00:00:00
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.
00:00:50
Speaker 3: Hard to believe it is October already, but it indeed is.
00:00:53
Speaker 4: We greet you on a Friday for 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. For the next while, we will be talking about your retirement, planning for it, and more importantly than just planning, acting.
00:01:13
Speaker 3: Upon it.
00:01:14
Speaker 4: Maybe not as a Simplicity client. We certainly hope so. We hope you'll pursue that possibility, but at least making sure that you are thinking about prioritizing your retirement investing, not just saving. Your savings won't keep up with inflation. Your savings won't multiply over time, and that's what they'll help you with at Simplicity Wealth Columbus. They're fiduciary investment advisors. That means they are legally obligated to do what is best for you, The best way to find out how that works is to contact them and take advantage of their extension of a free no-obligation consultation to you so they can explain it. And you can ask your questions. If you're thinking, oh, I'm going to go in, they're going to make a pitch and tell me this and that, and they're one-way, to reach retirement nirvana. No, that's not how it works at Simplicity. It might be how it works other places, but it's not how it works at Simplicity. Go in, ask the questions that apply to you, what you've done, what you envision, and how they can help you reach your goals for retirement. 614-917-1040 is their number, 614-917-1040. You can go to their website and find out more about the Simplicity team. It is simplicitywealth.com backslash And gentlemen, as we meet today, we typically tackle in the first segment of the show current events. We had a jobs report today that I think we predicted this when we got the last jobs report that was way higher than anticipated that the next one would be. First, that one would be revised down, which it was. And now this one is one that came in under expectations, 29,000 jobs, 88,000 expected. What does it mean, if anything?
00:02:57
Speaker 3: Well, I mean, what will the tea leaves say to the market or what will it say to the average person reporting on it? I think depends on what side of the aisle you're probably on, but we'll probably say that this is now pushing us in a direction where should we start worrying about bigger issues? Because remember, you know, as you look at the economy, interest rates are so important because that's the rate at which companies can borrow money. Jobs report is so important because obviously we need to be employed, but the two things are also interlinked, meaning as Jobs report looks bad. Inflation is also climbing. It prevents the Fed's ability, arguably, to be able to raise interest rates to combat inflation. So I think, you know, as you're looking at these kind of three tussling factors, you got jobs, you got interest rates, you have inflation. The jobs, interest rates, inflation also then point towards how much GDP growth do we have in an economy? How much money can we borrow to manufacture goods? How many people are working to buy those goods and services? And then how much those goods and services cost based upon inflation? When those things start getting out of whack, we start to look forward and say, what will the future of the economy look like? And inherently then what will the stock market return? And I think, you know, we've talked about this many times throughout our time working on the show. I think we're going to start to hear worries again about stagflation, which we haven't heard since probably around 2022, 2023. And a period of stagflation is when inflation is up, but the Fed has a difficult time combating that because in At simultaneously unemployment is up and GDP growth is down. So if you want to think of stagflation as a point in time where the economy is cooling, the jobs market is weak and the fed has been removed. I don't want to say they are removed of their, some of their tools, but just inherently because of inflation and the other factors, they don't have the ability to spur the economy as much. So, you know, is that true off of one jobs report?
00:04:48
Speaker 1: No.
00:04:49
Speaker 3: But we'll start to hear those rumblings, I would guess.
00:04:51
Speaker 4: Yeah, we always get overreaction to headlines. And some of that is related to the fact that people try to get ahead of the curve. And that's something that I know you guys prioritize is looking out there on the horizon and seeing what's out there. But, you know, Logan, 29,000 jobs, well, it's not the 88,000 that were anticipated. Probably a retirement being a long-term venture, it's best not to get invested in a short-term headline.
00:05:18
Speaker 5: Yeah, I think that's a great way to put it, especially because when we're looking, you know, what the Fed is going to have to do, they've kind of slow played all of this. They've looked at the jobs. I think the last jobs report kind of gave them the last green light that they needed to be able to take a small raise in interest rates.
00:05:35
Speaker 3: Right.
00:05:35
Speaker 5: Twenty five basis points isn't crazy. They're positioned to either add another one at the end of the year. potentially even take another one, take it back off the table at the beginning of next year, but they're just slowly getting.
00:05:47
Speaker 3: Ahead of it.
00:05:48
Speaker 5: So if I was the, if I was somebody going into retirement, I don't, I don't know how much weight I would put into this most recent jobs report, because I think that we still have yet to see what this current rate hike is going to do.
00:06:01
Speaker 3: You know, to add to that, I think it's, let's just look at what's actually happened as a result of this. So on one hand, I say the media is probably going to start reporting stagflation. What is the long-term impact on the economy? But as we sit here today, we entered into Friday with, uh, a us stock market being down about 1%. And now the stock market shoots back up. Uh, well, why would that be? Because the general consensus was there was a large possibility that the fed was going to increase rates once again, because inflation ticked up, you know, a very small nominal amount, but it ticked up nonetheless. Well, now that we see what's happening with the jobs report and we see all of the other tea leaves, if you will, in the economy. The belief is now the Fed isn't going to raise interest rates. So now the stock market reacts positively. So on one hand, you go, this is bad. But for the stock market, it's not proving to be the case in the short run. But a lot of buts in this. Logan, you're absolutely correct. I mean, what happens over the next week or two really doesn't matter. It's a long-term trend.
00:07:02
Speaker 4: So correct me if I'm wrong. Typically, when the Fed raises rates, they're trying to get inflation under control. And inflation is lower than it was at the worst peaks of the Biden administration. It's still not where they want it to be, although you and I have discussed many times that maybe their preferred rate of inflation might never get back to 2%, that they might have to accept something a little bit more than that. But when they're increasing the cost of borrowing money, that's supposed to kind of slow things down, right? And we saw mortgage interest rates grew over 7% for the first time in a long time, which just looking at that as a layman, I'm thinking, okay, well, that'll definitely slow things down because less people will be interested in buying houses. It's not like the house, the home builders will come to a screeching halt and just suspend operations. But housing is one of those big factors in the economy that bleeds over into everything, lumber sales. And then lumber sales, you're talking about tariffs and everything's interconnected. So I really didn't know what to make of the long-term impact of that quarter point of interest rate increase.
00:08:11
Speaker 3: It's so important to understand and recognize that everything is connected in very unusual ways. Let me give an example, and I'll get back to the housing in a second. But if you look at the, you know, interest rates raised U.S. treasury yields, because interest rates go up, treasury yields go up, treasuries are just simply the United States borrowing money from us, from other people. So you would suggest then, well, if interest rates go up, that's bad. But as US treasury yields go up, that increases foreign investment in US treasuries. Well, what does that do for the US dollar? It strengthens. So if the US dollar strengthens and we're buying goods and services from other countries, you would say inflation is up. But at the same time, inflation on a global scale just went down. So everything is interconnected in very unusual ways. And I think we're so tempted using housing for an example. We're so tempted to look at one metric. and think that somehow that is the most important metric. And the media doesn't do a very good job of this, by the way, where we go, you know, the one hidden open up your Instagram app or look on msn.com or wherever you get your information and say, you're going to start getting ads that say the one metric that Warren Buffett utilizes to predict the economy. I assure you, Warren Buffett doesn't look at one number to determine whether or not he's going to buy stocks, but housing, uh, is it complicated? Well, interest rates are one factor. Supply is another factor. And the fact that we need some place to live is another factor. How much people are making in their jobs is a factor. So it's not just interest rates, but we tend to assume that if interest rates take up a quarter point, somehow it's going to have a catastrophic effect on housing. And it's just simply not the case.
00:09:49
Speaker 4: The one factor that everybody pays attention to because it's on a big sign every place you walk down the street or drive down the street is gas prices. Gas prices are very high right now. We're going to get a break on Sunday with the suspension of the gas tax in the state of Ohio, which will knock down your per gallon price about 38 cents on gas and about 47 cents on diesel. But to Josh's point, Logan, that everything's interconnected. When diesel prices are as high as they are right now, that impacts trucking. A lot of goods are trucked to market. And I don't know that we've seen yet the increase in prices on store shelves in diesel. But it's just not logical to think that the rise in diesel costs are not going to bleed into prices of everything that's trucked to market. And that plays into inflation, which drives people crazy.
00:10:43
Speaker 5: Yeah, I think the top of mind you're discussing here with you drive by it every day, you see it. When you're going to the grocery store, Whether I buy milk and eggs for my kids, I'm not making that decision of whether I'm going to buy them or not. But the prices have not, I don't think, been priced in.
00:10:59
Speaker 3: All the way.
00:11:00
Speaker 5: It may shift where people spend their money, which will have an impact on companies as a whole. But I think that us as humans, we're just going to figure out a way to kind of just grind through this inflation until it corrects itself. And maybe we slow down our spending and hopefully we spend it down in the correct ways. But consumer staples and things that are important for us every day, we're going to keep spending on.
00:11:20
Speaker 4: Yeah, and I've become more, I guess, purposeful in, all right, I know I need to go here. I'm already going here. Maybe I can detour out of my way, and it's instead of going to location A from my home being a 30-mile round trip, I can go to A while I'm going to B, and it's a 10-mile extra round trip. Those are things you can do to save money, but eventually we are going to get to the point, I think, where prices are not going to stay here forever. I certainly hope they're not. We're fighting something in Iran, and I think a lot of other things are bleeding into it that people don't really factor in, which is we haven't built a refinery in the United States in a couple decades, and we've got Ukraine bombing Russian refineries, and that's raising the cost of diesel. So as we've said before, a lot of things are interconnected.
00:12:07
Speaker 3: Yeah, I mean, it's going to have a disproportionate impact on different industries, right? I mean, is it going to change whether or not consumers buy eggs? Probably not. Is it going to change whether or not you go on a vacation– when the prices of your air travel just doubled.
00:12:23
Speaker 5: Yes.
00:12:24
Speaker 3: So are certain industries going to be disproportionately affected? There's no question about it. And I think that's why it's so critical to have a, obviously we'll have a long-term approach on investing, but similarly, we should make positional changes where they make sense. So if we know that something is for sure going to fall out of favor, we should change our allocations. For example, if you look at Um, somebody really high tax bracket right now. And you look at, you know, we just got done talking about how treasury yields are way up. Well, municipal bond yields are way up too. Well, that means effective after tax yields, meaning when you buy a municipal bond, you don't have to pay state or federal taxes on many of them. Uh, is there an opportunity for us to divest from some of the risk in our market and the market equities like stocks and reposition of things that are safer at an opportune time where rates look really, really good. Yes. Does that mean we're trying to time the market? Absolutely not. It's just a good opportunity to reposition some assets.
00:13:24
Speaker 4: Logan Harris, Josh Pick, Bruce Hooley with you. This is the SimplicityWealth.com Retirement Blueprint Radio Show. It airs live on Fridays at 4 p.m. It'll replay on Saturday at noon. And you can get with the people at Simplicity to set up a free no-obligation consultation to talk about your retirement investment plan. I sure hope you have one. If you don't, you definitely need one. If you plan to retire, that's something that you really need to plan on doing because while you might think, nope, I'm healthy as a horse, I'll be able to work forever, that's really not a good plan because a lot of times things intrude that might be unwelcome, but you have to plan for them and the sooner you plan for them, the better off you're going to be. 614-917-1040 is their number at the office in Lewis Center off Route 750. 614-917-1040, their web address is simplicitywealth.com backslash Columbus. Yes, it's the same as it used to be where Josh and his firm are in control of your investment strategies as they were when they were Aptis Wealth Management. Now it's just a rebrand to Simplicity Wealth. And you guys, I know even before you were Simplicity, you went to a lot of conferences and you seek information from all different kinds of sources. You're just back from a conference that you attended.
00:14:36
Speaker 3: Why did you go? What was it about this.
00:14:38
Speaker 4: Conference that you felt like it was worth being out of town to attend it?
00:14:42
Speaker 3: Yeah, so one of the reasons that we joined Simplicity, and there's a myriad of reasons why we did, is Simplicity is a company that is driven, motivated, and constantly improving companies. I would argue that simplicity as a whole in the way that they've done business would be, you know, in our space, we call it a market disruptor, meaning that the way they came to pass and the way they do business is significantly different than some of the other industries out there. And as a part of that constant evolution of development, it affects things like the customer experience, the client experience. How do we interact with our clients? The technology that we utilize to not just interact and keep our clients abreast of what we're doing and why, but also the how do they access information about their investments. So the purpose of this conference was what is coming down the pipe in the way of increasing or improving that experience. So think of things like what's going on in the market as a whole. It's important that we keep apprised of what's happening in the economy and how we manage your money, but what direction is our industry going? In other words, what are the expectations of regulatory bodies? What do we see as the opportunities inside of not just the economy, but inside of this industry as well? And then again, so important, how do we communicate? How do we monitor our clients' accounts? How do we make adjustments efficiently, effectively, and at the lowest cost possible for our clients? So the purpose of these events is not like, believe me, I've been to a lot of industry events and a lot of it's a lot of, you know, shaking hands and talking about how, you know, we're becoming masters of the universe, but this is different. This is how can we maintain our accountability? How can we build more and more value for our clients? How do we make sure, let's be honest, you know, Logan, on a day-to-day basis, we're meeting with clients, we're investigating opportunities. But to a certain extent, every investment advisor on the planet is somewhat on an island, right? We have our staff, but the reality is Simplicity has 1,800 employees that their job is constantly investigating different opportunities. It's so critical to get together as a conglomerate sometimes and recognize, what are we missing? Where should we be going? What should we be doing? And I think they do a great job of not only laying that information out, But, you know, at the conference, uh, there was an accountability piece that said, you know, you will have this turned in on Monday or I will call you on Tuesday.
00:17:13
Speaker 5: That's right.
00:17:14
Speaker 3: Uh, you know, it was said somewhat in jest, but not really, not really. And why is that important? Because when we go out into our space, it would have been very easy for me to go back to Columbus, Ohio, sit in my office and go, yeah, that was great. And do nothing.
00:17:30
Speaker 5: Yeah, absolutely nothing.
00:17:31
Speaker 3: Absolutely nothing. Nobody's standing over me telling me that I need to do anything. So I think it's important. to have our independence and be able to give unbiased advice and have a suite of solutions that is based in merit, not based in my company's name is this. So I have to put all my clients money here. That's where you start to see lawsuits forming, but it's also important to have that, you know, that giant, uh, industry behind you saying, yes, you're on your own, but we're moving forward. You're not, you're not going to sit on your hands. We're not stagnating. You better keep moving forward. And I would say that, of all the industries or all the companies that I've ever worked with throughout my career, they do a tremendous job of holding that accountability line and continuing to push forward, not just for us, but for themselves.
00:18:16
Speaker 5: I think a thing that was just kind of an underlying theme the entire time was, okay, how do we deliver the maximum possible value to our clients? And how do we do that in a way that we are all learning from each other's best practices and biggest mistakes and so that we're not spending an inordinate amount of time trying to figure out something on our own like there are any new ideas. All the ideas are already out there. Somebody's already implemented something amazingly, and maybe it didn't work for me, but they tweaked this one little thing, and that was the unlock. And that's all the piece that I needed to hear to now go back to my clients and give them a 10x value. I mean, just to be around other people and to be able to do that so quickly, I mean, there's just not many other places you can go to get trusted advice from. you can implement quickly and do something about.
00:18:59
Speaker 3: And experience. There's a lot of experience in that room and a lot of different, give an example. There's a presenter there. Her entire practice is based on helping people with special needs, thousands of clients, attorneys, staff, special needs. She is a, she is through simplicity and she is a simplicity company, but one of the simplicity group of companies, meaning that if you have somebody, you have a child, you have a loved one with special needs, There is no better expert on the planet than somebody that has dedicated a 40 plus year career to nothing but that. Admittedly, we have several clients that have special needs, uh, you know, scenarios, but I might have a 10, not a thousand. Um, you know, Logan is way smarter than me, but Logan's 38. I'm 48. I've got 10 years worth of more mistakes. than he does. Right.
00:19:50
Speaker 5: That's true.
00:19:51
Speaker 3: Yep. And you go to an industry conference and you meet somebody who's been doing this for 50, 60 years, uh, whether they're doing a great job overall or not, there's something they learned that a lot of times I go to these conferences just to listen to everybody talk and hear, their successes and mistakes, but I'm almost more concerned about their mistakes. I want to make sure I avoid a landmine, right? And it's not that often you get in front of 60 really high performing advisors.
00:20:18
Speaker 4: I know when you made the change, I was kind of curious about it because I know you had valued your independence and you had been with a big company before, and then you went out on your own and you were successful and you took, some time to decide to commit fully to simplicity. You want to go through any of that or what really triggered the decision to go with them?
00:20:41
Speaker 3: Yeah, let's be very clear. I've worked for companies, but at the same time, I've been independent since 2003. It's a pretty long time. So why in the world in 2024, after 20 plus years, when I decide to join an organization, and I think it's sometimes like all things in life, opportunity and timing and finding the right fit are critical. And It was a time in my practice where for me to build out infrastructure, to improve the client experience, to get access to even more resources. I'll give you an example. There's something called direct indexing with tax lost harvesting. That is a lot of words. What it is, is one of the most tax efficient ways that you can possibly invest a non-qualified account. So think of money that's outside of an IRA, outside of a 401k. This is arguably the most tax efficient, logical way to invest money in that category, particularly if you're in a high income category. So much so that almost every family private office and high net worth client with any large institution, the Goldman Sachs of the world are doing that. It is labor intensive. There is no way that somebody that has six, seven employees could do that on their own. So what they end up doing, is they go to a third party money manager that charges them 1% extra to do it. Well, as soon as you charge the 1%, the value goes away. Simplicity has 1800 employees. We have the resources to do that. It's 10 basis points, 0.1% in total cost. That is ridiculous. That's I've never heard of that line. I've never, never heard it that low before. And I've never seen it done with such efficiency and value. So why do you join an organization? You join an organization because it's time to do so. But moreover, my objective is always to meet with clients. And I cannot meet with my clients. That's what I enjoy doing is meeting with clients. We had had meteoric growth, which is fantastic. But at some point, my career was very quickly tailing into, I'm going to be a manager of a bunch of investment advisors. I don't want to do that. So how do I outsource some of these things? HR, trading, et cetera. You join an organization that doesn't want to take away your autonomy, that doesn't want to take away what you do, that values your approach, but keeps you within the fiduciary standards and guidelines of the way the industry is going. It was a way, this is a really long-winded explanation, of telling you it was a way for us to bring even more value and free up more time so we can help more people. And that's a very, very difficult thing to find where you don't have the big hand, a big brother reaching down telling you, you better do it this way. And you go, I don't think this is the best way for my clients. Tough. The mothership has said it will be done. Right. And that's just not the case.
00:23:32
Speaker 4: When you talk about client experience, you're not talking about, you know, remodeling your office or, you know, different hot, you know, hot. coffee, different kinds of coffee, different kinds of this, that. You're talking about delivering results.
00:23:46
Speaker 3: Absolutely. Not only delivering results, but minimizing the potential for losses, increasing our financial planning capabilities, being even more specific on things like Roth conversion and tax strategies, the way we communicate with clients, meaning making your accounts even more accessible to you and having even more monitoring, being able to evaluate your position in the most fiduciary way possible. And that's a big word for saying Making sure that this is the most beneficial scenario for you. You need help to do that.
00:24:15
Speaker 4: Yep, absolutely right. And you need help to do retirement the right way. The sooner you prioritize it, the better off you'll be in the long run. Simplicity Wealth Columbus poised to help you with your retirement plan.
00:24:29
Speaker 3: They call it a blueprint because it's.
00:24:30
Speaker 4: Detailed and it is applied to your needs, your vision for what your retirement is going to look like. Reach out to them. Take advantage of the free no obligation consultation. 614-917-1040, 614-917-1040 or on the web at simplicitywealth.com backslash Columbus.
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.
00:00:50
Speaker 3: Hard to believe it is October already, but it indeed is.
00:00:53
Speaker 4: We greet you on a Friday for 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. For the next while, we will be talking about your retirement, planning for it, and more importantly than just planning, acting.
00:01:13
Speaker 3: Upon it.
00:01:14
Speaker 4: Maybe not as a Simplicity client. We certainly hope so. We hope you'll pursue that possibility, but at least making sure that you are thinking about prioritizing your retirement investing, not just saving. Your savings won't keep up with inflation. Your savings won't multiply over time, and that's what they'll help you with at Simplicity Wealth Columbus. They're fiduciary investment advisors. That means they are legally obligated to do what is best for you, The best way to find out how that works is to contact them and take advantage of their extension of a free no-obligation consultation to you so they can explain it. And you can ask your questions. If you're thinking, oh, I'm going to go in, they're going to make a pitch and tell me this and that, and they're one-way, to reach retirement nirvana. No, that's not how it works at Simplicity. It might be how it works other places, but it's not how it works at Simplicity. Go in, ask the questions that apply to you, what you've done, what you envision, and how they can help you reach your goals for retirement. 614-917-1040 is their number, 614-917-1040. You can go to their website and find out more about the Simplicity team. It is simplicitywealth.com backslash And gentlemen, as we meet today, we typically tackle in the first segment of the show current events. We had a jobs report today that I think we predicted this when we got the last jobs report that was way higher than anticipated that the next one would be. First, that one would be revised down, which it was. And now this one is one that came in under expectations, 29,000 jobs, 88,000 expected. What does it mean, if anything?
00:02:57
Speaker 3: Well, I mean, what will the tea leaves say to the market or what will it say to the average person reporting on it? I think depends on what side of the aisle you're probably on, but we'll probably say that this is now pushing us in a direction where should we start worrying about bigger issues? Because remember, you know, as you look at the economy, interest rates are so important because that's the rate at which companies can borrow money. Jobs report is so important because obviously we need to be employed, but the two things are also interlinked, meaning as Jobs report looks bad. Inflation is also climbing. It prevents the Fed's ability, arguably, to be able to raise interest rates to combat inflation. So I think, you know, as you're looking at these kind of three tussling factors, you got jobs, you got interest rates, you have inflation. The jobs, interest rates, inflation also then point towards how much GDP growth do we have in an economy? How much money can we borrow to manufacture goods? How many people are working to buy those goods and services? And then how much those goods and services cost based upon inflation? When those things start getting out of whack, we start to look forward and say, what will the future of the economy look like? And inherently then what will the stock market return? And I think, you know, we've talked about this many times throughout our time working on the show. I think we're going to start to hear worries again about stagflation, which we haven't heard since probably around 2022, 2023. And a period of stagflation is when inflation is up, but the Fed has a difficult time combating that because in At simultaneously unemployment is up and GDP growth is down. So if you want to think of stagflation as a point in time where the economy is cooling, the jobs market is weak and the fed has been removed. I don't want to say they are removed of their, some of their tools, but just inherently because of inflation and the other factors, they don't have the ability to spur the economy as much. So, you know, is that true off of one jobs report?
00:04:48
Speaker 1: No.
00:04:49
Speaker 3: But we'll start to hear those rumblings, I would guess.
00:04:51
Speaker 4: Yeah, we always get overreaction to headlines. And some of that is related to the fact that people try to get ahead of the curve. And that's something that I know you guys prioritize is looking out there on the horizon and seeing what's out there. But, you know, Logan, 29,000 jobs, well, it's not the 88,000 that were anticipated. Probably a retirement being a long-term venture, it's best not to get invested in a short-term headline.
00:05:18
Speaker 5: Yeah, I think that's a great way to put it, especially because when we're looking, you know, what the Fed is going to have to do, they've kind of slow played all of this. They've looked at the jobs. I think the last jobs report kind of gave them the last green light that they needed to be able to take a small raise in interest rates.
00:05:35
Speaker 3: Right.
00:05:35
Speaker 5: Twenty five basis points isn't crazy. They're positioned to either add another one at the end of the year. potentially even take another one, take it back off the table at the beginning of next year, but they're just slowly getting.
00:05:47
Speaker 3: Ahead of it.
00:05:48
Speaker 5: So if I was the, if I was somebody going into retirement, I don't, I don't know how much weight I would put into this most recent jobs report, because I think that we still have yet to see what this current rate hike is going to do.
00:06:01
Speaker 3: You know, to add to that, I think it's, let's just look at what's actually happened as a result of this. So on one hand, I say the media is probably going to start reporting stagflation. What is the long-term impact on the economy? But as we sit here today, we entered into Friday with, uh, a us stock market being down about 1%. And now the stock market shoots back up. Uh, well, why would that be? Because the general consensus was there was a large possibility that the fed was going to increase rates once again, because inflation ticked up, you know, a very small nominal amount, but it ticked up nonetheless. Well, now that we see what's happening with the jobs report and we see all of the other tea leaves, if you will, in the economy. The belief is now the Fed isn't going to raise interest rates. So now the stock market reacts positively. So on one hand, you go, this is bad. But for the stock market, it's not proving to be the case in the short run. But a lot of buts in this. Logan, you're absolutely correct. I mean, what happens over the next week or two really doesn't matter. It's a long-term trend.
00:07:02
Speaker 4: So correct me if I'm wrong. Typically, when the Fed raises rates, they're trying to get inflation under control. And inflation is lower than it was at the worst peaks of the Biden administration. It's still not where they want it to be, although you and I have discussed many times that maybe their preferred rate of inflation might never get back to 2%, that they might have to accept something a little bit more than that. But when they're increasing the cost of borrowing money, that's supposed to kind of slow things down, right? And we saw mortgage interest rates grew over 7% for the first time in a long time, which just looking at that as a layman, I'm thinking, okay, well, that'll definitely slow things down because less people will be interested in buying houses. It's not like the house, the home builders will come to a screeching halt and just suspend operations. But housing is one of those big factors in the economy that bleeds over into everything, lumber sales. And then lumber sales, you're talking about tariffs and everything's interconnected. So I really didn't know what to make of the long-term impact of that quarter point of interest rate increase.
00:08:11
Speaker 3: It's so important to understand and recognize that everything is connected in very unusual ways. Let me give an example, and I'll get back to the housing in a second. But if you look at the, you know, interest rates raised U.S. treasury yields, because interest rates go up, treasury yields go up, treasuries are just simply the United States borrowing money from us, from other people. So you would suggest then, well, if interest rates go up, that's bad. But as US treasury yields go up, that increases foreign investment in US treasuries. Well, what does that do for the US dollar? It strengthens. So if the US dollar strengthens and we're buying goods and services from other countries, you would say inflation is up. But at the same time, inflation on a global scale just went down. So everything is interconnected in very unusual ways. And I think we're so tempted using housing for an example. We're so tempted to look at one metric. and think that somehow that is the most important metric. And the media doesn't do a very good job of this, by the way, where we go, you know, the one hidden open up your Instagram app or look on msn.com or wherever you get your information and say, you're going to start getting ads that say the one metric that Warren Buffett utilizes to predict the economy. I assure you, Warren Buffett doesn't look at one number to determine whether or not he's going to buy stocks, but housing, uh, is it complicated? Well, interest rates are one factor. Supply is another factor. And the fact that we need some place to live is another factor. How much people are making in their jobs is a factor. So it's not just interest rates, but we tend to assume that if interest rates take up a quarter point, somehow it's going to have a catastrophic effect on housing. And it's just simply not the case.
00:09:49
Speaker 4: The one factor that everybody pays attention to because it's on a big sign every place you walk down the street or drive down the street is gas prices. Gas prices are very high right now. We're going to get a break on Sunday with the suspension of the gas tax in the state of Ohio, which will knock down your per gallon price about 38 cents on gas and about 47 cents on diesel. But to Josh's point, Logan, that everything's interconnected. When diesel prices are as high as they are right now, that impacts trucking. A lot of goods are trucked to market. And I don't know that we've seen yet the increase in prices on store shelves in diesel. But it's just not logical to think that the rise in diesel costs are not going to bleed into prices of everything that's trucked to market. And that plays into inflation, which drives people crazy.
00:10:43
Speaker 5: Yeah, I think the top of mind you're discussing here with you drive by it every day, you see it. When you're going to the grocery store, Whether I buy milk and eggs for my kids, I'm not making that decision of whether I'm going to buy them or not. But the prices have not, I don't think, been priced in.
00:10:59
Speaker 3: All the way.
00:11:00
Speaker 5: It may shift where people spend their money, which will have an impact on companies as a whole. But I think that us as humans, we're just going to figure out a way to kind of just grind through this inflation until it corrects itself. And maybe we slow down our spending and hopefully we spend it down in the correct ways. But consumer staples and things that are important for us every day, we're going to keep spending on.
00:11:20
Speaker 4: Yeah, and I've become more, I guess, purposeful in, all right, I know I need to go here. I'm already going here. Maybe I can detour out of my way, and it's instead of going to location A from my home being a 30-mile round trip, I can go to A while I'm going to B, and it's a 10-mile extra round trip. Those are things you can do to save money, but eventually we are going to get to the point, I think, where prices are not going to stay here forever. I certainly hope they're not. We're fighting something in Iran, and I think a lot of other things are bleeding into it that people don't really factor in, which is we haven't built a refinery in the United States in a couple decades, and we've got Ukraine bombing Russian refineries, and that's raising the cost of diesel. So as we've said before, a lot of things are interconnected.
00:12:07
Speaker 3: Yeah, I mean, it's going to have a disproportionate impact on different industries, right? I mean, is it going to change whether or not consumers buy eggs? Probably not. Is it going to change whether or not you go on a vacation– when the prices of your air travel just doubled.
00:12:23
Speaker 5: Yes.
00:12:24
Speaker 3: So are certain industries going to be disproportionately affected? There's no question about it. And I think that's why it's so critical to have a, obviously we'll have a long-term approach on investing, but similarly, we should make positional changes where they make sense. So if we know that something is for sure going to fall out of favor, we should change our allocations. For example, if you look at Um, somebody really high tax bracket right now. And you look at, you know, we just got done talking about how treasury yields are way up. Well, municipal bond yields are way up too. Well, that means effective after tax yields, meaning when you buy a municipal bond, you don't have to pay state or federal taxes on many of them. Uh, is there an opportunity for us to divest from some of the risk in our market and the market equities like stocks and reposition of things that are safer at an opportune time where rates look really, really good. Yes. Does that mean we're trying to time the market? Absolutely not. It's just a good opportunity to reposition some assets.
00:13:24
Speaker 4: Logan Harris, Josh Pick, Bruce Hooley with you. This is the SimplicityWealth.com Retirement Blueprint Radio Show. It airs live on Fridays at 4 p.m. It'll replay on Saturday at noon. And you can get with the people at Simplicity to set up a free no-obligation consultation to talk about your retirement investment plan. I sure hope you have one. If you don't, you definitely need one. If you plan to retire, that's something that you really need to plan on doing because while you might think, nope, I'm healthy as a horse, I'll be able to work forever, that's really not a good plan because a lot of times things intrude that might be unwelcome, but you have to plan for them and the sooner you plan for them, the better off you're going to be. 614-917-1040 is their number at the office in Lewis Center off Route 750. 614-917-1040, their web address is simplicitywealth.com backslash Columbus. Yes, it's the same as it used to be where Josh and his firm are in control of your investment strategies as they were when they were Aptis Wealth Management. Now it's just a rebrand to Simplicity Wealth. And you guys, I know even before you were Simplicity, you went to a lot of conferences and you seek information from all different kinds of sources. You're just back from a conference that you attended.
00:14:36
Speaker 3: Why did you go? What was it about this.
00:14:38
Speaker 4: Conference that you felt like it was worth being out of town to attend it?
00:14:42
Speaker 3: Yeah, so one of the reasons that we joined Simplicity, and there's a myriad of reasons why we did, is Simplicity is a company that is driven, motivated, and constantly improving companies. I would argue that simplicity as a whole in the way that they've done business would be, you know, in our space, we call it a market disruptor, meaning that the way they came to pass and the way they do business is significantly different than some of the other industries out there. And as a part of that constant evolution of development, it affects things like the customer experience, the client experience. How do we interact with our clients? The technology that we utilize to not just interact and keep our clients abreast of what we're doing and why, but also the how do they access information about their investments. So the purpose of this conference was what is coming down the pipe in the way of increasing or improving that experience. So think of things like what's going on in the market as a whole. It's important that we keep apprised of what's happening in the economy and how we manage your money, but what direction is our industry going? In other words, what are the expectations of regulatory bodies? What do we see as the opportunities inside of not just the economy, but inside of this industry as well? And then again, so important, how do we communicate? How do we monitor our clients' accounts? How do we make adjustments efficiently, effectively, and at the lowest cost possible for our clients? So the purpose of these events is not like, believe me, I've been to a lot of industry events and a lot of it's a lot of, you know, shaking hands and talking about how, you know, we're becoming masters of the universe, but this is different. This is how can we maintain our accountability? How can we build more and more value for our clients? How do we make sure, let's be honest, you know, Logan, on a day-to-day basis, we're meeting with clients, we're investigating opportunities. But to a certain extent, every investment advisor on the planet is somewhat on an island, right? We have our staff, but the reality is Simplicity has 1,800 employees that their job is constantly investigating different opportunities. It's so critical to get together as a conglomerate sometimes and recognize, what are we missing? Where should we be going? What should we be doing? And I think they do a great job of not only laying that information out, But, you know, at the conference, uh, there was an accountability piece that said, you know, you will have this turned in on Monday or I will call you on Tuesday.
00:17:13
Speaker 5: That's right.
00:17:14
Speaker 3: Uh, you know, it was said somewhat in jest, but not really, not really. And why is that important? Because when we go out into our space, it would have been very easy for me to go back to Columbus, Ohio, sit in my office and go, yeah, that was great. And do nothing.
00:17:30
Speaker 5: Yeah, absolutely nothing.
00:17:31
Speaker 3: Absolutely nothing. Nobody's standing over me telling me that I need to do anything. So I think it's important. to have our independence and be able to give unbiased advice and have a suite of solutions that is based in merit, not based in my company's name is this. So I have to put all my clients money here. That's where you start to see lawsuits forming, but it's also important to have that, you know, that giant, uh, industry behind you saying, yes, you're on your own, but we're moving forward. You're not, you're not going to sit on your hands. We're not stagnating. You better keep moving forward. And I would say that, of all the industries or all the companies that I've ever worked with throughout my career, they do a tremendous job of holding that accountability line and continuing to push forward, not just for us, but for themselves.
00:18:16
Speaker 5: I think a thing that was just kind of an underlying theme the entire time was, okay, how do we deliver the maximum possible value to our clients? And how do we do that in a way that we are all learning from each other's best practices and biggest mistakes and so that we're not spending an inordinate amount of time trying to figure out something on our own like there are any new ideas. All the ideas are already out there. Somebody's already implemented something amazingly, and maybe it didn't work for me, but they tweaked this one little thing, and that was the unlock. And that's all the piece that I needed to hear to now go back to my clients and give them a 10x value. I mean, just to be around other people and to be able to do that so quickly, I mean, there's just not many other places you can go to get trusted advice from. you can implement quickly and do something about.
00:18:59
Speaker 3: And experience. There's a lot of experience in that room and a lot of different, give an example. There's a presenter there. Her entire practice is based on helping people with special needs, thousands of clients, attorneys, staff, special needs. She is a, she is through simplicity and she is a simplicity company, but one of the simplicity group of companies, meaning that if you have somebody, you have a child, you have a loved one with special needs, There is no better expert on the planet than somebody that has dedicated a 40 plus year career to nothing but that. Admittedly, we have several clients that have special needs, uh, you know, scenarios, but I might have a 10, not a thousand. Um, you know, Logan is way smarter than me, but Logan's 38. I'm 48. I've got 10 years worth of more mistakes. than he does. Right.
00:19:50
Speaker 5: That's true.
00:19:51
Speaker 3: Yep. And you go to an industry conference and you meet somebody who's been doing this for 50, 60 years, uh, whether they're doing a great job overall or not, there's something they learned that a lot of times I go to these conferences just to listen to everybody talk and hear, their successes and mistakes, but I'm almost more concerned about their mistakes. I want to make sure I avoid a landmine, right? And it's not that often you get in front of 60 really high performing advisors.
00:20:18
Speaker 4: I know when you made the change, I was kind of curious about it because I know you had valued your independence and you had been with a big company before, and then you went out on your own and you were successful and you took, some time to decide to commit fully to simplicity. You want to go through any of that or what really triggered the decision to go with them?
00:20:41
Speaker 3: Yeah, let's be very clear. I've worked for companies, but at the same time, I've been independent since 2003. It's a pretty long time. So why in the world in 2024, after 20 plus years, when I decide to join an organization, and I think it's sometimes like all things in life, opportunity and timing and finding the right fit are critical. And It was a time in my practice where for me to build out infrastructure, to improve the client experience, to get access to even more resources. I'll give you an example. There's something called direct indexing with tax lost harvesting. That is a lot of words. What it is, is one of the most tax efficient ways that you can possibly invest a non-qualified account. So think of money that's outside of an IRA, outside of a 401k. This is arguably the most tax efficient, logical way to invest money in that category, particularly if you're in a high income category. So much so that almost every family private office and high net worth client with any large institution, the Goldman Sachs of the world are doing that. It is labor intensive. There is no way that somebody that has six, seven employees could do that on their own. So what they end up doing, is they go to a third party money manager that charges them 1% extra to do it. Well, as soon as you charge the 1%, the value goes away. Simplicity has 1800 employees. We have the resources to do that. It's 10 basis points, 0.1% in total cost. That is ridiculous. That's I've never heard of that line. I've never, never heard it that low before. And I've never seen it done with such efficiency and value. So why do you join an organization? You join an organization because it's time to do so. But moreover, my objective is always to meet with clients. And I cannot meet with my clients. That's what I enjoy doing is meeting with clients. We had had meteoric growth, which is fantastic. But at some point, my career was very quickly tailing into, I'm going to be a manager of a bunch of investment advisors. I don't want to do that. So how do I outsource some of these things? HR, trading, et cetera. You join an organization that doesn't want to take away your autonomy, that doesn't want to take away what you do, that values your approach, but keeps you within the fiduciary standards and guidelines of the way the industry is going. It was a way, this is a really long-winded explanation, of telling you it was a way for us to bring even more value and free up more time so we can help more people. And that's a very, very difficult thing to find where you don't have the big hand, a big brother reaching down telling you, you better do it this way. And you go, I don't think this is the best way for my clients. Tough. The mothership has said it will be done. Right. And that's just not the case.
00:23:32
Speaker 4: When you talk about client experience, you're not talking about, you know, remodeling your office or, you know, different hot, you know, hot. coffee, different kinds of coffee, different kinds of this, that. You're talking about delivering results.
00:23:46
Speaker 3: Absolutely. Not only delivering results, but minimizing the potential for losses, increasing our financial planning capabilities, being even more specific on things like Roth conversion and tax strategies, the way we communicate with clients, meaning making your accounts even more accessible to you and having even more monitoring, being able to evaluate your position in the most fiduciary way possible. And that's a big word for saying Making sure that this is the most beneficial scenario for you. You need help to do that.
00:24:15
Speaker 4: Yep, absolutely right. And you need help to do retirement the right way. The sooner you prioritize it, the better off you'll be in the long run. Simplicity Wealth Columbus poised to help you with your retirement plan.
00:24:29
Speaker 3: They call it a blueprint because it's.
00:24:30
Speaker 4: Detailed and it is applied to your needs, your vision for what your retirement is going to look like. Reach out to them. Take advantage of the free no obligation consultation. 614-917-1040, 614-917-1040 or on the web at simplicitywealth.com backslash Columbus.
