Investment Anxiety: Navigating the Fear-Driven Headlines
On this week’s Best of Simply Money podcast, Amy and Bob explore the current state of the economy, dissecting the fear-inducing headlines that dominate the financial news landscape. Then, they discuss alternatives to the traditional 60-40 portfolio, aiming to provide listeners with strategies for diversifying investments amid market uncertainty.
Plus, Amy shares firsthand insights on navigating divorce from a financial standpoint, highlighting the pitfalls of clinging to emotionally charged assets and the necessity of being financially informed. The episode concludes with a closer look at how current events, like inflation and egg prices, tie back to overarching financial principles.
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Amy: Tonight, frightening headlines. So many of them about the state of your investments, the economy, the markets, our take on an alternative maybe to the 60/40 portfolio. And we've got a whole lot more to get to. You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. I'm really lucky I've got so many clients, investors that I work with that listen to the show. And they're always, when they come into my office, "How does it work? And how do you do this?" And I just had one yesterday asking me about this. And I kind of say, "Hey, we start where a lot of you start. And that is kind of just looking at the financial headlines. What's out there? What are you coming across?" And we've been noticing a trend lately. It doesn't surprise us at all, but it is like you are being bombarded with negative headlines, you know, the most worst-case scenarios possible about this and that, that could be coming down and I get it. As an investor, you're looking at all this stuff, Bob, it's enough to make you kind of want to curl up in a fetal position.
Bob: Yeah. And we talk about fear and greed all the time and, you know, let's face it, the market's down so far for the year. You know, S&P approximately down 5% for the first quarter. Nasdaq down about twice as much, and that's after two very good years in the stock market. And we have a new administration, you know, in the White House with a lot of uncertainty out there around tariffs and various policies. So everybody, I think, is just kind of sitting out there saying what's going to happen next? And you know, while we're waiting, the news hasn't been very good. So yeah, negative headlines are going to crop up. I mean, but they do get crazy, to your point. Let me just read a few of them off to you. You know, NVIDIA stock drops, two reasons shares can't break out of their funk. Goldman Sachs, stagnation vibe sees it cut S&P target again and hike recession risk. "Here's the crucial level for the S&P 500 to hold if the market is going to advance at all in 2025," says one strategist. So it's all over the board. And yeah, it's all negative, negative, negative. Historically, when all the sentiment and all the headline risk and all that is negative, that oftentimes signals we're at least searching for a bottom, you know, in the short term. But who knows?
Amy: You know, pulling back the curtain a little bit here a hundred years ago, right, my first career was in media. And I remember I would write a story. I would carefully research it. I would investigate it. I would get both sides of the story and then it would go before someone else who would decide, okay, you know, these are the final edits we're going to make. And they would just tweak certain words to where what I essentially overall said, kind of remained the same. But the headlines, the big talk about it was a little more slanted, a little more in your face. And I used to get so frustrated by that. Please understand, this is 100% going on because if there were boring headlines like, "NVIDIA is down today, but long term, probably going to be okay," nobody's clicking on that, right? Nobody's clicking on "Here's what the economic indicators are saying and why we think we might be okay long term." Here's a reminder of what normal market cycles are and this is the cost of admission, right? Nobody's clicking on any of that because, Bob, back to your point, fear and greed, right? That's what draws people in. And they're trying to get you to click on these stories.
My concern is when you see so many of these headlines and you are just inundated by them, many times, you have this need to do something about them, right? If you have this fear that's starting to bloom inside of you because you're reading all of these things and all of these economists, they can't all be wrong, right? That's maybe what's going through your head. And then suddenly I need to do something about this. I have some really smart long-term investors that I have worked with for a while. A couple of them, in recent days, have started to get nervous. And really, it's about educating them. And Bob, we say this all the time, it is about making sure that the investors that we work with, do not make a mistake that they cannot recover from. And headlines like this can point a lot of people in that direction.
Bob: Well, it's great to hear you draw back on your vast experience, you know, as a media professional because you know how the sausage is made, so to speak. I mean, you've been in those rooms and you've been with those editors and you've seen stories that you have gone out and researched, to your point, and then watch what the finished product is. And oftentimes, to your point, it gets skewed. So, you know, I think where we come in and where good fiduciary advisors come in is to sit down and help people cut through these soundbite headlines and equip people with some actual historical perspective on volatility, on returns, on how markets have performed with various administrations in the White House, you know, and on and on and on. And I think once people know a little bit of history and could put things in perspective, they're able to make wiser decisions, and to your point, avoid making a decision that's going to cause them real damage.
Amy: You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. Are you tired of the crazy, negative financial headlines? Because we are. And, you know, I believe very strongly, Bob, that it is our job to deliver context in the midst of just the onslaught of negativity. And I think it would be helpful just to talk through with our listeners tonight, the kinds of conversations we're having one on one or with families or couples in our offices. You know, and the first thing that I say is what money are we going to need in the next year or the next couple of years? Are we going to buy a vehicle? What living expenses do we have? Do we have enough emergency cash to cover those needs? Any money that you're going to need in the next year or so, it doesn't need to be in the market. It doesn't belong in the market. And, you know, if you're someone who's constantly pulling out in retirement for your basic living expenses, I understand you might be losing some sleep right now with all of this volatility.
Bob: Yeah. It's periods like right now where clients actually benefit from having a good, sound financial plan.
Amy: Yes.
Bob: I mean, it's very easy to have a "financial plan" when the stock market's going up 24% a year. Now is the time, you know, when you have volatility. Yeah. And you brought up the point, now is where we got to look at what does your money need to do for you and when? And to the extent that you can have that one to three years' worth of cash flow or lump sum cash needs completely out of the stock market to begin with, those clients sleep well at night because, you know, we had a plan for that and it's being executed right now.
Amy: Yes. And I think there's some recency bias, right? I mean, 2022, markets were down. Many investors have forgotten all about that because '23 was a great year in the markets. '24 was a great year in the markets. And so we got spoiled. We got used to checking those 401(k) balances and seeing "up from the last time I checked, up from the last time I checked." You know, I mean, the people who write these headlines were scrambling during those years to find anything to scare you about because there was nothing scary going on in the markets. You know, the conversations that I'm having is a reminder of the cost of admission for being invested in the markets is that, you know, a typical market cycle is every 3 to 5 years, you are going to experience a 20% downturn. So, how do you plan proactively for what is inevitably coming so that you can easily weather that storm? Because what we know on the other side of the downturn is that a recovery is coming and the American economy and markets 100% of the time, 100% of the time, without exception, have rebounded to new highs. And for those who get scared when the inevitable downturn comes, they often then miss the rebound, the recovery. And those are the people who I feel really sad for.
Bob: Yeah. When you brought up, you know, what are we talking about with our clients and what are clients calling in to ask us about, I was thinking about that as I listened to you talk. And thankfully, you know, my phone's not ringing a whole lot right now. There's always those 3 or 4 clients that I've worked with for 25, 30 years. And I usually, you know, by the time they call me, I know 90% to 95% of the time we're about at a market bottom. And I think client sentiment tends to be something like this. "Hey, I'm reading all these headlines, headlines, headlines, everything's negative. Should we be doing something?" You know, you'll get that phone call. And then the other topic that comes up is, "Well, I think we should get out and we should wait until things are better." And it's almost impossible to feel like, hey, the coast is clear. Now's the time to back up the truck and put everything back in stocks. And the people that wait for that time to come are usually waiting a long time and they miss out on sizable returns that really make a difference in their long-term financial plan.
Amy: Often, these conversations, when someone reaches out to me and they start it, "Hey, listen, you know, I'm just really nervous right now because these tariffs and, you know, markets are up, markets are down, markets are up, and I'm retired." The first four words that I say are almost the same across the board. And it is, "Remember, we planned for this. We planned for this," you know. And then I remind them, "Here are the steps that we have taken. You weren't worried about this in 2024 or 2023, right? Tech stocks were up, those growth stocks were going crazy. Your returns, even in a 60/40 portfolio, were fantastic. But we planned for this. So this may be catching you off guard, but it's really not catching me off guard. And that's why you work with me." And then I walk them through, "Here's how we planned for this." And without exception, when we get off the phone, it's like, "Oh, yeah. Well, we shouldn't change anything because you're right. We did plan for this. I just forgot about it. I needed that. I needed you to hold my hand through this. I needed you to remind me of what we had already done. I needed that historical perspective to kind of shake me out of this negative mindset." But again, without exception, it's like, "Oh, yep, absolutely. You know, it took 10 minutes and I'm back on solid footing and I understand what my plan is again."
Bob: Yeah, you said it very well. I mean, the headlines are never going to provide any historical perspective. Nobody wants to read the full article and study history.
Amy: Yes.
Bob: You know, nobody wants to do that. But what you do for your clients is exactly what we should be doing. You know, people want a non-emotional, other hand on the wheel to just walk them through it and to your point, say, "Hey, this is why we built the plan that we built."
Amy: Yeah.
Bob: And if you remind them about the plan and then talk a little bit about, "Hey, we've been there before, we've done that before. Here's what's happened in the past. Those are the two things we need to do and we always do." And that's why, you know, Amy, 98%, 99% of our clients, you know, stay with us year after year.
Amy: Yeah, never leave. Here's the Allworth advice. Have a solid financial plan focused on the future. If you do, then just let the markets do their thing long term and go live your life, right. You have your plan. You don't need to lose sleep over it.
Coming up next, our take on a proposal for an alternative to maybe the traditional 60/40 portfolio. You're listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.
You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. If you missed our show one night, you don't have to miss any of our money advice. We've got a daily podcast for you. Just search Simply Money. It's right there on the iHeart app or wherever you get your podcasts. Coming up at 6:43, financial mistakes to avoid if you are facing divorce. I have been here and done that and I am happy to talk you through that in just a few minutes. Okay.
There's certain big names in our industry that when they talk, people sit up and kind of take note of what they're talking about. And one of them, one of the most influential people in the industry, Larry Fink, right? He's the Chairman and Chief Executive at BlackRock, which by the way, is the world's largest asset manager. He speaks, people listen. And Larry Fink recently kind of made a comment about where he thinks investing is going to go in the future. Typically, we talk about the 60/40 portfolio as a way where you can get some growth in retirement, but also some protection. And he kind of threw out there, Bob, and I really want to get your take on this is what he thinks the future, maybe standard portfolio is no longer 60/40, but now 50/30/20, 50 stock, 30 bonds, and 20 alternative assets.
Bob: Well, my take is, you know, with all due respect to Mr. Fink, he's not the first person to talk about this asset allocation strategy. In fact, right now here at Allworth, Andy Stout, our Chief Investment Officer is already running portfolios for our clients that have these other asset classes mixed in, you know, into the fold.
Amy: Yeah.
Bob: So this is nothing new. I think what he's talking about here is he's trying to, you know, maybe index the world of private credit and real estate and infrastructure and things like that, because when you get into these alternative investments, the fees can be higher. We've talked about this before. There can be lockup periods. So, he's trying to kind of standardize this 50/30/20 mix, get it into 401(k) plans, which BlackRock desperately wants to grow their market share in that area. So, I think anytime you can standardize some things and bring the fee structure down, you know, that typically benefits everybody, but the concept, in and of itself, is nothing new. And it's something that we're already doing for our clients here at Allworth as we speak right now.
Amy: For those though, who are listening and saying, "Oh, like, maybe I should make changes. Like, I am in a traditional kind of 60/40 portfolio. Maybe that's not enough. Maybe I need to look into private debt and real estate and private equity." What's your response to them?
Bob: Well, I think it's always a good thing to sit down with your fiduciary advisor and talk about the pros and cons of those type of allocations and also talk about the why. And we talked about this, Amy, with Andy Stout, I think last week where, you know, at the end of the day, this comes down to trying to find the right asset mix that gives you the highest rate of return per unit of risk, right? So, when you get into retirement and taking a cash flow from your investment portfolio, volatility matters greatly. And to the extent that you can build an asset allocation strategy that minimizes volatility, yet still gives you that upside total return potential, those are things that it makes sense to talk about, because that sequence of return risk, meaning volatility while you're pulling money out every month to live on, that is real. And as advisors, we need to help our clients mitigate that.
Amy: The timing of his comments are interesting to me. Yes, we are building some portfolios for some of our investors where this definitely does make sense, but, you know, inevitably it's like, as much as we know market cycles, markets, you know, will go down and then they will come back up. We also know that when markets start to head down, investors start to say, "Where else can I go? Where else can I put my money?" And you know, I think this is just kind of serving up another option. I think timing might be a little suspect here. You know, does this plan make sense for you all the time, 50/30/20, when markets are up, when markets are down? It's just like, with gold, right? People start talking about gold every time there's volatility in the markets.
Okay. Let's step back. Long-term perspective is the stock market, over time, has grown at a much faster, higher rates than gold, the value of gold over time, you know? So does this make sense for you? Well, there's a lot of things you have to think about here, one of them being, you know, additional fees. You know, but before we just jump all in on, "Hey, this really smart man who runs this large company is saying that what I've always been doing is the way of the past and this is the way of the future, and so I should jump all in, start asking a lot of questions about this."
Bob: You bring up an excellent point here, Amy, because, you know,... And I've been doing this for 34 years now. You know, anytime there is any market volatility or things change, people want to stand up and look like they're the smartest person in the room...
Amy: Yes.
Bob: ...and say, "Hey, if everybody did it this way, you know, I'm here to solve all your problems. Fire your current advisor, you know, move all your money over here because we we've got the new black-box way of investing," and that is just nonsense. I'm not saying that adding alternative investments to your allocation doesn't make sense, but I think you're making an excellent point. You know, just because we've had a little volatility in the markets this year doesn't mean you throw the baby out with the bathwater and say, "Well, the stock market doesn't work anymore, so I'm going to go over here and try that." It's some short-term volatility.
Amy: Yeah.
Bob: I mean, we're talking about the S&P down 5% for the year. Again, with some historical perspective, this is not a big deal. And for folks that do have a financial plan, to your point that you brought up in the last segment, for people that do have a well-diversified portfolio where... You know, for example, bonds are up for the year, nobody wanted to talk about bonds for the last three years. Well, now suddenly, they're up and that's why you have them as part of your portfolio. So, yeah. There's a little bit of, you know, "Look at me. I've got the new answer here." And unfortunately, a lot of people will flock to that because they just don't want to...they want to live under the illusion that short-term volatility can be eliminated totally from your life and that's not the case.
Amy: Here's the Allworth advice. Now listen, this is a situation where you need to be working with a fiduciary financial advisor who's putting your best interest first to determine whether this is a strategy that does align with your financial goals or maybe your current strategy is actually the best strategy for you.
Coming up next, a question for you about your will. Is it specific enough? What belongs in your will? And also, what doesn't belong in your will? We'll get to that. You're listening to "Simply Money" presented by Allworth Financial here in 55KRC, The Talk Station.
You know you should have a will. I know a lot of us tend to put these estate planning things off, but not only should you have a will, but what's supposed to be in it? How specific should your will actually be? Could you be missing something? Joining us is our estate planning expert from the law firm of Wood + Lamping, Mark Reckman. Mark, I think most people have gotten the message by now, you need to have a will. But beyond that, what are the specifics we need to make sure we're covering in there?
Mark: Well, you know, we are all very aware of the things we've collected, very proud perhaps, of several items in our household or in our possession.
Amy: Yeah.
Mark: And the truth is that the law is really less concerned about those details and placing details, detailed lists of items in your will, various consequences. And sometimes that's worth the effort or worth the extra trouble, but usually it's not. And so, people are often surprised. Clients of mine are often surprised that I don't ask them for a list of all their valuable jewelry, for example. Or some, you know, give me the type of car you drive, you know, the model and make of your car. But the truth is, we don't put that kind of detail into a will. And then, there's some very good reasons for it.
Bob: Mark, I can remember one example in my own family where a grandparent passed away and we had come back to the house from the funeral. And I'm talking about within an hour of the funeral, I'm watching in-laws walk around the house, putting sticky notes on pieces of furniture and china and other articles within the home. And these folks had just been buried an hour ago. It was shocking to me and somewhat of a mess. And it created a little bit of discord within the family. Talk about how we avoid situations like that.
Mark: Well, unfortunately, Bob, it's hard to avoid situations if there is already underlying tension in the family. And certainly, I have seen this and I've heard many stories like the ones you tell. And there are certainly ways that an executor, that's the person in charge of administering the estate, or the administrator, we call that if you die without a will, then your agent is called an administrator. But in this topic, we're talking about people who have a will. That means the executor runs the show and the executor generally will...the executor is in charge of dividing up household goods and personal effects. And there's a lot of different strategies. We've talked about that on another show, and perhaps that's a topic for another day. But the point is, the executor makes the decision and how tasteful they choose to be, depends on the individual family. But certainly, you can be specific in your will, but it really is a trap and it creates a lot more problems than it's worth.
Bob, what I have seen done, which takes a little bit of planning, and that is I've seen family...people who are older, when they do their will, they make a list of their big stuff that's not an official list. It's not in the will and it's not in the lawyer's file. Perhaps it's just a list on their computer or perhaps just in a notebook that lays out who they think should get each item. And that list goes into the hands of the executor and the executor uses the executor's own discretion about distributing the things that way. But of course, you pick an executor who's going to do what the list says. If you can't trust your executor to do what your list says, you've got the wrong executor. And this is commonly done to avoid the dynamics you just described. So if you've got a family where that feels like it could happen, I'm a big fan of making a list of the big stuff. Now, when I talk about big stuff, Bob, I'm talking about major items or furniture, family heirlooms, automobiles, things of that kind. Nobody really cares about knives, forks and spoons. And if they do, they don't really care about those things. They're looking to pick a fight for completely unrelated reasons.
Bob: So from your experience, Mark, by having mom and dad or grandma and grandpa actually write out a list and say here's who I'd like to get...you know, receive this particular article and maybe why, do you find that that diffuses a lot of this potential family discord? You know, because...
Mark: I think it does. But, you know, the truth is, Bob, if families are going to fight, they're going to fight and the dynamics in the family are really set outside of this whole process. And so, what I tell people is don't expect words on a page to change family dynamics. If you've got a family that works together and it gets along well, then you're not going to have a problem. And if you've got a family with tension in it, there really is not a very good solution. Now, that's not to say that you should not take steps to minimize that. But I don't want to give people the impression that somehow there's a magic bullet to stop family members from fighting.
Amy: Mark, when you talk about the fact, hey, the specifics, like, there can be a place for that and it can actually help maybe some drama when you're no longer here, if those specifics do not belong in your will, what does? What do we need to make sure is definitely included?
Mark: Well, generally, a will has two kinds of gifts in it, what we call specific bequests and then residual bequests. A specific bequest is what we're talking about right now, guys. Those are items that are listed that says, "I leave my car, my automobiles to my oldest grandchild." Or, "I leave my household goods and personal effects to my cousin." Or, a specific bequest can be an amount of money. "I leave $5,000 to each of my grandchildren," for example. That is a specific bequest. So a specific bequest can be things, in other words, items, or it can be cash. Once all the specific bequests in the will have been met, then there's generally what we call a residual bequest. And this is the clause that says, "Everything else that I haven't just listed above, everything else goes to fill in the blank." You could say, "I leave the rest and residue of my estate in equal shares to my children." Or, you might say, "I give 20% of my residual estate to the University of Cincinnati or the University of Kentucky. I give 40% to my son, Brent, and 40% to my son, Eric." In other words, you can allocate percentages like that. But of course, you better be sure those percentages add up to 100%.
Amy: Yeah.
Mark: I have seen a few examples in my career where they didn't, and it was really a mess.
Bob: Mark, I'm in the middle of a situation like the one you just described right now. So, there are specific dollar amount bequests to family members and then everything else, a lot of it goes to charities, you know, in a percentage basis. And we don't know what those dollar amounts are going to be because we don't know what the value of the estate is going to be at the end when this individual passes on. But I've got a situation now where, you know, one of the charities does happen to be a university and they are contacting the client wanting to finalize or put something in writing about a specific bequest. And we don't know what that dollar amount is going to, you know, end up being. So, when we're in a situation where we're on this residual-percentage basis approach, do you have a recommendation on how to deal with the local, you know, planned giving officers at various charities?
Mark: Well, these planned giving officers, they understand this dynamic and they're used to dealing with these things. And you just got to tell them what you're going to do. Many of these people, their success in their job, in other words, how well, a good a job they're doing is measured by how many specific requests they can generate. And so when they go in for their annual review, they're going to say to their boss, "You know, I was able to get us listed in these 23 wills." Now, there's no guarantee those wills won't be changed later on. But the point is that they're driven to try to get details from you because that's their job and that does not compel you and I to have to meet their goals. Well, you know, I've been in this situation a few times and where you politely say, "You know, we're just not there yet. We'll get back to you when we are."
Amy: Great perspective, as always, from our estate planning expert from the law firm of Wood + Lamping, Mark Reckman. What does belong in your will? What doesn't? And on top of that, I would say whatever you decide, please communicate that to your loved ones. You're listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.
You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. Do you have a financial question you just can't get it figured out for yourself? We're happy to help you out. There's a red button you can click on while you're listening to the show right there on the iHeart app. Record your question. It's coming straight to us.
Straight ahead, Bob Sponseller's favorite topic, eggs. How do we stack up compared to the rest of the country [inaudible 00:29:35]?
Bob: Eat more chicken.
Amy: Eat more something. My goodness, we've talked about eggs more lately than I think I ever have in my entire life, but stand by because at least you'll know are we paying more or less than everyone else? There are certain, I think, best laid plans, right? Best laid plans. You go into a marriage and you plan on being with that person forever. And, you know, I've seen this in my own life and the lives of others, it just doesn't work out that way. The problem from a financial standpoint is many times, the dynamic within that relationship, long before there was ever talk of divorce, is that one person kind of has all the financial information, right? They're kind of the family CFO and the other person doesn't. And if you're the person who doesn't and your marriage is currently in kind of choppy waters, I would say step number one, you better figure stuff out. You better start asking questions. You better start looking at statements. You better figure out what you actually have.
Bob: Great point, Amy. And, you know, this is why I always... I mean, I can never insist on anything, but I always strongly encourage that both the husband and wife come to every meeting that we have, because I want both spouses to be involved in the discussion, in the planning, in the decision-making. And along with all those discussions and planning and decision-making, both spouses become aware of what the couple even has in the way of assets. And that can oftentimes eliminate some of the surprises and some of the, you know, not so pleasant things that can happen if the marriage does end up ending at some point.
Amy: Well, and this is why I'm such a huge proponent of having a financial plan. I'm thinking of a client of mine, who, a couple of months ago came in. It was just a normal annual review. It was just him. And we sat down and he started crying and had said, "Listen, you know, I have been in love with my wife for years. Something happened in our marriage. We have decided that we might go our separate ways. And I don't even know which end is up." By the way, he was a couple of years away from when he had planned on retiring. We immediately went to the plan. We looked at, okay, if we were to divide assets, what does this look like? And by the time he left, right, and you're in such an emotional funk that it's like, your brain fog, it's not even working correctly, that at least, he had concrete answers on, okay, if we do move forward in this space and divide our assets at this kind of late stage in the game, here's the impact that this will have. And so, that's why both of you kind of being part of the conversation and having that financial plan that we can go to and say, what's the real impact of this decision, I think is incredibly critical.
Another mistake I often see is fighting over the home, right? There's just so much emotion and memories tied up in that place. All the holidays, maybe, you know, Johnny skinned his knee on this step and, you know, Emily lost her front tooth at the dinner table here, her first tooth, whatever, you can't separate that. But what you have to keep in mind is many times, we buy our homes and we make our plan for our families with two incomes involved. And when you're backing out one of those incomes, many times, I've seen people fight for that house and then on the other side of it, struggle to even keep up because the upkeep of the home and the bills for it were not ever meant for just one person's income. So many times, it makes the most sense to just say, "All right. We're going to sell this house. We're going to have some hard conversations with the kids and we're going to move forward, both of us kind of with a clean start." It's a difficult thing to do, I think, when there's so many emotions involved.
Bob: Yeah. In other words, winning in the legal proceeding doesn't necessarily and can oftentimes mean not winning in terms of long-term viability of your financial plan.
Amy: Yeah.
Bob: You can go fight and "win" a home or an asset that you are really emotionally attached to only to find out later that you can't afford to continue to live in that house. So, yeah. As difficult as it is sometimes to get a married couple to go through and figure out what they're actually spending each month, when you're in the middle of a divorce, getting two separate households to come up with a budget, that can be difficult, but it needs to be done. And that's why, you know, a good financial advisor is worth their weight in gold during times like this to make sure people don't get an emotional win and then a big financial loss down the road.
Amy: I always remind my clients who are in this situation, I am your advocate. I am here for you. And so, you can be hearing things from your friends and your family and this person, and it can be really hard to figure out which end is up. And so, my perspective is always, "Hey, if you make that decision, here's the potential negative consequences. Here's the potential good that could come out of it. And so, at least you have the information." And I think it would be really difficult to go through a situation like this without having an advocate in your corner. You know, personally, even when I went through it with the financial background that I have, I still had an attorney who was reminding me...you know, because sometimes it's just like, "I just want it to be done." "Hey, I'm also thinking of your future-self here. In the here and now, this feels like let's just rip off this Band-Aid and do this because it's easier, but I think it makes more sense to go back to the drawing board, to negotiate more on this," right. So, just make sure you have strong advocates in your corner that you can rely on.
Here's the Allworth advice. Listen, protecting yourself, your children, your money, it's essential when you're in the process of divorce and it is an incredibly emotional process. So make sure you've got good people in your corner.
Coming up next, you feel like you're just paying a ton for your eggs? How do we stack up? How much are other people in other places paying for their eggs? We'll tell you. You're listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.
You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. I do have to laugh because I've been doing this show for about a decade now. And there's certain times where I'm like, I never thought we would be talking about X, Y, Z and yet, we're talking about it all the time. And I'm going to put the topic of eggs in that exact basket right now because I never thought we would be spending so much time talking about eggs, but man, I get it. It's the thing you go to the grocery store and you're like, "How much for a dozen eggs?" And Bob, I know this is your favorite topic.
Bob: Oh, we're going to cover it. So, the average price per dozen was $2.99 in February of 2024 [crosstalk 00:36:45] versus $5.89 in February of 2025. That's a 97% increase. And we know that bird flu has been a big issue. Amy, it just comes down to supply and demand. And when there's less of a supply of something and demand doesn't change, guess what's going to go up? The price.
Amy: Yeah.
Bob: And that's what we're seeing. So, talk to us about what's going on in Cincinnati because I don't think we're paying quite as anywhere near as, you know, the price of eggs in Cincinnati as folks are, say, in Los Angeles or some other major cities around the country.
Amy: Yeah. I mean, I think here in Cincinnati, it depends on where you shop, right, from Trader Joe's to Kroger to Target to Walmart, but somewhere between $4.99 and $6.59 for a dozen eggs. I eat egg whites. I can't even find egg whites right now. I don't know what's happening. I guess all the egg whites are going...they're just keeping them in the actual eggs. So, who knows how that will shake out for those who shop for that. But, you know, some perspective here, right, because Cincinnati is always cheaper than other places. "USA Today" did this research and came up with, if you live in LA or anywhere on the West Coast, you could be paying almost $14 for a dozen eggs, more than double. I mean, in some cases, almost triple what you would be paying here in Cincinnati. So I don't know, maybe we don't complain as much. I don't know what the answer is.
Bob: All right. Well, here's my question, Amy. When you have your client meetings every day, how many of your clients are coming into your office and the topic of conversation is the price of eggs? How many people are doing that? Because I can give you my answer.
Amy: What's your answer?
Bob: Zero.
Amy: Yeah. Yeah.
Bob: It's never come up. Anyway, what goes on in your office with respect to eggs?
Amy: So, funny enough, one person did bring it up on a call yesterday, jokingly, right? And I think that's the perspective is, you know, listen, we should be worried about...not worried about, we should be paying attention to how our 401(k)s are invested and whether we've got the right asset allocation. It's control what you can control. We can gripe about egg prices. They will go back down, right? There's a reason for the spike. This is a temporary situation, but, you know, all in context here, right?
Thanks for listening. Tune in tomorrow. We're talking about how the pros and cons of getting a monthly check for the rest of your life that maybe isn't a pension. You've been listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.
Bob: Yeah. And we talk about fear and greed all the time and, you know, let's face it, the market's down so far for the year. You know, S&P approximately down 5% for the first quarter. Nasdaq down about twice as much, and that's after two very good years in the stock market. And we have a new administration, you know, in the White House with a lot of uncertainty out there around tariffs and various policies. So everybody, I think, is just kind of sitting out there saying what's going to happen next? And you know, while we're waiting, the news hasn't been very good. So yeah, negative headlines are going to crop up. I mean, but they do get crazy, to your point. Let me just read a few of them off to you. You know, NVIDIA stock drops, two reasons shares can't break out of their funk. Goldman Sachs, stagnation vibe sees it cut S&P target again and hike recession risk. "Here's the crucial level for the S&P 500 to hold if the market is going to advance at all in 2025," says one strategist. So it's all over the board. And yeah, it's all negative, negative, negative. Historically, when all the sentiment and all the headline risk and all that is negative, that oftentimes signals we're at least searching for a bottom, you know, in the short term. But who knows?
Amy: You know, pulling back the curtain a little bit here a hundred years ago, right, my first career was in media. And I remember I would write a story. I would carefully research it. I would investigate it. I would get both sides of the story and then it would go before someone else who would decide, okay, you know, these are the final edits we're going to make. And they would just tweak certain words to where what I essentially overall said, kind of remained the same. But the headlines, the big talk about it was a little more slanted, a little more in your face. And I used to get so frustrated by that. Please understand, this is 100% going on because if there were boring headlines like, "NVIDIA is down today, but long term, probably going to be okay," nobody's clicking on that, right? Nobody's clicking on "Here's what the economic indicators are saying and why we think we might be okay long term." Here's a reminder of what normal market cycles are and this is the cost of admission, right? Nobody's clicking on any of that because, Bob, back to your point, fear and greed, right? That's what draws people in. And they're trying to get you to click on these stories.
My concern is when you see so many of these headlines and you are just inundated by them, many times, you have this need to do something about them, right? If you have this fear that's starting to bloom inside of you because you're reading all of these things and all of these economists, they can't all be wrong, right? That's maybe what's going through your head. And then suddenly I need to do something about this. I have some really smart long-term investors that I have worked with for a while. A couple of them, in recent days, have started to get nervous. And really, it's about educating them. And Bob, we say this all the time, it is about making sure that the investors that we work with, do not make a mistake that they cannot recover from. And headlines like this can point a lot of people in that direction.
Bob: Well, it's great to hear you draw back on your vast experience, you know, as a media professional because you know how the sausage is made, so to speak. I mean, you've been in those rooms and you've been with those editors and you've seen stories that you have gone out and researched, to your point, and then watch what the finished product is. And oftentimes, to your point, it gets skewed. So, you know, I think where we come in and where good fiduciary advisors come in is to sit down and help people cut through these soundbite headlines and equip people with some actual historical perspective on volatility, on returns, on how markets have performed with various administrations in the White House, you know, and on and on and on. And I think once people know a little bit of history and could put things in perspective, they're able to make wiser decisions, and to your point, avoid making a decision that's going to cause them real damage.
Amy: You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. Are you tired of the crazy, negative financial headlines? Because we are. And, you know, I believe very strongly, Bob, that it is our job to deliver context in the midst of just the onslaught of negativity. And I think it would be helpful just to talk through with our listeners tonight, the kinds of conversations we're having one on one or with families or couples in our offices. You know, and the first thing that I say is what money are we going to need in the next year or the next couple of years? Are we going to buy a vehicle? What living expenses do we have? Do we have enough emergency cash to cover those needs? Any money that you're going to need in the next year or so, it doesn't need to be in the market. It doesn't belong in the market. And, you know, if you're someone who's constantly pulling out in retirement for your basic living expenses, I understand you might be losing some sleep right now with all of this volatility.
Bob: Yeah. It's periods like right now where clients actually benefit from having a good, sound financial plan.
Amy: Yes.
Bob: I mean, it's very easy to have a "financial plan" when the stock market's going up 24% a year. Now is the time, you know, when you have volatility. Yeah. And you brought up the point, now is where we got to look at what does your money need to do for you and when? And to the extent that you can have that one to three years' worth of cash flow or lump sum cash needs completely out of the stock market to begin with, those clients sleep well at night because, you know, we had a plan for that and it's being executed right now.
Amy: Yes. And I think there's some recency bias, right? I mean, 2022, markets were down. Many investors have forgotten all about that because '23 was a great year in the markets. '24 was a great year in the markets. And so we got spoiled. We got used to checking those 401(k) balances and seeing "up from the last time I checked, up from the last time I checked." You know, I mean, the people who write these headlines were scrambling during those years to find anything to scare you about because there was nothing scary going on in the markets. You know, the conversations that I'm having is a reminder of the cost of admission for being invested in the markets is that, you know, a typical market cycle is every 3 to 5 years, you are going to experience a 20% downturn. So, how do you plan proactively for what is inevitably coming so that you can easily weather that storm? Because what we know on the other side of the downturn is that a recovery is coming and the American economy and markets 100% of the time, 100% of the time, without exception, have rebounded to new highs. And for those who get scared when the inevitable downturn comes, they often then miss the rebound, the recovery. And those are the people who I feel really sad for.
Bob: Yeah. When you brought up, you know, what are we talking about with our clients and what are clients calling in to ask us about, I was thinking about that as I listened to you talk. And thankfully, you know, my phone's not ringing a whole lot right now. There's always those 3 or 4 clients that I've worked with for 25, 30 years. And I usually, you know, by the time they call me, I know 90% to 95% of the time we're about at a market bottom. And I think client sentiment tends to be something like this. "Hey, I'm reading all these headlines, headlines, headlines, everything's negative. Should we be doing something?" You know, you'll get that phone call. And then the other topic that comes up is, "Well, I think we should get out and we should wait until things are better." And it's almost impossible to feel like, hey, the coast is clear. Now's the time to back up the truck and put everything back in stocks. And the people that wait for that time to come are usually waiting a long time and they miss out on sizable returns that really make a difference in their long-term financial plan.
Amy: Often, these conversations, when someone reaches out to me and they start it, "Hey, listen, you know, I'm just really nervous right now because these tariffs and, you know, markets are up, markets are down, markets are up, and I'm retired." The first four words that I say are almost the same across the board. And it is, "Remember, we planned for this. We planned for this," you know. And then I remind them, "Here are the steps that we have taken. You weren't worried about this in 2024 or 2023, right? Tech stocks were up, those growth stocks were going crazy. Your returns, even in a 60/40 portfolio, were fantastic. But we planned for this. So this may be catching you off guard, but it's really not catching me off guard. And that's why you work with me." And then I walk them through, "Here's how we planned for this." And without exception, when we get off the phone, it's like, "Oh, yeah. Well, we shouldn't change anything because you're right. We did plan for this. I just forgot about it. I needed that. I needed you to hold my hand through this. I needed you to remind me of what we had already done. I needed that historical perspective to kind of shake me out of this negative mindset." But again, without exception, it's like, "Oh, yep, absolutely. You know, it took 10 minutes and I'm back on solid footing and I understand what my plan is again."
Bob: Yeah, you said it very well. I mean, the headlines are never going to provide any historical perspective. Nobody wants to read the full article and study history.
Amy: Yes.
Bob: You know, nobody wants to do that. But what you do for your clients is exactly what we should be doing. You know, people want a non-emotional, other hand on the wheel to just walk them through it and to your point, say, "Hey, this is why we built the plan that we built."
Amy: Yeah.
Bob: And if you remind them about the plan and then talk a little bit about, "Hey, we've been there before, we've done that before. Here's what's happened in the past. Those are the two things we need to do and we always do." And that's why, you know, Amy, 98%, 99% of our clients, you know, stay with us year after year.
Amy: Yeah, never leave. Here's the Allworth advice. Have a solid financial plan focused on the future. If you do, then just let the markets do their thing long term and go live your life, right. You have your plan. You don't need to lose sleep over it.
Coming up next, our take on a proposal for an alternative to maybe the traditional 60/40 portfolio. You're listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.
You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. If you missed our show one night, you don't have to miss any of our money advice. We've got a daily podcast for you. Just search Simply Money. It's right there on the iHeart app or wherever you get your podcasts. Coming up at 6:43, financial mistakes to avoid if you are facing divorce. I have been here and done that and I am happy to talk you through that in just a few minutes. Okay.
There's certain big names in our industry that when they talk, people sit up and kind of take note of what they're talking about. And one of them, one of the most influential people in the industry, Larry Fink, right? He's the Chairman and Chief Executive at BlackRock, which by the way, is the world's largest asset manager. He speaks, people listen. And Larry Fink recently kind of made a comment about where he thinks investing is going to go in the future. Typically, we talk about the 60/40 portfolio as a way where you can get some growth in retirement, but also some protection. And he kind of threw out there, Bob, and I really want to get your take on this is what he thinks the future, maybe standard portfolio is no longer 60/40, but now 50/30/20, 50 stock, 30 bonds, and 20 alternative assets.
Bob: Well, my take is, you know, with all due respect to Mr. Fink, he's not the first person to talk about this asset allocation strategy. In fact, right now here at Allworth, Andy Stout, our Chief Investment Officer is already running portfolios for our clients that have these other asset classes mixed in, you know, into the fold.
Amy: Yeah.
Bob: So this is nothing new. I think what he's talking about here is he's trying to, you know, maybe index the world of private credit and real estate and infrastructure and things like that, because when you get into these alternative investments, the fees can be higher. We've talked about this before. There can be lockup periods. So, he's trying to kind of standardize this 50/30/20 mix, get it into 401(k) plans, which BlackRock desperately wants to grow their market share in that area. So, I think anytime you can standardize some things and bring the fee structure down, you know, that typically benefits everybody, but the concept, in and of itself, is nothing new. And it's something that we're already doing for our clients here at Allworth as we speak right now.
Amy: For those though, who are listening and saying, "Oh, like, maybe I should make changes. Like, I am in a traditional kind of 60/40 portfolio. Maybe that's not enough. Maybe I need to look into private debt and real estate and private equity." What's your response to them?
Bob: Well, I think it's always a good thing to sit down with your fiduciary advisor and talk about the pros and cons of those type of allocations and also talk about the why. And we talked about this, Amy, with Andy Stout, I think last week where, you know, at the end of the day, this comes down to trying to find the right asset mix that gives you the highest rate of return per unit of risk, right? So, when you get into retirement and taking a cash flow from your investment portfolio, volatility matters greatly. And to the extent that you can build an asset allocation strategy that minimizes volatility, yet still gives you that upside total return potential, those are things that it makes sense to talk about, because that sequence of return risk, meaning volatility while you're pulling money out every month to live on, that is real. And as advisors, we need to help our clients mitigate that.
Amy: The timing of his comments are interesting to me. Yes, we are building some portfolios for some of our investors where this definitely does make sense, but, you know, inevitably it's like, as much as we know market cycles, markets, you know, will go down and then they will come back up. We also know that when markets start to head down, investors start to say, "Where else can I go? Where else can I put my money?" And you know, I think this is just kind of serving up another option. I think timing might be a little suspect here. You know, does this plan make sense for you all the time, 50/30/20, when markets are up, when markets are down? It's just like, with gold, right? People start talking about gold every time there's volatility in the markets.
Okay. Let's step back. Long-term perspective is the stock market, over time, has grown at a much faster, higher rates than gold, the value of gold over time, you know? So does this make sense for you? Well, there's a lot of things you have to think about here, one of them being, you know, additional fees. You know, but before we just jump all in on, "Hey, this really smart man who runs this large company is saying that what I've always been doing is the way of the past and this is the way of the future, and so I should jump all in, start asking a lot of questions about this."
Bob: You bring up an excellent point here, Amy, because, you know,... And I've been doing this for 34 years now. You know, anytime there is any market volatility or things change, people want to stand up and look like they're the smartest person in the room...
Amy: Yes.
Bob: ...and say, "Hey, if everybody did it this way, you know, I'm here to solve all your problems. Fire your current advisor, you know, move all your money over here because we we've got the new black-box way of investing," and that is just nonsense. I'm not saying that adding alternative investments to your allocation doesn't make sense, but I think you're making an excellent point. You know, just because we've had a little volatility in the markets this year doesn't mean you throw the baby out with the bathwater and say, "Well, the stock market doesn't work anymore, so I'm going to go over here and try that." It's some short-term volatility.
Amy: Yeah.
Bob: I mean, we're talking about the S&P down 5% for the year. Again, with some historical perspective, this is not a big deal. And for folks that do have a financial plan, to your point that you brought up in the last segment, for people that do have a well-diversified portfolio where... You know, for example, bonds are up for the year, nobody wanted to talk about bonds for the last three years. Well, now suddenly, they're up and that's why you have them as part of your portfolio. So, yeah. There's a little bit of, you know, "Look at me. I've got the new answer here." And unfortunately, a lot of people will flock to that because they just don't want to...they want to live under the illusion that short-term volatility can be eliminated totally from your life and that's not the case.
Amy: Here's the Allworth advice. Now listen, this is a situation where you need to be working with a fiduciary financial advisor who's putting your best interest first to determine whether this is a strategy that does align with your financial goals or maybe your current strategy is actually the best strategy for you.
Coming up next, a question for you about your will. Is it specific enough? What belongs in your will? And also, what doesn't belong in your will? We'll get to that. You're listening to "Simply Money" presented by Allworth Financial here in 55KRC, The Talk Station.
You know you should have a will. I know a lot of us tend to put these estate planning things off, but not only should you have a will, but what's supposed to be in it? How specific should your will actually be? Could you be missing something? Joining us is our estate planning expert from the law firm of Wood + Lamping, Mark Reckman. Mark, I think most people have gotten the message by now, you need to have a will. But beyond that, what are the specifics we need to make sure we're covering in there?
Mark: Well, you know, we are all very aware of the things we've collected, very proud perhaps, of several items in our household or in our possession.
Amy: Yeah.
Mark: And the truth is that the law is really less concerned about those details and placing details, detailed lists of items in your will, various consequences. And sometimes that's worth the effort or worth the extra trouble, but usually it's not. And so, people are often surprised. Clients of mine are often surprised that I don't ask them for a list of all their valuable jewelry, for example. Or some, you know, give me the type of car you drive, you know, the model and make of your car. But the truth is, we don't put that kind of detail into a will. And then, there's some very good reasons for it.
Bob: Mark, I can remember one example in my own family where a grandparent passed away and we had come back to the house from the funeral. And I'm talking about within an hour of the funeral, I'm watching in-laws walk around the house, putting sticky notes on pieces of furniture and china and other articles within the home. And these folks had just been buried an hour ago. It was shocking to me and somewhat of a mess. And it created a little bit of discord within the family. Talk about how we avoid situations like that.
Mark: Well, unfortunately, Bob, it's hard to avoid situations if there is already underlying tension in the family. And certainly, I have seen this and I've heard many stories like the ones you tell. And there are certainly ways that an executor, that's the person in charge of administering the estate, or the administrator, we call that if you die without a will, then your agent is called an administrator. But in this topic, we're talking about people who have a will. That means the executor runs the show and the executor generally will...the executor is in charge of dividing up household goods and personal effects. And there's a lot of different strategies. We've talked about that on another show, and perhaps that's a topic for another day. But the point is, the executor makes the decision and how tasteful they choose to be, depends on the individual family. But certainly, you can be specific in your will, but it really is a trap and it creates a lot more problems than it's worth.
Bob, what I have seen done, which takes a little bit of planning, and that is I've seen family...people who are older, when they do their will, they make a list of their big stuff that's not an official list. It's not in the will and it's not in the lawyer's file. Perhaps it's just a list on their computer or perhaps just in a notebook that lays out who they think should get each item. And that list goes into the hands of the executor and the executor uses the executor's own discretion about distributing the things that way. But of course, you pick an executor who's going to do what the list says. If you can't trust your executor to do what your list says, you've got the wrong executor. And this is commonly done to avoid the dynamics you just described. So if you've got a family where that feels like it could happen, I'm a big fan of making a list of the big stuff. Now, when I talk about big stuff, Bob, I'm talking about major items or furniture, family heirlooms, automobiles, things of that kind. Nobody really cares about knives, forks and spoons. And if they do, they don't really care about those things. They're looking to pick a fight for completely unrelated reasons.
Bob: So from your experience, Mark, by having mom and dad or grandma and grandpa actually write out a list and say here's who I'd like to get...you know, receive this particular article and maybe why, do you find that that diffuses a lot of this potential family discord? You know, because...
Mark: I think it does. But, you know, the truth is, Bob, if families are going to fight, they're going to fight and the dynamics in the family are really set outside of this whole process. And so, what I tell people is don't expect words on a page to change family dynamics. If you've got a family that works together and it gets along well, then you're not going to have a problem. And if you've got a family with tension in it, there really is not a very good solution. Now, that's not to say that you should not take steps to minimize that. But I don't want to give people the impression that somehow there's a magic bullet to stop family members from fighting.
Amy: Mark, when you talk about the fact, hey, the specifics, like, there can be a place for that and it can actually help maybe some drama when you're no longer here, if those specifics do not belong in your will, what does? What do we need to make sure is definitely included?
Mark: Well, generally, a will has two kinds of gifts in it, what we call specific bequests and then residual bequests. A specific bequest is what we're talking about right now, guys. Those are items that are listed that says, "I leave my car, my automobiles to my oldest grandchild." Or, "I leave my household goods and personal effects to my cousin." Or, a specific bequest can be an amount of money. "I leave $5,000 to each of my grandchildren," for example. That is a specific bequest. So a specific bequest can be things, in other words, items, or it can be cash. Once all the specific bequests in the will have been met, then there's generally what we call a residual bequest. And this is the clause that says, "Everything else that I haven't just listed above, everything else goes to fill in the blank." You could say, "I leave the rest and residue of my estate in equal shares to my children." Or, you might say, "I give 20% of my residual estate to the University of Cincinnati or the University of Kentucky. I give 40% to my son, Brent, and 40% to my son, Eric." In other words, you can allocate percentages like that. But of course, you better be sure those percentages add up to 100%.
Amy: Yeah.
Mark: I have seen a few examples in my career where they didn't, and it was really a mess.
Bob: Mark, I'm in the middle of a situation like the one you just described right now. So, there are specific dollar amount bequests to family members and then everything else, a lot of it goes to charities, you know, in a percentage basis. And we don't know what those dollar amounts are going to be because we don't know what the value of the estate is going to be at the end when this individual passes on. But I've got a situation now where, you know, one of the charities does happen to be a university and they are contacting the client wanting to finalize or put something in writing about a specific bequest. And we don't know what that dollar amount is going to, you know, end up being. So, when we're in a situation where we're on this residual-percentage basis approach, do you have a recommendation on how to deal with the local, you know, planned giving officers at various charities?
Mark: Well, these planned giving officers, they understand this dynamic and they're used to dealing with these things. And you just got to tell them what you're going to do. Many of these people, their success in their job, in other words, how well, a good a job they're doing is measured by how many specific requests they can generate. And so when they go in for their annual review, they're going to say to their boss, "You know, I was able to get us listed in these 23 wills." Now, there's no guarantee those wills won't be changed later on. But the point is that they're driven to try to get details from you because that's their job and that does not compel you and I to have to meet their goals. Well, you know, I've been in this situation a few times and where you politely say, "You know, we're just not there yet. We'll get back to you when we are."
Amy: Great perspective, as always, from our estate planning expert from the law firm of Wood + Lamping, Mark Reckman. What does belong in your will? What doesn't? And on top of that, I would say whatever you decide, please communicate that to your loved ones. You're listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.
You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. Do you have a financial question you just can't get it figured out for yourself? We're happy to help you out. There's a red button you can click on while you're listening to the show right there on the iHeart app. Record your question. It's coming straight to us.
Straight ahead, Bob Sponseller's favorite topic, eggs. How do we stack up compared to the rest of the country [inaudible 00:29:35]?
Bob: Eat more chicken.
Amy: Eat more something. My goodness, we've talked about eggs more lately than I think I ever have in my entire life, but stand by because at least you'll know are we paying more or less than everyone else? There are certain, I think, best laid plans, right? Best laid plans. You go into a marriage and you plan on being with that person forever. And, you know, I've seen this in my own life and the lives of others, it just doesn't work out that way. The problem from a financial standpoint is many times, the dynamic within that relationship, long before there was ever talk of divorce, is that one person kind of has all the financial information, right? They're kind of the family CFO and the other person doesn't. And if you're the person who doesn't and your marriage is currently in kind of choppy waters, I would say step number one, you better figure stuff out. You better start asking questions. You better start looking at statements. You better figure out what you actually have.
Bob: Great point, Amy. And, you know, this is why I always... I mean, I can never insist on anything, but I always strongly encourage that both the husband and wife come to every meeting that we have, because I want both spouses to be involved in the discussion, in the planning, in the decision-making. And along with all those discussions and planning and decision-making, both spouses become aware of what the couple even has in the way of assets. And that can oftentimes eliminate some of the surprises and some of the, you know, not so pleasant things that can happen if the marriage does end up ending at some point.
Amy: Well, and this is why I'm such a huge proponent of having a financial plan. I'm thinking of a client of mine, who, a couple of months ago came in. It was just a normal annual review. It was just him. And we sat down and he started crying and had said, "Listen, you know, I have been in love with my wife for years. Something happened in our marriage. We have decided that we might go our separate ways. And I don't even know which end is up." By the way, he was a couple of years away from when he had planned on retiring. We immediately went to the plan. We looked at, okay, if we were to divide assets, what does this look like? And by the time he left, right, and you're in such an emotional funk that it's like, your brain fog, it's not even working correctly, that at least, he had concrete answers on, okay, if we do move forward in this space and divide our assets at this kind of late stage in the game, here's the impact that this will have. And so, that's why both of you kind of being part of the conversation and having that financial plan that we can go to and say, what's the real impact of this decision, I think is incredibly critical.
Another mistake I often see is fighting over the home, right? There's just so much emotion and memories tied up in that place. All the holidays, maybe, you know, Johnny skinned his knee on this step and, you know, Emily lost her front tooth at the dinner table here, her first tooth, whatever, you can't separate that. But what you have to keep in mind is many times, we buy our homes and we make our plan for our families with two incomes involved. And when you're backing out one of those incomes, many times, I've seen people fight for that house and then on the other side of it, struggle to even keep up because the upkeep of the home and the bills for it were not ever meant for just one person's income. So many times, it makes the most sense to just say, "All right. We're going to sell this house. We're going to have some hard conversations with the kids and we're going to move forward, both of us kind of with a clean start." It's a difficult thing to do, I think, when there's so many emotions involved.
Bob: Yeah. In other words, winning in the legal proceeding doesn't necessarily and can oftentimes mean not winning in terms of long-term viability of your financial plan.
Amy: Yeah.
Bob: You can go fight and "win" a home or an asset that you are really emotionally attached to only to find out later that you can't afford to continue to live in that house. So, yeah. As difficult as it is sometimes to get a married couple to go through and figure out what they're actually spending each month, when you're in the middle of a divorce, getting two separate households to come up with a budget, that can be difficult, but it needs to be done. And that's why, you know, a good financial advisor is worth their weight in gold during times like this to make sure people don't get an emotional win and then a big financial loss down the road.
Amy: I always remind my clients who are in this situation, I am your advocate. I am here for you. And so, you can be hearing things from your friends and your family and this person, and it can be really hard to figure out which end is up. And so, my perspective is always, "Hey, if you make that decision, here's the potential negative consequences. Here's the potential good that could come out of it. And so, at least you have the information." And I think it would be really difficult to go through a situation like this without having an advocate in your corner. You know, personally, even when I went through it with the financial background that I have, I still had an attorney who was reminding me...you know, because sometimes it's just like, "I just want it to be done." "Hey, I'm also thinking of your future-self here. In the here and now, this feels like let's just rip off this Band-Aid and do this because it's easier, but I think it makes more sense to go back to the drawing board, to negotiate more on this," right. So, just make sure you have strong advocates in your corner that you can rely on.
Here's the Allworth advice. Listen, protecting yourself, your children, your money, it's essential when you're in the process of divorce and it is an incredibly emotional process. So make sure you've got good people in your corner.
Coming up next, you feel like you're just paying a ton for your eggs? How do we stack up? How much are other people in other places paying for their eggs? We'll tell you. You're listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.
You're listening to "Simply Money" presented by Allworth Financial. I'm Amy Wagner along with Bob Sponseller. I do have to laugh because I've been doing this show for about a decade now. And there's certain times where I'm like, I never thought we would be talking about X, Y, Z and yet, we're talking about it all the time. And I'm going to put the topic of eggs in that exact basket right now because I never thought we would be spending so much time talking about eggs, but man, I get it. It's the thing you go to the grocery store and you're like, "How much for a dozen eggs?" And Bob, I know this is your favorite topic.
Bob: Oh, we're going to cover it. So, the average price per dozen was $2.99 in February of 2024 [crosstalk 00:36:45] versus $5.89 in February of 2025. That's a 97% increase. And we know that bird flu has been a big issue. Amy, it just comes down to supply and demand. And when there's less of a supply of something and demand doesn't change, guess what's going to go up? The price.
Amy: Yeah.
Bob: And that's what we're seeing. So, talk to us about what's going on in Cincinnati because I don't think we're paying quite as anywhere near as, you know, the price of eggs in Cincinnati as folks are, say, in Los Angeles or some other major cities around the country.
Amy: Yeah. I mean, I think here in Cincinnati, it depends on where you shop, right, from Trader Joe's to Kroger to Target to Walmart, but somewhere between $4.99 and $6.59 for a dozen eggs. I eat egg whites. I can't even find egg whites right now. I don't know what's happening. I guess all the egg whites are going...they're just keeping them in the actual eggs. So, who knows how that will shake out for those who shop for that. But, you know, some perspective here, right, because Cincinnati is always cheaper than other places. "USA Today" did this research and came up with, if you live in LA or anywhere on the West Coast, you could be paying almost $14 for a dozen eggs, more than double. I mean, in some cases, almost triple what you would be paying here in Cincinnati. So I don't know, maybe we don't complain as much. I don't know what the answer is.
Bob: All right. Well, here's my question, Amy. When you have your client meetings every day, how many of your clients are coming into your office and the topic of conversation is the price of eggs? How many people are doing that? Because I can give you my answer.
Amy: What's your answer?
Bob: Zero.
Amy: Yeah. Yeah.
Bob: It's never come up. Anyway, what goes on in your office with respect to eggs?
Amy: So, funny enough, one person did bring it up on a call yesterday, jokingly, right? And I think that's the perspective is, you know, listen, we should be worried about...not worried about, we should be paying attention to how our 401(k)s are invested and whether we've got the right asset allocation. It's control what you can control. We can gripe about egg prices. They will go back down, right? There's a reason for the spike. This is a temporary situation, but, you know, all in context here, right?
Thanks for listening. Tune in tomorrow. We're talking about how the pros and cons of getting a monthly check for the rest of your life that maybe isn't a pension. You've been listening to "Simply Money" presented by Allworth Financial here on 55KRC, The Talk Station.