0:05

Reality Radio. For a really

0:07

great future. We're talking real

0:09

money. Were welcome to

0:11

another exciting addition. Know

0:13

talking real money, the

0:15

live Saturday radio show

0:17

that becomes a. Podcast.

0:20

A few days later, I'm Dawn Mcdonald

0:23

along with my good buddy Tom Cock

0:25

over there in the Seattle area. Buddy

0:27

so close I can almost touch him

0:29

right there. A gang leader thousand miles

0:31

or where. I can look out

0:33

his window see that there's little sunshine over

0:36

his shoulder. Make him happy. Does.

0:38

Yeah. It doesn't

0:41

make him high but it makes him

0:43

happy. You are Colorado Negative Another yeah

0:45

And you you my friends. You are

0:47

invited to join us here on program

0:50

with a call to Eight Five Five

0:52

Nine Three Five Doc. Please.

0:54

Do comrade call us Eight Five

0:56

Five Nine three Buying own for

0:58

Hope X or whatever it is

1:00

hoped for? Go parents it. You

1:03

know it's Rubles dude. Rule. Which.

1:05

Hoses Co pack that somebody is. And

1:08

why am I gonna have to look this up

1:10

Now I'm on a low get up and are

1:12

I brought it up all look at I brought

1:14

it up by look it up where he or

1:16

to help you deal with money better than you

1:18

did before and we love doing it. When you

1:20

call us at eight five five nine three five

1:22

talk as then we know what you want to

1:24

talk about because she called us about the coin

1:26

of Russia, Belarus, Ukraine and former Soviet Union. Will.

1:29

Must be. Oh, it's a coin. Yep, the

1:31

Ruble like the dollar are okay so that

1:33

I hope that I were partially right here.

1:36

In all this two, four, Six Kopecks A

1:38

A Ruble. I

1:41

not know. Ah add so. Anyway, call us

1:43

Eight five five nine three five Talk Eight

1:45

five five nine three five Eight to five

1:47

five One of a big. Big.

1:49

Issues that. We.

1:52

Talk about all the time because it's

1:54

the biggest money issue in most people's

1:56

life. Or if not, it should be.

1:59

Will. actually get the $400 saved

2:02

for an emergency, that's number one, then

2:04

pay for retirement. But

2:06

when you get there, you

2:09

know what, I'm just, I'm rethinking this story.

2:12

I'm rethinking this one. This is your idea. I'm

2:15

rethinking it now because... You've got your opinion.

2:17

You're entitled to it. Because this

2:19

is a story about the things you should

2:21

talk about in retirement with your spouse. To

2:24

avoid having this conversation, which is an uncomfortable

2:27

conversation, I always hate it, I'm

2:29

just never going to retire. So there we go.

2:31

All right, I've solved that problem. This should be,

2:33

by the way, it says retire, but this should,

2:35

for anyone in a long-term relationship... Oh no, I

2:37

don't want to talk about money at all. I'm

2:40

sorry. It just gets miserable. And you're in an

2:42

unusual situation because the article refers to the fact

2:44

that normally one party sort of takes the lead

2:47

with all this. The fact that your significant... yeah,

2:49

hang on. The

2:51

fact that your significant other used to

2:53

be in this business as a stock broker.

2:56

Oh yeah, yeah. And she has more

2:58

opinionated than I am. Oh yeah, very

3:00

much so. Not more right, but more

3:02

opinionated. No, okay. That can happen in

3:04

a relationship too, by the way. I

3:06

mean, you still

3:08

own some individual stocks and will not

3:10

listen to me on those. You will

3:12

not listen to me, nor your advisor.

3:15

No, about many things, including that.

3:19

Usually, most of the time... Lover, but anyway... Me

3:21

too. But most of the time when we

3:23

meet with people, one person

3:25

has been the sort of lead on

3:28

saving, investing, and generally the bill

3:31

payer, the kind of the financial person. That's

3:33

generally true, right? Yeah, no, it is.

3:35

Most of her life is pretty normal. Now,

3:38

when it comes to the bill pay, she's terrible

3:40

at that. I do all that stuff. Okay.

3:44

But here's the thing. The

3:47

painful discussion Don just

3:49

referred to. It's not

3:51

fun. I'm having a panic attack.

3:54

I know, because sometimes you have to use that

3:56

word that's known. No. Oh

3:58

my... You Tell them no. The

4:01

number one saw your other medical good it

4:03

can you know until the we have when

4:05

that argument know him She is a whirlwind

4:08

Hurricane Debbie Ah. Okay,

4:10

I know again way or I'm sorry

4:12

if I was lying about visiting us

4:15

on the campaign trail over the summer

4:17

as any of your mention that you

4:19

are banned is banned from staying my

4:22

oldest ever again. And by the

4:24

way if you did meet with you would not

4:26

see that's how did that He is harming. To.

4:28

The point isn't as bad. she's no no

4:30

I was saying a super hot and will

4:33

they. If. You hurricane was sounds

4:35

can a negative. I'm saying if they

4:37

if you matter their you'd never know

4:39

that own our alliances are known or

4:41

the freelance indeed prefer thirty plus years.

4:44

okay but please only remember that part

4:46

but I said right there for said

4:48

it added edits. Do we talk enough

4:50

about our money. That's. The

4:53

number one question retired couple should

4:55

ask themselves about their finances. And.

4:57

The answer generally is no oh we

4:59

just met with somebody who the at

5:01

when went to the review of the

5:03

money they had the woman with. I

5:06

didn't even know we had all his money. I thought

5:08

we couldn't afford a toaster. I didn't. Oh

5:10

what's going on here? Super forgo

5:13

husband. Exactly so enthusiastic about way

5:15

that we have thirty million dollars

5:17

an idea by of those serve

5:19

and eighty five ninety three by

5:21

charges or phone number will continue.

5:31

In medicine, a second opinion might save

5:33

your life. With investing a second opinion

5:35

My Save Your future. The trick is

5:38

getting one without a high pressure sales

5:40

with well, I'm Dawn Mcdonald and if

5:42

you been listening to Talking Real Money,

5:44

you know that our goal is to

5:47

help everyone create a brighter future by

5:49

investing and managing money better. That's why

5:51

in addition to helping everyone on our

5:53

show and podcast, we are also committed

5:56

to making our one Hundred Percent for

5:58

Do Here Advisers and of. Our

6:00

available to help everyone make the

6:02

best financial decisions based on size

6:05

of your being pitched a financial

6:07

product or system. Make sure you

6:09

get a second opinion with no

6:12

cost, no obligation and know annoying

6:14

sales pitch by going to Talking

6:16

Real money.com or call Eight Hundred

6:19

Three Eight Six Three Zero Zero

6:21

For that Eight Hundred Three A

6:23

Six Three Zero Zero Four or

6:26

Talking Real money.com. Your

6:30

Guys. Who are really great finance

6:32

officer. And

6:36

was gonna phone numbers. Eight Five Five Nine

6:38

Three five Talk Eight Five five Nine three

6:40

five Eight to five Five Talking about the

6:42

things you need to talk about with your

6:44

significant other or your spouse. In.

6:47

Retirement dumb. Nand.

6:49

And him some they should be before

6:51

retirement but also hosts out our while.

6:53

Yeah, I mean do we talk about

6:56

our money? Most people don't Most people

6:58

the part one partner has the role

7:00

doing s. And here's part of the

7:02

problem is often times investment reports can

7:05

be very confusing to those people that

7:07

don't. Understand. Any of this

7:09

nigga my head is why. Why? Selling what? What

7:11

is this media to please your where. The

7:13

I mean so here's what I think you

7:16

should have instead some. He just came in

7:18

with it brilliantly done the other day. It's

7:20

pretty simple spreadsheet. Of all the good stuff,

7:22

you gotta one side, you know the the

7:25

assets on the other side as I offered

7:27

a liability. Since then he got the liabilities

7:29

on hills Us which is easy to read.

7:31

I update mine every six months. And

7:34

then you sit down with I, sit down with

7:36

my wife and go through it, which can also

7:38

be painful because I remembered early twenty twenty three

7:41

when I saw research. Would.

7:43

I don't want to look as last it's less

7:45

than a was earrings. Always. That

7:47

Elites only. We're not a bad

7:49

year so, but I think having

7:51

that spreadsheet, having that meeting evs

7:53

every six months, especially for somebody

7:56

who's not interested is very, very

7:58

helpful and probably completely nuts. There

8:00

real is Eight, five five Nine

8:02

Three Five Talk. Give us a

8:04

call and Paul Europe next. Welcome

8:07

to the show. They

8:10

both say i. Say.

8:14

I I was listening to your show was

8:16

finished up my taxes and I heard a

8:18

gentleman call in. A Edu eighty

8:20

one year old gentleman who is a

8:23

retiree from Boeing and he had a

8:25

question for you about going out his

8:27

after tax money and leaving the interest.

8:30

And I actually have experience with that.

8:33

Are going to share that a play

8:35

you it? Yeah, Pluto is. Aren't

8:38

I said? please help us. Out

8:41

of this stuff. so up with

8:43

Bowl Win A Used to be

8:45

State Street Global that manage those

8:47

four One K plans and then

8:49

the over ten years ago so

8:51

choose to buy Dell it eats

8:53

Yup and if you request of

8:56

funds from your for always say.

8:58

They. Will send you a statement and they

9:01

was tell you this much is after tax

9:03

money. This. Much is interest.

9:06

Is Iris once get their hands on Earth?

9:08

the taxes you as as soon as possible.

9:10

So. If you're proportion to what

9:12

you have so you can see and your

9:14

statements. As much as after tax

9:16

money this much is interest and then if

9:18

you want to pull anything out. They

9:22

will go to a prorated about an

9:24

does have. It's. Okay, so you're

9:26

gonna. You're not. You're not able to skip.

9:29

Are. Are to of weight on the in

9:31

on the the earnings you tube you you

9:34

get a prorated sure that. that

9:37

is correct their least that's the way it

9:40

was handled wins and that in the retirement

9:42

plan at work i think he was talking

9:44

about an hour to be held ira if

9:46

it's in the retirement plan work i mean

9:49

i you know the rules are all most

9:51

the same it's not a human figure it

9:53

out so complicated yeah that's my guess because

9:55

this in a liar as was get paid

9:58

so they can so than i can to

10:00

let you skip around any anything

10:02

like that. How did your taxes

10:05

look this year Paul? How did it end up

10:07

looking? Oh

10:09

well so I always make sure I have a

10:12

refund coming that way I don't have to stress

10:14

so I'm just tying up loose ends

10:16

right now but taxes are looking

10:18

pretty good and you know

10:20

when I invested I heard

10:23

the gentleman say and this was the same thing I

10:25

had heard was that well expect to be in a

10:27

lower tax bracket when you retire. Well

10:29

decades ago when I started investing

10:32

I had the reverse philosophy in

10:34

that I was going to be in a higher tax

10:36

bracket when I retired and so

10:40

I put all my money in all my investments

10:42

after tax because I figured I want to pay

10:44

the tax now get it over with and let

10:47

it grow interest free you know put it in

10:49

a Roth and whatnot so

10:52

that was my philosophy. But

10:54

you're a unique person though. You are

10:56

a unique person. We say that too.

10:58

We say you know you're generally probably

11:01

better off you're

11:05

likely to be in a lower tax bracket

11:07

in retirement because most people tend to be

11:09

but good savers and good investors often

11:12

end up in a higher bracket and

11:14

you sound like you're one of those.

11:18

Well I've tried to be. Good for you. Well

11:20

done. Thank you so much. Great

11:23

stuff. We appreciate the call and

11:25

we hope you will all take

11:27

the call. Yeah take care. 855-935-talk

11:30

is our phone number and

11:32

let's see I'm just checking. Oh we're good.

11:34

We're good. Rob you're up next. Welcome to

11:37

the show. Hey

11:41

Rob. Yeah about six months ago. Can you

11:43

hear me? Yep. Hello.

11:46

Yes sir. Six

11:49

months ago I had about 625

11:51

and Schwab pretty much

11:54

all the Apple stock and

11:59

probably He went down, well

12:02

let's see, about a month ago I

12:04

moved everything over into Ed Jones. At

12:07

that time when I moved it into Ed Jones I

12:09

was about $5.25. So

12:14

Apple crashed or something happened

12:16

there, pretty weird. Anyways,

12:18

I heard you mentioned Ed Jones a couple

12:20

segments back and I thought, oh I'll give

12:22

you a call and see. So

12:25

it's fairly well diversified. They kept wanting me

12:27

to put more money in, more money, and

12:29

I have over $100,000 in cash on

12:35

hand. Now let me ask you a question.

12:37

It was only on hand. You say it's

12:39

pretty well diversified. Do

12:43

you know what's in the portfolio? You've

12:47

got a ticker of any kind? Unfortunately

12:49

I'm sitting in my, I have it,

12:52

I do know what all it is, but I

12:54

can't tell you because I'm not on my computer

12:56

looking at anything right now. Do you remember any

12:58

of the names? I'm driving around. Yeah, just don't

13:00

do it. No, don't do it. Do you remember

13:02

any of the names of any of the products

13:04

you have other than the Apple stock you once

13:07

had? At

13:11

this point in time I can't say that I

13:13

do. Any of them refer

13:16

to our country like American Fun News.

13:20

Franklin Templeton. Let me ask you

13:22

this. Is it possible

13:24

to call you guys and talk to

13:27

somebody on a work day and

13:29

when I'm sitting down with my portfolio

13:31

in front of me? We've done that

13:33

for thousands and thousands of people. Who

13:36

do I call? Somebody in, okay. Yeah,

13:38

it is absolutely free. It

13:40

is free. It is free. You

13:42

can call the number and ask. You

13:44

can call the number and start with me because you

13:47

know me. That's fine. Call the customer. Just

13:49

call 800-386-3004 on a work day. Or

13:56

even easier. 800-386-3004. Yeah,

14:01

it's okay. Yep,

14:04

that's it. And that was 800. Yep.

14:09

Okay. All right. I'll

14:11

do it. Ask for Tom. Who do I

14:13

ask for? Anybody? Tom.

14:16

You can ask for Tom. Tom. Yep.

14:19

All right, Tom. Tom and Don. Ron's brother.

14:22

Tom. Oh, yeah, it's on the weekend.

14:24

That'd be great. It'll be a lot better. Yeah. Yeah.

14:28

Thanks, Rob. Take a look at that.

14:30

And what you're paying. Yeah, we'll get into the Ed

14:32

Jones thing later, but the Apple

14:34

thing, because- Yeah, there's someone in your house

14:36

that's like the Apple fan or something? No,

14:38

no, no, no. Like you can sell Apple?

14:41

That's the Apple anger. Oh, okay. You're

14:44

thinking of the Apple anger, because when Steve

14:46

Jobs died, she goes, do you think this

14:48

could be bad for Apple? It's over. And

14:51

I said, I don't think it's good. Well,

14:54

probably wasn't, but then the stock went straight up.

14:56

Went straight up. And you're still

14:58

blaming me for not letting her get into

15:00

Apple. She shouldn't be in individual stocks, anyway.

15:02

She owned Disney, and it's not done well

15:04

lately. Yeah, shocking, shocking. But Apple stock this

15:07

year has been horrendous. I don't know. I was

15:09

going to ask you. Except

15:12

last week when the rest of the market

15:14

went south, Apple went up for some reason.

15:17

Probably because it had gone down so far. Yeah,

15:19

that's what they call it. They actually call

15:21

it a dead cat bounce. That

15:23

sounds bad, but it's good. But what

15:25

a real dead cat. I want to

15:27

talk about Apple because it's a fascinating

15:29

individual stock story. Well, then let's do

15:31

an after the break after the next

15:33

caller. We'll wait for the next caller.

15:36

855-935-talk. Call us. Tom

15:39

and Don are talking real money.

15:43

For your real life and real future, Tom

15:45

and Don are talking real money. Give

15:48

us a call. You take precedence if you call

15:51

over our conversations. We're going to talk more about

15:53

Apple in a minute. But first, before we do,

15:56

it's Terry's turn on talking real

15:58

money. Hi, Terry. What

16:01

I want, I'm thinking about changing

16:03

my IRA as it's so-called to,

16:05

is it called a Roth account?

16:07

You want to change from a

16:09

regular IRA to a Roth IRA?

16:13

Yeah, that's it. How

16:16

safe is it? You see

16:19

these advertisements on the web

16:21

all the time. Four. Four.

16:27

What kind of things? Yeah, you could put

16:29

the Roth IRA in any way. What are they telling you to put

16:31

it in? Well,

16:34

I don't know what they're telling me to put

16:36

a million. All right. Okay. Well,

16:38

we're going to change. I'm going to change my

16:41

tact on this. First of all, never get your

16:43

information on how to invest from the Internet. Or

16:46

the radio. That's why I'm calling you. No,

16:49

I mean because there could be a million. It could

16:51

be Bitcoin. It could be whatever.

16:54

There could be a thousand. The

16:56

right way to do this is to

16:58

go back to the very beginning of

17:00

the process. You have an

17:02

IRA now, correct? Well,

17:05

I have a, and I forgot the name of

17:08

it. I don't have, I have an IRA, but

17:10

it's in one of those guaranteed

17:12

money accounts. I forget what they call

17:14

them. A GIC?

17:16

Guaranteed? An

17:19

annuity? An annuity? Or

17:21

a money market? An annuity. An annuity. An annuity.

17:24

Oh, you've been sold a bill of goods,

17:26

as they say. You

17:28

have been, you

17:31

should have never been sold an annuity inside an

17:33

IRA. The person who did that is a bad,

17:35

bad person. Be taken out back

17:37

and beaten. Yes. Or at least

17:39

slapped, silly. This guy's a,

17:41

these are a BECU. Yeah,

17:44

oh, well that doesn't surprise me. Doesn't matter, yeah.

17:47

That doesn't surprise me. Just because it's a bank

17:49

or a credit union doesn't mean they have solid

17:52

investments being sold inside the branch.

17:54

They generally don't. One of the

17:56

worst people anyone can talk to

17:58

about investing. Take this a rule,

18:01

if they work for or in a

18:03

bank, avoid them like the

18:05

plague. If there is an insurance company

18:07

name in the name of their

18:10

company, avoid them like the plague. Those

18:12

of you- LPL is in the branches of BECU,

18:14

so that would not be a place I'd take

18:16

my money. How

18:19

much money do you have invested, Terry?

18:22

Overall. Well,

18:26

a little over 200,000 in that. I've

18:29

got a lot more money in cash, though. But how

18:31

long did you- So you got 200,000 in the annuity.

18:36

How long ago were you sold the annuity? About

18:41

seven years ago. Good

18:43

news, good news. You

18:46

can probably get out of it without paying what

18:48

they call a surrender charge. First

18:51

thing I would do- Exactly. First thing

18:53

I would do before you do anything else. You don't

18:55

even want to think about a Roth yet, because

18:58

we don't know if a Roth is going

19:00

to make sense for you even. You got

19:02

to know if it makes sense from a

19:04

tax standpoint. But what you do need to

19:06

do now is get out of that awful

19:08

overpriced, no matter what annuity,

19:10

piece of garbage that should never be

19:13

in an IRA to begin with. That

19:15

means you should move your account. You

19:17

should either contact Vanguard or Schwab to

19:20

transfer your IRA to them. Probably

19:23

Schwab, because it's going to give you

19:25

the most choices. You get it transferred

19:27

over to Schwab, and you just bring

19:29

it over in cash. You

19:32

have them liquidate the annuity, bring it over in

19:34

cash. You may have a surrender charge still. At

19:37

this point, I wouldn't care, because it's not going to be more

19:39

than like two or three percent. I

19:41

would pay it. I would get the heck out. I would never talk to

19:43

this person in BECU again,

19:46

ever, ever, bad

19:48

person. Then you move that

19:50

money over to Schwab, and then you call us, and

19:52

we're going to try to chat

19:54

with you a bit about how you

19:57

should invest it. Or again, like

19:59

the caller book. before you, call

20:01

Tom. He'll help you figure it out

20:03

or one of our other advisors. But

20:06

go to talkingrealmoney.com, click Meet an

20:08

Advisor. You need help that's a

20:10

fiduciary. Tom and John

20:13

are talking real money. Reality

20:20

Radio, we're a really great future.

20:23

We're talking real money. We

20:26

talk about real money with you all the time. You

20:31

can call us on Saturdays from noon to

20:33

2 Pacific, 3 to 5 Eastern every Saturday

20:35

and talk about money with us at 855-935-TALK.

20:39

855-935-8255. Miguel,

20:45

you're up next. Welcome to the show. Hey,

20:51

guys. I'm a recent listener. I've been

20:53

listening for about three months now. And

20:56

I've just kind of started on

20:58

my retirement savings journey. And

21:01

we got this big packet at work and

21:03

we have a plan rep for our 401K.

21:06

We tried calling them

21:08

and saying, hey, what do

21:10

I need to do? And he pretty much just told

21:12

me the shviel of listen to

21:14

the program. The program has you in the right

21:16

place. I

21:19

don't know. That just sounded kind of off

21:21

to me. It's just sort of like a

21:23

odd year. Listen

21:25

to the program. The program will figure it

21:27

out. I don't know. I've ever heard that

21:29

about a 401K or 403B or retirement plan

21:31

of any type. What's the

21:34

program? Do you know? So

21:38

I'm with Empower. And

21:41

they have all these risk

21:43

levels like aggressive. Okay.

21:45

All right. Before we even go there, how old are

21:47

you, Miguel? I'm

21:50

30. Okay. And

21:53

this is the first saving you've done for

21:56

retirement? Yeah.

21:58

I've been here a couple years. years but

22:00

you know I finally started paying

22:03

more attention and seeing the money slowly grow

22:05

I was like I need to know what's

22:07

going on. And what

22:09

is your roughly what

22:11

is your household income? Right

22:17

around $120 a year. Okay.

22:20

Good. And how much are you going to be

22:22

able to put into the retirement plan annually? Do

22:25

you have any idea? Right

22:28

now I put 11% in so I'm sitting at around

22:32

$40,000 right now after years here. That's

22:37

great. Okay. So

22:39

here's the thing. At 30

22:41

years old we're

22:44

going to want you to be aggressive. In

22:46

other words we're going to want you to be in a

22:48

lot of stocks because stocks have made

22:50

more than bonds or

22:52

cash not every

22:55

year but over the long haul and you've got the long haul

22:57

ahead of you here at age 30. I mean

22:59

that's the good news. So

23:02

that would be part one. Part

23:04

two is are you comfortable sort of

23:06

picking the funds that are available or

23:08

do you want to just

23:10

be in what they just said a program

23:12

that sort of manages it for you? I'm

23:20

okay with just picking. I saw

23:22

online you had like the simple

23:25

three portfolio plans. Those

23:27

seem straightforward and easy. When

23:30

it gets into 15 different

23:32

ones I'm probably not the

23:34

guy. Yeah. Here's

23:36

the thing. That

23:38

response is incredibly arrogant

23:40

and probably

23:43

helpful. Probably implies a

23:45

person who really doesn't have much

23:47

of a clue. I'm

23:50

guessing the former. Generally

23:54

speaking they're young and they don't have a clue.

23:56

They're hired for their sales skills. go

24:00

back to them and say, can you give

24:02

me the complete list of

24:06

all of the investments that are available to

24:08

me? Because right now, I

24:10

am not comfortable following the program when

24:12

you won't even tell me what the

24:14

program entails. And

24:18

if he wants to respond to the program,

24:20

then you need to know things like what

24:24

kind of funds or ETFs are available

24:27

to us? What are the costs of

24:29

the account, your advice, your

24:31

potential commissions, your fees?

24:34

I want to know all in

24:36

what the costs are going to be to me. Absolutely

24:38

all in. If he goes, well, no, no, it's about

24:40

what you make, not what you spend. No, it's about

24:42

what you spend because the less you spend, the more

24:44

you tend to make. So we need

24:46

to know what part of these all these questions before

24:49

you sign up for a darn thing. And

24:52

then the other question

24:54

for me would be around the, yeah,

24:56

the other one would be about whether you're going to be

24:58

in a traditional pre-tax kind of

25:00

plan or a Roth because

25:03

at 30 and your

25:05

income's great, but

25:07

it probably suggests you maybe do some of

25:09

both because remember you're going to be able

25:11

to deduct the stuff that goes into the

25:13

traditional from your income tax. The

25:16

Roth, no. So, and at 30

25:18

years, wow, it'd be great to have a lot

25:20

of tax free growth. So there's a lot of

25:22

questions to be asked here and empowers a big,

25:25

they have lots of plans. So it's hard

25:27

to know exactly what may

25:29

be there, but they do have some good

25:31

investments, but what they're trying to do is

25:34

say, oh, trust us. And I

25:36

would quote either Gorbachev

25:38

or Reagan, whoever said it first, trust

25:40

the verify. That's the one. Yeah, you

25:42

want to verify 855-935 talk is

25:46

our phone number. Miguel, good luck. Get back to us. investment

26:00

portfolio whose symptoms include lots of

26:02

stocks, loads of random loaded mutual

26:04

funds and maybe an annuity or

26:07

two. Most who suffer

26:09

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26:55

guys to a really great financial future.

27:02

One of the biggest problems I have

27:04

with Empower is the level of confusion

27:06

and I have this problem with a

27:08

lot of investment firms. Empower

27:10

offers through their 401ks they offer

27:13

Vanguard funds for example. You

27:15

can get Vanguard target date funds

27:18

through Empower. Which is

27:20

maybe what Miguel should be doing. Which

27:22

are very, very expensive. Yeah. But you

27:24

can also get into expensive or inexpensive.

27:27

You can also get into a Templeton

27:29

fund or a T-road price fund or

27:31

Empower's own funds. And Empower's own funds,

27:34

they have target date funds with expense ratios

27:37

at eight or nine tenths of

27:39

a percent. Whereas Vanguard's are at

27:42

six one hundredths of one percent.

27:44

But you don't know. You don't know.

27:46

But guess which fund it's likely they're

27:49

going to put in the program. Sure.

27:55

Which is 12 times more expensive. 12 times.

28:00

Right, yeah. So

28:02

if you're paying, you know, $4 for

28:04

a gallon of gas

28:06

today, you can go pay $50 instead, if you'd rather.

28:10

What is wrong with this industry?

28:14

Really? What is wrong with

28:16

all of you in this industry? You

28:18

feel good about charging people 12 times

28:21

more than one of your competitors charges, and

28:23

you could even be charging them that. But

28:26

you, you are greedy and want to make more

28:29

money for you. I'm sorry,

28:31

but that's wrong unless you

28:33

fully disclose both possibilities. If

28:35

you were to say to

28:37

your client, hello, Mr. Client,

28:39

I have a target date

28:41

fund here that costs 0.06%,

28:44

or have a target date fund here that costs 0.80%.

28:49

Now, you need a calculator just

28:51

to figure out which is better for you? They

28:54

don't do it. They don't offer that advice,

28:56

and they say just go with the program. Go with the

28:58

program. That's even worse. Because they're trying to

29:00

make as much as they can for them. You

29:03

have to protect you. Nobody

29:05

else is going to do as good a job protecting

29:08

you as you are. I'm sorry. They

29:10

seem so nice. Aren't

29:14

they always so nice? Scott,

29:17

you're up next. Welcome to Talking

29:19

Real Money. Hey,

29:23

guys. I love your show. Thank

29:25

you. I've got a question. I'm

29:28

kind of

29:30

asking this for my daughter. She

29:33

is 40, and she's been funding her. She's,

29:39

well, let me back up. She

29:42

is self-employed business owner,

29:45

and she's been funding her

29:48

retirement with

29:51

after-tax money, but

29:53

it's going in the same account that

29:58

her pre- employers

30:02

were putting money

30:05

in. Don't know how you do that. This is

30:07

kind of back to... This

30:09

is kind of back to... Well,

30:12

it's a Fidelity account. Well,

30:15

no, that's just the custodian. In other words,

30:17

it's the money... Oh, wait, wait. Are you

30:19

saying she's putting money in Fidelity in another

30:21

account, and they also have her 401k there?

30:27

As far as I understand, I think

30:29

she's just continuing

30:31

on. No, you

30:34

can't do that. I don't know

30:36

how that would happen. You can't. What's

30:38

the 401k? Once your employment

30:41

ends, your ability to participate

30:43

in the 401k ends? She

30:48

worked for a large chain that

30:51

does a lot of beauty

30:53

and haircutting kind of stuff.

30:56

That doesn't really play into it. Is

30:58

she an independent contractor with them? No,

31:03

she was an employee, and

31:06

then she went out on her own. I

31:10

mean, the thing about this is, Scott, that

31:12

we'd have to look at the account type

31:14

to give you advice, because I don't know.

31:16

That's confusing. Because I've

31:18

never heard of a 401k that lets you

31:20

participate after you terminate. No,

31:24

I don't think there is. I'm

31:26

sorry. I misspoke. I

31:28

think it's an IRA. Ah,

31:31

so she took the money that was at

31:33

her employer plan. She moved it to an

31:35

IRA. Now she's putting what you're saying, though,

31:37

still after-tax money. She's putting

31:39

after-tax money in it. Well, that

31:41

should go into a Roth IRA,

31:43

not an IRA. Yeah, that's

31:46

foolish. Because

31:50

if you pay tax on the money,

31:52

it should go into an account that then

31:54

grows tax-free. That's called a Roth IRA versus

31:57

an IRA, which is money that is not

31:59

a tax-free. yet been

32:01

taxed. She should call Fidelity next

32:03

week and ask them this question,

32:06

the money that I'm putting in, is

32:08

that going into a regular IRA on

32:10

an after-tax basis or a Roth IRA?

32:13

Ask that question specifically. Call and talk to

32:15

a real person and ask that question. If

32:17

it is not being put into a Roth

32:19

IRA, tell them they should have told her

32:22

to put it in a Roth to begin

32:24

with. That

32:28

kind of makes a little more sense. A

32:30

lot of more sense. Yeah. So ask that

32:33

question and then if the answer is weird

32:35

or you don't like it, call us back

32:37

next week because we just hang out here

32:39

waiting for you guys to call. We

32:43

don't have a line. Can I ask you one more?

32:45

Yeah, go ahead. I've

32:49

got my own personal. I've

32:53

got a bunch of money in a savings account and

32:55

just trying to figure out what the hell to do

32:57

with it. What's

33:00

the purpose of the money? Right

33:03

now there is no purpose. It has to

33:05

have a purpose. You must have signed a

33:07

purpose. To every dollar you

33:10

have. Yes. Every dollar

33:12

must be either this is for emergencies or

33:14

this is for buying a car or something

33:16

in the future or it's retirement. Okay, I

33:18

got a hundred

33:24

thousand dollar emergency fund

33:27

and I've got... What's your cost of living?

33:32

Why do you have so much in an emergency fund? Here's the thing.

33:36

I mean this is...

33:38

It's okay. I'm trying to answer

33:40

your question. Scott, Scott. You are

33:42

in my home. I own my

33:45

cars. Yeah, that's right. You are

33:47

a very normal person. Most people

33:49

do not understand or

33:51

want to know, really. At least you want to

33:54

know what the heck they're doing with their money.

33:56

They don't know what it... And this is why we are... you're

34:00

a saver. We harp on the whole

34:02

idea of a plan. The plan is

34:04

you need six months, maybe a year's

34:07

worth of expenses put away for an

34:09

emergency. Then the

34:11

money becomes different. Yeah,

34:15

that's where the money in the savings account

34:17

is getting higher than

34:19

it should be for making

34:21

nothing. Yeah, your plots. That's

34:24

typical. Yeah, we're gonna do a little, if

34:26

we have time, we're gonna talk to you

34:28

a little bit about how you can get

34:30

more on your money at the bank. How

34:35

much you making on the money at the bank? How

34:37

much you making at the bank? Oh,

34:41

God, like .001.

34:44

Yeah, it's

34:47

terrible, isn't it? Oh, gosh.

34:50

Here's what I want you to do. Here's what

34:52

I want you to do. If they charge me

34:54

the $15 fee, then I didn't make anything. All

34:59

right, here's what I need you to do. I

35:01

need you to, this is your homework, go

35:04

find all of your account statements for all

35:06

the money you have. Write

35:09

it all down on a piece of paper, where

35:11

it is, and then I want you

35:13

to begin to figure out what

35:17

you need to live on every year, and

35:20

then just a rough idea of what

35:22

you imagine that future

35:24

goal is for the other money that

35:26

isn't emergency money. Then I want you

35:28

to call us back next

35:31

week or the week after, and let's go over

35:33

it, okay? All

35:36

right, I will do that. Sounds like a plan.

35:38

And have your daughter call on the IRA. Thank

35:41

you, sir. I will absolutely.

35:45

Thank you. All right, we'll be

35:47

back in a minute talking about wealth money. Did you

35:49

have something you wanted to add really fast? You finished

35:51

the four things, I only got one out. You're not

35:53

going to get the other ones in. Not

35:56

then. That's all right. That's my life. Look

35:58

at the wall. Tom

36:01

and Don are cooking real money.

36:05

For your real life and real future,

36:07

Tom and Don are talking real money.

36:10

We can't leave Tom just hanging with

36:12

three things left unsaid. So

36:14

quickly, what are the three things that you

36:16

should talk about? Well, these are the four

36:18

questions couples should ask themselves about their finances.

36:20

We mentioned one was do we talk about

36:22

money? Yeah. And the answer most of the

36:24

time is no. And you got to be able to do that.

36:26

Number two, are we on the same page when it comes to

36:28

risk? Well, we know that's probably a

36:31

no too. Yeah. But

36:33

you could each take the risk quiz and discuss it. Number three, is

36:35

there a backup plan if the financial

36:37

steward dies first or develops dementia?

36:40

This is a reason, by the way, for people in their 50s and

36:42

60s. If you don't have an advisor, you

36:44

should have an idea who that might be

36:46

so the other person knows how to

36:49

deal with it. And then the fourth one, are good

36:51

records being kept including, and this is where I was

36:53

a little surprised on, major

36:55

expenses. This is not something I've shared with my wife,

36:57

like how to pay the mortgage, how to pay the

36:59

utility bill, that's something that should be done too. I'm

37:02

going to add that to my list because it wasn't

37:04

on my personal one. Yeah. Those

37:06

four things. I told my wife, I said,

37:08

basically, if you don't pay it, they'll send you

37:10

a dunning notice. Or

37:12

they'll show up one day. Yeah. Well,

37:16

the thing is, I have my auto pay. As

37:18

long as she keeps stuffing money into our joint

37:20

account, it's fine. Then it'll work. Everything's auto paid.

37:23

Anyway, real quickly, the trick. Here's a trick. I

37:25

said, I'm going to do this. By going to the bank, I'm on an HOA

37:27

board. I had to go to

37:29

a bank to set up an account for the Homeowners

37:32

Association because I'm the president. I had to

37:34

be on it. I said, what's this account? It's

37:36

like the day-to-day money account for the

37:39

HOA. 150 grand in it. I

37:41

said, how much is this earning? She goes, actually,

37:43

that's the money market. Excuse me? You

37:45

mean making? Yeah. How much

37:47

is that earning? She goes, business money market,

37:50

that's 0.01%. I

37:53

said 0.01%. So basically, the Bank

37:55

of America, oh my gosh, that's

37:57

an awful rate. She goes, yep. But

38:00

we have another account called the Platinum

38:02

Business Account, Money Market. I

38:05

said, so it's a money market, it's a daily liquid, yeah.

38:07

What's the rate on that? I

38:10

went, what? Why aren't we in that? Why aren't we in

38:12

that one? She goes, well, you have to ask. Oh,

38:15

they don't tell you. They don't want

38:17

to tell you that they have a higher

38:19

yielding account. But if you ask,

38:22

they will put you in. I said, well, what happens

38:24

when this special promotional rate ends?

38:26

She goes, well, when that ends, just call us

38:28

and we'll tell you what the new promotional rate

38:30

is that you would have had to ask for.

38:34

That's just outrageous as a customer. And it

38:36

goes back to the problem with the financial

38:38

services industry. We will rip you off as

38:40

long as we are legally able to do

38:43

so. We don't care and we don't

38:45

want to care. Right. We're not going to

38:47

tell you you could make more money with us. We're

38:49

not going to tell you we're not a

38:51

fiduciary. We're not going to tell you we

38:53

offer lower price mutual funds. We're not going

38:55

to tell you that you could get into

38:58

an annuity if you really want one without

39:00

a surrender charge. We're not going to tell

39:02

you the truth because telling you the truth

39:05

means you make, they make

39:07

less money. You make more. Yeah, the

39:09

people that are providing the service make

39:12

more. Yeah. And this is, I'd like

39:14

to say that was shocking, but

39:17

frankly, it is not. You

39:19

also mentioned something this hour that at

39:21

the end of the day, well, we're going to

39:23

give you the best advice we know how. A lot of

39:25

this is up to you. You're going to have to

39:27

take charge of these things and pay attention and say, wait,

39:29

that's not right. I got to fix this. Sorry.

39:33

Because kind of like the spouse in the relationship who's handling

39:35

all the money, what if we die? If we die, there

39:37

will be no one left on the radio telling you the

39:39

truth. I

39:42

did. Financial, investing, I can't

39:44

think of anybody. Not

39:47

when it comes to the investing side, no. Well,

39:49

Jill Schlesinger, I trust you. But she doesn't really

39:51

give much in the way of like investing.

39:54

Specific funds, no. She doesn't talk about

39:56

that. Anyway, you want somebody to help

39:58

you? Really? Truly? down and

40:00

help you because you're in the car and you

40:02

don't have the numbers. Well, go

40:04

to talkingrealmoney.com. talkingrealmoney.com. There's

40:07

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40:10

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40:12

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40:14

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40:17

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40:19

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40:34

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40:38

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40:41

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40:43

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40:45

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40:47

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40:59

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41:01

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41:03

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41:05

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41:07

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41:15

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41:20

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41:36

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41:38

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41:41

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41:43

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41:45

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