March 18, 2023
- Putting banking industry turmoil into context 00:04
- The danger of investing in SPACS 14:58
- Am I making a mistake by renting? 19:38
- Should I open a tax-deferred account for my 2023 income? 30:29
- Why smart people are making bad financial decisions 39:46
SPECIAL EPISODE: Banks bite the dust, a question about renting versus buying a home, and why smart people are making poor financial decisions right now.
On this special episode of Money Matters, Scott and Allworth Chief Investment Officer Andy Stout put banking industry turmoil into context. Then Scott and Pat help a 60-year-old single woman who wonders whether she’s making a mistake by not owning a home. A caller wants to know whether he should open a tax-deferred account to house some of his 2023 income, or just pay the taxes now. Finally, Scott and Pat talk to an expert on decision making about why smart people are making bad financial choices right now.
Join Money Matters: Get your most pressing financial questions answered by Allworth's CEOs Scott Hanson and Pat McClain live on-air! Call 833-99-WORTH. Or ask a question by clicking here. You can also be on the air by emailing Scott and Pat at email@example.com.
Man: Would you like an opinion on a financial matter you're dealing with, whether it's about retirement, investments, taxes or 401(k)s, Scott and Pat McClain would like to help you by answering your call to join Allworth's "Money Matters." Call now at 833-99-WORTH. That's 833-99-WORTH.
Scott: Hi, Scott Hanson here, Allworth's "Money Matters." Pat and I recorded our traditional show, which you'll hear shortly. But we recorded it about a week ago and so much has gone on with the financial markets, we thought we would have a little update on what's happened this past week with Silicon Valley Bank and the rest. And so, I'm interviewing with Andy Stout, and so hope you enjoy this. After about 15 minutes, you'll hear our regular programming.
Well, hi, everyone. Scott Hanson here. I'm here with Andy Stout, our chief investment officer at Allworth. We want to just have a conversation about what's going on in the market this week. Obviously, it's been a crazy week and so Andy, thanks for asking a little time to be with us.
Andy: Thank you, Scott. Happy to be here.
Scott: Yeah. So first of all, what's your take on what the Fed's done with the bank, SVB, and what's happening with some of these other regional banks and...?
Andy: So when we look at what's been going on with the regional banks and just the banking industry as a whole, there appears to be some cracks emerging in the system, partly because the federal reserve has kept interest rates so low for so long and then hiked them really, really quickly to fight off inflation. And that inflation shock led to this interest rate shock, which is having an effect on the bank's balance sheets in general. And when we look at problems with the banks, I mean, there's a few things you want to think about. You want to think about is there a liquidity issue. Is there a solvency issue? And those are two very different things. When you look at the banking industry as a whole, solvency does not appear to be a problem, meaning they're going to be profitable enough to stay in business. Liquidity is when there's a run on deposits, and then they can't satisfy that because their assets are tied up, and that's what happened with SVB, or Silicon Valley Bank. So let me just start by saying with them, they failed Finance 101 on college.
Scott: Their board, I think there was one person with a banking background on the board. They were a bunch of outside...they got involved in things that really...their mission wasn't really about banking anymore, it seems. They got confused.
Andy: And they failed the most basic thing when it comes to banking, which is matching assets with liabilities. When you look at what their composition was of their clients was really concentrated in tech startups, which is, that's fine. But what happens when that industry slows and you're so concentrated? People end up pulling their money out.
Scott: It's really interesting because I had a good friend of mine go to work for that bank several years ago, and I learned a lot more about the bank, what was happening there. And I thought, "How is this bank gonna do when there's a tech recession?" Because tech had been in a boom really since 2000s, the last dot-com thing, and people forgot that tech can go through its own recession. So here we start seeing a pullback and there's not a lot written about it but I think that's really what the challenge was here, right, because had they had a diverse set of depositors, they wouldn't be in the position that they're in. But because they were so focused on these tech startups and the lockdowns created all this capital that deposits went through the roof, and they had to put the deposits to work somewhere and then cycles turn and suddenly there's no IPOs for these companies, there's no fresh cash that's getting deposited. Instead, these startups are having to use their capital for the business expenses. And so, all of a sudden, the banks start seeing their depositors decline and that's what's kinda triggered this all from the start, right? And had they had their reserves in short-term security, short-term treasuries, they wouldn't be in this situation. But they didn't, so it seemed to me that there was kind of two things they screwed up on.
Andy: Yeah, that's exactly right. When you look at their assets, they had about 56% or so in treasury bonds, but more specifically, longer term treasury bonds. So they were seeing a lot of variability in their value. So when they went to sell those treasuries to cover the deposits that people wanted their money back, they were doing it, taking a big loss on those treasuries. Then that's really where it all came to fruition and we saw FDIC take over Silicon Valley Bank.
Scott: Yeah, and I don't know how I feel. I mean, I do know how I feel. I don't like the fact that every depositor was made whole to 100%. I clearly understand that something needed to be done, otherwise there'd be a run on every regional bank and I have actually quite a bit of concern of what this is gonna mean to reasonable banks. Because my guess is boards of companies around the country are asking their CFOS, like, "Hey, where are we keeping our cash deposits? Are they insured? Why are we with a small bank? Why aren't we with one of the large, too large to fail banks that are practically tied in with the government these days?"
Andy: Yeah, so if you look at it from that perspective, Scott, I mean, the FDIC did an explicit guarantee on all deposits for depositors at Silicon Valley Bank. But what that explicit guarantee really was, it was an implicit guarantee for the rest of the banking industry...
Scott: A hundred percent.
Andy: ...that the FDIC or the treasury, however you want to look at it, would come in and say that if something would happen. And to your point, what that results in is the potential for moral hazard where people take way too much risk for what they're really supposed to be doing, which is banking, which isn't supposed to be a really risky thing.
Scott: Yeah. Well, we can talk about Silicon Valley Bank, but we are seeing some spillover to some other banks, obviously both in Europe and even some highly, what were highly respected banks here in the U.S., like First Republic, it looks like they've ran into some challenges. I mean, their stock got down almost 90% from where it's high and just incredible. But it's been really an interesting thing. But Andy, I think a lot of people are, I don't know if a lot of people, but some people are clearly concerned, like, is this just the first chapter of a long book on the next recession, right. What's coming next? And so, maybe you can just kinda share maybe what's different this time around than what we had back in the Great Recession in '07 and some of the cracks we started seeing in banking.
Andy: Yeah, so 2007, 2008, 2009, the Great Financial Crisis was significantly different than what we have going on here when it comes to the banking industry as a whole. I mean, just think about it. First off, all of these banks back then were very interconnected with cross lending, and I don't know if you remember the term, CDOs and CDO-Squares, wherever there was lending on lending. No one knew what the exposure was from one bank to another. If this bank failed, what did it mean for, you know, it's like six degrees of separation. You don't know what happens down the road. That's all pretty well known. That's been pretty much fixed. I mean, there's still some interconnectivity, obviously. Not going to downplay that, but it's nothing like it was in 2008.
Also, remember one of the biggest causes was the subprime lending market. And when you look at the housing market today, yes, it is coming down but you don't have these same degree of lenders out there from the subprime side. And we know what the exposures are. We know now how banks have handled that in terms of keeping skin in the game, as it's called, where they got to keep some of those loans before selling them off. So it's nothing like 2008. Is there possibly some other bank issues to happen? Yeah.
I mean, Credit Suisse over in Switzerland, that's a big deal. That's something to keep watching. But if you think about them, Scott, they've had a history of mismanagement, from spying on outgoing executives to the big hedge fund collapse. They leaked, what, 30,000 customers' data last year, which tie them in with some drug trafficking, money laundering and things like that. Now what we had this week, the SEC saying, "Hey, your financial statements are..." material weakness was the term they used. So in other words, we can't really trust what they are reporting on their income statement and balance sheet. Saudi National Bank are not investing anymore money. So all this came together. A lot of outflows in Credit Suisse and you have everything going on here in the U.S. with SVB. And, you know, that's going to be a problem. So Credit Suisse, they'll probably be saved some form or another. I know the Swiss National Bank's already letting them borrow, like, $54 billion. But what we're probably going to end up seeing way down the road, so you're asking, like, what could happen, I think it's one of two things. It's either, like, a takeover of Credit Suisse, maybe by UBS and a sell-off of their existing assets, or it's just going to be a completely full deposit guarantee for all depositors and that would allow them to essentially restructure their bank and I think that's what could happen there.
But here in the U.S., I mean, you got Signature Bank, which failed, Silicon Valley, they failed. You got First Republic. They just got a lifeline this week where 30 billion of deposits are coming from other banks, so that's going to shore them up. But the problem with First Republic, and this is the thing with Silicon Valley, Signature Bank, First Republic, they're not representative of the entire banking sector at all. A lot of these companies had a vast majority of their assets as uninsured, and that spooks people. That can really [inaudible 00:09:18.962].
Scott: Really different. Yeah. And I think most regional banks, they're probably something more like 80% or 85% some of their deposits are under that 250 limit. And frankly, a lot of banks have suite programs where they work with other banks so that they can get the 250 limit multiple times over. And I also thought was interesting with Signature Bank, Barney Frank was on their board, you know, the Dodd-Frank Bill. That's named after him. And I don't know. My personal take is...
Andy: It's a little ironic, yeah.
Scott: The government is way too involved in a lot of business' lives, whether it's the Fed and the Fed trying to fontal the economy. And we see what kind of mistakes they make there and then you get ex-politicians then start, they know the rules of the game because they wrote the rules. And then, they go and lobby to get the rules changed so they don't have to abide by the rules and here we are today, so. Anyway, go ahead, Andy.
Andy: I was gonna say, and here we are today. But, you know, one thing the government and policymakers need to do, they need to keep that confidence in the banking system so we keep that financial market stability.
Scott: A hundred percent.
Andy: It is a bailout. There's no question about that. And I know people say it won't be on taxpayers, but it will eventually come to taxpayers...
Scott: Of course.
Andy: ...whether you like it or not...
Scott: And the consumer anyway. Yeah.
Andy: ...in one form or another. But, I mean, they are doing probably what needs to be done given the situation. But perhaps we shouldn't have been put in that situation to begin with.
Scott: Yeah. Well, I personally would have liked to see, like, let them have a haircut, let the Feds step in and say, "We're going to provide liquidity immediately," the cash is available but with some haircut short-term. Because there's probably enough assets to cover all of those depositors. We'll see. And then, guarantee kind of unlimited on other banks for a period of time. But anyway, they made the decisions. They didn't have a lot of time to make those decisions and here's where we are. But from an investment standpoint, and an investor standpoint, like, for those of us that are nearing retirement or already retired or, like, what's your take with that?
Andy: Well, I mean, there are good things going on in the world for investors. Inflation's been in the headlines. The good news on inflation is the momentum is slowing, so that's really good news. That also means we're near the peak of the Fed hiking interest rates. The Fed meets next Wednesday to announce how much they're going to raise or not raise rates. if you go back a couple of weeks ago...
Scott: That's really changed.
Andy: It's changed...
Scott: Everyone was betting the half-point and where are we sitting today? This is Thursday afternoon that we're recording this on March 16th.
Andy: As of Thursday afternoon, there's a 78% chance of just one-quarter point rate hike, and that means a 22% chance of no move at all by the Fed. When we look at the pricing, that's based on Fed Fund futures, which are securities that are traded indicated where the Fed Funds Rate might be. But if we look at for the remainder of the year, there's basically three to four cuts already priced in for the rest of this year, so that's what the market is expecting.
Scott: Rate cuts.
Andy: Rate cuts. That's right. So essentially, we'll be about, if it pans out, about a 0.75% percentage points lower on the Fed Funds Rate, which is the overnight rate that banks can lend to each other. Sounds a little esoteric, Scott, I know. However, every other interest rate in the world is really just based off that fund rate. So when they make that move, it affects everything. But, yeah, so interest rate cycle is nearing the end. Inflation momentum is slowing. And when we look at just the overall picture, yes, there is elevator risk, but really focusing on high quality bonds and high quality stocks is where we're thinking might be a good place to add some value.
Scott: Yeah, and I think there's always that kind of short-term bias, whatever's going on, people have a tendency to believe it's gonna continue forever, right? And I'm actually in Dallas right now at a conference for "Barron's magazine. And last night, Jeremy Siegel was our speaker for dinner and I got to chat with him a bit afterwards. And he was a University of Chicago professor for, I don't know, 45 years, something like that. He's on CNBC all the time. Many of you might know his name. And he somehow got data back to 1802. And if you look at the U.S. stock market since 1802, historically, stocks have averaged 6.7 percentage points above that of inflation. And he just kind of looked at all these different periods of time and it still kinda held true. And it was always a good reminder that these short-term things are gonna happen. There's always noise in the economy. Frankly, it's times like these that create the best buying opportunities and when everything looks rosy and euphoric, maybe that's time when you take a little chips off the table and make sure you rebalance. Great time to rebalance for investors that have not rebalanced, because stocks are a little cheaper than they used to be. But over the long term, I still feel very confident in the U.S. economy. I feel confident frankly even in the global economy where there's still a lot of tailwinds behind us and we'll get through this banking crisis like we have every other thing we've been through in the past.
Andy: Exactly. We got through 2008. We got through COVID. Both of those felt like the world was coming to an end, right? But they ended up being great opportunities if you had capital to invest. And if you were just patient and...
Scott: Patient, yeah.
Andy: ...didn't make a costly emotional decision, you still came out ahead. So really, it's just a matter of focusing on the longer run because, I mean, if you look at three and five-year periods in the S&P 500, as an example, they're up about 85% to almost 90% of the time...
Scott: [inaudible 00:14:40.866]
Andy: ...going back over the past 50 to 75 years. Yeah. So it's really just, to your point, the world does feel like it ends a lot. But most of the time, you're doing pretty well if you're a patient investor.
Scott: Yeah. Well, hey, Andy, thanks for taking a little time. I know I'm in my hotel room in Dallas and you're somewhere busy as well. Looks like you're in your office.
Welcome to Allworth's "Money Matters." Scott Hanson...
Pat: And Pat McClain.
Scott: Glad you're with us as we talk about financial matters. Both myself and my cohost beside me here, we are both financial advisors, practicing financial advisors, certified financial planner, charter financial consultant and we've spent the last three decades helping people like yourself plan their financial future, broadcast this program on the weekends...
Pat: For 27 years, something like that.
Pat: Long time.
Scott: Long time.
Pat: Long time. Enjoy doing it. Really like the phone calls though. Really enjoy people calling in and asking questions about their financial situation.
Scott: Yeah, and we'll take those today and we also have a special guest, Hal Hershfield. We've interviewed him in the past. He's a PhD down at UCLA. But he's really interesting.
Pat: Yeah. He studies a lot of behavioral science around investing.
Scott: Yeah. Which is what drives, so much of what drives investments, particularly over the short-term.
Pat: Even institutional investing.
Scott: Oh, 100%.
Pat: People pretend that the spreadsheet says everything.
Scott: By the way, here's my experience. Three decades. People can make spreadsheets tell them whatever they want to hear. If they are set on something, like they want to buy this company at this sort of price, they will just continue to change the assumptions until it gives them the output that they want.
Pat: They will build an Excel spreadsheet that...
Scott: A model.
Pat: ...that will actually access confirmation bias to their decision.
Scott: That's all it is, confirmation bias.
Pat: It is.
Scott: Don't you think so?
Pat: Yeah. But everyone...
Scott: Oh, we're all guilty of that.
Pat: ...we do all that. Look, you get a new car and you're driving down the road.
Scott: You see a gazillion of them. I had no idea this was so common.
Pat: You see, all of a sudden, I had no idea that everyone...and that's a form of confirmation bias that you actually bought the right car is or maybe it's just vanity.
Scott: Might be vanity.
Pat: Depends on the car. And then, you look and see how good-looking the people driving the cars, that are driving the same car as you and figure out how good-looking they are. And you're like, "Oh, no. That person identifies with this brand? I'm in trouble."
Pat: That's right.
Scott: You've seen it. Oh, wow.
Pat: It's like the...yes.
Scott: I thought I was driving a hip car. That person's driving this car too? Maybe I'm just not hip.
Pat: Maybe my dad's Buick. Anyway [inaudible 00:17:22.351].
Scott: We're gonna take calls in a couple moments here, but before, and you've heard us talk before in the past on these SPACs, special purpose acquisition companies. And a couple years ago...going public is very costly and cumbersome in today's day and age. Twenty, 30 years ago, companies would oftentimes go public. They'd get to a certain size. They'd raise money through the public markets, carry on with their business plan. Today it's so complicated and so cumbersome, so costly, that companies stay private forever sometimes.
Pat: There was a period of time where reverse mergers were very, very popular...
Scott: That's correct. That's right.
Pat: ...which is where you would buy a company that was kind of a shell that didn't really do anything that was on its way out.
Scott: And then you have it buy the company you really wanted.
Scott: That company will buy the company.
Pat: This is a SPAC with a different cover on it.
Scott: Yeah, so SPACs, someone figured out, "Hey, if we do a special purpose acquisition company, it's kinda like going public...what we do is we buy this company. We don't have a business yet but we say we're going to find a business to invest in. And it's a way to kinda skirt around the typical avenue you'd have to go through.
Pat: You don't have to give any projections about what's gonna happen in the future, what the business plan is or revenues. You don't have to have any audited financials.
Scott: A lot of people on Wall Street thought, "This is a good way to make some money because, heck, we can charge all kinds of fees for putting these things together." Well, there's a pile of bankruptcies right now. Quantum-Systems, as an example, it took them 10 months to go from its stock market debut to bankruptcy.
Pat: Ten months. Fast Radius did it in nine months?
Scott: Yeah, here we go. Electric Mile, they went bankrupt in 352 days. [inaudible 00:19:14.450]
Pat: And Joy Technologies did it in eight and a half months.
Scott: Five thirty, Clarus Therapeutics, 361 days. Enjoy Technology, 256 days. These are, like, a year.
Pat: Where the money was raised...
Scott: Watch out.
Pat: ...just when they're trying to sell it to you as the next new thing, be very, very careful.
Scott: Hey, let's take some calls. 833-99-WORTH is our number and we're talking with Ana. Ana, you're with Allworth's "Money Matters."
Ana: Hi, Scott and Pat.
Together: Hi, Ana.
Ana: Hi. Long time listener.
Scott: You've called before. Have you not?
Ana: I have not. This is my first call.
Scott: I don't remember an Ana.
Pat: Okay. I'm glad that you're calling.
Ana: Yeah. Well, here's my question. I have no interest in owning a home. I'm 60 years old. I'm single. I have no plans to marry at this time, but, you know, I'm open to the future. But I can't really think about that in terms of planning. And I have always found, I did own a home at one time, many years ago. I also took care of two parents as they aged and was pretty much put in charge of taking care of their home. And in both instances, I found it very overwhelming. You are, first of all, I don't have anyone to share the responsibilities, so I am up against taking care of every single thing that happens in the house and that goes wrong. And I just found, especially after my parents both passed, that I just was like, "You know, why would I want to put myself into that situation where I'm constantly having to worry about a home?" I'm already worried about my own self. And I have seen articles from economists even that have said, "Actually, renting is much more economical and instead of using your money to put down on a home, that it's actually better to invest." But I've also heard you guys speak numerous times about own your home, have it paid off. Anyways, so I just wanted to put that out there and see what your thoughts were.
Pat: No, I just listened to a podcast, like, six, eight weeks ago, with an economist on the podcast with exactly this, with this in mind, which is economically, if you go strictly by the numbers and how people actually treat their own homes versus their rented home, that you can make an argument, and this economist did, that your money is much better off invested in a well-balanced portfolio over time by taking the difference between. But...
Scott: The exact same home?
Pat: Nope, that's the point. For a dwelling. And what it failed to ignore is where you're buying in the cycle versus rent versus buy, because there's certainly times that you look at the economic...
Scott: Over shorter period of time.
Pat: ...over short periods of time where you can make the argument that you're better off renting.
Scott: From an economic standpoint, rent the cheapest apartment you can...if you're comparing the cheapest apartment you can find versus a nice home, obviously, from an economic standpoint, do the cheap apartment.
Pat: But our point is when we say this is that buying a home has a given outcome, where renting a home doesn't necessarily have a given outcome, unless you're actually doing exactly what you should be doing, which is recognizing that you need to possibly save more in order to offset inflation in those rents. So tell us about your financial situation.
Ana: So I consider myself a success story, but not probably by your standards.
Scott: Oh, no, no, no.
Ana: Yeah, let me explain.
Pat: Okay. And by the way, I have very low standards.
Ana: Good to know.
Scott: Low standards. Nice.
Ana: So 10 years ago, I had basically nothing. I was in debt. I had credit card debt. I had tax debt. I had all kinds of stuff going on. I have turned that around. I have zero debt. Car's paid for. I have no credit card debt. I pay my credit cards off every month. I have managed to save close to $400,000 in the last 10 years. I have increased my...I've been able to get promoted. My last year's earnings were $160,000. I'm saving and I'm maxing out everything I possibly can. But I know I'm behind the eight-ball.
Scott: That's right.
Ana: I know I'm behind. And I listen to you guys. I know it. I listen to you, I listen to other podcasts. So I'm trying to get the best returns on everything. And for the last three or four years, I've been saving for a home. But I'm very ambivalent about it.
Scott: What's your rent cost you today?
Ana: I'm paying $2,500 for a beautiful place in Marina Bay in the Bay Area, in Richmond. And it's a condo that I'm renting from the owner. It's very nice, but I'm not a condo person though because I know that that might be an option for me.
Scott: But you're living in one.
Ana: I am living in one. I do appreciate the fact that they take care of everything on the outside. But honestly, I do like the idea of having my own, you know, four walls and nobody on either side of them.
Scott: Which will cost you more money.
Ana: Which will cost me more money.
Scott: So if the option is renting a condo versus buying a house in the Bay Area, you're probably better off renting the condo. But apples to apples would be renting the condo versus buying an equivalent condo. So you've chosen to rent the condo, which is less expensive.
Ana: I have.
Pat: But Scott, in honest, she doesn't want to own a house.
Scott: Then don't own a house.
Pat: Then don't own a house. But you need to save a lot more money.
Pat: A lot more money.
Scott: Here's why we have concern about going to retirement and not having a roof paid for. What happens if we have a high inflation and that $2,500 goes to $3,500 or $4,500 or $5,500 or $6,500.
Scott: And if you look at other economies that have gone through high inflation or even our own back in the late '70s, early '80s, it was most detrimental on retired people, because workers, their paychecks went up. But those that are on fixed...
Ana: Like mine has.
Scott: Yeah, like yours has. But those on fixed income, didn't [inaudible 00:26:25.030].
Pat: Will you receive a pension when you retire?
Ana: I will not. I will not. But the owners have been kind to me. I'm actually thinking of investing in the company to possibly get a return there, but that's another [inaudible 00:26:39.497].
Pat: In your own company that you work for?
Ana: Yeah, that I work for, yeah.
Pat: Okay. But that's a different...if you're going to rent forever, especially if you're going to stay in the Bay Area, which by the way, they could go all over the board in a matter of years, which we have seen...
Scott: Home prices?
Pat: No, rents too in the Bay Area.
Scott: Yeah, I wouldn't be surprised if some rents came down in some areas.
Ana: Yeah, I don't know if I'll stay here. That is a question.
Pat: Okay. Well, then, at 60 years old, if you think that you're gonna retire in the next 5 to 10 years and that there's a chance that you're not going to stay in the Bay Area, I would not buy a home. I would continue to rent.
Ana: Okay. I see what you're saying. To hold a house for 10 years, but my return on that house may be nothing.
Scott: If you have less than five years, don't buy a house.
Pat: Yeah. And even 5 to 10, you should not. I mean, you might find that you want to move to, you know, Missoula, Montana because you love the cold.
Ana: Not. Not.
Pat: But you shouldn't be beating yourself up. But by the time you retire, you should have a goal of over a million dollars saved.
Ana: Appreciate that. Yeah.
Pat: But you've done great. I mean, obviously something changed in your life in the last 10 years that, you know, that...
Ana: I got serious. I got serious and I got help. I got help.
Ana: You know, you have to be able to reach out and get the support you need.
Pat: Yeah. Yeah. Listen...
Ana: You're at a place in your life...
Pat: Yeah, I understand. Sometimes you got the ability, but not the will. And that happens.
Ana: There you go.
Pat: You're talking to a guy that was the worst student you've ever met in college, not because I was stupid, just I didn't care until I met my wife.
Scott: Then you had purpose?
Pat: And amazingly, like, I was on the dean's honor list the next semester.
Pat: Oh, yeah. I went from academic probation my sophomore year...
Scott: Why? What did Kathy do different?
Pat: I was windsurfing every day, snow skiing.
Scott: Oh, yeah. Women have a tendency to let...at least my wife, she reminds me where the guardrails are.
Pat: Yeah. I went from academic probation to dean's honor list in one semester and they're like, "What happened?" I'm like, "You know, you do much better when you come to class." So appreciate your call.
Scott: Appreciate the call, Ana. It reminds me, Pat, in high school, I was not a good student in high school. If I got higher than a C, I thought I was wasting my time. And I remember in French...
Pat: Why? Because why, a C's a degree?
Scott: I don't know. So I had the French class and for whatever reason, I decided I was gonna actually read the chapter. And so, I got an A on the quiz or the test or whatever, and the teacher, she handed me the things back and she says, "I know you cheated. I just can't prove it." And I was so offended...
Pat: Were you really offended?
Scott: I still remember it.
Pat: But you were offended. That was the only time that you actually...
Scott: In history class, everyone did look at Mark Neiman's...
Pat: Where's Mark now?
Scott: I don't know.
Pat: We always looked up to Mark
Scott: He sat in the front in the whole class, in Uncle Larry's class.
Pat: Your teacher's name was Uncle Larry?
Scott: They called him Uncle Larry.
Pat: That's creepy. I'm just saying. That's just plain creepy. Did he...
Scott: I don't know why I remember those things.
Pat: They didn't call him Uncle Larry to his face, did they?
Scott: Uncle Larry. He was known as Uncle Larry.
Pat: He'd answer to Uncle Larry?
Scott: You remember those teachers that they just, you could tell they were just counting down a couple more years to retirement.
Pam: Oh, yeah.
Scott: That was him. He was done with teenager, which as an older...I don't blame him. I would probably be the same. They were just like, listen, buddy, you're just time on my calendar. You call yourself a student but you're just time on my calendar until I'm out of this place.
Pat: That's what Uncle Larry was.
Scott: Hence the name, Uncle Larry. Let's heading out of California, talk with Jeffrey. Jeffrey, you're with Allworth's "Money Matters."
Jeffrey: Hi, guys. Thanks for taking my call. I've enjoyed your show for more than 25 years.
Jeffrey: Rarely ever called but always enjoy listening to your podcast.
Scott: Well, thank you.
Pat: Appreciate it.
Jeffrey: I'll ask my question first and then give you the background. So the question is should I open a SEP IRA or some other deferred compensation agreement or arrangement for my 2023 income, or should I just pay the taxes now and put the rest in a brokerage account?
Scott: Tell us about your situation then.
Jeffrey: The background is I'm 64 years old. My wife is 66. And I quit my job of 25 years two years ago and I opened my own consulting business as a sole proprietor, Schedule C, that kind of thing. At that time, I rolled my 401(k) from my prior employment into an IRA. In my consulting job, I expected to work 20, 25 hours a week and really didn't need to work, but I enjoy doing what I do primarily. And I expected I might, you know, net 100K a year in that part-time role. However, in my first full tax year, which is 2021, business was a lot busier than I expected and I had net earnings over 400K.
Scott: Wow. Good for you.
Pat: I was waiting for this because I have seen lots of, we have lots of clients that have left...and you may be consulting back to the same industry you left, I assume.
Pat: Or the same company.
Scott: They've got a lot of expertise and wisdom [inaudible 00:32:13.347].
Pat: Yeah, you've got institutional knowledge, which is hard to find and they're willing to pay for it.
Scott: Go ahead. Continue.
Jeffrey: So I maxed out for that 2021 tax year, maxed out a SEP IRA, go to see my accountant early in 2022, he says, "Holy cow, you have to set up an SCORP. You need to set up an S corp." And I won't go into why he said that but I'm sure you guys get that. We hired my wife as my biller, payroll expert, scheduler, and she hired the only employees of this S corp. As I said, she's 66. She has about 32 quarters of work under the Social Security rule, so...
Jeffrey: ...in a year, she'll have 40 quarters.
Scott: Can't you get four quarters in one quarter?
Pat: Depends on how much the interest is.
Scott: It's really low. Anyway, good to hear.
Pat: Continue. That's brilliant. You get to 40 quarters so that she's Social Security eligible.
Jeffrey: So the net earnings of the S corp before paying payroll to my wife and I for 2022 were about 470 and I expect 2023 is gonna be the same way.
Scott: How much were you able to contribute in the SEP IRA? What's the maximum on that?
Jeffrey: As a sole proprietor, I ended up doing, I believe it was 58 or 59.
Scott: Solo-k, yeah. And what's your overall net worth, ballpark?
Jeffrey: So good question. So my wife and I have about 1.1 million just in cash split among eight different banks and credit unions. That IRA that I rolled over, it declined in value, of course, over the last year, so it's down to about 3.9 million. The SEP IRA from the one year, yeah, it's got about 55 in it, I think it dropped a little, have an HSA with 220K. Roth IRA...
Scott: That's a big HSA.
Jeffrey: ...490K. Yeah.
Pat: And no debt, I assume?
Jeffrey: No debt.
Scott: He's paying off his $18,000 credit card balance back.
Pat: Oh, Scott. Here's what I think you should do. Did your accountant talk to you about setting up a defined benefit pension plan?
Scott: Yeah, that's exactly what I was thinking. Or quasi age-based profit sharing plan. They go by different names.
Jeffrey: I'm actually meeting with him in February and I thought this is, I should get your opinion. So yeah, that's my question.
Pat: This isn't unusual at all. And so, what you want to do is you want to set up, it's a quasi defined benefit pension plan.
Scott: And we normally don't pitch ourselves, but we have a division that specializes in...it typically goes after industries where you have an older employee owner who's got the vast majority of the wages and only a couple employees.
Pat: Read dentist, doctor.
Scott: Yeah. And so, you can structure it where you can put massive amounts into your retirement account.
Pat: So we actually have, people in our company that...
Scott: Whether it's us or not, talk to someone who's done this [inaudible 00:35:34.087].
Pat: Internally, we have people that specialize in this particular structure, which is written for you. I mean, this is exactly where there's typically one very high income earner that has a tendency to be older and a couple of younger employees. Yours is a little bit different but it's your wife, so who cares. And what it is is it's based on a defined benefit that you would receive at some point in the future.
Scott: You might actually increase your wife's wages on this. And you could do a Roth defined benefit, I believe, can you? If it's a profit sharing, you should be able to.
Pat: So what you do is you actually say, "The benefit retirement will be $70,000 a year." And then you go back to a formula, just broad scope, so every financial advisor attorney wants to call me and complain that I did this wrong. This is broadly speaking.
Scott: This is not what you do on a regular basis. You are not the expert.
Pat: Yes, but this is broadly speaking. You define a benefit to come out in the future, let's call it 870. Then you actuarially figure out how much money you need to put into that plan in order to provide the benefit in the future. And that will go in on a pre or post tax basis. But that's what you want to do. You have left the realm of the 401(k) or the self-employed pension plan or the 401(k).
Scott: I would certainly look into that.
Pat: It's perfect.
Scott: Because 470,000 is much higher than your required minimum distribution is gonna be, even though you've done a great job saving in your...
Pat: Yeah. And so, you could shelter over half of this. So ask your accountant and they go by a lot of different names, but that's what you want is a defined benefit plan.
Jeffrey: Okay. Very good.
Scott: Seriously look into it.
Pat: Come on, Scott.
Scott: That's what I would do if I was...
Pat: Seriously look into it.
Scott: I'd like to see if you can...yeah.
Pat: I mean, there's more money he's made in his whole life, he retired and take it easy, and all of a sudden, you're like, you probably had to think to yourself, "Were they underpaying me all those years?"
Jeffrey: Exactly. And I am turning clients down now. I cannot do more.
Pat: Are you having fun?
Jeffrey: I am having great fun.
Pat: Good, good, good.
Scott: [inaudible 00:37:53.638]
Jeffrey: Love my clients.
Pat: I've had this discussion with many a people. It's okay to raise your rates until clients actually decide that you're charging too much and let them decide, not you. If you're turning clients down, you know, just understand...
Scott: That's true.
Pat: ...how it works underneath the supply and demand curve. But you've got to do that yourself. And some people just say, it's fair.
Scott: Glad you called, Jeff. Wish you well. It's great.
Pat: Appreciate it.
Jeffrey: All right. Thank you so much. Have a good day.
Scott: Thanks. You know, it's interesting, Pat. Years ago, I was doing a retirement workshop. Not that many years ago, actually. And I'm kind of in the back, and I still do them periodically. I've done, I don't know if it's a thousand to hundreds of live workshops over the years and I still kind of enjoy. Anyway, I overheard a conversation. Someone said, "Yeah, never take retirement advice from someone who's still working." And I think it was a little bit of a dig or something before I started. And I thought, "Just because I'm working doesn't mean I'm not able to retire." Right? And so, you look at someone like Jeffrey clearly has the finances and he's having a ball and gets paid a lot to do it.
Pat: Seems happy.
Scott: He says he's really enjoying it.
Pat: Yeah. Yeah. Yeah. Well, I don't believe...
Scott: Now most people aren't quite in his situation. I think most people in their 60s be like, "I wish I was in Jeffrey's situation."
Pat: Well, that's right. That's right. But, you know, I've heard people say the same thing, that this one guy told me never takes financial advice from someone that makes less than him. I thought, "Well, that's stupid."
Scott: What happens if you're, like, Elon Musk? You don't listen to anybody.
Pat: Well, he probably doesn't.
Scott: Fair enough. I think you got a point. We're taking a quick break. We'll be right back.
Pat: Can't get enough of Allworth's "Money Matters?" Visit allworthfinancial.com/radio to listen to the "Money Matters" podcast.
Scott: Welcome back to Allworth's "Money Matters." Scott Hanson.
Pat: Pat McClain. Thanks for sticking with us.
Scott: We've got to get a fun guest on. We've had Hal on before.
Pat: At least a couple times.
Scott: Yeah, a few times. And oftentimes, you get economists or people that are specialists in education that sometimes are brilliant but not that entertaining, interesting to listen to.
Pat: Or disconnected from the real world, everything's theoretical.
Scott: You're kidding? I've never talked to a professor like that.
Pat: Professor where everything was theoretical. You know, in a test tube...
Scott: Anyway, Hal Hershfield, he's been with us in the past, he's a professor of marketing, behavioral decision-making, which we're gonna talk about, and psychology at the UCLA Anderson School of Business. And so, Dr. Hal Hershfield, thanks for being part of us today.
Dr. Hershfield: Hey, thanks, guys. Thanks for having me and feel like I have a lot to live up to now, not to talk about test tubes and abstract stuff.
Scott: You can if you want. I'm kind of curious what use you have with test tubes in your area of study.
Pat: Yeah, but if you want to, we'll just pretend like we're listening and you can continue to talk. No, we wanted to talk about, like, what's going on in this, like, what's the psychology of the investor do you think right now? What would you be considered normal behavior in these marketplaces with all signs of uncertainty ? Are people feeling the right way? Am I asking the question the right way?
Scott: And by the way, we didn't want somebody who specializes in economics. The fact that you are behavioral decision-making, that's what drives investments, particularly over the short-term, so that's why we find you interesting here.
Dr. Hershfield: I appreciate it. Yeah, no, I mean, I think your question's a great one and I think, you know, part of the issue there, of course, is what's the right way? And it's like, quite difficult to point to what does that even mean, right? So I mean, and I don't want to get too philosophical about it, but in a way, that's [inaudible 00:42:13.072] of question that you kinda hope investors have worked out in advance and have worked out with their advisors or with themselves because, you know, part of the problem that we've seen, and it's not just now, it's any time you see these ups and downs, part of the problem is when people start acting, you know, "irrationally" in the short-term because all of a sudden, the emotions take hold and they're making decisions that they wouldn't necessarily make in a sort of a nice, calm, cool and collected state of mind.
Scott: And what other areas of life might some similarities would you see to investor behavior?
Pat: Like morning of the death of a...
Scott: I don't know. I'm asking Hal's opinion.
Pat: Yeah. As an example, would that be something that would be...
Dr. Hershfield: It's such a good question, right. So, you know, the classic example, I mean, I would say the easiest analogy is the, you know, going to the grocery store when you're overly hungry or overly full and you've gotta make decisions for the rest of your week. I call this, those are decisions with consequences though not nearly, you know, they're not nearly as consequential as investor decisions right now. And the problem is that go to the grocery store hungry, you know how this goes, right? I may end up getting a lot more food than I need.
Scott: And maybe some junk food, ice cream or something.
Pat: I love the pork rinds.
Dr. Hershfield: And then, the problem at the end of the week is that I have no problem finishing that stuff and then I'm throwing out another package of zucchini yet again, you know?
Scott: Relatively small problem.
Dr. Hershfield: Relatively small but then, you know, you can think about this in other settings as well, right? So, you know, what if I've got certain temptations that I find myself not really acting myself around, you know. I'm tempted by whether it's alcohol or drugs or even, you know, someone outside of my relationship. These are all context where I may tell myself that I'm not gonna smoke, I'm not gonna, you know, drink to excess, I'm not gonna meet up with my ex. And the opportunity presents itself and it's really easy to get pulled in by sort of those present moment temptations.
Scott: I've never experienced that myself, Hal.
Pat: So essentially...
Dr. Hershfield: I'm talking abstract.
Scott: Okay. Thank you. Because I'm not human.
Pat: So basically, like, hey, I told myself I wasn't gonna react to the market because my advisor told me that markets go down for periods of time and that I should expect it but now it's down and I can't really help myself. I'm bailing out of these markets. Right? Is that...
Dr. Hershfield: Yeah. Yeah. Exactly. I mean, I think to me, that's a great example. This, of course, I'm sure we'll get to, it cuts both directions, right, the market. I see something that looks like it's on a rocket ship and I want to get in even though have I really thought through this investment. And then the flipside as you just mentioned is things are starting to tank. I've told myself that I'm gonna give it some time and not pull out for fear of missing out on the upswing. And yet, here I find myself, you know, pulling out too quickly. And I think that's one of these cases where, gosh, it really makes sense to try to have some, you know, some rules set up in the advance with the advisor. And, you know, it's harder to do this if you're not working with an advisor, because then you're sorta setting up the contract with yourself and it's really easy to make excuses. The beauty of having that third party in there, you know, or I guess really a second party in that case, is that it's just one extra layer of friction. It's one extra point where somebody can say, "Hold on. Before you do anything, you told me before that you didn't want to do this and we set a rule for that." And so, I think that's something that the real advantage there that can be conferred by an outside professional.
Scott: It's interesting. I've been a practicing financial advisor for over three decades. And Pat, you've heard me say this a number of times. Like, I think that the greatest value a financial advisor brings is not the financial planning or the tax planning or the picking the right ETS or whatever. It's keeping people from making mistakes from which they cannot recover. So it's either the fear of missing out when something's taking off, crypto or whatever the Dogecoin or whatever those things are, or it's the fear of going broke and not having any confidence that markets are gonna recover and you would think it's gonna get worse every day. Then you're running for safety.
Dr. Hershfield: And then you find yourself sitting on the sidelines. But you're absolutely right. I mean, I'm not the only person who has said before people can often be their own worst enemies. And it's sort of a funny concept because it's like you got these multiple versions of yourself where you've got the you who's, you know, just wants to do the right thing, and then you who gets overwhelmed by those emotions, the stress, the fear, or, you know, the sort of, in Shiller's terms, the irrational exuberance, right, of wanting to not miss out on that whatever it is, the Dogecoin or whatever of the moment.
Pat: How do you think that marketers of financial products actually use people's emotions against them?
Dr. Hershfield: Look, obviously it depends on the financial product we're talking about. But I mean, gosh, how can we...can't get anymore direct in this particular case than the sort of crypto ads we saw over the Super Bowl, not this past Super Bowl, but the one...
Scott: Right? A year ago, yeah.
Dr. Hershfield: Yeah. I forget what the, you know, it's like almost [inaudible 00:48:16.042]...
Scott: Every other ad. Every other ad.
Dr. Hershfield: Every other ad and, you know, some of them I think went so far as to almost say, "Don't miss out."
Scott: They did.
Dr. Hershfield: But you don't even need that language. All you need to have is the celebrity advertiser there because the implication is I want to live my life kind of like them, so if he's investing, I probably should too. I mean that, to me, is the most erect example of marketers doing this sort of thing.
Scott: And you know what's interesting on this too, if you look at who, particularly the smaller owners of crypto, it skewed younger and of higher minorities, people of minorities. I don't know if you've seen the numbers on that.
Dr. Hershfield: I have. I have. And it's really [inaudible 00:49:05.240]...
Scott: Why do you think that happened?
Dr. Hershfield: Well, I mean, this is just speculation but, you know, I'll first note that it's really sad, because one of the biggest topics that I think cuts across both the financial advisory and wealth management industry and academia is trying to close the savings gap, you know, the socioeconomic status and race-based savings gaps that we see. And then, you know, here you see it widening in a way because you've got investors who, you know, maybe shouldn't be getting in to some of these alternative products getting in and then finding themselves really in a worse off position. Now why do we think this might be happening? There's all sorts of reasons, you know. One reason I've come across that I think has had some intuitive appeal is that investors who are typically underrepresented have also typically not been treated all that well by the sort of mainstream and conventional financial institutions. And so, now you've got this essentially an alternative investment product. And there's something appealing about that and that has been part of the marketing of crypto is this sort of alternative nature of it. And that may be in particular appealing to groups who feel like they've been ignored or left out by the mainstream.
Pat: Which is this sort of decentralized but if it was so decentralized, how did FTX end up losing so much money if it was so decentralized, which just kind of beats the...I was thinking, like, right now you hear a lot of ads about gold. Gold, gold, gold. You don't have to put up with the stock market losing all your money. You're not gonna have to live through or companies that are selling some sort of hedge products without actually talking about the downside in it. I mean, are there marketing groups that sit around thinking you would know better than I, like, this is how we take advantage of people's emotions at this point in time?
Dr. Hershfield: Oh, man. I mean, you know, in my academic job, you know, I teach the core marketing class to the full-time MBAs. And, you know, one of the very first things we talk about is, you know, the dangers in doing justice. Because can you squeeze out some profit? Absolutely. Will it last? Absolutely not, right? This is, like, you know, the type of strategy that made sense in a world where firms and consumers had sort of more single shot interactions and they weren't expected to have repeated interactions, and that's not the world that we live in now. And there's a lot more transparency. Now, do marketers sit around the room and say this? I highly suspect not. But, you know, probably part of what they're thinking about is, you know, how can we get this sale? Is this something that's gonna work? It's, of course, isn't the only space where we see this. I mean, there's a whole, you know, you probably talked about the whole world of behavioral economics and there's, you know, all sorts of nudges that try to sort of orient consumerists to try to do "the right thing" to save more. And now there's a whole sort of cottage industry that's dropped up that are doing what we call sludge. Rather than putting in nudges, they're putting in sludges. And if you've ever booked a ticket and the default option is to upgrade to first class, that's a great example of using a behavioral insight in a pretty nefarious way.
Pat: And what does Sludge stand for?
Dr. Hershfield: Oh, it doesn't stand for anything. It's not an acronym. It's just that it's...
Pat: It's just pushing you forward, not a nudge. I'm gonna smack you forward.
Dr. Hershfield: Well, I think another way to think about it is it gets you stuck into patterns that are not actually helpful to you.
Scott: You mean like this morning, I bought a bagel sandwich, right? And you go to enter the card, the minimum tip was 18%. It was ranged from 18% to 30% for a...
Pat: Where did that happen?
Scott: A bagel shop.
Pat: I know. But when did that happen? That didn't happen three years ago, four years and five years ago. This has happened now.
Scott: It's funny. If it had said 50 cents, a buck or a buck-fifty or two bucks, I probably would have given a buck. But when you're asking for 30%, it just seemed a little outlandish.
Dr. Hershfield: Oh, and I see this all the time...
Dr. Hershfield: ...and, you know, and that particular one, by the way, that one kills me because you see it in all different ways. Sometimes they default you into 25% and then other times they set it up so 30% is all the way on the left and 18% is on the right. And, you know, it's just another case of consumers have got enough things pulling their attention. You gotta pay attention to this too. And it's not that some workers don't deserve that extra tip, but you kinda want to be the one to decide it.
Pat: That's right.
Scott: So you've done a lot of work on future selves, having people identify with their future, because most people have a hard time seeing themselves 20 or 30 or 40 years out, right? So...
Dr. Hershfield: That's right.
Scott: ...for an investor today, how can they use their future self, the view of their future self, in order to make more prudent decisions as opposed to react emotionally right now?
Dr. Hershfield: Yeah. It's a great question. I'll say it's not something we've tested from a research perspective. We haven't actually tested, you know, whether we could get people to think more about their future self and have them make slightly more rational, you know, "rational investment decisions." I'd actually flip it around which is to say let's not actually make it about the future self because it's a hard concept to think about in more sort of quiet and cold settings and it's an even harder one to think about when you're getting pulled into the heat of the moment. The way I'd rather think about these is to just consider, you know, help investors consider that there are current and future selves and that the version that you are right now who's making this decision isn't the only version of you who's gonna be out there. And that if you pull out now, you may miss out on those big games later. And it's not just you, but it's your future self. And if you do jump in now to something that looks like it's taking off, don't forget, is it because you really want to do the right thing or is it that you're getting pulled in too much?
So I guess the way that I would think about this is not to say necessarily, you know, think about who you'll be, but rather question the motives for why you're doing what you're doing. Is the reason that you're trying to jump ship or the reason that you're trying to get onboard, you know, right reason? Does it fit in with your overall investment goals? Or is it because you're feeling something right now and you got to scratch that itch and it may be left sort of a, you know, left unscratched, if you will.
Pat: Yup. I couldn't agree more. In the good, you know, a good investor has an investment thesis that they actually understand...
Scott: Stick with.
Pat: ...and stick with and aim to. And then, you do it with a great degree of cynicism, skepticism and moderation.
Scott: You really do. That's funny. I mean, obviously the market's a little choppy right now, inflation's high and all those other things. But so it's not a fun time, but it's nothing like the financial crisis and I remember in the midst of the financial crisis, it's like either things are gonna recover or it's gonna be some compete reset. And if it's a complete reset, it's not gonna really matter where your money is because it's a complete reset. And if things recover, you better be on the side of the recovery. I mean, it's just, like, foolishness to sell everything and stick on the sideline.
Pat: I want to share a quote with you that when we talk about manufacturing products on Wall Street, about 20 years ago I was at a conference with a bunch of investment advisors. And this, he must have been 80, had been in the business forever, and he came up to me and he said, "Pat, remember this. When the ducks quack, feed them." And I said, "What does that mean? What does that mean?" And he says, "When they want it, you give it to 'em. Don't worry about what happens to 'em." And I thought, "Holy smokes. What a terrible view of your customers."
Dr. Hershfield: Yeah. Exactly.
Scott: They were customers.
Pat: They were customers. And his point was when they ask for it, I don't care what happens to 'em. When the ducks quack, you feed them. And I thought, "Oh, my. What a sad, sad view of your business that you must have."
Dr. Hershfield: That is pretty sad.
Pat: It is really.
Scott: And you wonder why people don't hire financial advisors.
Pat: And you wonder why, right? And you wonder why.
Scott: There's too many guys like that out there. Hey Hal, appreciate you taking some time to join us.
Pat: As always, we appreciate you and love to ask you back at some point in the future.
Dr. Hershfield: Hey, guys. Thanks so much for having me. I appreciate it.
Pat: All right. Take care.
Scott: See you, Hal.
Dr. Hershfield: Take care.
Pat: He sounds like he's about 25, doesn't he? I feel like I'm talking to one of my kids.
Scott: Did he get a PhD from Stanford or is that like a mail order or something?
Pat: It was from Stanford. Like, what, did you start college when you were 14? What's the deal?
Scott: Maybe. I don't know.
Pat: His education got a BA in psychology from Tufts University in 2001.
Scott: Nobody cares about his [inaudible 00:58:53.177].
Pat: 2009 from a PhD in psychology from Stanford. Gonna make me feel bad about myself.
Scott: Huh? I don't think you really are feeling bad about yourself, Pat.
Pat: No. Yeah. What do you mean feeling bad about myself?
Scott: That's what you just said.
Pat: I probably should have spent more time on my formal education.
Scott: So I did a...I think you've heard this before.
Pat: But I didn't like it that much.
Scott: You learned other areas and you read a ton and...
Scott: I would put you up with anyone with a PhD in financial planning.
Pat: Fair enough. Fair enough. Fair enough.
Scott: But I went through junior college and state school. I worked all my way through and never took things too seriously until my last couple years. Then I did. But I didn't really take anything seriously. And then I did a week long course back at one of the Ivy League schools, I'm not gonna mention the name because kinda irrelevant. And I had so much fun and I remember sitting there thinking, "I probably would have enjoyed this." Maybe I wouldn't have at 20 years old. Maybe I would have been bored stiff. But as an adult, I'm like this is actually...
Pat: It's not too late.
Scott: We are just about out of time here and want to let people know about of workshops. We've got workshops on Social Security, everything related to Social Security. If you are getting near the age of Social Security, it's how do you balance Social Security with all the other things that you've got going on in your financial life. So it's the week of March 22nd through April 1st in Sacramento, Denver, Cincinnati and the Bay Area. And you can sign up at allworthfinancial.com/workshops. We will see you next week.
Man: This program has been brought to you by Allworth Financial, a registered investment advisory firm. Any ideas presented during this program are not intended to provide specific financial advice. You should consult your own financial advisor, tax consultant or estate planning attorney to conduct your own due diligence.