

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Speaker 2: Yeah.

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Speaker 5: So most of the time, if you think about it,

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Speaker 5: this is what we're saying, is most of the time,

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Speaker 5: the market does a bunch of nothing. All we did

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Speaker 5: was pull thirty days out of twenty years, and we

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Speaker 5: basically made the market do nothing over the past twenty years,

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Speaker 5: even though we started with an example of a seven

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Speaker 5: time return over that timeframe. So the majority of trading days, Bob,

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Speaker 5: they don't end with huge gains and losses.

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Speaker 2: They kind of go up a little bit and go

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Speaker 2: down a little bit.

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Speaker 5: Over those So let's unpack that a little bit over

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Speaker 5: the last Over the past three years, just since twenty

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Speaker 5: twenty two, again ending literally today October fourteenth, of twenty

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Speaker 5: twenty five, we've had seven hundred and fifty trading days.

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Speaker 5: Of those, four hundred and fifteen have had an average

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Speaker 5: daily gain of point seven percent, the other three hundred

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Speaker 5: and thirty five and average loss of point six percent, So

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Speaker 5: that almost cancels out, except that there are more updates

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Speaker 5: than down days. So if you compound that tiny point

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Speaker 5: zero three percent edge over seven hundred fifty days all

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Speaker 5: of a sudden, instead of just adding up to twenty

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Speaker 5: two and a half percent, it's snowballs. Every day's gain

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Speaker 5: builds on the last. That's compounding, and it happens in

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Speaker 5: the background. But it can't if you kick the legs

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Speaker 5: of the stool out from under by trying to time.

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Speaker 4: Yeah, the point is that your portfolio growth takes time.

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Speaker 4: In most days, it's gonna feel like it's doing nothing,

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Speaker 4: and you do have to sit through some volatility like

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Speaker 4: what's gone on, let's say over the last few days,

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Speaker 4: up down, up down. That's all part of the game,

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Speaker 4: the game, and you've got to remain patient and discipline

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Speaker 4: and not worried about or focus on what's happening every

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Speaker 4: single day, because most days not much is happening at all. Now, Brian,

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Speaker 4: this doesn't mean that we've never had some extended bear markets.

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Speaker 4: You know, since nineteen forty nine, we've had twelve bull

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Speaker 4: markets and twelve bear markets. Again, since nineteen forty nine,

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Speaker 4: the same number of bull and bear markets.

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Speaker 5: Well, Bob, if we've had just as many bulls as bears,

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Speaker 5: then how can we possibly have made any money.

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Speaker 2: That doesn't make any sense.

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Speaker 4: Well, here's the key, and this is really important. The

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Speaker 4: average length of those bull markets has been five years

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Speaker 4: and five months, with an average total return of two

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Speaker 4: hundred and seventy percent over that time. For each of

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Speaker 4: the bear markets, the average length of each bear market

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Speaker 4: has just been one year and one month, with an

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Speaker 4: average total loss of only thirty two percent over every

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Speaker 4: bear market. So you don't have to be a genius

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Speaker 4: or a math wizard to know that even though the

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Speaker 4: number of bearing, the gains that you get in bull

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Speaker 4: markets far outweighs any pullbacks that we have in bear markets.

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Speaker 4: And that's why long term investors always win.

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Speaker 5: Yeah, And so the idea is to stay invested in

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Speaker 5: and ride it out because the bull markets are longer

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Speaker 5: and go higher than the bear markets last and that

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Speaker 5: the bear markets go down. So volatility is to be expected, right,

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Speaker 5: We're always going to have the ups and downs. US

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Speaker 5: stocks have experienced corrections, averaging fourteen percent down since nineteen eighty,

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Speaker 5: so that's pretty average. We had one to ten percent

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Speaker 5: earlier earlier this year in April. That was no fund

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Speaker 5: It was more than it was more than ten.

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Speaker 4: I mean, it was getting close to, if not over,

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Speaker 4: that fourteen percent. And let's face it, everyone was freaking

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Speaker 4: out because we'd never seen the reason why before. We

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Speaker 4: had never seen, you know, a president of the United

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Speaker 4: States hold up a chart saying we're going to tear

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Speaker 4: if the entire world, you know, simultaneously back in eight

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Speaker 4: oh nine, we'd never seen a housing crisis like what

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Speaker 4: we saw then. You know, the reasons for these bear

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Speaker 4: markets are always new you know, think of COVID. No

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Speaker 4: one had ever seen anything like COVID during their lifetime,

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Speaker 4: so we we have a tendency to think that, well,

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Speaker 4: this time it's different. You know, this time the market's

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Speaker 4: never going to return just because it goes downcent But

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Speaker 4: expect in terms of a market plock market, that's normal,

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Speaker 4: and that's what we kind of call the price admission,

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Speaker 4: the price of being involved.

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Speaker 2: Yeah, and then there's always an upswing that follows it.

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Speaker 5: So take this, for example, from nineteen forty nine to

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Speaker 5: twenty twenty four, if we see a twenty percent pullback,

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Speaker 5: Historically speaking, these are not estimates, these are real numbers.

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Speaker 5: Whenever the market pulls back twenty percent from those set

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Speaker 5: seventy five year period going back to right after World

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Speaker 5: War Two, a twenty percent drop has rebounded with a

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Speaker 5: forty six percent return over the next three years and

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Speaker 5: seventy three percent over the next five years.

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Speaker 2: So don't screw with the long term investments.

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Speaker 5: Remember, there are people sitting at the top of all

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Speaker 5: of our publicly traded companies and they are navigating, they

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Speaker 5: are making decisions, They are pulling levers and pushing buttons

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Speaker 5: to try to make those companies profitable again. When the

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Speaker 5: market pulls back, it's simply saying, I don't see how

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Speaker 5: you're going to be profitable here in the short run,

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Speaker 5: and changes are made, layoffs happen, new products are discovered,

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Speaker 5: new markets are discovered, and we move on the United States.

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Speaker 5: A profit margin has always been that way, and that's

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Speaker 5: why we always have that recovery. The stock market is.

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Speaker 5: It's not detached from anything else for the purpose of

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Speaker 5: measuring opinions on how profitable companies will be. And as

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Speaker 5: long as there is human greed out there, someone is

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Speaker 5: going to push the ball forward because it is by

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Speaker 5: far the best way to create a bigger pile of money.

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Speaker 4: Here's the all Worth advice. The most accomplished investors will

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Speaker 4: they exhibit unwavering discipline regardless of current market conditions. This

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Speaker 4: bull market may have some folks thinking they've quote unquote

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Speaker 4: made it financially. Coming up next, why that sense of

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Speaker 4: success might actually be the biggest risk to your long

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Speaker 4: term wealth. You're listening to Simply Money, presented by all

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Speaker 4: Worth Financial on fifty five KRC the talk station.

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Speaker 3: In add least, we have all to work together to

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Speaker 3: make sure that it happens.

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Speaker 4: In the day's news for barently toward one of the

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Speaker 4: longest shutdowns in American history.

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Speaker 3: The government is China US trade war affecting the market

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Speaker 3: fifty five.

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Speaker 6: KRC the talk station all Worth Financial a registered investment

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Speaker 6: advisory firm. Any idea is presented during this program are

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Speaker 6: not intended to provide specific financial advice. You should consult

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Speaker 6: your own financial advisor, tax consultant, or a state planning

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Speaker 6: attorney to conduct your own due diligence.

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Speaker 4: You're listening to. Simply Money isented by all Worth Financial

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Speaker 4: and Bob spond Seller along with Brian James. If you

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Speaker 4: can't listen to Simply Money live every night, subscribe and

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Speaker 4: get our daily podcast. And if you think your friends

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Speaker 4: or family or both could use some financial advice, tell

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Speaker 4: them about us as well. Just search Simply Money on

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Speaker 4: the iHeart app or wherever you find your podcast straight

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Speaker 4: Ahead at six forty three. We are digging into some

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Speaker 4: of your most pressing financial questions, like when to move

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Speaker 4: money out of CDs that are paying five percent, what

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Speaker 4: to do when you're sitting on big games in your

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Speaker 4: brokerage account, and more. Well, there's this natural tendency to

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Speaker 4: believe that once you've built a big you know, net

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Speaker 4: worth or big pile of wealth. It just runs on autopilot.

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Speaker 4: It's self sustaining. You don't have to worry about it anymore.

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Speaker 4: You don't have to optimize anything. The market's been doing great,

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Speaker 4: like we've just illustrated, so we'll just ride it out

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Speaker 4: and watch. Well. The more money you have, the more

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Speaker 4: exposed you might be. Bigger balances mean bigger tax bills,

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Speaker 4: more estate planning complications, and more risks in terms of

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Speaker 4: dollar amounts and volatility if you allow your asset allocation

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Speaker 4: to drift off target. Brian, let's walk through some of

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Speaker 4: these moves that a lot of wealthier investors just you know,

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Speaker 4: kind of don't pay attention to. They can really make

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Speaker 4: a huge difference if they do a little proactive planning

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Speaker 4: and get strategic about their money.

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Speaker 2: Yeah.

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Speaker 5: So one of the areas where complacency can be a problem,

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Speaker 5: where if I start ignoring things, well, things get a

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Speaker 5: little bit out of whack, Bob. So, maybe I was

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Speaker 5: in a sixty to forty nine balanced conservative portfolio when

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Speaker 5: I set my plan, but if I haven't touched it

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Speaker 5: in these past three years of this really strong bull market,

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Speaker 5: but I might be sitting on a portfolio that's no

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Speaker 5: longer sixty percent stocks, it's eighty percent stocks.

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Speaker 2: That's a good thing.

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Speaker 5: We want growth, but that's the whole point of needing

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Speaker 5: to rebalance an asset allocation and diversification. You're not going

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Speaker 5: to know that until a correction hits, and it hits

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Speaker 5: a little harder than you thought it would. You thought

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Speaker 5: it would, well, that means you were probably out of

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Speaker 5: whack to begin with. So so you had a little

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Speaker 5: too much exposure in the more volatile thing. Another element, Bob,

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Speaker 5: is tax loss harvest thing. You look like I want

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Speaker 5: to say something, Bob, So I'm gonna give you. Well,

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Speaker 5: I'll give you a second there.

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Speaker 4: Now, well good, I want to go back to that

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Speaker 4: first point. I mean, because I see this happen once

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Speaker 4: in a while. You allow, you know, people allow their

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Speaker 4: portfolio to get, like you said, move from that initial

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Speaker 4: sixty percent stock up to eighty eighty five percent you

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Speaker 4: know stocks, and then we get that you know, annual

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Speaker 4: fourteen percent decline, and then the phone rings and say

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Speaker 4: should we get out? Well, what you should have done

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Speaker 4: is trim some of the game. The market was up

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Speaker 4: and you and I have been talking about of that.

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Speaker 4: It seems like for the last two or three weeks now,

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Speaker 4: keeping your allocation in balance where it needs to be

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Speaker 4: according to your risk tolerance, so you don't freak out

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Speaker 4: when we get a little volatility, you know, I just

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Speaker 4: bring that up because that happens from time to time. Yeah,

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Speaker 4: that's what some of my phone calls are about. I

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Speaker 4: don't know. Do you go through anything similar with your clients.

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Speaker 5: Absolutely, and we always go over you know, here, let's

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Speaker 5: talk about what's working in the portfolio and what's not

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Speaker 5: working as well, right, because an asset allocated portfolio diversification

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Speaker 5: by definition means you're gonna have something that's leading the

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Speaker 5: pack doing great, and you're gonna have something that's bringing

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Speaker 5: up the rear end. But those things are never going

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Speaker 5: to stay the same. For years, it's been the international

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Speaker 5: and emerging market stocks that have kind of lagged the

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Speaker 5: rest of the pack. But that is not the case

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Speaker 5: this year. You're up, you know, twenty five thirty percent

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Speaker 5: in your international position, assuming you kept it in place.

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Speaker 2: A lot of people walked away.

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Speaker 5: From it over the last decade when when those positions

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Speaker 5: were simply not performing as well as the US based stocks,

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Speaker 5: so make sure you've got a good allocation there. The

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Speaker 5: United States is changing how it's perceived by the rest

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Speaker 5: of the world. For you know, good batter and different.

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Speaker 5: That's what's happening. And the world is changing its perception.

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Speaker 5: Therefore opportunities are being found elsewhere.

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Speaker 4: All right, I interrupted you before, Brian, you wanted to

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Speaker 4: talk about I think tax loss harvesting and dovetailing that

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Speaker 4: with concentrated stock positions.

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Speaker 5: I have here, stuff to share, time time to start

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Speaker 5: thinking about this stuff. We're getting close to you close

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Speaker 5: to go time here in Q four. So that means

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Speaker 5: hopefully your advisor or you are looking for proactively looking

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Speaker 5: for losses to harvest, or maybe if you've got something

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Speaker 5: that's sitting at a significant gain, sell that too to

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Speaker 5: to to realize that.

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Speaker 2: Gain and not lose the dollars.

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Speaker 5: But I'll offset it with some kind of if there's

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Speaker 5: a loss in a position, at a loss position, then

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Speaker 5: go ahead and offset the game with that. Otherwise just

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Speaker 5: leaving money on the table. Either are puzzle pieces in

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Speaker 5: front of you that fit directly together, so do that.

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Speaker 5: If you have a good nest egg. We're not talking

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Speaker 5: small dollars here. Good tax planning can easily be a

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Speaker 5: pretty significant six figure swing over a few years by

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Speaker 5: taking these taking these steps. Now, this also comes up

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Speaker 5: with concentrated stocks. People do let their gains run, don't

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Speaker 5: want to pay the tax, and hey, it ain't broke,

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Speaker 5: I'm not going to fix it.

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Speaker 2: That doctor just keeps running and running.

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Speaker 5: Now, all of a sudden, we got a single position

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Speaker 5: that's maybe thirty or forty percent of their portfolio, or

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Speaker 5: sometimes this is an employer stock grants and options, those

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Speaker 5: kinds of things. You have a lot exposed and not

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Speaker 5: sleeping very well at night. So I think you got

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Speaker 5: an example for us.

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Speaker 4: Yeah, let's take an example. You know, hypothetical couple named

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Speaker 4: Dan and Lisa. They're in their early sixties. They recently

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Speaker 4: sold a business. They've got about six million dollars now,

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Speaker 4: obviously more than enough to feel financially independent. They're smart,

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Speaker 4: they've worked, they've worked hard, and now they feel like

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Speaker 4: they've made it and they're coasting. They haven't rebalanced their

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Speaker 4: portfolio in years, they haven't updated their estate plan since

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Speaker 4: their kids were in college, and they've made almost no

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Speaker 4: tax planning moves at all. And Brian, this is an

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Speaker 4: example of what you just talked about. They just let

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Speaker 4: their portfolio coast up to eighty five percent in stocks,

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Speaker 4: heavily concentrated in tech stocks. So they've got big embedded

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Speaker 4: gains in several positions, and now they don't want to

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Speaker 4: talk about it because they know that taxman is looming

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Speaker 4: in any moves that they make. They're worried about a

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Speaker 4: big tax bill. Here's the risk. They're just one correction

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Speaker 4: away from losing hundreds of thousands of dollars in value,

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Speaker 4: and they have no guardrails in place, no structured withdrawal plan,

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Speaker 4: no strategy for wroth conversions, and no estate transition plan.

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Speaker 4: So everything they've built is exposed. Not because they're reckless,

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Speaker 4: but because they've just grown comfortable and they just they

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Speaker 4: just assume that that six million dollar number will manage itself.

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Speaker 4: And those are the kind of people that will benefit

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Speaker 4: from working with a good fiduciary advisor to help them

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Speaker 4: be a good steward of that six million dollars and

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Speaker 4: make it work even harder for them.

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Speaker 2: Yeah, you're high performer.

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Speaker 5: You've got there for a reason, but most likely there

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Speaker 5: was somebody pushing you along the way. So even high

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Speaker 5: performers need accountability, and the irony of that is, you know,

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Speaker 5: the more money you have, the more you need somebody

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Speaker 5: asking tough questions to make sure we're looking under every

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Speaker 5: stone for things that can go wrong and possibly for

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Speaker 5: missed opportunities. But very often sometimes high net worth investors

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Speaker 5: stop listening to that. We hit a point where we

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Speaker 5: checked the box. I've made it. I've got made my fortune.

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Speaker 5: You know, I must be doing something right. Therefore nothing

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Speaker 5: needs to change. But as we just talked about with

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Speaker 5: the example of the international stock positions, markets do change.

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Speaker 5: There's also tax laws that change your goals. Your own

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Speaker 5: personal situation may change. So it's an ongoing conversation really

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Speaker 5: that never stops. Even Tiger Woods has a swing coach.

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Speaker 5: At the top of his game, he still had people

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Speaker 5: in his ear telling him what was going well and

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Speaker 5: what wasn't. So he could have somebody in arms length

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Speaker 5: away who would see things that he wouldn't.

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Speaker 2: That's what a financial advisor does.

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Speaker 4: Yeah, the people who stay sharp, the ones who preserve

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Speaker 4: their wealth and even continue to grow it. They treat

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Speaker 4: financial planning like a skill to maintain, not just a

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Speaker 4: box they checked one time. Here's the all Worth advice.

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Speaker 4: The moment you feel like you've quote unquote made it

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Speaker 4: is exactly when you need to stay engaged because success

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Speaker 4: can't protect you from complacency. Here's a question you may

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Speaker 4: have asked yourself, should I invest in real estate? We're

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Speaker 4: gonna look at the pros and cons coming up next.

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Speaker 4: You're listening to Simply Money presented by all Worth Financial

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Speaker 4: on fifty five KRC, the talk station Allot.

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Speaker 7: The Straight Jacket.

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Speaker 6: This is fifty five KARC and iHeartRadio station.

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Speaker 4: You're listening to Simply Money presented by Allworth Financial on

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Speaker 4: Bob Sponseller along with Brian James, joined tonight by our

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Speaker 4: real estate expert, Michelle Sloan, owner of Remax Time and Michelle.

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Speaker 4: This is a topic that Brian and I are excited

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Speaker 4: to get into because it comes up all the time

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Speaker 4: with our clients. Is real estate a good investment, especially

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Speaker 4: now considering prices are higher than ever? You know, talk

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Speaker 4: about pros and cons of real estate as an investment.

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Speaker 7: Well, it is no matter what whether you're buying a

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Speaker 7: home that is for your personal use, or buying a

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Speaker 7: home that you're going to use as a rental or

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Speaker 7: a vacation home or an airbnb it is an investment

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Speaker 7: one way or another. It's the biggest investment that you're

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Speaker 7: ever going to make. So the question is do you

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Speaker 7: try to jump into the market right now when we

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Speaker 7: have talked about the home sales year over year are

438
00:21:34,320 --> 00:21:39,520
Speaker 7: up seven percent, So yes, the prices of homes are up.

439
00:21:39,840 --> 00:21:43,159
Speaker 7: They are higher than they were, but we don't anticipate

440
00:21:43,200 --> 00:21:48,240
Speaker 7: them to be lower anytime soon. So you get in today,

441
00:21:49,040 --> 00:21:52,719
Speaker 7: it's going to be a better price most likely than

442
00:21:52,800 --> 00:21:55,800
Speaker 7: it will be a year from now. And you have

443
00:21:55,880 --> 00:21:58,800
Speaker 7: to you have to do your own financial planning, and

444
00:21:58,840 --> 00:22:02,959
Speaker 7: you have to talk to peopeople that know your situation,

445
00:22:03,160 --> 00:22:06,160
Speaker 7: because every situation is different. Are you going to need

446
00:22:06,200 --> 00:22:09,119
Speaker 7: a mortgage, Well, you're gonna have to bake in that

447
00:22:09,240 --> 00:22:12,119
Speaker 7: interest rate, in those closing costs, and maybe you have

448
00:22:12,200 --> 00:22:15,639
Speaker 7: to do some repairs, depending on what you're looking for.

449
00:22:16,280 --> 00:22:18,480
Speaker 7: You want to you want to look at the big picture.

450
00:22:18,720 --> 00:22:22,080
Speaker 7: If you're gonna pay cash, the different story you may

451
00:22:22,119 --> 00:22:25,120
Speaker 7: not have as much to you. You're not gonna have

452
00:22:25,240 --> 00:22:31,160
Speaker 7: that overhead of a mortgage payment and the interest rate

453
00:22:31,240 --> 00:22:34,399
Speaker 7: and all of that stuff. So there seems to be

454
00:22:34,440 --> 00:22:37,119
Speaker 7: an awful lot of buyers today that.

455
00:22:38,520 --> 00:22:40,000
Speaker 2: On the topic of the mortgage there.

456
00:22:40,160 --> 00:22:42,240
Speaker 5: So for those people looking maybe for a second home,

457
00:22:42,280 --> 00:22:44,159
Speaker 5: these are people who tend to be, of course, you know,

458
00:22:44,200 --> 00:22:47,280
Speaker 5: maybe retired or maybe you're about to retire. Is can

459
00:22:47,320 --> 00:22:49,160
Speaker 5: you talk a little bit about the challenge of getting

460
00:22:49,200 --> 00:22:51,200
Speaker 5: a mortgage if you're you may have plenty of assets

461
00:22:51,200 --> 00:22:53,080
Speaker 5: but no income. Some banks are cool with that, some

462
00:22:53,200 --> 00:22:54,920
Speaker 5: banks aren't, even though you've got a lot of money

463
00:22:54,920 --> 00:22:55,240
Speaker 5: in the bank.

464
00:22:55,280 --> 00:22:57,480
Speaker 2: And what kind of situations have you seen like that.

465
00:22:57,840 --> 00:23:00,359
Speaker 7: Yeah, you have to shop around. I am fine that

466
00:23:00,560 --> 00:23:03,560
Speaker 7: A lot of buyers in that situation who maybe are

467
00:23:03,560 --> 00:23:06,760
Speaker 7: in their seventies and they're retired, they still have some income,

468
00:23:07,160 --> 00:23:09,120
Speaker 7: it may not be as much as if they were

469
00:23:09,160 --> 00:23:13,600
Speaker 7: working full time, and more often than not, they're going

470
00:23:13,680 --> 00:23:17,960
Speaker 7: to put maybe seventy or eighty percent down in cash

471
00:23:18,080 --> 00:23:20,760
Speaker 7: and then only get a small mortgage. And that's really

472
00:23:20,840 --> 00:23:23,600
Speaker 7: the way to go if you have the means to

473
00:23:23,680 --> 00:23:26,520
Speaker 7: do that. That way, you know you're not using all

474
00:23:26,560 --> 00:23:29,639
Speaker 7: of your cash, uh and you have leaving some of

475
00:23:29,680 --> 00:23:32,920
Speaker 7: that available and then you're only taking out a small mortgage.

476
00:23:32,920 --> 00:23:35,280
Speaker 7: You might have to do just a little bit of shopping,

477
00:23:35,400 --> 00:23:37,960
Speaker 7: but there are definitely lenders out there who can help

478
00:23:38,000 --> 00:23:39,640
Speaker 7: you all.

479
00:23:39,600 --> 00:23:41,800
Speaker 4: Right, Michelle. I'm curious because I think we have to

480
00:23:41,840 --> 00:23:44,320
Speaker 4: distinguish between you know, when we buy a home, are

481
00:23:44,359 --> 00:23:46,720
Speaker 4: we buying it to live in it or you know,

482
00:23:46,800 --> 00:23:50,160
Speaker 4: a second home you know vacation destination to live in it,

483
00:23:50,760 --> 00:23:54,920
Speaker 4: or are we buying it as a rental income source,

484
00:23:55,160 --> 00:23:59,040
Speaker 4: you know, a true one hundred percent investment property. Talk

485
00:23:59,080 --> 00:24:03,159
Speaker 4: about the whole property for rental income market right now?

486
00:24:04,240 --> 00:24:09,000
Speaker 4: How are average rents trending? Are you seeing people successfully

487
00:24:09,400 --> 00:24:12,400
Speaker 4: handle rental property right now when you factor in all

488
00:24:12,400 --> 00:24:15,800
Speaker 4: the tax benefits of the depreciation You've already talked about

489
00:24:15,800 --> 00:24:19,200
Speaker 4: potential appreciation of the home price to say nothing in

490
00:24:19,240 --> 00:24:22,480
Speaker 4: the rental income. Is that still working right now as

491
00:24:22,520 --> 00:24:24,800
Speaker 4: a good cash flow investment strategy.

492
00:24:25,520 --> 00:24:30,040
Speaker 7: Absolutely, there is always opportunities in the real estate industry.

493
00:24:30,119 --> 00:24:33,040
Speaker 7: I think that you have to decide if you're buying

494
00:24:33,080 --> 00:24:38,400
Speaker 7: a home as rental income. A lot of the HLAs

495
00:24:38,440 --> 00:24:41,119
Speaker 7: have tightened down. And this is the one thing that

496
00:24:41,200 --> 00:24:44,640
Speaker 7: I get questioned, awful an awful lot. I have three

497
00:24:44,720 --> 00:24:48,040
Speaker 7: hundred thousand dollars to spend. I want to buy a

498
00:24:48,080 --> 00:24:52,879
Speaker 7: rental property. I'd like to be maybe get a condo

499
00:24:53,080 --> 00:24:54,760
Speaker 7: or something like that, So I don't have to do

500
00:24:54,800 --> 00:24:55,840
Speaker 7: all of the maintenance.

501
00:24:56,520 --> 00:24:57,639
Speaker 2: What can you find for me?

502
00:24:58,320 --> 00:25:02,600
Speaker 7: Well, that's to be more of a challenge because if

503
00:25:02,640 --> 00:25:08,000
Speaker 7: you are buying a condo for rental purposes, oftentimes the

504
00:25:08,240 --> 00:25:14,080
Speaker 7: HOA has clamped down and not allowing rentals in a

505
00:25:14,080 --> 00:25:18,359
Speaker 7: lot of communities. So again it's a lot of research,

506
00:25:19,400 --> 00:25:22,840
Speaker 7: but there are opportunities. And then if you have to

507
00:25:22,880 --> 00:25:26,160
Speaker 7: think about if you're buying a rental single family home,

508
00:25:26,280 --> 00:25:28,440
Speaker 7: you're going to have maintenance. Who's going to take care

509
00:25:28,480 --> 00:25:32,120
Speaker 7: of the yard, the lawn, the exterior, that kind of thing.

510
00:25:32,560 --> 00:25:36,680
Speaker 7: The average rent right now in Cincinnati is about fourteen

511
00:25:36,920 --> 00:25:38,240
Speaker 7: hundred dollars a month.

512
00:25:39,400 --> 00:25:41,120
Speaker 2: Uh, that sounds so.

513
00:25:41,240 --> 00:25:46,840
Speaker 7: High, but and it is, but and it has the

514
00:25:46,880 --> 00:25:50,400
Speaker 7: rent has rows seven point four percent, So you want

515
00:25:50,400 --> 00:25:52,320
Speaker 7: to do some calculations, you know.

516
00:25:52,440 --> 00:25:55,120
Speaker 5: So is it even possible because I'll have people throw

517
00:25:55,160 --> 00:25:57,080
Speaker 5: this out every now and then they inherit money, they

518
00:25:57,080 --> 00:25:59,640
Speaker 5: retire and so forth, is it really even possible? Because

519
00:25:59,680 --> 00:26:01,240
Speaker 5: we get this idea that hey, I'll just buy a

520
00:26:01,280 --> 00:26:03,480
Speaker 5: property and I'm gonna airb and be it. That was

521
00:26:03,560 --> 00:26:06,080
Speaker 5: cool maybe fifteen years ago. You could actually you know,

522
00:26:06,520 --> 00:26:08,760
Speaker 5: make a little cash flow it. Yeah, you could totally

523
00:26:09,080 --> 00:26:10,919
Speaker 5: make it pay for itself. But now I'm feeling like

524
00:26:10,960 --> 00:26:13,760
Speaker 5: it maybe may know, it may get you just under

525
00:26:13,800 --> 00:26:15,200
Speaker 5: a break even, but you're gonna lose money.

526
00:26:15,200 --> 00:26:15,600
Speaker 2: Am I wrong?

527
00:26:15,640 --> 00:26:17,440
Speaker 5: There just seems like every situation I look at, it's

528
00:26:17,440 --> 00:26:18,480
Speaker 5: just there's a lot of.

529
00:26:18,440 --> 00:26:20,560
Speaker 4: Work involved, and people don't see that.

530
00:26:20,800 --> 00:26:23,679
Speaker 7: You know, you every time somebody's in and out, you

531
00:26:23,800 --> 00:26:26,600
Speaker 7: have to clean. And then if they bust things up,

532
00:26:27,040 --> 00:26:28,919
Speaker 7: you know you're gonna have to fix things.

533
00:26:28,960 --> 00:26:31,480
Speaker 2: And then you read it like a rental for a reason.

534
00:26:31,560 --> 00:26:35,520
Speaker 7: Yeah, yeah, you know, an airbnb. I think again, it

535
00:26:35,800 --> 00:26:40,600
Speaker 7: sounds great, but I would do I would do. Buyer

536
00:26:40,680 --> 00:26:43,400
Speaker 7: beware if you're planning to do something like that, because

537
00:26:43,440 --> 00:26:45,920
Speaker 7: there are a lot of hitting costs that you may

538
00:26:45,960 --> 00:26:49,200
Speaker 7: not consider. Yeah, it sounds perfect, you know, buy let's

539
00:26:49,240 --> 00:26:54,359
Speaker 7: buy a cool place in downtown Cincinnati overlooking the river,

540
00:26:55,040 --> 00:26:58,280
Speaker 7: and you know we'll airbnb it and we'll get one

541
00:26:58,280 --> 00:27:01,879
Speaker 7: thousand dollars a night. Well, well, you're not always going

542
00:27:01,960 --> 00:27:05,399
Speaker 7: to be rented. It's it's gonna cost you money. You're

543
00:27:05,440 --> 00:27:07,119
Speaker 7: going to have to hire somebody unless you're going to

544
00:27:07,200 --> 00:27:10,680
Speaker 7: do the work, unless you're going to clean after every person, and.

545
00:27:11,040 --> 00:27:12,320
Speaker 4: You're going to be in this thing.

546
00:27:12,920 --> 00:27:14,640
Speaker 2: Yeah, you're gonna be in it more than you ever

547
00:27:14,680 --> 00:27:15,240
Speaker 2: intended to.

548
00:27:15,920 --> 00:27:19,399
Speaker 4: Absolutely, Well, it's a lot of work, Michelle. You know

549
00:27:19,560 --> 00:27:22,600
Speaker 4: something that that I've become aware of here in recent months,

550
00:27:22,680 --> 00:27:24,840
Speaker 4: you know, is you brought up the hoa's. I think

551
00:27:24,840 --> 00:27:27,480
Speaker 4: you got to do your due diligence on the financial

552
00:27:27,520 --> 00:27:31,800
Speaker 4: condition of that hoas because insurance rates are climbing, So

553
00:27:31,880 --> 00:27:35,720
Speaker 4: these condo buildings are in need of repairs, which means

554
00:27:35,760 --> 00:27:41,800
Speaker 4: assessments and depending on the location, you know, big time assessments.

555
00:27:41,840 --> 00:27:44,680
Speaker 4: You know, think about areas in Florida where these these

556
00:27:44,760 --> 00:27:47,879
Speaker 4: condos that are forty fifty years old are not hurricane proof.

557
00:27:48,480 --> 00:27:50,800
Speaker 4: You know, you got to look beyond just the price

558
00:27:50,840 --> 00:27:53,040
Speaker 4: of the place and what you think you can rent

559
00:27:53,080 --> 00:27:56,080
Speaker 4: it for, right and so are there particular locations you're

560
00:27:56,119 --> 00:28:00,320
Speaker 4: seeing that are very attractive versus you know, big watch

561
00:28:00,400 --> 00:28:01,040
Speaker 4: out signs?

562
00:28:02,320 --> 00:28:04,840
Speaker 7: You know that, And that's a really good question, and

563
00:28:04,920 --> 00:28:08,440
Speaker 7: it really is going to it's going to be very personal.

564
00:28:09,000 --> 00:28:12,200
Speaker 7: So if the rentals that Scott and my own, they're

565
00:28:12,240 --> 00:28:15,120
Speaker 7: all local, so if we need to get to them quickly,

566
00:28:15,800 --> 00:28:21,439
Speaker 7: we can. But thinking of I would never buy personally

567
00:28:21,640 --> 00:28:25,080
Speaker 7: a rental in Florida because I can't keep my eyes

568
00:28:25,160 --> 00:28:25,720
Speaker 7: on it.

569
00:28:25,720 --> 00:28:27,320
Speaker 2: It's kind of like owning a bar.

570
00:28:28,920 --> 00:28:31,640
Speaker 7: If you're not in that bar all the time, people

571
00:28:31,680 --> 00:28:34,399
Speaker 7: are going to be drinking your alcohol and they're going

572
00:28:34,440 --> 00:28:38,440
Speaker 7: to be stealing from the till unless you're there and

573
00:28:38,720 --> 00:28:41,760
Speaker 7: monitoring the situation, or maybe hiring somebody that you know

574
00:28:41,840 --> 00:28:45,400
Speaker 7: and trust. So as far as a location, it really

575
00:28:45,440 --> 00:28:49,160
Speaker 7: really depends on what type of property you're looking for.

576
00:28:49,520 --> 00:28:52,280
Speaker 7: If you're looking for a little higher end property, if

577
00:28:52,320 --> 00:28:55,800
Speaker 7: you're looking for something that's, you know, a fixer upper.

578
00:28:56,520 --> 00:29:00,360
Speaker 7: There's there's so many options, but the biggest thing that

579
00:29:00,440 --> 00:29:03,520
Speaker 7: I can say is planning is key. Connect with a

580
00:29:03,560 --> 00:29:07,400
Speaker 7: smart financial planner I think we know some, and a

581
00:29:07,480 --> 00:29:08,560
Speaker 7: really smart realtor.

582
00:29:08,840 --> 00:29:10,440
Speaker 2: I think we know one of those too.

583
00:29:11,280 --> 00:29:14,040
Speaker 4: It sounds great. Hey, Thanks, thanks as always for all

584
00:29:14,080 --> 00:29:16,920
Speaker 4: your help. Michelle. You're listening to Simply Money presented by

585
00:29:16,960 --> 00:29:20,600
Speaker 4: all Worth Financial on fifty five KRC the talk station.

586
00:29:21,080 --> 00:29:23,520
Speaker 2: The Shumer shutdown, Trump shutdown.

587
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588
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589
00:29:26,440 --> 00:29:28,760
Speaker 5: The Ice facility has been under siege.

590
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Speaker 4: President's declared war on Chicago is a disaster. We deserve

591
00:29:33,600 --> 00:29:35,160
Speaker 4: to be safe in our communities.

592
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593
00:29:36,160 --> 00:29:38,880
Speaker 4: Trump again Israel and hamas a piece deal is closer

594
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595
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596
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597
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Speaker 3: Fifty five KRC.

598
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Speaker 4: The talk station Get a Pen.

599
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600
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Speaker 6: one for podcasting. Fifty five KRC iHeartRadio Station.

601
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Speaker 4: You're listening to Simply Money sent up by all Worth

602
00:30:08,640 --> 00:30:11,920
Speaker 4: Financial on Bob Sponseller along with Brian James. Do you

603
00:30:11,960 --> 00:30:14,120
Speaker 4: have a financial question you'd like for us to answer.

604
00:30:14,240 --> 00:30:16,560
Speaker 4: There's a red button you can click while you're listening

605
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606
00:30:20,120 --> 00:30:23,840
Speaker 4: your question and it will come straight to us. All right.

607
00:30:23,880 --> 00:30:27,120
Speaker 4: Brian Martin and Lovelin has one for you. He says,

608
00:30:27,120 --> 00:30:31,160
Speaker 4: we're retired and we're drawing from our portfolio. How do

609
00:30:31,240 --> 00:30:35,400
Speaker 4: we decide which accounts to tap first? Taxable accounts? Iras

610
00:30:35,680 --> 00:30:38,840
Speaker 4: roth irays, how do we decide to make that money

611
00:30:38,920 --> 00:30:39,840
Speaker 4: last longer?

612
00:30:40,480 --> 00:30:42,479
Speaker 5: Yeah, this is a great question and it's a good

613
00:30:42,520 --> 00:30:45,640
Speaker 5: thing to tackle early on to understand the differences between

614
00:30:45,680 --> 00:30:48,840
Speaker 5: all these accounts. So so really with the you might

615
00:30:48,920 --> 00:30:51,200
Speaker 5: have a lot of different accounts. There could be fifteen

616
00:30:51,200 --> 00:30:53,960
Speaker 5: accounts in one household. But there's really only a handful

617
00:30:54,000 --> 00:30:57,160
Speaker 5: of tax treatments. So some things are tax defferred. That's

618
00:30:57,160 --> 00:30:59,640
Speaker 5: oftentimes you're iras, and four in case you've never paid

619
00:30:59,680 --> 00:31:02,480
Speaker 5: tax or those things can also be roth, meaning you

620
00:31:02,520 --> 00:31:04,800
Speaker 5: paid you didn't get a deduction up front, so you

621
00:31:05,000 --> 00:31:07,600
Speaker 5: technically pay taxes on the front end, but no taxes

622
00:31:07,640 --> 00:31:09,800
Speaker 5: on the back. Or you can have you might have

623
00:31:09,800 --> 00:31:11,880
Speaker 5: a taxable account, this is something that spits out of

624
00:31:11,880 --> 00:31:14,200
Speaker 5: ten ninety nine every year on the dividends, and maybe

625
00:31:14,240 --> 00:31:15,840
Speaker 5: they are capital gains and those kinds of things. So

626
00:31:15,880 --> 00:31:18,720
Speaker 5: those are the three basic tax treatments. So here's some

627
00:31:18,760 --> 00:31:20,880
Speaker 5: ways to think about it. A good rule of thumb

628
00:31:21,200 --> 00:31:24,520
Speaker 5: is to spend those taxable accounts first, then your tax

629
00:31:24,560 --> 00:31:28,520
Speaker 5: deferred ones, and save those wroth iras for a last

630
00:31:28,560 --> 00:31:31,280
Speaker 5: that's now let's get more specific. There are exceptions to this,

631
00:31:31,360 --> 00:31:32,840
Speaker 5: but that's that's kind of a good way to just

632
00:31:32,880 --> 00:31:35,320
Speaker 5: start thinking about it. Since the WROTH money is tax

633
00:31:35,360 --> 00:31:38,640
Speaker 5: free and there's no require minimum distributions, we're not trying

634
00:31:38,680 --> 00:31:40,920
Speaker 5: to avoid those at age seventy five or seventy three,

635
00:31:41,440 --> 00:31:43,719
Speaker 5: so let the ross run put them on the back end,

636
00:31:43,760 --> 00:31:45,320
Speaker 5: and your kids are also going to inherit them a

637
00:31:45,360 --> 00:31:46,200
Speaker 5: little more efficiently.

638
00:31:46,600 --> 00:31:48,800
Speaker 2: So, but let's talk about more specific situations.

639
00:31:48,800 --> 00:31:51,040
Speaker 5: If you're at a low tax bracket early in retirement,

640
00:31:51,080 --> 00:31:53,200
Speaker 5: you might fill up those brackets by going ahead and

641
00:31:53,240 --> 00:31:57,320
Speaker 5: taking proactively strategic IRA withdrawals and paying taxes a little

642
00:31:57,360 --> 00:32:00,680
Speaker 5: earlier than you have to, but otherwise doing it at

643
00:32:00,680 --> 00:32:02,800
Speaker 5: a lower bracket because you have less income.

644
00:32:02,800 --> 00:32:05,400
Speaker 2: You also might do partial Roth conversions at this time.

645
00:32:05,640 --> 00:32:07,320
Speaker 5: Not only is that going to turn it into tax

646
00:32:07,320 --> 00:32:09,360
Speaker 5: free income from here on out, it's also going to

647
00:32:09,400 --> 00:32:13,120
Speaker 5: reduce future require minimum distributions and you're going to control

648
00:32:13,160 --> 00:32:15,600
Speaker 5: your taxes later when Social Security and Medicare kicks in.

649
00:32:16,240 --> 00:32:18,120
Speaker 5: So hopefully that helps. That helps answer that question a

650
00:32:18,120 --> 00:32:20,120
Speaker 5: little bit. Let's move on to Jerry and Westchester, and

651
00:32:20,200 --> 00:32:22,960
Speaker 5: Jerry says, if Roth accounts are so tax efficient, why

652
00:32:22,960 --> 00:32:25,000
Speaker 5: wouldn't we just stick all of our dollars into that

653
00:32:25,080 --> 00:32:27,080
Speaker 5: instead of traditional iras and four O one k's what

654
00:32:27,120 --> 00:32:27,560
Speaker 5: do you think of that?

655
00:32:27,560 --> 00:32:31,440
Speaker 4: Bob Well, I say to Jerry that that might be

656
00:32:31,520 --> 00:32:33,960
Speaker 4: exactly what you want to do, I mean, depending on

657
00:32:34,000 --> 00:32:37,680
Speaker 4: your situation. So kudos to you for thinking about this stuff.

658
00:32:38,000 --> 00:32:40,240
Speaker 4: You know, up front. So here, but here's how I'd

659
00:32:40,240 --> 00:32:43,760
Speaker 4: answer the question. Anytime we get into a discussion or

660
00:32:43,800 --> 00:32:46,440
Speaker 4: you have to do the analysis on this WROTH versus

661
00:32:46,480 --> 00:32:49,800
Speaker 4: regular iran four oh one K you got you gotta

662
00:32:49,960 --> 00:32:54,040
Speaker 4: build some assumptions into your long term financial plan, things

663
00:32:54,080 --> 00:32:57,400
Speaker 4: like what are tax rates now based on your current income,

664
00:32:58,080 --> 00:32:59,760
Speaker 4: What do you think tax rates are going to be

665
00:33:00,040 --> 00:33:03,160
Speaker 4: down the road, what are your income needs gonna be.

666
00:33:03,320 --> 00:33:06,160
Speaker 4: So there's some there's some work that goes into this

667
00:33:06,280 --> 00:33:09,200
Speaker 4: to come up with a plan to determine whether it

668
00:33:09,240 --> 00:33:13,520
Speaker 4: does make sense to defer taxes now most of the time,

669
00:33:14,000 --> 00:33:16,760
Speaker 4: you know, the traditional iras in four oh one k's

670
00:33:16,960 --> 00:33:19,320
Speaker 4: make the most sense for people that are in a

671
00:33:19,480 --> 00:33:23,520
Speaker 4: high income tax bracket now and think they're going to

672
00:33:23,600 --> 00:33:26,720
Speaker 4: be in a lower tax bracket you know, when they retire.

673
00:33:26,840 --> 00:33:28,960
Speaker 4: So you got to run the numbers. But look, there's

674
00:33:29,080 --> 00:33:32,720
Speaker 4: nothing wrong with the WROTH iren in case, there's a

675
00:33:32,720 --> 00:33:36,240
Speaker 4: lot right with the WROTH accounts, there's nothing wrong with it.

676
00:33:36,640 --> 00:33:40,440
Speaker 4: The key here is to match the strategy with your

677
00:33:40,560 --> 00:33:46,440
Speaker 4: individualized financial plan to determine which mix of WROTH versus

678
00:33:46,480 --> 00:33:50,560
Speaker 4: regular accounts make the most sense for you. And again

679
00:33:50,640 --> 00:33:52,440
Speaker 4: it has to do with a lot to do with

680
00:33:52,480 --> 00:33:55,280
Speaker 4: your current income now, the tax bracket you're in now

681
00:33:55,400 --> 00:33:57,320
Speaker 4: versus where you think you're going to be down the road.

682
00:33:57,360 --> 00:34:00,400
Speaker 4: And then everybody has an opinion on where tax rates

683
00:34:00,440 --> 00:34:03,120
Speaker 4: are headed. We'll leave that for another day, but hope

684
00:34:03,120 --> 00:34:06,480
Speaker 4: that helps Jerry. All right, Rachel and fort Mitchell. You know,

685
00:34:06,600 --> 00:34:10,440
Speaker 4: says Brian. We've got cash and CDs earning over five percent,

686
00:34:11,160 --> 00:34:14,600
Speaker 4: but rates won't stay that high forever. How do we

687
00:34:14,760 --> 00:34:18,360
Speaker 4: transition back into longer term investments when the time comes?

688
00:34:18,520 --> 00:34:20,680
Speaker 5: All right, Rachel, This is a very common question now

689
00:34:20,719 --> 00:34:23,040
Speaker 5: because when interest rates finally got off the mat a

690
00:34:23,040 --> 00:34:25,400
Speaker 5: few years ago and we all slowly began to remember

691
00:34:25,400 --> 00:34:27,920
Speaker 5: that we're allowed to get paid on our deposits, a

692
00:34:27,920 --> 00:34:29,680
Speaker 5: lot of people put money into in the CDs and

693
00:34:29,719 --> 00:34:31,040
Speaker 5: kind of lock some of these rates in. Well, those

694
00:34:31,040 --> 00:34:32,960
Speaker 5: are starting to come due now, and we've got decisions

695
00:34:33,040 --> 00:34:35,600
Speaker 5: to make. Yields are coming down. The Federal Reserve has

696
00:34:36,000 --> 00:34:38,160
Speaker 5: cut rates, has cut interest rates a little bit and

697
00:34:38,160 --> 00:34:40,160
Speaker 5: as problem and is expected to have a few more

698
00:34:40,160 --> 00:34:41,480
Speaker 5: of those too, which is going to be good for

699
00:34:41,520 --> 00:34:44,680
Speaker 5: your stock market portfolio, but not great for where you're

700
00:34:44,680 --> 00:34:45,920
Speaker 5: trying to lock in those yields.

701
00:34:45,960 --> 00:34:49,200
Speaker 2: So really the think of it like this. Think of

702
00:34:49,239 --> 00:34:51,120
Speaker 2: it this way. We're kind of turning down a dimmer switch.

703
00:34:51,120 --> 00:34:52,160
Speaker 2: You're not flipping light switch.

704
00:34:52,200 --> 00:34:55,759
Speaker 5: Instead of moving everything at once, reinvestings gradually maybe every

705
00:34:55,840 --> 00:34:58,279
Speaker 5: quarter or as those CDs mature. That's a way to

706
00:34:58,360 --> 00:35:00,440
Speaker 5: kind of force yourself to dollar cost aver. You're not

707
00:35:00,480 --> 00:35:02,880
Speaker 5: throwing everything into your stock and bond portfolio at the

708
00:35:02,920 --> 00:35:05,640
Speaker 5: worst possible time, because you're gonna spread it out over time.

709
00:35:05,920 --> 00:35:08,200
Speaker 5: You also could look at what something called a bond ladder,

710
00:35:08,239 --> 00:35:10,799
Speaker 5: which basically means let's say you buy you know, I'll

711
00:35:10,800 --> 00:35:11,480
Speaker 5: make up an example.

712
00:35:11,520 --> 00:35:12,760
Speaker 2: You've got fifty thousand dollars.

713
00:35:12,760 --> 00:35:16,640
Speaker 5: You put ten thousand dollars into five different bonds coming

714
00:35:16,719 --> 00:35:18,960
Speaker 5: due each year over the next five years. That's going

715
00:35:19,000 --> 00:35:21,319
Speaker 5: to lock in the yields where they currently are, but

716
00:35:21,400 --> 00:35:24,960
Speaker 5: also create liquidity on an annual basis. That's the basic

717
00:35:25,000 --> 00:35:28,239
Speaker 5: function of a bond ladder. So you know, it's just

718
00:35:28,640 --> 00:35:30,520
Speaker 5: think of it as a as a as a process,

719
00:35:30,600 --> 00:35:32,759
Speaker 5: not a Okay, I'm done with CDs today and now

720
00:35:32,760 --> 00:35:35,120
Speaker 5: I'm all in the stock market, so just be don't

721
00:35:35,160 --> 00:35:36,920
Speaker 5: don't make it more complicated than it has to be

722
00:35:36,960 --> 00:35:39,200
Speaker 5: to get back in. So we're gonna move on to

723
00:35:39,280 --> 00:35:41,799
Speaker 5: John and Anderson. John's had an advisor for a long time,

724
00:35:41,840 --> 00:35:43,799
Speaker 5: and he says they're starting to wonder about how to

725
00:35:43,800 --> 00:35:47,479
Speaker 5: evaluate performance beyond just the returns. What should they really

726
00:35:47,520 --> 00:35:51,440
Speaker 5: be measuring in determining whether this advisor's providing value for them, Bob.

727
00:35:52,719 --> 00:35:55,080
Speaker 4: Well. John also said, you know, they've been working with

728
00:35:55,120 --> 00:35:57,799
Speaker 4: the same advisor for years, and he's just starting to

729
00:35:57,840 --> 00:36:01,840
Speaker 4: wonder how to evaluate the performance not just of market returns,

730
00:36:01,840 --> 00:36:05,799
Speaker 4: but advisors. And here's my answer. And and this this

731
00:36:05,880 --> 00:36:09,000
Speaker 4: is somewhat I guess might be controversial to some. I

732
00:36:09,040 --> 00:36:12,640
Speaker 4: think most people in our business, Brian, feel free to disagree.

733
00:36:12,920 --> 00:36:17,640
Speaker 4: Whether it's fiduciary advisors, commission based brokers, people holding them

734
00:36:17,719 --> 00:36:22,439
Speaker 4: south themselves out as investment advisors. You know, let's face it,

735
00:36:22,560 --> 00:36:27,080
Speaker 4: eighty over almost eighty percent of all actively managed you know,

736
00:36:27,200 --> 00:36:32,800
Speaker 4: accounts net of fees underperform their peer group index again

737
00:36:33,320 --> 00:36:36,640
Speaker 4: over two thirds, close to eighty percent. So you gotta,

738
00:36:36,719 --> 00:36:39,760
Speaker 4: you gotta, you got to conclude that the value added

739
00:36:39,800 --> 00:36:44,360
Speaker 4: here in any financial advisor relationship is not in that

740
00:36:44,520 --> 00:36:47,959
Speaker 4: advisor saying I'm gonna beat the market every year. It's

741
00:36:48,000 --> 00:36:51,600
Speaker 4: all the other stuff they do for you, the tax efficiency,

742
00:36:51,760 --> 00:36:57,680
Speaker 4: the estate planning, the truly comprehensive financial plan, putting behavioral

743
00:36:57,760 --> 00:37:01,240
Speaker 4: guardrails around some of the decisions that people may keeping

744
00:37:01,280 --> 00:37:04,080
Speaker 4: them from making decisions from what they might not be

745
00:37:04,120 --> 00:37:07,040
Speaker 4: able to recover from. That's where the value is added.

746
00:37:07,560 --> 00:37:10,480
Speaker 4: And if your advisor is not current advisor is not

747
00:37:10,640 --> 00:37:14,120
Speaker 4: adding that kind of value, you might want to get

748
00:37:14,120 --> 00:37:17,879
Speaker 4: a second opinion from a good fiduciary advisor. Coming up next,

749
00:37:17,920 --> 00:37:21,560
Speaker 4: I've got my two cents on why people don't stay

750
00:37:21,640 --> 00:37:25,800
Speaker 4: more disciplined from a long term standpoint in the stock market.

751
00:37:26,200 --> 00:37:28,760
Speaker 4: You're listening to Simply Money, presented by all Worth Financial

752
00:37:28,800 --> 00:37:33,320
Speaker 4: on fifty five KRC the talk station Mark Levin.

753
00:37:33,560 --> 00:37:36,480
Speaker 1: Let me tell you, so, the Internet is breeding evil,

754
00:37:36,640 --> 00:37:39,800
Speaker 1: breeding evil, and TikTok is the main culprit. And I

755
00:37:39,800 --> 00:37:42,279
Speaker 1: don't know what's happening with TikTok, but that damn thing

756
00:37:42,360 --> 00:37:44,239
Speaker 1: needs to be sold now and it needs to be

757
00:37:44,280 --> 00:37:46,239
Speaker 1: cleaned up. And I don't want to hear about free

758
00:37:46,239 --> 00:37:49,480
Speaker 1: speech and everything else. It's a private company. The company

759
00:37:49,520 --> 00:37:52,280
Speaker 1: needs to clean it up because this is crazy between

760
00:37:52,280 --> 00:37:55,360
Speaker 1: the communist Chinese and all the crap that people put.

761
00:37:55,200 --> 00:37:55,800
Speaker 4: On this stuff.

762
00:37:55,880 --> 00:37:59,560
Speaker 3: Mark Levin tonight at ten oh six on fifty five KRC,

763
00:38:00,080 --> 00:38:02,840
Speaker 3: the talk station at the Thompson House flows.

764
00:38:02,880 --> 00:38:04,680
Speaker 6: I am so worried that next month I have to

765
00:38:04,760 --> 00:38:07,600
Speaker 6: choose between groceries for my kids or gas for my car.

766
00:38:07,840 --> 00:38:11,600
Speaker 3: Talk about it here fifty five KRC, the talk station.

767
00:38:15,480 --> 00:38:17,520
Speaker 4: You're listening to. Simply Money, said I by all Worth

768
00:38:17,520 --> 00:38:21,640
Speaker 4: Financial on Bob Sponsller along with Brian James. All Right, Brian,

769
00:38:21,680 --> 00:38:25,200
Speaker 4: I'm gonna throw my behavioral finance cap on here tonight

770
00:38:25,320 --> 00:38:29,880
Speaker 4: and talk a little bit about why some investors don't

771
00:38:29,920 --> 00:38:34,160
Speaker 4: stay more disciplined, you know, and treat the stock market

772
00:38:34,200 --> 00:38:38,400
Speaker 4: like the wonderful long term investment opportunity that it is.

773
00:38:39,880 --> 00:38:42,440
Speaker 4: And you know, we threw out a slew of data

774
00:38:42,520 --> 00:38:46,120
Speaker 4: earlier in the show today making the case, and it's facts.

775
00:38:46,480 --> 00:38:49,839
Speaker 4: There's no opinion there, it's just facts on the benefits

776
00:38:49,920 --> 00:38:52,480
Speaker 4: of having a lot of your money in the stock

777
00:38:52,520 --> 00:38:55,200
Speaker 4: market long term. I want to talk about why people

778
00:38:55,239 --> 00:38:58,040
Speaker 4: don't do it, and I've come up with three most

779
00:38:58,120 --> 00:39:01,160
Speaker 4: common reasons. And look, I've been guilty of all three

780
00:39:01,200 --> 00:39:03,920
Speaker 4: of these, you know, at some point in time over

781
00:39:04,000 --> 00:39:06,799
Speaker 4: the course of my career. I would say one is

782
00:39:06,880 --> 00:39:10,960
Speaker 4: control when the market does nothing, and we're used to

783
00:39:11,040 --> 00:39:14,040
Speaker 4: running a business and we want to make things happen.

784
00:39:14,239 --> 00:39:17,080
Speaker 4: We want we we think we're smart and we think

785
00:39:17,120 --> 00:39:19,439
Speaker 4: we can outsmart the market. We think we can pick

786
00:39:19,480 --> 00:39:22,279
Speaker 4: stocks and pick you know, time the market in and out.

787
00:39:22,320 --> 00:39:25,719
Speaker 4: We just think we're smarter than everyone else, and we

788
00:39:25,760 --> 00:39:29,319
Speaker 4: want to control the outcome ourselves. Number two, and this

789
00:39:29,400 --> 00:39:32,920
Speaker 4: is a big one, is just the media. Let's face it,

790
00:39:33,040 --> 00:39:36,759
Speaker 4: over a ninety percent of the stories we hear all day,

791
00:39:37,000 --> 00:39:41,000
Speaker 4: every day in the media are negative. That's what sells

792
00:39:41,239 --> 00:39:46,160
Speaker 4: negative headlines, and people just get scared and they say, gosh,

793
00:39:46,280 --> 00:39:49,480
Speaker 4: what else could happen bad? I'm going to park my

794
00:39:49,600 --> 00:39:52,880
Speaker 4: money on the sidelines and wait for the market to

795
00:39:52,920 --> 00:39:56,440
Speaker 4: get better. And as we've already illustrated, you miss the

796
00:39:56,480 --> 00:39:59,560
Speaker 4: best ten twenty thirty days over a twenty year period,

797
00:39:59,640 --> 00:40:02,840
Speaker 4: and you literally leave millions of dollars on the table.

798
00:40:03,640 --> 00:40:06,200
Speaker 4: And then the third is politics, you know, depending on

799
00:40:06,280 --> 00:40:09,680
Speaker 4: who's in the office, and and and again you know

800
00:40:09,800 --> 00:40:12,919
Speaker 4: this is not a political you know, common I'm just saying,

801
00:40:12,960 --> 00:40:15,839
Speaker 4: people on both sides of the aisle, depending on our biases,

802
00:40:16,280 --> 00:40:19,360
Speaker 4: we think if one political party is in power, the

803
00:40:19,400 --> 00:40:21,239
Speaker 4: whole world's going to come to an end, and if

804
00:40:21,280 --> 00:40:25,160
Speaker 4: I get my guy or my party in office, everything's

805
00:40:25,200 --> 00:40:27,520
Speaker 4: going to be great. And this is just a great

806
00:40:27,600 --> 00:40:30,920
Speaker 4: reminder that if you look back over history, depending on

807
00:40:30,960 --> 00:40:35,360
Speaker 4: which political party is in power, the long term returns

808
00:40:35,360 --> 00:40:39,920
Speaker 4: on the stock market are nearly identical. Brian, thanks for listening.

809
00:40:40,000 --> 00:40:42,279
Speaker 4: You've been listening to Simply Money, presented by all Worth

810
00:40:42,280 --> 00:40:45,400
Speaker 4: Financial on fifty five KRC, the talk station.

811
00:40:46,080 --> 00:40:48,000
Speaker 2: I want to know what's happening. I know what's going

812
00:40:48,040 --> 00:40:48,960
Speaker 2: on around town.

813
00:40:48,880 --> 00:40:51,240
Speaker 5: Around the country.

814
00:40:49,960 --> 00:40:52,040
Speaker 4: I don't I need to.

815
00:40:51,960 --> 00:40:52,920
Speaker 5: Know the weather, in traffic.

816
00:40:53,080 --> 00:40:55,000
Speaker 3: I want to know what's happening on my local school

817
00:40:55,040 --> 00:40:56,160
Speaker 3: boards if I want to know that too.

818
00:40:57,480 --> 00:40:59,440
Speaker 1: If I don't know what's going on, how can I

819
00:40:59,480 --> 00:41:00,400
Speaker 1: have a valid opinion.

820
00:41:00,640 --> 00:41:03,880
Speaker 5: Knowing is like massage in your brain, and it's pretty

821
00:41:03,920 --> 00:41:04,960
Speaker 5: easy to do, right.

822
00:41:05,080 --> 00:41:07,040
Speaker 4: I do it every day, be in the know.

823
00:41:07,480 --> 00:41:09,719
Speaker 1: I listen on the way to work every day, I

824
00:41:09,760 --> 00:41:10,600
Speaker 1: listen on the way home.

825
00:41:11,480 --> 00:41:15,400
Speaker 3: Listen and you'll know LAT fifty five KRC being talkstation.

826
00:41:16,640 --> 00:41:17,120
Speaker 2: Maybe this is