The difference between saving and investing | TRANSCRIPT

Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Certified Advisory Corp is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

Stay tuned for On the Money, Central Florida’s most listened to financial call and show brought to you by Certified Financial Group in Altamonte Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee, but on Saturdays, the advice is absolutely free and has been for more than 30 years for their WDBO listeners. If you have a financial question you want answered by real fiduciaries, the lines are wide open. Call 844-580- WDBO, that’s 844-580-WDBO and enjoy the show.

Good morning and welcome to On the Money right here on WDBO. My name’s Josh McCarthy with the team at WDBO. Joined in studio today with Joe Bert and Nancy Hecht, the team at Certified Financial Group. The three of us combined, well really the two of them combined with this average Josh here in the studio equal the On the Money show. It’s your chance to hop on, be a part of the show, pick up the phone right now, 844-580-9326. Give us a call. I’ll take your name, your number and your question and then I’ll put you on with the experts, the certified financial experts with the Certified Financial Group and they will answer your question. Anything going on with your financial future, your 401K, you heard a new investment opportunity that sounds too good to be true. Now’s your chance to see if that’s true or not because a team at Certified Financial Group has been on the airwaves here at WDBO for over 30 years. We are a live financial call-in program. The only one of its kind in the area. Joe, Nancy, how are we doing today?

Good morning, Josh. We’re doing fine.


Doing good.

It’s always good to hear, always good to kick off your weekend with some financial news.

For those folks that just may have tuned in, Nancy and I are here as we have been now for more than 30 years, taking calls. This is not a one-hour infomercial, this is the only calling show, financial calling show in Central Florida where we are here live this morning to answer your questions. Questions that might be on your mind regarding your personal finances, decisions that you’re trying to make regarding an IRA, regarding long-term healthcare, regarding insurance, regarding your mutual funds, all that stuff.
The things that Nancy and I and the 14 other certified financial planners due for a fee on Monday through Friday working as fiduciaries for our clients, but on Saturday morning we are here for you absolutely free. So if you have any questions regarding any financial topic, things that might be on your mind as Josh said, just things you may have heard, things your neighbor may have told you, things you might’ve read, you want some clarification. We are here and the good news for you is right now the lines are absolutely wide open, so if you have any questions or things on your mind, pick up the phone and dial these magic numbers.

844-580-9326, 844-580-WDBO or you’re more than welcome to send us an open mic using that free WDBO app. Open the mic, click the open the app, click the WDBO open mic button and ask us your best question. In about 15 seconds, I’ll play it live on the air. Today’s topic, the difference between saving and investing.

Right. Okay. So as far as savings go, there’s a couple different kinds of savings. The first one I would call toe at the sock savings, and that would be the money that you have in checking, savings, money market that is for any type of emergency that might arise. We’re just ending hurricane season so we all know what weather can do to people’s homes or God forbid somebody’s got an illness or a car accident or something like that. So those are the dollars that should be in checking, savings, money market types of accounts. And then anything that you might have to spend in the next 18 to 24 months also needs to be kept liquid. So let’s say that you’re planning a vacation or you know that there’s some family event that’s coming up, those are things that you’re saving for and you’re keeping liquid, but you know that you’re going to be spending those dollars in a relatively short period of time.
I often have people ask me, how much money should I keep in cash? And really it’s a personal decision. I have some clients that want a couple hundred thousand always in cash and some people that feel comfortable with 5,000 in cash. I think for most people, for emergency purposes, somewhere between 20 and 30 always in cash is a decent amount, maybe a little bit more, but that’s what savings is for. It’s for the emergencies, it’s for the security or for the items that you know you’re going to be spending money on in the next 18 to 24 months. As far as investing goes, most people think of retirement savings and that’s something that’s going to be long-term. And then you can look at the various different stock and bond mutual funds, equities or income combinations that are appropriate for your risk tolerances that can work for you, and that you’re going to be adding money to over regular periods of time for a long period of time.
I know a lot of people are very, very concerned about what’s happening with the economy right now and should I sell out my investments and go all to cash? And my answer is no. First of all, if you have things that are paying monthly or quarterly dividends, you’re reinvesting on sale, which is for long-term savings, a really nice thing to be able to do. And second of all, if you’re going to be retiring in say maybe 10 years, you have to look at what is your longevity? If we’re planning for you living into your late 80s, your mid 90s, that’s the timeframe you’re looking at for these long-term investments to be working for you and that’s what you need working in the stock and bond predominantly growth for most people, growth tends to keep things ahead of inflation. So short-term needs cash, long-term savings or long-term, excuse me, investing, then you’re going to the equity and income funds.

So the key is really to distinguish what you need in the short term and don’t have that money invested because the way you lose money is to sell when things are down. You haven’t incurred a loss until you’ve sold. And unfortunately, if you’re fully invested and you have to sell when things are down, you will in fact incur a loss. That’s why important to know what your immediate needs are, what your cash needs are, and have that liquid money available so you don’t sell when things are down. And you were talking about the emergency money, Nancy, it’s not uncommon. I know you and I go through this. When we meet with clients, they come in and they have all this money sitting in cash. Well, that’s my emergency fund and you’ve got 50, 60, 100, $150,000 sitting in cash, and so you probe, okay, what’s the possible emergency that you’re going to need and what’s the worst thing that can happen?
Well, worst thing is the roof blows off. All right, do you have insurance? Yeah, you have a deductible? Yeah. Okay, that’ll cover that. The air conditioner blows up. Well, okay, maybe that’s 10, 15, 20,000. Okay, you can cover that, but what else other than that? I mean unless a sinkhole opens up and you lose your entire house. So it’s that comfort level I think that a lot of people have sitting in cash and that comfort level in the long term, as you said, if you have a reasonable life expectancy, costs you a lot of money in the long term. And that’s what financial planning is all about. Looking at what your cashflow needs are, understanding what your big expenses that may be coming up as you said, a wedding, a graduation, a new house, a car, and then allocating the rest of your money for your growth for the rest of your life.
So those are the critical things. What Nancy and I and the 14 other certified financial planners work with our clients in developing a plan that will get you to and through your retirement years. You don’t want to be 100% invested, but you want to have growth in your portfolio because with life expectancies being what they are today, you want to be sure that you have enough income in those later years. It’s real easy to see where you are today and figure it out on the back of an envelope, but what a financial planner will do is sit down and look at what your needs are, factoring inflation, taxes, social securities, pension and those kinds of things, and then design a plan for you. And I see we have a call there, Josh.

That’s right. Let’s go to Bill calling from Bitler. Go ahead, Bill, you’re on the air with the Certified Financial Group.

Hey Bill, what’s up?

Hey, good morning. Great show. I listen to you every Saturday. I’m 73 and I have a big house, about 2,600 square feet, a house right up the street that’s 400 square feet smaller because they don’t have a Florida room on the back with an upstairs deck. Just sold for 400. Now I’ve been in this house 23 years and it’s too big and I haven’t sold a piece of property. I used to be a real estate investor in 20 years and it used to be 250,000 tax-exempt for personal residences. Have they raised that limit? If I sell this house and I’ve paid say 115 and I got 50 in it for my improvements, what is the maximum that’s tax-free? Unless that’s gone away. I don’t know. I’m not up to speed on that.

It has not changed beyond the 250.



Are you married, Bill?


Okay. And the rest would be taxed as capital gains. And let me just look real fast and give you what the limits are for capital gains, if I can find it on my little,

While Nancy’s looking it up for our listeners, just to recap, and I mean, you probably remember Bill back in the day where if you sold your house and you rolled it into another house, you could defer the taxes. Remember those days?

Yes. I did it twice I think.

Right. Right. And most of us did. So and I think you’re going to have to go back to your original cost basis. If you’ve been deferring those gains all along, that may enter into the calculation as well.

Or any material changes that you’ve added to the house and you have the receipts for it.

Right, right, right.



Go ahead.

Good thing I kept the receipts.

There you go.

All right, so depending on what you would sell the property for, if for somebody whose single, if the gain is between 44,600 and 492,300, you would pay a 15% capital gains tax on anything over the,

That’s the gain over,

Over the 250.

That’s a gain over my cost or over 250?

No, your cost plus 250, you get 250 free.

Okay. So if my cost is, let’s just say for simple numbers 165, I add 250 to that and that’s tax-exempt.



Okay, so that would take me over the $400,000 price range?

That’s correct.

Okay. And nobody gets full price right now or things are changing.

Right. That’s correct.


That’s correct. That’s correct.

Okay. And that’s before expenses like real estate commissions, correct?


That’s correct. That’s correct.

Okay. All right. Hey, thank you very much. I really appreciate that.

You’re welcome Bill and good luck and appreciate your listening. By the way, how are you listening? AM, FM online? What are you doing?

I’ve been an AM listener for 23 years.

Okay, well we appreciate your tuning in. Appreciate the call and have a great weekend.

Okay, thank you. Bye-bye.

You’re welcome, Bill. Bye. All right. So yeah, Nancy, it’s still, it’s unbelievable after all these years that there’s still folks that number one, that they haven’t raised the limit on the 250 to 500, right?

Well, but that would be beneficial. So,

I understand, but how many people still recall the day when you could defer all your gain by buying a larger house?


Remember that? Remember those days? Well, those days are pretty much gone. I see Josh is teeing up the call.

Well, maybe that was before my time.

Well, that probably was before your time. I remember those days.

I don’t.

All right. Do you want to take it away, Josh? We got another caller here. I see.

All right. Yep. We got Haynes calling in from Altamonte Springs. Haynes got a question about gifting his daughters some cash. Go ahead, Haynes, you’re on the air.

Good morning, Haynes.

Hi Haynes.

Well, good morning folks. I listened for your show. You have a good show. Thank you very much then.

Thank you.

Thank you for calling.

My question is I’m 91 years old. When I retired, I took a lump sum distribution and rolled it over into an a qualified IRA.


I have two daughters, and my question is, would I be allowed to take a one time distribution from that IRA and give it to my daughters as a gift without paying taxes?

The answer is no.

Yeah, I mean you can take the distribution and you can make the gift to your daughters, but yeah, any money that’s coming out of a qualified retirement account is going to be taxed. You can send money directly to a charity and have that qualify as part of your required minimum distribution, but the dollars that you pull out of any type of tax deferred account is going to be taxed.

Yeah. The idea of a gift, a lot of people think gift to my kids, gift to my church, gift to my charity, all the same. Now it’s got to be a 501(c)(3) to be tax-deductible, but taking any money out of your IRA will be taxable to you. And when you make that gift, if it’s under $17,000, there’s no gift tax.

Okay, very good. I appreciate your information and thank you very much.

You’re welcome Haynes.

Thank you.

Thanks for the call. I see we’re up against the break, Josh, so take it away, buddy.

That’s right. You want to hop on the air? Do you want to be the next person in line to ask a question about your financial future? The number to call is 844-580-9326, 844-580-WDBO, or use that open mic feature inside our free WDBO app, send in your question that way. We got one question from the open mic section coming up here soon later in the show. 844-580-WDBO. You’re listening to On the Money where we’re planning tomorrow,



With the Certified Financial Group. Welcome back to On the Money right here on WDBO 1073 FM, AM 580, always streaming live in that WDBO app. If you want to hop on board today, be a part of the show, we got Joe Bert and Nancy Hecht standing by to answer your questions. Planning your financial future, maybe your kid’s financial future or anybody’s financial future that you want to be a part of, this is the number to call 844-580- 9326, 844-580-WDBO or feel free to send in an open mic using that free WDBO app. Or if you want to ask Joe or Nancy a question or another member of the certified financial team, a question face-to-face, there’s an option for that too, isn’t there?

There is. There is. You can reach, let me see who’s in the office this week. Is it, Rodney I believe. Rodney is taking calls and that’s what you were referring to, right Josh? I kind of lost my train of thought. The reason I lost my train of thought was that,

We have a guest in the lobby.

Yeah, we have a live studio audience here this morning.

All right.


Nancy had a 10 o’clock appointment and the gentleman showed up a little early, so he’s now part of our live studio audience. So good morning to you, Joe. Is it?


Good man, Joe. All right, so anyway, Nancy and I are here to take your questions and off the air if you have anything that you want to delve into a little bit more personal stuff, you can reach, I believe Rodney Ownby at our office at 407-869-9800, 407-869-9800 or 1-800-EXECUTE. And if the line is busy, he promises to call you back. And we have some workshops coming up, right, Nancy?

Yes, we do. Okay. The next worship, excuse me, is getting long-term care planning right. This is Wednesday, October 11th, it’s at 6:30. And then after that we have Taste the Baldwin, which we are hosting on November 2nd at 6:30. It’s a big open up,

Baldwin Park. Yep, it’s live. We’ll be there. What’s the date there? Tuesday,



November 2nd. It starts at 6:30 and then on November 4th, how tax planning changes through four stages of I’m guessing life.


That’s Saturday, November 4th. That’s at 10:30 in the morning. And then the last one that we have on the books for right now is Social Security Planning Basics Rules and Claiming Strategies, and that’s Wednesday, November 15th at 6:30. If you go to our website,, there’s a workshop tab. I highly recommend if you want to attend one of these workshops that you make a reservation now, because they fill up pretty fast.

These are all absolutely free. Leave your checkbook at home. We’re not going to try to sell you an annuity or something, but it’s an opportunity for you to get some information that I’m sure will save you some money in through your retirement years. And also an opportunity to learn a little bit more about what Nancy and I and the 14 other certified financial planners do with Certified Financial Group, working with our clients for a fee, providing financial planning and investment advice. So once again, as Nancy said, go to our website, that’s,, and you can make your reservation right there and I hear the bumper music. So that means you’re about to take a break.

That’s what we do. If you want to hop on board during the commercial break, get your question answered live on the show. The number to call is 844-580-9326, 844-580-WDBO or send in your question using that free WDBO open mic feature inside that WDBO app. You’re listening to On the Money where we’re planning tomorrow with the Certified Financial Group.

Welcome back to On the Money, Central Florida’s most listened to financial call and show brought to you by Certified Financial Group in Altamonte Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years for their WDBO listeners. If you have a financial question you want answered by real fiduciaries, the lines are wide open. Call 844-580-WDBO, that’s 844-580-WDBO and enjoy the rest of the show.

Welcome back to On the Money right here on WDBO 1073 FM, AM 580. Take On the Money with you anywhere you go around the world this time of day, as long as you got that internet using our free WDBO app. If you find yourself inside that app and you want to be a part of the show, go ahead and push the open mic button, send in your question that way and we’ll put you live on the air. You want to do it the old-fashioned way, we got that available too. The number to call to talk to Joe and Nancy with the Certified Financial Group is 844-580-9326, 844-580-WDBO. Bill is calling in today from Bitlow, and I believe Bill was the caller from earlier, but he heard something Joe said, he’s like, oh, I got some more. Joe gave me more info than I thought I was going to get. So I need to clarify on that now. Go ahead, Bill. You’re on the air.

Hey Bill.

Welcome back, Bill.

Okay, thanks. Joe had mentioned that if you buy another house after you sell this house at whatever the capital gain is, do I have to buy another house,



No. No.

To be tax-exempt?

No, no, no, no.

Okay. I misunderstood you. I wanted to make sure on that. Okay. For the leg up person is what I was thinking. You’re going from 200 to 300 then the 100. Okay. Is that,

What I was referring to, Bill is that’s the way it used to be. It used to be that if you bought a larger house you can defer all your gains and roll it into the new house and that’s the way it was. But the rules changed sometime back and I don’t remember exactly what year, but it did change. But it’s interesting, as Nancy and I were talking off the air, how many people still remember the old rules as I just said, where if you buy a bigger house, you can defer all the gains on the old house, but those days are gone. Once again, 250 if you’re single, 500 if you’re married, that’s gains. That’s not what you get from the bank after you pay the mortgage or whatever. That’s gains, the difference between what you paid for it and what you sell it for.

Okay. Hey, thank you very much. I appreciate your expertise. Thank you.

You’re welcome, Bill.

Thank you.

Thanks for the call.

Okay, bye-bye.

Bye. All right. You there Josh?

Yep, I’m here. Where do you want to go right now?

Okay, well we’ve got that text question. It was, what a app.

We got a open mic.

Open mic.

Open mic.

Open mic. So if you’re inside that WDBO app, you want to send in your question, it’s going to sound a little bit like this when we play it back and Joe and Nancy will answer away. Here we go.

Sorry, I couldn’t call in. Good morning. I’m driving right now. I’ll make it quick. Late 59 year old just inherited $100,000. Would it be smart to invest in two treasury notes right now?


Yeah. Or I would say perhaps.

Yeah. The thing is, is we need to look at entirely what it is you want to accomplish. If you want, you’re still a young guy, you need to have growth in your portfolio. We don’t know what your other assets are. Putting people in treasury bills is kind of like savings. It’s for really kind of short term. It’s a way to also to protect some of your portfolio that you may have in equities, but taking on, if that’s your only investment money and putting it in treasuries, it feels good for the moment, but in the long run it’s not going to get you there. Nancy?

Well, and the point is you need growth. Growth is what eventually will keep you ahead of inflation and growth you get through equities or stocks and we prefer mutual funds because you spread the risk out. But as Joe had said, we don’t know what other assets you have and we don’t know what your risk tolerance is. Something that we do is we have all of our clients take a risk tolerance questionnaire and we get an idea of what would be the ideal mix for that particular person between equities and incomes. And being 59 again, it is on the younger side of longevity. You have potentially 30 years or more for that money to be working for you. So treasuries might be good for a portion of it, but a mix between stocks and bonds would probably be more appropriate for somebody your age.

Yeah. What we’d want to know too is do you have a retirement plan? If you have an IRA or 401K, you could put a lot of money into that. You can’t put that $100,000 in directly, but you can reduce your income, your take home money and live off of that money and maximize your contribution into your 401K plan. You could put $30,000 pre-tax in your 401K plan. In three years, you’ve used up that 100 grand, you’ve gotten 100,000 dollars worth of tax deductions and now you’ve got that money growing for you on a tax deferred basis. So those are just some of the ideas that we would discuss with you are. These are the things that Nancy and I go through with our clients when they come in for a meeting, really what it is we want to accomplish. What options do you have available to you?
If you want more information about what we do and how we do it, I would encourage you to go to our website, that’s, that’s We offer a no obligation visit to see if there is in fact a fit, if what we do suits you. We also have a remote office, we’re at the outpost down in Windermere and another office of convenience in Daytona at the Halifax Yacht Club. So we encourage you to come to our office for the first meeting, but we can meet you subsequently at any of those offices. So once again, go to our website, that’s And I’ve got a text question I saw floated in there. Josh.

You got it. This one says, can I pull my money out of my 401K to move to my IRA while I’m still working?

So what this question is referring to is what’s called the in-service withdrawal. And many companies offer the ability for people to take in-service withdrawals. And I’m not talking about a hardship type of withdrawal. I’m just talking about pulling out the dollars that are in there and moving them into another qualified account. Some companies only allow people to pull out 50% of what is the vested amount. Some companies allow 100% of what is vested to be moved out of the account. You have to talk to your HR department and see what the rules are for your particular company. I’ve had this question come up to me from a lot of clients recently because they’re not real happy with how things are doing in their 401K and they’re happier with how the assets that I’m managing for them outside are doing. It’s important that if you’re going to be doing it in service withdrawal, that you have the paperwork set up, that it goes directly from the 401K to the outside IRA, and that way you will not pay any taxes on the money that you’re moving out.

So why do people do that? Once again, it’s to give them the opportunity to get professional management as opposed to being limited in what the choices are and just kind of letting it drift.

Right. Right. And they’re happier. I mean, the clients that have been asking me about it with the performance I’ve been able to provide than what they have in their 401K.

So plus you get a consolidated statement. So these are some of the things that we do for our clients. So once again, that’s all about that so.

And then,

Go ahead.

The internal expenses, people are beginning to realize in 401K holdings are a lot higher than buying similar types of mutual funds through a managed roll IRA account.

Right. Once again, the funds that we use, the ETFs that we use are no load and no commission involved, and we buy what are called institutional class shares, which means that you generally can’t get them at the retail level unless you have a million dollars or more, sometimes five million to invest in them. But because the amount of money that we manage, we can get you those low cost great funds at a discounted price. So once again, want more information about what we do? That’s, And I see another text question that floated in there, Josh.

We do. If you want to join the show, the number to call is 844-580-9326, 844-580-WDBO. Send in your open mic using that free WDBO app. Next text question, and I read this and I’m wondering if I’m seeing things or if I know less than I thought I knew about financial planning. What does per stirpes mean?



Is the correct pronunciation.

Because my brain says stripes,


But I see it’s not stripes.

That’s what a lot of people think it is. Or it’s a misprint, right?


It’s per stirpes. It’s Latin.

Yeah. Yeah. So when you’re naming beneficiaries, like people will name, if you’re married, a spouse will be a primary beneficiary. But looking at contingents is often children. And if you have more than one child, you may want your son’s kids to inherit their portion versus the dollars going to the other siblings. So per stirpes is just going down family lines. So if you have Johnny and Sally and David as your contingent beneficiaries and you don’t list per stirpes, and God forbid Johnny passes away, then his portion goes to the other two siblings that you’ve named. If you have per stirpes checked and Johnny has kids, then his portion of what he would inherit will go down to his children. So it’s just keeping things on family lines as opposed to going across.

And these checkoffs are available on your 401K, your 403B, your 457. And oftentimes people sign up for these things, they don’t understand what that’s about, and they do what Nancy says, everybody equally. And then Johnny passes away and then Johnny’s kids are in the dark. And also the other thing to remember, that it doesn’t go to the surviving spouse, it goes to the bloodline, to the grandchildren. So those are things you want to consider. Then if you have those kinds of family situations where maybe the grandkids aren’t responsible or you don’t want the chunk of money, that’s when the trust get involved. But these are all the things that you want to consider. And as people have built up hundreds of thousands of dollars in their retirement plans, those are important decisions to be made and you can’t make them after you’re gone. So these are the things that Nancy and I review with our clients to be sure that your beneficiary and all that stuff passes through probate, which is the beauty of it, right?

Yeah. Well no, it avoids probate.

Well, that’s right. Did I say passes through? It avoids probate.

Yeah. It avoids probate.

Thank you. It avoids probate.



Which is something that is extremely important.

Right. Right.

And another thing that people don’t realize is you’re checking, savings, money market accounts, you can have beneficiaries attached to those also. You don’t want to make your kids owners on your bank accounts because then you’re opening up a whole potential can of worms. God forbid something happens bad to your kids. But to name a beneficiary is important because then those accounts will pass without probate also. And probate in Florida starts at what? 7% is the initial probate tax. So yeah, we don’t like paying taxes if we,

Well, it’s really the cost of settling the estate that the attorneys generally charge. The key there is that you need to understand what the options are. And when we open up investment accounts for our clients, these are the kinds of questions that we ask. So it doesn’t have to go through a will, it doesn’t have to go through a trust. It’ll avoid probate by naming those things when you set up those accounts. So these are some of the things that we do for our clients. And once again, if you want more information about Nancy and me and the other 14 certified financial planners, go to our website, that’s I see we’re up against the break here, Josh, so take it away.

If you want to join the last segment of the show, the number to call is 844-580-9326, 844-580-WDBO. Rodney Ownby with the Certified Financial Group is standing by to answer your questions off-air. If one pops into your head as the show concludes, or maybe you want to get down to a little more details, some personal information, that’s what that off-air line is for. That number is 407- 869-9800. One more segment coming up. You’re listening to On the Money where we’re planning tomorrow,


With the Certified Financial Group. Welcome back to On the Money right here on WDBO. Reliable information for decades provided by the Certified Financial Group. The number to call right now, if you want to be a part of the show, I’ll give it out for maybe next time, but the show’s coming to an end, 844-580-9326. A more useful number for you right in this exact number is Rodney Ownby is standing by in the office, if you’ve got a question you want to continue off the air. That number is 407-869- 9800, 407-869-9800. We’ll talk to Jim in Winter Park, then a score my funds wrap up and then we’ll head on out. Jim, you’re on the air.

Morning Jim.

Morning Jim.

Good morning. I have Franklin Municipal Bonds high yield, had them for quite a while, but I’ve never seen the share price this low and I’ve never seen the monthly money that comes off of it this low. I just wanted to get an opinion.

Well, Franklin’s a good fund company. I’ve used their tax-free bond funds for some time, but what you’re experiencing is a thing that everybody’s experiencing that holds bonds, rising interest rate environment. The value of the bonds go down and unfortunately they have to continue to invest money and they take that money and invest it in today’s low interest rate environment. So the yield is going down, the dividend and the interest is going down simply because that’s the environment in which we’re dealing with. So there’s nothing wrong with the bonds, it’s just the cards they’ve been dealt. So unless you’re desperate or need those funds for anything, I just hang onto it and recognize that you’re going to have some low income for a while. Now that will turn around.

Wait, wait, I have a question.

Go ahead.

All right. So if rates have been going up, hasn’t the yield gone up on the bond fund?

You would think, but they are unfortunately buying bonds that are out in the market today, which are less than what you had previously. That’s what I should have said. The bonds at that fund held when you originally bought it were higher yielding than what they can get in today’s market environment. But Nancy’s right, because interest rates are going up, they’re buying rates, but nevertheless, the ones that they’re buying are less than the ones that are being redeemed or called. So that’s what’s driving down the income that you’re getting.

But the natural seesaw for any bond fund is when rates go up, the price per share goes down, and if you’re reinvesting then that’s fine because you’re buying shares on sale. If you’re taking the income, then that’s okay also because you got a bigger check. I mean, we haven’t seen interest rates like this since what, like 2007?

Right. So are you taking the income, Jim, or you’re reinvesting?

No, I’m taking the income.

Yeah. Yeah, so you’re experiencing the thing that frankly every bond holder is dealing with in today’s interest rate environment, but when things turn around, what will happen is you’ll see the share value go up and your income go up.

Right. So I mean if you’re taking the check, you have to almost ignore what’s happening to the value. Is the chicken fat or skinny? Who cares? As long as it’s laying the eggs. I don’t know. I heard somebody say that about 20 million years ago so.

All right. That help you Jim?

The check is getting less and less, but I just wondered if [inaudible 00:35:43] of the time to jump off the end of the dock or not.

No, I wouldn’t do that. I mean, if you look,

I mean, I guess just hold on.

If you’re looking at it for tax-free income, it’s still there. It’s still providing the income. Unfortunately it’s less income, but that will turn around.

Okay, thank you.

You’re welcome Jim. Thanks for the call. All right, let’s wrap up here. We’ve got score my funds. Nancy, you want to talk about that real quick?

Sure. This is something that we do with our quarterly reports, but if anybody is not a client and they want to know about the quality of the mutual funds that they hold, they can go to and they could put in the ticker symbol of 20 different mutual funds and then we will send back the report. No obligation. If you don’t know the ticker symbol of your fund, there is a dropdown where you could look it up. There’s 14 different data points that every single fund is held up to in this report that we do and it’s been a really nice report to be able to provide to people and you can find out the quality of what you have.

Absolutely free., and look for our workshops coming up, coming up Wednesday. I think you want to be there. It’s about long-term care, long-term healthcare, the options. That’s our website, Great show, Josh.

Thank you so much, Joe, Nancy with the Certified Financial Group. Great advice as always. You, the listener, have just listened to On the Money where we’re planning tomorrow,


With the Certified Financial Group.


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