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- [00:00]
JP Swenson
This episode of the Rotary Voices Podcast is brought to you by History Explorer. Learn more@historyexplorer.com.
- [00:11]
Derek Kinney
From Rotary magazine. This is the Rotary Voices Podcast. I'm your host, Derek Kinney, a proud member of the Rotary Club of Arlington. As America's financial educator, I'm a frequent guest on Fox, cnn, cnbc, and Yahoo. Finance, sharing my Middle Class to Millionaire playbook so people can grow their money.
- [00:31]
James Bogart
And do more good.
- [00:32]
Derek Kinney
I'm also the author of Good Money Revolution, a Wall Street Journal and USA Today bestseller. Over the past few months, the market volatility around the world has sent many investors on an emotional rollercoaster as they figure out what to do about their investments and retirement accounts. In today's episode, I'm joined by certified financial planner James Bogart. James is the founder and CEO of Bogart wealth, which is widely considered one of the top financial planning firms in the country. Bogart wealth is an independent, the only wealth management firm guiding corporate executives, professionals and families on their paths to and from retirement. James and I will have a practical money conversation to address your concerns and help make things easy to understand in.
- [01:21]
James Bogart
The market and and in the economy right now. I'm excited about our conversation today, James.
- [01:31]
Derek Kinney
Because there's so much going on in.
- [01:33]
James Bogart
The market and the economy right now.
- [01:35]
JP Swenson
Well, thank you for the very kind introduction, Eric, and I appreciate the opportunity to be here.
- [01:40]
James Bogart
First of all, for many people, 2025 is not going how most people expected it to go and consumer confidence has dropped. We've got quite a bit of market volatility and of course, tariff worries. But first of all, let's talk about the overall economy. What's your perspective on where things are at right now?
- [01:59]
JP Swenson
I have to say, I think 2025 is actually playing out in line with anticipation. I mean, it's one of those things where we knew at the outcome of the election that we were going to experience dramatic change. And now no one could quantify what that change actually would mean or the manner or even the duration or frequency of how that change would be. But yeah, as we came into the year at Bogart wealth, you know, we flat out said volatility is going to be the norm as opposed to what we've been experiencing recently, especially because 2023 and 2024 were, were very much what we would describe as anomalies of a year because of the way market volatility was so muted relative to normal expectations. It's actually more common to have 10% swings intra year than it is not to have that and why I say 2023 and 2024 were anomalies simply because those were two consecutive years where we didn't have volatility more than 10%. And so a lot of the conversations we've been having with our clients have been around just framing of this environment. Yes, this is different. And I'm going to argue every single time that we've seen volatility of over 10% and it's been different. The catalyst is different. It's something new. What I will always say with any one of our clients is, is you need to stay rooted in the fundamentals, stay rooted in your plan and have the components built into your portfolio that will allow you to remove emotion from investment decisions. Because the number one detractor from long term performance is and will always be emotional involvement. It doesn't belong with investments, it never should. And what we find in these types of environments, whenever you amplify volatility, and again, name the catalyst, right, Geopolitical, Fed tariffs, the catalyst can all intertwine. And of course, the more uncertainty we have, the more volatility we have. It's one of those things where if you're not preparing prior to those environments, then you're going to be more emotionally responsive when these environments actually happen. That's when I think about dependent upon where you are in your journey of thinking about retirement, planning for retirement or accumulating for retirement. It could be a very different perspective along the way. Our younger investors, you're getting a discount, right? Like, let's find ways to get money invested because we have a longer term perspective on this than somebody who's actually in retirement in that deaccumulation phase of life where they're needing their money to generate an income in paycheck for them.
- [04:34]
James Bogart
You know, I'm talking to advisors right now and one of the things they're sharing is they're sort of juggling. They know that long term is the strategy. They know that people should invest long term and stay invested in times of volatility. But many people feel like now they're seeing companies that are saying, look, we're not going to report expectations for what earnings might be. We're going to take away this guidance because of unknown factors about tariffs. And some of these things, to me, when I'm talking to advisors as I coach them, it feels like clients are feeling more uncertainty now than they have been recently. What do you say to your advisors to kind of lead them, but also to your clients? Because what you're saying is spot on. It's fundamental financial planning. But in times of uncertainty, those worries, what do you do to sort of help them manage those emotions, even when they know they shouldn't have them, but they do experience them?
- [05:25]
JP Swenson
There's two parts to that question here. There's the conversation with clients and then there's the conversation as an advisor leading a team of other advisors. I always am mindful. I don't want to be overly optimistic or overly confident in recognizing there are systemic issues that we are needing to address within not only the US Economy, but even the global economy. And there are real things going on. But I also stay rooted in a tremendous amount of conviction around the resiliency of the US economy, the resiliency of the US Consumer, and candidly, the innovative capabilities of US Companies. And what we're seeing right now is an environment where, yes, there is a tremendous amount of uncertainty and we're going through this dramatic change management exercise. But at the same time too, we're seeing phenomenal corporate earnings across the board almost. And if anything, like I look at the Magnificent Seven, which were the names that were by and large impacted the most in this most recent period of volatility, we're actually starting to see a narrative around them as to why we actually really like them in a longer term position in someone's portfolio. Because a lot of these names aren't necessarily as dramatically impacted by things like tariffs specifically, and especially when we talk about the US Economy in the manner that we are. I mean, we're essentially a big technology etf. If you look at the magnitude of the technology sector relative to the US economy, tech is not one that is going to be as dramatically impacted as an example. And candidly, I also say this on the other side of this argument. The S&P 500 isn't necessarily, in my opinion, a proxy of what normal Americans look, feel and experience from their day to day living. Right. So there is a little bit of a disconnect with regards to the S and P, how it's structured because from the way it's a market cap weighted index, these tech companies are continuing to form on a relative basis. Well, their earnings have been very good. Where I personally am seeing the disconnect right now is I think a lot of consumer behavior is reacting very short term and we're not going to actually manifest the implications of that behavior for probably months, maybe even next year before we actually start to see that translate into actual earnings data. And what's happening, like for example, we're seeing a lot of businesses accelerating their Purchasing in anticipation of what tariffs may be. And again, in a lot of instances, the terraces haven't actually even been instituted. But we're seeing acceleration of spending which could actually impact corporate earnings in second quarter. Right, where we're seeing a high level of spending. So we see earnings across the board be good in Q2, but what we don't know is, is that going to continue on in the third quarter and the fourth quarter as well. It's not a normalization of the year. Right. And it comes back to this whole staying rooted with the long term fundamentals because I think that 2025 in aggregate is actually still going to be a good year, good being more normalized single digit return expectations. But I don't think that it's going to be in any way shape or form a linear curve, but it's going to have a dramatic amount of amplitude before we get to the finish line this year.
- [08:35]
James Bogart
What are your thoughts about odds of a recession? We're starting to see some of the main names in finance weigh in that they're saying, hey, we likely may touch a recession. We might feel like we're in one, we might go into a full blown recession. You know, as you mentioned, and I concur that two thirds of the economy is all consumer spending. And it's basically how people feel about the economy, their outlook, how safe they feel in their job, how secure they feel about their future and their ability to earn money and save money. That largely guides what the economy does. It's almost what you think will happen, often does happen. But for somebody right now who may be worried and listening about are we going to tip into a recession? What would you say to them?
- [09:18]
JP Swenson
By the way, in any normal year we have odds of a recession and I'm not trying to discount this year by any means. I would tell you with a high level of personal conviction, odds of recession for 2025 have increased, but they're still below 50%. Again, I think it really does depend on where you are in your wealth journey, that the mindset associated with how you react to those types of environments. And I think of myself, I'm in my 30s still, like I'm relatively young. I'm still in what I would describe as the wealth accumulation phase of my journey, not the deaccumulation phase. So for me it's looking at ways of how do I increase my savings and especially if we're in a position where we're going to see a market contraction, how do I get that money deployed when the markets go down so like in April, I was buying personally, right. I was not de risking or moving to cash or anything of the store. I was using that strategically as an opportunity to start deploying some money that I didn't necessarily need to keep in a more conservative saving environment. I'm thinking about it more from the three to five year outlook, which is these are going to be relatively good entry points. They might not be the low, and I could tell you for a fact I didn't buy in at the low. Right. But that's the perspective of someone who's in accumulation phase. When we talk about someone who is needing their savings to be their nest egg and provide income and cash flow for them, we need to make sure that we have that cash position or that low risk position already ballasted, regardless of the market environment. And candidly, what we see a lot of times with investors coming off of great years like a 2023 and a 2024 because of the what we call fear of missing out fomo, like they tend to reduce those cash positions because they want to get it invested, because they're chasing returns, whatever you want to describe it as. And then they're not adequately prepared for when the storms come. You know, we're all but certain to know that storms are going to come. We can't tell you when they're going to come. We need to be ready for them when they do. Right. And what we're seeing in 2025, by the way, is a reminder of why diversification needs to be a part of someone's long term investment thesis. Right. You look at international positions this year and how well they're performing. Whereas on the flip side, small and mid caps and they're not performing anywhere near as well. So you need to stay balanced in a longer term, more diversified portfolio. But recognizing if you need your portfolio to generate income and cash flow or you have a certainty of need and some predefined timeline, we need to make sure that's in a lower risk environment. And we should be doing that regardless with what's going on in Washington.
- [11:43]
James Bogart
Let me ask you this, James, because right now there's no shortage of access to news. You could go on Instagram, LinkedIn, TikTok, the mainstream news, there's news streaming all the time. What would you say to a couple who feels worried that they know that they're doing the right things, but because of what social media is telling them and other voices, these get rich quick voices that are out there, but they want to resist that temptation. What would you say to them to say, just stay the course. It may feel boring and not as exciting as these other things that people talk about that often aren't true. But what would you say to them?
- [12:18]
JP Swenson
I'll shamelessly plug my own podcast. But we literally just did an episode on this, on the Bogart Effect, where we were talking about the implications of media and candidly, the bad investment advice that the media proliferates. You know, I. I have a very good friend who's on one of the major channels. I won't name him, but the comment that he made to me was, we absolutely love this environment. And I said, how do you figure? He goes, because our ratings are up. We're up 83% on our ratings, and that means we made more money. I think it's really, really important for investors to just remember where the data is coming from and how that data is derived. The media proliferates or monetizes mongering fear. And that's why when we talk about the speed and access to data, make sure that you're understanding the source of where it's coming from. And we're also in an environment now with social media that it's a microphone for anyone, anyone who has an opinion or a perspective, they can share it. And I'm not saying there's anything wrong with that, but that doesn't mean it's a credible source. The number one piece of advice I give when we have volatility, don't look at your accounts. Just have some discipline. Do not log in, don't check the app, and we have volatility as best you can, turn the news off. You know, occupationally, I can't not watch the news, right, because we need to know what's going on. But I'll admit I still get emotionally charged as I hear some of these things and I see all the red on the screen. I mean, it's a gamification of the system and it absolutely elicits a response.
- [13:42]
James Bogart
Well, I'll share a funny story with you. There was a couple I worked with for many, many years, and as they would come in the office, the wife would say, derek, you need to tell my husband to stop looking at his investment accounts. And I said, well, Tom, what are you doing? He said, well, every morning I go up and log in and check my accounts. And when I come down, that sort of dictates the mood I'm in. If I'm making money, I'm in a good mood. If I'm not making money, I'm in a bad mood. And his wife jokingly said, tomorrow, if you go upstairs again, I may not be here when you come back down. And that was her way of telling him, look, you need to not base your feelings on where the market is and where your account balance is that day.
- [14:22]
JP Swenson
What's going to change? He's like, truly and candidly, I'm obviously a professional in this space, but I look at futures first thing in the morning and yeah, it absolutely will impact my mindset. So one of the things that I had to change is I don't look at the futures now until I actually walk into the office. I commit that time in the morning to my wife, my children. I make sure that I'm in the right mind state as I'm coming into the office. That way I'm not being impacted for that couple hours prior to getting my professional day going.
- [14:52]
James Bogart
Yeah, people like to think that, no, I'm not emotional. But ultimately, when it comes down to them thinking about, I've worked so hard for this money, I don't want to lose it. They feel out of control. And right now, a lot of the world, for many people, does feel out of control. But I think the way to control it is step back and ask yourself, is what I'm doing on my personal goal path. I think right now it's a calling card to say, look, what are your goals and what strategy helps you get what you want and it really helps you weather the storms.
- [15:22]
JP Swenson
Said another way, control what you can control.
- [15:25]
James Bogart
Yeah.
- [15:29]
Derek Kinney
Coming up after the break, James shares.
- [15:31]
James Bogart
The common worries and concerns of everyday.
- [15:34]
Derek Kinney
People in the current market.
- [15:41]
Lech Wałęsa
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- [16:15]
James Bogart
Well, let's shift over to worries and concerns, whether it's about the economy, about will their kids have the money to go to college? Will they be able to not run out of money in retirement? And I'm curious right now, James, as you and your team talk with clients and prospective clients, what are people asking about right now? What concerns are they expressing right now?
- [16:38]
JP Swenson
The undeniable one is everything related to what's happening in Washington. It feels like the acceleration of change is happening much quicker than it was in previous years, right, where we're getting new data points intraday that have material changes on market perception or outlook. And I think just that in general is really raising levels of anxiety. Markets are looking for stability, they're looking for predictability, they're looking for really at the end of the day, they're trying to predict the future. A stock's price is its future earnings discounted back to today. So whenever you amplify uncertainty, you amplify volatility. And I think that that's then being directly reflected in this current environment. And we're seeing it where I think a lot of people don't necessarily believe in what's happening in Washington right now and the longer term plan associated with it. And frankly, I would argue that communication has been relatively lacking coming out of Washington in that regards. Like why are we doing some of these things? It feels very self inflicted. And so that's a lot of the conversations that we're having and how do we turn the proverbial lemon into lemonade and look at this environment more opportunistically than anything else? You know, are there strategy things that we need to be looking to take advantage of and deploy in these types of environments? Is there opportunity for tax loss harvesting if your portfolio is down? And we need to be talking about Roth conversions, like is this the time that we should go ahead and be integrating that into strategy? So a lot of what we're doing is taking these worries, taking these concerns, bringing it back to that long term, deep rooted fundamental conviction around the long term plan and outlook and reframing it. Right. Because we can't control what's happening in Washington right now. You can't? I can't. What we do know is that long term the markets are very resilient and if we're of the mindset and we're taking on equity risk within a portfolio, we, we have to have a long term outlook period. The end.
- [18:34]
James Bogart
Yeah, I think that's so, so well said. And you know, one experience I had recently, I was invited by an advisor to talk to some of their top clients at an appreciation event. And one of the concepts I shared with them was it's so easy to get sort of sucked into the daily news cycle. As you talked about there, there feels like there may be a lack of communication. There's such a rapid pace happening in Washington right now, it's hard to digest it all and there's a lot of manufactured worry as well. But I mentioned, I said you need to think of yourselves as the CEO of your lives. And I mentioned that because a typical CEO, for example, whether you're at Ford or Amazon or Microsoft, wherever it might be, a daily crisis, doesn't cause them to put their hair on fire and just run around and not have any control over the situation. They say, okay, here's a problem. How, how can I distance myself emotionally from that and sort of observe it and not get caught up into it? And that's one of the qualities that I see you working with your advisors and your team, and it's why I wanted to have you on today is, James, you're able to assimilate all this information, but also pull back and say, okay, let's see what this actually means to you. Because not everything means something to someone. So for someone that might feel overwhelmed right now with all, all of this data and this information, what would you say to them to help them simplify and really get grounded on just their goals?
- [19:59]
JP Swenson
Well, frankly, I think if they don't have a plan, this is the time to have that plan. Right? And by the way, I don't think that planning for life events needs to be something that we wait for. That life event, whether it be retirement, whether it be new job, marriage, whatever. I personally believe every person as they're going through their or middle school, high school, college, and you start developing a plan and working that plan, and if you haven't done it yet, it's never too late. But having that plan that then gives you that stability point that you can ballast off of going forward, it allows that emotional pressure to start being relieved layer by layer by layer. And again, I'll speak for myself personally, but as I see that plan get implemented and executed, I get more momentum and that momentum creates more momentum and that momentum then ultimately creates more success and more results. And so when we tie it back to investing, there's always going to be something. And even in the best of economies, there's always something that could be on the proverbial horizon that can create ominous fear. One of the colleagues in the industry, he made a comment recently, he's like, what my gift is, is I look at the clouds that are on the horizon and I address the cloud before it ever gets to me and rains on me. And that's what we're ultimately trying to do and why we're staying rooted in this basis around planning.
- [21:18]
James Bogart
So let's talk about our listeners who are middle age right now. A lot of them, they might be 10 to 20 years from retirement. What are some strategies that you're recommending for them right now. And even more than strategy, just a thought process of that demographic, how they should think about their money and their investments.
- [21:35]
JP Swenson
That's always a difficult age, right? I say that that middle age group is when it's candidly probably the most expensive because everything's chipping away at the same discretionary dollar and there is only. So that comes into the pot, right? And then simultaneously you have the pressures of children and you have the pressures of saving for houses and cars and retirement and all of these things are chipping away at that same marginal dollar. I fundamentally believe it's really important to align the respective dollars with the tranches of investments that should be in them. And what I mean by that is that every person in my opinion needs to have a rainy day fund, some type of emergency fund. But that amount could vary from you versus me versus my neighbor. And I think a lot of that comes down to what is the stability of your income source, right? If you have a job that's, that's with a big company and high probability that you're going to have a job, you don't necessarily need to have a year's worth of your expenses sitting in a savings account, right? I mean probably three, six months is a good number. Everyone's going to be a little different in that regards. But then from there we need to start establishing timelines for the respective goals as you're accumulating wealth, right? So like you might have a bucket for saving for a car or a bucket that's saving for your kids, colleges and then also a bucket for retirement, right? So I kind of intermittently would say we've got our short term bucket that, that's there to cover the emergencies. We've got our intermediate term bucket that's covering the things that are associated with, you know, some shorter duration, interval of time. And then for example in the retirement category, that's long term, especially if you're 10 to 20 years away. If it's 10 to 20 years away, that money needs to be invested as if it's 10 to 20 years away and you don't need it. Which means we're taking risk. But the short term money, we're not taking a lot of risk with. Money markets right now are great, the paying for 4.3%, right? Like just have it sitting in money markets. But then that stuff in the middle, let's make sure that we're aligning it with what the respective goals are. And the number one mistake I tend to see that middle aged group is, is that they build up too much cash. They don't necessarily look at what that cash position is relative to what their needs are. They miss out on opportunities to invest because they've just been either head in the sand or just not thinking about it not being delivered and direct in their approach. And then next thing you know, we get this market environment and then they're debilitated, they're completely paralyzed, they can't get the money invested. And it's like, all right, well, I'm going to need that money at some point, but can you tell me when that point is and probability is? No. My fundamental narrative around it is make sure that you're aligning your savings and your investments with the respective timeline of when the money is going to actually be needed.
- [24:10]
James Bogart
Let me throw this out there too. I like when you talked about how you think about money in sort of different buckets and not all time frames are the same. One of the biggest things, especially for entrepreneurs and professionals that I will visit with, they're often hesitant to fully fund everything into a college fund. And I like to call this an educational empowerment fund, my name, but it's a concept of not putting all of the money for a kid's College into like a 529 or, or another investment just for college. Instead, maybe put 50% into that, but the other 50% keep in a cash account. And the purpose is to provide liquidity to let your teenager take courses or launch businesses and really give them this entrepreneurial mindset of don't just tie it up for college, we've got that option there. But also give them this business mentality. And I'm curious if you come across other programs, professionals or entrepreneurs that also kind of want to give their teenagers this leg up or an opportunity to have another option.
- [25:12]
JP Swenson
I love that. By the way. I think that it doesn't differ from the conversation around the buckets. It's just the specific account type that it's being assigned to. From my perspective, it comes back to like, alignment of values and what's your goals, what's your priorities? I love the idea of encouraging entrepreneurial behavior. I think that it's becoming less and less prevalent in our society right now, especially with the younger generations. And if mom and dad are in a position where they can support someone taking on some risk, that's going to have a meaningful impact not only to themselves, but the bigger economy. I love it. And especially earlier on when I think about it, like you could take risk. You know, it's funny when I think about playing my story back out and really thinking about the implications of launching my business. Fast forward to where I am now nine years later. I don't know if I would have had the same mindset. Right. Like, so there's a very real power around when you're in your 20s and you don't necessarily have children, you don't have a fixed expense structure, you don't have a house, you don't have a mortgage, you don't have all the stuff that puts pressure on the time to take the risk is when you can take the risk. Yeah. And yeah, you'll have time on the back end to recover from that if it doesn't work out. And again, I'm just coming back to myself personally. I'm like, if someone had told me the level of risk I was taking when I launched my company, I thought I knew, well, 10x20x100 exit like it was a lot more risk than I ended up taking along the way. And the journey became that much more rewarding because of what I went through. But at the same time too, it's one where I fully, fully support. If mom and dad are in the position to be able to further entrepreneurial behavior or creative behavior, whatever it is. Like I love supporting that. And you're right, sometimes the account structures that we would be saving into wouldn't be appropriate for that type of behavior. Like for example the 529, we wouldn't be able to distribute funds to go start a business without taking a taxable event on taking the gain out.
- [27:06]
James Bogart
Let's pivot over to retirees. There's a lot of people retired listening right now, wanting to know what advice we have for them. You know, for somebody who's retired and they might be on a fixed income or they definitely have some level of income they count on now every single month. And probably their biggest fear is not running out of it. What advice would you have for those people currently retired and are you recommending to your clients who might be retired any investment changes or any type of philosophy changes given the environment right now?
- [27:39]
JP Swenson
So when we're in the accumulation phase of life, so pre retirement we have one level of risk profile. When we move into the deaccumulation phase, it should be by design a different risk profile and the structuring. I still love the buckets. Right. So we have a short term, intermediate, long term bucket. But then it becomes much more imperative to look at what are our dedicated income sources. Whether it's pension income, Social Security income, income from dividend paying stocks, corporate Bonds, municipal bonds, whatever it is, we look at our income sources and we make sure that we're ballasted to weather whatever market environment is coming. And it's a recurring theme with us, but that's how we manage our retirees portfolios for them is we're looking at what are those income sources, making sure that they're covering really hopefully at a minimum, their necessary expenses and allowing just the discretionary to need to be covered off of a capital appreciation or growth in the portfolio. And that way the pressure's off in most instances. Now there will be times when we deliberately defer certain types of income. Like for example, we might have a 62 year old that we're deciding not to take Social Security. Yet we're treating Social Security as an investment in that scenario. Right. And so then we're putting a little bit more pressure on the portfolio, but we're staying rooted with the long term fundamentals of we have a plan, we're working the plan, and these are how the different pieces are integrating together to make sure that we're amplifying the probability of long term success.
- [29:01]
James Bogart
Are you finding any current worry that retirees have or are they just kind of buying into this? Look, we've got a strategy, we've got a plan, work the plan. And that mentality is holding true for them.
- [29:13]
JP Swenson
Whenever you have amplified volatility, you could absolutely tell who is very comfortable with their plan and who's not. And so general guidance that I always love to address talk to is what is your withdrawal rate? Because a lot of advisors love to talk about headline, this is what their rate of return was, and maybe even they'll use a real rate of return, which is a rate of return minus inflation. That's an important conversation, but I think it's also equally as important to have the conversation of what are you spending off of your portfolio? Because real rate of return and withdrawal rate, they work in tandem with each other. I mean, you can do a great job growing a portfolio and let's say it's a I'll make it up 7% annualized rate of return. That's a good return number for a retiree. But if you're withdrawing at 8%, that math doesn't work. Right. And so it's staying rooted with those respective guidance points. And so like for example, safe withdrawal rate, customarily we talk about 4%. That portfolio is going to last for 41 years assuming a 5 and a half percent rate of return with 2 and a half for inflation. So that portfolio for a 60 year old probably is going to do fine. Right. But that same math doesn't work for, let's say somebody who retires at 40. Right. Time horizon has an implication there. But what I would also say that is if we're not looking at that income source and how that's having a direct implication on how we're performing on the portfolio, then you're amplifying the probability of a not so ideal outcome. And then when we talk about like fears associated with this environment and changes that come into it, the fact of the matter is, is that we're not looking at or taking on any level of investment risk for a three or a six month outcome. Right. And that's where I think it's very important to stay reminded that even if you're investing in CDs or bonds, it's not what's going on this week or today. Right. And if you're taking on equity risk, well, candidly the reason that equity investors get outsized performance is because they're willing to take on volatility. If we're not willing to take on volatility, then we should not take on equity risk. Right. That's just the reality of it. And so when I think about like our clients that get dramatically charged in these types of environments, you kind of have to peel it back and see what is the real catalyst or cost for that. In almost every instance it's the comfort level related to their plant and direct correlation to that is what are they spending on their portfolio.
- [31:40]
James Bogart
You know, one of the best things about being a Rotarian is the opportunity to support the Rotary foundation and all of the amazing work it does for our listeners who want to be generous, but they don't know the best ways to give, especially in kind of some volatile times. Right now, let's talk about some steps they can take. So what would be some practical ways the people could be generous right now?
- [32:02]
JP Swenson
I think at first it starts with your budget, right? Like what is the amount that you're willing to do? And then we can back into the mechanics of what are the best ways of doing it, you know, regardless of market environment. I'm a big, big believer that if you have a stock position in a brokerage account that has unrealized gains, you absolutely should be donating stock and not writing a check. And the reason is, is because you're able to give the equivalent amount and get the tax deduction based upon the amount that goes in without having to pay capital gains in order to be able to write the check. And So I think part of it is looking at, from the context of all right, how much do I want to give? Then I would then translate it over and say, all right, that, you know, if I want to give them $100, I'm going to give them one share of a stock that's worth 100 bucks, might have a cost basis of 15 or 20 or 30, but that gain gets transitioned over without having to pay tax on it. That's the most tax efficient way of giving away money. And if you're supporting in a cause that you have conviction around, I just love doing stock donations along the way. We can use donor advised funds as well. And so that's a charitable account that could be structured with whoever your advisor or custodian is where you can move shares of those positions into a donor advised fund and then set it up where the donor advised fund will just write a check to the Rotary Foundation.
- [33:18]
James Bogart
And I'm going to throw out a couple, two crazy ideas. And James, you can shoot these down, but one of the things I find is that when people often retire, there can be this loss of meaning and purpose in their lives. Their identity was kind of wrapped up in their title and now they're searching for like, who am I? And we had success with this before I sold my business as I gave the advice to a couple couples about, hey, if you wanted to work part time, not because you have to, but only because you want to doing something you truly enjoy, but then gift a large part of that income that you're making back, in this case to the Rotary foundation or to a cause that you care about. So now it's a person being active and engaged or if the person was very entrepreneurially minded, here's a reason to tie a cause to their cash. Go start something not because you need the money, but because you just want to be active and keep your mind engaged and use that as a fresh way to inject money into a cause you care about as well.
- [34:17]
JP Swenson
Love it. Yeah. No, I mean, and I completely agree, most individuals myself tie their identity to their profession, their occupation, what they do, and that sense of purpose is imperative. And so I think, especially when you're, you're making a life transition, whether it's a new job, whether it's retiring, being able to have that proverbial why is really, really important. And if there's an element of that that can be brought right back into supporting things that are very important to you, Rotary foundation being one of them. I think that's a fantastic idea.
- [34:50]
James Bogart
I love that. James, thank you for being our very special guest today. And by the way, if you want to reach out to James, he's the founder and CEO of Bogart wealth, you can go to bogartwealth.com, bogart wealth.com considered one of the top financial and investment firms in the country. That's bogartwealth.com James, thanks again for joining us today.
- [35:11]
JP Swenson
Thank you, Derek. It was great.
- [35:15]
Derek Kinney
This episode of the Rotary Voices Podcast was produced by JP Swenson and edited by Wen Wong, production by Joe Desaux, music by Yoo Sue Kim, and I'm Derek Kinney. For more about me, check out successforadvisors.com and my book, Good Money Revolution. If you enjoyed the show, please give us a five star rating on Apple Podcasts and Spotify and share it with your friends. The Rotary Voices Podcast is produced by Rotary Magazine, the official monthly publication of Rotary International. Thank you for listening.