Loading summary
Transcript17 lines
- [00:00]
A
This year I'm not missing opportunities and it starts with not missing calls because a missed call is money out the door. Quo helps you and your team share one business number, reply faster and stay on top of every customer conversation so you never miss an opportunity to connect with your customers. That's why today's episode is brought to you by Quo, spelled Q U O. The smarter way to run your business communications. Quo isn't just a phone system, it's a smart system. AI automatically logs calls, generates summaries, highlights next steps and can even qualify leads or respond after hours so your business stays responsive even when you're offline. Plus, it's easy to scale, add teammates new numbers and sync your CRM in minutes. Your team can manage everything from one shared number, ensuring no messages are missed and no customer slips through the cracks. Try Quo for free plus get 20% off your first six months when you go to quo.com jillonmoney that's Q-U O.com jillonmoney Quo no missed calls, no missed customers need contract help for those workload peaks and backlog projects. You're not alone. Robert half found that 67% of companies surveyed said they will increase their use of contract talent. That's why their recruiters leverage their experience and use award winning AI to to quickly find the skilled candidates you want. Learn about their specialized talent in finance, accounting, technology, marketing, legal and administrative support at Robert Half. They know talent. Visit robert.comtalent today. Welcome to the Jill on Money Show. It's Wednesday, February 18th and we are here trying to help you make better and sometimes just less bad financial decisions. If something's going on in your life no matter how big or small and you need a little bit of guidance or mentoring or you need a Sherpa to carry the emotional baggage that you are carrying right now. Mark and I are emotional Sherpas and we're also certified financial planners and we'd love to help you out. Just go to the website jillonmoney.com, click the contact us button, write us a note and if you would like to come on the air just check the box. Mark does everything else. Right now we are going to do some emails because the box is getting filled up. Benny writes. Hi Jill and Mark. Thanks so much for reading this and we hope you can help us. We are a married couple, no kids, just pets, 48 and 49 living in a very high income tax, high cost of living state. We both work in stressful, competitive and recently shrinking industries. Thanks a lot AI says Benny our current annual income varies between 230 to $350,000. What a range. That's before taxes. Now, because of impending layoffs at our employers and some escalating health issues that might dramatically limit our ability to find new jobs in other fields, we're worried that we might be forced to retire prematurely in the next year or two. Wow. So like around 50. Thankfully we've been saving up because we realized this day was coming. So right now, and by the way, the in par with the market at all time highs, here's what they have. Two and a half million bucks in 401ks, $1.3 million in a taxable brokerage account, which is mostly in Vanguard funds. A million dollars in cash, high yield savings and laddered CDs. Because we know we are going to have to carefully manage our modified adjusted gross income to afford health insurance through the AFF Care act if we are laid off. Okay, small pension, 400 bucks a month at age 55 and then Social Security, which will be about $5,600 a month. $30,000 left on a mortgage on a $500,000 condo. Expenses are running 12 grand a month. And let's see, this includes assumed cost of health care of at least $2,000 a month once the mortgage is paid off. Okay, so Jill and Mark, if we wind up jobless next year, can we retire early and focus on our health?
- [04:30]
B
It's close. It's tight.
- [04:32]
A
I don't. It's not great.
- [04:33]
B
12 grand a month, it's tight.
- [04:34]
A
I can tell you right now it's not great. Because I can. Okay, so here's the, here's the issue, gang. I mean you're, you're probably, everybody's listening is like they have $5 million. What are you talking about? Why are they, why are they even emailing? Okay, but here's why. The two and a half million in 401ks hasn't been taxed yet. So it's not two and a half million. Right. And if you're living, and I don't know where you're living right now, but if you're in a high income tax state, then I'm going to say that that $2.5 million is probably more like 1.8. And then so now we're down at 1.817. And now you know, there's not that much money to generate 12 grand a month and 12 grand a month in today's dollars. So I am concerned that we're not going to get there. But then I'm also concerned that, you know, because of the three. Let's say you knock down, let's say we kind of take the 401k and we say, okay, that plus the taxable brokerage is 3 million bucks. What can that 3 million bucks throw off? And they're young, right? So what are we going to throw off? 100, maybe 100. 100 to 120 grand. Okay, so that kind of gets them close, but they're so young that I think it's really. It's going to be hard. And I don't know what to say except to say that I would have to know a lot more about what else is going on. How much. Is it possible that could either of you maybe work part time? I know there's health issues, but I don't know what those issues are, but I. It's not a slam dunk anyway. Young. They're young. They're young. 50 years old.
- [06:13]
B
Hope everything goes right.
- [06:15]
A
Exactly. Okay. NP has a half a million dollars in savings trying to decide if they want to pay off a mortgage. Their rate is five and a half percent or take that half a million dollars and put into the brokerage account to invest. NP we don't know because I don't know what other money you have. If you have a whole bunch of money in your brokerage, if you're like, oh, I have $5 million in my brokerage and this half a million is just hanging around and I want to pay off my mortgage. I don't know how old you are. I mean, you know, I love holding onto my cash, but a five and a half percent interest rate is certainly a high enough rate that it would catch your attention. But it really depends on everything else and how old you are and, you know, what are my other alternatives around the money? Generally speaking, we don't love the whole paying off the debt because you lose access to the money. Okay. Oh, here's an interesting question from Gary, who said, hey, you said to keep a credit card in the back of the desk drawer. What if the card has an annual fee as it collects dust? The whole point on reducing your debt would be to remove the culprit, wouldn't it, Mark? What about. Because when you close the account out, you then shut down, you then lose some ground on your credit score. So, Gary, I think it depends on whether you're, like, borrowing money or not. If you're not planning on borrowing money, sure, you can get rid of it, but like, if it's a $35 fee, maybe and you're about to go get a car or something. Maybe I wouldn't get rid of it. So what do you think, Mark?
- [07:41]
B
Yeah, I think it depends on how much the annual fee is. I mean, I get what he's saying. If I'm not using the card and it's just sitting in the back of the drawer and I'm paying $150 a year. Well, why am I doing that?
- [07:51]
A
I wish mine were $150 a year. Please.
- [07:54]
B
You said, what'd you say, 30?
- [07:56]
A
Yeah. Well, 35 is some of the cheap ones. I think the Amex is now like hundreds.
- [08:02]
B
Oh, yes, yes.
- [08:03]
A
Right. Okay. Linda is 74 years old. She's a widow. And she said, before my husband passed away five years ago, we put most of our retirement in CDs and they were earning 2%. Now she's making 3.75%. Here's the quote. I have a friend who invests in exchange traded funds that mimic the S&P 500. My question is, should I change to investing in exchange traded funds at this stage of my life or should I stick with investing in CDs while I'm still getting a good rate? I'll tell you what, Linda. As soon as you make that investment and buy spy, the exchange traded fund that mirrors the s and P500 index, it will probably go straight down. So I'm not gonna tell you to absolutely do this. I think it would. We'd need to know more about you at the very least. If you wanted to, say, put maybe 10% into a fund, that's fine, but I don't know if it's even worth it. If you hate volatility, what would you do if the thing went down? Lot of questions I gotta follow up with.
- [09:02]
B
This is all about risk. I mean, the reason why the S and P is doing better is because it's taken on more risk. Your CDs are essentially risk free. You don't have to worry about the value going down.
- [09:12]
A
Exactly. Exactly. Okay. Jasmine says, hi, Jill. I'm curious to know what you would say about this situation. I am a local healthcare professional. I graduated in 2021 from my residency with about. Hang on to your hat, Mark. $275,000 in total student loan debt. Oh, my God. I just have to pause for a second. Okay. That made my debt to income ratio unfavorable and thus I've not been able to save for retirement. Between a combination of living like a resident and spending most of my income on loans, I'm down to my last $40,000. She went from 275 to 40. Oh my God. I've taken a step back to consider my options and put $25,000 in a high yield savings account for approximately the last three months or so. I started to qualify for a company sponsored IRA last year, so I've been using that and contributing for about six months. I now earn about 150 to $200,000 a year depending on my time off in production. So where do you suggest starting? My company does not offer a 401k. It is not an option. My husband is in tech and so our emergency savings comes from the cash that he has saved. We are also planning on growing our family and moving into the city. So a lot of big life movements coming in the next two years. I'm open to the idea of speaking to a financial planner. My husband less so he would be more open to someone who is fee based versus a percentage. Your thoughts? I don't think you need a financial planner right now and you can get one. But I think that I need to know exactly what is going on between the two of you. In other words, you're amazing. You're paying down these student loans. But what's his situation like? What's your cash flow look like together? Because it sounds like you sort of created this scenario where it was just you and then all of a sudden the husband came in. So I think that there are a couple of things to consider, which is if you and your husband are looking at maybe buying something or having kids, we'd really want to look at what's happening for you guys together. And it may not mean that you need to do much more than just use that ira. Maybe in this situation your husband maxes out his retirement account and you use your salary to pay down the student loans and gather up more cash. But I would need to know a lot more about you guys together before offering like advice on that. Do you agree with that, Mark?
- [11:53]
B
I agree. Long term, this is not a person that I'm really worried about because this person just paid off more than $200,000 in loans in five years. So she knows how to save.
- [12:02]
A
Oh yeah. Oh yeah. But we just need to find out like the best way to get there. So I think that's the most important thing. Scott wants to know about his portfolio costs. He says, I've just retired and I'm 54 years old. My wife, also retired, is 53. We are debt free. Our portfolio is worth 2.4 million and my wife has a small pension that brings in $2,400 a month. So long story short, we pay about one and a half percent of fees on a managed portfolio on that $2.4 million. And the question is, is this a normal range to pay? It's hard to find true information. Everyone has a different setup. Can you elaborate more on this? Okay, Scott, so if you've got $2.4 million, I would say that one and a half percent is a high number. I think many firms, again, you're right, everybody's a little bit different. But most firms will charge you a certain amount of a fee up to say a million dollars and then another up like 1 to 2 million and a different amount above 2 million. Now they may give you a blended fee, but I think one and a half is too high on 2.4 million. The next question is, what is that person who is managing your portfolio? What is he or she doing for you on the planning side? Because if they're just managing money for one and a half percent, I sure think you could do better with someone who is doing full time financial planning, running scenarios for you, helping you understand what's going to happen for you guys in the near, you know, in the near term, intermediate term and long term. And you could do that probably for cheaper than one and a half percent. So I would encourage you to get back in touch with us, come on the air with us and talk it through because I don't know if you need this person. I don't know if you can do this yourself. But what I do know is 1 1/2% on a $2.4 million portfolio with no financial planning, that's way too much. I wouldn't do that. So I hope that helps. Okay, Mark, we just blew through this show. What a great show. I appreciate it and I always appreciate you and we appreciate your questions. If you've got one, go to jillonmoney.com click the contact us button. Write us a note if you'd like to join us live. Just check the box. Mark will do everything else. Don't forget, you must sign up for the free weekly newsletter comes out every Friday. And it will also entail mail you receiving the blog post that I write every so often. I don't like to get into like a ritual. Like once a week is fine. Maybe a couple times. We'll see. You can check out my videos, the last appearances on CBS News. You can see what it looks like when I get all gussied up. That's about that. Okay. You can subscribe to us on the Odyssey app or wherever you find your favorite podcast. We ask that you always do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening and we'll talk to you tomorrow. Hey gang, I just made a first time ever purchase on behalf of the pod. I was so psyched because Mark and I don't do a lot of promotional materials, but I was able to create a branded sweatshirt. Yep, a Jill on Money branded sweatshirt with vistaprint. Now I'm not usually good at these things, but Vistaprint made it simple to bring this idea like, oh, wouldn't it be cool if Mark and I could create some sweatshirts that we'll try out and maybe the listeners would want to get them as well. They've got these great design tools, they have fast shipping human support if you need a little guidance along the way. Because the sweatshirts were so easy to execute. Now I'm thinking about doing some other stuff. Maybe there's some baseball caps or, I don't know, other fun stuff that you guys would want. You'll let us know. There's a reason that over a million people trust Vistaprint for their small business print needs. Vistaprint print your possible right now new customers get 20% off with code new20@vistaprint.com Go behind the scenes of one of TV's most watched true crime series with the 48 Hours Postmortem podcast, where correspondents and producers take you inside every Monday. Listen to a new episode of 48 Hours and then join me, 48 Hours correspondent Ann Marie Green every Tuesday for a new episode of Postmortem. Follow and listen to 48 Hours on the free Odyssey app or wherever you get your podcasts.