November 9, 2024 - Money Matters Podcast
The election and the stock market, investment strategies for retirement, and do you have enough money to stop working?
On this week's Money Matters, Scott and Pat provide insights into the market's reaction post-election and discuss the impact of economic policies on corporate profits and investor sentiment. Then, they tackle listener questions, including a man contemplating selling a cell tower lease and another caller assessing their readiness for retirement. Plus, they discuss the Federal Reserve's recent interest rate cut and its implications for the broader economy. Finally, enjoy a lighter moment as Scott shares his experience in a self-driving car, highlighting the ever-evolving landscape of technology and transportation.
Join Money Matters: Get your most pressing financial questions answered by Allworth's co-founders 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 questions@moneymatters.com.
Transcript
Man: Would you like an opinion on a financial matter you're dealing with? Whether it's about retirement, investments, taxes, or 401ks, Scott Hanson 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-W-O-R-T-H.
Scott: Welcome to Allworth's Money Matters. Scott Hanson.
Pat: Pat McClain. Thanks for joining us.
Scott: Yep. And what a week financially.
Pat: Yes, we are taping this Thursday, November the 7th. Not taping it, we're storing it in some digital form.
Scot: That shows how long we've been doing the program because it used to be like these...
Pat: Little cartridges.
Scott: They were like eight-track.
Pat: So Thursday, November the 7th at 12:30 Pacific time.
Scott: Yeah, just to give you some idea.
Pat: Just a context...
Scott: In case something...
Pat: ...of where we're at.
Scott: ...weird happens on Friday, but...
Pat: Yeah, interesting.
Scott: And we're not going to talk about the election because there's eight million shows you can listen to to talk about the election.
Pat: I do want to talk about the market...
Scott: Of course.
Pat: ...the day after the election and why it absolutely doesn't matter, why it makes no difference whatsoever that the market was up 3.5%. Over the long run, it will even itself out. So let's talk about it now. I was at the gym this morning, and you're thinking, "Pat goes to a gym?" Yes, because the bathrooms are cleaner and the TV is better. So I was at the gym this morning and they were talking about, like, the markets,. And I said, "You know, this is exuberance that may or may not be well-placed. It is exuberance that doesn't matter in the long run because what matters in the long run for stock market, Scott?
Scott: Growth of the... Well, I might differ with you, but growth of the economy.
Pat: That's right.
Scott: And growth of profits, obviously. It's obvious. It's all based on discounted cash flows and what a company is going to earn in the future.
Pat: Yeah. And the cost of money. But the markets might be saying, clearly, whether they're going to be right or not, "We believe that under this administration, the results of the election, that the future profits of companies are going to be better than otherwise." And maybe it's further than that. There was no...it was a clear call. It wasn't like we're going to be in weeks of...which I expected.
Scott: And is someone going to not concede and all that other stuff?
Pat: Which I thought, "Well, this thing could go on for months." Right? You think about Bush and Florida and all those things.
Scott: I think a lot of us were concerned about that.
Pat: And it surely was a sign that, hey, a group of investors, not all investors, but a group of investors felt that this was better for corporate profits than the alternative. But over the long run, it makes no difference.
Scott: What happened yesterday.
Pat: What happened yesterday. That's what I mean.
Scott: With the markets.
Pat: With the markets, yes, over the long run. What happens to businesses under one administration versus another. There are certain... Yeah, I mean, you can tell that by, you know, if you don't think government plays a role. We live in the state of California. You know, look at all the Fortune 100 companies that have left the state of California because of...
Scott: Lots of reasons.
Pat: ...lots of reasons, but mostly policy reasons from the government. They have left the state of California. So that does tell you that how a government acts does affect how a company will actually perform or where they're most certainly located.
Scott: Someone had said that the increase in the market swing on Wednesday, that was 1500 points. So, like, this is the largest increase ever, not on a percentage point.
Pat: Not on percentage point.
Scott: It really wasn't. It's the biggest percentage point increase we've had in two years, to put things in perspective. We had some day two years ago. I have no idea which day that was where the markets were up the same. But as we continue to go higher with the Dow, we're going to have...a 1% point swing is now we need 400 points to get a 1% swing.
Pat: Yes. You know, like, oh, so what?
Scott: Yeah. And 1% swings are very common. And as we continue, it's not going to be that long before we're at Dow 100,000.
Pat: No.
Scott: Sometime in the next 10 to 15 years.
Pat: Yes. Yeah.
Scott: And if the stocks perform as they have historically, it'll be about 10 years.
Pat: Yeah. And then they're going to reprice the whole Dow.
Scott: Just carve it out.
Pat: Just split the Dow. No, it's just...it's where we're at.
Scott: Yeah. Anyway, we're happy to be in the studio here talking about financial stuff and answering your questions and taking your calls. One thing, Pat, before we do that, one of the big question marks in people's minds was the whole estate planning issue.
Pat: Yes. Wanted to talk about that.
Scott: Because it was part of the...not jobs creation act, jobs act, jobs act of some sort. Obviously not jobs reduction act, but no one would call it that, even if that was the result.
Pat: Everything's got a really positive name.
Scott: Yeah. But all the tax cuts, the Trump tax cuts that were set to expire December 31st, 2025.
Pat: They were temporary. They were set to expire.
Scott: But considering that 52 senators, as of the time right now, we don't know who's going to win the house, but it's certainly looking likely it's going to be...high likelihood that they're not going to change much.
Pat: No. In fact, I would expect that the only thing they're going to do is probably extend them and not actually make them permanent.
Scott: They can't make them permanent.
Pat: Yes, because then they'd actually have to adjust the budget to account for that.
Scott: This is just a short term. We don't have to account for it. But I think for a lot of people that were like, "Uh-oh, my estate's larger than..." Five million is probably what it was set to revert back to. But who knows, right? I think now people are not gonna...
Pat: I wouldn't worry about it as much.
Scott: No, I wouldn't rush to do any estate planning in the next 14 months.
Pat: Yeah. And you'll know in the middle of next year.
Scott: And we talked about it. We've talked about it multiple times about why this is really important. About three, four weeks ago, we talked about, depending upon who takes the house, the Senate, and the presidency, that you may want to address this. And so everything we said six or eight weeks ago about being concerned about it, I wouldn't worry about it.
Pat: That's right. Exactly.
Scott: Well, we saw things come. Anyway, if you want to join us, you can send us an email, questions@moneymatters.com, or give us a call 833-99-WORTH. And we're starting out with Rex. Rex, you're with Allworth's Money Matters.
Rex: Yes, sir. How you doing?
Pat: Good.
Scott: Good.
Rex: I got a question for you. I have a cell tower that was installed on my property.
Scott: You have a what?
Pat: A cell tower?
Scott: Oh, cell tower.
Rex: A cell tower. Yes, sir. Okay. Cell phone tower.
Scott: Yep.
Rex: And it started out at $11,000 a year, a 2% gain every year. And I got 26 years left and I have a company that wants to buy me out. Do you recommend to ride it out or take the buyout?
Pat: And so you have... So when did you put this thing in?
Rex: Four years ago.
Pat: Okay. So you have a 30-year lease on this, right?
Rex: Yes, sir.
Pat: And it's a triple net, so basically there's no expense to you whatsoever. Zero.
Rex: No, sir.
Scott: And so you get $11,000 a year that increases at 2% per year.
Rex: Yes, sir.
Pat: What are they offering to buy it for?
Rex: If it's cash out, 170. Five years, 190. And 10 years at 225.
Pat: I don't know what that means.
Scott: What do you mean 10 years?
Rex: 10 years, $225,000. That'd be $22,500 a year.
Scott: Oh, they're going to take these payments and pay you over 10 years?
Rex: Yes, sir.
Pat: Okay. Okay.
Scott: And who's the company that's doing this, that's offering this?
Rex: The one that owns it now.
Scott: Yes. One of the things that you're worried about... My guess, it's a third party financial company. I'm just curious if that third party company approached you directly or they're working with whoever the company that installed the cell tower and who's handling the finances.
Pat: Or a third party altogether.
Rex: I rushed out to a couple different companies that buy out cell tower leases. And this is what they came back with. But my cell tower people, they have a clause in there that they have a third party where they have a chance to buy it before they can.
Pat: Yeah. First right of refusal, correct?
Rex: Yes, sir. Yes, sir.
Pat: And what's driving you to do this?
Rex: The future because of Leon Musk [SP] is doing the solar, I mean, satellite...
Scott: Starlink?
Rex: Satellite link.
Scott: Yeah, Starlink. So you're concerned that the payments aren't going to be there 26 years out.
Rex: Well, they can pull out at any time they want to.
Pat: Wait.
Rex: But no penalty.
Pat: They can tear that cell tower down anytime they want and quit paying you.
Rex: Yes, sir.
Pat: And just quit paying you.
Rex: Yes, sir.
Pat: Anytime. Right?
Rex: Yes.
Pat: Oh, I'd sell it.
Rex: You would sell it?
Pat: Oh, heck yeah. Look, I'd try to get the highest price.
Rex: Yes, sir.
Pat: But you're selling a stream of income in the future that you're afraid is going to go away.
Rex: It could go away. Yes, sir.
Pat: Yeah. And so you've got 26 years on it and they want to pay you $22,000 over... What's the lump sum? Tell me what the lump sum is.
Rex: 170 is the lump sum.
Scott: Unfortunately, it makes really boring radio to crunch numbers. It's just a mathematical...
Pat: It's a math...
Scott: But my guess is there's probably 8% or 9% or 10% internal rate of return that's calculated for the investor, if not more, because of the risk...
Pat: ...of them pulling that tower.
Scott: Yeah.
Rex: Yes, sir.
Pat: And they came out of the box at 170?
Rex: Yes.
Pat: I'd ask for 190.
Rex: Okay.
Scott: And maybe split over two calendar years.
Pat: That's not a bad idea.
Rex: Would you do the 10-year plan?
Pat: No.
Rex: Or you think they could go out of business and...?
Pat: Look, the reason you're doing this is because you believe that there's an inherent risk. But if you really believe that, there is not only an inherent risk to you, there's an inherent risk to the buyer of who's buying that cell tower.
Scott: And they've calculated in that price. Someone's willing to take that bet. Right?
Rex: Yes. It's a gamble.
Pat: And are you selling an easement or are you selling that little plot of land?
Rex: No, it's just the easement, not the plot of land.
Pat: And where does this easement sit on the property? Is it in the middle of the property? How big is the property?
Rex: Seventeen acres, but it's only...it's like a 50 by 50 or 100 by 100, something like that.
Pat: Is it in the corner, the middle?
Rex: Yes, it's in the corner.
Pat: It's in the corner. Oh, brilliant. Very, very good. So you wouldn't... Like, if I bought that property and there was an easement on, if I bought it from you and there was an easement on it, unless I was deathly afraid of cell waves, whatever they are, I'm not a scientist, and even if I wasn't a scientist, I should probably know what they are. But yeah, I would...
Scott: Only because of that risk.
Pat: Because of that risk. And actually, I've never thought about it before, but that's a real risk.
Rex: Yes.
Scott: That's a lot... Twenty-six years in the world of technology is a long time. Think about 26 years ago and how much communication has changed.
Rex: Yes.
Pat: Yeah. Ask your kids if they know what a rotary phone looks like.
Rex: They don't.
Scott: Yes. Nor are they that interested in talking about it either, Pat. Like, "Oh, good for you, Dad."
Rex: But you know how fast technology...
Scott: Yeah, yeah, yeah.
Pat: That's right.
Scott: I agree with you 100%.
Pat: But I would push them on price. And I agree with Scott. I'd have it paid out over two calendar years just for tax purposes.
Rex: Yes. Well, that's why I was thinking the 10-year, but, you know, they could go bankrupt and go out.
Pat: Yeah, they're betting...
Scott: I mean, before I did this, I would crunch the numbers to have an idea of, like, what kind of hurdle rate, what rate of return would I need? But even the 10-year, it's like... [crosstalk 00:13:18.857].
Pat: Ten years at $22,000 a year, is that what you said?
Rex: For 10 years, yes, sir.
Pat: Yeah. Well, you know that their hurdle rate's probably somewhere around 7% to 8%.
Scott: Or higher, because they might view this as a...
Pat: Well, maybe they're just picking them up to repackage and sell off. Who knows? But have you gotten another quote from someone else?
Rex: Well, the people that own the lease now, they offer me, like, 140.
Pat: Okay.
Rex: And then this other one said 170.
Scott: Well, just see the... Yeah, I'd get the maximum price. I would try to... I mean, if you can pull this off, do half in December. I don't know the rest of your financial situation, but assuming everything else is static, I'd do half in December and half in January.
Rex: Okay. Sounds good.
Scott: That way you can spread the tax over two years.
Pat: Good for you. Good for you.
Rex: Yeah, it started to just be a piece of hunting ground, but it turned out to be getting paid to hunt.
Pat: Yeah. And so there's no houses around it?
Rex: No, not even close.
Pat: Oh, is that right? And how's your cell phone reception there?
Rex: Not good.
Scott: It's literally not?
Rex: No, it shoots above us.
Scott: That's hilarious.
Pat: That's funny. And the whole reason I wanted the cell phone tower on my land was so I got good cell reception. That's great. That's great. Yes. Push them for money and take it over two years.
Rex: Okay, sir.
Scott: Yeah. I think you're wise to look at the risk on this sort of thing. And really, like, for other listeners that don't have the luxury of having a plot of land they can lease to a cell tower company, it's the same concept you would consider on whether it's owning a company and, like, what's the probability of this being a viable company 25, 30 years from now? Or even more so, to think of it as like a bond.
Pat: That's right.
Scott: And...
Pat: The more risk there is, right?
Scott: What's a prominent company that's gone bankrupt lately? I can't tell.
Pat: Well, I mean, we could go back to WorldCom.
Scott: No, lately.
Pat: What would be a better thing for you to answer is which ones are going to go bankrupt soon.
Scott: Okay.
Pat: That would be valuable information.
Scott: Looks like Spirit Airlines. You follow that story at home?
Pat: Yeah, but TGI Fridays.
Scott: TGI Fridays.
Pat: What, last week?
Scott: Who would have thought? When was the last time you heard of TGI Fridays?
Pat: I don't know. All I remember is from the working spaces where Jennifer Aniston got in trouble for not wearing enough bling.
Scott: That wasn't TGI Friday, though. That was...
Pat: It was the same thing. They called it...
Scott: Yeah, yeah, yeah. What was that? That was... Working spaces.
Pat: "Office Space."
Scott: "Office Space." Yes, yes. The one that runs every Saturday at two o'clock for people that only have...people that don't... I think that pretty much is...if you're an old white male, it's a pretty funny movie because other than that, I don't know.
Pat: Okay. All right.
Scott: But I lost my train of thought with... So anyway, thinking about the same way you'd want to consider the risk of a bond. At least with a bond, the market changes every day. The price changes. You know what the value is. Something obscure like this.
Pat: But I think that I've never thought about Starlink, but I'll tell you, in third world countries, they're not building cell systems like they would have because of Starlink. It's just easier to stand it up.
Scott: Well, you know, so I've had a small cabin in Tahoe, Lake Tahoe for 20 years or whatever, and my internet provider, it's this repeater system of some sort. It's totally janky, right?
Pat: It must be awful. A house in Lake Tahoe with poor internet service.
Scott: Yeah, but it's just like you've got this satellite-looking dish that goes across the mountain and it gets a repeater thing. Anyway, up until two years ago, the thing always had challenges. And if you remember years ago, Pat, we would do a show remotely. Sometimes I'd be up there and it seemed like one out of three times, something would be wrong. Since Starlink became available, my service is almost perfect. It's amazing how they've really upped their game. It's the free markets.
Pat: You love it, don't you? It's just like, this is competition.
Scott: Yes.
Pat: This is competition.
Scott: Yes. They had to up their game because before it was the only option.
Pat: Yes. This is competition. That's great. Anyway...
Scottt: Let's continue on here.
Pat: Well, that was a great... I enjoyed that call. Well, I had never really...it was a new thought. It's, like, introduced new ideas that changed my view.
Scott: I mean, I would certainly be thinking, what is the chance, 26 years from now, we'll still be using these cell towers?
Pat: Yes. Or driving your own car. My nephew and I phoned a Waymo in San Francisco.
Scott: I rode in one a week or two ago.
Pat: How was it?
Scott: It was surreal.
Pat: All right. Before we go to the next call... I'll tell you. Andrew's been waiting, so let's make a note here.
Scott: All right. We'll take Andrew, and then...
Pat: This thing might run longer than an hour, Scott. So I want to talk about all work, making the notes. Someone asked me why we changed our name.
Scott: You can see how much prep work is done with our show.
Pat: And then we're going to talk about Waymo and Scott's experience. Anything else anyone wants to talk about?
Scott: No, no. I'm glad you're...
Pat: Because we bring up topics we're going to talk about and sometimes we don't talk about, but I've got notes.
Scott: Yeah, there is a little bit of prep that goes into the show. Anyway, let's talk with Andrew. Andrew, you're with Allworth's Money Matters.
Andrew: Hey, gentlemen. How you doing?
Scott: Awesome.
Andrew: Thanks for taking the call.
Pat: Thank you.
Andrew: So I have a question about what to do with some after-tax money to invest. I got a promotion and a raise recently and ended up with a surplus. And so I've got about $36,000 to $40,000 a year looking ahead to next year. Maxed out all of the pre-tax stuff I can do. And I'm kind of thinking, you know, I had it in a high yield account for a while, but realizing that interest is just kind of kicking up, and the money is great, but the taxes are great too on that.
Scott: How old are you?
Andrew: I am 49. I'm in public safety. So I could retire as early as next year, but I probably will end up staying about five more years.
Scott: And you'll have a pension that's going to be roughly equal to your pay now?
Andrew: It's going to be a bit lower, lost some years in the divorce. So if I go soon, I'd have to work those five years to make it roughly equal.
Pat: By the way, this listener, just based on the area code, is from the state of California. And if you're a safety worker, which means you're in law enforcement or working in prison, it is some of the richest pension benefits in the U.S. Fair statement?
Scott: Oh, yeah. You know, it's funny. So, I've got a couple of good friends that are retired CHP, and one was complaining because his cost of living is only 2%. But as he was telling me this, he says, "I know I shouldn't be complaining about this."
Pat: That's correct. So, for the rest of the listeners across the U.S. and overseas, both of you, their pensions are fat pensions.
Scott: So do you have a 457? One of the reasons that people stick in the...
Pat: But you have a 457 and a 401k available to you, do you not?
Andrew: Yes. So I've maxed out my 457 and I've been doing the pre-retirement catch-up. That's part of why I'm going to end up with so much surplus next year as I've been doing the pre-retirement catch-up up to the state age of 50.
Scott: What about the 401k?
Andrew: I'm using a 401 to backdoor a Roth.
Pat: Oh, no, no. Okay. Let's...
Scott: No, he's using the 401k for a Roth.
Pat: But are you putting the maximum in both the 457 and the 401k?
Andrew: Yes. Yeah, the 401k, but that maximum is, you know, quite a bit lower. But yeah, I'm doing the maximum. Then I also teach part...
Pat: It's not. It's not lower.
Andrew: Okay.
Scott: And you teach part-time. How much do you earn teaching?
Andrew: About $10,000 a year, and I have 100% of that going into the 403.
Pat: Okay. But I think you have room there. The 401k and the 403b fall under the same guidelines. Correct, Scott? But the 457 doesn't.
Scott: That's right.
Pat: Right? So what happens is people have a tendency to look at these, they look at the 401k, 457, 403b as the same.
Scott: And there's maximum limits...
Pat: On each one.
Scott: Both on each one, but also in aggregate.
Pat: With the 403b and the 401k.
Scott: And IRAs, yeah.
Pat: But there is not an aggregate limit with the 457.
Scott: Because it's a deferred compensation.
Pat: It's a deferral. It's a deferred compensation. It isn't a retirement plan.
Scott: You actually don't own the asset until you leave.
Pat: So I think you probably have a lot of room left in your 401k and your 403b.
Scott: If you wanted to do it on a Roth basis.
Andrew: So could I...can I contribute more to a 403b than I make at that employer?
Scott: No.
Pat: No. But you can contribute more... What percentage of your pay is going into your 401k?
Scott: Or how much annually is the question. Dollar amount.
Andrew: So I have an IRA that I use to backdoor. I don't have a 401k. I was under the impression that it was either/or with government workers for 457 or 401.
Pat: Easy, easy. Yep. It is the 401k.
Andrew: Okay.
Scott: And you're going to be limited on... Isn't that the...you only have to combine with the 403b and the 401k for maximum loans?
Pat: That's right. I believe so. Don't quote me on it. So I think your limit is... I think your limit is, what, $26,000 a year or something?
Andrew: Yeah, it's right around there.
Scott: And it'll go up when you're age 50.
Pat: Yes.
Andrew: Yeah. Okay.
Scott: So that'll take care of some. And then do you have any money in... Like, what do you have in savings outside of your retirement accounts?
Andrew: So, outside of those retirement accounts, I have about $90,000 split up between a high yield savings. A lot of ETFs, because I listen to you guys and you guys say use the ETF. Although, I don't listen to some, so I have 15% in individual stocks that I just like to play with.
Scott: That's fine.
Andrew: And I have about 20% in bonds.
Pat: So I just looked it up. So the maximum limit on a 401k, and it combines with a 403b, is $23,000 for 2024.
Andrew: So there's another $13,000 I can put into a 401.
Scott: And I'm assuming you don't have any other debt.
Andrew: Mortgage at 2.9%.
Scott: Yeah, yeah, yeah. I would just continue to build up... I mean, in a perfect world, you get to retirement, you've got a nice pension, you've got money in a tax deferred 457, you've got money in Roth assets, and you have money in just brokerage accounts. Because that way, it gives you the greatest amount of flexibility when it comes time to actually spending some of these dollars, right? Because there's tax consequences on just about everything.
Andrew: Sure.
Scott: So the more diversification you have in your saving strategy, the better off you're going to be.
Pat: When it comes to withdrawal.
Scott: Yes. So I would continue to do the ETFs.
Andrew: Okay. So just, yeah, as much as possible into those ETFs as a savings vehicle and hope for long-term capital gains when you finally got to pay?
Pat: Yeah. Yeah. And are you living the lifestyle you want, though?
Scott: I was kind of thinking the same thing.
Andrew: You know, I am. So I'm actually living the same lifestyle that I had about three years ago before I was promoted. I just didn't change anything. I didn't want the increased salary creep into my life.
Scott: Perfect.
Andrew: I still travel. I'm about to go on a two-week cruise with the girlfriend and, you know, I'm doing the things that I want to do.
Pat: Perfect. Where are you going?
Andrew: Hawaii, out of San Francisco.
Scott: Well, you're going to take a cruise all the way to Hawaii.
Andrew: Yeah.
Scott: How long does that take?
Andrew: Four days getting there, five days getting back, and then no self-service the whole time, which is one of the biggest [crosstalk 00:25:31.071].
Scott: Oh, that sounds pretty nice.
Andrew: Getting away from everything.
Pat: So why'd you go on a cruise?
Scott: That's funny. That's funny.
Pat: Yep. Easy. Easy. And just between the 403b and the 401k, go to the maximum of 23. And remember at age 50, you have the catch-up provision, whatever that means.
Scott: Yeah, you get a catch-up.
Pat: And beginning next year, there's even more for, what age is it, 60?
Scott: Sixty something. Yeah.
Pat: I think it's age 60. There's more you can contribute. The challenge is there's still requirement on distributions. And even though they've increased the age, they haven't adjusted the table that's used, which is based upon, crazy as it sounds, a joint life expectancy between you and somebody 10 years younger than you. That's how they came up with this crazy table.
Scott: But they have not adjusted that at all.
Pat: But they did adjust what happens to the required minimum distribution at death.
Scott: Yeah. And considering that we are now no longer...our life expectancy has been shrinking the last few years. One could make the argument that they need to shorten it, but that would be a horrible thing. I'm just throwing that out there. Anyway, glad you called, Andrew.
Pat: Thank you.
Scott: Have fun on your cruise. I think I mentioned last week, I had a very new experience last week. I performed a wedding ceremony for the first time. I was the officiant.
Pat: Oh, you did?
Scott: Yes. My niece, someone else was supposed to do it and called me at, like, the last minute.
Pat: That had to make you feel good. "Hey, Uncle Scott, I know you're very religious."
Scott: They couldn't find anybody.
Pat: "I know you're very religious, but my friend Jimmy, who's 26, he's in jail. Can you please do it for me?" So how'd you do it?
Scott: I don't think they went that big a list. The main guy fell through and they thought... Well, you know, what's funny about it, I've done, like you, Pat, hundreds, if not thousands, of public speaking engagements and doing this show. So I don't get nervous. I don't care if there's a thousand people in the audience. I don't get nervous at all. I want to make sure I do a good job. But when it's somebody's wedding, like, the gravity of it, like, I don't want to screw this thing up, have to start over, miss something. It all went fine.
Pat: I did one last summer where I actually stopped in the middle of it when I said, "And you..." And then who said it? She said, "Yes, I do." And then they read to each other. And after that, when they're done reading, I just stood there, and she looked at me, and she said, "Well, what's next?" And I said, "Oh, I was just so engrossed by those words and I had just blanked out." But then...
Scott: You were so moved?
Pat: That's what I said. "I was so engrossed by the beautiful things you said to each other. I just kind of got lost in the moment," which it wasn't that at all. I was thinking about whether I actually need to put new gutters on the side of my house.
Scott: You were not thinking that.
Pat: No, but I had kind of spaced out. But then I was at a funeral, my brother's wife and my brother asked me to say something, and I got up and said, "I got to tell you, I am a minister just like this man standing here."
Scott: Are you a minister of some sort of...?
Pat: American Marriage Ministries. It was like $25.
Scott: And then did you still have to get licensed in the state of California?
Pat: I was able to sign the...
Scott: Because you're a minister.
Pat: Yeah.
Scott: I'm licensed by the state of Hawaii. I'm just a civil servant.
Pat: How much did it cost?
Scott: Well, I had an option. It was $100 for a year or $25 for 60 days. So the next 55 days or so, if anyone needs to get married in Hawaii, I might be your man.
Pat: I think I can marry anyone.
Scott: In any state. And how much did yours cost?
Pat: I think it was $40 or $50.
Scott: Did you have to do a test?
Pat: No.
Scott: Did you have to agree to some certain things?
Pat: Not that I recall. They sent me a beautiful certificate that I have framed in my office.
Scott: You're so proud of...
Pat: By American Marriage Ministries.
Scott: Is that what it's called?
Pat: Yes.
Scott: American Marriage Ministries.
Pat: I don't appreciate you making fun of this.
Scott: Yes, I think you do. It's funny.
Pat: But when I did get up and speak at the funeral and pointed out that I am a minister, so I have the same sort of...my words have the same gravity as the man that has studied it his whole life.
Scott: Yeah. He might not have thought it was funny. All right. Let's continue on with calls. We're talking with Sam. Sam, you're with Allworth's Money Matters.
Sam: Oh, hi, Scott and Pat. Thanks for taking my call.
Scott: Yeah.
Sam: So I'm trying to figure out. I just retired this year on April. I'm trying to figure out if I'm going to be okay remaining retired.
Scott: Did the retirement date come earlier than you had planned? Or was this like suddenly the company made it...?
Sam: Yeah, it's way early. I just hit 60 yesterday.
Scott: Okay. Happy birthday.
Sam: Thank you. Thank you. So I sold my business with a building, which I carried a note, and that would net me about $4,047 a month. And I also have a rental that I'm renting for $3,200. And my wife is bringing home about $4,000 net. So we will clear about $11,200 a month. But my combined expenses, because of the two mortgage I'm still having and utility and insurance and everything, will come out to about $8,100.
Pat: Okay. One second here, Sam. You sold this building.
Scott: Did you get a cash?
Sam: No, I'm carrying the note.
Pat: For how long?
Sam: It's a 20-year term with a balloon payment. But they have a pay up. I mean, early pay off is five years. So anytime after that, he could pay off the whole amount.
Pat: And what is the amount?
Sam: About $600,000.
Pat: And your business was in the building. So did you sell the building and the business together?
Sam: Correct.
Pat: Okay.
Scott: Okay. And you received no cash upfront?
Sam: $90,000.
Pat: Okay. And then, so the mortgages are on the rental in your primary residence, correct?
Sam: Right.
Pat: Okay. And what is the value of the rental?
Sam: The value of the rental is about $800.
Pat: And what do you owe on it?
Sam: $190.
Pat: And what's the interest rate?
Sam: 1.875.
Pat: Okay. And the primary, what's the value?
Sam: About 1.1.
Pat: And what do you owe on it?
Sam: $150.
Pat: And I assume the interest rate is probably about 1.8 as well.
Sam: 1.9, yes.
Pat: Okay. All right. And what other assets...?
Scott: Fifteen-year loans.
Scott: Was the rental a primary residence at one time?
Sam: It was.
Scott: That's how you got the low rate then?
Sam: Right.
Pat: How long ago was it a primary residence?
Sam: Thirty years ago. But I refinanced. So I have a primary residence for 30 years and I built a home, which I subdivide from my property. So I built another home and I moved back here, like, five years ago.
Scott: And what do you have in... Sorry.
Sam: I never did rent it out. I'm sorry. The rental, I never did rent it out, so it was always a primary residence for [inaudible 00:33:20.595] address, because one is in the front, one is in the back, but it's on two separate lots.
Pat: Got it. Got it. Got it. Now you're renting it out.
Sam: Yes. Now I'm renting it out.
Pat: And what other assets do you have?
Scott: And let me just...real quick. Is the $3,200 from rent, is that after the mortgage and expenses on the house?
Sam: No.
Pat: But you netted it out, the expenses as part of the $8,100 amount that you're... Correct?
Sam: Right. Right. The $8,100 is including the two mortgage.
Pat: Okay. So what other assets do you have, Sam?
Sam: So I have about $210,000 cash. I have $100,000 of it sitting in a high-yield account. And $100,000 of it is at a Betterment with 90% equity in stock market and 10% in bonds.
Pat: Anything else?
Sam: I have a retirement account, which is worth about $382,000, which $220,000 of it is in IRA and $150,000 or $160,000 of it is in Roth.
Pat: Okay. Anything else?
Sam: No, that's it.
Pat: And how much longer does your wife plan on working?
Sam: That's my next question, if it's doable. The problem was her work covered my health insurance, so if it's doable, she'd like to retire at 62.
Pat: How old is she now?
Sam: Sixty.
Pat: And how much does she make?
Sam: Net about $4,000. Her gross is about $80,000, I think $79,000 or $80,000 a year.
Pat: So let's ask this question. I'm not implying that you have enough or don't have enough. If you were to go back to work, what would you do and how much would you make?
Sam: If I were to go back to work?
Pat: Yes. Because you said you don't know if you have enough money to retire. So I took the null hypothesis and said, okay, let's assume you don't have enough money to retire. What would you do? If you had to go back... You sold it. You've been self-employed for many, many years, I assume.
Sam: Forty-two years.
Scott: So I don't think he's going to be working for anybody. My guess. Don't forget to punch the clock on the way out.
Pat: Right. The idea of you going in and actually getting a job is probably not very appealing.
Sam: No, it's not... Well, I'm tired of it. So I could go back to work, but I don't know if anybody's going to hire me as a service waiter. Well, I owned a mechanic shop for 42 years.
Pat: By the way, did you sell to a large institution?
Sam: No, it's a small shop, so it's another person that bought it.
Pat: So you want to know whether you have enough to retire?
Sam: I want to know if inflation is going to catch up with me and I'm going to be screwed when I get to 62 and 65.
Scott: No, you're fine. I'm not worried about you getting screwed between age 62 and 65. The concern is 80 and 90 years old.
Pat: Yeah. And I'm concerned...
Scott: You're going to have social security kicking in, your wife's going to have social security kicking in, and you may or may not choose to take it early based upon the rest of your financial situation. It seems like the rent you're receiving for the house seems a little low, an $800,000 house and you're only getting $3,200 a month gross.
Sam: Yeah, it's a 1600 square feet house, three-bed, two-bath. I think that's what it's called for in this neighborhood. I could get as much as $3,500 but...
Pat: Must be in a nice neighborhood.
Sam: It's in an okay neighborhood. I mean, it's not bad. It's in [inaudible 00:37:47.305].
Pat: Okay. Well, that kind of explains it. And do you plan on staying in the Bay Area?
Sam: Yes.
Pat: You know, this is tight. This is touch and go.
Scott: I mean, you've got about $800,000 outside of your rental and your home. You've got that other income that's coming in, but we need to...
Pat: But we don't know how... We know that that's only going to... At the maximum, it's going to come in for 20 years. It could come in much sooner.
Scott: We need to make sure that at 20 years from now that we can replace that income.
Pat: Because if your wife quit her job, then the answer is no, you can't retire. If your wife works till she's 65, and by the way, you're really smart to be concerned about the cost of health insurance, because...
Sam: That's why I'm worried.
Pat: You should be, because Medicare kicks in at 65 and you talked about her retiring at 62. And it's conceivable that your insurance payments are $2,000, $2,500 a month, which is $30,000 a year.
Scott: That's what I figure, $20,000 to $30,000 grand a year.
Pat: Yes. So it's touch and go. If she was going to work to 65, and then you looked at what your social security was coming in and what her social security is coming in, my guess is that you'd be able to make up that $4,000, you know, hit and pay.
Sam: Oh, yeah, she's going to get pension too.
Pat: Okay. Well, that's... How much will her pension be?
Sam: I think it's 65% of her wages, max.
Scott: That'll help a lot.
Pat: And she's social security eligible. She doesn't have a job where she did not participate in social security.
Sam: Yes, she could get social security too.
Scott: In a perfect world, if we talked in January, we'd say, Sam, why don't you put off a couple years? I know you've been doing it for 42 years. If you can put it off a couple years, you'll probably be better off financially. Let's focus on doing all those steps that we should be taking now to put you in the best position for when you ultimately sell your business. But we didn't talk in January, we talk now. And maybe that was still the right thing for you. I don't know your situation.
Pat: And what's the value of the building that you sold to them and carried the note on?
Sam: $600.
Pat: So the business was just thrown in for free?
Sam: Yes. In my view, the business is only worth something when I'm there.
Pat: Yes. Well, that isn't 100% true because there's...
Scott: Goodwill.
Pat: There's goodwill. So the reason I asked that question, which is, is that payment at risk, and the answer is probably not because of the fact you can go back and take the building if they default on the loan. So you're probably okay. If you're using Betterment and you're paying them to do some financial planning, you would probably be well-served to actually sit down and pay someone to actually do some projection.
Scott: A full plan, yes.
Sam: Well, I'm not paying Betterment. It's a robo account.
Pat: No, you're paying them.
Sam: I am?
Pat: Oh, yeah.
Scott: Not much. Yeah, you're getting the low cost. You're getting what you're paying for, though.
Pat: Yeah. But it's not free. It's not free.
Scott: But part of the plan, Sam, is, like, how do we replace that income 20 years out? And, like, what happens when our utilities continue to go up? And property taxes, although they're limited in California, they still increase 2% a year. Two percent, 1.5%, whatever it is.
Pat: Let's just put it this way. You'd probably be okay. But I don't think that that's the right answer.
Scott: At a minimum, just pay to have someone do a financial plan for you.
Pat: I would never say to my brother, "You'll probably be okay." I'd say, "You need to actually go and pay someone to do a financial plan for you. A third party that actually says..." And I said it to my own brother. I said, "Look, I don't want..." My brother-in-law. "I don't want to be your financial advisor. We're too close. You need to talk to a third party." Fortunately, they used Allworth. I'd probably be insulted that they didn't. But it is someone else giving the advice. And I paid for his financial plan. I said, "I'll pay for it. Do the financial plan." They found out he could retire in two years, and he retired. I would recommend the same to you.
Sam: So what would be the cost for somebody to sit down and plan my financial plan?
Pat: Talk to the particular provider. What's the cost...?
Scott: Maybe a couple of grand or something.
Pat: Couple of grand. But what's the cost if you don't do it?
Scott: I mean, like Pat said five minutes ago, this is kind of on the bubble here, so...
Pat: I was hoping you'd come back and the other assets would be in the millions. And then I'd say, "Don't worry about it." But they're not. So it's on the bubble. Look, my guess is that the advisor is probably going to tell your wife she needs to work till 65 and that you're going to have to do all the shopping, cleaning, and cooking.
Sam: Nothing news there.
Scott: All right, Sam. Our recommendation is do the plan. Involve your spouse with the plan. You can look at it. The numbers aren't going to lie. I mean, there are... You obviously have to use some projections in there, like what are we going to assume for inflation, what are we going to assume for... But just be relatively conservative on that. And then you'll have an idea of your probability of success.
Pat: And not only that, it would include your estate plan, what you're doing for estate planning, and make recommendations there in tax planning. So I think it's money well spent. Yeah.
Scott: We appreciate the call. And I would probably be tired of being a mechanic for 42... Pat, I am so bad. I won't even tell you. I screwed something up the house. I'm just, like, killing my... You know, the sparks.
Pat: Did you try to do it yourself?
Scott: Sparks and the thing.
Pat: The sparks?
Scott: The thermostat thing.
Pat: That's just not...
Scott: I thought I turned the power off. I went outside and flipped the switch. It was mislabeled or something.
Pat: Oh, you're lucky you're sitting here.
Scott: I'm not going to get killed off a... I guess I could, but...
Pat: Yeah. People die from electricity almost every day. So yes. Smoke? So, anyway, someone asked me the other day. So, Scott and I have been working as business partners for 30, maybe 31 years, something like that. And up until five, six years ago, five years ago, he was called Handsome McClain.
Scott: Yeah. And if you listened to it on the radio in Sacramento, you know Handsome. You still know Handsome.
Pat: Some lady asked if she could have a selfie with me the other day. That's never happened to me before.
Scott: Really?
Pat: Yes. Yes. A selfie.
Scott: Look at you, Pat.
Pat: I know.
Scott: It only took 30 years.
Pat: I know. I'm an overnight success. I said to her, "Really? Really?" So someone was asking me, why did you change your name to Allworth? And I said, well, look, it was Handsome McClain. At first it was Handsome McClain Retirement Group, and then it was Handsome McClain Financial. But Retirement Group sounded like we did pension plans. And financial, we could have been a mortgage company or a broker, or, you know, we could have done auto loans or whatever. And the reason we changed it to Allworth is because as we've grown the business over the last 30 plus years, we've added more services. So we've added estate planning. Well, there's estate planning attorneys on staff. We've added a large suite of accounting services for individuals. And where appropriate, our advisors will bring that in. Plus, we've got relationships for Medicare insurance and for someone like Sam who retires prior to Medicare kicking in. We have a third party that we work with under a white label that actually makes recommendations, and the advisor actually walks the clients through the recommendations. So I was sitting with an advisor and a new client the other day. And, you know, as they explained it to her, the new client came in, we took their trust, we downloaded it into our system, we scanned it for highlights, right? And then we have an estate planning attorney look at it and then make recommendations to the client that may or may not be appropriate. Then the client can either have us institute it or bring it to a third party. That's part of all your worth.
Scott: And an insurance division that analyzes whole life policies and that sort of stuff.
Pat: And annuities and long-term care policies, right? So we've got specialists in that. And, you know, as the company has grown... You know, 30 years ago, it was you, me and one person. As the company has grown, actually, we've been able to add more and more services, nd we wanted that to be reflected in our name, Allworth, which is trying to create a one-stop shop for most of our clients so that we can take care of all their worth.
Scott: By the way, this is where the industry's headed. So there's kind of the independent advice, like we've been independent for 30 years. It had primarily been almost a cottage industry. So it tended to be a lot of smaller organizations, but it's really hard to provide all these services as a small organization. It's almost impossible. So, like, part of our growth is finding other firms that want to partner up with us. We find some of the best financial advisors in the country.
Pat: And then we bring them a suite of services that [crosstalk 00:47:28.339] to the client.
Scott: And they become part of Allworth.
Pat: So it goes back to Sam's question, which is, you know, he's worried about whether he has enough to retire and he was, you know, bright enough to worry about the cost of insurance, but we would actually price the cost of insurance and wouldn't just guess what it will be for him, right?
Scott: Yeah, a true plan.
Pat: A true plan. And then bring in estate planning and tax planning around the whole things, and then talk about the risk, right? The risk associated with his financial plan. And the question was, well, how much is it going to cost? That's when he was like, "How much is it going to cost?" Well, visit with the advisor and they will quote you a price. And then if you don't want to pay for the plan, then don't pay for the plan. Right?
Scott: You know, it's interesting that you're talking about all this. I write a column every other week for a publication called Investment News.
Pat: I haven't read that in a long time.
Scott: None of you listening read it because it's...
Pat: Including me.
Scott: Including Pat.
Pat: I used to, but now they started... Okay, keep going.
Scott: I don't know why you don't anymore.
Pat: I don't.
Scott: I don't think I pay anything. I shouldn't have to pay. I write for them every other week. But the reason I brought this up is you were going, talking about that. The article I just finished writing this week was about aging advisors. And either do your clients a service by really staying in the game, or retire and get out of the way and have someone else come in and step in, because things have changed so much in the last, even, decade, as you're talking about all these services, right? A decade ago, we weren't providing services.
Pat: No, no.
Scott: And then you think of the technologies.
Pat: Well, a few years ago, estate planning, what we're doing today, you really couldn't do because the technology didn't exist. And I hate to use the word AI, artificial intelligence, but we use it. I mean, it's a buzzword, but it actually really adds great scale and efficiency.
Scott: So my point in this article is, like, your clients might love you and might think you're doing a good job, but if you're not keeping up to date with all the latest technology and all the latest services, you are not helping your clients and you should probably just retire. Because the average age of advisors in our industry is late 50s, I mean, early 60s. There are more certified financial planners over age 70 than under age 30.
Pat: Oh, I didn't know that.
Scott: More certified financial planners over age 70. These are people that keep up to date on their continuing education and pay their dues.
Pat: I didn't know.
Scott: Now, there's some great advisors. I've seen enough of advisors that they get to a certain point, the client books, they got plenty of clients.
Pat: They retire and don't tell anyone.
Scott: That's right. They're golfing three days a week. They travel all the time and they don't really keep up. They don't keep up to date with everything.
Pat: And they don't tell their clients that they're not really keeping up to date.
Scott: And the clients don't know what the new thing is out that they've missed out on. Well, anyway, so I literally came in the studio midday. I had not listened to or read the news in a couple of hours. And I see this article dropped on my desk of Federal Reserve cuts key interest rates by a quarter point. And I look at this, like, "Is this today?"
Pat: And the markets did nothing.
Scott: And the markets did nothing.
Pat: But yesterday, the markets did so much that it made up for whatever's today.
Scott: And the bond market sold off a bit on on Wednesday.
Pat: So one of the things to keep in mind here is this is not an automatic translation to mortgage rates. In fact, mortgage rates in the last couple of months have gone up...
Scott: In this week, have gone up.
Pat: ...by over a half a percentage point. Not this week, but over the last month, I think it's been up 7/10 of a percent from 6.1% to 6.8%. So it tells you that what the Fed is doing and what they believe the long term growth of the economy is going to look like is reflected. So the Fed is a consensus of people that sit on the FOMC. Is that correct?
Scott: Yes.
Pat: Board. And then the market is what controls long term interest rates. And so it was 8.8% to...
Scott: Well, they control a bit. They can buy bonds in the open market, which they do as well, but...
Pat: Not a primary, not as much as they once did. And sell bonds into the open market.
Scott: But obviously, the market had priced this in fully, right?
Pat: That's right. Yes, expected it. But we've seen it overseas as well.
Scott: Yeah, Canada just did it a week or two ago.
Pat: I guess that's not overseas. Unless...
Scott: Well, you could get there, actually. I guess it's not. They probably have more coastline than we have. Anyway, this is not a geography show. [inaudible 00:52:23.894] in Alaska. I don't know. I don't know why I'm thinking...
Pat: Okay, Scott. All right. You're going to have to discover that on your own time. So before we talk about your Waymo experience driving in a...
Scott: It's not that big of an experience.
Pat: Well, I'd like to hear about it. Not enough that I'd actually go to San Francisco and ride in one of those cars.
Scott: Other cities have them. Phoenix has them. I don't know.
Pat: So Vanguard just paid a $40 million fine.
Scott: Whoops.
Pat: And why did they pay it? They paid it because of their asset allocation funds. They're called target date funds that work very, very well inside of a...
Scott: ...of a retirement account.
Pat: ...inside of a retirement account
Scott: Because they'll shift allocations. And, you know, if it's in a retirement account, who cares about the tax consequences? Because there are no tax consequences on transactions, only withdrawals.
Pat: But outside of a retirement account, you have no way of controlling, as is in many mutual funds, the taxation of them.
Scott: Yes.
Pat: As in many, especially actively traded funds. So the reason I point this out is because these were all the rage a number of years ago, target date, and they're great for small amounts, if you're new to savings. In fact, years ago, you talked about you recommended one to your daughter.
Scott: Yes.
Pat: But if someone came in and put $200,000 in a target...
Scott: It was also in a time when transaction fees were much higher.
Pat: That's true. That's right.
Scott: I mean, because you can build a portfolio of ETFs even with $10,000 and have several.
Pat: Good point. Good point. So the point being is that the reason I bring this up is that you need to pay attention to what's happening in your brokerage account. Not only the investments, but the taxation of those investments.
Scott: Wasn't this...they were reduced?
Pat: Reduced fees and it created more...I don't know.
Scott: They swap funds out for institutional clients. They reduce the fees, the minimum for institutional clients way down. And so they converted a bunch of people, and in that conversion process, triggered a capital taxation for it.
Pat: Yeah, but they would trigger a capital gain anyway that the investor would have...
Scott: Eventually.
Pat: ...no control over. Yes. So just the point being is pay attention to your brokerage accounts and the taxation on those. All right, Scott, Waymo.
Scott: It's not that exciting. Waymo or Whammo? Whammo. I don't know. Whammo.
Pat: Okay. So you're in San Francisco.
Scott: So I tried using it a couple of months ago. I was there with my wife in San Francisco a couple of months ago. We were going to use it to go to a concert, but I looked at the app and it was going to take, like, 18 minutes for the car to get there. And it was, like, a 14-minute walk. So it was an easy decision that we're just gonna walk. But then I was there. I was in conference a week ago and I'm like, "Let's try." I was with a friend. Like, we're going to dinner. "Let's try Waymo here." It was surreal because the car has a steering wheel.
Pat: It does.
Scott: You sit in the back seat. I guess you can sit in the front seat too. Not with the driver's seat, but the passenger seat, if you have that many... And you just watch the wheel turn. I mean, it clearly doesn't need a steering wheel, but it has the steering wheel. So I ordered the thing on an app. And there's a flat rate. It's like seven or eight bucks right now. I'm just trying to get people to start using it. And so I went to the front of the hotel, and I guess I must've had the wrong... So anyway, it went to pick me up a block and a half away, so I had to walk the block. And as I was walking the block and a half, it had to go do a loop around the block because it couldn't stay parked there. So I got a notification that it had to go somewhere. So by the time I got there, you got to open the...
Pat: You open the doors.
Scott: You push a button on the phone and it unlocks the doors. All of a sudden, the doors unlock and you get in. And what was surprising to me about it, same thing with the...
Pat: Is that they still talk to you. The driver that wasn't there...
Scott: No.
Pat: ...actually came on a speaker phone and still talked.
Scott: There's actually not some guy behind the curtain with a little joystick.
Pat: We find out that these are all driven remotely from the Philippines.
Scott: The whole center.
Pat: And they're all in cars.
Scott: Like those driver training things you had in high school.
Pat: Exactly. They got a whole bank of them.
Scott: But what was surprising is the speed in which the car would accelerate. I mean, I just assumed it'd be really slow and smooth, but I mean, I guess it's a city, so you want to pull out and there's traffic.
Pat: Just boom.
Scott: That's exactly how it drove.
Pat: And you can't tip. You don't have to tip. I don't tip anyway. No, I'm just joking.
Scott: Anyway, that was my Waymo experience.
Pat: And you'd do it again.
Scott: Oh, yeah, 100%. As a matter of fact, I mean...
Pat: My nephew says that's all he uses in San Francisco.
Scott: Well, yeah, I totally... I mean... I had trouble figuring out how to unlock the doors. My app had froze, so I had to shut the app down, open it back up. So it took us a little... But once you do it once or twice, then it's pretty simple.
Pat: It is. So this goes back to when we were talking about cell phones and the gentleman that's got a 26-year lease left on it. Who knows what...
Scott: Today, my son, his first day being a co-pilot in a commercial jet. I'm not going to tell you the airlines right now, just in case you're flying today. I don't think anyone's going to know. "Oh, and the co-pilot, Blake Hanson, by the way, it's his first day."
Pat: Everyone congratulates the boy and he brought a Scooby-Doo lunchbox.
Scott: The surgeon's great. You might be his first patient, but I'm sure it'll go fine. So even just interesting about his... Like, planes don't really need pilots.
Pat: That's right.
Scott: Right? Particularly in the cockpit. I think they're there, one, to help the passengers feel much better.
Pat: I would not get on a plane without a pilot.
Scott: Yeah. It's one thing about getting on a car that's going 20 miles an hour, as opposed to being in an airplane. But how many years before we only need one pilot? When you're comfortable enough with the plane, it's so rare that something goes south. The changing of times.
Pat: It is. It's interesting.
Scott: Anyway, all right. It's been fun being with you. This has been Scott Hanson, Pat McClain.
Pat: Yep. And join us next week. Oh, and by the way, this goes back to Sam. On our website, he sold his business and someone had an offer without doing financial planning. We see this a lot. And on our website, we have an emergency guide to retirement so that if you are displaced...
Scott: You retire earlier than you planned, something happens.
Pat: ...you retired earlier than you planned, this kind of walks you through the steps of what you should be doing, what you should be looking at. And it's the emergency guide to retirement, I believe. I think so. It's on our website.
Scott: Anyway, we'll see you next week. This has been Allworth's Money Matters.
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.
Scott: Welcome to Allworth's Money Matters. Scott Hanson.
Pat: Pat McClain. Thanks for joining us.
Scott: Yep. And what a week financially.
Pat: Yes, we are taping this Thursday, November the 7th. Not taping it, we're storing it in some digital form.
Scot: That shows how long we've been doing the program because it used to be like these...
Pat: Little cartridges.
Scott: They were like eight-track.
Pat: So Thursday, November the 7th at 12:30 Pacific time.
Scott: Yeah, just to give you some idea.
Pat: Just a context...
Scott: In case something...
Pat: ...of where we're at.
Scott: ...weird happens on Friday, but...
Pat: Yeah, interesting.
Scott: And we're not going to talk about the election because there's eight million shows you can listen to to talk about the election.
Pat: I do want to talk about the market...
Scott: Of course.
Pat: ...the day after the election and why it absolutely doesn't matter, why it makes no difference whatsoever that the market was up 3.5%. Over the long run, it will even itself out. So let's talk about it now. I was at the gym this morning, and you're thinking, "Pat goes to a gym?" Yes, because the bathrooms are cleaner and the TV is better. So I was at the gym this morning and they were talking about, like, the markets,. And I said, "You know, this is exuberance that may or may not be well-placed. It is exuberance that doesn't matter in the long run because what matters in the long run for stock market, Scott?
Scott: Growth of the... Well, I might differ with you, but growth of the economy.
Pat: That's right.
Scott: And growth of profits, obviously. It's obvious. It's all based on discounted cash flows and what a company is going to earn in the future.
Pat: Yeah. And the cost of money. But the markets might be saying, clearly, whether they're going to be right or not, "We believe that under this administration, the results of the election, that the future profits of companies are going to be better than otherwise." And maybe it's further than that. There was no...it was a clear call. It wasn't like we're going to be in weeks of...which I expected.
Scott: And is someone going to not concede and all that other stuff?
Pat: Which I thought, "Well, this thing could go on for months." Right? You think about Bush and Florida and all those things.
Scott: I think a lot of us were concerned about that.
Pat: And it surely was a sign that, hey, a group of investors, not all investors, but a group of investors felt that this was better for corporate profits than the alternative. But over the long run, it makes no difference.
Scott: What happened yesterday.
Pat: What happened yesterday. That's what I mean.
Scott: With the markets.
Pat: With the markets, yes, over the long run. What happens to businesses under one administration versus another. There are certain... Yeah, I mean, you can tell that by, you know, if you don't think government plays a role. We live in the state of California. You know, look at all the Fortune 100 companies that have left the state of California because of...
Scott: Lots of reasons.
Pat: ...lots of reasons, but mostly policy reasons from the government. They have left the state of California. So that does tell you that how a government acts does affect how a company will actually perform or where they're most certainly located.
Scott: Someone had said that the increase in the market swing on Wednesday, that was 1500 points. So, like, this is the largest increase ever, not on a percentage point.
Pat: Not on percentage point.
Scott: It really wasn't. It's the biggest percentage point increase we've had in two years, to put things in perspective. We had some day two years ago. I have no idea which day that was where the markets were up the same. But as we continue to go higher with the Dow, we're going to have...a 1% point swing is now we need 400 points to get a 1% swing.
Pat: Yes. You know, like, oh, so what?
Scott: Yeah. And 1% swings are very common. And as we continue, it's not going to be that long before we're at Dow 100,000.
Pat: No.
Scott: Sometime in the next 10 to 15 years.
Pat: Yes. Yeah.
Scott: And if the stocks perform as they have historically, it'll be about 10 years.
Pat: Yeah. And then they're going to reprice the whole Dow.
Scott: Just carve it out.
Pat: Just split the Dow. No, it's just...it's where we're at.
Scott: Yeah. Anyway, we're happy to be in the studio here talking about financial stuff and answering your questions and taking your calls. One thing, Pat, before we do that, one of the big question marks in people's minds was the whole estate planning issue.
Pat: Yes. Wanted to talk about that.
Scott: Because it was part of the...not jobs creation act, jobs act, jobs act of some sort. Obviously not jobs reduction act, but no one would call it that, even if that was the result.
Pat: Everything's got a really positive name.
Scott: Yeah. But all the tax cuts, the Trump tax cuts that were set to expire December 31st, 2025.
Pat: They were temporary. They were set to expire.
Scott: But considering that 52 senators, as of the time right now, we don't know who's going to win the house, but it's certainly looking likely it's going to be...high likelihood that they're not going to change much.
Pat: No. In fact, I would expect that the only thing they're going to do is probably extend them and not actually make them permanent.
Scott: They can't make them permanent.
Pat: Yes, because then they'd actually have to adjust the budget to account for that.
Scott: This is just a short term. We don't have to account for it. But I think for a lot of people that were like, "Uh-oh, my estate's larger than..." Five million is probably what it was set to revert back to. But who knows, right? I think now people are not gonna...
Pat: I wouldn't worry about it as much.
Scott: No, I wouldn't rush to do any estate planning in the next 14 months.
Pat: Yeah. And you'll know in the middle of next year.
Scott: And we talked about it. We've talked about it multiple times about why this is really important. About three, four weeks ago, we talked about, depending upon who takes the house, the Senate, and the presidency, that you may want to address this. And so everything we said six or eight weeks ago about being concerned about it, I wouldn't worry about it.
Pat: That's right. Exactly.
Scott: Well, we saw things come. Anyway, if you want to join us, you can send us an email, questions@moneymatters.com, or give us a call 833-99-WORTH. And we're starting out with Rex. Rex, you're with Allworth's Money Matters.
Rex: Yes, sir. How you doing?
Pat: Good.
Scott: Good.
Rex: I got a question for you. I have a cell tower that was installed on my property.
Scott: You have a what?
Pat: A cell tower?
Scott: Oh, cell tower.
Rex: A cell tower. Yes, sir. Okay. Cell phone tower.
Scott: Yep.
Rex: And it started out at $11,000 a year, a 2% gain every year. And I got 26 years left and I have a company that wants to buy me out. Do you recommend to ride it out or take the buyout?
Pat: And so you have... So when did you put this thing in?
Rex: Four years ago.
Pat: Okay. So you have a 30-year lease on this, right?
Rex: Yes, sir.
Pat: And it's a triple net, so basically there's no expense to you whatsoever. Zero.
Rex: No, sir.
Scott: And so you get $11,000 a year that increases at 2% per year.
Rex: Yes, sir.
Pat: What are they offering to buy it for?
Rex: If it's cash out, 170. Five years, 190. And 10 years at 225.
Pat: I don't know what that means.
Scott: What do you mean 10 years?
Rex: 10 years, $225,000. That'd be $22,500 a year.
Scott: Oh, they're going to take these payments and pay you over 10 years?
Rex: Yes, sir.
Pat: Okay. Okay.
Scott: And who's the company that's doing this, that's offering this?
Rex: The one that owns it now.
Scott: Yes. One of the things that you're worried about... My guess, it's a third party financial company. I'm just curious if that third party company approached you directly or they're working with whoever the company that installed the cell tower and who's handling the finances.
Pat: Or a third party altogether.
Rex: I rushed out to a couple different companies that buy out cell tower leases. And this is what they came back with. But my cell tower people, they have a clause in there that they have a third party where they have a chance to buy it before they can.
Pat: Yeah. First right of refusal, correct?
Rex: Yes, sir. Yes, sir.
Pat: And what's driving you to do this?
Rex: The future because of Leon Musk [SP] is doing the solar, I mean, satellite...
Scott: Starlink?
Rex: Satellite link.
Scott: Yeah, Starlink. So you're concerned that the payments aren't going to be there 26 years out.
Rex: Well, they can pull out at any time they want to.
Pat: Wait.
Rex: But no penalty.
Pat: They can tear that cell tower down anytime they want and quit paying you.
Rex: Yes, sir.
Pat: And just quit paying you.
Rex: Yes, sir.
Pat: Anytime. Right?
Rex: Yes.
Pat: Oh, I'd sell it.
Rex: You would sell it?
Pat: Oh, heck yeah. Look, I'd try to get the highest price.
Rex: Yes, sir.
Pat: But you're selling a stream of income in the future that you're afraid is going to go away.
Rex: It could go away. Yes, sir.
Pat: Yeah. And so you've got 26 years on it and they want to pay you $22,000 over... What's the lump sum? Tell me what the lump sum is.
Rex: 170 is the lump sum.
Scott: Unfortunately, it makes really boring radio to crunch numbers. It's just a mathematical...
Pat: It's a math...
Scott: But my guess is there's probably 8% or 9% or 10% internal rate of return that's calculated for the investor, if not more, because of the risk...
Pat: ...of them pulling that tower.
Scott: Yeah.
Rex: Yes, sir.
Pat: And they came out of the box at 170?
Rex: Yes.
Pat: I'd ask for 190.
Rex: Okay.
Scott: And maybe split over two calendar years.
Pat: That's not a bad idea.
Rex: Would you do the 10-year plan?
Pat: No.
Rex: Or you think they could go out of business and...?
Pat: Look, the reason you're doing this is because you believe that there's an inherent risk. But if you really believe that, there is not only an inherent risk to you, there's an inherent risk to the buyer of who's buying that cell tower.
Scott: And they've calculated in that price. Someone's willing to take that bet. Right?
Rex: Yes. It's a gamble.
Pat: And are you selling an easement or are you selling that little plot of land?
Rex: No, it's just the easement, not the plot of land.
Pat: And where does this easement sit on the property? Is it in the middle of the property? How big is the property?
Rex: Seventeen acres, but it's only...it's like a 50 by 50 or 100 by 100, something like that.
Pat: Is it in the corner, the middle?
Rex: Yes, it's in the corner.
Pat: It's in the corner. Oh, brilliant. Very, very good. So you wouldn't... Like, if I bought that property and there was an easement on, if I bought it from you and there was an easement on it, unless I was deathly afraid of cell waves, whatever they are, I'm not a scientist, and even if I wasn't a scientist, I should probably know what they are. But yeah, I would...
Scott: Only because of that risk.
Pat: Because of that risk. And actually, I've never thought about it before, but that's a real risk.
Rex: Yes.
Scott: That's a lot... Twenty-six years in the world of technology is a long time. Think about 26 years ago and how much communication has changed.
Rex: Yes.
Pat: Yeah. Ask your kids if they know what a rotary phone looks like.
Rex: They don't.
Scott: Yes. Nor are they that interested in talking about it either, Pat. Like, "Oh, good for you, Dad."
Rex: But you know how fast technology...
Scott: Yeah, yeah, yeah.
Pat: That's right.
Scott: I agree with you 100%.
Pat: But I would push them on price. And I agree with Scott. I'd have it paid out over two calendar years just for tax purposes.
Rex: Yes. Well, that's why I was thinking the 10-year, but, you know, they could go bankrupt and go out.
Pat: Yeah, they're betting...
Scott: I mean, before I did this, I would crunch the numbers to have an idea of, like, what kind of hurdle rate, what rate of return would I need? But even the 10-year, it's like... [crosstalk 00:13:18.857].
Pat: Ten years at $22,000 a year, is that what you said?
Rex: For 10 years, yes, sir.
Pat: Yeah. Well, you know that their hurdle rate's probably somewhere around 7% to 8%.
Scott: Or higher, because they might view this as a...
Pat: Well, maybe they're just picking them up to repackage and sell off. Who knows? But have you gotten another quote from someone else?
Rex: Well, the people that own the lease now, they offer me, like, 140.
Pat: Okay.
Rex: And then this other one said 170.
Scott: Well, just see the... Yeah, I'd get the maximum price. I would try to... I mean, if you can pull this off, do half in December. I don't know the rest of your financial situation, but assuming everything else is static, I'd do half in December and half in January.
Rex: Okay. Sounds good.
Scott: That way you can spread the tax over two years.
Pat: Good for you. Good for you.
Rex: Yeah, it started to just be a piece of hunting ground, but it turned out to be getting paid to hunt.
Pat: Yeah. And so there's no houses around it?
Rex: No, not even close.
Pat: Oh, is that right? And how's your cell phone reception there?
Rex: Not good.
Scott: It's literally not?
Rex: No, it shoots above us.
Scott: That's hilarious.
Pat: That's funny. And the whole reason I wanted the cell phone tower on my land was so I got good cell reception. That's great. That's great. Yes. Push them for money and take it over two years.
Rex: Okay, sir.
Scott: Yeah. I think you're wise to look at the risk on this sort of thing. And really, like, for other listeners that don't have the luxury of having a plot of land they can lease to a cell tower company, it's the same concept you would consider on whether it's owning a company and, like, what's the probability of this being a viable company 25, 30 years from now? Or even more so, to think of it as like a bond.
Pat: That's right.
Scott: And...
Pat: The more risk there is, right?
Scott: What's a prominent company that's gone bankrupt lately? I can't tell.
Pat: Well, I mean, we could go back to WorldCom.
Scott: No, lately.
Pat: What would be a better thing for you to answer is which ones are going to go bankrupt soon.
Scott: Okay.
Pat: That would be valuable information.
Scott: Looks like Spirit Airlines. You follow that story at home?
Pat: Yeah, but TGI Fridays.
Scott: TGI Fridays.
Pat: What, last week?
Scott: Who would have thought? When was the last time you heard of TGI Fridays?
Pat: I don't know. All I remember is from the working spaces where Jennifer Aniston got in trouble for not wearing enough bling.
Scott: That wasn't TGI Friday, though. That was...
Pat: It was the same thing. They called it...
Scott: Yeah, yeah, yeah. What was that? That was... Working spaces.
Pat: "Office Space."
Scott: "Office Space." Yes, yes. The one that runs every Saturday at two o'clock for people that only have...people that don't... I think that pretty much is...if you're an old white male, it's a pretty funny movie because other than that, I don't know.
Pat: Okay. All right.
Scott: But I lost my train of thought with... So anyway, thinking about the same way you'd want to consider the risk of a bond. At least with a bond, the market changes every day. The price changes. You know what the value is. Something obscure like this.
Pat: But I think that I've never thought about Starlink, but I'll tell you, in third world countries, they're not building cell systems like they would have because of Starlink. It's just easier to stand it up.
Scott: Well, you know, so I've had a small cabin in Tahoe, Lake Tahoe for 20 years or whatever, and my internet provider, it's this repeater system of some sort. It's totally janky, right?
Pat: It must be awful. A house in Lake Tahoe with poor internet service.
Scott: Yeah, but it's just like you've got this satellite-looking dish that goes across the mountain and it gets a repeater thing. Anyway, up until two years ago, the thing always had challenges. And if you remember years ago, Pat, we would do a show remotely. Sometimes I'd be up there and it seemed like one out of three times, something would be wrong. Since Starlink became available, my service is almost perfect. It's amazing how they've really upped their game. It's the free markets.
Pat: You love it, don't you? It's just like, this is competition.
Scott: Yes.
Pat: This is competition.
Scott: Yes. They had to up their game because before it was the only option.
Pat: Yes. This is competition. That's great. Anyway...
Scottt: Let's continue on here.
Pat: Well, that was a great... I enjoyed that call. Well, I had never really...it was a new thought. It's, like, introduced new ideas that changed my view.
Scott: I mean, I would certainly be thinking, what is the chance, 26 years from now, we'll still be using these cell towers?
Pat: Yes. Or driving your own car. My nephew and I phoned a Waymo in San Francisco.
Scott: I rode in one a week or two ago.
Pat: How was it?
Scott: It was surreal.
Pat: All right. Before we go to the next call... I'll tell you. Andrew's been waiting, so let's make a note here.
Scott: All right. We'll take Andrew, and then...
Pat: This thing might run longer than an hour, Scott. So I want to talk about all work, making the notes. Someone asked me why we changed our name.
Scott: You can see how much prep work is done with our show.
Pat: And then we're going to talk about Waymo and Scott's experience. Anything else anyone wants to talk about?
Scott: No, no. I'm glad you're...
Pat: Because we bring up topics we're going to talk about and sometimes we don't talk about, but I've got notes.
Scott: Yeah, there is a little bit of prep that goes into the show. Anyway, let's talk with Andrew. Andrew, you're with Allworth's Money Matters.
Andrew: Hey, gentlemen. How you doing?
Scott: Awesome.
Andrew: Thanks for taking the call.
Pat: Thank you.
Andrew: So I have a question about what to do with some after-tax money to invest. I got a promotion and a raise recently and ended up with a surplus. And so I've got about $36,000 to $40,000 a year looking ahead to next year. Maxed out all of the pre-tax stuff I can do. And I'm kind of thinking, you know, I had it in a high yield account for a while, but realizing that interest is just kind of kicking up, and the money is great, but the taxes are great too on that.
Scott: How old are you?
Andrew: I am 49. I'm in public safety. So I could retire as early as next year, but I probably will end up staying about five more years.
Scott: And you'll have a pension that's going to be roughly equal to your pay now?
Andrew: It's going to be a bit lower, lost some years in the divorce. So if I go soon, I'd have to work those five years to make it roughly equal.
Pat: By the way, this listener, just based on the area code, is from the state of California. And if you're a safety worker, which means you're in law enforcement or working in prison, it is some of the richest pension benefits in the U.S. Fair statement?
Scott: Oh, yeah. You know, it's funny. So, I've got a couple of good friends that are retired CHP, and one was complaining because his cost of living is only 2%. But as he was telling me this, he says, "I know I shouldn't be complaining about this."
Pat: That's correct. So, for the rest of the listeners across the U.S. and overseas, both of you, their pensions are fat pensions.
Scott: So do you have a 457? One of the reasons that people stick in the...
Pat: But you have a 457 and a 401k available to you, do you not?
Andrew: Yes. So I've maxed out my 457 and I've been doing the pre-retirement catch-up. That's part of why I'm going to end up with so much surplus next year as I've been doing the pre-retirement catch-up up to the state age of 50.
Scott: What about the 401k?
Andrew: I'm using a 401 to backdoor a Roth.
Pat: Oh, no, no. Okay. Let's...
Scott: No, he's using the 401k for a Roth.
Pat: But are you putting the maximum in both the 457 and the 401k?
Andrew: Yes. Yeah, the 401k, but that maximum is, you know, quite a bit lower. But yeah, I'm doing the maximum. Then I also teach part...
Pat: It's not. It's not lower.
Andrew: Okay.
Scott: And you teach part-time. How much do you earn teaching?
Andrew: About $10,000 a year, and I have 100% of that going into the 403.
Pat: Okay. But I think you have room there. The 401k and the 403b fall under the same guidelines. Correct, Scott? But the 457 doesn't.
Scott: That's right.
Pat: Right? So what happens is people have a tendency to look at these, they look at the 401k, 457, 403b as the same.
Scott: And there's maximum limits...
Pat: On each one.
Scott: Both on each one, but also in aggregate.
Pat: With the 403b and the 401k.
Scott: And IRAs, yeah.
Pat: But there is not an aggregate limit with the 457.
Scott: Because it's a deferred compensation.
Pat: It's a deferral. It's a deferred compensation. It isn't a retirement plan.
Scott: You actually don't own the asset until you leave.
Pat: So I think you probably have a lot of room left in your 401k and your 403b.
Scott: If you wanted to do it on a Roth basis.
Andrew: So could I...can I contribute more to a 403b than I make at that employer?
Scott: No.
Pat: No. But you can contribute more... What percentage of your pay is going into your 401k?
Scott: Or how much annually is the question. Dollar amount.
Andrew: So I have an IRA that I use to backdoor. I don't have a 401k. I was under the impression that it was either/or with government workers for 457 or 401.
Pat: Easy, easy. Yep. It is the 401k.
Andrew: Okay.
Scott: And you're going to be limited on... Isn't that the...you only have to combine with the 403b and the 401k for maximum loans?
Pat: That's right. I believe so. Don't quote me on it. So I think your limit is... I think your limit is, what, $26,000 a year or something?
Andrew: Yeah, it's right around there.
Scott: And it'll go up when you're age 50.
Pat: Yes.
Andrew: Yeah. Okay.
Scott: So that'll take care of some. And then do you have any money in... Like, what do you have in savings outside of your retirement accounts?
Andrew: So, outside of those retirement accounts, I have about $90,000 split up between a high yield savings. A lot of ETFs, because I listen to you guys and you guys say use the ETF. Although, I don't listen to some, so I have 15% in individual stocks that I just like to play with.
Scott: That's fine.
Andrew: And I have about 20% in bonds.
Pat: So I just looked it up. So the maximum limit on a 401k, and it combines with a 403b, is $23,000 for 2024.
Andrew: So there's another $13,000 I can put into a 401.
Scott: And I'm assuming you don't have any other debt.
Andrew: Mortgage at 2.9%.
Scott: Yeah, yeah, yeah. I would just continue to build up... I mean, in a perfect world, you get to retirement, you've got a nice pension, you've got money in a tax deferred 457, you've got money in Roth assets, and you have money in just brokerage accounts. Because that way, it gives you the greatest amount of flexibility when it comes time to actually spending some of these dollars, right? Because there's tax consequences on just about everything.
Andrew: Sure.
Scott: So the more diversification you have in your saving strategy, the better off you're going to be.
Pat: When it comes to withdrawal.
Scott: Yes. So I would continue to do the ETFs.
Andrew: Okay. So just, yeah, as much as possible into those ETFs as a savings vehicle and hope for long-term capital gains when you finally got to pay?
Pat: Yeah. Yeah. And are you living the lifestyle you want, though?
Scott: I was kind of thinking the same thing.
Andrew: You know, I am. So I'm actually living the same lifestyle that I had about three years ago before I was promoted. I just didn't change anything. I didn't want the increased salary creep into my life.
Scott: Perfect.
Andrew: I still travel. I'm about to go on a two-week cruise with the girlfriend and, you know, I'm doing the things that I want to do.
Pat: Perfect. Where are you going?
Andrew: Hawaii, out of San Francisco.
Scott: Well, you're going to take a cruise all the way to Hawaii.
Andrew: Yeah.
Scott: How long does that take?
Andrew: Four days getting there, five days getting back, and then no self-service the whole time, which is one of the biggest [crosstalk 00:25:31.071].
Scott: Oh, that sounds pretty nice.
Andrew: Getting away from everything.
Pat: So why'd you go on a cruise?
Scott: That's funny. That's funny.
Pat: Yep. Easy. Easy. And just between the 403b and the 401k, go to the maximum of 23. And remember at age 50, you have the catch-up provision, whatever that means.
Scott: Yeah, you get a catch-up.
Pat: And beginning next year, there's even more for, what age is it, 60?
Scott: Sixty something. Yeah.
Pat: I think it's age 60. There's more you can contribute. The challenge is there's still requirement on distributions. And even though they've increased the age, they haven't adjusted the table that's used, which is based upon, crazy as it sounds, a joint life expectancy between you and somebody 10 years younger than you. That's how they came up with this crazy table.
Scott: But they have not adjusted that at all.
Pat: But they did adjust what happens to the required minimum distribution at death.
Scott: Yeah. And considering that we are now no longer...our life expectancy has been shrinking the last few years. One could make the argument that they need to shorten it, but that would be a horrible thing. I'm just throwing that out there. Anyway, glad you called, Andrew.
Pat: Thank you.
Scott: Have fun on your cruise. I think I mentioned last week, I had a very new experience last week. I performed a wedding ceremony for the first time. I was the officiant.
Pat: Oh, you did?
Scott: Yes. My niece, someone else was supposed to do it and called me at, like, the last minute.
Pat: That had to make you feel good. "Hey, Uncle Scott, I know you're very religious."
Scott: They couldn't find anybody.
Pat: "I know you're very religious, but my friend Jimmy, who's 26, he's in jail. Can you please do it for me?" So how'd you do it?
Scott: I don't think they went that big a list. The main guy fell through and they thought... Well, you know, what's funny about it, I've done, like you, Pat, hundreds, if not thousands, of public speaking engagements and doing this show. So I don't get nervous. I don't care if there's a thousand people in the audience. I don't get nervous at all. I want to make sure I do a good job. But when it's somebody's wedding, like, the gravity of it, like, I don't want to screw this thing up, have to start over, miss something. It all went fine.
Pat: I did one last summer where I actually stopped in the middle of it when I said, "And you..." And then who said it? She said, "Yes, I do." And then they read to each other. And after that, when they're done reading, I just stood there, and she looked at me, and she said, "Well, what's next?" And I said, "Oh, I was just so engrossed by those words and I had just blanked out." But then...
Scott: You were so moved?
Pat: That's what I said. "I was so engrossed by the beautiful things you said to each other. I just kind of got lost in the moment," which it wasn't that at all. I was thinking about whether I actually need to put new gutters on the side of my house.
Scott: You were not thinking that.
Pat: No, but I had kind of spaced out. But then I was at a funeral, my brother's wife and my brother asked me to say something, and I got up and said, "I got to tell you, I am a minister just like this man standing here."
Scott: Are you a minister of some sort of...?
Pat: American Marriage Ministries. It was like $25.
Scott: And then did you still have to get licensed in the state of California?
Pat: I was able to sign the...
Scott: Because you're a minister.
Pat: Yeah.
Scott: I'm licensed by the state of Hawaii. I'm just a civil servant.
Pat: How much did it cost?
Scott: Well, I had an option. It was $100 for a year or $25 for 60 days. So the next 55 days or so, if anyone needs to get married in Hawaii, I might be your man.
Pat: I think I can marry anyone.
Scott: In any state. And how much did yours cost?
Pat: I think it was $40 or $50.
Scott: Did you have to do a test?
Pat: No.
Scott: Did you have to agree to some certain things?
Pat: Not that I recall. They sent me a beautiful certificate that I have framed in my office.
Scott: You're so proud of...
Pat: By American Marriage Ministries.
Scott: Is that what it's called?
Pat: Yes.
Scott: American Marriage Ministries.
Pat: I don't appreciate you making fun of this.
Scott: Yes, I think you do. It's funny.
Pat: But when I did get up and speak at the funeral and pointed out that I am a minister, so I have the same sort of...my words have the same gravity as the man that has studied it his whole life.
Scott: Yeah. He might not have thought it was funny. All right. Let's continue on with calls. We're talking with Sam. Sam, you're with Allworth's Money Matters.
Sam: Oh, hi, Scott and Pat. Thanks for taking my call.
Scott: Yeah.
Sam: So I'm trying to figure out. I just retired this year on April. I'm trying to figure out if I'm going to be okay remaining retired.
Scott: Did the retirement date come earlier than you had planned? Or was this like suddenly the company made it...?
Sam: Yeah, it's way early. I just hit 60 yesterday.
Scott: Okay. Happy birthday.
Sam: Thank you. Thank you. So I sold my business with a building, which I carried a note, and that would net me about $4,047 a month. And I also have a rental that I'm renting for $3,200. And my wife is bringing home about $4,000 net. So we will clear about $11,200 a month. But my combined expenses, because of the two mortgage I'm still having and utility and insurance and everything, will come out to about $8,100.
Pat: Okay. One second here, Sam. You sold this building.
Scott: Did you get a cash?
Sam: No, I'm carrying the note.
Pat: For how long?
Sam: It's a 20-year term with a balloon payment. But they have a pay up. I mean, early pay off is five years. So anytime after that, he could pay off the whole amount.
Pat: And what is the amount?
Sam: About $600,000.
Pat: And your business was in the building. So did you sell the building and the business together?
Sam: Correct.
Pat: Okay.
Scott: Okay. And you received no cash upfront?
Sam: $90,000.
Pat: Okay. And then, so the mortgages are on the rental in your primary residence, correct?
Sam: Right.
Pat: Okay. And what is the value of the rental?
Sam: The value of the rental is about $800.
Pat: And what do you owe on it?
Sam: $190.
Pat: And what's the interest rate?
Sam: 1.875.
Pat: Okay. And the primary, what's the value?
Sam: About 1.1.
Pat: And what do you owe on it?
Sam: $150.
Pat: And I assume the interest rate is probably about 1.8 as well.
Sam: 1.9, yes.
Pat: Okay. All right. And what other assets...?
Scott: Fifteen-year loans.
Scott: Was the rental a primary residence at one time?
Sam: It was.
Scott: That's how you got the low rate then?
Sam: Right.
Pat: How long ago was it a primary residence?
Sam: Thirty years ago. But I refinanced. So I have a primary residence for 30 years and I built a home, which I subdivide from my property. So I built another home and I moved back here, like, five years ago.
Scott: And what do you have in... Sorry.
Sam: I never did rent it out. I'm sorry. The rental, I never did rent it out, so it was always a primary residence for [inaudible 00:33:20.595] address, because one is in the front, one is in the back, but it's on two separate lots.
Pat: Got it. Got it. Got it. Now you're renting it out.
Sam: Yes. Now I'm renting it out.
Pat: And what other assets do you have?
Scott: And let me just...real quick. Is the $3,200 from rent, is that after the mortgage and expenses on the house?
Sam: No.
Pat: But you netted it out, the expenses as part of the $8,100 amount that you're... Correct?
Sam: Right. Right. The $8,100 is including the two mortgage.
Pat: Okay. So what other assets do you have, Sam?
Sam: So I have about $210,000 cash. I have $100,000 of it sitting in a high-yield account. And $100,000 of it is at a Betterment with 90% equity in stock market and 10% in bonds.
Pat: Anything else?
Sam: I have a retirement account, which is worth about $382,000, which $220,000 of it is in IRA and $150,000 or $160,000 of it is in Roth.
Pat: Okay. Anything else?
Sam: No, that's it.
Pat: And how much longer does your wife plan on working?
Sam: That's my next question, if it's doable. The problem was her work covered my health insurance, so if it's doable, she'd like to retire at 62.
Pat: How old is she now?
Sam: Sixty.
Pat: And how much does she make?
Sam: Net about $4,000. Her gross is about $80,000, I think $79,000 or $80,000 a year.
Pat: So let's ask this question. I'm not implying that you have enough or don't have enough. If you were to go back to work, what would you do and how much would you make?
Sam: If I were to go back to work?
Pat: Yes. Because you said you don't know if you have enough money to retire. So I took the null hypothesis and said, okay, let's assume you don't have enough money to retire. What would you do? If you had to go back... You sold it. You've been self-employed for many, many years, I assume.
Sam: Forty-two years.
Scott: So I don't think he's going to be working for anybody. My guess. Don't forget to punch the clock on the way out.
Pat: Right. The idea of you going in and actually getting a job is probably not very appealing.
Sam: No, it's not... Well, I'm tired of it. So I could go back to work, but I don't know if anybody's going to hire me as a service waiter. Well, I owned a mechanic shop for 42 years.
Pat: By the way, did you sell to a large institution?
Sam: No, it's a small shop, so it's another person that bought it.
Pat: So you want to know whether you have enough to retire?
Sam: I want to know if inflation is going to catch up with me and I'm going to be screwed when I get to 62 and 65.
Scott: No, you're fine. I'm not worried about you getting screwed between age 62 and 65. The concern is 80 and 90 years old.
Pat: Yeah. And I'm concerned...
Scott: You're going to have social security kicking in, your wife's going to have social security kicking in, and you may or may not choose to take it early based upon the rest of your financial situation. It seems like the rent you're receiving for the house seems a little low, an $800,000 house and you're only getting $3,200 a month gross.
Sam: Yeah, it's a 1600 square feet house, three-bed, two-bath. I think that's what it's called for in this neighborhood. I could get as much as $3,500 but...
Pat: Must be in a nice neighborhood.
Sam: It's in an okay neighborhood. I mean, it's not bad. It's in [inaudible 00:37:47.305].
Pat: Okay. Well, that kind of explains it. And do you plan on staying in the Bay Area?
Sam: Yes.
Pat: You know, this is tight. This is touch and go.
Scott: I mean, you've got about $800,000 outside of your rental and your home. You've got that other income that's coming in, but we need to...
Pat: But we don't know how... We know that that's only going to... At the maximum, it's going to come in for 20 years. It could come in much sooner.
Scott: We need to make sure that at 20 years from now that we can replace that income.
Pat: Because if your wife quit her job, then the answer is no, you can't retire. If your wife works till she's 65, and by the way, you're really smart to be concerned about the cost of health insurance, because...
Sam: That's why I'm worried.
Pat: You should be, because Medicare kicks in at 65 and you talked about her retiring at 62. And it's conceivable that your insurance payments are $2,000, $2,500 a month, which is $30,000 a year.
Scott: That's what I figure, $20,000 to $30,000 grand a year.
Pat: Yes. So it's touch and go. If she was going to work to 65, and then you looked at what your social security was coming in and what her social security is coming in, my guess is that you'd be able to make up that $4,000, you know, hit and pay.
Sam: Oh, yeah, she's going to get pension too.
Pat: Okay. Well, that's... How much will her pension be?
Sam: I think it's 65% of her wages, max.
Scott: That'll help a lot.
Pat: And she's social security eligible. She doesn't have a job where she did not participate in social security.
Sam: Yes, she could get social security too.
Scott: In a perfect world, if we talked in January, we'd say, Sam, why don't you put off a couple years? I know you've been doing it for 42 years. If you can put it off a couple years, you'll probably be better off financially. Let's focus on doing all those steps that we should be taking now to put you in the best position for when you ultimately sell your business. But we didn't talk in January, we talk now. And maybe that was still the right thing for you. I don't know your situation.
Pat: And what's the value of the building that you sold to them and carried the note on?
Sam: $600.
Pat: So the business was just thrown in for free?
Sam: Yes. In my view, the business is only worth something when I'm there.
Pat: Yes. Well, that isn't 100% true because there's...
Scott: Goodwill.
Pat: There's goodwill. So the reason I asked that question, which is, is that payment at risk, and the answer is probably not because of the fact you can go back and take the building if they default on the loan. So you're probably okay. If you're using Betterment and you're paying them to do some financial planning, you would probably be well-served to actually sit down and pay someone to actually do some projection.
Scott: A full plan, yes.
Sam: Well, I'm not paying Betterment. It's a robo account.
Pat: No, you're paying them.
Sam: I am?
Pat: Oh, yeah.
Scott: Not much. Yeah, you're getting the low cost. You're getting what you're paying for, though.
Pat: Yeah. But it's not free. It's not free.
Scott: But part of the plan, Sam, is, like, how do we replace that income 20 years out? And, like, what happens when our utilities continue to go up? And property taxes, although they're limited in California, they still increase 2% a year. Two percent, 1.5%, whatever it is.
Pat: Let's just put it this way. You'd probably be okay. But I don't think that that's the right answer.
Scott: At a minimum, just pay to have someone do a financial plan for you.
Pat: I would never say to my brother, "You'll probably be okay." I'd say, "You need to actually go and pay someone to do a financial plan for you. A third party that actually says..." And I said it to my own brother. I said, "Look, I don't want..." My brother-in-law. "I don't want to be your financial advisor. We're too close. You need to talk to a third party." Fortunately, they used Allworth. I'd probably be insulted that they didn't. But it is someone else giving the advice. And I paid for his financial plan. I said, "I'll pay for it. Do the financial plan." They found out he could retire in two years, and he retired. I would recommend the same to you.
Sam: So what would be the cost for somebody to sit down and plan my financial plan?
Pat: Talk to the particular provider. What's the cost...?
Scott: Maybe a couple of grand or something.
Pat: Couple of grand. But what's the cost if you don't do it?
Scott: I mean, like Pat said five minutes ago, this is kind of on the bubble here, so...
Pat: I was hoping you'd come back and the other assets would be in the millions. And then I'd say, "Don't worry about it." But they're not. So it's on the bubble. Look, my guess is that the advisor is probably going to tell your wife she needs to work till 65 and that you're going to have to do all the shopping, cleaning, and cooking.
Sam: Nothing news there.
Scott: All right, Sam. Our recommendation is do the plan. Involve your spouse with the plan. You can look at it. The numbers aren't going to lie. I mean, there are... You obviously have to use some projections in there, like what are we going to assume for inflation, what are we going to assume for... But just be relatively conservative on that. And then you'll have an idea of your probability of success.
Pat: And not only that, it would include your estate plan, what you're doing for estate planning, and make recommendations there in tax planning. So I think it's money well spent. Yeah.
Scott: We appreciate the call. And I would probably be tired of being a mechanic for 42... Pat, I am so bad. I won't even tell you. I screwed something up the house. I'm just, like, killing my... You know, the sparks.
Pat: Did you try to do it yourself?
Scott: Sparks and the thing.
Pat: The sparks?
Scott: The thermostat thing.
Pat: That's just not...
Scott: I thought I turned the power off. I went outside and flipped the switch. It was mislabeled or something.
Pat: Oh, you're lucky you're sitting here.
Scott: I'm not going to get killed off a... I guess I could, but...
Pat: Yeah. People die from electricity almost every day. So yes. Smoke? So, anyway, someone asked me the other day. So, Scott and I have been working as business partners for 30, maybe 31 years, something like that. And up until five, six years ago, five years ago, he was called Handsome McClain.
Scott: Yeah. And if you listened to it on the radio in Sacramento, you know Handsome. You still know Handsome.
Pat: Some lady asked if she could have a selfie with me the other day. That's never happened to me before.
Scott: Really?
Pat: Yes. Yes. A selfie.
Scott: Look at you, Pat.
Pat: I know.
Scott: It only took 30 years.
Pat: I know. I'm an overnight success. I said to her, "Really? Really?" So someone was asking me, why did you change your name to Allworth? And I said, well, look, it was Handsome McClain. At first it was Handsome McClain Retirement Group, and then it was Handsome McClain Financial. But Retirement Group sounded like we did pension plans. And financial, we could have been a mortgage company or a broker, or, you know, we could have done auto loans or whatever. And the reason we changed it to Allworth is because as we've grown the business over the last 30 plus years, we've added more services. So we've added estate planning. Well, there's estate planning attorneys on staff. We've added a large suite of accounting services for individuals. And where appropriate, our advisors will bring that in. Plus, we've got relationships for Medicare insurance and for someone like Sam who retires prior to Medicare kicking in. We have a third party that we work with under a white label that actually makes recommendations, and the advisor actually walks the clients through the recommendations. So I was sitting with an advisor and a new client the other day. And, you know, as they explained it to her, the new client came in, we took their trust, we downloaded it into our system, we scanned it for highlights, right? And then we have an estate planning attorney look at it and then make recommendations to the client that may or may not be appropriate. Then the client can either have us institute it or bring it to a third party. That's part of all your worth.
Scott: And an insurance division that analyzes whole life policies and that sort of stuff.
Pat: And annuities and long-term care policies, right? So we've got specialists in that. And, you know, as the company has grown... You know, 30 years ago, it was you, me and one person. As the company has grown, actually, we've been able to add more and more services, nd we wanted that to be reflected in our name, Allworth, which is trying to create a one-stop shop for most of our clients so that we can take care of all their worth.
Scott: By the way, this is where the industry's headed. So there's kind of the independent advice, like we've been independent for 30 years. It had primarily been almost a cottage industry. So it tended to be a lot of smaller organizations, but it's really hard to provide all these services as a small organization. It's almost impossible. So, like, part of our growth is finding other firms that want to partner up with us. We find some of the best financial advisors in the country.
Pat: And then we bring them a suite of services that [crosstalk 00:47:28.339] to the client.
Scott: And they become part of Allworth.
Pat: So it goes back to Sam's question, which is, you know, he's worried about whether he has enough to retire and he was, you know, bright enough to worry about the cost of insurance, but we would actually price the cost of insurance and wouldn't just guess what it will be for him, right?
Scott: Yeah, a true plan.
Pat: A true plan. And then bring in estate planning and tax planning around the whole things, and then talk about the risk, right? The risk associated with his financial plan. And the question was, well, how much is it going to cost? That's when he was like, "How much is it going to cost?" Well, visit with the advisor and they will quote you a price. And then if you don't want to pay for the plan, then don't pay for the plan. Right?
Scott: You know, it's interesting that you're talking about all this. I write a column every other week for a publication called Investment News.
Pat: I haven't read that in a long time.
Scott: None of you listening read it because it's...
Pat: Including me.
Scott: Including Pat.
Pat: I used to, but now they started... Okay, keep going.
Scott: I don't know why you don't anymore.
Pat: I don't.
Scott: I don't think I pay anything. I shouldn't have to pay. I write for them every other week. But the reason I brought this up is you were going, talking about that. The article I just finished writing this week was about aging advisors. And either do your clients a service by really staying in the game, or retire and get out of the way and have someone else come in and step in, because things have changed so much in the last, even, decade, as you're talking about all these services, right? A decade ago, we weren't providing services.
Pat: No, no.
Scott: And then you think of the technologies.
Pat: Well, a few years ago, estate planning, what we're doing today, you really couldn't do because the technology didn't exist. And I hate to use the word AI, artificial intelligence, but we use it. I mean, it's a buzzword, but it actually really adds great scale and efficiency.
Scott: So my point in this article is, like, your clients might love you and might think you're doing a good job, but if you're not keeping up to date with all the latest technology and all the latest services, you are not helping your clients and you should probably just retire. Because the average age of advisors in our industry is late 50s, I mean, early 60s. There are more certified financial planners over age 70 than under age 30.
Pat: Oh, I didn't know that.
Scott: More certified financial planners over age 70. These are people that keep up to date on their continuing education and pay their dues.
Pat: I didn't know.
Scott: Now, there's some great advisors. I've seen enough of advisors that they get to a certain point, the client books, they got plenty of clients.
Pat: They retire and don't tell anyone.
Scott: That's right. They're golfing three days a week. They travel all the time and they don't really keep up. They don't keep up to date with everything.
Pat: And they don't tell their clients that they're not really keeping up to date.
Scott: And the clients don't know what the new thing is out that they've missed out on. Well, anyway, so I literally came in the studio midday. I had not listened to or read the news in a couple of hours. And I see this article dropped on my desk of Federal Reserve cuts key interest rates by a quarter point. And I look at this, like, "Is this today?"
Pat: And the markets did nothing.
Scott: And the markets did nothing.
Pat: But yesterday, the markets did so much that it made up for whatever's today.
Scott: And the bond market sold off a bit on on Wednesday.
Pat: So one of the things to keep in mind here is this is not an automatic translation to mortgage rates. In fact, mortgage rates in the last couple of months have gone up...
Scott: In this week, have gone up.
Pat: ...by over a half a percentage point. Not this week, but over the last month, I think it's been up 7/10 of a percent from 6.1% to 6.8%. So it tells you that what the Fed is doing and what they believe the long term growth of the economy is going to look like is reflected. So the Fed is a consensus of people that sit on the FOMC. Is that correct?
Scott: Yes.
Pat: Board. And then the market is what controls long term interest rates. And so it was 8.8% to...
Scott: Well, they control a bit. They can buy bonds in the open market, which they do as well, but...
Pat: Not a primary, not as much as they once did. And sell bonds into the open market.
Scott: But obviously, the market had priced this in fully, right?
Pat: That's right. Yes, expected it. But we've seen it overseas as well.
Scott: Yeah, Canada just did it a week or two ago.
Pat: I guess that's not overseas. Unless...
Scott: Well, you could get there, actually. I guess it's not. They probably have more coastline than we have. Anyway, this is not a geography show. [inaudible 00:52:23.894] in Alaska. I don't know. I don't know why I'm thinking...
Pat: Okay, Scott. All right. You're going to have to discover that on your own time. So before we talk about your Waymo experience driving in a...
Scott: It's not that big of an experience.
Pat: Well, I'd like to hear about it. Not enough that I'd actually go to San Francisco and ride in one of those cars.
Scott: Other cities have them. Phoenix has them. I don't know.
Pat: So Vanguard just paid a $40 million fine.
Scott: Whoops.
Pat: And why did they pay it? They paid it because of their asset allocation funds. They're called target date funds that work very, very well inside of a...
Scott: ...of a retirement account.
Pat: ...inside of a retirement account
Scott: Because they'll shift allocations. And, you know, if it's in a retirement account, who cares about the tax consequences? Because there are no tax consequences on transactions, only withdrawals.
Pat: But outside of a retirement account, you have no way of controlling, as is in many mutual funds, the taxation of them.
Scott: Yes.
Pat: As in many, especially actively traded funds. So the reason I point this out is because these were all the rage a number of years ago, target date, and they're great for small amounts, if you're new to savings. In fact, years ago, you talked about you recommended one to your daughter.
Scott: Yes.
Pat: But if someone came in and put $200,000 in a target...
Scott: It was also in a time when transaction fees were much higher.
Pat: That's true. That's right.
Scott: I mean, because you can build a portfolio of ETFs even with $10,000 and have several.
Pat: Good point. Good point. So the point being is that the reason I bring this up is that you need to pay attention to what's happening in your brokerage account. Not only the investments, but the taxation of those investments.
Scott: Wasn't this...they were reduced?
Pat: Reduced fees and it created more...I don't know.
Scott: They swap funds out for institutional clients. They reduce the fees, the minimum for institutional clients way down. And so they converted a bunch of people, and in that conversion process, triggered a capital taxation for it.
Pat: Yeah, but they would trigger a capital gain anyway that the investor would have...
Scott: Eventually.
Pat: ...no control over. Yes. So just the point being is pay attention to your brokerage accounts and the taxation on those. All right, Scott, Waymo.
Scott: It's not that exciting. Waymo or Whammo? Whammo. I don't know. Whammo.
Pat: Okay. So you're in San Francisco.
Scott: So I tried using it a couple of months ago. I was there with my wife in San Francisco a couple of months ago. We were going to use it to go to a concert, but I looked at the app and it was going to take, like, 18 minutes for the car to get there. And it was, like, a 14-minute walk. So it was an easy decision that we're just gonna walk. But then I was there. I was in conference a week ago and I'm like, "Let's try." I was with a friend. Like, we're going to dinner. "Let's try Waymo here." It was surreal because the car has a steering wheel.
Pat: It does.
Scott: You sit in the back seat. I guess you can sit in the front seat too. Not with the driver's seat, but the passenger seat, if you have that many... And you just watch the wheel turn. I mean, it clearly doesn't need a steering wheel, but it has the steering wheel. So I ordered the thing on an app. And there's a flat rate. It's like seven or eight bucks right now. I'm just trying to get people to start using it. And so I went to the front of the hotel, and I guess I must've had the wrong... So anyway, it went to pick me up a block and a half away, so I had to walk the block. And as I was walking the block and a half, it had to go do a loop around the block because it couldn't stay parked there. So I got a notification that it had to go somewhere. So by the time I got there, you got to open the...
Pat: You open the doors.
Scott: You push a button on the phone and it unlocks the doors. All of a sudden, the doors unlock and you get in. And what was surprising to me about it, same thing with the...
Pat: Is that they still talk to you. The driver that wasn't there...
Scott: No.
Pat: ...actually came on a speaker phone and still talked.
Scott: There's actually not some guy behind the curtain with a little joystick.
Pat: We find out that these are all driven remotely from the Philippines.
Scott: The whole center.
Pat: And they're all in cars.
Scott: Like those driver training things you had in high school.
Pat: Exactly. They got a whole bank of them.
Scott: But what was surprising is the speed in which the car would accelerate. I mean, I just assumed it'd be really slow and smooth, but I mean, I guess it's a city, so you want to pull out and there's traffic.
Pat: Just boom.
Scott: That's exactly how it drove.
Pat: And you can't tip. You don't have to tip. I don't tip anyway. No, I'm just joking.
Scott: Anyway, that was my Waymo experience.
Pat: And you'd do it again.
Scott: Oh, yeah, 100%. As a matter of fact, I mean...
Pat: My nephew says that's all he uses in San Francisco.
Scott: Well, yeah, I totally... I mean... I had trouble figuring out how to unlock the doors. My app had froze, so I had to shut the app down, open it back up. So it took us a little... But once you do it once or twice, then it's pretty simple.
Pat: It is. So this goes back to when we were talking about cell phones and the gentleman that's got a 26-year lease left on it. Who knows what...
Scott: Today, my son, his first day being a co-pilot in a commercial jet. I'm not going to tell you the airlines right now, just in case you're flying today. I don't think anyone's going to know. "Oh, and the co-pilot, Blake Hanson, by the way, it's his first day."
Pat: Everyone congratulates the boy and he brought a Scooby-Doo lunchbox.
Scott: The surgeon's great. You might be his first patient, but I'm sure it'll go fine. So even just interesting about his... Like, planes don't really need pilots.
Pat: That's right.
Scott: Right? Particularly in the cockpit. I think they're there, one, to help the passengers feel much better.
Pat: I would not get on a plane without a pilot.
Scott: Yeah. It's one thing about getting on a car that's going 20 miles an hour, as opposed to being in an airplane. But how many years before we only need one pilot? When you're comfortable enough with the plane, it's so rare that something goes south. The changing of times.
Pat: It is. It's interesting.
Scott: Anyway, all right. It's been fun being with you. This has been Scott Hanson, Pat McClain.
Pat: Yep. And join us next week. Oh, and by the way, this goes back to Sam. On our website, he sold his business and someone had an offer without doing financial planning. We see this a lot. And on our website, we have an emergency guide to retirement so that if you are displaced...
Scott: You retire earlier than you planned, something happens.
Pat: ...you retired earlier than you planned, this kind of walks you through the steps of what you should be doing, what you should be looking at. And it's the emergency guide to retirement, I believe. I think so. It's on our website.
Scott: Anyway, we'll see you next week. This has been Allworth's Money Matters.
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.
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