Jul 14, 2021 . 8:58 AM . ID: 439840397

Transcript

00:00 – 00:03
Todd Smith
This conference will now be recorded.

00:05 – 00:06
Todd Smith
Hey, horror!

00:09 – 00:09
Jorge
Hey, how are you?

00:10 – 00:10
Todd Smith
Good, arjo.

00:12 – 00:12
Jorge
Well.

00:13 – 00:14
Todd Smith
It’s going on.

00:14 – 00:15
Jorge
Getting ready.

00:20 – 00:20
Jorge
Same stuff.

00:21 – 00:21
Jorge
Stuff.

00:22 – 00:22
Jorge
So.

00:23 – 00:23
Todd Smith
Yeah.

00:24 – 00:26
Todd Smith
Day for the grind.

00:28 – 00:29
Jorge
Yep, yep.

00:31 – 00:32
Jorge
So, how many people are respecting.

00:34 – 00:37
Todd Smith
Anywhere in between just you in 3 or four?

00:40 – 00:42
Jorge
Here, I’m here to support my friend.

00:44 – 00:44
Jorge
No.

00:45 – 00:47
Todd Smith
These, that’s what they’re designed to be.

00:47 – 00:49
Todd Smith
They’re not supposed to be big events, you know.

00:49 – 00:50
Jorge
It’s not a massive event.

00:50 – 00:51
Jorge
Agree, yeah.

00:51 – 00:51
Jorge
Yeah.

00:52 – 00:59
Todd Smith
I saw a few registrations, but it seems like people are registered, and they, they forget, Or they don’t, Yeah.

01:00 – 01:01
Jorge
That’s, that’s right.

01:01 – 01:01
Jorge
Yeah.

01:01 – 01:02
Jorge
That happens all the time.

01:02 – 01:03
Jorge
Yeah.

01:06 – 01:07
Todd Smith
Sounds good.

01:07 – 01:08
Todd Smith
That’s OK.

01:08 – 01:10
Todd Smith
It’s we’ve had some pretty good conversations.

01:10 – 01:17
Todd Smith
I’ve had one people, one person show up on it’s an hour and a half conversation, like five people.

01:17 – 01:23
Todd Smith
And, you know, it leads to conversations I didn’t expect, but sounds good.

01:24 – 01:27
Jorge
It’s always good to show Ogle Showcase for you.

01:28 – 01:31
Jorge
And then it’s it’s always good to learn from from.

01:31 – 01:33
Jorge
You also know so yeah, it’s good.

01:34 – 01:35
Jorge
It’s a two-way street.

01:35 – 01:36
Jorge
Absolutely.

01:37 – 01:39
Todd Smith
So, yeah, it’s nine o’clock.

01:39 – 01:48
Todd Smith
I’m just going to intro here and see if anybody hopson at, Let’s see, July Board, July 14th.

01:48 – 01:52
Todd Smith
This is the monthly coffee chat for those who can make it.

01:52 – 01:55
Todd Smith
This is being recorded, So we record all these events.

01:56 – 02:03
Todd Smith
Just for people that can make them, there’ll be posted online, on our YouTube channel and our website show.

02:05 – 02:12
Todd Smith
Welcome, so, Jorge, I want to make sure I answered your question the other night.

02:12 – 02:16
Todd Smith
That was one of the things I was going to talk about.

02:17 – 02:17
Jorge
Oh.

02:19 – 02:33
Todd Smith
Just to re-iterate, when people need access to funds and I think we’ve all been there at some point of how best to do that or what is available given the type of account you have.

02:33 – 02:33
Todd Smith
Show.

02:34 – 02:40
Todd Smith
That was going to be I always have kind of a grab bag of questions prepared that people have asked recently.

02:41 – 02:42
Todd Smith
Nobody asked questions.

02:42 – 02:44
Todd Smith
But so that was one of them.

02:44 – 02:49
Todd Smith
But before we do that, did you have any other things you want to talk about today are.

02:50 – 02:50
Jorge
No.

02:50 – 02:51
Jorge
No.

02:51 – 02:52
Jorge
You can talk about that.

02:52 – 02:53
Jorge
That will be very good.

02:53 – 02:54
Jorge
Yes.

02:54 – 02:56
Todd Smith
So, Martin Frank.

02:59 – 03:01
Todd Smith
Right from the cabin in Wisconsin.

03:02 – 03:04
Todd Smith
Good to see or smiley face Frank.

03:07 – 03:08
Jorge
Having fun, frank jacket.

03:09 – 03:23
Todd Smith
Yeah, Um, so yeah, we can talk about that here briefly, I think you understand it, but I think it’s for other people that listen to the recording, or hop on, they may want to understand.

03:23 – 03:33
Todd Smith
So, typically, in the investment world, you have kind of 2 or 3 types of buckets to, you know, two of which are retirement.

03:33 – 03:41
Todd Smith
So you might have, for, for one K plan, you might have an IRA, then the other investment bucket generally is just a regular investment account.

03:41 – 03:51
Todd Smith
So, frequently, if people are needing money, they’re going to look where most of their money essentially is, and that’s usually in the retirement bucket.

03:51 – 03:54
Todd Smith
So, for you and others, that’s usually the 401 K Plan.

03:55 – 04:00
Todd Smith
So, if you need to tap into your phone, kay?

04:00 – 04:03
Todd Smith
There’s generally two ways you can do that.

04:03 – 04:10
Todd Smith
One is via a distribution, depending on the specific plan rule.

04:10 – 04:20
Todd Smith
So your employer, when they design the plan, they have in the plan document, how you can take distributions at what point, in what form, and how much.

04:20 – 04:26
Todd Smith
So there’s a whole potential list of variables there, depending on the employer.

04:27 – 04:32
Todd Smith
Some make them very restrictive, Some make them less restrictive, It just depends.

04:32 – 04:39
Todd Smith
Then, of course, it depends on whether you’re still employed or you’re not, you’re not employed, you generally have more liberty to do different things.

04:40 – 04:46
Todd Smith
While you’re employed, and especially when you’re under 59.5, it’s really restricted to take distributions.

04:47 – 04:53
Todd Smith
Um, so, we always defer people back to that plan administrator to see what the specific rules are.

04:53 – 05:05
Todd Smith
Um, because that’s really the, quote, unquote, Bible of the rules, and others, IRS rules are kind of a sidecar to the plan rules, but, know, that’s where you always want to start.

05:05 – 05:09
Todd Smith
The plan document and only the administrator really would have that.

05:10 – 05:19
Todd Smith
So, distribution is the one way to access that, but you have to keep in mind obviously anything that you take out is going to be taxable as ordinary income.

05:21 – 05:26
Todd Smith
If you’re under 59.5, you’re going to have a 10% excise penalty.

05:26 – 05:28
Todd Smith
Now, there are exceptions to those rules.

05:28 – 05:29
Todd Smith
We’re going to get into all of them right now.

05:29 – 05:40
Todd Smith
But if you are have attained the age of 55 in separate service, from the particular employer, 10% would be waived.

05:40 – 05:45
Todd Smith
So for you, Jorge, I believe that would apply if you were to take a taxable distribution.

05:46 – 05:47
Todd Smith
Ok.

05:47 – 05:47
Jorge
Ok.

05:49 – 05:53
Todd Smith
The other option is the loan provision, I think, or this is when people get confused.

05:53 – 05:57
Todd Smith
I think we may even talked about it on this call before, but alone provision.

05:58 – 06:02
Todd Smith
Really, if the plan allows it, again, you have to check the plan document.

06:03 – 06:09
Todd Smith
They’ll have the rules surrounding if, plan, or loans are available, and what that looks like.

06:09 – 06:20
Todd Smith
But generally, you can only borrow up to 50% of the account for the maximum cap at 50,000, per 12 month rolling period, as is the general rule.

06:21 – 06:28
Todd Smith
And the reason they allow you to do this now that that 50,000 is not taxable, or whatever, that that loan amount is not taxable.

06:29 – 06:42
Todd Smith
And the reason that is, is because the loan provision states that you have to pay it back plus interest to yourself, and that’s almost always going to be done through payroll deduction.

06:42 – 06:44
Todd Smith
So, why are employed?

06:44 – 06:45
Todd Smith
Would that particular company?

06:46 – 06:58
Todd Smith
And, um, and if you were to take a loan while you’re employed, any payroll deduction and they allow for alone, then that’s how it would work.

06:58 – 07:00
Todd Smith
You’d pay it back now, if you’re not employed.

07:01 – 07:10
Todd Smith
I would say I’ve only seen this once or twice with some really goofy situations where people are no longer employed, could have a loan and pay it back.

07:11 – 07:24
Todd Smith
Um, not to payroll deduction, so, but that’s a very rare event, So for you to take a loan on your four, OK, is probably not going to be an issue, are allowed, because you’re no longer employed, OK.

07:25 – 07:27
Jorge
Does apply also to IRS, or No.

07:28 – 07:33
Todd Smith
That’s a great question, so that’s where I’m segue to IRAs are totally different animal.

07:34 – 07:35
Todd Smith
You can’t take a loan from an IRA?

07:37 – 07:39
Todd Smith
So, anything you have to, there’s no provision.

07:40 – 07:42
Todd Smith
The IRS doesn’t even allow it.

07:42 – 07:48
Todd Smith
So, the only way you can access money from an IRR is really to take that taxable distribution.

07:51 – 07:51
Jorge
Ok.

07:53 – 08:04
Todd Smith
So then the taxable distribution, you have a little bit more leniency typically how you do it, how much that sort of thing the taxation is going to be the same?

08:06 – 08:12
Todd Smith
However, you don’t get that exception at 55, that you would mean a forum on K plan.

08:12 – 08:14
Todd Smith
So that’s kinda a pitfall.

08:14 – 08:20
Todd Smith
If somebody were rollover, therefore, one K to an IRA, then take the distribution, it might miss out on that exemption.

08:21 – 08:25
Todd Smith
So, somebody’s really needed the money, then you want to take it out of the four K point.

08:26 – 08:27
Todd Smith
So it makes sense.

08:27 – 08:28
Jorge
Millimeter, hm.

08:29 – 08:35
Todd Smith
So, always go back and look at to talk to the administrator that sometime is the HR department.

08:35 – 08:50
Todd Smith
Sometimes it’s the actual company, Fidelity, or Vanguard, whomever actually, is the sponsor of that particular the investment firm that manages it go back to them to see what the plan document.

08:51 – 08:56
Todd Smith
Correct me if I’m wrong Frank I think you said your plan with Caterpillar just says by.

08:56 – 08:59
Todd Smith
By example, if you were to take distributions.

08:59 – 09:02
Todd Smith
From that plan, you had to do a pro rata pro rata right?

09:02 – 09:04
Todd Smith
You couldn’t select the investments that you told me that one time.

09:06 – 09:11
Frank Zawatski
I think, I can’t recall actually Australia, but they may have had some provision like that.

09:11 – 09:20
Frank Zawatski
They had some some funny roles, because the plan was one of the first ones initiated in and then never got amended.

09:20 – 09:26
Frank Zawatski
So they add on after Tax Provision and some other oddball vestiges of the 19 sixties.

09:29 – 09:33
Todd Smith
So sometimes what I was talking about, Jorge, and I mean, you mentioned this to you in the past.

09:33 – 09:37
Todd Smith
Say, you have 10 investments in Year 4 and 1 K plan and you want to take a distribution.

09:38 – 09:43
Todd Smith
The plan may dictate that you can’t pick and choose which investment to sell off to provide that distribution.

09:43 – 09:47
Todd Smith
You actually have to take it across all of your investments.

09:48 – 09:50
Todd Smith
But, John, the service doesn’t seem so bad.

09:50 – 09:50
Todd Smith
For me.

09:50 – 09:55
Todd Smith
I’d rather have a little bit flexibility, especially if something’s really depressed and price.

09:55 – 09:57
Todd Smith
You don’t know the timing of it, right?

09:57 – 09:59
Todd Smith
So you’re going to have a really depressed investment.

09:59 – 10:00
Todd Smith
I’d rather not spend from that.

10:01 – 10:05
Todd Smith
I’d rather sell off something that was maybe overvalue, like large Cap, or something.

10:07 – 10:08
Todd Smith
So it’s just It’s more optimal.

10:10 – 10:20
Todd Smith
You might be splitting hairs by bringing it up, you know, as illustration, that no, employer plans are great because they subsidize most the costs.

10:20 – 10:23
Todd Smith
But the tradeoff is you have to play by the rules.

10:23 – 10:23
Todd Smith
No.

10:23 – 10:31
Todd Smith
So, having money in an IRA, whether it’s self directed, or you have an advisor or whatever, generally has a lot more flexibility for you.

10:33 – 10:37
Todd Smith
So the IRA option is not alone.

10:38 – 10:41
Todd Smith
You only can take a taxable distribution.

10:41 – 10:51
Todd Smith
And, the one kind of saving grace for a loophole there is that 60 day rollover rule, which we may have mentioned before.

10:51 – 10:57
Todd Smith
I think we talked about the other day, and that allows you to take the taxable distribution.

10:58 – 11:04
Todd Smith
And, as long as you put it back in within that timeframe, um, you do not pay those tax.

11:04 – 11:06
Todd Smith
You don’t pay those taxes, so, they kind of give you that.

11:07 – 11:11
Todd Smith
Now, you gotta be careful, they only allow for that, what, once, every 12 months, no for it.

11:11 – 11:12
Todd Smith
I believe is through.

11:13 – 11:17
Frank Zawatski
Its once every 365 calendar days.

11:18 – 11:18
Todd Smith
It’s.

11:18 – 11:20
Frank Zawatski
Not wants one per year, a lot of words.

11:20 – 11:23
Frank Zawatski
You can’t do it in December, we’re going to do it again the following January:.

11:24 – 11:25
Todd Smith
Radar.

11:27 – 11:29
Jorge
Can you repeat that every year?

11:30 – 11:30
Frank Zawatski
Yeah.

11:30 – 11:34
Frank Zawatski
Once every 365 days, you’re allowed to go roll.

11:36 – 11:37
Todd Smith
An indirect rollover.

11:39 – 11:41
Todd Smith
So this is indirect rollover.

11:41 – 11:45
Todd Smith
So you’re you’re actually, Say you were to rollover.

11:45 – 11:49
Todd Smith
Your phone came directly to an IRA and not touch the money that would be direct rollover.

11:49 – 11:51
Todd Smith
People do that all the time.

11:51 – 11:57
Todd Smith
An indirect rollover is when you actually take Take the money, then you put it back in.

11:57 – 11:58
Todd Smith
So, you use the money.

11:58 – 12:01
Todd Smith
So, in your case, if you are saying, Hey, I need to flow myself.

12:01 – 12:05
Todd Smith
20 grand until I solidify my employment.

12:07 – 12:12
Todd Smith
If you take that 20 grand and then you put it back within that 60 days, you don’t pay taxes on it.

12:13 – 12:19
Todd Smith
So, it’s not the same as a loan, but it kind of is your learning yourself that money, and putting it back, but you have a very defined timeline.

12:19 – 12:24
Todd Smith
That type of role, where you can only do once every 365 days.

12:26 – 12:36
Todd Smith
So that’s a rolling 12 months, not the calendar year, So you couldn’t do on now, and then, another one before the end of the, or the one ending in 20 22, you’d have to wait until July of next year.

12:37 – 12:39
Jorge
That’s from a 401 K to an Ira, right?

12:41 – 12:42
Todd Smith
No.

12:42 – 12:44
Todd Smith
That’s, that’s what we’re talking about.

12:44 – 12:46
Todd Smith
If you were to do the indirect IRA.

12:47 – 12:49
Jorge
Ok, well.

12:49 – 12:54
Todd Smith
They didn’t change it because there was an attorney, there were some, I can’t remember there’s an attorney.

12:54 – 12:57
Todd Smith
He was doing rollovers every year, multiple times.

12:57 – 12:58
Todd Smith
You remember that case, I think that’s what started?

12:59 – 13:01
Frank Zawatski
Off towards the name.

13:01 – 13:04
Todd Smith
Yeah, I can’t remember what you were doing that way.

13:05 – 13:13
Frank Zawatski
Anyway, he was rolling 659 day loans to himself, and he did it over and over and over again.

13:14 – 13:15
Frank Zawatski
And it was really interesting.

13:15 – 13:24
Frank Zawatski
The IRS’s special publication actually had an example that that was OK, wound up at the tax court.

13:24 – 13:28
Frank Zawatski
And they said, no, the IRS publication is wrong.

13:28 – 13:37
Frank Zawatski
They weren’t right by the legislation that authorizes rover’s from Congress and additionally wiped out his whole, all right.

13:37 – 13:38
Todd Smith
Yeah, yeah.

13:39 – 13:40
Todd Smith
That’s why this new rule.

13:42 – 13:43
Todd Smith
Yeah.

13:44 – 13:47
Todd Smith
So, So anyway, I don’t think a lot of people run into that scenario.

13:47 – 13:51
Todd Smith
You’re just going to be aware of the rules, and but it is one.

13:52 – 13:55
Todd Smith
Kind of escape hatch if you need money and you want to avoid the taxes.

13:56 – 13:57
Jorge
Ok, so good to know.

13:57 – 14:07
Todd Smith
Assert option that you know, I bring up two peoples occasionally, not very often is that if you have another bucket of investments, obviously you can sell some of those off.

14:08 – 14:13
Todd Smith
Um, and, know, take the proceeds.

14:13 – 14:14
Todd Smith
There’s going to be taxes there.

14:14 – 14:18
Todd Smith
Potentially, capital gain, obviously, the money’s not working for you, et cetera.

14:18 – 14:19
Todd Smith
So there’s drawbacks there.

14:20 – 14:26
Todd Smith
In rare cases, you can, you can actually use those as collateral for a loan.

14:26 – 14:33
Todd Smith
So there are institutions that will say, hey, you have $100,000, and securities will loan you based on using that as collateral.

14:35 – 14:49
Todd Smith
So that’s not optimal either, but even TD Ameritrade that we work with does have that it has to be non retirement funds, but in extreme cases or depending on the scenario.

14:50 – 14:51
Todd Smith
No, that’s another option.

14:52 – 15:06
Todd Smith
Keep in mind, I didn’t mention this before, but when you take a loan through a 400 K, just as further ratification of how this works, that isn’t a loan against the form, OK, It’s actually a distribution.

15:06 – 15:11
Todd Smith
So, say you take a $50,000 loan from the fall, OK, that money is actually being extracted.

15:11 – 15:21
Todd Smith
So, it’s no longer in the account, No longer invested, until you get it back in, could be 2, 3, 5 years, depending on the loan provision.

15:21 – 15:30
Todd Smith
So, I think that’s a misconception for a lot of people they think they are borrowing against, therefore, one K there actually borrowing the money, they’re lending the money to themselves.

15:30 – 15:31
Todd Smith
It comes out of the account.

15:31 – 15:32
Todd Smith
Then it goes back in.

15:32 – 15:42
Todd Smith
So, there’s an opportunity cost there of that money, not working, but it’s a better alternative, typically, than, well, not necessarily better.

15:42 – 15:56
Todd Smith
But if the other alternative is high interests new consumer debt somewhere, then it might be a better option because the, the interest rate that you pay yourself back, at least goes into your account and is generally at a lower rate.

15:58 – 15:59
Todd Smith
Just an FYI, there.

16:00 – 16:01
Jorge
Ok, good to know.

16:02 – 16:12
Frank Zawatski
Another possibility, if you have a whole life insurance policy or some kind of permanent life insurance, you might be able to get a loan against the cash value of that, that’s another alternative.

16:13 – 16:13
Todd Smith
Yep.

16:13 – 16:14
Todd Smith
Yep.

16:16 – 16:18
Todd Smith
Did you get that, Jorge?

16:18 – 16:19
Jorge
Yes.

16:19 – 16:21
Jorge
I don’t have a term insurance, either.

16:22 – 16:23
Jorge
Permanent life insurance.

16:24 – 16:25
Jorge
That’s another notion.

16:27 – 16:34
Todd Smith
Then, of course, is, you know, home equity, I think you’ve gone down that route, but just for other listeners.

16:35 – 16:35
Jorge
Mm home.

16:35 – 16:42
Todd Smith
Equity, I think even financial planners kind of excluded from plans which I think is a misstep know ethic.

16:43 – 16:46
Todd Smith
Our homes are some of our biggest assets, right?

16:46 – 16:59
Todd Smith
So I think not considering the proper use of home equity, maye, the mistake, whether it’s long term planning, whether it’s short-term needs, are some kind of combination.

17:00 – 17:05
Todd Smith
Know, Frank and I have been banging our heads against the wall a little bit talking about home equity.

17:05 – 17:06
Todd Smith
Conversion mortgages.

17:07 – 17:08
Todd Smith
People have been brainwashed.

17:08 – 17:09
Todd Smith
That they’re really bad.

17:09 – 17:10
Todd Smith
The ugly.

17:13 – 17:16
Todd Smith
The ugly word, Being reverse mortgage.

17:16 – 17:19
Todd Smith
People just think it’s bad, but I think there’s a time and place for reverse mortgage.

17:19 – 17:26
Todd Smith
I think there’s time in place to tap an equity he locks, um, I think you’ve explored that already to have in your In your instance.

17:26 – 17:27
Todd Smith
Yes.

17:27 – 17:29
Jorge
Yes, I already last year.

17:29 – 17:30
Jorge
I use my HELOC.

17:30 – 17:30
Jorge
Yeah.

17:30 – 17:34
Jorge
So that’s not that’s not an option for me.

17:34 – 17:35
Jorge
So yeah.

17:36 – 17:38
Todd Smith
Then the last resort is your kids, right?

17:40 – 17:40
Todd Smith
Yeah.

17:41 – 17:43
Jorge
I have been considering that.

17:43 – 17:45
Jorge
So that’s another option, Yes!

17:45 – 17:49
Todd Smith
You don’t mind sharing if you don’t mind sharing or me sharing your son’s little success.

17:50 – 17:52
Jorge
No, no, that’s OK, That’s OK Sign.

17:52 – 17:53
Todd Smith
Your son is Howell.

17:55 – 17:56
Jorge
Glenny 7.

17:57 – 17:58
Todd Smith
27.

17:58 – 18:01
Todd Smith
So I don’t know all the particulars.

18:01 – 18:04
Todd Smith
Maybe you could speak to it but he had a little bit of GameStop.

18:04 – 18:14
Todd Smith
So here’s one of the, one of the lucky few that have game stock GameStop stock at the time that all happened, right?

18:14 – 18:15
Todd Smith
And then he cashed out.

18:16 – 18:17
Todd Smith
Pretty.

18:17 – 18:18
Jorge
Lucky Gambler.

18:18 – 18:20
Jorge
Yes, he made it.

18:20 – 18:21
Jorge
Absolutely.

18:21 – 18:24
Todd Smith
So he ended up with like six figures from Dundee.

18:25 – 18:27
Jorge
Yep, that’s correct, yes.

18:27 – 18:29
Jorge
He made he made some money on that one.

18:29 – 18:29
Jorge
Yes.

18:30 – 18:30
Todd Smith
That’s good.

18:31 – 18:34
Todd Smith
Yeah, well, I like success stories like that, but.

18:34 – 18:39
Jorge
Well, it’s not, it’s not, it’s not the best option, but, yeah, he made, he made some money there now.

18:39 – 18:39
Jorge
Yeah.

18:42 – 18:44
Todd Smith
All right, well, I think I beat that dead horses.

18:45 – 18:47
Todd Smith
Anybody have any other thoughts around that?

18:48 – 18:53
Todd Smith
Right now, liquidity, accessing funds, that sort of thing.

18:54 – 18:58
Frank Zawatski
I mean, I think it touched all the bases, Elda.

18:59 – 19:07
Frank Zawatski
The challenge when you’re out of work, is obviously your 401 K money, It is not X accessible to you unless you basically get it out of the plan.

19:08 – 19:09
Frank Zawatski
That’s.

19:09 – 19:11
Jorge
Usually a.

19:11 – 19:14
Frank Zawatski
Door gets closed, linear impermanence, the loan, the loan off.

19:15 – 19:15
Todd Smith
All right.

19:18 – 19:20
Todd Smith
Ok, that helpful hora.

19:21 – 19:22
Jorge
Very helpful, guys.

19:22 – 19:23
Jorge
Very helpful.

19:23 – 19:24
Jorge
Yes, I appreciate the help.

19:25 – 19:35
Todd Smith
Ok, well, we don’t have a lot of callers today, obviously, but I’m going to go through a few questions that we had, at least for the recording, or that I had.

19:36 – 19:50
Todd Smith
I also want to announce a couple of things, or theme, this particular quarter, or, at least from our content, is more around behavioral finance, which I find pretty fascinating and important.

19:50 – 19:54
Todd Smith
So, I think Frank’s been pushing out a few articles on that already.

19:55 – 20:15
Todd Smith
So, I’d recommend people check out the blog, My ask you, in my experience, what I’ve seen in terms of people being successful investors, just generally, sound financially, is are there, they’re strong from a technical standpoint, but they’re also strong from a behavioral standpoint.

20:15 – 20:24
Todd Smith
And, I think, as advisors, that’s where we really step in, is to make sure the investor behavior is appropriate.

20:24 – 20:32
Todd Smith
Especially in a bad year or so, but I think there’s a lot to be learned there that we call it kind of the soft side of finance.

20:33 – 20:34
Todd Smith
So, I would encourage everybody to look at that.

20:35 – 20:40
Todd Smith
We can talk about investing, methodology, taxes, and so forth.

20:40 – 20:42
Todd Smith
That’s the technical, harder side of finance.

20:42 – 20:54
Todd Smith
But behavioral or softer side, I think, is probably equally important, because you can have all the nodes in the world, But if you don’t, manager, emotions, in your behaviors, you’re likely to do the wrong thing at the wrong time.

20:55 – 20:56
Todd Smith
Thanks for doing that, Frank.

20:57 – 21:01
Todd Smith
What I’ve seen so far as good, so you get a couple more on the way or how many were you doing?

21:02 – 21:04
Frank Zawatski
Yeah, I’m lucky, right?

21:04 – 21:13
Frank Zawatski
And then as long as I can find the topics, I think you’re absolutely right, it, you know, controlling your emotions is is at least as important as your technical knowledge.

21:13 – 21:20
Frank Zawatski
And, unfortunately, you know, we’re not trained to know our own, our own human weaknesses.

21:20 – 21:23
Frank Zawatski
And if there’s nothing wrong with having the biases.

21:23 – 21:28
Frank Zawatski
You just have to make sure you take that into account when you make financial decisions.

21:29 – 21:30
Todd Smith
Yeah, you need to be aware of it.

21:30 – 21:39
Todd Smith
We all have our own biases, And the first is learning what they are being aware of it, and then, hopefully, modifying that on your own.

21:39 – 21:43
Todd Smith
If not, that’s, that’s why you hire somebody to help you help you do that.

21:44 – 21:49
Todd Smith
We also built in protocols, you know, to kind of remove emotion.

21:49 – 21:51
Todd Smith
You know, perfect example Is rebalancing.

21:51 – 21:55
Todd Smith
You know, right, we haven’t done it yet this quarter but every quarter.

21:55 – 21:59
Todd Smith
We we systematically rebalance everybody’s accounts.

22:00 – 22:05
Todd Smith
In that’s regardless of what’s going on in the economy, and I always explain to people.

22:05 – 22:06
Todd Smith
We do it for two reasons.

22:06 – 22:08
Todd Smith
One is to keep your risk reward.

22:09 – 22:11
Todd Smith
Kinda mandate in check, right?

22:11 – 22:18
Todd Smith
So you don’t have that drift where, you know, you’re getting too heavy inequities are to everything bonds, so we’re keeping that in check.

22:18 – 22:32
Todd Smith
Then do it’s an emotional component where, um, or shaving off profits, it’s something from areas that are doing particularly well, and buying into things slower or not, are kind of underperforming potentially.

22:33 – 22:33
Todd Smith
None.

22:34 – 22:38
Todd Smith
Those usually believe it or not, the opposite of what most people do, what do they want to do.

22:38 – 22:43
Todd Smith
Like, oh, this is agree, this has been a great fun, or whatever, last year, I’m gonna keep adding to it.

22:43 – 22:48
Todd Smith
So, things like that, sounds simple, but it’s, there’s a reason we do it.

22:49 – 22:49
Todd Smith
No.

22:49 – 23:02
Todd Smith
And another illustration is one way of deposits come in, know, somebody transfers their accounts or making deposits, within reason, I try to invest it pretty immediately.

23:03 – 23:14
Todd Smith
And I don’t sit on it and try to time it, so that’s an emotional kind of protocol, control protocol for me, pinar organization, but also for investors.

23:15 – 23:15
Todd Smith
Hmm.

23:16 – 23:17
Todd Smith
So, anyway, that’s good stuff.

23:18 – 23:19
Todd Smith
So, we’ll be looking for that.

23:19 – 23:20
Todd Smith
Maybe one of these.

23:20 – 23:23
Todd Smith
Maybe next month, we’ll get into more of the behavioral stuff.

23:24 – 23:28
Todd Smith
Um, let’s see what else came up.

23:28 – 23:35
Todd Smith
So this week, I think this kind of an interesting one is not an interesting one, but fairly common.

23:36 – 23:41
Todd Smith
When I meet with new clients, one of the first questions I typically ask is.

23:43 – 23:44
Todd Smith
You know, what?

23:45 – 23:47
Todd Smith
What do you, what are your expectations for rates of return?

23:48 – 23:49
Todd Smith
Yeah.

23:50 – 23:54
Todd Smith
Most people shrug and they say, I really don’t know or they’re way off the mark.

23:56 – 23:59
Todd Smith
I had a client in here the other day.

24:00 – 24:08
Todd Smith
They had met with another advisor and they were really fixated on the rates of return that particular advisor had suggested.

24:08 – 24:12
Todd Smith
So there’s two problems with that conversation.

24:12 – 24:17
Todd Smith
In my mind, I just wanted to bring the Y one was very investment rate of return centric.

24:19 – 24:24
Todd Smith
Then, what I tried to articulate to the client, I think they got it, was that.

24:25 – 24:36
Todd Smith
The rate of return by itself is fairly meaningless without a plan and you can invest to invest, um, then try to get the best returns.

24:36 – 24:42
Todd Smith
But, it’s not very meaningful if it’s not connected to some kind of retirement or financial plan.

24:42 – 24:49
Todd Smith
So, I always say you need to start with a plan the plan then kinda backfill into the type of portfolio you should have.

24:51 – 24:53
Todd Smith
Thus, the type of return you should be getting.

24:54 – 24:54
Todd Smith
All right.

24:54 – 25:04
Todd Smith
So, the goal in my mind is not trying to get the best absolute return all the time, it’s really getting the return that you need to make the plan work.

25:05 – 25:09
Todd Smith
So, that was kind of the first, the first thing I always try to explain to people.

25:09 – 25:17
Todd Smith
The second is really just educating them on rates of return and what is an expectation, You know, what kind of expectation should you have?

25:18 – 25:21
Todd Smith
And, Jorge, I’m going to put you on the spot.

25:21 – 25:24
Todd Smith
What, what do you think are good rates of return near sharp guy?

25:24 – 25:25
Todd Smith
You probably get this, right.

25:28 – 25:31
Jorge
The band depend on the investment and depend on the jira and depend on the economy.

25:31 – 25:33
Jorge
There’s a lot of things that you need to consider.

25:33 – 25:34
Jorge
Now.

25:34 – 25:36
Todd Smith
Well, let’s say along, Let’s let’s start.

25:36 – 25:37
Todd Smith
I always start with long term.

25:37 – 25:47
Todd Smith
So none of us on this call really know what the rate of return of stocks, bonds or other asset classes in the next six months of the year really would be.

25:47 – 25:49
Todd Smith
Or, in the next three years, or five years.

25:50 – 26:00
Todd Smith
I think that’s, it’s harder to come up with, right, and I think that most people would agree that rates of return in that timeframe, in the next five years, even 10.

26:00 – 26:02
Todd Smith
It’s not going to be like the previous 10, right?

26:02 – 26:08
Todd Smith
So we could say that we’re probably expected moody, muted returns, Right?

26:08 – 26:14
Todd Smith
So we probably all agree with that, but let’s, let’s look at historical returns like over a long period of time.

26:15 – 26:17
Todd Smith
What, who has the stock market?

26:17 – 26:20
Todd Smith
What do you think the average annual return has been?

26:22 – 26:25
Jorge
Also between 10 and 11%?

26:27 – 26:29
Todd Smith
You’re pretty close, pretty close.

26:29 – 26:32
Todd Smith
It depends on what index you use and what timeframe.

26:34 – 26:39
Todd Smith
I’m looking at a chart right now, and I usually use this as kind of a starting point.

26:40 – 26:49
Todd Smith
But if you look at the last 50 years, from 19 70, it’s through 20 19, the average annual return was just north of 12%.

26:51 – 26:51
Jorge
Yep.

26:52 – 27:08
Todd Smith
So, when I kinda write this on the whiteboard, or a meeting with people when I say, so, in my estimation, unless you get into something, really leverage, really, extreme, you know, private equity, like your own business.

27:10 – 27:11
Todd Smith
You know, something off the chart.

27:11 – 27:16
Todd Smith
Truly, that should be the high point of what you should expect.

27:17 – 27:18
Todd Smith
No, depending on how aggressive you are.

27:19 – 27:28
Todd Smith
Um, then, I talked to them about, OK, over those 50 years, how many of those years use, do you think we’re positive versus negative?

27:33 – 27:42
Jorge
I will say that probably 70% of the years are positive around the number.

27:43 – 27:44
Todd Smith
See, I knew you are sharp guy.

27:44 – 27:46
Todd Smith
I need somebody else on this call.

27:47 – 27:53
Todd Smith
Actually fix 76% of those years were positive, and the 24% were negative.

27:55 – 27:56
Todd Smith
You’re close.

27:56 – 28:07
Todd Smith
So, And actually, if you look at, if you look at 94 years, they’re pretty close, 25 years, and different, kinda.

28:08 – 28:13
Todd Smith
If you look at 19 42 to 66, for instance, the rate of return was actually higher.

28:14 – 28:16
Todd Smith
The negative years was about 20%.

28:16 – 28:25
Todd Smith
If you look from 95 through 20 19, that was pretty, pretty consistent with the 50 years.

28:26 – 28:35
Todd Smith
So, um, when you start getting into five years, in 10 years, you’re going to have a greater deviation away from that.

28:35 – 28:42
Todd Smith
But, the point being is, I try to educate people who say, this is where, I think the maximum you could expect if you were 100% equities.

28:43 – 28:45
Todd Smith
What’s your not going to be?

28:46 – 28:53
Todd Smith
But I also want to make sure that you understand that statistically one out of five years, or five years, is going to be a negative view.

28:53 – 28:58
Todd Smith
It may not be the scary negative, but you need prayer for that if you’re going to be an investor.

29:00 – 29:00
Todd Smith
So, I think that’s good.

29:00 – 29:12
Todd Smith
I wanted to bring that up because that was a specific question that somebody we’re talking about this week, but people don’t really know what to expect, Especially in a very good market.

29:13 – 29:16
Todd Smith
They just look at their statements and they see their accounts are up.

29:16 – 29:16
Todd Smith
But they don’t have any.

29:17 – 29:22
Todd Smith
The, what the benchmark that two, or what expectations they should have.

29:23 – 29:32
Jorge
Now it’s important for them to know what’s going to happen because you have people, some, some people they have no clue of, of what is going to happen to their money.

29:32 – 29:33
Jorge
No, absolutely.

29:35 – 29:39
Todd Smith
So we started using riskalyze last last year.

29:39 – 29:43
Todd Smith
The year before riskalyze is a software program that will quantify that per pupil.

29:44 – 29:52
Todd Smith
And it will take your portfolio, um, actually categorized our risk number to that particular portfolio.

29:52 – 29:55
Todd Smith
So, here, for one K, for instance, Jorge.

29:55 – 30:01
Todd Smith
If you plug it into that, you would assign in a number between 0 and 100 being the most aggressive.

30:02 – 30:19
Todd Smith
But further than that, it will give you an in-depth, kind of overview of the sector exposure in our country, exposure, so on and so forth and then tell you, within a 95% probability, what will happen to that type of mixture, or that score.

30:20 – 30:23
Todd Smith
The next six months, they’ll tell you the upside and the downside.

30:24 – 30:38
Todd Smith
Then, it also stress test it until you, what that number or that type of mixture did in 708, know, what it’s done in good markets, bad markets, you really get a visual depiction.

30:38 – 30:41
Todd Smith
And a conversation about, you know, what does this really look like?

30:41 – 30:43
Todd Smith
Because otherwise, it’s just way too conceptual.

30:44 – 30:45
Todd Smith
No, you’re right.

30:46 – 30:55
Todd Smith
They don’t, and I always joke with people, like you don’t know how you’re going to behave back to the behavioral side of things until it happens, but we’re going to talk about and prepare you as much as we can now.

30:56 – 30:58
Todd Smith
So, you get it.

30:58 – 31:01
Todd Smith
You get somebody in here, it says, I am pretty aggressive.

31:01 – 31:03
Todd Smith
You know, I’m happy to do that.

31:04 – 31:05
Todd Smith
Well, that never been through a bad market.

31:06 – 31:06
Todd Smith
So.

31:06 – 31:07
Jorge
Drunk.

31:08 – 31:09
Todd Smith
Changes quite a bit.

31:09 – 31:12
Todd Smith
When they see a -20% or something like that.

31:12 – 31:20
Jorge
We are always very aggressive until you see other above 20, 25%, because as well, maybe not so aggressive Now.

31:20 – 31:20
Jorge
Yeah.

31:21 – 31:25
Todd Smith
What it might taste and say everybody’s tough until they get punched in the face or might not.

31:28 – 31:29
Frank Zawatski
Normally get punched in the.

31:29 – 31:29
Todd Smith
Nose.

31:31 – 31:32
Todd Smith
It’s kind of the same thing, right?

31:34 – 31:35
Jorge
It’s the same thing.

31:35 – 31:35
Jorge
Yeah.

31:36 – 31:44
Todd Smith
Frank strang’s been around longer than me, obviously So he was, I think, What’s your story with 8687 or 2?

31:44 – 31:49
Todd Smith
Didn’t you invest like that day or something Or something right, before I tell you a story around.

31:51 – 32:12
Frank Zawatski
Not that I can recall, but, uh, it’s, I think your point is very well taken about you don’t really know how you’re going to behave until it happens and that’s, you know, that’s the that’s the real weakness of all these risk questionnaires is you can answer the questions till you’re blue in the face, but you don’t know how you’re going to behave until it happens.

32:13 – 32:13
Frank Zawatski
Alright.

32:13 – 32:14
Todd Smith
And that’s.

32:14 – 32:17
Frank Zawatski
That’s when you really learn about yourself and again, getting back to that behavioral.

32:18 – 32:22
Frank Zawatski
It’s how well can you control the urge, do something irrational?

32:24 – 32:24
Todd Smith
Right, right.

32:25 – 32:27
Todd Smith
And if not, you really need to pick up the phone.

32:27 – 32:28
Todd Smith
Right.

32:30 – 32:41
Todd Smith
Ok, the other thing that came up this week a little bit was evaluated at Merrill Lynch account for somebody and I just wanted to revisit fees with people.

32:42 – 32:47
Todd Smith
There’s generally 3, 3 types of fees that you look for.

32:47 – 32:50
Todd Smith
One is the management fee by the advisor.

32:51 – 33:01
Todd Smith
One is anything by the custodian or the brokerage, then the third part that’s most often overlooked is the expense of deandre lying investment.

33:02 – 33:08
Todd Smith
So, this was actually for somebody in Michigan.

33:08 – 33:14
Todd Smith
Um, they thought that the fees and everything were in line and they just wanted me to take a look at it.

33:15 – 33:15
Todd Smith
Be happy to.

33:15 – 33:19
Todd Smith
And he said, I think I’m paying about 1%.

33:20 – 33:28
Todd Smith
Well, once we really analyzed everything, the underlying investments, some of them were north of 1%.

33:28 – 33:31
Todd Smith
And some of them, we’re a little bit lower.

33:31 – 33:34
Todd Smith
I think on average, it came about zero point eight, five of 1%.

33:36 – 33:44
Todd Smith
And then they also had a variable annuity in there in one of their IRAs and that was north of 2%.

33:46 – 33:52
Todd Smith
So, obviously, to the client, they did not, they weren’t aware of this, and.

33:54 – 34:06
Todd Smith
No, isn’t news to them, so, I always like to bring it up when you’re evaluating your portfolio, regardless of where it is generally, those three, um, expenses that you’d be need to be aware of.

34:06 – 34:10
Todd Smith
Now, you might say, well, zero point seventy 5 point 8 five isn’t a lot.

34:12 – 34:20
Todd Smith
But when you add it on to the other fees, they’re paying 1% for the, the portfolio, which is north of multi-millions.

34:20 – 34:25
Todd Smith
So, that should have gone down after that, but they didn’t have any break points.

34:25 – 34:33
Todd Smith
But they were paying 1% there, plus the point 8 5 on the underlying investments.

34:33 – 34:36
Todd Smith
So you’re at 1.85 alone.

34:37 – 34:39
Todd Smith
Some people links still does not a lot.

34:39 – 34:41
Todd Smith
But that’s a drag, right?

34:41 – 34:47
Todd Smith
That’s a big drag on your investment, performance, goes back to what we’re talking about, return expectations.

34:47 – 34:51
Todd Smith
Return expectations at 12 is the high point.

34:51 – 34:58
Todd Smith
But you add bonds and other asset classes to the portfolio, so maybe you’re now in the 6 to 8 range.

34:58 – 35:03
Todd Smith
Well, almost 2% is going to cost and fees.

35:04 – 35:06
Todd Smith
Then you have inflation and another 2%.

35:06 – 35:10
Todd Smith
You’re barely making it barely outpacing inflation at that point.

35:10 – 35:13
Todd Smith
So, I’d just like to remind people above that.

35:15 – 35:24
Todd Smith
For you, Jorge, that’s that’s the benefit of having your money in the form K You pay most of those costs, but the underlying investments you just need to be aware of.

35:25 – 35:26
Jorge
Hmm?

35:26 – 35:26
Jorge
Hmm, hmm.

35:26 – 35:26
Jorge
Hmm.

35:27 – 35:28
Jorge
Of the extra fees.

35:28 – 35:28
Jorge
Absolutely.

35:28 – 35:29
Jorge
Yup.

35:31 – 35:34
Todd Smith
So that came up and then the last one.

35:36 – 35:37
Todd Smith
The last one is fairly common, too.

35:39 – 35:45
Todd Smith
Is all about insurable Neve, and do do I need insurance?

35:45 – 35:55
Todd Smith
So we typically, I typically work with a lot of people in there, fifties and sixties and beyond, and they have a lot of legacy, kind of insurance policies.

35:56 – 35:58
Todd Smith
Kinda like you, who are you return?

35:58 – 35:59
Todd Smith
You don’t have whole life.

36:01 – 36:09
Todd Smith
But there it gets to a point in my mind that you don’t really have that, the risks that needs to be mitigated.

36:09 – 36:17
Todd Smith
Typically at that age your kids are gone ero of dependence that really relying in your income.

36:18 – 36:22
Todd Smith
So the need for insurance as you get older, becomes less and less.

36:22 – 36:25
Todd Smith
I think the caveat to that is there’s a couple things really.

36:25 – 36:38
Todd Smith
Is, hey, maybe you want, you still want proces going to, your spouse, could be to pay off the mortgage or just send it to supplement retirement.

36:38 – 36:39
Todd Smith
So, I think that’s a consideration.

36:40 – 36:47
Todd Smith
I think there’s also charitable and estate planning considerations, too, it all depends on the goal, right.

36:47 – 36:51
Todd Smith
But you could create an immediate state by just having Insurance Policy.

36:51 – 36:52
Todd Smith
No.

36:52 – 37:02
Todd Smith
So maybe not that you’re protecting dependence, but maybe you’re creating in a state by having that, keeping that insurance policy in place.

37:03 – 37:08
Todd Smith
Then lastly, you can do that for charitable inclinations as well.

37:08 – 37:19
Todd Smith
So, that all depends on the goals, but frequently, um, people in their fifties and sixties are really need insurance and that’s an extra costs that they probably don’t need to keep incurring.

37:20 – 37:24
Todd Smith
So, I’d like to just bring that up since I was a question this week.

37:24 – 37:27
Todd Smith
Um, any thoughts on that, guys?

37:29 – 37:43
Frank Zawatski
I would say, of people who are very wealthy, may need insurance in there, or a older age, because of anticipated estate tax expenses, but that is a very, very small majority of the American population.

37:44 – 37:49
Todd Smith
That might change with new tax law, but we’ll see what happens.

37:50 – 37:58
Todd Smith
The other thing that, too, I think, that you experienced with family member last year or so, is state liquidity.

37:58 – 38:05
Todd Smith
You know, if there’s no liquidity in the estate and you need to, you need cash, whatever the case may be.

38:06 – 38:10
Todd Smith
That insurance policy could influx cash into the state.

38:10 – 38:11
Todd Smith
So say it’s all property.

38:12 – 38:18
Todd Smith
Know, I’ve seen people know, there’s an essay where it’s all farmland or stuff that can’t easily be sold.

38:19 – 38:22
Todd Smith
But they have administrative fees and taxes to pay.

38:22 – 38:27
Todd Smith
Where do they get cash that ensures Pulse, you can do that as well.

38:28 – 38:33
Todd Smith
So, um, one other thought.

38:33 – 38:34
Todd Smith
But I can’t recall.

38:34 – 38:43
Todd Smith
Oh, I guess the other thing that I would say is a strategy people should should consider, um, are not necessarily consider, but be aware of.

38:44 – 38:54
Todd Smith
We’ve looked at this for a number of people, who said, say, you decide you don’t need insurance, and you’re paying, You’re still continuing to pay premiums.

38:55 – 38:58
Todd Smith
You’ve been paying the premiums for a multitude of years.

38:58 – 39:03
Todd Smith
And you hate just let it go, There’s a couple different options.

39:03 – 39:12
Todd Smith
Depending on the life insurance policy you have, one, you can actually go to market and sell your insurance policy.

39:12 – 39:18
Todd Smith
There’s, there’s people out there that will actually buy them, they’ll give you cash for the type of policy that you have.

39:18 – 39:34
Todd Smith
The other 1 is 2, is to consider, this is really in the cash value, kind of whole live type arena, not the term, But that is to exchange that into some type of long term care, hybrid.

39:34 – 39:37
Todd Smith
As we know, that’s one of the biggest risks, indeed.

39:38 – 39:40
Todd Smith
Retirement, is that health care kind of event.

39:41 – 39:53
Todd Smith
So, if you don’t have long-term care, and you have an old policy, life insurance policy, you don’t think you need, you can make that exchange so that you’re not giving up on money, that you spent to have that policy.

39:54 – 40:00
Todd Smith
And you’re now you’re getting long term care coverage with not really more out of out of pocket expense to you.

40:00 – 40:02
Todd Smith
So, just wanted to bring that up.

40:02 – 40:03
Jorge
Slowly for term, right?

40:03 – 40:06
Jorge
But that’s only for whole life, not not for term.

40:06 – 40:07
Jorge
Correct.

40:07 – 40:07
Todd Smith
Correct.

40:08 – 40:11
Frank Zawatski
And horrible notice, that’s another one you can exchange.

40:11 – 40:14
Frank Zawatski
But, Yeah, it doesn’t apply to term.

40:16 – 40:16
Todd Smith
Ok.

40:18 – 40:21
Todd Smith
Um, I guess that was it.

40:21 – 40:23
Todd Smith
I had for questions this week.

40:24 – 40:31
Todd Smith
Um, I think I was just going to bring up a recommendation, and you know, we’re still kind of wrapping up some of our tax stuff.

40:32 – 40:36
Todd Smith
If you have tax returns that we haven’t reviewed, please get them into us.

40:36 – 40:37
Todd Smith
That was a little late this year.

40:38 – 40:47
Todd Smith
But I just wanted to bring up a reminder that a few of the low hanging deductions out there, obviously, are going to be your IRAs, your for one case.

40:47 – 40:48
Todd Smith
Always look at that.

40:49 – 40:51
Todd Smith
We’ve talked about a couple of strategies.

40:53 – 40:55
Todd Smith
The last couple of years, one is bunching.

40:55 – 41:03
Todd Smith
Your deductions, as you know, is getting harder and harder too itemize and exceed the standard deduction.

41:03 – 41:12
Todd Smith
So one strategy is bunching some of your deductions every couple of years so that it puts you over the standard deduction and you can now itemize.

41:13 – 41:22
Todd Smith
So, we’ve got a few people do that, that, that are, you know, contributing to charity, if they’re contributing maturity, right, every year.

41:22 – 41:27
Todd Smith
But they’re not really getting an ancillary, no economic benefit from that, because they’re not itemizing.

41:28 – 41:35
Todd Smith
One such strategy would be, too, do a lot more in one year, Like every three years, you do much larger amount.

41:36 – 41:40
Todd Smith
The charity is still getting the same, just at different times.

41:41 – 41:47
Todd Smith
You at least get a benefit from the charitable deduction that you wouldn’t normally get.

41:47 – 41:55
Todd Smith
So, and then that leads into the last point, one of my favorite things, in that strategies using a donor advised fund.

41:56 – 42:08
Todd Smith
A donor advised fund allows you to get the current year charitable deduction, but you can then control when you make the district, you know, the distribution, too, your respective charitable interests.

42:09 – 42:10
Todd Smith
So it gives a lot more flexibility.

42:11 – 42:16
Todd Smith
Then the caveat to that real quick, and if anybody wants to talk in more detail, I’m happy to do that.

42:17 – 42:22
Todd Smith
You know, the caveat to that really is, yeah, I like giving money, but I don’t want to give that much money away.

42:25 – 42:29
Todd Smith
No, once I give that money, I can never have it back.

42:29 – 42:32
Todd Smith
There are, there are instruments out there that allow you to at least get an income stream.

42:33 – 42:38
Todd Smith
So there’s these instruments called pool income funds that operate just like a donor advised fund.

42:38 – 42:39
Todd Smith
You can put money into it.

42:40 – 42:43
Todd Smith
You get the courier tax deduction.

42:44 – 42:52
Todd Smith
It goes to the charity of your choice, but then there’s a mathematical equation to figure out an income stream that comes back to you.

42:52 – 42:57
Todd Smith
So, that’s kinda nice in the sense that you’re not totally giving your money away.

42:57 – 43:00
Todd Smith
You’re getting a tax benefit and an income stream from it at the same time.

43:01 – 43:03
Todd Smith
That’s a little bit more powerful to people.

43:04 – 43:07
Todd Smith
But I’ve gone down the rabbit hole real quick.

43:07 – 43:10
Todd Smith
I just want to bring that up when you’re looking at tax deductions.

43:10 – 43:15
Todd Smith
When we’re talking about strategies to minimize tax in our tax analysis.

43:16 – 43:22
Todd Smith
Bunching is a pretty common when bunching up deductions you could do that with property taxes or just regular taxes.

43:23 – 43:29
Todd Smith
You could do that with charitable contributions, but that’s usually most prevalent for the people that I’ve been working on.

43:30 – 43:35
Todd Smith
Um, I just started out a lot of questions on that, Jorge or anybody, Any thoughts?

43:38 – 43:38
Jorge
No.

43:38 – 43:40
Jorge
No questions on this a lot.

43:43 – 43:45
Todd Smith
Well, that’s all I have today.

43:48 – 43:49
Todd Smith
Double check here.

43:52 – 43:55
Todd Smith
We talked about expected returns.

43:56 – 44:03
Todd Smith
So we will be having probably some type of event, probably two events coming up this summer.

44:03 – 44:06
Todd Smith
I hope to do an in person event for clients.

44:06 – 44:08
Todd Smith
So look out for that.

44:09 – 44:12
Todd Smith
And then we’ll probably have some kind of webinar this quarter.

44:12 – 44:15
Todd Smith
I just haven’t scheduled at this point.

44:15 – 44:16
Todd Smith
Everybody is traveling now.

44:17 – 44:18
Todd Smith
They’re always free.

44:19 – 44:22
Todd Smith
Lot of people are gone or are busy in the summer.

44:22 – 44:24
Todd Smith
And so it’s good to see, you know, things opening up.

44:25 – 44:26
Todd Smith
Things are pretty open.

44:26 – 44:29
Todd Smith
They’re now in LA right before.

44:29 – 44:35
Jorge
It’s everything is open now, but the Delta is going up again.

44:35 – 44:36
Jorge
So, well knows.

44:38 – 44:39
Todd Smith
That was written up this morning.

44:39 – 44:43
Todd Smith
There’s some hotspots for a lot of the unvaccinated areas.

44:44 – 44:46
Todd Smith
They’re low vaccination rates.

44:47 – 44:50
Todd Smith
About Wisconsin, Frank, is it all back to normal?

44:50 – 44:51
Todd Smith
They’re pretty much sure.

44:52 – 44:53
Frank Zawatski
Yeah, pretty much.

44:53 – 45:06
Frank Zawatski
Matter of fact, I guess, there’s a state of Wisconsin County by county website that came out and it’s updated every day and I look at that every couple of days, out of curiosity.

45:07 – 45:15
Frank Zawatski
And Barron County, which is, where I’m at, there was one positive covert case in the entire county last week.

45:15 – 45:22
Frank Zawatski
So, it’s, it’s, either, they’re not getting tested or, it’s, it seems to be receding.

45:22 – 45:23
Todd Smith
That’s good.

45:23 – 45:24
Todd Smith
That’s good.

45:24 – 45:24
Todd Smith
Yeah.

45:26 – 45:27
Todd Smith
And before I go, how’s the fishing?

45:28 – 45:29
Todd Smith
Sure.

45:31 – 45:32
Frank Zawatski
We had official last night.

45:34 – 45:35
Todd Smith
Yeah.

45:35 – 45:36
Frank Zawatski
It’s been OK.

45:36 – 45:39
Frank Zawatski
It’s off and on, and you know you go out one time and get shot.

45:39 – 45:42
Frank Zawatski
Went up a couple of days ago, and had plenty of them.

45:43 – 45:46
Frank Zawatski
Then I went out the next day and call to sew.

45:47 – 45:47
Todd Smith
All right, It.

45:47 – 45:47
Frank Zawatski
Varies.

45:48 – 45:49
Frank Zawatski
It varies.

45:49 – 45:53
Todd Smith
Well, you haven’t got scout then the nice days.

45:53 – 45:55
Frank Zawatski
It’s got a few times.

45:55 – 45:59
Frank Zawatski
But if they usually catch 1 or 2, we’ve never had zero.

45:59 – 46:00
Frank Zawatski
But it does happen.

46:03 – 46:04
Todd Smith
Well, we should catch up.

46:04 – 46:06
Todd Smith
Sure, Let’s, let’s get a call.

46:06 – 46:09
Todd Smith
I think you’re coming back into town this month, aren’t you, sometime in the month of June 30th.

46:10 – 46:12
Frank Zawatski
July 30th rather.

46:13 – 46:17
Todd Smith
Ok, probably catch up before the spend.

46:17 – 46:18
Frank Zawatski
Ok?

46:20 – 46:20
Todd Smith
Guy.

46:21 – 46:24
Todd Smith
Hey, thanks for coming in and good luck with everything and thank.

46:24 – 46:25
Jorge
You for the help, I’ll talk.

46:26 – 46:26
Todd Smith
To.

46:26 – 46:28
Todd Smith
I think We’ll be talking Thursday night.

46:28 – 46:29
Todd Smith
Right, right, OK.

46:30 – 46:30
Jorge
Alright.

46:31 – 46:36
Todd Smith
Guys, thanks so much for showing up and we’ll be talking to you guys post, Alright, OK!

46:38 – 46:39
Jorge
Thank you, guys.

46:39 – 46:39
Jorge
Have a good week.

46:40 – 46:40
Todd Smith
Thanks.

46:41 – 46:41
Todd Smith
Bye.

46:41 – 46:42
Jorge
Bye.