TRANSCRIPT FOR THE DECEMBER 3, 2016 “ON THE MONEY” SHOW

Hosts: Harry Stadelmayer, CFP®, AIF® and Joe Bert, CFP®, AIF®

It’s Saturday morning.  It’s an Ask the Expert Saturday on WDBO and this is On the Money brought to you by Orlando’s oldest and largest independent firm of certified financial planning professionals.
Harry hasn’t been here six weeks — six months.  He’s forgotten the cue.

I’ve missed it.

From the Certified Financial Group, say good morning to the Oracle of Orlando, Joe Bert.

Good morning.

How are you, sir?

I’m doing great.

And yeah, we do have a stranger sitting next to you for awhile.  Harry Stadelmayer, who is a certified financial planning professional in his own right is back in the studio with us after taking some time off.  How you been, sir?

I’m glad my GPS worked this morning.

Hey Joe, in case anybody’s new to the program, what are you and Harry here to take calls about?

Well, Harry and I are here to answer those questions that we have to deal with in life and unfortunately we don’t get any formal education to figure it out.  Most of our clients go through life doing some of this, doing some of that, and they wake up one morning and say gee, you know the paycheck is going to stop and how are we going to maintain our lifestyle and do all the things we hoped and dreamed about in our retirement years? And we built this firm over 40 years on doing planning because planning is very important before you even start investing.  Unfortunately in the investment world today, everybody wants to manage your money, wants to sell you something, and wants to take your money, and they’ll see you later.  We built this firm on answering and working with our clients for a fee and doing financial planning.  Of course, we do manage money, that’s part of what we do as well, but we have to answer those questions of how do you determine what you need to do with your funds and it oftentimes revolves around questions you have to make about stocks, and bonds, and mutual funds, and real estate, and long-term health care, and IRAs, and life insurance, or reverse mortgages, all of that and more.  Harry and I are here to take your calls, so if you have any questions about any of those topics or anything else I may not have mentioned, the good news for you, the lines are absolutely wide open.  And if you pick up the phone and dial, you don’t even need to use your real name.  You can pretend like you’re Jack, or Daphne, or anybody else that you want to pretend you are.

Like that guy <Inaudible> last week did.

Yeah, that’s right.  He <Inaudible>.

So, pick up the phone and dial.  What’s the number there Kirkmeister?

844-220-0965.  844-220-0965.  You could also text us from your mobile device and that number is 21232.  21232.  Or, if you want your voice on the program, you could use the Open Mic.  You’ll find the Open Mic on the News 96.5 app.  Among other things we’re going to talk about today with Harry, four post-election lessons to help make us better investors.  But, let’s kick things off this week with an e-mail we have: My broker is talking about tax harvesting.  What in the world is that and is it a good idea?

Tax harvesting, that is a word that tends to pop up at the end of the year.  Really, it’s a way of — let’s assume that you had an investment that maybe didn’t do real well in 2016 and you had some losses.  And if it were in a non-qualified plan or a non-qualified account, all of a sudden you’re looking at it —

You’re talking about <Inaudible> the term non-qualified.

Non-qualified, meaning not as in IRA or a 401k, or a — some Roths, or —

<Inaudible> account.

You’re looking at your Fidelity statement and it has not done well.  Of course, this time a year, many times some of these funds pay out long-term capital gains and those are the words kind, especially if you have a loss in your investment.  This is a way of looking at your portfolio, saying boy, I’ve had some losses.  I know I’ve got some gains and I had some dividends.  It’s a way of going ahead and looking at your portfolio and selling those investments that may, in fact, have not performed real well to help offset some of the gain.  So, it’s really kind of a tax play.  Certainly you want to be careful.  You want to talk to your advisor or your tax preparer to make sure you’re not making a big mistake.  What you don’t want to do though is also sell a good investment, an investment that made long-term — maybe <Inaudible> year hasn’t done well, but it could be a quality investment.  So, you have to be a little careful when your broker is talking about tax harvesting.  But, it is an effective way of perhaps managing your tax liability at the end of the year.

So basically what we’re doing, we’re selling the losses <Inaudible> against the gains, but you’ve got to be careful that even though you might like that investment, buy back in, the <Inaudible> rules —

Correct, within 30 days, so you don’t get the deduction if, in fact, you buy that investment back within 30 days.  So, you do have to be a little bit careful.  The other thing it might do is it might alter your asset allocation model.  Let’s say that you had an investment and it was sizeable, you sold it, and now all of a sudden you have too much in maybe bonds or maybe in equities.  So, you have to be careful there as well when you get into tax harvesting that you don’t mess up the balance of your portfolio, because that is first and foremost <Inaudible>.

We’ve got a couple of calls here.

Alright.

James in Deltona.  Good morning, James.

<Inaudible> how you doing.

Good, how are you? How can we help you?

Not too bad.  I am — just turned 54 years old.  I have a small business.  Enough to put food on the table, it pays the bills and stuff, but I really haven’t saved anything as far as a lot towards retirement.  Being 54 years old, am I pretty much past the savings point and plan on living on Social Security now? Or is it <Inaudible>

It’s never, ever too late.  The earlier you get started, of course, the more you will have.  But, what kind of business are you in?

I’m an electrical contractor.

Okay, are you self-employed?

I am.

So, you have no employees, I presume.

Correct, correct.  <Inaudible>

Are you filing a schedule C or are you an S corporation, or what have you got going there?

I’m an S corp.

S corporation, okay.  Well, you can set yourself up a retirement plan, alright? And the good news for you is you can set up what’s called a one-man uni-k.

One man uni-k?

<Inaudible> a one-man 401k and if you combine that with profit-sharing component, you can set aside up to $53,000 on a pre-tax basis for yourself.  And that’s by far and away the best way — now, you don’t have to go to that maximum, but you can set up a retirement plan for yourself that will allow you to get a tax deduction.  Because you probably, like most folks, are looking for tax deductions come April, right?

Of course.

Yeah, so that’s the best thing for you to do and you stock aside as much money as you can into that plan and you’re going to be far — you’ll look back 10 years and man, I never realized I could accumulate so much capital.

James, I’m assuming that you don’t have a lot of debt, though.  Is that — let’s start there.

What do you consider a lot of debt?

30,000 in credit card debt.

No, no, no.  My credit card balances are under 5,000 and basically I’ve got a vehicle payment.

So you’re able to pay the bills?

Yes.

You’re able to pay the bills.  So, what you need to do is discipline yourself now to sock away some serious bucks for the next 10, 12 years.

Right.  Okay, any idea on — I mean, is there a certain amount I need to go for or just what I can plan?

You can go for the maximum.  That’s what — I told you what the maximum amount is, but anything that you can do between now and then is only going to help you tax-wise and accumulating some money.

<Inaudible> talking about a month, putting some away monthly into that account, right?

Yes.  You can do that monthly, you can do it annually, you can do it semi-annually.  You can do it as you — maybe you had a really good month.  However, you’ve got a lot of flexibility there, James.

Okay.  Alright.  And who would I go to — set this up through? I don’t know, like Charles Schwab or somebody?

Well, we do that kind of thing, but you want to have it set up before the end of the year.  Now, you don’t have to fund it until you file your taxes, that’s the good news.  But, the plan needs to be set up before the end of the year.

Okay, and what’s the name of your company?

Certified Financial Group.

Alright, I’m writing this down.

Yeah.

Financial Group.  Okay, do you guys have a phone number?

I think we do.  407-869-9800.  407-869-9800.  And James, if you also have a computer available to you, this week’s must-read also talks about some nice ways of reducing your taxes in 2016 and it also talks a little bit about tax planning and some of the things that you can do to help get your tax bill down.  But the important thing that I’m hearing is it’s never too late.  Don’t just think you’re 54, or 56 — 54 — and say well, you know, I’ll just rely on Social Security.  Because Social Security may look a whole lot different when you’re 66, 67, or 70 than it does now and certainly that’s not the only avenue that you want to rely on.  You want to go ahead and take some responsibility and put some money away, and that will only help you down the road.

Okay, great, great.  I appreciate your information.  I’ll give you guys a call and get this <Inaudible> set up.

You’re welcome, James.  Good luck to you.  Thanks for the call.

And you can have that line.  The number is 844-220-0965.  It’s 9:15, quarter past 9:00, on WDBO.  Dave Wall is off today.  Shauna Vickers is in the News Center.  She has the top three stories coming up here in about five minutes along with Pam Warner in traffic and meteorologist Maurina Jerrica on the weather.  Let’s talk to Harry in Longwood.  Good morning, Harry.

Good morning.

Good morning, Harry.

Hi, Harry.

How can we help you?

And that’s my real name.

Mine too.

There you go.

Yeah, this is hopefully a simple question.  I work for a company, I have health care now.  I’ll be 65 next year and I guess I’ll be going to Medicare that I’ve been paying for all these years.  And I heard someone say that you need to apply for that like six months before your birthday or something like that.

Wow.  Are you going to continue to work after 65?

Probably not.

Okay.  So yes, you want to apply for Medicare part A and part B, and then you also want to get yourself a supplement.  And you don’t need to do six months in advance, but you can give yourself 60 days or so.

So, 60 days before I plan to retire.

Yes.  Yeah, well, before you’re 65.

Okay, 60 days before I’m 65 whether I’m still working at 65 or —

Yeah, now if you’re still working, you’ve got some options here.  You’ve got to check with HR to see if your group plan — I presume you have insurance through work?

Right.

Well, you want to see if your group plan will work as your primary coverage and then you’ll have part A for your hospitalization and part B will be covered by your group plan so you don’t need to pay the premium of part B.

Okay, so if I only work a few months after I turn 65, then I would have to apply for a part B.

Yes.  So, once you’re no longer covered under your group plan, then you need to do that immediately.  Yes.

Okay, so it’s not six months.  I just need to —

No, no.  Nope, nope, nope, nope.

By the time I’m 65 then.

Yes.

Okay, so I should talk with HR, bottom line.

Yes, check with them and see if, in fact, that your group plan will be your primary coverage after age 65 and this way you don’t have to do part B.  Your ‘e automatically covered for part A.  Now, this may not apply in your situation, but for our listeners at — I found this out unfortunately the hard way, is that part A which is your hospitalization, if you have an HSA plan — you can contribute to an HSA plan once you’re covered by Medicare and you’re automatically covered by part A at age 65.  However, you can opt out of part A, but you’ve got to step up and do that if you want to continue on an HSA, which allows you to put money on a pre-tax basis and pays for your medical bills.

<Inaudible> health savings account.

Yes sir.

For me, I don’t think I need to worry about that, but I do need to — when do I actually go in online and apply for Medicare? I guess that’s my question right now.

You can do it — I would do it a couple months before you’re 65.

Okay.  Alright, we’ll that’s perfect.  Well, thank you for the help.

Harry, the other thing I would highly recommend — and I don’t know when you turn 65 — but on March 14th Gary Abley, who is one of our planners in our office, who does an outstanding seminar about all the Medicare options and that whole maze that you need to go through.  Gary is an expert, came to us from the health care industry if you will, and the man is very, very knowledgeable and he’s going to give you his knowledge for free on March 14th from 6:00 to 8:00 in our office.  You can certainly go online, certifiedfinancialgroup.com, and look around in there.  But, there is a workshop on Tuesday, March 14th from 6:00 to 8:00 that I would highly encourage you to attend because it’s packed with really good info about where do I go, what do I do, how do I do it, and it’s two hours of time well spent.

Gary is a CFP as well as a CPA, and he’s very, very knowledgeable on Medicare and all the options you have involved and just right around the time you’re thinking about doing it.

So, Harry said go to our website, Harry, that’s financialgroup.com.  Up at the top, click on workshops.  You make a reservation right there online.  In fact, we had one on — the other day.

The other day, yeah.

Full house.

Full house.

People raved about it.  So, this is one of those areas that can be tricky because you only do it one time and when you turn 65, you get inundated.  I mean, I don’t know how these people find you, but your mailbox is filled with all this stuff that you want to make decisions on.  So, Gary is an expert in that regard, so go to our website, financialgroup.com.  Plus, there’s other workshops we have coming up, Harry.  What’s next on the agenda, here? We got one coming up?

I’ll tell you exactly what it is.  It’s When Can You Retire.  January the 7th.  Once again, Gary is doing that,  January 7th from 11:00am to 1:00pm at our office, 11:00am to 1:00pm.  This is a Saturday morning and it’s going to tell you Know Your Number.  How much capital do you need when you’re ready to retire.  So once again, go to our website, financialgroup.com.

There’s some more workshops that we’ll tell you about coming up as well.  Alright.  Harry, thanks for calling in.  You can have that line.  The number is 844-220-0965.  844-220-0965.  When we come back, we’ll take some texting and some <Inaudible> phone calls.  Oh my, $15,000 in credit card debt.  That’s a lot of debt.  We’ll help out if we can coming up on WDBO.

This hour was paid for by the host and does not reflect the opinion of News 96.5.

It’s an Ask the Expert Saturday morning on WDBO —

I think I will put that on the radio on the way home.

That was Joe harmonizing in case you didn’t know it.

1964.

You’ve got some beautiful — who did that?

Them.

What?

Them.

Who?

<Inaudible> Them.

They’re one-hit wonders.

Okay, well we’ll help you figure that one out.  It’s 9:26.  I already said that.  The number to call, 844-220-0965.  And as is custom, when I’m around, Veterans always pop to the front of the line.  Who is this here?

This is Henry from Winter Park.

Good morning, Henry.

Hi, Henry.

Good morning and thanks for your service, how can we help you?

Sure.  I’m a retired, disabled military vet and I get complete coverage through the VA <Inaudible>, wanted to know do I — can I option out of the part A and part B?

Are you already in it?

Yes.

I don’t think you can.  I can’t tell you for sure.  That’s an unusual question.  I’ve never had it asked before.  I don’t think — why would you do that?

Well because first of all there’s a deductible as well as with the part A and part B and I’m full taken care of by the VA and I’m very satisfied with their coverage.

So, part A is free.  What you’re saying is they’re taking from your Social Security check the part B premium and you want to get out of part B.

Correct.

I don’t know that you can.  That’s a good question, but I don’t have an answer for that.

I’ll tell you who would know.  It’s Gary.

Gary would probably know that answer.

Yup, okay.  And secondly, they don’t let me double dip, so if I do have the co-pay, the part A or part B won’t cover it because they call it double-dipping.

Well, but if it’s covered by VA, why would you want part B to pay for it anyway?

Well, some of the medication because of financial status.

Got it, got it, got it.

It has somewhat of a co-pay.

Yeah, sorry I can’t answer your question, Henry.  But, thank you again.

I’ll contact him, then.

Thanks for your service, though.

Thank you very much.

You know, I have a good feeling about this upcoming administration when it comes to our veterans and I think they’re going —

Well, we’ll see.

Yup, we’re going to see.  We’ll see.  Here’s a question for you from the text board: I have $15,000 in credit card debt.  Drowning myself, can’t even buy groceries.  Should I withdraw from my 401k to settle debt or not?

Ugh, first of all don’t drown yourself.  It’s — it may be bleak and it may be dark, but it’s hard to say whether you should or should not.  I’m not sure how much — A, how old you are and how much is in the 401k.  However, if this were an option and you are literally not even able to eat or buy groceries, you may want to go to your 401k and don’t do a withdrawal, but do a loan.  Chances are your plan has a loan provision so you can pull this money out and pay yourself back with a minor interest.  And if you’re still working, they’ll go ahead and take that money out of your pay to repay the loan.  If you do a withdrawal and you’re not 59 and a half, you’ve got a couple things going on.  Number one, you’re going to pay taxes on the total amount that you withdraw, A.  B, if you’re not 59 and a half, you’ll have a 10% penalty on that money.  So that can get very, very expensive.  So, look at the loan provision and most importantly, look at your expenses.  Take a good, hard look at where you’re spending money and certainly food is a necessity.  But, you need to get that under control especially now with the holidays coming up.  The temptation is go to just pull out that credit card and continue.  It’s cancer.  It hurts you.

We were just talking about rates going up as well, so you’d be further buried. Who’s she singing that with?

She’s singing that with —

I like the <Inaudible> better.

Yeah, I do.

This is more of the disco era.

That man had a voice.  Boy, I’ll tell you what.

Alright, moving on.  We’re going to take your questions. <Inaudible>

Ladies and gentlemen, be it known that Joe Bert has a soft side.  Yes.

He’s just a fuzzy little teddy bear.

I’m telling you, Joe Bert —

Bruises very easily.

Speaking of Joe Bert, the Oracle of Orlando is in the studio with us right now and you can talk to Joe and Harry Stadelmayer.  Both of these gentlemen are certified financial planning professionals.  First off, let me ask you quickly, what are you taking calls about?

Well, Harry and I are here to take any questions that you might have regarding Barry White songs –We’re pretty knowledgeable about personal finances.  Harry and I are both certified financial planning practitioners, been doing this for many, many years.  We have 12 certified financial planner practitioners affiliated with our firm.  We have more CFPs than almost anybody in the state of Florida and we are now <Inaudible> certified.  <Inaudible> certified.  We are — only less than 1% of advisory firms in the country are <Inaudible> certified, which is the highest level of fiduciary compliance if you will, and we’re proud to have attained that.

And fiduciary meaning?

Fiduciary means that we work for you as opposed to working for the companies.  It’s defined in the law.  People with brokers — and there’s a place for brokers in this world — but brokers only have a suitability requirement which means that it has to be okay for you, but it’s not necessarily in your best interest.  As a fiduciary, you’re required to work in your client’s best interest.  So, we work on your behalf.  We charge a fee for the services that we provide, and this morning we’re providing services absolutely free, so if you have any questions about your personal finances about decisions you have to make, about mutual funds, and investing, or real estate, and stocks, and 401(k)s, and IRAs, and taxes, and all that and more, Harry and I are here to take your call.  So, good news for you, the lines are absolutely wide open.  We’ve cleared them out in the first half of our program and all you have to do is pick up the phone and dial these numbers.

844-220-0965.  844-220-0965.  You could also text us from your mobile device.  That texting number is 21232.  Again, 21232.  I have —

I’m sorry, I want to go back to — this show has got some great listeners and during our break, we had a gentleman call in, Brad, who again thank you for your service to our country, he — we had Henry on that was asking about full coverage with VA.  He’s not interested in any of the benefits from Medicare and wanted to opt out and wanted to know if that was possible.  And Joe and I kind of looked at each other and said <Inaudible>, but Brad called during the break and said yes, you, in fact, can do that.  He’s done it and all you need to do is go to the Social Security office, just tell them that you’re 100% covered by VA, and that you’re not interested in the part B I think it is?

Part B.

Yeah, part B, and they will do it.  And according to Brad, thank you Brad, but he said he did it and Henry, there you go.

There you go.

It pays to listen.

Thank you Brad <Inaudible>

Informed callers.

Yeah.

Yes.

Well, that’s not patronizing at all because we actually do.  You do have some smart callers.

Yeah, we do.

844-220-0965.  844-220-0965.  Question for Harry — or actually, what are these four post-election lessons to help make us better investors?

Well, I think what this election showed us when it comes to investing and help us be better investors, number one is that attempting to outguess the market is just a really wrong thing to do.  The outcome was a leap off the high board into an empty pool of market timing.

Oh yeah.

I love that quote.  I was about to throw up on election night when all they did is start throwing out futures and I know about you, Joe, but I did get some e-mails at 1:00am in the morning about Harry, I’m not sure I want to get out now.  These futures are plummeting right —

Yeah, futures down 700 points within <Inaudible>

When Donald Trump was — president-elect, the market — at least until the market opened.

So, there you go and I believe the next day we opened at 300.  So, attempting to outguess the market is not a good idea.  Number two, that the stock market is unpredictable.  You need to pick a plan and stick with your plan and don’t try to get rich quickly.  And number three is that the financial media is entertainment.

That’s correct.

It is entertainment.  It’s a source of financial insight.  It’s not a source of financial insight.  It is entertainment and that’s pretty much all it is.  And number four, ignore all forecasts.  We had all these pundits saying oh my gosh, if, if, if, if, if and based on what I heard, the majority of them were wrong.

Yes.

And if you went to cash, here’s the problem.

Tell me.

When are you getting back in.

Exactly.

And now you’re at an all-time high.

Yup.

Again, trying to out-time the market is financial suicide, folks.  If you went into your 401k and you said, boy, I’m getting out and I’m going to settle, this market took a sharp turn up.  I don’t know where it’s going from here, but the fact of the matter is if you’re trying to catch fish, you’ve got to have your worm in the water.  I’m telling you, if you’re sitting in cash, you’re missing the boat.

And the key is diversification.

Exactly.

Unfortunately — and you know what I think, Harry? I think a lot of people that aren’t investors or have never done it before, they think it’s voodoo stuff and you know I see this stuff on TV and Wall Street, and I’m all confused with all this stuff I hear, don’t know what to do — the best way to invest is the way that you and I invest, and that’s to use mutual funds.  And have good quality managers, have a diversified portfolio with different kinds of mutual funds, then invest in stocks, then invest in bonds, and invest around the world, and be well-diversified with quality money managers in the long run, you will be successful.  You won’t be able to go to a cocktail party and talk about the big hits you made on the stocks this month.  We’re not in this for excitement or for braggadocios purposes.  We’re here to make money on a regular basis.  I like to tell my clients, we like to be regular single and double hitters, not try to hit home runs, and not strike out.

Well, I saw a letter you drafted this week to a client because there was some concern about why performance is not going up and everything else is.  And it was a wonderful letter, Joe, I read and that is exactly true.  It — I always tell my clients if you receive your quarterly statements and you’re up 14% in everything, you should fire me.

Yeah, yes.

Well, maybe not.

Well.

<Inaudible>

Exactly.

If you have a well diversified portfolio, you’ll always have something that’s losing money.

There should be green and red on the sheet.

That’s correct.

But in the long run, you want to have more winners than losers, and that’s what investing is all about and you can’t have everything <Inaudible> either.

No, no no no.

Alright, we’ve got some calls here.  We’ve got Cathy in Leesburg.  Good morning, Cathy.

Good morning, how are you?

We’re doing great, how are you?

I’m doing fantastic.

Thanks for your call.

I had a question.  I’m being advised.  I’ll turn 59 next year and unfortunately I have — or fortunately — my money tied up in annuities which are doing well.

Okay.

But I’m being told that I should take a certain amount of that money and put it in an IUL each year for over —

Oh my gosh.

You’re dealing with some insurance guy that now wants to sell you another insurance product.

Yeah, he’s <Inaudible> do that.

For our listeners that may not be familiar with what this strategy is, you’ve got this money that you’ve accumulated into annuities that’s been growing nicely for you.  Now, what he wants you to do is to take the money out of there and to buy a life insurance product to make another commission, and the idea is you’re going to put it in there and somewhere down the road you’ll be able to take it out tax free.  Is that the scheme.

Yeah, that’s it.

I know, yeah, yeah, yeah, yeah.

You’re dealing with a guy that the only thing he can sell you is an insurance product and sell it with high commissions, probably.

Right, yes, yes, yes.  Yeah.  That’s not a good idea.

That was easy.

Well yeah, I mean we see this unfortunately by people in this industry who profess to be financial advisors, financial planners, and all they are unfortunately is salesmen.  And then this guy sold you some annuities, which may be okay for you, but now what he wants to do is make another commission.  And he sees this money you’ve accumulated in this annuity product.  A-ha, we’ve got another opportunity to sell you something else.  Now, insurance may be appropriate for you, but I’m not sure that the strategy of taking money out of this annuity, which is going to be taxable to you, you know — you’re going to have to pay taxes on the money you pull out of there —

<Inaudible> no she can’t <Inaudible>

Well, I don’t know.  Part of what he told me I didn’t — it was kind of confusing.  I didn’t have my dollar amounts wrong, but take out — like in my case — 58,000, put it in an IUL, and then the IUL directly pays the IRS.  I guess his estimate was $12,000.

Oh wonderful.

That’s your money.

No, no, no.  I would say, not only no, but hell no.

Okay.

That stinks.

You want some help? This is what we do day in and day out.  Give our office a call, 407-869-9800 or go to our website financialgroup.com.  But you need to find another advisor because this guy is in it for his commission.  I hate to say it.

Okay.  Thank you for the call.  The number is 844-220-0965.  I see Shauna Vickers in the News Center getting ready for the big three coming up in just about four minutes from now.  Also, Pam Warner is on traffic today with meteorologist Maurina Jerrica.  We’ll have your forecast coming up as well.  Let’s talk to Fred.

Good morning, Fred.

Hi, Fred.

Good morning.

Good morning.  Thanks for calling.  How can we help you?

I don’t know exactly what my question is.

Well we don’t know exactly what the answer is, so.

Yeah.  I’m 47.  Been with <Inaudible> for almost my whole life, or most of my son’s life.  Just a regular old blue-collar working man.  Pipe fitter.

Okay.

So, never had put any money away.  No real money.

Gotcha.

I’ve got about 13,000 of my savings.  This opportunity come up to by a chemical lawn fertilizer truck at a pretty good price.

Okay.

And I have another person I know that does that in the industry.

Okay.

So, we’re thinking of starting our own company, you know, building her out.  And I’m taking my life savings of $13,000 and investing into this.  Not ever running a business before.

Okay.

So, there’s the question I don’t know what to ask.

So, what you have is an opportunity to become an entrepreneur.  You’re going to invest your $13,000 of life saving and take a flyer.  How old are you?

47.

47.

47.  You’re still a young guy, but the risk is that you’ve never run a business and therein lies the potential pitfall.  What you’re going to have is immediate on the job training and you can’t afford to stumble and hurt yourself.  What you’re going to need is some sort of business plan.  Tell us about your partner.

That’s the big risk.

The partner has been in the industry doing chemical fertilization for over 15 years.  He knows the ins and outs.

Okay.

He’s also just blue collar but with minimal business experience.  He tried it once on his own before and the market dropped and he lost his business.

Okay, what do you mean the market dropped? What happened?

Back in 2008, whenever.

Fred, why does he want you as a partner? Why are you —

Because I’m the money man being able to buy the truck.

There you go.  And so he’s not going to put any skin in the game?

Just what his <Inaudible>

Ah, Fred, Fred, Fred, you know.  I’m reluctant to tell you to go ahead and do it because all kind of red lights are flashing here.  But, by the same token I’m an entrepreneur, I love entrepreneurs, I want to see you succeed.  But there’s far more coaching that you’re going to need than I can give you right here on a Saturday morning.

Right.  And that’s the other thing.  I’ve never went to any other type of financial advisors.

Yeah, and the financial — what we do, we’re not business managers or business advisors, but we can tell you that — we can see clearly that you’ve got an opportunity here, but you could really hurt yourself as well.  Fred, I don’t have an answer for you on this, to tell you what to do.

Wish you good luck.

Yeah.

Alright, while I’ve got you if no one else is waiting.  Just another quick question, totally different.

Okay, can you hold on? Fred.

Now, this is the tune I was talking about Harry.  You remember the old <Inaudible>.

That was the intro to <Inaudible> wasn’t it also in the Love Boat?

Yes.  It was on the Love Boat.

The plane, the plane.

No, that’s — no, the Love Boat.

No, I don’t know.  I don’t know.  Don’t know.

<Inaudible>

Alright, this is On the Money brought to you by the Certified Financial Group, Orlando’s largest and oldest —

Independent.

What’s that?

Independent.

Independent, you say?

Independent.

Independent firm of certified financial planning professionals.  You get addicted by this.  Fred’s still on the line, we’re just — hi, Fred.  Are you still there?

I’m still here.

Fred, listen, the more Harry and I talked about this at the break, we don’t think this is a good idea.  You’re risking what you have there.  How old is your son, by the way?

He’s grown.  He’s 27.  I’ve actually got a six year old son — <Inaudible> grandson now.

Not living with you? He’s not dependent right?

No, no.

Just you.

Little bit worried that you were giving your life savings up and weren’t going to be able to feed your <Inaudible>.

Sorry, is your plan to continue to work as a pipe fitter?

Yes.  Yes.

So, you’re just the money man in this deal and you’re going to own the truck.  The truck will be in your name.  Now what’s the — this guy is going to do this full-time?

Yes.

Alright.  Oh man.

It’s a matter of just building the route and then I figure if he does down the route if we have a significant route built, then that could be some sort of a financial future too.

Sure, sure.

Without having to physically get out there and do the work.

I understand where you’re coming from.  The challenge is that you don’t have any business experience.  Running a business is full of land mines and pot holes, and risks that you’re have that you’re not even aware of.  The thing could blow up overnight.

Right.

However, he does have a — he has a truck.  I mean, if things go sideways you could sell the truck, right?

Yes, for a profit.  Yes.

But here’s the first thing you’ve got to remember.  You own this truck.  The truck out to be in your name.  Actually, what you ought to do is <Inaudible> set up a corporation and then have the corporation own the truck because god forbid he has a wreck, you lose everything you have.

Oh my.

So, <Inaudible> in your name.

Yeah, that was another question.  I didn’t know the differences between LLCs and —

Well an LLC is <Inaudible> you set it up as an S corp but don’t have the truck in your name with this guy driving it.

Right.

But there’s a whole bunch of basics that need to be covered.  And we can’t go into it.  But, you had another question.  What’s your other question?

Yes, the other question was what we were just talking about.  I have a six year old grandson and I would like to do something for his future and if there was a way to maybe take advantage of him being a minor and able to contribute money to some sort of a fund where he <Inaudible> penalized for it but it grows.

You can — if you’re looking for college, you can use a college 529 plan.  It allows you to set aside money for college that will be his, grow tax free for college purposes.  You can look at the Florida prepaid plan, which I think is a better investment early on than the 529 plan.  Or, you can set up a Uniform Transfer to Minors account where it’s his money, it becomes his when he’s age 18.  He can put it in a mutual fund.  Those are the three choices that I would suggest for you.

And we’re back to Barry White.

Yeah, we’ve got to go.  We’ve got to make room for Shauna Vickers in the News Center.

Give us the phone number for the Certified Financial Group.

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