Should You Jump Into Alternatives? Here's What to Know
On this week’s Best of Simply Money podcast, Bob and Brian unpack the booming world of alternative investments—from gold and crypto to private equity and real estate. Is now the time to diversify beyond stocks and bonds? Plus, what big bank earnings tell us about the economy, what a Cincinnati real estate expert sees in 2026, and how to financially support aging parents without derailing your own retirement. And if you waited until now to think about your 2025 taxes—don’t worry, there’s still time.
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Bob: Should you take advantage of the explosion of alternative investments? We'll explore that tonight. You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James.
Well, right now, the most exciting stuff in the financial services industry in investing isn't happening in just the stock and bond market, it's happening kind of what we'll call off to the side. Private market investments are booming, and that's stuff that just used to be available for big institutional investors, it is now within reach of everyone, seemingly. And the whole idea of what it means to be diversified is starting to shift just a little bit. We're not talking just about private equity tonight, the whole alternative investment space. So, that's what Brian and I want to jump into for a little bit tonight because there's a lot to talk about here, and it can get very complex very quickly.
Brian: Yeah, it can. Everything, but stocks, bonds, mutual funds is what we're talking about today. So, as we start off 2026, let's start with data. You know I love my data, Bob. That's where we're going to start today. So, alternative investments have topped over $26 trillion in total assets under management. Private equity and hedge funds, of course, those are the most commonly known, what people are most familiar with. And this is coming from a website called coinlaw.io, which aggregates financial data and trends and things like that. So, let's take a look at where all this is playing out in the alternative landscape, and how are the more sophisticated investors taking advantage of these opportunities and working these assets in the long term plans? We're starting to get more and more questions about whether these types of things fit into a more standard financial plan.
Bob: Yeah. And the whole thing here within a well-constructed financial plan, Brian, and that's why a segment like this is difficult. But when you throw out the word alternative investments, or the term alternative investments, just like we're about to throw out another term, cryptocurrency, man, there's a lot of stuff packed into those couple of words. And it gets complex. And we're going to do the best we can to kind of give the overview of this stuff. But let's start with gold. It's been a classic hedge, not a growth engine over time. But let's face it, Brian, over the last couple of years, the price of gold has just been skyrocketing. And like anything else in the financial world, once we have two or three tremendously good up years, then the questions start coming. Should I get into it now? Kind of like buying NVIDIA stock after it went up a few 100%.
Brian: Yes. To me, gold is nothing but market timing because we only hear about it when people get a little spooked, and we normally really start hearing about it, like you just said, after the horse is out of the barn and gold has run up because there are scary headlines out there. And that's kind of the situation we're in right now. But nobody brings up gold in terms of, "I should buy this and sit on it for the rest of my life." Some people do that and they tend to throw it in a safe and let the kids deal with it when they inherit it. But to me, gold is something, when people start bringing it up that don't have much experience with precious metals, those kinds of things, then what they're thinking is, "Should I put my money into that, into something that I perceive to be a little safer for the time being until things settle down?"
That is no different than, "I should sell all my investments because I read a scary headline this morning, and I will worry about it later when to get back in." That's how most people tend to think about gold. But like you said, gold is not an asset that is aligned with a growth philosophy. It does not spit out income. It's not going to invent the next iPhone we all have to have. It's not going to find a new market to sell in. And it's simply worth what people think it is. So, all you're really trying to do is time human emotions. So, I'm not saying it's a bad investment. It is a decent hedge against stuff that goes up and down. But if you are not somebody who really truly panics between the peaks and valleys of the overall market, then I don't feel like it's got a very significant place in a well-balanced portfolio.
Bob: Yeah, decent inflation hedge for sure. It beats sitting in cash, but what a lot of people don't bargain for when they get into gold is it's a lot more volatile to the upside and the downside than cash. So, you know, it's not a CD replacement. So, again, you've kind of made the point there, look carefully and make sure it fits.
Brian: Let me polish it off there. Because you just triggered a thought for me, too. Remember, gold is worth what people think it is. So, right now, gold is worth a lot because a lot of people feel like it's a good part of their portfolio. Sooner or later, the dust will settle as it has done over the many, many cycles we've had over the decades you can look at. And eventually, the herd is going to move the other way and it won't feel like cash at all. It will drop.
Bob: Yeah, it may. And I think a lot of people pile into gold based on this $38 trillion and accumulating US debt, which that isn't going away anytime soon. So, yeah, it's just always an interesting asset class. All right, let's dive into crypto because man, Brian, when we talk about cryptocurrency, there's a whole lot of stuff out there. And we got to try to separate, I guess, what's become part of the institutional asset allocation class now. I guess some responsibly-managed, regulated ETFs, for example, versus some of this just garbage out there, these Dogecoin and coins that are being advertised in social media. There's a wide variety and vast difference between a good diversified Bitcoin ETF and some of this, what I'll call, just flat out garbage that's out there.
Brian: Yeah, and I think we're starting, there's a light at the end of the tunnel for the garbage. I mean, I'm hoping we are past the days where the Hawk Tuah Girl can release her own crypto for whatever stupid reason for her 12 minutes of fame. I'm not even going to give her 15 minutes of fame, and she's long gone anyway. But I hope we are moving to a part. I don't think the big financial institutions were ever going to buy the Hawk Tuah coin. However, they are starting to build structures around having cryptocurrency as part of a portfolio. This isn't a bad thing. Sophisticated investors are starting to pay attention to this. The good reasons are there is the potential for uncorrelated return stream, something that isn't regular stocks and bonds, something else that can command the attention of investors for a while. Pretty good liquidity because there are significant markets for these. Very rapid market responsiveness. Now, that goes both ways, right? That's not only a good thing. That just means it moves quickly in either direction.
More real world use cases. Every time you hear some industry talking about the blockchain, that came from cryptocurrency. And the settlement technologies, this means we can move money faster and we can complete transactions more quickly. Expanded access through all the custodial platforms, meaning your Fidelities and your Schwabs and so on and so forth and regulated vehicles. It's starting to look more like a tool that the average investor can use. That said, there is still risk, right? There's still going to be extreme volatility. You're never certain of the valuation of these things. There is a commodity aspect to these things still. It's still worth what the crowd says.
Bob: Yeah. And again, back to why people use alternative investments in the first place as part of a well-diversified financial plan and investment strategy, a lot of people are looking for negatively correlated assets. In other words, assets that zig when the rest of their portfolio zags. Brian, cryptocurrency did not behave that way in 2025. When we saw corrections in tech stocks, for example, I mean the price of Bitcoin fell and fell precipitously. So, to me, that's not a reason to own cryptocurrency, is to kind of hedge or offset any volatility in the rest of your portfolio because it just isn't working that way so far.
Brian: Yeah, we don't have enough history yet to truly say this is a hedge, this is not, because there just hasn't been... And it's going to take decades really for us to get to that point, to truly understand, how does cryptocurrency behave in various interest rate cycles. We've seen a few things like that, but we've only seen it for the first time. And the more people get into it, the more differently it will behave as the flock of birds gets bigger and more unpredictable.
Bob: All right, let's get into an asset class that might actually make a lot of sense for some growth-oriented, long-term investors, folks that can be patient, and select investments appropriately, and that's the whole private equity space. This whole space has really taken off, and I think it will continue to do so. Let's talk about what private equity even is. It's where you have the opportunity to invest in companies, and these are usually early stage, growth companies that are not traded in the public markets. You cannot buy their public stock. It's a good thing to get in early on some of these if you know what you're getting into.
I think a lot of people, Brian, look at this as kind of like the IPO space where, "Man, if I could get in early like the owners of this company or the senior executives, I'm going to make a killing." They want to swing for the fence and make a huge return. You got to know what you're getting into here. And when you're talking to an advisor or somebody in the financial services industry, I'm just telling you, you're not going to get in to the early stuff where it's just free money. So, you better have somebody that can vet what this stuff really is, evaluate the fees, evaluate the liquidity issues. There's a lot that goes into evaluating this whole private equity space. It can play a great role in a long-term portfolio if you have somebody selecting the right place to be or better yet, not to be.
Brian: Yeah, and these things may be closer to you than you think. If you're driving down the street going on your commute for the five billionth time and you notice that that little vet clinic on the corner that's been there for 50 years all of a sudden has a new logo and a new name, you can be pretty confident that there's a private equity firm behind that. What they're starting to do for those types of small businesses, whoever that veterinarian is, to beat that example to death, wants to retire at some point. And for some of those folks, a private equity exit is how they do it. They sell their practice into a larger entity, and that entity combines expenses and takes advantage of economies of scale and allows other people to invest in it.
Now, it does create a different environment sometimes in those four walls. You might hear some grumpy people because of the changes that are coming, but if you're standing outside those four walls wanting to invest in it, just be aware, that's the kind of thing you're investing in. You're not going to see that little vet clinic inside a mutual fund or something like that. The returns can be better, but they can go south as well because they're just more volatility, less liquidity. That's for darn sure. There isn't a publicly traded market. That's literally the difference. Publicly traded means I can see the ticker symbol. I can see the price all day, every day. Private means, I'll probably hear from an accounting firm a few times a year as to what it's worth.
Bob: And that's where you want to evaluate. You want to just be in one or two or five companies where you really want to spread out your risk and be in a broadly-diversified private equity portfolio, maybe a fund-to-fund approach with several different managers. Again, watch the fees, watch the liquidity terms, watch how taxes are reported. A lot of people get into this stuff and they have no idea that they're going to get a K1 tax reporting. Brian, you and I talk to clients all the time. You want to make somebody unhappy real quickly, tell them they're not going to be able to file their tax return until October.
Brian: Yeah, exactly right.
Bob: So, you better know what you're getting into in terms of tax reporting.
Brian: That is a virtual guarantee. If you're going to get into these types of things, you're done filing in April, you're going to file an extension, and you're going to forget about all of it until August. That's a fact.
Bob: All right, Brian, walk us through real estate. Because, again, another term where we throw out, well, real estate, "Have some real estate."
Brian: We ain't making any more of it, right, Bob?
Bob: You can either own it yourself or you can have a professionally-managed portfolio. Both options come with various pros and cons.
Brian: Yeah, and then I think we've officially reached the stage where, if you are somebody who has never owned it and you're thinking about picking up one or two apartment buildings on the side to run and to have a stream of income, I'm just going to go ahead and say don't. People who do this for the first time and have never, it seems like they cannot wait to get out of it after two or three years maybe being invested in these things. Now, if you figured out the game and you know how to make a scalable business out of it, that's a whole different environment. But if you just want to have something, if you refer to it as passive income, rest assured, it ain't passive. It's very active income unless you're going to hire a property management firm, in which case, you're probably going to get more like CD-level returns out of it anyway.
Bob: Yeah, and then if you go the institutional side and get into a professionally-managed REIT, that comes with some, you know, different set of complexities. A lot of times these things have high fees, high commissions, you know, some liquidity constraints. So, again, buyer beware when you're evaluating this, and in the best case, work with a good fiduciary advisor. Here's the Allworth advice, alternatives can add real value to a well-constructed portfolio, but only when they're thoughtfully integrated into a plan that fits your unique goals, risk, and liquidity needs. So, make sure you're working with a fiduciary who truly puts your interests first. Well, five of the nation's biggest banks just reported their fourth quarter earnings and we've got them all for you. We'll break it down and what it could mean for investors coming up next. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. Straight ahead at 6:43, we're diving into the questions that hit home for many of you, from how to help aging parents without derailing your own retirement plan, to the right way to prioritize experiences over things. Plus Medicare IRMAA surprises and why outdated retirement projections might be leading you off track. Brian, sharpen your pencil here because we've got a lot to talk about coming up here at 6:43.
All right, the big banks continue to report fourth quarter earnings, and the news seems to be mixed depending on which bank we're looking at. And remember, big bank earnings can be somewhat significant to how everybody's viewing the broader market because they do kind of act like a pulse check on the broader economy and the overall financial system. So, let's get into it. We got a few banks that have already reported. For the most part, the news has been pretty good. Nothing to really cause anyone to lose any sleep though.
Brian: Yeah, I think we're in a solid position here. But just I want to reiterate why you said what you did about that bank earnings are...banks aren't the sexiest things to look at. It's not the most exciting industry to pay attention to. However, like you said, it's just the pulse. If banks are doing well, that means other companies, other businesses are probably borrowing money so they can expand and grow and so forth. That's a great sign for the economy.
Bob: Yeah, and you hit the magic word borrow. I mean a lot of these gross companies function on access to credit, access to money, liquidity. So, we got to have our banking system healthy or else, a lot of things can shut down in a hurry. But let's get into some of these major bank and their fourth quarter earnings report.
Brian: Yeah, so some of the headlines. And we've been talking about this all week because it's bank week. So, Goldman Sachs. Goldman Sachs had a great earnings report here. They blew through their expectations. And again, as we always say, remember, it's not about what they did. It's about whether the analysts were right or not. So, they blew through the analyst expectations for their equities trading revenue. Goldman Sachs is a slightly different bank than what you might be thinking of on the street corner. All time Wall Street record of $4.3 billion in the final three months of last year. I know I sleep better knowing those Goldman Sachs folks are going to get giant bonuses here in the next few months.
Anyway, they increased their targets. And this is really what the market can care about. They also increased their own internal targets for their asset and wealth management businesses. And those themselves posted a quarterly record for fees. They're now targeting a 30% pre-tax margin in the intermediate term, which was up from the mid-20s in returns in the high teens, blah, blah, blah. These are all numbers. Basically, they're saying, "We thought we were going to do good. Now, we think we're going to do better." That's a good sign for, at least, one bank.
Bob: And I'd say Morgan Stanley's report was almost identical. The highlight in the report was how well their wealth management and asset management business is doing. Let's face it, Brian, we've all heard the TV commercials, we do better when you do better, right? I mean, if the markets go up 15%, 18%, 20%, a few years in a row, guess what? Wealth managers are going to make more money because there's more assets under management. And that is playing itself out in the earnings report.
All right. Wells Fargo, however, missed analyst profit estimates in the fourth quarter. They got some other issues going on over there at Wells Fargo, but they missed expectations. The stock got hit a little bit. Bank of America, Citigroup, on and on. Bank of America had an earnings beat. Citigroup had a little hiccup here, taking a little bit of a loss related to its plan to sell some assets in Russia. Brian, without getting into the weeds here, Russia is probably not the best place to be trying to operate right now. So...
Brian: Yeah, Russia has always been a little bit of the wild west, but I'm not sure right now that I'd want to be partnering out there. But in any case, let's get local, right? So, we got a big bank right here in town. How are they looking? Fifth Third Bank just got approval to merge with Comerica Bank, which is mostly up in Michigan. Federal Reserve finally approved. It's about almost an $11 billion deal. I know Fifth Third has been on the hunt for a long time for a move like this. This goes back more than a decade in terms of their desires. Because the banking industry for these sort of mid-level, and Fifth Third is a little more than a mid-level bank, but these regional banks, it's very much acquire or be acquired, and they still want to be the hunter, and so far so good.
But the Federal Reserve finally approved that deal, and that will allow Fifth Third to become one of the largest banks. Combined, it's going to be the ninth largest bank in the United States. $290 billion in total assets reaching 17 of the 20 fastest growing U.S. markets. Now, Texas, California, Florida, and across the Southeast. What a lot of us think of Fifth Third is some place that Uncle Charlie worked a million years ago. Now, it's becoming a national bank. A little bit different now.
Bob: All right. Well, let's turn our attention to the broader economy. And a new report that suggests, well, like always, we continue to spend, no matter what's going on, Brian. And I will maintain this until I die, the average American, if we have a dollar in our pocket, we're going to spend about a dollar and five cents.
Brian: That's a problem. That's a lump in my pocket I want to get rid of. Yeah, I'm American, darn it.
Bob: Exactly. So, U.S. retail sales rose in November by the highest mark since July, fueling a rebound in auto purchases and very resilient holiday shopping. Consumers spent a record breaking amount online during the holiday season. That should probably come as no surprise. And spending at restaurants and bars, the only service sector category in the retail report gained 0.6% after falling the prior month. I always go back to my personal, you know, anecdotal evidence of how the economy is doing. Look at an average Applebee's parking lot on a Tuesday night. If that place is packed, people have jobs, have money, they're outspending. Life is good, Brian.
Brian: But unlimited appetizers. So, they're making smart financial decisions, right? And bringing doggy bags, I'm sure. Now, I want to throw out here, the data we're sharing here, this is not adjusted for inflation. So, a lot of this can indicate that people are simply doing what they've always done. It's just costing more because this report is simply telling us how many dollars were spent on these various categories.
Bob: Yeah, and the fact that people are spending doesn't necessarily mean that the retailers that are offering those goods are growing their profits. I mean, they'll price it to move it. So, we'll see how the earnings shake out for the retailers.
Brian: Good news is it's not a decline.
Bob: Yep, for sure. All right, coming up next, a look at the local housing market. When to take advantage of buying or selling coming up next. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. Joined tonight by our real estate expert, Michelle Sloan, owner of RE/MAX Time. And Michelle, it's 2026, Happy New Year to you. And as we turn the page, and turn the page on a new calendar year, we really need to get into what's going on with the real estate market here in January of 2026 now that the temperatures are sub-freezing. What's going on in the real estate market? How busy are you right now?
Michelle: Not too crazy, yet. We're not in that frenzy of the season, but there are good deals to be had for buyers out there in the world. And the biggest, absolutely best thing that could happen is our mortgage rates have dipped below 6%. So, as of today, we're at 5.94% for a 30-year fixed rate mortgage. Now, obviously, it's going to depend on your credit and that information. But if we're seeing the trend going down and if we're in the fives, I personally think, in my expert opinion, that that is the sweet spot for buyers to get back on the horse and ride towards their new home.
Brian: So, Michelle, what is it like? We always talk about the buying season, and we talk about it on the radio all the time. This is not the buying season because as Bob hinted at, the weather kind of stinks, and people don't want to deal with it. Is there like a period of time where your phone just stops ringing and it just goes over the cliff and it's quiet for a while, then it ramps up? Does it really work like that?
Michelle: In a certain... Sort of. You know, I still get calls, but certainly not as many calls as I get during the peak season. And really the peak season starts around March and April because it takes 30 to 60 days to close on a property if you find a property. So, I always recommend, like everybody asks, "When's the best time to list my home for sale?" When they're going to be the most eyeballs looking at it. And honestly, I do think there are a lot of people that are right now, that are looking at the market, they're watching the realtor.com and the different websites. There's a lot of people just looking online, but they're not looking in person just yet.
So, once March hits... And that's really, again, I find that I end up listing and getting under contract more homes in March and April, and then they close in May and June. And then by the time we get to July, we see a little bit of a fall off again. So, if we're looking at our upcoming year, this is the planning season. So, if you're thinking about buying a home, now's an awesome time to get with your real estate agent, find a real estate agent that you want to hire, that you want to work with, and you will have to get under contract because that's the new rule. If you're a buyer, you have to be under contract with the real estate agent in order to even view homes on the market. So, that's something that happened last year. It's a change from... A lot of people are like, "I just want to look." Well that's fine. You can go find an open house maybe. But if you want to seriously look at a home and you want to take an agent with you, you're going to have to have a contract with that agent. Does that make sense?
Brian: Okay, Michelle, what...? It does. I actually went through that last year.
Bob: Yeah, in other words, the tire kicking is over.
Brian: Yeah, exactly.
Michelle: That's right. Exactly.
Brian: No more looking for interior decorating jobs.
Michelle: When you get serious, you got to be serious, yes.
Brian: Michelle, what if I'm a seller? So, if I'm in a situation where maybe my job changed or something like that, and I just got to sell my house maybe at the not the ideal time. What are those folks doing during this time of the year? Are they saying, "You know what? We will just tough it out until spring when the prices will be better?" Or do they hang on or do they pull it off the market? How does that work?
Michelle: Well, I recommend that you go ahead and put your home on the market. If you're in a situation where you need to sell because you're moving, or there is some other circumstance personally that you have to sell your home, you can't really sell your home unless it's on the market. So, yes, if you put your home on the market in January or February, we may have fewer buyers looking at it. I try to set the tone and have everybody just ready to understand that you're not going to have 10 showings on the first day. You're likely to have maybe one showing a week. And if you're getting one showing a week, that's good. And so, we have to set those expectations.
Again, if I were in a perfect world and you don't have to sell and you have a little bit of time, I recommend you go ahead and put your home on the market in March. That way, you're beating the rush of other properties going on the market, and you're going to have more eyeballs on it. You're going to have more potential buyers looking at the home. It might be a little slow to start, but again, you're going to get your professional photos. It takes a minute to get your house ready. And I want to make sure, now is the time, and we're not in the same timeframe as we were a few years ago that homes will sell no matter what it looks like. You have to do the prep work again. And being in the business for 20 years, I think it's so very, very, very important to have your home ready, staged, decluttered, all of those things that we talk about if you're planning to sell your home.
Bob: Yeah, Michelle, you almost anticipated exactly my next question. And it goes back to, you know, if March and April are kind of go time for listing the property, it would seem to me, January and February are prep time. I know you're very thorough in helping people get their home actually ready to market in the best condition at the best price. And that's not just a 48-hour process. Walk people through what they need to be thinking about now if they're going to work with a real estate professional like yourself to really have the best outcome, you know, when the calendar does flip around March, April, May, June, and when you really want to sell your house. What do we need to be doing now to get ready?
Michelle: Yeah, absolutely. Now is the time to really, like I said, lock in your real estate agents. Have them talk to you. Talk to a couple different real estate agents. Here's the thing. If you are a seller, you have an opportunity. You know, you may call me and say, "Michelle Sloan, I'd like you to come look at my house. I'm thinking about selling." And then you're going to call another agent with a different brokerage. And they're going to come over. And maybe you get along with me better and you like what I have to say. And, you know, we think that we have a good working relationship. Because it is a relationship after all. And it's one that you really have to trust the agent is going to do what's in your best interest.
So, talk to a couple of agents. I wouldn't say that you necessarily need to talk to more than two. But if the first two are duds, go ahead, talk to another one. That's something that you can be doing right now. The other thing is listen to the advice. I know you think your house is beautiful. I know that you think your house is worth a million dollars. Listen to your real estate agent because it may not be beautiful for everybody.
Bob: You mean you might not like my shag carpeting in the third bedroom that might actually have to be replaced? "Nobody likes that bedroom, Bob."
Michelle: You still have that in there? I told you to get rid of that.
Bob: You've been telling me that for months. All right. Hey, great advice.
Michelle: I know.
Bob: Great advice as always tonight from our real estate expert, Michelle Sloan, owner of RE/MAX Time. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. You have a financial question you'd like for us to answer, there's a red button you can click while you're listening to the show. If you're listening to the show on the iHeart app, simply record your question, and as always, it will come straight to us. All right, Brian, Mark in Mason says, "I'm considering a second home mainly for lifestyle reasons, not return. How should I think about that decision without forcing it to just justify it financially?" I love this question because...
Brian: Hits a little closer to home, doesn't it?
Bob: ...this is what a lot of people do. They buy something because they want to buy it, and then they walk in here and try to talk us into why it's a great quote unquote "investment". It's great to see Mark walking in here with his eyes wide open, so it's good.
Brian: Yeah, no, this is good. So, this is a good instinct, Mark, that you're thinking about here. And by the way, my job, and I don't know if you feel this way, but over the decades, it has evolved into begging people to spend their own money. So, this isn't necessarily a bad thing that somebody is considering this. I think we have to go in, like you said, Bob, eyes wide open. So, the...
Bob: This is why all the wives in our couples client relationships love you more and more each year, Brian. You give them permission to go to the mall and buy new cars and it's wonderful.
Brian: I have plenty of wives who don't want their husbands thinking that way on the spendy side. So, I think that has balanced out a bit. But in any case, but if it fits the plan, it's something you want to do, we are not on this planet to look at a growing pile of money, right? When nobody's going to sit on their death bed and talk about that time they didn't spend that money. So, if this is truly something that your family would enjoy and it fits the financial plan, right, that, of course, is very important. We need to make sure it's not going to disrupt your ability to pay your bills in the short run. But if those things are all true, then by all means, let's figure out a way to do it.
What I would say, the first thing, if you know you really want to do it, but you're feeling irresponsible on spending the money, first I would say, redefine your terms. Buying a second home is not spending. It is investing in an illiquid asset that's not going to be all that productive financially. But you've already referenced that, Mark. You've already said that, "I don't want this to justify itself financially. I just want to be in a good place." But the eyes wide open part, if you're thinking Florida, as many people in this area tend to think over the decades, be looking at those homeowners association fees, be looking at property taxes and all the different... Whatever it is that you have to pay just for the privilege of owning it. I'm not even talking about the mortgage.
That said, also speaking of mortgages, be open to it. Just because you have signed on for a 30-year mortgage for a second home that maybe you didn't have to, doesn't mean you're going to have a mortgage for 30 years. You may simply be buying yourself time. So, for example, if you were looking at this right now, then you could sign up for a 30-year mortgage, and that would buy you time over the next three, say, four years, to slowly liquidate other assets and pay taxes on them, and then pay off that mortgage over time. But again, just be open to more creative ideas than I'll just sell everything and write a check. But again, first and foremost, if this is truly a lifestyle decision, make sure it doesn't disrupt your other bill paying abilities. That's the important part.
Okay, we're going to move on to Rachel in Anderson. Rachel says she's helping her parents out. Part of that sandwich generation, I'm guessing. "Our parents are starting to need more help," she says, "and it's affecting our own plans. How do families support aging parents without quietly sacrificing their own future?" This is a tough one, Bob.
Bob: Yeah, it is a tough one. And this is a situation I'm going through with more than a few of my clients right now and their families. It's tough. So, I'd say, the two words that jump out to me is setting some boundaries. So, boundaries, and then communication. And here's what I mean, what you don't want to do is just open up the checkbook and pour out funds after funds and put yourself in a situation 20 years from now that you're trying to help your parents deal with today.
Brian: That goes for kids too.
Bob: Yeah, you got to put some boundaries or limits around what you can really responsibly afford to do in this area without derailing your own long-term plan. And then a lot of times, this is both a money decision and just, how much stamina and time do I have every day to deal with this? And sometimes, and we deal with this, Brian, all the time, some of the kids don't live in the same city as their parents. A couple do. And the ones that do tend to take on a huge amount of the burden. You know, going over there and taking care of things, buying groceries, cleaning the house, you know, making sure mom and dad are safe. It's a tough situation.
So, I would say, sit down, first of all, and update your financial plan, Rachel, and just put some boundaries around what you can really afford to do financially. And then, proactively, communicate with both your parents and your siblings, if you have them, and try to develop a team approach here where everybody is doing what they can do to protect the long-term dignity and care for your parents without putting any one of the siblings in either financial jeopardy or just, you know, emotional exhaustion as you go through the process. I hope that helps.
All right, Chris in Fort Thomas says, "I want to prioritize experiences over things." I love this. "But I'm not sure how to plan for that without losing structure. How do I budget for what truly matters?" Brian, this right in your wheelhouse.
Brian: Yeah, I love this stuff, because I'm not a person who wants to go to that same beach I've been going to for the last 50 years of my life. Beaches are great and margaritas are awesome, but that stuff kind of has its limit. I'm the same way. I want different experiences, too. So, what I would suggest is...
Bob: You want to have your McDonald's breakfast at, like, six or seven different McDonald's every month, right?
Brian: Exactly, I want to see if it's different anywhere else. Yes, exactly. But, no, think about it this way, maybe define the experiences you want to have, and then assign a budget to each of them. So, you might have that two-week summer family trip. That's where you are going to hit the margaritas in the beach and get sand in your underwear and all that kind of stuff. That's great. Go do it. That's one of them. And then monthly local experiences. So, maybe there's plenty of things right around your hometown that you've never done. Well, come up with a budget for that.
You can also look at, you know, some people will categorize an annual learning or enrichment trip. You know, something where I'm going to go somewhere, but it's going to be much more focused on putting my brain in a place it's never been. Maybe that's museums. Maybe it's art, whatever it is, rather than sitting on my rear end on the beach and drinking margaritas. And again, I'm still a fan of that. Don't let me...
Bob: I can tell.
Brian: Don't let me get that wrong. And then also, maybe you're hosting friends and family. If you've got people coming in from elsewhere and you want to entertain them around town. So, the point would be, figure out what the categories of the experiences you want to have are, and then assign different things you might do within that. And then you can start to put price tags on everything.
Bob: All right, coming up next, Brian has his bottom line. And stay tuned for this segment. Brian's going to help all you procrastinators out there by telling you what you could still do to help your 2025 tax bill, even though you've waited till 2026 to get started. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. And Brian's got some good stuff for us, for all of us that like to put off tax planning for 2025 until January or February of 2026. This is good stuff. There's some real nuggets in here, Brian.
Brian: Hey, procrastinators, you've still got some time to do some stuff, even though New Year's Eve has come and gone. There are still things that you can do before tax time comes here in April. So, first off, a lot of people know this, but some people are new to it, you can still contribute to an IRA for last year, all the way up until the tax filing deadline. Anybody can contribute up to $7,000 to an IRA, right? There are income limitations. Let's not forget that. So, your deductibility may or may not happen, but don't forget about the backdoor Roth. But that's a little bit of a different radio segment. We'll get into that another time. But the point is, if you want to do these things, you can still do them up until tax time. If you're 50 or older, there's a catch up provision that allows up to $8,000.
Now, on the traditional side, of course, you're looking at reducing your taxable income, that's a deduction that'll help you this year. Or on the Roth side, if you make too much money, you may only have the choice of doing a straight up Roth IRA contribution. Or you may have to do a backdoor Roth, which means, you're literally going through the back door to do it because your income is too high. But that would be a decision that's going to help you in the future. You don't get a deduction on the Roth, but you'll never pay taxes on whatever it grows to. Don't stick this stuff in a CD, folks. If you're going to do a Roth IRA, invest it in something that has the ability to grow because it doesn't help you at all until it has grown somewhere.
Second, health savings accounts. HSA is one of the most powerful and most overlooked tax tools that's out there. If you're covered by a high-deductible health plan, this has to be something that you chose back in the November or December timeframe when your company was chasing you for your benefit decisions. But a high deductible health care plan comes along with an HSA account that you can be funding with your own money. So, the limits here are $4,150 bucks for individual coverage, $8,300 per year for family coverage. If you're 55 or older, you can add an extra $1,000 catch-up contribution. But the reason we love these is because you can get a triple tax benefit out of this. You can get deductions on the way in if you invest it properly. Which is a huge step a lot of people miss, don't just throw it in there and ignore it. Make sure it's invested in something. And you can move these dollars. You do not have to stay with the bank that your company has set you up with.
But if you invest it in some kind of mutual fund, any of that growth is tax-free. And then withdrawals down the road for qualified medical expenses themselves are tax-free. Now, here's the big bullet that few people get. If you hang on to your receipts for 2026 and you cash them in 2035, that means you've got 10 years' worth of tax-free growth. And you'll be taking that distribution out, pay any bill you want with it, but you're basing it off of something that happened in 2025. So, hang on to those receipts, let it grow, then withdraw it.
Bob: Yeah, most people never think of that, and that's a great idea. A great way to kill two birds with one stone. Maximum tax deferral, tax deduction, and then investing that money and using it later. There's nothing else quite like it.
Brian: Yep, and you can still contribute for last year up until tax time.
Bob: All right. Thanks for listening tonight. You've been listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
Well, right now, the most exciting stuff in the financial services industry in investing isn't happening in just the stock and bond market, it's happening kind of what we'll call off to the side. Private market investments are booming, and that's stuff that just used to be available for big institutional investors, it is now within reach of everyone, seemingly. And the whole idea of what it means to be diversified is starting to shift just a little bit. We're not talking just about private equity tonight, the whole alternative investment space. So, that's what Brian and I want to jump into for a little bit tonight because there's a lot to talk about here, and it can get very complex very quickly.
Brian: Yeah, it can. Everything, but stocks, bonds, mutual funds is what we're talking about today. So, as we start off 2026, let's start with data. You know I love my data, Bob. That's where we're going to start today. So, alternative investments have topped over $26 trillion in total assets under management. Private equity and hedge funds, of course, those are the most commonly known, what people are most familiar with. And this is coming from a website called coinlaw.io, which aggregates financial data and trends and things like that. So, let's take a look at where all this is playing out in the alternative landscape, and how are the more sophisticated investors taking advantage of these opportunities and working these assets in the long term plans? We're starting to get more and more questions about whether these types of things fit into a more standard financial plan.
Bob: Yeah. And the whole thing here within a well-constructed financial plan, Brian, and that's why a segment like this is difficult. But when you throw out the word alternative investments, or the term alternative investments, just like we're about to throw out another term, cryptocurrency, man, there's a lot of stuff packed into those couple of words. And it gets complex. And we're going to do the best we can to kind of give the overview of this stuff. But let's start with gold. It's been a classic hedge, not a growth engine over time. But let's face it, Brian, over the last couple of years, the price of gold has just been skyrocketing. And like anything else in the financial world, once we have two or three tremendously good up years, then the questions start coming. Should I get into it now? Kind of like buying NVIDIA stock after it went up a few 100%.
Brian: Yes. To me, gold is nothing but market timing because we only hear about it when people get a little spooked, and we normally really start hearing about it, like you just said, after the horse is out of the barn and gold has run up because there are scary headlines out there. And that's kind of the situation we're in right now. But nobody brings up gold in terms of, "I should buy this and sit on it for the rest of my life." Some people do that and they tend to throw it in a safe and let the kids deal with it when they inherit it. But to me, gold is something, when people start bringing it up that don't have much experience with precious metals, those kinds of things, then what they're thinking is, "Should I put my money into that, into something that I perceive to be a little safer for the time being until things settle down?"
That is no different than, "I should sell all my investments because I read a scary headline this morning, and I will worry about it later when to get back in." That's how most people tend to think about gold. But like you said, gold is not an asset that is aligned with a growth philosophy. It does not spit out income. It's not going to invent the next iPhone we all have to have. It's not going to find a new market to sell in. And it's simply worth what people think it is. So, all you're really trying to do is time human emotions. So, I'm not saying it's a bad investment. It is a decent hedge against stuff that goes up and down. But if you are not somebody who really truly panics between the peaks and valleys of the overall market, then I don't feel like it's got a very significant place in a well-balanced portfolio.
Bob: Yeah, decent inflation hedge for sure. It beats sitting in cash, but what a lot of people don't bargain for when they get into gold is it's a lot more volatile to the upside and the downside than cash. So, you know, it's not a CD replacement. So, again, you've kind of made the point there, look carefully and make sure it fits.
Brian: Let me polish it off there. Because you just triggered a thought for me, too. Remember, gold is worth what people think it is. So, right now, gold is worth a lot because a lot of people feel like it's a good part of their portfolio. Sooner or later, the dust will settle as it has done over the many, many cycles we've had over the decades you can look at. And eventually, the herd is going to move the other way and it won't feel like cash at all. It will drop.
Bob: Yeah, it may. And I think a lot of people pile into gold based on this $38 trillion and accumulating US debt, which that isn't going away anytime soon. So, yeah, it's just always an interesting asset class. All right, let's dive into crypto because man, Brian, when we talk about cryptocurrency, there's a whole lot of stuff out there. And we got to try to separate, I guess, what's become part of the institutional asset allocation class now. I guess some responsibly-managed, regulated ETFs, for example, versus some of this just garbage out there, these Dogecoin and coins that are being advertised in social media. There's a wide variety and vast difference between a good diversified Bitcoin ETF and some of this, what I'll call, just flat out garbage that's out there.
Brian: Yeah, and I think we're starting, there's a light at the end of the tunnel for the garbage. I mean, I'm hoping we are past the days where the Hawk Tuah Girl can release her own crypto for whatever stupid reason for her 12 minutes of fame. I'm not even going to give her 15 minutes of fame, and she's long gone anyway. But I hope we are moving to a part. I don't think the big financial institutions were ever going to buy the Hawk Tuah coin. However, they are starting to build structures around having cryptocurrency as part of a portfolio. This isn't a bad thing. Sophisticated investors are starting to pay attention to this. The good reasons are there is the potential for uncorrelated return stream, something that isn't regular stocks and bonds, something else that can command the attention of investors for a while. Pretty good liquidity because there are significant markets for these. Very rapid market responsiveness. Now, that goes both ways, right? That's not only a good thing. That just means it moves quickly in either direction.
More real world use cases. Every time you hear some industry talking about the blockchain, that came from cryptocurrency. And the settlement technologies, this means we can move money faster and we can complete transactions more quickly. Expanded access through all the custodial platforms, meaning your Fidelities and your Schwabs and so on and so forth and regulated vehicles. It's starting to look more like a tool that the average investor can use. That said, there is still risk, right? There's still going to be extreme volatility. You're never certain of the valuation of these things. There is a commodity aspect to these things still. It's still worth what the crowd says.
Bob: Yeah. And again, back to why people use alternative investments in the first place as part of a well-diversified financial plan and investment strategy, a lot of people are looking for negatively correlated assets. In other words, assets that zig when the rest of their portfolio zags. Brian, cryptocurrency did not behave that way in 2025. When we saw corrections in tech stocks, for example, I mean the price of Bitcoin fell and fell precipitously. So, to me, that's not a reason to own cryptocurrency, is to kind of hedge or offset any volatility in the rest of your portfolio because it just isn't working that way so far.
Brian: Yeah, we don't have enough history yet to truly say this is a hedge, this is not, because there just hasn't been... And it's going to take decades really for us to get to that point, to truly understand, how does cryptocurrency behave in various interest rate cycles. We've seen a few things like that, but we've only seen it for the first time. And the more people get into it, the more differently it will behave as the flock of birds gets bigger and more unpredictable.
Bob: All right, let's get into an asset class that might actually make a lot of sense for some growth-oriented, long-term investors, folks that can be patient, and select investments appropriately, and that's the whole private equity space. This whole space has really taken off, and I think it will continue to do so. Let's talk about what private equity even is. It's where you have the opportunity to invest in companies, and these are usually early stage, growth companies that are not traded in the public markets. You cannot buy their public stock. It's a good thing to get in early on some of these if you know what you're getting into.
I think a lot of people, Brian, look at this as kind of like the IPO space where, "Man, if I could get in early like the owners of this company or the senior executives, I'm going to make a killing." They want to swing for the fence and make a huge return. You got to know what you're getting into here. And when you're talking to an advisor or somebody in the financial services industry, I'm just telling you, you're not going to get in to the early stuff where it's just free money. So, you better have somebody that can vet what this stuff really is, evaluate the fees, evaluate the liquidity issues. There's a lot that goes into evaluating this whole private equity space. It can play a great role in a long-term portfolio if you have somebody selecting the right place to be or better yet, not to be.
Brian: Yeah, and these things may be closer to you than you think. If you're driving down the street going on your commute for the five billionth time and you notice that that little vet clinic on the corner that's been there for 50 years all of a sudden has a new logo and a new name, you can be pretty confident that there's a private equity firm behind that. What they're starting to do for those types of small businesses, whoever that veterinarian is, to beat that example to death, wants to retire at some point. And for some of those folks, a private equity exit is how they do it. They sell their practice into a larger entity, and that entity combines expenses and takes advantage of economies of scale and allows other people to invest in it.
Now, it does create a different environment sometimes in those four walls. You might hear some grumpy people because of the changes that are coming, but if you're standing outside those four walls wanting to invest in it, just be aware, that's the kind of thing you're investing in. You're not going to see that little vet clinic inside a mutual fund or something like that. The returns can be better, but they can go south as well because they're just more volatility, less liquidity. That's for darn sure. There isn't a publicly traded market. That's literally the difference. Publicly traded means I can see the ticker symbol. I can see the price all day, every day. Private means, I'll probably hear from an accounting firm a few times a year as to what it's worth.
Bob: And that's where you want to evaluate. You want to just be in one or two or five companies where you really want to spread out your risk and be in a broadly-diversified private equity portfolio, maybe a fund-to-fund approach with several different managers. Again, watch the fees, watch the liquidity terms, watch how taxes are reported. A lot of people get into this stuff and they have no idea that they're going to get a K1 tax reporting. Brian, you and I talk to clients all the time. You want to make somebody unhappy real quickly, tell them they're not going to be able to file their tax return until October.
Brian: Yeah, exactly right.
Bob: So, you better know what you're getting into in terms of tax reporting.
Brian: That is a virtual guarantee. If you're going to get into these types of things, you're done filing in April, you're going to file an extension, and you're going to forget about all of it until August. That's a fact.
Bob: All right, Brian, walk us through real estate. Because, again, another term where we throw out, well, real estate, "Have some real estate."
Brian: We ain't making any more of it, right, Bob?
Bob: You can either own it yourself or you can have a professionally-managed portfolio. Both options come with various pros and cons.
Brian: Yeah, and then I think we've officially reached the stage where, if you are somebody who has never owned it and you're thinking about picking up one or two apartment buildings on the side to run and to have a stream of income, I'm just going to go ahead and say don't. People who do this for the first time and have never, it seems like they cannot wait to get out of it after two or three years maybe being invested in these things. Now, if you figured out the game and you know how to make a scalable business out of it, that's a whole different environment. But if you just want to have something, if you refer to it as passive income, rest assured, it ain't passive. It's very active income unless you're going to hire a property management firm, in which case, you're probably going to get more like CD-level returns out of it anyway.
Bob: Yeah, and then if you go the institutional side and get into a professionally-managed REIT, that comes with some, you know, different set of complexities. A lot of times these things have high fees, high commissions, you know, some liquidity constraints. So, again, buyer beware when you're evaluating this, and in the best case, work with a good fiduciary advisor. Here's the Allworth advice, alternatives can add real value to a well-constructed portfolio, but only when they're thoughtfully integrated into a plan that fits your unique goals, risk, and liquidity needs. So, make sure you're working with a fiduciary who truly puts your interests first. Well, five of the nation's biggest banks just reported their fourth quarter earnings and we've got them all for you. We'll break it down and what it could mean for investors coming up next. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. Straight ahead at 6:43, we're diving into the questions that hit home for many of you, from how to help aging parents without derailing your own retirement plan, to the right way to prioritize experiences over things. Plus Medicare IRMAA surprises and why outdated retirement projections might be leading you off track. Brian, sharpen your pencil here because we've got a lot to talk about coming up here at 6:43.
All right, the big banks continue to report fourth quarter earnings, and the news seems to be mixed depending on which bank we're looking at. And remember, big bank earnings can be somewhat significant to how everybody's viewing the broader market because they do kind of act like a pulse check on the broader economy and the overall financial system. So, let's get into it. We got a few banks that have already reported. For the most part, the news has been pretty good. Nothing to really cause anyone to lose any sleep though.
Brian: Yeah, I think we're in a solid position here. But just I want to reiterate why you said what you did about that bank earnings are...banks aren't the sexiest things to look at. It's not the most exciting industry to pay attention to. However, like you said, it's just the pulse. If banks are doing well, that means other companies, other businesses are probably borrowing money so they can expand and grow and so forth. That's a great sign for the economy.
Bob: Yeah, and you hit the magic word borrow. I mean a lot of these gross companies function on access to credit, access to money, liquidity. So, we got to have our banking system healthy or else, a lot of things can shut down in a hurry. But let's get into some of these major bank and their fourth quarter earnings report.
Brian: Yeah, so some of the headlines. And we've been talking about this all week because it's bank week. So, Goldman Sachs. Goldman Sachs had a great earnings report here. They blew through their expectations. And again, as we always say, remember, it's not about what they did. It's about whether the analysts were right or not. So, they blew through the analyst expectations for their equities trading revenue. Goldman Sachs is a slightly different bank than what you might be thinking of on the street corner. All time Wall Street record of $4.3 billion in the final three months of last year. I know I sleep better knowing those Goldman Sachs folks are going to get giant bonuses here in the next few months.
Anyway, they increased their targets. And this is really what the market can care about. They also increased their own internal targets for their asset and wealth management businesses. And those themselves posted a quarterly record for fees. They're now targeting a 30% pre-tax margin in the intermediate term, which was up from the mid-20s in returns in the high teens, blah, blah, blah. These are all numbers. Basically, they're saying, "We thought we were going to do good. Now, we think we're going to do better." That's a good sign for, at least, one bank.
Bob: And I'd say Morgan Stanley's report was almost identical. The highlight in the report was how well their wealth management and asset management business is doing. Let's face it, Brian, we've all heard the TV commercials, we do better when you do better, right? I mean, if the markets go up 15%, 18%, 20%, a few years in a row, guess what? Wealth managers are going to make more money because there's more assets under management. And that is playing itself out in the earnings report.
All right. Wells Fargo, however, missed analyst profit estimates in the fourth quarter. They got some other issues going on over there at Wells Fargo, but they missed expectations. The stock got hit a little bit. Bank of America, Citigroup, on and on. Bank of America had an earnings beat. Citigroup had a little hiccup here, taking a little bit of a loss related to its plan to sell some assets in Russia. Brian, without getting into the weeds here, Russia is probably not the best place to be trying to operate right now. So...
Brian: Yeah, Russia has always been a little bit of the wild west, but I'm not sure right now that I'd want to be partnering out there. But in any case, let's get local, right? So, we got a big bank right here in town. How are they looking? Fifth Third Bank just got approval to merge with Comerica Bank, which is mostly up in Michigan. Federal Reserve finally approved. It's about almost an $11 billion deal. I know Fifth Third has been on the hunt for a long time for a move like this. This goes back more than a decade in terms of their desires. Because the banking industry for these sort of mid-level, and Fifth Third is a little more than a mid-level bank, but these regional banks, it's very much acquire or be acquired, and they still want to be the hunter, and so far so good.
But the Federal Reserve finally approved that deal, and that will allow Fifth Third to become one of the largest banks. Combined, it's going to be the ninth largest bank in the United States. $290 billion in total assets reaching 17 of the 20 fastest growing U.S. markets. Now, Texas, California, Florida, and across the Southeast. What a lot of us think of Fifth Third is some place that Uncle Charlie worked a million years ago. Now, it's becoming a national bank. A little bit different now.
Bob: All right. Well, let's turn our attention to the broader economy. And a new report that suggests, well, like always, we continue to spend, no matter what's going on, Brian. And I will maintain this until I die, the average American, if we have a dollar in our pocket, we're going to spend about a dollar and five cents.
Brian: That's a problem. That's a lump in my pocket I want to get rid of. Yeah, I'm American, darn it.
Bob: Exactly. So, U.S. retail sales rose in November by the highest mark since July, fueling a rebound in auto purchases and very resilient holiday shopping. Consumers spent a record breaking amount online during the holiday season. That should probably come as no surprise. And spending at restaurants and bars, the only service sector category in the retail report gained 0.6% after falling the prior month. I always go back to my personal, you know, anecdotal evidence of how the economy is doing. Look at an average Applebee's parking lot on a Tuesday night. If that place is packed, people have jobs, have money, they're outspending. Life is good, Brian.
Brian: But unlimited appetizers. So, they're making smart financial decisions, right? And bringing doggy bags, I'm sure. Now, I want to throw out here, the data we're sharing here, this is not adjusted for inflation. So, a lot of this can indicate that people are simply doing what they've always done. It's just costing more because this report is simply telling us how many dollars were spent on these various categories.
Bob: Yeah, and the fact that people are spending doesn't necessarily mean that the retailers that are offering those goods are growing their profits. I mean, they'll price it to move it. So, we'll see how the earnings shake out for the retailers.
Brian: Good news is it's not a decline.
Bob: Yep, for sure. All right, coming up next, a look at the local housing market. When to take advantage of buying or selling coming up next. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. Joined tonight by our real estate expert, Michelle Sloan, owner of RE/MAX Time. And Michelle, it's 2026, Happy New Year to you. And as we turn the page, and turn the page on a new calendar year, we really need to get into what's going on with the real estate market here in January of 2026 now that the temperatures are sub-freezing. What's going on in the real estate market? How busy are you right now?
Michelle: Not too crazy, yet. We're not in that frenzy of the season, but there are good deals to be had for buyers out there in the world. And the biggest, absolutely best thing that could happen is our mortgage rates have dipped below 6%. So, as of today, we're at 5.94% for a 30-year fixed rate mortgage. Now, obviously, it's going to depend on your credit and that information. But if we're seeing the trend going down and if we're in the fives, I personally think, in my expert opinion, that that is the sweet spot for buyers to get back on the horse and ride towards their new home.
Brian: So, Michelle, what is it like? We always talk about the buying season, and we talk about it on the radio all the time. This is not the buying season because as Bob hinted at, the weather kind of stinks, and people don't want to deal with it. Is there like a period of time where your phone just stops ringing and it just goes over the cliff and it's quiet for a while, then it ramps up? Does it really work like that?
Michelle: In a certain... Sort of. You know, I still get calls, but certainly not as many calls as I get during the peak season. And really the peak season starts around March and April because it takes 30 to 60 days to close on a property if you find a property. So, I always recommend, like everybody asks, "When's the best time to list my home for sale?" When they're going to be the most eyeballs looking at it. And honestly, I do think there are a lot of people that are right now, that are looking at the market, they're watching the realtor.com and the different websites. There's a lot of people just looking online, but they're not looking in person just yet.
So, once March hits... And that's really, again, I find that I end up listing and getting under contract more homes in March and April, and then they close in May and June. And then by the time we get to July, we see a little bit of a fall off again. So, if we're looking at our upcoming year, this is the planning season. So, if you're thinking about buying a home, now's an awesome time to get with your real estate agent, find a real estate agent that you want to hire, that you want to work with, and you will have to get under contract because that's the new rule. If you're a buyer, you have to be under contract with the real estate agent in order to even view homes on the market. So, that's something that happened last year. It's a change from... A lot of people are like, "I just want to look." Well that's fine. You can go find an open house maybe. But if you want to seriously look at a home and you want to take an agent with you, you're going to have to have a contract with that agent. Does that make sense?
Brian: Okay, Michelle, what...? It does. I actually went through that last year.
Bob: Yeah, in other words, the tire kicking is over.
Brian: Yeah, exactly.
Michelle: That's right. Exactly.
Brian: No more looking for interior decorating jobs.
Michelle: When you get serious, you got to be serious, yes.
Brian: Michelle, what if I'm a seller? So, if I'm in a situation where maybe my job changed or something like that, and I just got to sell my house maybe at the not the ideal time. What are those folks doing during this time of the year? Are they saying, "You know what? We will just tough it out until spring when the prices will be better?" Or do they hang on or do they pull it off the market? How does that work?
Michelle: Well, I recommend that you go ahead and put your home on the market. If you're in a situation where you need to sell because you're moving, or there is some other circumstance personally that you have to sell your home, you can't really sell your home unless it's on the market. So, yes, if you put your home on the market in January or February, we may have fewer buyers looking at it. I try to set the tone and have everybody just ready to understand that you're not going to have 10 showings on the first day. You're likely to have maybe one showing a week. And if you're getting one showing a week, that's good. And so, we have to set those expectations.
Again, if I were in a perfect world and you don't have to sell and you have a little bit of time, I recommend you go ahead and put your home on the market in March. That way, you're beating the rush of other properties going on the market, and you're going to have more eyeballs on it. You're going to have more potential buyers looking at the home. It might be a little slow to start, but again, you're going to get your professional photos. It takes a minute to get your house ready. And I want to make sure, now is the time, and we're not in the same timeframe as we were a few years ago that homes will sell no matter what it looks like. You have to do the prep work again. And being in the business for 20 years, I think it's so very, very, very important to have your home ready, staged, decluttered, all of those things that we talk about if you're planning to sell your home.
Bob: Yeah, Michelle, you almost anticipated exactly my next question. And it goes back to, you know, if March and April are kind of go time for listing the property, it would seem to me, January and February are prep time. I know you're very thorough in helping people get their home actually ready to market in the best condition at the best price. And that's not just a 48-hour process. Walk people through what they need to be thinking about now if they're going to work with a real estate professional like yourself to really have the best outcome, you know, when the calendar does flip around March, April, May, June, and when you really want to sell your house. What do we need to be doing now to get ready?
Michelle: Yeah, absolutely. Now is the time to really, like I said, lock in your real estate agents. Have them talk to you. Talk to a couple different real estate agents. Here's the thing. If you are a seller, you have an opportunity. You know, you may call me and say, "Michelle Sloan, I'd like you to come look at my house. I'm thinking about selling." And then you're going to call another agent with a different brokerage. And they're going to come over. And maybe you get along with me better and you like what I have to say. And, you know, we think that we have a good working relationship. Because it is a relationship after all. And it's one that you really have to trust the agent is going to do what's in your best interest.
So, talk to a couple of agents. I wouldn't say that you necessarily need to talk to more than two. But if the first two are duds, go ahead, talk to another one. That's something that you can be doing right now. The other thing is listen to the advice. I know you think your house is beautiful. I know that you think your house is worth a million dollars. Listen to your real estate agent because it may not be beautiful for everybody.
Bob: You mean you might not like my shag carpeting in the third bedroom that might actually have to be replaced? "Nobody likes that bedroom, Bob."
Michelle: You still have that in there? I told you to get rid of that.
Bob: You've been telling me that for months. All right. Hey, great advice.
Michelle: I know.
Bob: Great advice as always tonight from our real estate expert, Michelle Sloan, owner of RE/MAX Time. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. You have a financial question you'd like for us to answer, there's a red button you can click while you're listening to the show. If you're listening to the show on the iHeart app, simply record your question, and as always, it will come straight to us. All right, Brian, Mark in Mason says, "I'm considering a second home mainly for lifestyle reasons, not return. How should I think about that decision without forcing it to just justify it financially?" I love this question because...
Brian: Hits a little closer to home, doesn't it?
Bob: ...this is what a lot of people do. They buy something because they want to buy it, and then they walk in here and try to talk us into why it's a great quote unquote "investment". It's great to see Mark walking in here with his eyes wide open, so it's good.
Brian: Yeah, no, this is good. So, this is a good instinct, Mark, that you're thinking about here. And by the way, my job, and I don't know if you feel this way, but over the decades, it has evolved into begging people to spend their own money. So, this isn't necessarily a bad thing that somebody is considering this. I think we have to go in, like you said, Bob, eyes wide open. So, the...
Bob: This is why all the wives in our couples client relationships love you more and more each year, Brian. You give them permission to go to the mall and buy new cars and it's wonderful.
Brian: I have plenty of wives who don't want their husbands thinking that way on the spendy side. So, I think that has balanced out a bit. But in any case, but if it fits the plan, it's something you want to do, we are not on this planet to look at a growing pile of money, right? When nobody's going to sit on their death bed and talk about that time they didn't spend that money. So, if this is truly something that your family would enjoy and it fits the financial plan, right, that, of course, is very important. We need to make sure it's not going to disrupt your ability to pay your bills in the short run. But if those things are all true, then by all means, let's figure out a way to do it.
What I would say, the first thing, if you know you really want to do it, but you're feeling irresponsible on spending the money, first I would say, redefine your terms. Buying a second home is not spending. It is investing in an illiquid asset that's not going to be all that productive financially. But you've already referenced that, Mark. You've already said that, "I don't want this to justify itself financially. I just want to be in a good place." But the eyes wide open part, if you're thinking Florida, as many people in this area tend to think over the decades, be looking at those homeowners association fees, be looking at property taxes and all the different... Whatever it is that you have to pay just for the privilege of owning it. I'm not even talking about the mortgage.
That said, also speaking of mortgages, be open to it. Just because you have signed on for a 30-year mortgage for a second home that maybe you didn't have to, doesn't mean you're going to have a mortgage for 30 years. You may simply be buying yourself time. So, for example, if you were looking at this right now, then you could sign up for a 30-year mortgage, and that would buy you time over the next three, say, four years, to slowly liquidate other assets and pay taxes on them, and then pay off that mortgage over time. But again, just be open to more creative ideas than I'll just sell everything and write a check. But again, first and foremost, if this is truly a lifestyle decision, make sure it doesn't disrupt your other bill paying abilities. That's the important part.
Okay, we're going to move on to Rachel in Anderson. Rachel says she's helping her parents out. Part of that sandwich generation, I'm guessing. "Our parents are starting to need more help," she says, "and it's affecting our own plans. How do families support aging parents without quietly sacrificing their own future?" This is a tough one, Bob.
Bob: Yeah, it is a tough one. And this is a situation I'm going through with more than a few of my clients right now and their families. It's tough. So, I'd say, the two words that jump out to me is setting some boundaries. So, boundaries, and then communication. And here's what I mean, what you don't want to do is just open up the checkbook and pour out funds after funds and put yourself in a situation 20 years from now that you're trying to help your parents deal with today.
Brian: That goes for kids too.
Bob: Yeah, you got to put some boundaries or limits around what you can really responsibly afford to do in this area without derailing your own long-term plan. And then a lot of times, this is both a money decision and just, how much stamina and time do I have every day to deal with this? And sometimes, and we deal with this, Brian, all the time, some of the kids don't live in the same city as their parents. A couple do. And the ones that do tend to take on a huge amount of the burden. You know, going over there and taking care of things, buying groceries, cleaning the house, you know, making sure mom and dad are safe. It's a tough situation.
So, I would say, sit down, first of all, and update your financial plan, Rachel, and just put some boundaries around what you can really afford to do financially. And then, proactively, communicate with both your parents and your siblings, if you have them, and try to develop a team approach here where everybody is doing what they can do to protect the long-term dignity and care for your parents without putting any one of the siblings in either financial jeopardy or just, you know, emotional exhaustion as you go through the process. I hope that helps.
All right, Chris in Fort Thomas says, "I want to prioritize experiences over things." I love this. "But I'm not sure how to plan for that without losing structure. How do I budget for what truly matters?" Brian, this right in your wheelhouse.
Brian: Yeah, I love this stuff, because I'm not a person who wants to go to that same beach I've been going to for the last 50 years of my life. Beaches are great and margaritas are awesome, but that stuff kind of has its limit. I'm the same way. I want different experiences, too. So, what I would suggest is...
Bob: You want to have your McDonald's breakfast at, like, six or seven different McDonald's every month, right?
Brian: Exactly, I want to see if it's different anywhere else. Yes, exactly. But, no, think about it this way, maybe define the experiences you want to have, and then assign a budget to each of them. So, you might have that two-week summer family trip. That's where you are going to hit the margaritas in the beach and get sand in your underwear and all that kind of stuff. That's great. Go do it. That's one of them. And then monthly local experiences. So, maybe there's plenty of things right around your hometown that you've never done. Well, come up with a budget for that.
You can also look at, you know, some people will categorize an annual learning or enrichment trip. You know, something where I'm going to go somewhere, but it's going to be much more focused on putting my brain in a place it's never been. Maybe that's museums. Maybe it's art, whatever it is, rather than sitting on my rear end on the beach and drinking margaritas. And again, I'm still a fan of that. Don't let me...
Bob: I can tell.
Brian: Don't let me get that wrong. And then also, maybe you're hosting friends and family. If you've got people coming in from elsewhere and you want to entertain them around town. So, the point would be, figure out what the categories of the experiences you want to have are, and then assign different things you might do within that. And then you can start to put price tags on everything.
Bob: All right, coming up next, Brian has his bottom line. And stay tuned for this segment. Brian's going to help all you procrastinators out there by telling you what you could still do to help your 2025 tax bill, even though you've waited till 2026 to get started. You're listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.
You're listening to "Simply Money", presented by Allworth Financial. I'm Bob Sponseller along with Brian James. And Brian's got some good stuff for us, for all of us that like to put off tax planning for 2025 until January or February of 2026. This is good stuff. There's some real nuggets in here, Brian.
Brian: Hey, procrastinators, you've still got some time to do some stuff, even though New Year's Eve has come and gone. There are still things that you can do before tax time comes here in April. So, first off, a lot of people know this, but some people are new to it, you can still contribute to an IRA for last year, all the way up until the tax filing deadline. Anybody can contribute up to $7,000 to an IRA, right? There are income limitations. Let's not forget that. So, your deductibility may or may not happen, but don't forget about the backdoor Roth. But that's a little bit of a different radio segment. We'll get into that another time. But the point is, if you want to do these things, you can still do them up until tax time. If you're 50 or older, there's a catch up provision that allows up to $8,000.
Now, on the traditional side, of course, you're looking at reducing your taxable income, that's a deduction that'll help you this year. Or on the Roth side, if you make too much money, you may only have the choice of doing a straight up Roth IRA contribution. Or you may have to do a backdoor Roth, which means, you're literally going through the back door to do it because your income is too high. But that would be a decision that's going to help you in the future. You don't get a deduction on the Roth, but you'll never pay taxes on whatever it grows to. Don't stick this stuff in a CD, folks. If you're going to do a Roth IRA, invest it in something that has the ability to grow because it doesn't help you at all until it has grown somewhere.
Second, health savings accounts. HSA is one of the most powerful and most overlooked tax tools that's out there. If you're covered by a high-deductible health plan, this has to be something that you chose back in the November or December timeframe when your company was chasing you for your benefit decisions. But a high deductible health care plan comes along with an HSA account that you can be funding with your own money. So, the limits here are $4,150 bucks for individual coverage, $8,300 per year for family coverage. If you're 55 or older, you can add an extra $1,000 catch-up contribution. But the reason we love these is because you can get a triple tax benefit out of this. You can get deductions on the way in if you invest it properly. Which is a huge step a lot of people miss, don't just throw it in there and ignore it. Make sure it's invested in something. And you can move these dollars. You do not have to stay with the bank that your company has set you up with.
But if you invest it in some kind of mutual fund, any of that growth is tax-free. And then withdrawals down the road for qualified medical expenses themselves are tax-free. Now, here's the big bullet that few people get. If you hang on to your receipts for 2026 and you cash them in 2035, that means you've got 10 years' worth of tax-free growth. And you'll be taking that distribution out, pay any bill you want with it, but you're basing it off of something that happened in 2025. So, hang on to those receipts, let it grow, then withdraw it.
Bob: Yeah, most people never think of that, and that's a great idea. A great way to kill two birds with one stone. Maximum tax deferral, tax deduction, and then investing that money and using it later. There's nothing else quite like it.
Brian: Yep, and you can still contribute for last year up until tax time.
Bob: All right. Thanks for listening tonight. You've been listening to "Simply Money", presented by Allworth Financial on 55KRC, THE Talk Station.