Crypto and your portfolio, weathering financial shocks, and generating retirement income.
On this week’s Best of Simply Money podcast, Amy and Bob navigate the complex world of cryptocurrency, offering insights into its evolving role in investment portfolios. They discuss strategies like Bitcoin ETFs as a safer entry point, while also stressing the importance of understanding the high volatility and ensuring investments do not jeopardize long-term financial goals.
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Amy: Tonight, we are going to have a real and honest conversation about crypto. Does it really have a place in your portfolio? You're listening to Simply Money, presented by Allworth Financial. I'm Amy Wagner, along with Bob Sponseller. No question here. The world of investing has evolved, right? You can buy and sell investments 24/7, and the types of investments have also evolved. And of course, one of the most talked about, widely written about, discussed at dinner parties is crypto. And it is now, Bob, in the news more than ever.
Bob: Yeah, and the most recent news is Robinhood, an online brokerage firm, announced yesterday that the U.S. Securities and Exchange Commission has dismissed its investigation into the company's cryptocurrency division. That was an investigation that was supposedly launched last year. And the dismissal of the case is seen as a positive development for the crypto industry in general, which has faced heightened scrutiny, as we all know, from U.S. regulators in recent years. And I guess it suggests that regulators, especially under the new Trump administration, may be taking a more measured approach to oversight after years of aggressive enforcement actions against crypto firms. I don't know, Amy. I think regulation is great when it involves getting rid of fraud and abuse. Other than that, I think freedom is a good thing. So, as long as people are protected from fraud and abuse, I say let it rip.
Amy: You know, Bob, I'm not surprised by how crypto has evolved. When we first started hearing about it, it was oftentimes in conjunction with the dark web. You know, there were players in Russia that were using it, and it was because there was no regulation, it felt like the Wild West. It was like, you know, people that were up to no good on the dark web and also, like, 20-year-olds in their parents' basement. There wasn't a great understanding of what it was. And, you know, I think we have moved past the Wild West days into, to your point, finding some regulation to crack down on people losing their shirts in these kind of investments. I'm not saying it can't happen now. But I think we have now, as a community of investors, developed a deeper understanding of Bitcoin, of cryptocurrency, of how it works, and how you can maybe invest a little more safely.
Bob: Yeah, and there's still ways to lose a ton of money very quickly. And so there's a big difference between Bitcoin itself, and then some of these other more obscure cryptocurrencies like Dogecoin, Shiba Inu, you know, other things that come along that are even more volatile than Bitcoin itself, if you can believe that. But yeah, there are reputable exchanges now. I'll throw out one, Coinbase, which is a publicly traded company. So, it is subject to all SEC regulation. I mean, that is a reputable wallet, so to speak, where you can go on there and trade cryptocurrency. So, yes, it's becoming mainstream. Some countries, even the United States, has been talking about doing a sovereign wealth fund that would hold cryptocurrency. So, yes, it's becoming more mainstream. More people are involved in it. And, yeah, I think maybe it's good to talk about why people would even invest in cryptocurrency. I mean, going back, you know, we talk about tariffs, and we talk about inflation all the time. I mean, one of the reasons people are interested in this type of an asset class is to protect against currency deflation, which, you know, the inverse of that is inflation. You know, when governments print money around the world to finance government spending, you know, fiat currency, paper currency becomes devalued. And so just like gold, certain cryptocurrencies like Bitcoin, the thought is where you have a high stock to flow ratio, meaning there's not a lot of it being consumed relative to the amount of stock that's in place, that tends to bode well for any currency, you know, like gold, for example, that people have been using for over 6,000 years as a storehouse of value.
Amy: Yeah. And I think, you know, it's like, does this belong in my portfolio? Well, now there's Bitcoin ETF, right? That would be maybe a safer way that you could dip your toe into it and still kind of take part in crypto investing but also be diverse, you know. And I think what you have to understand with crypto is what you're signing up for. It is when we talk about the roller coaster of investing, this is a far steeper roller coaster than maybe one you've ever been on before. If you think the stock market is volatile, right? If you get whiplash from the stock market, if it keeps you up at night, buyer beware here, because crypto laughs at that. We've seen Bitcoin drop 80% before bouncing right back, right? And then what happens is, you know, you're buying at the top when everyone's talking about it, and then you're panicking when it's going down 80%, right? So you kind of have to know what you're getting into here.
You're listening to Simply Money, presented by Allworth Financial. I'm Amy Wagner, along with Bob Sponseller. We're having a real deep-dive conversation into crypto. We have always said on the show, we don't think it's going anywhere. There was a time several years ago when I said, listen, unless you've got kind of play money, I don't know that any of it belongs in cryptocurrency. Now, we have a deeper understanding around it. There is some more regulation there that could protect you. There's still a lot to be learned here. But again, I think something like a Bitcoin ETF might be a safer way to dip your toe in. One of the things I like to think about when it comes to crypto is when we talk about investments, when we talk about the stock market and the bond market and gold, whatever, on this show, we're doing so with a lot of historical perspective, right? We have decades of historical perspective to talk about how different asset classes have performed and responded to different things. We do not have the history with cryptocurrency to be able to say, oh, last time it did that. We're going back like 10 years here, you know?
Bob: Yeah, Amy, and to your point, a lot of the reasons people want to get involved in different types of currency, and I'll use the example of gold, is they want a safe place to park their money that protects their money from inflation. And I think it's very important to just for people to understand that Bitcoin and cryptocurrency is much more volatile than even things like gold. I'm looking at a chart right now of Bitcoin. I mean, it peaked at about $105 a share just one month ago. And as I'm looking at it today, it has dipped to $87,000 per Bitcoin just over the course of a month. That's way more volatile than most people are bargaining for when they pick any kind of an asset class. So, yeah, it's buyer beware. Learn what you're getting into and study some of the historical movements of cryptocurrencies of any type before you go throwing money at it, because it is not... I would not consider this to be a quote unquote safe short-term investment.
Amy: So how do you get started if you're interested? I would say 1%, 5% of your portfolio at the max, right? Enough to have some skin in the game, some exposure to crypto, but not enough, please, not enough to wreck your entire retirement. So many people that have asked me about crypto are asking me because they hear other people talking about it. They hear the words crypto, and you name it, Bitcoin, Dogecoin, whatever it is, Ethereum. And they just hear numbers that sound like really, really great returns. It is like anything else, right? Your friends that bet on the Super Bowl or the horse race or whatever, they don't often talk about the losses, right? So I don't know that if you're at a dinner party and someone's like, oh, I made so much money on Bitcoin, they're also not talking about the fact that they've lost so much and they need Dramamine to be on this ride. So I think if you're going to dip your toe in, fine, first of all, let's do it with a safe percentage of your portfolio. But go into this with eyes wide open. If you are someone that does not have a pretty high risk tolerance, this may not be the investment for you.
Bob: No, you're exactly right, Amy. And as I listen to you talk, I think the thought that comes to my mind is before you get involved in something like this, you have to answer for yourself the why behind the investment. And what I mean by that is there's a big difference between trading something in the short term and investing in something in the long term. And a lot of the early adopters to Bitcoin they have used this a lot like some of these meme stocks during COVID. These things can fly up, fly down. And if you're sitting at your computer all day and you have the time and inclination to more or less day trade these kind of things, yeah, you can make a lot of money and you can also lose a lot of money. But if you're somebody that wants to take 1%, 3%, 5% of your portfolio and plunge it into this thing and consider it like a savings account, buckle up because your result could be way different than what you might be bargaining for.
Amy: I love the point that you made about ask yourself why, like really ask yourself why. And if the answer to your why is because everyone else is doing it, I think you already have your answer as to whether it's a smart thing for you, right? It's the same conversation I'm having with my teenagers. Just because everyone else is doing it doesn't mean that this has a place in your portfolio. I have a very dear friend who several years ago with money that was on the sidelines, not even earmarked for retirement, made some investments in cryptocurrency for the grandkids and said if this goes great, great. And if not, everyone can still eat and sleep and go to college and retire. And I think that's a really, really healthy way to look at crypto, right? Dip your toe in, give it a try. But not with any money, any money that could possibly wreck your retirement or any long-term financial goals that you have. Here's the Allworth advice. You wouldn't put your life savings into any single stock. Don't do it with crypto either. Now, it could be, though, a smaller part of your portfolio. Just do your research. Understand what you're getting into. Coming up next, do you have a contingency plan? If you were to suddenly experience a financial shock, maybe you work for the federal government right now. Very top of mind for many. We'll get into this next. 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 can't listen to our show every night, don't worry. Don't worry. You don't have to miss any of the brilliant money advice we're giving you because we have a daily podcast for you. Just search Simply Money. It's right there on the iHeart app. So you can find it there or wherever you find your podcast. Also, if you've got friends who are maybe need a little help with money, send them in that direction, too. Straight ahead at 6:43, we're going to take a look at the different ways to maybe earn income once you stop working full time. You do have some options there. If you have checked the headlines any time in the past few weeks, you know that thousands of federal workers have recently lost their jobs. I think thousands of others have major, major concerns about what could be happening next. And I am having conversations with my clients who have federal jobs. Like, what happens if we're forced to retire right now? What happens if we lose our job immediately? And so I think if you are in this boat, listen up. Even if you're not, I think there's something in here for you, too, because any of us could lose our job at any point in time. It's just the reality.
Bob: Yeah. And this is not fun for anyone. Unfortunately, social media, people love to poke fun at these kind of things. Right now, it's all the layoffs that might happen due to Doge. I remember back when the Keystone pipeline got shut down, there were 17,000 workers displaced immediately. And the jokes on social media were like, well, go learn to code or go find a green job. This is not funny and shouldn't be joked around about because for the vast majority of people that work in any industry, whether it's the federal government, state government, for-profit industry, the vast majority of people work very hard every day and they devote their lifetime of energy and thought and effort into doing a great job. And then, through no fault of their own, they could potentially get the rug pulled out from under them. It's very unsettling and very troubling. So, let's talk about how to help these people, Amy.
Amy: Yeah. First of all, this could happen to anyone. And what should you be doing potentially to prepare? You've got to build your boat before the storm hits, right? It just makes sense. You do not want to try to put a boat together and figure out your financial situation in the midst of a storm, in the midst of this news. It is so much easier to already have a financial plan built, to have emergency cash reserves. And then to get this call and this news, while it is still devastating, while it is still highly emotional and scary, it becomes a detour on your roadmap. You're not trying to figure out what the roadmap is at that point. So cash reserves. We say three months if you've got two people working of critical expenses. I would say, you know, if one person is working six months or I had a call last week, actually, Bob, not with a client, with someone who was reaching out for the first time, both of them, federal workers, and they love their jobs and they didn't have any interest in retiring. I think they wanted to work until they were both 70. And now they're like, we don't know if we'll have jobs next week. So we don't even know if we have enough saved. And both of us could potentially be on the line here, right? So, you know, I don't turn my nose up at someone who has a really, really well-funded emergency fund, because, you know, if the worst happens, and I think the worst would be two incomes coming in and you're both losing them around the same time, at least you have time to breathe because you've built up cash reserves enough for it.
Bob: Yeah. And when you have two folks that are in the same industry or both working for the federal government, whatever the case may be, where they might both get hit simultaneously, now you want to ramp up that emergency fund, you know, instead of 6 to 12 months. I'm thinking 12 to 24 months, maybe a little bit more, because, you know, you want to give yourself some time financially to just let all this settle in and not have to sell assets, stocks, bonds, what have you, in a market decline to fund your lifestyle. So I guess that leads to the next point is, and we talk about this all the time, Amy, this is why you have to stay diversified and have to have a plan. You have to have a pile of or should have a pile of assets in non-volatile asset classes like cash, like high yield savings, like short-term bonds, where you can weather a storm like this. And to me, this storm is no different than a big market decline type of storm, where as we look back historically, you know, even in these big market declines like the tech bubble or the housing crisis or whatever, people that are able to allow their long term growth oriented assets to stay invested after three to four years, those assets tend to totally recover. Same thing should apply here. If you've got that nest egg built up, you can weather that storm economically, even though emotionally it's a whole different can of worms here to just talk through the emotional adjustment of potentially losing your job.
Amy: Well, and I think on the flip side, if you don't have that emergency, those emergency reserves available to you, what I see is too many people going to making really bad decisions about, okay, well, I don't have cash reserves. I'm going to carry a big balance on my credit card, and eventually, I'll pay it off. Well, that's terrible. I mean, the average APR right now is inching closer to 30%. I mean, astronomical. I've seen far too many people saying, well, I'm just going to take money out of my 401k, right? Well, if you're not 59 and a half, you're going to pay a 10% penalty. You're going to pay taxes on it, and you are then taking money away from your future self and even taking out any kind of a loan or debt right now, right? Debt is cheap when interest rates are low, but when they spike, borrowers can get crushed. So when you have a well-funded emergency fund, you're giving yourself options rather than backing yourself into a corner and having to choose the best terrible decision, you know, the best of the terrible options.
Bob: Yeah. And I want to focus now on the folks that, you know, maybe have not gotten that layoff notice but are worried they might be getting it at some point here in the future weeks and months that, you know, in the short term. Now's the time to sit down with a good fiduciary financial advisor. I mean, let's face it, if you lose your job tomorrow, we can sit here and talk about emergency funds all day long. You know, that's stuff that you plan for in advance. I think the thing that you can do right now is sit down with a good advisor and actually stress test your current portfolio right now. Ask yourself, if I lose my job, if the market drops 30% or so, am I okay? And if the answer is no, now's the time to get your ducks in a row. Put some money in short, non-risk assets so that you are prepared to weather that storm if and when it comes here in the next few weeks and months to come.
Amy: Here's the Allworth advice. The truth is you don't have to predict the next shock. You just need to be ready for one or whenever it comes. Coming up next, we're talking about the benefits of having an open relationship. No, not the X-rated version. Stay with us. We'll explain. 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 don't normally like to do segments where I don't fully know exactly what we're talking about because I'm kind of a control freak. But we have a really good friend of the show, Al Riddick. He runs Game Time Budgeting. He is so smart about money. And he has only shared with me that today, we are talking about open relationships. This could go anywhere. So I have buckled my seatbelt. Al Riddick, open relationships. Let's hear it.
Al: How are you doing today, Amy?
Amy: A little nervous, Al. A little nervous.
Al: So, you know, when people hear this term open relationships, most of the time it might conjure up, you know, some images of, shall I say, unconventional romantic arrangements. However, when we talk about adding a third party, so far as unconventionality, what if that third party, Amy, was money, right? So when couples treat money as an active participant in their relationships, it's possible that they could unlock deeper levels of trust, understanding, and collaboration.
Amy: Okay, I'm following here. Your open relationship is partners, the two partners, and then the money kind of becomes an equal partner or an equal role in that relationship.
Al: That is so true. So let me give you an example of another benefit, Amy. So, let's just say you have this couple who has initiated the practice of having routine conversations about money. And let's be real, when you're talking about money, that could be a very intimate experience, right?
Amy: Sure. Yeah.
Al: So while one individual in this relationship may be expressing some of their personal aspirations or fears or values as it relates to money, and then the other person you get to hear that, you know, that's a shared experience. So then what happens if this couple gets on the same page and maybe put together a plan to pay down some credit card debt or possibly figure out how to save more money and things of that nature? So what is actually happening, you're deepening the bond between the two partners. And the next thing you know, you're starting to celebrate some of those wins when you actually do pay down the credit card debt or hit some of those savings milestones.
Amy: Al, I'm following you 100%.
Al: I'm so glad, Amy.
Amy: I want to throw out there that there are statistics, and they're pretty high, that show a lot of times if marriages end in divorce, that the major issue is money. They just cannot get on the same page with money. So when you're saying, hey, let's have an open relationship, this is open about money. And if this dialogue starts from the very beginning, think how much healthier your marriage could potentially be. So it's not just about the money. It's about the depth of communication in that marriage.
Al: Without question, Amy. So, let's just be real about it. I know you're married, and I'm married, right?
Amy: Mm-hmm.
Al: So, I would dare say, well, I don't want to put you on the spot, Amy. So, as it relates to myself and my wife, when we finally united in holy matrimony, each of us came to the relationship with some preconceived notions about what we thought marriage should be like and how we each think we should handle money. Now, the funny part is each of us probably thought we were 100 % correct, just like many of your listeners right now, right? But you have to invest the time getting to understand your partners or your spouse's relationship with money, because we always, I mean, all of us, we have a relationship with money, but we don't take the time to peel the onion, so to speak, to get down to the core of why we believe what we believe about money, where we develop certain behaviors. And to really be honest, Amy, how many of us take a step back and say, you know what? What if I believe something about money that's not even true? You know what I mean?
Amy: Yeah. Sure. Al, I think for many people, we grew up in homes where people didn't talk about money openly, and so you could have dated this person for years and really not have had much of an in-depth conversation about money. So I think a lot of people... And you could be married for years, right? And not really talking about it. So for someone who's listening and thinking, okay, this is us, right? I'm raising my hand right now. We don't have a really open, healthy dialogue about money. Al, one of the things I know about you is you and your wife are so strong in this aspect. You have a regular cadence that you meet about money. Do you mind sharing a little bit about what you guys do as kind of maybe a frame of reference for others?
Al: So actually, I'm going to answer that question in two different ways, Amy. So for couples that might be new in their relationship, like, and you might be headed towards the going down the aisle or already married. Just a couple of questions to consider when you're having those intimate conversations with your spouse. Like, what are your thoughts on how we could improve our money system as a couple? Or another question might be, you know, if you had to list our top three financial values as a couple, what would they be? And last but not least, like, what one financial accomplishment would you be most proud of if we were able to achieve it as a couple? So when you ask questions that way, you can't help but get a well thought out answer because it's not a closed ended question. Like, do you like to eat dinner? The answer to that is yes. You know what I mean? You can't ask questions like that.
Amy: Or do you like money? Yes.
Al: Exactly. In a relationship. So for my wife and I, when we sit down and have our conversation, now, keep in mind, Amy, we've been married like over 22 years, so we've had a lot of practice at this. We spend a lot of time talking about plans for the future because our day-to-day, like, cash flow plan, it is a system that we just repeat over and over and over. And to be honest with you, it's really boring, but it works well. So we just keep doing it. So I'm always intrigued to know what my wife is thinking because, typically, she'll throw something out like this. Well, I want to remodel the bathroom. So when I hear something like that, obviously, I know we're talking about quite a few thousands of dollars, but I need to know that information so I can plan accordingly. So when she puts her dream or desire out into the atmosphere, I kind of feel like, you know, it's my job to kind of make that come true because if I could put a smile on her face, what do people say? Happy wife, happy life, right?
Amy: Exactly. So where do we take it from there?
Al: So from there, actually, it's really just all about having the discussions with your special human. But I do need to caution people when you're having these initial discussions, and your special person is expressing why they believe what they believe or why they commit certain actions or behaviors with money. One thing I'll caution people about, Amy, never ask this one-word question, which is the word why. Let me tell you, when most people hear the word why, they find it offensive because, let's just be real about it, Amy. The reason most of us do anything is because we feel like it, right? So, you already know the answer to the question.
Amy: That's true.
Al: But when you can phrase the question with the word why, excuse me, when, how, or what, that usually leads to a more productive conversation because nobody feels cornered. And when most people are cornered, they want to attack.
Amy: Yep. Makes sense. So don't ask why. Ask open-ended questions. Keep the dialogue going. Regular cadence of meetings. And I think really, it's kind of coalescing around the same shared goals. So if you're saying, you know, hey, what's your goal? And then you're kind of adding yours to it. I think it helps to then make smaller financial decisions. Hey, is this going to get us closer or farther away from that goal? So, Al Riddick, I got to tell you, I was a little nervous when you said you wanted to talk about open relationships, but I'm fully buying it now. I think it's open communication around money, giving it the proper role, and having a healthy approach to it in your marriage, your partnership, whatever that looks like for you. Great advice, as always, from our good friend Al Riddick from Game Time Budgeting. 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 already have a financial question you need a little help with? 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. And straight ahead, evidence that illustrates how important it is to help your kids or your grandkids become financially literate. Like, this could make a difference in dollars and cents. We'll explain that. You know, Bob, we were just talking a few minutes ago about how many federal workers are on edge right now. They've either gotten news that their jobs aren't going to be there, or they have concerns that they may not be there very soon in the future. And this is something that happens to a lot of people, whether you're a federal employee or not. You know, you're maybe in that final chapter of working, and then you get word like you either don't have the job anymore, it's gone, or you just cannot do it another minute. You hate your boss, right? You can't continue to do it. So you may have the option in your financial plan to not make the $90,000 that you were making before or a $100 and something or $60 something. Maybe it's just that you need to bring something in and get health care benefits covered in order to get you to a point where then you can start taking distributions from retirement assets, right? And so if that's the case and that's maybe the detour, the workaround for you, I think you do have some options.
Bob: You have a lot of options. And this even applies to the folks that have planned to retire and want to retire. But they don't want to do nothing. They want to stay active. They want to use their talents and experiences that they have accumulated over decades, and they want to stay active doing something productive. So I guess this is just a reminder that there are a lot of options out there that will bring folks fulfillment and also bring them a paycheck. So consulting and freelancing is one. I find this with many retirees that I work with. People are begging them to come back and work 10, 15, 18 hours a week. And it's that right amount of work for them that keeps them active, keeps a paycheck coming in, and it also gives them the free time that they were looking for, which caused them to want to retire in the first place. It's a wonderful option. And there are a lot of opportunities out there in the consulting, free freelancing, and part-time workspace.
Amy: Yeah. I mean, just bringing your expertise back to the table, if you have decades of experience in whatever, graphic design, whatever it is, there would probably be a lot of companies out there saying, yeah, let us leverage that expertise that you have, which could also bring in a paycheck. I'm thinking of a time, and this was years ago, Nathan Bachrach, one of our founders, had a client who had a very high-powered, high-paying job, right? Thought he was just going to coast right into retirement seamlessly. And then it was talk about a shock. He got laid off out of the blue, zero notice. And I mean, it was the absolute wind getting knocked out of him. And he called Nathan immediately, and Nathan was like, okay, listen, let's talk about this. We ran your financial plan. Obviously, it was flawless before. Now we're maybe looking at retiring, or this is five years before we expected that. And the solution was, and I'm not joking about this, Bob, he became an usher at Great American Ballpark. And that brought in enough money for him to not have to touch his retirement assets until they had originally planned. And once again, it was seamless. It brought in enough money to cover the monthly expenses in addition to what his wife was making. And it ended up, talk about win-win. He had no expectation of that. The guy loved baseball. He got to be in every way...
Bob: You're starting to describe my dream job, Amy.
Amy: Do not put in your notice, Bob. We need you here.
Bob: No, but again, as you talk about that, I think for all of us, you know, that we need to keep in mind is these abrupt, unannounced, you know, layoffs or job eliminations, they are an emotional gut punch. You know, when, when you've worked at something and built a career over many, many years, it's a real gut punch for somebody to come along and basically say you're not needed or wanted anymore. And I think it's good to have that conversation. And I harken back to some of the things our friend Julie Bocchi talks about all the time when she talks about, you know, people tend to vastly underestimate their value to society and their value in their job. And sometimes they just need to be reminded of how valuable they are, how valuable their skills and experience are. And that enables people to transition into, you know, what can you do that will bring yourself some fulfillment and leverage all those gifts and skills that you've accumulated, you know, over a lifetime.
Amy: I mean, there's a financial component of it, right? Bringing in money, but then there's also just, what am I going to do with my time, you know?
Bob: Yeah.
Amy: And for a lot of people going from a high stress, long hours, been doing this forever to nothing. It is whiplash of the worst kind. And so something like, you know, a part-time job, seasonal work, you know, maybe you love to golf and now you're going to be the starter at your favorite golf course and you're out there talking to other people about golfing. Okay. Well, you don't have to be at work at 7:00 in the morning for 17 meetings that day, but you get to be doing something you love. And by the way, also bringing something in, you know, a paycheck and you've got some structure around your day. You know, even if it's just seasonal employees for certain things like the ballpark or whatever it is, there's options. If there's a museum that you have always loved or loved to take the grandkids to. Is there part-time work there? Or even if the financial component of it isn't part of things, maybe it's just a volunteer work, but there are options. The key is to kind of thinking through what they could be. Here's the Allworth advice. These activities not only keep you busy during retirement, they may allow some of you to get some money as you continue to save and grow your investments. Coming up next. If you have the opportunity to teach your kids or grandkids about the value of money, do it. We've got some really interesting data for you next. 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. One of the things that has been in the DNA of the Simply Money show from the beginning is advocating for financial literacy. It is in our DNA. We want you to understand money. It is a powerful tool to reach your life goals, and we want you to know how to use it and use it well. And if you are not having these conversations with your children or your grandchildren, we have always said you're missing out, and now there's some interesting data that really kind of puts some context to this.
Bob: Yeah, I'm looking at a recent bank rate survey that just came out, which, Amy, I think, really pretty much states the obvious that says Americans that grew up with a strong financial education were one and a half times more likely to be successful when negotiating pay increases during their career with their employer. And also, you know, Americans that were raised with strong financial education were more likely to implement healthy financial habits as adults, you know, over their lifetime. I mean, stating the obvious, but there's some recent data that confirms that. So, there you go.
Amy: Well, I think the obvious is that if you have this education behind you, you're going to make better decisions. But what's new to me, to your point, Bob, this bank rate research saying, hey, if you have this background, you're more likely to negotiate a raise. I didn't necessarily see that one coming. And maybe it's that you have just more confidence around your money and your financial life, right? You know your worth, and you're going to go in there and advocate for yourself. And this is making sure that positive habits are starting early. Are you making sure that your kids have a job? And maybe, you know, for my kids, it was you have to pay for gas from the time you turn 16. You know, I know other people you pay for part of the car, you pay for part of the insurance, so they understand money's coming in, but it's earmarked for certain things. You know, all of these things go to build a really solid financial foundation.
Bob: Yeah, I think the key is any time any individual is tasked with having to handle some money personally, have the responsibility to handle it, they tend to see how it works, whether that's taxation or the price of gas or any of those things. And that's how you learn how to handle money. You know, even managing a credit card. When you handle money, and you're responsible for the pros and cons of decisions, you tend to get better at it. And that's why it's important to start early rather than later.
Amy: I know many of you grew up in homes where money was not talked about. Stop that cycle. Break it now and make some healthy positive changes for your kids moving forward. Thanks for listening. You've been listening to Simply Money presented by Allworth Financial here on 55KRC, THE Talk Station.
Bob: Yeah, and the most recent news is Robinhood, an online brokerage firm, announced yesterday that the U.S. Securities and Exchange Commission has dismissed its investigation into the company's cryptocurrency division. That was an investigation that was supposedly launched last year. And the dismissal of the case is seen as a positive development for the crypto industry in general, which has faced heightened scrutiny, as we all know, from U.S. regulators in recent years. And I guess it suggests that regulators, especially under the new Trump administration, may be taking a more measured approach to oversight after years of aggressive enforcement actions against crypto firms. I don't know, Amy. I think regulation is great when it involves getting rid of fraud and abuse. Other than that, I think freedom is a good thing. So, as long as people are protected from fraud and abuse, I say let it rip.
Amy: You know, Bob, I'm not surprised by how crypto has evolved. When we first started hearing about it, it was oftentimes in conjunction with the dark web. You know, there were players in Russia that were using it, and it was because there was no regulation, it felt like the Wild West. It was like, you know, people that were up to no good on the dark web and also, like, 20-year-olds in their parents' basement. There wasn't a great understanding of what it was. And, you know, I think we have moved past the Wild West days into, to your point, finding some regulation to crack down on people losing their shirts in these kind of investments. I'm not saying it can't happen now. But I think we have now, as a community of investors, developed a deeper understanding of Bitcoin, of cryptocurrency, of how it works, and how you can maybe invest a little more safely.
Bob: Yeah, and there's still ways to lose a ton of money very quickly. And so there's a big difference between Bitcoin itself, and then some of these other more obscure cryptocurrencies like Dogecoin, Shiba Inu, you know, other things that come along that are even more volatile than Bitcoin itself, if you can believe that. But yeah, there are reputable exchanges now. I'll throw out one, Coinbase, which is a publicly traded company. So, it is subject to all SEC regulation. I mean, that is a reputable wallet, so to speak, where you can go on there and trade cryptocurrency. So, yes, it's becoming mainstream. Some countries, even the United States, has been talking about doing a sovereign wealth fund that would hold cryptocurrency. So, yes, it's becoming more mainstream. More people are involved in it. And, yeah, I think maybe it's good to talk about why people would even invest in cryptocurrency. I mean, going back, you know, we talk about tariffs, and we talk about inflation all the time. I mean, one of the reasons people are interested in this type of an asset class is to protect against currency deflation, which, you know, the inverse of that is inflation. You know, when governments print money around the world to finance government spending, you know, fiat currency, paper currency becomes devalued. And so just like gold, certain cryptocurrencies like Bitcoin, the thought is where you have a high stock to flow ratio, meaning there's not a lot of it being consumed relative to the amount of stock that's in place, that tends to bode well for any currency, you know, like gold, for example, that people have been using for over 6,000 years as a storehouse of value.
Amy: Yeah. And I think, you know, it's like, does this belong in my portfolio? Well, now there's Bitcoin ETF, right? That would be maybe a safer way that you could dip your toe into it and still kind of take part in crypto investing but also be diverse, you know. And I think what you have to understand with crypto is what you're signing up for. It is when we talk about the roller coaster of investing, this is a far steeper roller coaster than maybe one you've ever been on before. If you think the stock market is volatile, right? If you get whiplash from the stock market, if it keeps you up at night, buyer beware here, because crypto laughs at that. We've seen Bitcoin drop 80% before bouncing right back, right? And then what happens is, you know, you're buying at the top when everyone's talking about it, and then you're panicking when it's going down 80%, right? So you kind of have to know what you're getting into here.
You're listening to Simply Money, presented by Allworth Financial. I'm Amy Wagner, along with Bob Sponseller. We're having a real deep-dive conversation into crypto. We have always said on the show, we don't think it's going anywhere. There was a time several years ago when I said, listen, unless you've got kind of play money, I don't know that any of it belongs in cryptocurrency. Now, we have a deeper understanding around it. There is some more regulation there that could protect you. There's still a lot to be learned here. But again, I think something like a Bitcoin ETF might be a safer way to dip your toe in. One of the things I like to think about when it comes to crypto is when we talk about investments, when we talk about the stock market and the bond market and gold, whatever, on this show, we're doing so with a lot of historical perspective, right? We have decades of historical perspective to talk about how different asset classes have performed and responded to different things. We do not have the history with cryptocurrency to be able to say, oh, last time it did that. We're going back like 10 years here, you know?
Bob: Yeah, Amy, and to your point, a lot of the reasons people want to get involved in different types of currency, and I'll use the example of gold, is they want a safe place to park their money that protects their money from inflation. And I think it's very important to just for people to understand that Bitcoin and cryptocurrency is much more volatile than even things like gold. I'm looking at a chart right now of Bitcoin. I mean, it peaked at about $105 a share just one month ago. And as I'm looking at it today, it has dipped to $87,000 per Bitcoin just over the course of a month. That's way more volatile than most people are bargaining for when they pick any kind of an asset class. So, yeah, it's buyer beware. Learn what you're getting into and study some of the historical movements of cryptocurrencies of any type before you go throwing money at it, because it is not... I would not consider this to be a quote unquote safe short-term investment.
Amy: So how do you get started if you're interested? I would say 1%, 5% of your portfolio at the max, right? Enough to have some skin in the game, some exposure to crypto, but not enough, please, not enough to wreck your entire retirement. So many people that have asked me about crypto are asking me because they hear other people talking about it. They hear the words crypto, and you name it, Bitcoin, Dogecoin, whatever it is, Ethereum. And they just hear numbers that sound like really, really great returns. It is like anything else, right? Your friends that bet on the Super Bowl or the horse race or whatever, they don't often talk about the losses, right? So I don't know that if you're at a dinner party and someone's like, oh, I made so much money on Bitcoin, they're also not talking about the fact that they've lost so much and they need Dramamine to be on this ride. So I think if you're going to dip your toe in, fine, first of all, let's do it with a safe percentage of your portfolio. But go into this with eyes wide open. If you are someone that does not have a pretty high risk tolerance, this may not be the investment for you.
Bob: No, you're exactly right, Amy. And as I listen to you talk, I think the thought that comes to my mind is before you get involved in something like this, you have to answer for yourself the why behind the investment. And what I mean by that is there's a big difference between trading something in the short term and investing in something in the long term. And a lot of the early adopters to Bitcoin they have used this a lot like some of these meme stocks during COVID. These things can fly up, fly down. And if you're sitting at your computer all day and you have the time and inclination to more or less day trade these kind of things, yeah, you can make a lot of money and you can also lose a lot of money. But if you're somebody that wants to take 1%, 3%, 5% of your portfolio and plunge it into this thing and consider it like a savings account, buckle up because your result could be way different than what you might be bargaining for.
Amy: I love the point that you made about ask yourself why, like really ask yourself why. And if the answer to your why is because everyone else is doing it, I think you already have your answer as to whether it's a smart thing for you, right? It's the same conversation I'm having with my teenagers. Just because everyone else is doing it doesn't mean that this has a place in your portfolio. I have a very dear friend who several years ago with money that was on the sidelines, not even earmarked for retirement, made some investments in cryptocurrency for the grandkids and said if this goes great, great. And if not, everyone can still eat and sleep and go to college and retire. And I think that's a really, really healthy way to look at crypto, right? Dip your toe in, give it a try. But not with any money, any money that could possibly wreck your retirement or any long-term financial goals that you have. Here's the Allworth advice. You wouldn't put your life savings into any single stock. Don't do it with crypto either. Now, it could be, though, a smaller part of your portfolio. Just do your research. Understand what you're getting into. Coming up next, do you have a contingency plan? If you were to suddenly experience a financial shock, maybe you work for the federal government right now. Very top of mind for many. We'll get into this next. 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 can't listen to our show every night, don't worry. Don't worry. You don't have to miss any of the brilliant money advice we're giving you because we have a daily podcast for you. Just search Simply Money. It's right there on the iHeart app. So you can find it there or wherever you find your podcast. Also, if you've got friends who are maybe need a little help with money, send them in that direction, too. Straight ahead at 6:43, we're going to take a look at the different ways to maybe earn income once you stop working full time. You do have some options there. If you have checked the headlines any time in the past few weeks, you know that thousands of federal workers have recently lost their jobs. I think thousands of others have major, major concerns about what could be happening next. And I am having conversations with my clients who have federal jobs. Like, what happens if we're forced to retire right now? What happens if we lose our job immediately? And so I think if you are in this boat, listen up. Even if you're not, I think there's something in here for you, too, because any of us could lose our job at any point in time. It's just the reality.
Bob: Yeah. And this is not fun for anyone. Unfortunately, social media, people love to poke fun at these kind of things. Right now, it's all the layoffs that might happen due to Doge. I remember back when the Keystone pipeline got shut down, there were 17,000 workers displaced immediately. And the jokes on social media were like, well, go learn to code or go find a green job. This is not funny and shouldn't be joked around about because for the vast majority of people that work in any industry, whether it's the federal government, state government, for-profit industry, the vast majority of people work very hard every day and they devote their lifetime of energy and thought and effort into doing a great job. And then, through no fault of their own, they could potentially get the rug pulled out from under them. It's very unsettling and very troubling. So, let's talk about how to help these people, Amy.
Amy: Yeah. First of all, this could happen to anyone. And what should you be doing potentially to prepare? You've got to build your boat before the storm hits, right? It just makes sense. You do not want to try to put a boat together and figure out your financial situation in the midst of a storm, in the midst of this news. It is so much easier to already have a financial plan built, to have emergency cash reserves. And then to get this call and this news, while it is still devastating, while it is still highly emotional and scary, it becomes a detour on your roadmap. You're not trying to figure out what the roadmap is at that point. So cash reserves. We say three months if you've got two people working of critical expenses. I would say, you know, if one person is working six months or I had a call last week, actually, Bob, not with a client, with someone who was reaching out for the first time, both of them, federal workers, and they love their jobs and they didn't have any interest in retiring. I think they wanted to work until they were both 70. And now they're like, we don't know if we'll have jobs next week. So we don't even know if we have enough saved. And both of us could potentially be on the line here, right? So, you know, I don't turn my nose up at someone who has a really, really well-funded emergency fund, because, you know, if the worst happens, and I think the worst would be two incomes coming in and you're both losing them around the same time, at least you have time to breathe because you've built up cash reserves enough for it.
Bob: Yeah. And when you have two folks that are in the same industry or both working for the federal government, whatever the case may be, where they might both get hit simultaneously, now you want to ramp up that emergency fund, you know, instead of 6 to 12 months. I'm thinking 12 to 24 months, maybe a little bit more, because, you know, you want to give yourself some time financially to just let all this settle in and not have to sell assets, stocks, bonds, what have you, in a market decline to fund your lifestyle. So I guess that leads to the next point is, and we talk about this all the time, Amy, this is why you have to stay diversified and have to have a plan. You have to have a pile of or should have a pile of assets in non-volatile asset classes like cash, like high yield savings, like short-term bonds, where you can weather a storm like this. And to me, this storm is no different than a big market decline type of storm, where as we look back historically, you know, even in these big market declines like the tech bubble or the housing crisis or whatever, people that are able to allow their long term growth oriented assets to stay invested after three to four years, those assets tend to totally recover. Same thing should apply here. If you've got that nest egg built up, you can weather that storm economically, even though emotionally it's a whole different can of worms here to just talk through the emotional adjustment of potentially losing your job.
Amy: Well, and I think on the flip side, if you don't have that emergency, those emergency reserves available to you, what I see is too many people going to making really bad decisions about, okay, well, I don't have cash reserves. I'm going to carry a big balance on my credit card, and eventually, I'll pay it off. Well, that's terrible. I mean, the average APR right now is inching closer to 30%. I mean, astronomical. I've seen far too many people saying, well, I'm just going to take money out of my 401k, right? Well, if you're not 59 and a half, you're going to pay a 10% penalty. You're going to pay taxes on it, and you are then taking money away from your future self and even taking out any kind of a loan or debt right now, right? Debt is cheap when interest rates are low, but when they spike, borrowers can get crushed. So when you have a well-funded emergency fund, you're giving yourself options rather than backing yourself into a corner and having to choose the best terrible decision, you know, the best of the terrible options.
Bob: Yeah. And I want to focus now on the folks that, you know, maybe have not gotten that layoff notice but are worried they might be getting it at some point here in the future weeks and months that, you know, in the short term. Now's the time to sit down with a good fiduciary financial advisor. I mean, let's face it, if you lose your job tomorrow, we can sit here and talk about emergency funds all day long. You know, that's stuff that you plan for in advance. I think the thing that you can do right now is sit down with a good advisor and actually stress test your current portfolio right now. Ask yourself, if I lose my job, if the market drops 30% or so, am I okay? And if the answer is no, now's the time to get your ducks in a row. Put some money in short, non-risk assets so that you are prepared to weather that storm if and when it comes here in the next few weeks and months to come.
Amy: Here's the Allworth advice. The truth is you don't have to predict the next shock. You just need to be ready for one or whenever it comes. Coming up next, we're talking about the benefits of having an open relationship. No, not the X-rated version. Stay with us. We'll explain. 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 don't normally like to do segments where I don't fully know exactly what we're talking about because I'm kind of a control freak. But we have a really good friend of the show, Al Riddick. He runs Game Time Budgeting. He is so smart about money. And he has only shared with me that today, we are talking about open relationships. This could go anywhere. So I have buckled my seatbelt. Al Riddick, open relationships. Let's hear it.
Al: How are you doing today, Amy?
Amy: A little nervous, Al. A little nervous.
Al: So, you know, when people hear this term open relationships, most of the time it might conjure up, you know, some images of, shall I say, unconventional romantic arrangements. However, when we talk about adding a third party, so far as unconventionality, what if that third party, Amy, was money, right? So when couples treat money as an active participant in their relationships, it's possible that they could unlock deeper levels of trust, understanding, and collaboration.
Amy: Okay, I'm following here. Your open relationship is partners, the two partners, and then the money kind of becomes an equal partner or an equal role in that relationship.
Al: That is so true. So let me give you an example of another benefit, Amy. So, let's just say you have this couple who has initiated the practice of having routine conversations about money. And let's be real, when you're talking about money, that could be a very intimate experience, right?
Amy: Sure. Yeah.
Al: So while one individual in this relationship may be expressing some of their personal aspirations or fears or values as it relates to money, and then the other person you get to hear that, you know, that's a shared experience. So then what happens if this couple gets on the same page and maybe put together a plan to pay down some credit card debt or possibly figure out how to save more money and things of that nature? So what is actually happening, you're deepening the bond between the two partners. And the next thing you know, you're starting to celebrate some of those wins when you actually do pay down the credit card debt or hit some of those savings milestones.
Amy: Al, I'm following you 100%.
Al: I'm so glad, Amy.
Amy: I want to throw out there that there are statistics, and they're pretty high, that show a lot of times if marriages end in divorce, that the major issue is money. They just cannot get on the same page with money. So when you're saying, hey, let's have an open relationship, this is open about money. And if this dialogue starts from the very beginning, think how much healthier your marriage could potentially be. So it's not just about the money. It's about the depth of communication in that marriage.
Al: Without question, Amy. So, let's just be real about it. I know you're married, and I'm married, right?
Amy: Mm-hmm.
Al: So, I would dare say, well, I don't want to put you on the spot, Amy. So, as it relates to myself and my wife, when we finally united in holy matrimony, each of us came to the relationship with some preconceived notions about what we thought marriage should be like and how we each think we should handle money. Now, the funny part is each of us probably thought we were 100 % correct, just like many of your listeners right now, right? But you have to invest the time getting to understand your partners or your spouse's relationship with money, because we always, I mean, all of us, we have a relationship with money, but we don't take the time to peel the onion, so to speak, to get down to the core of why we believe what we believe about money, where we develop certain behaviors. And to really be honest, Amy, how many of us take a step back and say, you know what? What if I believe something about money that's not even true? You know what I mean?
Amy: Yeah. Sure. Al, I think for many people, we grew up in homes where people didn't talk about money openly, and so you could have dated this person for years and really not have had much of an in-depth conversation about money. So I think a lot of people... And you could be married for years, right? And not really talking about it. So for someone who's listening and thinking, okay, this is us, right? I'm raising my hand right now. We don't have a really open, healthy dialogue about money. Al, one of the things I know about you is you and your wife are so strong in this aspect. You have a regular cadence that you meet about money. Do you mind sharing a little bit about what you guys do as kind of maybe a frame of reference for others?
Al: So actually, I'm going to answer that question in two different ways, Amy. So for couples that might be new in their relationship, like, and you might be headed towards the going down the aisle or already married. Just a couple of questions to consider when you're having those intimate conversations with your spouse. Like, what are your thoughts on how we could improve our money system as a couple? Or another question might be, you know, if you had to list our top three financial values as a couple, what would they be? And last but not least, like, what one financial accomplishment would you be most proud of if we were able to achieve it as a couple? So when you ask questions that way, you can't help but get a well thought out answer because it's not a closed ended question. Like, do you like to eat dinner? The answer to that is yes. You know what I mean? You can't ask questions like that.
Amy: Or do you like money? Yes.
Al: Exactly. In a relationship. So for my wife and I, when we sit down and have our conversation, now, keep in mind, Amy, we've been married like over 22 years, so we've had a lot of practice at this. We spend a lot of time talking about plans for the future because our day-to-day, like, cash flow plan, it is a system that we just repeat over and over and over. And to be honest with you, it's really boring, but it works well. So we just keep doing it. So I'm always intrigued to know what my wife is thinking because, typically, she'll throw something out like this. Well, I want to remodel the bathroom. So when I hear something like that, obviously, I know we're talking about quite a few thousands of dollars, but I need to know that information so I can plan accordingly. So when she puts her dream or desire out into the atmosphere, I kind of feel like, you know, it's my job to kind of make that come true because if I could put a smile on her face, what do people say? Happy wife, happy life, right?
Amy: Exactly. So where do we take it from there?
Al: So from there, actually, it's really just all about having the discussions with your special human. But I do need to caution people when you're having these initial discussions, and your special person is expressing why they believe what they believe or why they commit certain actions or behaviors with money. One thing I'll caution people about, Amy, never ask this one-word question, which is the word why. Let me tell you, when most people hear the word why, they find it offensive because, let's just be real about it, Amy. The reason most of us do anything is because we feel like it, right? So, you already know the answer to the question.
Amy: That's true.
Al: But when you can phrase the question with the word why, excuse me, when, how, or what, that usually leads to a more productive conversation because nobody feels cornered. And when most people are cornered, they want to attack.
Amy: Yep. Makes sense. So don't ask why. Ask open-ended questions. Keep the dialogue going. Regular cadence of meetings. And I think really, it's kind of coalescing around the same shared goals. So if you're saying, you know, hey, what's your goal? And then you're kind of adding yours to it. I think it helps to then make smaller financial decisions. Hey, is this going to get us closer or farther away from that goal? So, Al Riddick, I got to tell you, I was a little nervous when you said you wanted to talk about open relationships, but I'm fully buying it now. I think it's open communication around money, giving it the proper role, and having a healthy approach to it in your marriage, your partnership, whatever that looks like for you. Great advice, as always, from our good friend Al Riddick from Game Time Budgeting. 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 already have a financial question you need a little help with? 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. And straight ahead, evidence that illustrates how important it is to help your kids or your grandkids become financially literate. Like, this could make a difference in dollars and cents. We'll explain that. You know, Bob, we were just talking a few minutes ago about how many federal workers are on edge right now. They've either gotten news that their jobs aren't going to be there, or they have concerns that they may not be there very soon in the future. And this is something that happens to a lot of people, whether you're a federal employee or not. You know, you're maybe in that final chapter of working, and then you get word like you either don't have the job anymore, it's gone, or you just cannot do it another minute. You hate your boss, right? You can't continue to do it. So you may have the option in your financial plan to not make the $90,000 that you were making before or a $100 and something or $60 something. Maybe it's just that you need to bring something in and get health care benefits covered in order to get you to a point where then you can start taking distributions from retirement assets, right? And so if that's the case and that's maybe the detour, the workaround for you, I think you do have some options.
Bob: You have a lot of options. And this even applies to the folks that have planned to retire and want to retire. But they don't want to do nothing. They want to stay active. They want to use their talents and experiences that they have accumulated over decades, and they want to stay active doing something productive. So I guess this is just a reminder that there are a lot of options out there that will bring folks fulfillment and also bring them a paycheck. So consulting and freelancing is one. I find this with many retirees that I work with. People are begging them to come back and work 10, 15, 18 hours a week. And it's that right amount of work for them that keeps them active, keeps a paycheck coming in, and it also gives them the free time that they were looking for, which caused them to want to retire in the first place. It's a wonderful option. And there are a lot of opportunities out there in the consulting, free freelancing, and part-time workspace.
Amy: Yeah. I mean, just bringing your expertise back to the table, if you have decades of experience in whatever, graphic design, whatever it is, there would probably be a lot of companies out there saying, yeah, let us leverage that expertise that you have, which could also bring in a paycheck. I'm thinking of a time, and this was years ago, Nathan Bachrach, one of our founders, had a client who had a very high-powered, high-paying job, right? Thought he was just going to coast right into retirement seamlessly. And then it was talk about a shock. He got laid off out of the blue, zero notice. And I mean, it was the absolute wind getting knocked out of him. And he called Nathan immediately, and Nathan was like, okay, listen, let's talk about this. We ran your financial plan. Obviously, it was flawless before. Now we're maybe looking at retiring, or this is five years before we expected that. And the solution was, and I'm not joking about this, Bob, he became an usher at Great American Ballpark. And that brought in enough money for him to not have to touch his retirement assets until they had originally planned. And once again, it was seamless. It brought in enough money to cover the monthly expenses in addition to what his wife was making. And it ended up, talk about win-win. He had no expectation of that. The guy loved baseball. He got to be in every way...
Bob: You're starting to describe my dream job, Amy.
Amy: Do not put in your notice, Bob. We need you here.
Bob: No, but again, as you talk about that, I think for all of us, you know, that we need to keep in mind is these abrupt, unannounced, you know, layoffs or job eliminations, they are an emotional gut punch. You know, when, when you've worked at something and built a career over many, many years, it's a real gut punch for somebody to come along and basically say you're not needed or wanted anymore. And I think it's good to have that conversation. And I harken back to some of the things our friend Julie Bocchi talks about all the time when she talks about, you know, people tend to vastly underestimate their value to society and their value in their job. And sometimes they just need to be reminded of how valuable they are, how valuable their skills and experience are. And that enables people to transition into, you know, what can you do that will bring yourself some fulfillment and leverage all those gifts and skills that you've accumulated, you know, over a lifetime.
Amy: I mean, there's a financial component of it, right? Bringing in money, but then there's also just, what am I going to do with my time, you know?
Bob: Yeah.
Amy: And for a lot of people going from a high stress, long hours, been doing this forever to nothing. It is whiplash of the worst kind. And so something like, you know, a part-time job, seasonal work, you know, maybe you love to golf and now you're going to be the starter at your favorite golf course and you're out there talking to other people about golfing. Okay. Well, you don't have to be at work at 7:00 in the morning for 17 meetings that day, but you get to be doing something you love. And by the way, also bringing something in, you know, a paycheck and you've got some structure around your day. You know, even if it's just seasonal employees for certain things like the ballpark or whatever it is, there's options. If there's a museum that you have always loved or loved to take the grandkids to. Is there part-time work there? Or even if the financial component of it isn't part of things, maybe it's just a volunteer work, but there are options. The key is to kind of thinking through what they could be. Here's the Allworth advice. These activities not only keep you busy during retirement, they may allow some of you to get some money as you continue to save and grow your investments. Coming up next. If you have the opportunity to teach your kids or grandkids about the value of money, do it. We've got some really interesting data for you next. 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. One of the things that has been in the DNA of the Simply Money show from the beginning is advocating for financial literacy. It is in our DNA. We want you to understand money. It is a powerful tool to reach your life goals, and we want you to know how to use it and use it well. And if you are not having these conversations with your children or your grandchildren, we have always said you're missing out, and now there's some interesting data that really kind of puts some context to this.
Bob: Yeah, I'm looking at a recent bank rate survey that just came out, which, Amy, I think, really pretty much states the obvious that says Americans that grew up with a strong financial education were one and a half times more likely to be successful when negotiating pay increases during their career with their employer. And also, you know, Americans that were raised with strong financial education were more likely to implement healthy financial habits as adults, you know, over their lifetime. I mean, stating the obvious, but there's some recent data that confirms that. So, there you go.
Amy: Well, I think the obvious is that if you have this education behind you, you're going to make better decisions. But what's new to me, to your point, Bob, this bank rate research saying, hey, if you have this background, you're more likely to negotiate a raise. I didn't necessarily see that one coming. And maybe it's that you have just more confidence around your money and your financial life, right? You know your worth, and you're going to go in there and advocate for yourself. And this is making sure that positive habits are starting early. Are you making sure that your kids have a job? And maybe, you know, for my kids, it was you have to pay for gas from the time you turn 16. You know, I know other people you pay for part of the car, you pay for part of the insurance, so they understand money's coming in, but it's earmarked for certain things. You know, all of these things go to build a really solid financial foundation.
Bob: Yeah, I think the key is any time any individual is tasked with having to handle some money personally, have the responsibility to handle it, they tend to see how it works, whether that's taxation or the price of gas or any of those things. And that's how you learn how to handle money. You know, even managing a credit card. When you handle money, and you're responsible for the pros and cons of decisions, you tend to get better at it. And that's why it's important to start early rather than later.
Amy: I know many of you grew up in homes where money was not talked about. Stop that cycle. Break it now and make some healthy positive changes for your kids moving forward. Thanks for listening. You've been listening to Simply Money presented by Allworth Financial here on 55KRC, THE Talk Station.