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Central Florida’s most listened to financial call and show brought to you by certified financial group and Altamont 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. Hello and welcome to on the money right here on WDBO, a special holiday edition. Yesterday was, of course, Independence Day.
Hope you all had a wonderful, wonderful Friday. I’m sitting here in studio today with Joe Burt and Gary Abley, two certified financial planners with a certified financial group. If you want to join the conversation, go ahead and leave us an open mic inside the WDBO app.
We’ll play it back on a live future episode of on the money. As you have listened to this show for more than 30 years on the airwaves of WDBO, always giving out great advice, always informing the central Florida area of guiding people to and through their retirement, the team of certified financial group has such a connection with this area. Joe, Gary, how are we doing today? We’re doing great.
Good to be with you, Josh. As you said in the intro, Gary and I are here to take your calls as we have been now for more than almost 40 years and this is not a one-hour infomercial. We are here as a call-in show for our listeners to answering questions that might be on your mind.
It’s what we do, Gary and I and the 15 other certified financial planners providing retirement planning and investment management for a fee on Monday through Friday, but on Saturday mornings, we’re here for you absolutely free. So if there’s anything on your mind, we are here and delighted that you have joined us and our topic for today is… It is will the next 34% move in the market be up or down? Gary, what do you think? Well, so it’s interesting, Joe. I’m going to ask you this question too, but I’ll answer it first.
So I had a client that came in. Actually, he was a prospective client that came into the office and I was giving him some education and a few things people don’t realize. For example, out of the last 100 years, we’ve only had six occasions where we’ve had an average stock market return defined by a return within 20% of the long-term average, which is around 10%.
So in other words, a range of 8% to 12%. A lot of people find that pretty surprising that about once every 15 or 16 years, we get an average return. You would expect to get average returns frequently.
And then I said, you know, another interesting thing is that we haven’t had a bear market since March of 2009 by one definition of a bear market, and there’s many out there, but the one that we tend to subscribe to is a drop of 20% or more, lasting at least a couple quarters. And so the last time we’ve had that, and some of you might be saying, well, we just had that. We had an index drop by more than 20%, but as we all know, because we hit a record last week, that we had a V-shape recovery, so it did not last long at all.
So on average, we get a bear market every five and a half years, if we go historically, and we haven’t had one in a little over 16 years. So we’re, we could say we’re about 11 years overdue, right? All right. So now that we know that we’re overdue, we say, well, how big is the average bear market? We know it’s more than 20%.
And as it turns out, the average is around 34%. And that’s why I came up with that question. You know, are we more likely to see the market go up 34% from this point first, or are we more likely to see a decline of 34%? Definitely the decline.
Well, I think it would be the decline, personally. And I would say that because the market multiple, basically how many times earnings we’re paying when we buy stocks today in the S&P 500 index, is around 24. If we go on a actual price earnings ratio, that’s looking back at the earnings over the last 12 months.
Forward looking, it’s a little lower. It’s around 23 times earnings. But when we look at that and we compare it to the historical average last 20 years, it’s, you know, closer to 19 times earnings, right? So we are trading at a premium.
And, you know, what Joe and I were talking about this before we came on the air today, and a lot of the uncertainty, a lot of what caused this most recent drop of more than 20%, a lot of that’s remained unresolved. Now we have some resolution, some, I guess you’d say, outlines of agreements, for example, with China, and that’s what’s helped move the market of late. But we also have still some unresolved issues.
We really don’t have complete clarity on the Iranian nuclear program. We know we set it back a long ways. We just don’t know how long that is.
We still know that there’s fighting in Gaza. We still know that numerous, you know, weapons keep getting flown over into Ukraine. So there’s a lot still unresolved, and the market has moved higher.
But it’s interesting that you agree with me because I tend to be the conservative, pessimistic guy in this group. So I’m glad to see we agree. No, I think you’re right.
But I think, you know, what’s also driving it, that, you know, what you’re saying is a lot of things that have not been settled. But if you look at the euphoria, I don’t want to say euphoria, but the relief or the success that our military has had, there’s a whole new pride, I think, in America. And, you know, what they were able to accomplish.
And then the president going over to NATO and getting them to agree, and them all being buddy buddies, and they’re all back on track. And then the little breakthroughs that we’re having here and there, little breakthroughs of, you know, we’ve got a trade deal here coming, we’ve got a trade deal there coming. Things are working and going in the positive direction.
And I think there has been some clarity, too, about the president’s executive orders, that the Supreme Court came along and said, you know, the circuits can shut down what the president wants to do. So there’s been some clarity there. So I think all those things combined have led, have taken some of the, have created maybe a better sense of feeling in the world.
Now, some people politically I know will disagree with me, but I really think that’s part of what’s going on here as well. Well, now let’s talk about, we’ve got a holiday weekend. So let’s make this a little positive.
So if both of us, and I imagine if you polled all of us here, a lot of us would think the same, we’re probably likely to see a 34 percent decline. No question. And what that really means to the average investor who’s moderate, who has 60 percent in stocks and 40 percent in bonds, it means you’ll see a temporary decline in your portfolio of about 20 percent, if you do the math.
Now, tell me, Joe, why that’s good news. Why is it good news? Because it gives you an opportunity to, number one, reposition, rebalance your portfolio, do some tax-loss harvesting, and buy some things when they’re on sale. And that’s what you want to do.
That’s right. So a steady, up-stringing market isn’t always good. I mean, you know what you’re doing.
Well, things are more expensive when you’re putting more money to work. That’s correct. It’s interesting, I asked AI this, this is a little off-topic, but I asked AI, if you’ve got a 60-40 mix of stocks and bonds, what percentage drop do you need in stocks to be 5 percent off-balance if bonds stay static? Go ahead.
And the answer they give is wrong, by the way. You can do the math pretty easily, but it’s around 18.5 percent decline. So a bear market’s going to get you typically where you need to be if you start at 60-40, to where you’re able to rebalance.
And rebalancing means we’re selling the bonds, which were static or, you know, steady, and we’re buying stocks that are now, you know, cheaper, 20 percent off. Cheaper, right. So this is actually good news.
You know what it’s called when AI gives you the bad information, incorrect information? It’s called a hallucination. Seriously. That’s what it’s called.
So when you get bad information from AI, it’s called a hallucination. Oh, that’s interesting. So, I mean, it’s kind of a bad news, good news, but the market does appear, on most historical basis, it does appear overpriced.
Now, we should say, and we want to make this clear, because I’m sure our compliance department listens to these radio shows, neither Joan or I can predict the direction of the market. Honestly, if you had told me that a lot of our clients will get their quarterly statements for the second quarter in a month or so, and they’re going to look at that, and they’re going to say, oh, my gosh, with all of the uncertainty and with the wars going on, my account went up over 5 percent, let’s say, if that happens. How did that happen for one quarter when we had all this uncertainty? Well, you cannot predict short-term movements of the market, right? And the key is, if you’re invested, you have to recognize that there are going to be times, as you said, when the markets are down.
Stock markets are going to be down, and it is an opportunity. But it really doesn’t hurt you unless you’ve sold when it’s down. And therein lies the secret to long-term success financially.
You’ve got to have money set aside. You have to position yourself that when that time comes, you’re not going to be tapping into your funds and selling when things are down to provide your standard of living. Well, that’s exactly right.
And we call that staying the course. You know, I had a workshop a couple Saturdays ago, and one of the things I talked about, because our current president is very polarizing. You know, you love him or you don’t love him, right? But clearly, you don’t want to make investment decisions based upon politics or who’s in office.
And I know some of us feel very passionately one way or the other, but that kind of emotions, we’ve got to keep emotions out of investing in order to get good long-term returns. It’s just trying to time things that just does not work. Right, right.
Well, we know time and time again, we say it’s time in the market, not timing in the market. And investing is never a smooth, straight line, as I like to say. And if in dieting and investment would be easy, we’d all be skinny and rich.
Yeah, well, that’s right. And I gave up my chocolate in the workshop to get rid of the temptation. So I know that I’m not skinny.
Anyway. But you’re right. It’s inevitable that that 34% is going to be on the downside.
But you know what’s going to happen? You don’t know when it’s going to happen. Well, and we should clarify, too, you know, 34% is an average. That’s correct.
Like, you know, you go back 100 years, and I say this constantly to clients. Yes. By the way, we’re not predicting a 34%.
No, we’re not. Yes, please. No.
But you know, you go back 100 years, and the average return for the market’s been close to 10%. But you go back 50 years, it’s a different story, right? We’ve got global competition. So averages can be very deceiving.
And for example, we look at the dot-com peak to trough, and it was around 57%. Now, we had a loss in 2008 of, I believe it was 38%, somewhere around that for the S&P 500 index. You look at the dot-com from peak to trough, it was around 49%.
So just because we throw out a 34%, again, averages can be misleading. We can have something less, or we could have something more. But for certain, you know, if you’re 65 out there listening to us, you should be expecting about five bear markets if you’re lucky to live to your mid-90s.
For your lifetime. And once again, the key is to have a plan. And if you have a plan, you don’t panic when that stuff happens.
And I think that’s why our clients have been so successful over all the years. They listen, for the most part, listen to our guidance. And you know, the interesting thing is, and I know we’ve all experienced it, when we had the tariffs hit, and everybody, the general market’s panicked.
You turn on CNBC, you turn on this newscast, and everything’s going to hell in a handbasket. And fortunately, our clients did not react. That is right.
I mean, it was, I mean, and you know. No doubt, we got some calls. But it was a pretty easy conversation.
Because anytime we do have these temporary declines, they’ve always been followed. And we can say that unequivocally, because we’re at all-time highs now, right? Anytime we have these drops, they’re always followed by, you know, new market highs. And outside of great calamity, where none of us are here, I think that’s likely, because companies provide what you and I need to live on.
And it’s not just investing. You know, as we say time and time again, good investing requires good planning. You need to know what your time horizon is.
You need to understand your risk tolerance. It’s got to match up. And then you build your portfolio around that, and to recognize the rates of return that you’re getting based on your time horizon and risk tolerance.
Well, exactly. So for example, you know, we do cash flow planning. And you know, if I had a client that was going to buy that new $80,000 Lexus in 2008, I might have gone to him and said, you know, that flexible budget we talked about, maybe we put some tires on the old Chevy, and we wait a year and, you know, see what happens here.
So that’s what we mean by, you know, planning, flexible budgets. On the flip side, you have two phenomenal years, like 23 and 24. You know, you also want to reevaluate based upon, you know, your cash flow assumptions.
Right. And of course, once again, the key is to rebalance your portfolio, because there are times when they get out of whack. You have a strong bull market, and you want to take some of that gain off the table.
And that’s, I think, the benefit of working with an advisor, is to have him or her keeping on your portfolio to keep you in balance. Well, and so we talk about emotions. What do most investors do when it comes to investing in U.S. versus foreign? Would you guess? Well, most investors do.
They’re not working with us, for example, or working with a professional asset manager. Well, they’re not in favor of foreign. Exactly.
It’s what you’re comfortable with, right? We know General Electric. You know, we know Apple. We’re not as familiar with, you know, Siemens Energy, maybe.
And so, interestingly, one of the biggest differences that we’ve seen between foreign and U.S. just happened in the first quarter. This is the time, yeah. And then, also, one of the biggest differences we’ve seen between value and growth stocks, where value stocks way outperform growth in this first quarter.
Yes, and that’s, you know, the idea behind diversification. You never know which asset class is going to outperform. You want to have exposure to various asset classes.
And what you don’t want is a portfolio that’s all doing the same thing at the same time. Because if it’s all going up, you think we’re geniuses, and the market is great. But when it corrects, then it, you know, it gets ugly.
And that’s why you have to accept that if you have a diversified portfolio, you’re never going to really beat the market. That’s right. And, you know, I was just showing a client yesterday the components of the S&P 500 Index.
And I thought it was interesting. The first 10 stocks in the S&P 500 Index comprise roughly 35% of the index. So more than a third.
And just about all of them, the only value-oriented stock was Berkshire Hathaway, about 2%. The other 33% were all growth stocks. So I hear the bumper music there.
Josh, take it away. You got it. If you want to join in, leave your open mic inside the WDBO app.
I like what you said earlier, Joe, about how AI, if it ever is wrong, it says, no, no, that’s just a hallucination. I’m going to try to use that in my day-to-day life as well. I’m not wrong.
You’re hallucinating. That’s not what I said. Tell your wife that.
I was just going to say that. I think I’ll have a better luck with my boss. Thank you so much.
If you want to join in again, leave an open mic inside the WDBO app. You’re listening to On The Money, where we’re planning tomorrow, today, with the Certified Financial Group. Welcome back to On The Money here on WDBO AM 580, always streaming inside your WDBO app.
If you want to join into the conversation, by all means, open up your WDBO app and send in an open mic. We got Joe Bert and Gary Abley, two Certified Financial Planners with the Certified Financial Group, giving us another great hour of some financial advice, getting us to and through retirement. If you want to, again, join in, send us that open mic, and we’ll play it back on a future episode.
And Joe, Gary, what do you say we hit a text question here real fast? Tony, Tori, rather, texting from the land. Tori says, my husband buys individual stocks on his own and never consults with me. I am worried he might be gambling with our money.
How do I confront him? Well, tell him he’s hallucinating. Tony GPT. Or he’s going to tell you you’re hallucinating.
So what do you think? That’s an interesting question. It is an interesting question. And, you know, quite honestly, when we have meetings, this brings up kind of our other occupation, other than Certified Financial Planners.
We’re also behavioral psychologists, although we don’t have a degree. Right. So, you know, what I would say to, I think it was Tori, I would say to her what might be best for her, if she’s not comfortable confronting, is just to say, hey, you know, I listened to this show on WDPO called On The Money while I was maybe going shopping or whatever.
And, you know, they offer a free consultation. And I thought it’d be a good idea just to get a checkup on our portfolio to see how we are progressing toward retirement. So maybe you can do it in a non-confrontational way and basically get a second opinion.
You know, when we’re successful with investments, and it’s easy to be successful when the stock market’s doing well, sometimes we do think, you know, we’re doing well because of our own smarts. And sometimes it’s luck, right? And it’s very common when Joe and I meet with prospective clients, they bring in a portfolio of things they’ve been doing themselves. And I find, oh, my, you know, they have 25% in small company stocks, and yet maybe they’re moderately conservative or moderate.
So a checkup, you know, basically starts with, you know, assessing somebody’s risk tolerance. And then, you know, we complete a portfolio X-ray of their portfolio to see just, you know, how are they allocated between small, mid, large, growth, value blend, international, U.S., how much do they have in bonds, real estate, et cetera. And that’s a good idea for people to, you know, to know at all points in their retirement years.
But if you’re concerned, you know, I would say half of that money is yours. And, you know, maybe he’s listening. Maybe he’ll get the message.
But I don’t think you should have any, you know, you should be involved in that decision-making process. So I hear the bumper music there. Josh, take it away.
Thank you so much. You are listening to On the Money, where we’re planning tomorrow. Today with the Certified Financial Group.
Welcome back to On the Money, Central Florida’s most listened to financial call-in show, brought to you by Certified Financial Group and Altamont 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 here on WDBO.
AM 580, always streaming inside your WDBO app. We got Gary Abley and Joe Burt with the Certified Financial Group here getting us through another great hour of On the Money. If you want to join the conversation, by all means, open up that WDBO app and send an open mic in like this listener.
Yes, I have a question for the gentleman this morning. Is it okay for me to take my RMD and donate it to 501c3s without any penalty on my taxes for this year when I file for next year? At this stage, I do not need my RMD, but I would like to make donations to 501c3s without any and not have to pay any taxes on that amount. Can you confirm that? Thank you.
Okay, so once again, this lady has to take her RMD, which is required minimum distribution. Based on her age, she has to… It’s a variable amount based on her age and the amount that she has in her retirement accounts. And can she take that and send it to a 501c3 or not for profit and not pay taxes? So, Gary, what do you recommend? Well, the answer is yes, provided you do it correctly.
So let’s just go over the rule. The rule is you must be at least 70 years old, a half and a few days. And the reason I put it that way, 70 and a half years old and a few days, is it’s not the year in which you turn 70 and a half.
It’s you must be 70 and a half years old, right? Across that threshold. Across the threshold. And incidentally, for most of our listeners, their required minimum distribution age is probably either age 73 or 75.
However, you are still permitted under the current law to start donating from your IRA at the age of 70 and a half. And I always add a couple of days. All right.
So now, can you… Let’s back up. You can donate anytime you want to charities, take money out of your IRA. Oh, sure you can.
But you’re talking about a QCD. I’m talking about a qualified charitable distribution. Let’s define what that is.
So a qualified charitable distribution is when you send money directly, directly from your IRA to a qualified 501c3 organization. You cannot take $10,000, put it in your checking account, and then write $10,000 to your church. You may get a checking account from your IRA account and write a check directly from your IRA account, right? Going to your church.
It may not go to you. So now that’s the process. It must be a direct distribution to a charitable organization.
You must be at least 70 and a half years old. Somebody had asked me, apparently it was recently in the newspaper, and said, if I’ve taken my required minimum distribution already and I decide I want to do a QCD afterwards, can that make up for my RMD? And of course, the answer is, well, you’ve already satisfied your RMD. So if you’ve already taken money out, then it’s going to be taxable if it went to you as an individual.
The key is for it not to be taxable, for it to be a qualified charitable distribution or QCD, it must go directly to the charity. So once again, why do we want to do that, have that direct transfer from our retirement account to the charity, as opposed to just making the withdrawal and then still getting a tax deduction if we can itemize? What are the benefits of doing that? The reason is a lot of people are not able to itemize anymore because of the higher standard deduction. So this ensures being able to pre-tax the money.
So anything you go to send directly to charity from your IRA, once you’re that age, does not count as a taxable distribution. So if you wanted to lower your RMD, say at age 73 or 75, you could start earlier, once you’re 70 and a half, and again, a couple of days, to lower the balance in your IRA account, which would in essence lower what you have to take out in the future. Right.
Okay. So we hope we answered that question. I see you got another text question there, Josh, take it away.
Of course, if you want to join the conversation, open mic inside the WDBO app, like that earlier listener. We always love audience participation because that’s kind of what they do on this show. They’ve been doing it for so long, the Certified Financial Group, giving out great information.
And I think they’ll do the same for Drew, texting in from Orlando. And Drew says, I met with a financial planner who discussed a buffer ETF, which sounded terrific, decent upside and limit on downside. But what’s the catch? Yeah.
So, Joe, what do you think the catch is? Well, the catch is that you’re giving up some upside and, you know, for the protection of the downside. So there’s no free lunch in the investment world. You’ve got to recognize that you’re going to protect yourself on the downside.
When the markets do really well, you don’t take advantage of the full benefit on the upside. So that’s a tradeoff. So let me give you an example of one that was recently available.
It may not be the current up and downside, but there was a buffered ETF a few months ago on the S&P 500 index, where you could get up to 15% on the upside from a year, from point to point a year later. And it had downside protection of about 15% as well. And a person, you know, proposed this and said, you know, this almost seems to be too good to be true.
And I said, well, let’s look at the data. And here’s the interesting thing. If you go back 100 years, we’ve got, I believe it’s 38 or 39 years.
It’s one of those two where the market has gone up more than a positive 20%. All right. Now let’s look at the opposite.
We’ve only had six years in those 100 years where the market has gone down more than minus 20%. So we’ve got 38 up more than 20% and six years down more than minus 20%. So that’s a pretty good tradeoff.
That pretty much tells you why we like investing in stock mutual funds, right? Right. But you’re giving up too much upside. I mean, just look at what happened in 23 and 24.
You would have given up 8% plus, you know, to the upside each year. And you never recover that. No, you don’t.
And, you know, these sound like great insurance policies. But what do we know about insurance policies? There’s a cost. Well, there’s a cost.
And I always say insurance company always wins. They’ve got the actuaries and they figure out what they can offer and still make some money. So they do sound like a great idea, but it really amounts to timing the market.
There’s nothing wrong with it. If somebody were ultra conservative and they said, you know what? I’m willing to take a 15% return because I’m nervous about this or that. And I would say to a client, if your alternative was to go to Bank of America and earn hardly anything with your money, then yeah, though, this is a better alternative to that.
Right. So if it helps keep somebody invested, then I would say they’re worth looking at. Or, you know, you wouldn’t bet the ranch on it, but maybe it’s a small portion of your portfolio just to get it there.
Maybe it’s part of the overall strategy. So that’s one thing to consider. But they are around and, you know, as long as I’ve lived there every year, not every year, but with some frequency, there’s always a new mousetrap.
I bet every year. I’m going to say every year. There’s always a new mousetrap.
So that’s the answer on those. OK, Josh, I see you got another text question there. You got it.
Susan wants to know, Susan is listening to WDBO, listening to the news. And Susan is nervous that this big, beautiful bill in Washington right now might lead to more debt. When does our country’s irresponsible borrowing behavior affect my investment? The market keeps going up.
Oh, Susan, I love the question because I’m kind of a fiscal hawk. So I empathize with you. You know, the $37 trillion is a big number.
But when you add in the unfunded liabilities, we’re actually over $100 trillion. You want to know that’s right. You don’t want to know.
It’s a holiday weekend. Let’s maybe not go into all those details. But I can tell you just from a historical perspective, the answer is, of course, no one can pinpoint when this becomes a problem.
But I really think, you know, this spending $2 trillion more than we take in will become a problem, certainly if we let our debt to GDP ratio get into the 200 percent level. So let’s talk about why it is a problem. What would make it a problem? Well, so we have to finance this debt, right? And what can happen is we can.
It’s not just having the debt, but really what does it lead to? Well, so let’s lead to higher interest rates, right? So we just saw our debt downgraded. And as we keep adding more and more and our shares are over a half a million, right, when these numbers keep getting higher and higher, the rest of the world and individuals who buy our debt might say, how the heck are they going to ever pay this back? Right. Now, the interesting thing, I think it was Warren Buffett said, you know, it’d be pretty much impossible for the U.S. to ever default on its debt because they can just print paper.
Well, what happened when we printed the paper during the pandemic? Right. We printed about $5 trillion, as I recall. The money supply, I think, went up that much.
And, you know, what happened was crazy inflation. And, you know, when you have inflation, you’re losing the purchasing power of your money. And so that’s the problem.
Right. And the Japanese experienced this for, unfortunately, decades. So I don’t have an answer for you.
I, you know, what a great question for, you know, for the Fourth of July weekend. It’s a great it’s a great concern. And it’s something that we watch and we hope that some sanity, some fiscal discipline does return to Washington, because neither party, in my opinion, this is Gary Abley speaking now, has done a good job managing our balance sheet.
But, you know, despite all that, the dollar is still the currency of choice around the world. I mean, you know, you get it and I get it to get a client says, well, how about China and Brazil and this BRICS idea? And and these ideas are going to come up with some that’s it doesn’t work. And the reason being is because up to this point, the United States has a legal system that protects people.
That’s right. And we’re still its most stable economy. Yes.
We still have the rule of law. All of these things are what makes us the envy of the world. Yeah.
And I don’t disagree with that. But I do think that sometimes this is getting to be silly, silly levels. So no, no, no, no question about it.
So I don’t know if you’d answer the question directly, but that’s that’s what I would say. 200 percent debt to GDP ratio. It would be a good guess, but no one knows for sure, of course.
Well, hopefully, you know, there’s the new tax bill will have some growth in it and we can hopefully grow our way out of some of these problems as we’ve done in the past when we’ve had deficits. But we’ll we’ll see what happens. The proof will be in the pudding when this when this when this big, beautiful bill finally becomes a reality.
We’ll, of course, be on the air and let our listeners know how it impacts impacts them. That’s right. Yeah, because there’s always there’s always stuff in there that, you know, I didn’t know that was in there.
Exactly. Yeah, I didn’t know it was in there. You got to read all the pages.
My gosh, my gosh, my good, good way to if you have a problem sleeping, right? Sure. I got another text question there, Josh. I saw it come in.
Absolutely. Richard wants to know. Richard says, what is a good price for a financial plan? I like to manage my own investments, so I just need some sound financial advice.
Oh, that’s a good question. We don’t get that asked very often. So, you know, some financial advisors and I’ll just kind of talk in our office.
You know, they some charge by the hour. I think maybe we have some that have charged a per fee plan. I think it’s it’s really based upon the complexity of the client situation.
I’ll give you an example. I had recently done one where the client had gosh, I don’t remember how many rental properties now it was over a dozen and they wanted some help with what the depreciation recapture would be if they were to sell it, what the tax implications were, how to calculate the cost basis for sales. And that’s a little more detailed than a lot of plans would would go into.
So that would be, you know, obviously more complicated. Some need need help with reviewing of their insurance coverages. You know, do I am I covered adequately? Right.
So it was a that’s a tough question. But I think you’re right. It’s all a matter of complexity.
Right. And and so before we before you would engage us for the the opportunity to to solve that issue for you, we’d look at the complexity of the situation. We tell you what our fee would be.
And this way, you know, going in, there’s no surprises. There’s no. But to be fair to you to be fair with us, we need to sit down with you, look at what you’re dealing with, what the big issues are, if there’s any any things out there that are unusual, how complicated your situation is or how straightforward your situation is.
Are you working? What are the retirement sources you’d be looking at? Pensions, social security, look at taxes, look at inflation, and then we’ll tell you what our fee is to do the work for you. So well, we encourage you to come in and sit down. Yeah, I had a unique situation, Joe.
So I did a plan for a couple, but only one spouse came in. Those are tough. And then he said, now, let me let me do this.
Let’s let’s do some what ifs. What if my assets were half? And what if? Now, what if I was just single and what if, you know, on and on? So, I mean, the beautiful thing and we should talk a little bit about the software we have. Yes, it allows us to do just about any what ifs you can imagine.
So I was just working with somebody a week ago and we were talking about, well, what if they buy the second home? And then I said, yeah, but you’re probably not going to own that second home and until you’re until you’re gone. So when do we want to assume we sell that second home at age 80, age 85, because I want to show that inflow again. And then this particular client also had some rental properties and they said, well, a lot of people don’t want to own rental properties at age 85, you know, and so it’s it’s just interesting.
It’s the beauty of what we do is everybody’s different. Yes. And that’s so we encourage you to if you want to learn more about what we do and how do we do it, go to our website.
That’s financialgroup.com and you can make your no obligation visit appointment right there. Thank you so much. If you want to join the conversation, send in your open mic now using that WDBO app.
You’re listening to On The Money, where we’re planning tomorrow today with a certified financial group. Welcome back to On The Money here on WDBO AM 580. Always streaming inside your WDBO app.
We got Gary Abley and Joe Burt, two certified financial planners with a certified financial getting us through another great hour of On The Money. What do you say, Gary? Joe, we get one more text question. Let’s do it.
All right. You got it. So Nancy says, Nancy says, my mom recently received an increase in her John Hancock long term care premium.
They offered a paid up option, which seems attractive. But is this a good option to consider? Oh, well, I this is this is a great question, and I will tell you why, boy, I could go on and on. I know we don’t have a lot of time remaining.
This is a very confusing option for people. It implies that, oh, I’ve been paying on my long term care policy forever. Now I check this last box in the last column and my policy is all paid up.
Well, guess what? You’ve just you’ve just ruined the whole time you bought the policy, because now the maximum benefit that you’re going to get is the amount of premiums you’ve paid. And frankly, I think it should be. This is Gary’s opinion should be unlawful for them to call it a paid up policy, as it implies.
You still have a policy, but you don’t. You just have something that’s going to pay you back what you’ve paid in with no growth on any of that money. So I think it’s very misleading.
And oh, my gosh, the answer to this one is a strong, strong no. You bought the long term care policy for a reason. Do not go to the paid up policy unless, of course, there was no ability to pay anything anymore.
But that would be I’d almost want to beg, borrow and steal if the person were toward the end of their life when when you need it when you need it the most. I mean, that’s I don’t like that. I don’t like that option.
And unfortunately, a lot of folks who have long term care policies and it’s not just John Hancock. It’s all the carriers are raising their premiums. And, you know, a lot of them are sending out these options, which I think can be very confusing to seniors, especially think about, you know, you’re eighty five, ninety years old and you get this thing and it says, oh, I can check this and it’s paid up.
So be very, very careful for for those listening. Make sure you’re helping your parents and grandparents to to make the right decisions here. Yeah, you’ve been paying in that policy for for many, many years and you’re and you’re going to get closer and closer to perhaps needing it.
You want to be sure that, you know, you know, it’s like you’ve been paying your home and homeowner’s insurance over all those years and you’re getting closer and closer to having that hurricane blow through here because you never had it. And then you’ve you’ve done something not so smart with the policy. So, yeah, that’s the kind of stuff that we look at day in and day out.
I want to talk about the upcoming workshop on July the 12th. Dave Belichristian is holding one on on the the retirement account distributions. You know, as we say in the ad, when you’re when you’re working, you’re accumulating your money and when you’re retired, you’re decumulating.
And where should be taking your money out of your IRA, out of your Roth, where your 401k out of your taxable, non non taxable accounts. All that stuff be covered in our workshop on July the 12th here on our state of the art learning center right here in Altamont Springs. If you want more information about that, you can go to our website.
That’s financial group dot com financial group dot com. You can make a reservation right there. There’s a handful of seats left and we like to see you there on July the 12th.
And I want to close with talking about score my funds. I mentioned this last week on the program. The number of our listeners have taken advantage of this.
And Gary, as you know, it’s an opportunity for for our listeners to get evaluation. That’s on your mutual funds and ETFs. Some folks send in on their stocks.
We don’t opine on individual stocks, but we can take a deep dive in the mutual funds and the ETF that you might have, whether it’s in your 401k, your IRA or your brokerage account. All you need to do is go to score my funds dot com. That’s score my funds dot com.
You’ll see a pull down menu there. If you don’t know the ticker that it requires, you go to pull down menu, put in a fund name or the ETF name and it’ll give you the ticker. And we will then send you a detailed report of the quality of those funds.
It’s not a report that we have created. It’s by the Center for Fiduciary Studies. So we look at on a regular basis to determine what the quality of the investments that we want to maintain and acquire for on our clients behalf.
So that’s score my funds dot com. Thank you so much for listening to another great episode of on the money where we’re planning tomorrow today with a certified financial group.
