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Speaker 1: The airing of this program by this station is not an endorsement or recommendation by the station of the products or services discussed in the program. The station does not guarantee the results of any investments made by a listener to this program.
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Speaker 2: Josh Peck is a registered investment advisor representative with Simplicity Wealth Advisors Columbus. Investment advisory and financial planning services are offered through Simplicity Wealth, LLC, an SEC-registered investment advisor. Exposure to ideas and financial vehicles discussed should not be considered investment advisor recommendation to buy or sell a financial vehicle. This information should not be considered tax or legal advice. Individuals should consult with professionals to see if any ideas expressed would fit their specific situation. Past performance is not a guarantee of future results. Securities can fluctuate, and when redeemed, may be more or less than when originally invested.
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Speaker 3: Welcome in to the Simplicity Wealth Retirement Blueprint Radio Show. I'm Bruce Hooley here with Logan Harrison, Josh Pick of Simplicity Wealth Columbus. They're located in Lewis Center, just off Route 750, not far from 23 and 270. And we're happy to be talking today about your retirement investing. If you have not prioritized that yet, you should.
00:01:08
Speaker 4: Get to it.
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Speaker 3: It doesn't matter what age you are. The sooner you start, the better off you're going to be. It's a complex process and a very individualized process because everybody envisions retirement differently. You may have different goals. You may have different purposes for your money. SimplicityWealth.com can help you accomplish those goals and allow you to proceed toward retirement. And you may still work. You may sit on a beach somewhere and drink, you know, umbrella drinks, whatever. But you've got to plan for it, and you've got to invest for it. Now, just save for it. That's what they help you with.
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Speaker 4: 614-917-1040. 614-917-1040.
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Speaker 3: They offer you a free no-obligation consultation. so that you can come in and discuss this matter and ask the questions that you want to ask and get the information that you need. So set that up by calling 614-917-1040 or by visiting their website, which is simplicitywealth.com backslash Columbus. And unfortunately for you two guys, you're here in Columbus, Ohio today on Friday, August the 28th. You're not in Jackson Hole, Wyoming, where it's all happening with Kevin Warsh and the Fed.
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Speaker 4: Yeah, well, I wouldn't mind being there. It's a beautiful place. If you haven't been, I recommend you go. I think on Monday we talked about this. Fun facts about Jackson Hole. It is the highest in the county that Jackson Hole resides. It is the highest per capita net worth of anywhere in the country. I think the median home price in Jackson Hole is something like $ 7 million with the average income being $ 500 and some thousand dollars or 75% of that coming from interest.
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Speaker 5: The county. The county of Jackson Hole, Wyoming.
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Speaker 4: Yeah, whatever county that is.
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Speaker 3: I mean, like. Okay, so you've been there, so I picture it as just a city. There's coffee shops, there's apartments, there's this. The average price of a home. So there must be, I mean, there'd have to be homes, $ 7 million is quite a home. I know you're paying for location, location, location, and all that kind of stuff, but I mean, there must be just some amazing mansions there.
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Speaker 4: Amazing. We have Jackson Hole Ski Resort right there, which is one of the nicest ski resorts in there. in the country and in the world for that matter. And then you have this beautiful little town, but, but ultimately what ended up happening is, you know, you had a lot of billionaires roll in. So, I mean, I don't want you to think that everybody that lives in Jacksonville is rich. It's kind of like Elon Musk walks into this. Oh, right. In here right now, our average net worth goes through the roof, but it does not take away from the fact that the average net worth in Jacksonville, Wyoming is $ 40 million. That's average. Wow. But nevertheless, so the Fed is meeting for a symposium. I think this is important to note because everybody is saying the Fed is meeting and almost giving this inclination like we're going to get some sort of information on rates, and I don't think that's the case. But they're really meeting to discuss the implications of digital payments and how much impact that will have in the United States moving forward. So think of things like people transacting business with Bitcoins or tokens, et cetera. But that's not what most people will be listening to. What most people will be listening to is, is there any tea leaves to follow to give an indication as to whether or not the Fed will be raising and lowering rates at their next actual meeting? And so far up to this point, Chairman Warsh has been very close to the vest with his cards and not really sharing anything, much to the chagrin of most analysts saying that we can't really get a read on him. He's not giving us enough information. And why in the world would a Fed chairman do that? So, you know, Logan, what do you think? I mean, why would a Fed chairman, which in the past they've been pretty vocal about kind of leading the witness as to where they're going to go. Why is the new Fed chairman potentially, obviously this is hearsay, but why is he potentially holding back?
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Speaker 6: I think because, you know, the Fed has its mandates, but he's trying not to allow the Fed to be the prime mover and shaker as far as how the markets are going to do things. I mean, He wants the markets to figure it out. I mean, he said in his last meeting, play the ball, don't play the referee. He considers the Fed the referee in the financial market. And that upsets a lot of people because they see the Fed as a player. Actually, I heard earlier today on a podcast, the Fed is the 800-pound gorilla on the field. If you're playing on the field, you kind of want to know where that 800-pound gorilla is so you don't get smacked by it. But as far as how it affects the economy and markets, businesses and investment advisors want to make their decisions based on what the Fed is going to do. And we don't want to say insider information, right? But I mean, if we're all looking to see what the teacher is telling us is on the test before we decide how we're going to study, is that a prudent decision for us?
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Speaker 4: Now, that sounds great. But like, let's break that down. If we were going to think for a person or a company, I think what you're saying, correct me if I'm wrong, is if I'm a company and I'm leading this company, And I'm looking to see if the Fed's going to raise rates, that means the economy is in a poor position. Maybe I don't hire people. Or if they're going to lower rates, well, then we can just carte blanche reinvest as much money as we want because clearly that means the economy is going to be doing better. That's going to be a tailwind. Or if I'm a person, well, as long as the Fed keeps rates low, I guess I can just keep spending because they're telling me everything's okay. What I think you're saying is that it makes more sense to look at individual scenarios and decide. In other words– you take a company like Coca-Cola, they've been around a minute. They've gone through rate increases, rate decreases, different administrations, depressions, recessions, and through all of that, it's still a good investment. So I think you can't just base everything on economic theory of a tailwind and a headwind. And if you could, there'd be a lot of really rich economists out there, but I challenge you to find one.
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Speaker 6: Yeah, the businesses have to make decisions for themselves as far as how they're going to allocate their resources. I mean, even the consumer, right? My situation, I've got young kids, a couple of years are going to need to be pretty well established for school and stuff like that. If we get to the end of this rainbow and interest rates are still high when I need to buy a house, I mean, I'm not going to hold out and wait another 10 years for interest rates to go back down, right? I need to be somewhere and set up for my family, like my personal situation is It needs to dictate the decisions I make, not based on what the Fed's going to do.
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Speaker 5: Yeah, and I've read about Kevin Warsh.
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Speaker 3: I think everybody thought when Trump appointed him and got rid of Jerome Powell that Warsh is going to do whatever Trump tells him to do, whatever Trump wants him to do. And we know Trump wanted Jerome Powell to lower interest rates. But I've read that traditionally the Fed has preferred the inflation metrics, say, that strips out gas and energy prices. Warsh won't even commit to that. People can't even get a handle on what what data does he most value? And I wonder what are the pros and cons of that from a perspective of what you do and what you do on behalf of your clients?
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Speaker 4: Not only does he not say that he's using that exclusively as a significant metric, but in the past, the Fed has kind of leaned into certain reports, you know, unemployment or the jobs report or whatever it might be. And He's not even doing that. He's saying, I'm taking real-time data all the time, just consistently, day in and day out, and then making my decisions based upon that. I think that's a great approach. I mean, I think it's kind of silly, quite frankly, if we look back throughout history, and here we are with this thing called the internet and real-time data, and we're still waiting until the end of the quarter to get a report. So I think it's a good idea. I also personally, and we're in the infancy of his reign, if you will, as the Fed chairman, So I can't really say whether I like or dislike the decisions he's making. But the positions that he's taking on, I don't need to tell you everything that we're going to do going in. I'm not going to tell you all the metrics that we're looking at. I think to your point, Logan, being the referee versus the ball metaphor that you used, keep your eye on the ball with your own situation and ignore the Fed. And I think that's what he's trying to perpetuate. And I don't think that's a bad thing. Now, we'll see. We haven't seen it before. So we'll see.
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Speaker 3: Yeah, and we've talked before about the fundamentals of really successful retirement investing are not unpredictable. So for people to be caught up in, like we've talked before about the fallacy of timing the market, I'm going to get out now because the market's going down. When do I get back in and all that? And the danger you're putting yourself in is that you miss, if you miss the couple really great weeks or maybe the great month, you've missed the gains of the entire year. So I think it's better for retirement investing to not be so tied up in what the Fed's going to do, what interest rates are going to do, what they're looking at.
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Speaker 4: Well, I mean, if you look at it from today's perspective and you say, I'm going to make my decisions on my investing life based upon what the Fed's doing, what are you going to do when you retire? Are you going to say, I'm retired now, but if the Fed raises interest rates by 75 basis points, I'm coming back out of retirement because I don't, I mean, it's crazy. You know, I mean, so you better be able to develop an all weather plan that will handle all of these fluctuations. Obviously, you need to have some ability to alter things along the way. I mean, a perfect example of that would be as you're drawing income or as you're doing things like Roth conversions, tax code changes. Right now, we have an extra $ 12, 000 deduction for a married couple over the age of 65 that wasn't there three years ago and probably won't be here in three years. We'll see what the next president decides and whether or not they're going to continue that. So you need to make adjustments. But at the end of the day, You have to have some sort of baseline plan, a blueprint to look towards the future and say, if this happens, then I pull this lever. If this happens, I pull this lever. And I don't care really. Obviously, we'd love for the market to do nothing but go up and we'd love for inflation to be at zero. But I'm not aware of a time period where that happened. So we better have some levers to pull no matter what occurs.
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Speaker 3: Yeah, that's what they help you with at Simplicity Wealth Columbus. Set up your free no-obligation consultation. Call their office, 614-917-1040, 614-917-1040. You can make your appointment online, but the consultation is in person. They'd like to look at you across the desk and get more of a human interaction, find out what you've done, find out what your purpose for your money is in retirement, how you envision retirement. It is a conversation, not a presentation. They don't have a one-size-fits-all approach because that would be silly.
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Speaker 5: There is no one-size-fits-all. fits all approach. I'm a client.
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Speaker 3: My wife and I became clients by doing what I'm suggesting you do, which is go in for your free, no obligation consultation. The number again is 614-917-1040, physical address in Lewis Center, just off Route 750. And it's interesting, you were talking about having a plan and, you know, knowing what you're going to do. And my daughter is entering your industry. She's getting her master's and is working for a financial services company in Indiana. And she was telling me a story of on her honeymoon, she met a couple, an older couple that I think were retired or on the cusp of retirement. And she said that they had not made any Roth conversions and that they were expressing once they found out what she was doing, they were telling her how things work with the person, the agency that they have, uh, done a lot of their retirement investing with, and that they have purposed, you know, investing, but they don't have any idea now what to do with their money, how to get it, what bucket, quote unquote, to take it out of, and that they would be charged more money by their advisor to go in and get that, to go in and figure that out. I know that's not how it works in your firm, and I'm not here to disparage other firms, but it strikes me that there is a difference between accumulating assets and then figuring out how you're going to access those assets when the time comes.
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Speaker 4: Yeah, I think you're, in our words, in our world, we call that the intersection of accumulation and distribution. And unfortunately, and it makes sense if you kind of read into, not to be, you know, kind of a Debbie Downer, but when you look at our industry, how does our industry make money? They make money through the accumulation phase. The more money you have, I make a percentage of it, or I'm making a commission off of it, depending upon how you're doing business. But the exact opposite is true in distribution. You're actually taking money away from me. So, so how many brochures are going to be produced based upon how you can take money out of my pocket? Right. As, as a, as an industry. Yeah. Um, But the reality is, and the accumulation side, I don't want to say it's simple because it certainly isn't. But for most people, the accumulation is, I'm working, I have a 401k, hopefully I have a match. I'm trying to minimize my taxes. I'm a W-2 employee, so I put as much in my 401k as I can. I kind of do a little bit of analysis between traditional and Roth. I'm hopefully max funding an HSA if I can, because that's another lever. And if I have kids, I'm putting money in a 529 or a Trump account or all these different things. But beyond that, How much control do you really have over things like taxes, for example? You know, when you're accumulating, we all hear the same thing. Well, in the long run, the stock market's the best place to be. And when you're 25, who cares what happens to the stock market? Does that change a little bit when you're 70 and you're planning? You have to live off of this stuff. Of course it does.
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Speaker 5: Quite a bit.
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Speaker 4: Do you have an ability to impact your taxes when you're retired? Yeah. Actually, you have a huge ability. You can decide, I'm going to take all the income I need for the next five years this year and pay taxes on it and then none for the rest. I'm not suggesting that's a good idea, but you could, but you could, right? You can determine where am I going to take the money from? Am I going to take it from my Roth, my IRA, my 401k from this? I got stock from a local bank. I mean, you could, you could pick anything that you want, but there's more to it than that. For most people we've seen them, they've been saving their whole lives and they develop a set of patterns. That's how they got where they're at, right? I mean, If you're not consistent, disciplined, and just rinse, repeat, rinse, repeat, and live on less than you make, you're not in a position to really even have this conversation. But when you do get there, Logan, I know you've seen a lot of this over the last couple of weeks. When you do get there, there has to be some significant mental shifts in how we handle it. Yeah, absolutely.
00:15:45
Speaker 6: I mean, you start working, let's say you're 20 years old. You retire at 65 or 45 years if you are doing business one way. And now all of a sudden you're expected to change almost on a dime to do business a different way for the next 25 to 30 years. And that's mentally challenging for people. Kind of, you know, bringing a little bit to like your point about interest rates a little bit earlier was, you know, are we making a decision for income based on that? Well, if you're at the finish line and you need to protect money for the next five, 10 years to hedge off some risk of market risk, does it matter if interest rates are at two or at five?
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Speaker 4: Right.
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Speaker 6: I mean, you have to use that money when you need it.
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Speaker 4: It's got to be there.
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Speaker 6: So we make the decision based on where we're at. We had a healthy little debate yesterday about investment available options in Trump accounts.
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Speaker 4: Right.
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Speaker 6: Right now, you can only invest in the S & P 500. Would I recommend that.
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Speaker 4: To a retiree? No.
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Speaker 6: Is that a solid bet for a two year old for the next 58, 63 years? I think so, because I'm betting on the U.S.
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Speaker 4: Economy.
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Speaker 6: And as we get closer to the finish line, then maybe we'll shift it or along the way we'll make our changes.
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Speaker 3: Yeah, it's a thing that I think a lot of people, A, they envision retirement. They have their personal view of how it's going to work. And they may hear something on a financial show, a podcast. They may talk to their neighbor. A lot of times you can get information from places that it sounds good, but if you don't have the sophistication to understand what all the ramifications of those decisions are. And that's why I underscore, you know, the fact that for me, the greatest thing I got from becoming a client with you, Josh, is just the peace of mind that I know that you guys are monitoring all that and that there won't be a big mistake made by my wife and I in our investing that will put us in a situation where, yikes, we're retired or we're ready to retire and we're not adequately financially outfitted to retire.
00:17:46
Speaker 4: Yeah, I think, you know, a lot of people go to advisors or whatever they're calling themselves. And they try and get a peace of mind. And what they tend to receive, which for many, this is enough because they don't know any better. What they tend to receive is the equivalent of an Excel spreadsheet that shows, here's how much money you have. And here's it dwindling down by you taking out this amount of money every single year. And look at this, you don't run out of money. The same amount of money every year, every year. So, so I mean, an Excel spreadsheet, I could just put a million dollars at the start, withdraw $ 40, 000 a year, estimate that I'm going to earn 7% per year, and look at that. You're going to be fine. Let's take it a little more sophisticated. Now let's put in an inflation adjustment. Look at that. You're going to be fine. A couple problems with that. Number one, it is completely agnostic and ignores taxes. It completely ignores taxes. What you're investing in probably isn't going to earn 7% every single year, and inflation probably isn't going to be exactly the same amount every year. It ignores what if husband and wife, what if a spouse dies? It ignores how it correlates with other assets. It ignores, I mean, it just ignores so many things. So I think the real value to the process, at least the way we see it, the way we do it, is not just is it more comprehensive for us nerds who say these are all the things that need to be covered in a retirement plan, but from the client's perspective, and you've heard me say this a million times, through this process, I have no idea if you're going to be a good client for us or if we're going to be a good fit for you. But I can guarantee one thing. You will walk away knowing a heck of a lot more than you came in, but most importantly, you're going to walk away knowing that even if you don't want to work with us or we don't want to work with you, whatever the reason is, You will know the right questions to ask whomever you decide to work with or if you're going to do it yourself. You will know what are the rocks that I haven't turned over yet that can make a dramatic impact. And Logan, you've seen the dramatic impact on things like we've done just this week. We've probably done analysis on 20 different Roth conversions because it's that time of year. And you've seen some of them go over somebody's lifetime. It's going to improve their scenario by the amount that they leave their kids. Again, our whole objective, though, is live on the amount of money we want to live on. predictably, safely, confidently, and most tax efficiently. And then at the end of the rainbow, whatever is left, hopefully it's the biggest pot of money to leave to our kids. We've taken people's scenarios and said, you're living on the same amount of money and you have $ 3 million more to pass to your kids. And then other scenarios where it doesn't benefit you at all. But you wouldn't know if you didn't know how to do the actual calculation. And I'm not suggesting that people that come in, we're going to teach them how to do the calculation. You just need to know that it's a thing. and find somebody or do some research or have us do it because it can make a dramatic difference. So that intersection between accumulation and distribution and your words, Logan, what got you here? I always hate when people say this, like the new math, but what got you here is not necessarily what you need to know to get you there. Once you reach that intersection.
00:20:56
Speaker 6: Yeah.
00:20:56
Speaker 4: Yeah.
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Speaker 3: That's very important. And this couple that my daughter met on her honeymoon, they were very frustrated with it. They were really kind of operating blindly and they asked if they could reach out to her. And she's like, sure, I'll be happy to help you. But there's a limit to that, too, because, you know, eventually she's going to want to forge a formal relationship with them as opposed to just giving away free advice. But it was it was shocking to me. She said they didn't even know what a Roth conversion was and a Roth conversion of an IRA Roth IRA. You've already paid the taxes on it. You can take the proceeds out. You're not taxed on proceeds. If you have a conventional IRA, it's great. You're accumulating the money tax free, but eventually the tax man is going to want his money.
00:21:33
Speaker 5: And you're going to have to give him that money.
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Speaker 3: So I'm envisioning a scenario where people come in and the number one question they ask, they've been a client for a while, is can I retire? How do you answer that question? I mean, like what, you have to know so much more probably before you can say yes or no.
00:21:49
Speaker 4: Oh, the answer is always the same. Based on the information that I have, absolutely you can retire. I have no idea for how long, but you can. It might be until you walk out of the office. It might be for the rest of your life, but we're going to have to dig in a little bit more than that. You know, it's funny you brought up that. that conversation with your daughter and these people that she met on her honeymoon saying, will you help us get the right answers? But at the same time, oftentimes they say, but I don't want to leave my existing advisor.
00:22:16
Speaker 5: That's right. That's exactly what they said.
00:22:18
Speaker 4: It's crazy.
00:22:19
Speaker 5: It's great.
00:22:19
Speaker 4: So the information that would make me feel comfortable in my financial life for the rest of my life, this is all the money I've, I've spent my whole life. Yeah. Piling up this money. Now I need to know how to get it back predictably, safely, tax efficiently. for the rest of my life. So I don't go broke. And I want to feel comfortable about that. Cause I don't know what you think you envision retirement to be, but for me, it's not waking up every morning in panic, hoping just fingers crossed ostrich, right? I don't want to do that, but we'll have people come in all the time and go, but I mean, I've known this guy or girl for a really long time and they're really good. And, and I really like them and they've done right by me. And I don't want to leave, but I have no idea when I should take my Social Security. I have no idea how to minimize taxes. I have no idea if I'm taking too much risk or not. I have no idea. But they're doing great.
00:23:07
Speaker 5: They're doing great.
00:23:08
Speaker 4: But what do they do?
00:23:08
Speaker 5: Yeah, I would say, well, really not.
00:23:10
Speaker 4: I know you don't want to say that, but that's. You got to delicately walk that line. Particularly the hardest scenario is when somebody comes in and it's an absolute dumpster fire. Where their friend from church.
00:23:23
Speaker 5: Yeah.
00:23:24
Speaker 4: Whom they thought, you know, oh, we do Christmas every year. And then you look at it and go, oh boy, this is bad. Because what ends up happening is if I'm the one that, now I'm attacking the individual's ability to read people. And you'll have, if you go, this is terrible, they'll walk out and never come back. So it's my goal in those scenarios that even if they're never going to come to us, what can we tell them to at least help them? Yeah.
00:23:51
Speaker 3: Yeah, that's important because this, I mean, as I talked to Katie about this situation at meeting this couple on her honeymoon, they.
00:23:59
Speaker 5: Were just so grateful that they could approach her and they have. And, you know, she got into this.
00:24:06
Speaker 3: I know you enjoy, you guys get a lot of personal fulfillment out of helping people with an issue, retirement and arriving at retirement with peace of mind. I know you guys get a lot of gratification out of that. That's why she got into the business. she wants to help them, but also she's got to make a living and there'll probably be a time where she has to have that uncomfortable conversation with them. Wouldn't it be better to get the answers right now while you still have time before that retirement window is upon you? 614-917-1040 to set up your consultation at Simplicity Wealth Columbus, simplicitywealth.com backslash Columbus.
00:24:41
Speaker 5: Again, the number 614-917-1040.
Speaker 1: The airing of this program by this station is not an endorsement or recommendation by the station of the products or services discussed in the program. The station does not guarantee the results of any investments made by a listener to this program.
00:00:11
Speaker 2: Josh Peck is a registered investment advisor representative with Simplicity Wealth Advisors Columbus. Investment advisory and financial planning services are offered through Simplicity Wealth, LLC, an SEC-registered investment advisor. Exposure to ideas and financial vehicles discussed should not be considered investment advisor recommendation to buy or sell a financial vehicle. This information should not be considered tax or legal advice. Individuals should consult with professionals to see if any ideas expressed would fit their specific situation. Past performance is not a guarantee of future results. Securities can fluctuate, and when redeemed, may be more or less than when originally invested.
00:00:49
Speaker 3: Welcome in to the Simplicity Wealth Retirement Blueprint Radio Show. I'm Bruce Hooley here with Logan Harrison, Josh Pick of Simplicity Wealth Columbus. They're located in Lewis Center, just off Route 750, not far from 23 and 270. And we're happy to be talking today about your retirement investing. If you have not prioritized that yet, you should.
00:01:08
Speaker 4: Get to it.
00:01:09
Speaker 3: It doesn't matter what age you are. The sooner you start, the better off you're going to be. It's a complex process and a very individualized process because everybody envisions retirement differently. You may have different goals. You may have different purposes for your money. SimplicityWealth.com can help you accomplish those goals and allow you to proceed toward retirement. And you may still work. You may sit on a beach somewhere and drink, you know, umbrella drinks, whatever. But you've got to plan for it, and you've got to invest for it. Now, just save for it. That's what they help you with.
00:01:42
Speaker 4: 614-917-1040. 614-917-1040.
00:01:43
Speaker 3: They offer you a free no-obligation consultation. so that you can come in and discuss this matter and ask the questions that you want to ask and get the information that you need. So set that up by calling 614-917-1040 or by visiting their website, which is simplicitywealth.com backslash Columbus. And unfortunately for you two guys, you're here in Columbus, Ohio today on Friday, August the 28th. You're not in Jackson Hole, Wyoming, where it's all happening with Kevin Warsh and the Fed.
00:02:14
Speaker 4: Yeah, well, I wouldn't mind being there. It's a beautiful place. If you haven't been, I recommend you go. I think on Monday we talked about this. Fun facts about Jackson Hole. It is the highest in the county that Jackson Hole resides. It is the highest per capita net worth of anywhere in the country. I think the median home price in Jackson Hole is something like $ 7 million with the average income being $ 500 and some thousand dollars or 75% of that coming from interest.
00:02:42
Speaker 5: The county. The county of Jackson Hole, Wyoming.
00:02:45
Speaker 4: Yeah, whatever county that is.
00:02:46
Speaker 3: I mean, like. Okay, so you've been there, so I picture it as just a city. There's coffee shops, there's apartments, there's this. The average price of a home. So there must be, I mean, there'd have to be homes, $ 7 million is quite a home. I know you're paying for location, location, location, and all that kind of stuff, but I mean, there must be just some amazing mansions there.
00:03:09
Speaker 4: Amazing. We have Jackson Hole Ski Resort right there, which is one of the nicest ski resorts in there. in the country and in the world for that matter. And then you have this beautiful little town, but, but ultimately what ended up happening is, you know, you had a lot of billionaires roll in. So, I mean, I don't want you to think that everybody that lives in Jacksonville is rich. It's kind of like Elon Musk walks into this. Oh, right. In here right now, our average net worth goes through the roof, but it does not take away from the fact that the average net worth in Jacksonville, Wyoming is $ 40 million. That's average. Wow. But nevertheless, so the Fed is meeting for a symposium. I think this is important to note because everybody is saying the Fed is meeting and almost giving this inclination like we're going to get some sort of information on rates, and I don't think that's the case. But they're really meeting to discuss the implications of digital payments and how much impact that will have in the United States moving forward. So think of things like people transacting business with Bitcoins or tokens, et cetera. But that's not what most people will be listening to. What most people will be listening to is, is there any tea leaves to follow to give an indication as to whether or not the Fed will be raising and lowering rates at their next actual meeting? And so far up to this point, Chairman Warsh has been very close to the vest with his cards and not really sharing anything, much to the chagrin of most analysts saying that we can't really get a read on him. He's not giving us enough information. And why in the world would a Fed chairman do that? So, you know, Logan, what do you think? I mean, why would a Fed chairman, which in the past they've been pretty vocal about kind of leading the witness as to where they're going to go. Why is the new Fed chairman potentially, obviously this is hearsay, but why is he potentially holding back?
00:04:52
Speaker 6: I think because, you know, the Fed has its mandates, but he's trying not to allow the Fed to be the prime mover and shaker as far as how the markets are going to do things. I mean, He wants the markets to figure it out. I mean, he said in his last meeting, play the ball, don't play the referee. He considers the Fed the referee in the financial market. And that upsets a lot of people because they see the Fed as a player. Actually, I heard earlier today on a podcast, the Fed is the 800-pound gorilla on the field. If you're playing on the field, you kind of want to know where that 800-pound gorilla is so you don't get smacked by it. But as far as how it affects the economy and markets, businesses and investment advisors want to make their decisions based on what the Fed is going to do. And we don't want to say insider information, right? But I mean, if we're all looking to see what the teacher is telling us is on the test before we decide how we're going to study, is that a prudent decision for us?
00:05:45
Speaker 4: Now, that sounds great. But like, let's break that down. If we were going to think for a person or a company, I think what you're saying, correct me if I'm wrong, is if I'm a company and I'm leading this company, And I'm looking to see if the Fed's going to raise rates, that means the economy is in a poor position. Maybe I don't hire people. Or if they're going to lower rates, well, then we can just carte blanche reinvest as much money as we want because clearly that means the economy is going to be doing better. That's going to be a tailwind. Or if I'm a person, well, as long as the Fed keeps rates low, I guess I can just keep spending because they're telling me everything's okay. What I think you're saying is that it makes more sense to look at individual scenarios and decide. In other words– you take a company like Coca-Cola, they've been around a minute. They've gone through rate increases, rate decreases, different administrations, depressions, recessions, and through all of that, it's still a good investment. So I think you can't just base everything on economic theory of a tailwind and a headwind. And if you could, there'd be a lot of really rich economists out there, but I challenge you to find one.
00:06:49
Speaker 6: Yeah, the businesses have to make decisions for themselves as far as how they're going to allocate their resources. I mean, even the consumer, right? My situation, I've got young kids, a couple of years are going to need to be pretty well established for school and stuff like that. If we get to the end of this rainbow and interest rates are still high when I need to buy a house, I mean, I'm not going to hold out and wait another 10 years for interest rates to go back down, right? I need to be somewhere and set up for my family, like my personal situation is It needs to dictate the decisions I make, not based on what the Fed's going to do.
00:07:19
Speaker 5: Yeah, and I've read about Kevin Warsh.
00:07:21
Speaker 3: I think everybody thought when Trump appointed him and got rid of Jerome Powell that Warsh is going to do whatever Trump tells him to do, whatever Trump wants him to do. And we know Trump wanted Jerome Powell to lower interest rates. But I've read that traditionally the Fed has preferred the inflation metrics, say, that strips out gas and energy prices. Warsh won't even commit to that. People can't even get a handle on what what data does he most value? And I wonder what are the pros and cons of that from a perspective of what you do and what you do on behalf of your clients?
00:07:55
Speaker 4: Not only does he not say that he's using that exclusively as a significant metric, but in the past, the Fed has kind of leaned into certain reports, you know, unemployment or the jobs report or whatever it might be. And He's not even doing that. He's saying, I'm taking real-time data all the time, just consistently, day in and day out, and then making my decisions based upon that. I think that's a great approach. I mean, I think it's kind of silly, quite frankly, if we look back throughout history, and here we are with this thing called the internet and real-time data, and we're still waiting until the end of the quarter to get a report. So I think it's a good idea. I also personally, and we're in the infancy of his reign, if you will, as the Fed chairman, So I can't really say whether I like or dislike the decisions he's making. But the positions that he's taking on, I don't need to tell you everything that we're going to do going in. I'm not going to tell you all the metrics that we're looking at. I think to your point, Logan, being the referee versus the ball metaphor that you used, keep your eye on the ball with your own situation and ignore the Fed. And I think that's what he's trying to perpetuate. And I don't think that's a bad thing. Now, we'll see. We haven't seen it before. So we'll see.
00:09:07
Speaker 3: Yeah, and we've talked before about the fundamentals of really successful retirement investing are not unpredictable. So for people to be caught up in, like we've talked before about the fallacy of timing the market, I'm going to get out now because the market's going down. When do I get back in and all that? And the danger you're putting yourself in is that you miss, if you miss the couple really great weeks or maybe the great month, you've missed the gains of the entire year. So I think it's better for retirement investing to not be so tied up in what the Fed's going to do, what interest rates are going to do, what they're looking at.
00:09:51
Speaker 4: Well, I mean, if you look at it from today's perspective and you say, I'm going to make my decisions on my investing life based upon what the Fed's doing, what are you going to do when you retire? Are you going to say, I'm retired now, but if the Fed raises interest rates by 75 basis points, I'm coming back out of retirement because I don't, I mean, it's crazy. You know, I mean, so you better be able to develop an all weather plan that will handle all of these fluctuations. Obviously, you need to have some ability to alter things along the way. I mean, a perfect example of that would be as you're drawing income or as you're doing things like Roth conversions, tax code changes. Right now, we have an extra $ 12, 000 deduction for a married couple over the age of 65 that wasn't there three years ago and probably won't be here in three years. We'll see what the next president decides and whether or not they're going to continue that. So you need to make adjustments. But at the end of the day, You have to have some sort of baseline plan, a blueprint to look towards the future and say, if this happens, then I pull this lever. If this happens, I pull this lever. And I don't care really. Obviously, we'd love for the market to do nothing but go up and we'd love for inflation to be at zero. But I'm not aware of a time period where that happened. So we better have some levers to pull no matter what occurs.
00:11:09
Speaker 3: Yeah, that's what they help you with at Simplicity Wealth Columbus. Set up your free no-obligation consultation. Call their office, 614-917-1040, 614-917-1040. You can make your appointment online, but the consultation is in person. They'd like to look at you across the desk and get more of a human interaction, find out what you've done, find out what your purpose for your money is in retirement, how you envision retirement. It is a conversation, not a presentation. They don't have a one-size-fits-all approach because that would be silly.
00:11:38
Speaker 5: There is no one-size-fits-all. fits all approach. I'm a client.
00:11:41
Speaker 3: My wife and I became clients by doing what I'm suggesting you do, which is go in for your free, no obligation consultation. The number again is 614-917-1040, physical address in Lewis Center, just off Route 750. And it's interesting, you were talking about having a plan and, you know, knowing what you're going to do. And my daughter is entering your industry. She's getting her master's and is working for a financial services company in Indiana. And she was telling me a story of on her honeymoon, she met a couple, an older couple that I think were retired or on the cusp of retirement. And she said that they had not made any Roth conversions and that they were expressing once they found out what she was doing, they were telling her how things work with the person, the agency that they have, uh, done a lot of their retirement investing with, and that they have purposed, you know, investing, but they don't have any idea now what to do with their money, how to get it, what bucket, quote unquote, to take it out of, and that they would be charged more money by their advisor to go in and get that, to go in and figure that out. I know that's not how it works in your firm, and I'm not here to disparage other firms, but it strikes me that there is a difference between accumulating assets and then figuring out how you're going to access those assets when the time comes.
00:13:17
Speaker 4: Yeah, I think you're, in our words, in our world, we call that the intersection of accumulation and distribution. And unfortunately, and it makes sense if you kind of read into, not to be, you know, kind of a Debbie Downer, but when you look at our industry, how does our industry make money? They make money through the accumulation phase. The more money you have, I make a percentage of it, or I'm making a commission off of it, depending upon how you're doing business. But the exact opposite is true in distribution. You're actually taking money away from me. So, so how many brochures are going to be produced based upon how you can take money out of my pocket? Right. As, as a, as an industry. Yeah. Um, But the reality is, and the accumulation side, I don't want to say it's simple because it certainly isn't. But for most people, the accumulation is, I'm working, I have a 401k, hopefully I have a match. I'm trying to minimize my taxes. I'm a W-2 employee, so I put as much in my 401k as I can. I kind of do a little bit of analysis between traditional and Roth. I'm hopefully max funding an HSA if I can, because that's another lever. And if I have kids, I'm putting money in a 529 or a Trump account or all these different things. But beyond that, How much control do you really have over things like taxes, for example? You know, when you're accumulating, we all hear the same thing. Well, in the long run, the stock market's the best place to be. And when you're 25, who cares what happens to the stock market? Does that change a little bit when you're 70 and you're planning? You have to live off of this stuff. Of course it does.
00:14:47
Speaker 5: Quite a bit.
00:14:49
Speaker 4: Do you have an ability to impact your taxes when you're retired? Yeah. Actually, you have a huge ability. You can decide, I'm going to take all the income I need for the next five years this year and pay taxes on it and then none for the rest. I'm not suggesting that's a good idea, but you could, but you could, right? You can determine where am I going to take the money from? Am I going to take it from my Roth, my IRA, my 401k from this? I got stock from a local bank. I mean, you could, you could pick anything that you want, but there's more to it than that. For most people we've seen them, they've been saving their whole lives and they develop a set of patterns. That's how they got where they're at, right? I mean, If you're not consistent, disciplined, and just rinse, repeat, rinse, repeat, and live on less than you make, you're not in a position to really even have this conversation. But when you do get there, Logan, I know you've seen a lot of this over the last couple of weeks. When you do get there, there has to be some significant mental shifts in how we handle it. Yeah, absolutely.
00:15:45
Speaker 6: I mean, you start working, let's say you're 20 years old. You retire at 65 or 45 years if you are doing business one way. And now all of a sudden you're expected to change almost on a dime to do business a different way for the next 25 to 30 years. And that's mentally challenging for people. Kind of, you know, bringing a little bit to like your point about interest rates a little bit earlier was, you know, are we making a decision for income based on that? Well, if you're at the finish line and you need to protect money for the next five, 10 years to hedge off some risk of market risk, does it matter if interest rates are at two or at five?
00:16:23
Speaker 4: Right.
00:16:23
Speaker 6: I mean, you have to use that money when you need it.
00:16:26
Speaker 4: It's got to be there.
00:16:27
Speaker 6: So we make the decision based on where we're at. We had a healthy little debate yesterday about investment available options in Trump accounts.
00:16:36
Speaker 4: Right.
00:16:37
Speaker 6: Right now, you can only invest in the S & P 500. Would I recommend that.
00:16:40
Speaker 4: To a retiree? No.
00:16:43
Speaker 6: Is that a solid bet for a two year old for the next 58, 63 years? I think so, because I'm betting on the U.S.
00:16:50
Speaker 4: Economy.
00:16:51
Speaker 6: And as we get closer to the finish line, then maybe we'll shift it or along the way we'll make our changes.
00:16:56
Speaker 3: Yeah, it's a thing that I think a lot of people, A, they envision retirement. They have their personal view of how it's going to work. And they may hear something on a financial show, a podcast. They may talk to their neighbor. A lot of times you can get information from places that it sounds good, but if you don't have the sophistication to understand what all the ramifications of those decisions are. And that's why I underscore, you know, the fact that for me, the greatest thing I got from becoming a client with you, Josh, is just the peace of mind that I know that you guys are monitoring all that and that there won't be a big mistake made by my wife and I in our investing that will put us in a situation where, yikes, we're retired or we're ready to retire and we're not adequately financially outfitted to retire.
00:17:46
Speaker 4: Yeah, I think, you know, a lot of people go to advisors or whatever they're calling themselves. And they try and get a peace of mind. And what they tend to receive, which for many, this is enough because they don't know any better. What they tend to receive is the equivalent of an Excel spreadsheet that shows, here's how much money you have. And here's it dwindling down by you taking out this amount of money every single year. And look at this, you don't run out of money. The same amount of money every year, every year. So, so I mean, an Excel spreadsheet, I could just put a million dollars at the start, withdraw $ 40, 000 a year, estimate that I'm going to earn 7% per year, and look at that. You're going to be fine. Let's take it a little more sophisticated. Now let's put in an inflation adjustment. Look at that. You're going to be fine. A couple problems with that. Number one, it is completely agnostic and ignores taxes. It completely ignores taxes. What you're investing in probably isn't going to earn 7% every single year, and inflation probably isn't going to be exactly the same amount every year. It ignores what if husband and wife, what if a spouse dies? It ignores how it correlates with other assets. It ignores, I mean, it just ignores so many things. So I think the real value to the process, at least the way we see it, the way we do it, is not just is it more comprehensive for us nerds who say these are all the things that need to be covered in a retirement plan, but from the client's perspective, and you've heard me say this a million times, through this process, I have no idea if you're going to be a good client for us or if we're going to be a good fit for you. But I can guarantee one thing. You will walk away knowing a heck of a lot more than you came in, but most importantly, you're going to walk away knowing that even if you don't want to work with us or we don't want to work with you, whatever the reason is, You will know the right questions to ask whomever you decide to work with or if you're going to do it yourself. You will know what are the rocks that I haven't turned over yet that can make a dramatic impact. And Logan, you've seen the dramatic impact on things like we've done just this week. We've probably done analysis on 20 different Roth conversions because it's that time of year. And you've seen some of them go over somebody's lifetime. It's going to improve their scenario by the amount that they leave their kids. Again, our whole objective, though, is live on the amount of money we want to live on. predictably, safely, confidently, and most tax efficiently. And then at the end of the rainbow, whatever is left, hopefully it's the biggest pot of money to leave to our kids. We've taken people's scenarios and said, you're living on the same amount of money and you have $ 3 million more to pass to your kids. And then other scenarios where it doesn't benefit you at all. But you wouldn't know if you didn't know how to do the actual calculation. And I'm not suggesting that people that come in, we're going to teach them how to do the calculation. You just need to know that it's a thing. and find somebody or do some research or have us do it because it can make a dramatic difference. So that intersection between accumulation and distribution and your words, Logan, what got you here? I always hate when people say this, like the new math, but what got you here is not necessarily what you need to know to get you there. Once you reach that intersection.
00:20:56
Speaker 6: Yeah.
00:20:56
Speaker 4: Yeah.
00:20:57
Speaker 3: That's very important. And this couple that my daughter met on her honeymoon, they were very frustrated with it. They were really kind of operating blindly and they asked if they could reach out to her. And she's like, sure, I'll be happy to help you. But there's a limit to that, too, because, you know, eventually she's going to want to forge a formal relationship with them as opposed to just giving away free advice. But it was it was shocking to me. She said they didn't even know what a Roth conversion was and a Roth conversion of an IRA Roth IRA. You've already paid the taxes on it. You can take the proceeds out. You're not taxed on proceeds. If you have a conventional IRA, it's great. You're accumulating the money tax free, but eventually the tax man is going to want his money.
00:21:33
Speaker 5: And you're going to have to give him that money.
00:21:35
Speaker 3: So I'm envisioning a scenario where people come in and the number one question they ask, they've been a client for a while, is can I retire? How do you answer that question? I mean, like what, you have to know so much more probably before you can say yes or no.
00:21:49
Speaker 4: Oh, the answer is always the same. Based on the information that I have, absolutely you can retire. I have no idea for how long, but you can. It might be until you walk out of the office. It might be for the rest of your life, but we're going to have to dig in a little bit more than that. You know, it's funny you brought up that. that conversation with your daughter and these people that she met on her honeymoon saying, will you help us get the right answers? But at the same time, oftentimes they say, but I don't want to leave my existing advisor.
00:22:16
Speaker 5: That's right. That's exactly what they said.
00:22:18
Speaker 4: It's crazy.
00:22:19
Speaker 5: It's great.
00:22:19
Speaker 4: So the information that would make me feel comfortable in my financial life for the rest of my life, this is all the money I've, I've spent my whole life. Yeah. Piling up this money. Now I need to know how to get it back predictably, safely, tax efficiently. for the rest of my life. So I don't go broke. And I want to feel comfortable about that. Cause I don't know what you think you envision retirement to be, but for me, it's not waking up every morning in panic, hoping just fingers crossed ostrich, right? I don't want to do that, but we'll have people come in all the time and go, but I mean, I've known this guy or girl for a really long time and they're really good. And, and I really like them and they've done right by me. And I don't want to leave, but I have no idea when I should take my Social Security. I have no idea how to minimize taxes. I have no idea if I'm taking too much risk or not. I have no idea. But they're doing great.
00:23:07
Speaker 5: They're doing great.
00:23:08
Speaker 4: But what do they do?
00:23:08
Speaker 5: Yeah, I would say, well, really not.
00:23:10
Speaker 4: I know you don't want to say that, but that's. You got to delicately walk that line. Particularly the hardest scenario is when somebody comes in and it's an absolute dumpster fire. Where their friend from church.
00:23:23
Speaker 5: Yeah.
00:23:24
Speaker 4: Whom they thought, you know, oh, we do Christmas every year. And then you look at it and go, oh boy, this is bad. Because what ends up happening is if I'm the one that, now I'm attacking the individual's ability to read people. And you'll have, if you go, this is terrible, they'll walk out and never come back. So it's my goal in those scenarios that even if they're never going to come to us, what can we tell them to at least help them? Yeah.
00:23:51
Speaker 3: Yeah, that's important because this, I mean, as I talked to Katie about this situation at meeting this couple on her honeymoon, they.
00:23:59
Speaker 5: Were just so grateful that they could approach her and they have. And, you know, she got into this.
00:24:06
Speaker 3: I know you enjoy, you guys get a lot of personal fulfillment out of helping people with an issue, retirement and arriving at retirement with peace of mind. I know you guys get a lot of gratification out of that. That's why she got into the business. she wants to help them, but also she's got to make a living and there'll probably be a time where she has to have that uncomfortable conversation with them. Wouldn't it be better to get the answers right now while you still have time before that retirement window is upon you? 614-917-1040 to set up your consultation at Simplicity Wealth Columbus, simplicitywealth.com backslash Columbus.
00:24:41
Speaker 5: Again, the number 614-917-1040.
