10.14.25 Ask An Advisor With Wes Moss

Summary

The Clark Howard Podcast

Episode: Ask An Advisor With Wes Moss (10.14.25)
Date: October 14, 2025
Host: Clark Howard | Guests: Wes Moss, Krista Dibias

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Overview

This episode of “Ask An Advisor” dives deep into listener financial questions with guest advisor Wes Moss and co-host Krista Dibias. The team examines the state of the current bull market, provides historical context for potential market moves, answers specific investing dilemmas (from mortgage pay-down strategies to 529 plans for children and timing the market), and tackles the important difference between being “set” vs. being “settled” financially. The tone is conversational, plainspoken, and upbeat, with particular emphasis on practical, consumer-first advice that mirrors Clark Howard’s trademark approach.

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Key Discussion Points and Insights

1. The State of the Bull Market: Where Do We Stand?

[02:04 – 09:28]

• Wes reviews the three-year anniversary of the current bull market, observing that stocks have risen significantly, with the S&P 500 up about 92% in total return over the past 36 months.
• Historical context: The average bull market lasts around 58 months (just under five years) with an average return of 172%.
• Positive indicators: “History is very much on our side for markets to continue to be strong.” – Wes Moss, [03:03]
• However, concerns about froth and overvaluation are flagged, especially with current price-to-earnings (PE) ratios elevated at about 28x, reminiscent of the late 1990s dot-com era.
• The job market has shifted to equilibrium, and home price appreciation has largely stalled (“only risen about 1.6%”).
• AI enthusiasm is driving huge investments — e.g., OpenAI’s $500 billion valuation — suggesting the market’s “little bit of exuberance.”
• Wes emphasizes the need for investors to remain patient, consider portfolio rebalancing if exposed to excess stock risk, and remain vigilant about their planned stock-bond allocation.
• Notable Quote:
  “If you originally said, ‘I’m comfortable only having 50% in stocks and now that’s 75%,’ just understand that your portfolio has gotten a lot riskier... Just do a gut check.”
  — Wes Moss, [08:37]

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2. Listener Q&A: Focus on Real-Life Money Decisions

a. Pay Down the Mortgage or Buy Bonds?

Jason in Utah
[09:47 – 15:37]

• Jason has $300k in a note (earning 4.5%), $900k in a brokerage account (mostly S&P 500), and a sizable 401(k). Wondering whether to use $200k to pay down a 4.375% mortgage or invest in bond funds with “uninspiring” returns.
• Wes’s take: If you can pay off the mortgage with a third or less of your after-tax money, do it.
  “Happy retirees either have a paid off mortgage or are getting close…even though it’s a low rate, you’ll be more comfortable in retirement without the burden.” — Wes Moss, [12:35]
• Bond returns should track today’s yields (“yield is destiny”), but those are close to the mortgage rate; paying off the mortgage is “somewhat of a guaranteed rate of return.”
• Lean: Use after-tax money to pay down the mortgage for tax flexibility and retirement comfort.

b. How Does a 401(k) Track Traditional vs. Roth Money?

David in Ohio
[15:37 – 17:47]

• David wonders how providers track which dollars are traditional vs. Roth, especially after rebalancing.
• Wes explains: Each deposit and its earnings are “tagged” by tax type in the system, even though it appears as a single pie chart.
• Industry systems are heavily audited and regulated, so they “don’t mess this up.”

c. UGMA vs. 529 Plan for a 10-Month-Old Niece

Derek in New Hampshire
[17:47 – 21:29]

• Derek would rather invest for his niece than buy toys. Debates a flexible UGMA custodial account vs. the more restrictive 529 college plan.
• Wes’s view: 529 plans are now more flexible (thanks to Secure 2.0, allowing rollovers to Roth IRAs), and offer significant advantages if not used for college.
  “You can…convert that into a Roth, which is a jump on retirement.” — Wes Moss, [20:23]
• UGMA/UTMA accounts become the child’s at age 18/21 and have some tax drawbacks (kiddie tax).
• 529s impact FAFSA less and can jumpstart retirement savings.

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3. Deep Dive: “Set But Not Settled” — Why Rich People Still Worry

[24:29 – 32:49]

• Wes introduces the concept: Many people are “set” financially but not “settled” emotionally.
  • “Set” means having plenty of money; “settled” means truly feeling at ease.
  • Even high-net-worth individuals share similar anxieties as those with less wealth, especially around retirement and market cycles.
• Holistic planning is essential: Not just financial assets, but also taxes, distributions, estate planning, lifestyle, hobbies, and the psychological side.
• Recurring risks: Concentrated stock holdings, sequence of returns, withdrawal strategies, tax planning, long-term care, and estate questions.
• The antidote to anxiety: Have a constantly evolving plan and revisit it regularly.
  “No plan means no peace.” — Wes Moss, [28:48]
• Notable Quote:
  “Just because they have more assets doesn’t mean all of a sudden everything’s set. In fact, sometimes there’s more problems.” — Wes Moss, [28:17]
• Ultimately: True financial freedom comes from a combination of being “set” and “settled”; planning is the bridge.

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4. Rapid-Fire Q&A: Practical Financial Advice

a. How Do Asset Fees Work—Are They Hidden?

Andrew in Iowa
[32:49 – 34:23]

• Andrew asks how mutual fund/ETF fees are collected.
• Wes clarifies: Fund fees are taken from the fund on a daily, pro-rata basis and are baked into price performance; investors don’t need to track them separately.

b. Finding a Plain-Speaking Financial Planner

David in Massachusetts
[34:23 – 42:03]

• David has ~$3.5 million, feels lost during technical explanations, and wants actionable, plain English advice—ideally for a flat or hourly fee.
• Krista and Wes agree: You should never feel confused by your advisor.
• Wes’s tips:
  • Visual learners should have planners use drawings and visual aids.
  • Keep asset allocation simple (consider 50/50 stock/bond as Buffett’s mentor Graham suggested).
  • Consider hybrid approaches: manage some assets yourself, use a low-cost advisor for planning (Vanguard’s service is cited at 0.35%), or pay an hourly planner (rare but available).
  • Important:
    “Investing at its core is just a blend of risky assets (stocks) and safety assets (bonds/cash)…it can be that simple.” — Wes Moss, [39:20]

c. Should I Wait For the Market to Drop Before Investing?

Leslie in North Carolina
[42:04 – 44:14]

• Leslie is waiting for a better entry point into “VO” (Vanguard S&P 500 ETF) but the market keeps rising.
• Wes diagnoses: This is market timing (even if only with new cash), and it rarely pays.
• Solution: Trick yourself with dollar-cost averaging—invest a set amount regularly, smoothing out entry points and psychological stress.
  • “DCA is the only way to trick yourself into being invested.” — Wes Moss, [43:05]

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Notable Quotes

• “History is very much on our side for markets to continue to be strong.”
  — Wes Moss, [03:03]
• “Happy retirees either have a paid off mortgage or are getting close…even though it’s a low rate, you’ll be more comfortable in retirement without the burden.”
  — Wes Moss, [12:35]
• “No plan means no peace.”
  — Wes Moss, [28:48]
• “Just because they have more assets doesn’t mean all of a sudden everything’s set. In fact, sometimes there’s more problems.”
  — Wes Moss, [28:17]
• “You should never feel confused when you talk to your financial planner.”
  — Krista Dibias, [35:17]
• “Investing at its core is just a blend of risky assets (stocks) and safety assets (bonds/cash)…it can be that simple.”
  — Wes Moss, [39:20]

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Timestamps for Key Segments

• Market Review & Bull Market History: [02:04 – 09:28]
• Jason’s Mortgage Dilemma: [09:47 – 15:37]
• 401(k) Roth/Traditional Tracking: [15:37 – 17:47]
• UGMA vs. 529 Question: [17:47 – 21:29]
• Set But Not Settled (Deep Dive): [24:29 – 32:49]
• Asset Fee Mechanics: [32:49 – 34:23]
• Plain-Spoken Planners: [34:23 – 42:03]
• Market Timing & Dollar Cost Averaging: [42:04 – 44:14]

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Memorable Moments

• Krista and Wes’s banter over the need for simplicity and visual aids in financial planning [37:32 – 37:49].
• Wes’s candid admission of the universality of retirement anxiety, regardless of portfolio size [28:17].
• The light-hearted acknowledgement of how “set it and forget it” is a myth in financial planning [28:48, 31:17].
• Clark audience humor: “I’d rather give them money than clothes they’ll outgrow. That’s such a Clark audience thing to say.” — Wes Moss, [19:57]

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Summary

This episode blends a timely market outlook with practical, nuanced answers to listener dilemmas. Whether it’s about staying disciplined during a long bull market, handling the “good problems” of surplus savings, or simply tricking yourself into investing when it feels uncomfortable, the core message is clear: financial empowerment requires both planning and psychological awareness. The show’s strength is in plainspoken guidance and a down-to-earth tone, keeping it accessible and actionable for listeners at every stage of their financial journey.

Transcript

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[Krista Dibias]

This episode is brought to you by Amazon Business. We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn [e-mail] welcome to Ask an Advisor. I'm Krista Dibias, here with.

[Wes Moss]

I'm Wes Moss.

[Krista Dibias]

Mr. Wes Moss, who is a very brilliant investment advisor. Yes. And we like to talk about all of your investing questions, your money questions. I think this show really complements what Clark does on the Clark Howard show.

[Wes Moss]

And the questions are complex and that's a good thing. Some of them you have to almost truncate because they're long and they're pretty detailed. But we continue to get amazing questions and hopefully it continues to be helpful.

[Krista Dibias]

So, so I know later on in the show you're going to talk about, you mentioned earlier to me a client that you had that had a lot of money but it's so nervous that they don't have enough. Like when can someone.

[Wes Moss]

Yeah, it's this concept of set but not settled. A really good friend of mine who's a CFA and a wealth advisor, a very comprehensive holistic wealth advisor uses that term, which is set, meaning plenty of money but not settled. And you would think those two, one would take care of the other. But part of this is that I keep seeing questions that you are asking people with a lot of money that listen to the show and watch the show and they have millions, millions of dollars and yet they're confused or worried about something. And that's that unsettled part. So we'll talk about that. But maybe first we'll we're in the three year anniversary of what?

[Krista Dibias]

The bull market.

[Wes Moss]

The bull market. So let's start out with right now we've gone about three years, 36 months into the bull market, which has been obviously very good for stocks. And three years in though, what does history tell us about what's next? Because it's always about what's next. It doesn't really matter what has happened in the past. It's always about looking forward and how you're positioning and how you're thinking about your investments. And I would look at this as there's some good news around this, meaning that History is very much on our side for markets to continue to be strong. And that's great. But then there's some cross currents or not that great of news if you really start to look at the numbers. So it's. I don't know if I'm gonna give you a perfect answer here around how long the bull market's gonna last, but I think it's always really important to go back and look at history and then just accept what's happening right now in the year 2025 and where we stand. So here's the good news. History still on our side. If we look at where we are, the stock market. If you look at the total return for the s and P500 and you go back 36 months, it's up about 92%. And we've had dividend. Stocks are up 60, 65%. Gold is up more than stocks. A lot of that has come over the past year. And even bonds in the last three years, while stocks have been really good, bonds have at least clipped along. Total return for the overall bond market has been about 16%. Not amazing, but in three years, progress. So we've had a lot of asset inflation. And I would contend that if you open up and look at your 401k, most of those categories have done pretty well, and particularly the stock category. So we've had this really good run. But how long do these runs usually last? Well, the answer is when you go back and look at all bull markets over the course of history. So go back 100 some years. The average bull market lasts 58 months. So let's call that just shy of five years. The average return or total return. And we're looking at the s and P500 here is 172%. These are big, long runs. So where do we stand today? Well, the market's up about 90, 92%, give or take, and it's 36 months old. What does that tell us? It tells us that at least over the course of history, there could still be room to run. That suggests we have maybe another two years. At least that's what history says. And another 80% or so on the upside. But again, that's just history, and that's what history tells us. So I think that's maybe the good news here. But let's kind of come back down to earth a little bit. We gotta look at valuations. Valuations are a reflection of what prices are in the market relative to earnings. And we know that earnings are what drive stocks. That is the absolute Fundamental nature of why markets should go higher or lower earnings. Contract markets go down, earnings continue to power higher. And eventually markets either reflect that sometimes they're a little ahead of earnings, sometimes they're behind earnings. And you could contend that today, even though earnings have been really good and we've had this is yet another year 2025 where earnings estimates from the big Wall street firms are ending up being short. So earning company performance has been better than what Wall street thought and that's led to really strong stock performance. But if you look at multiples price divided by earnings, which we historically is in the 17 to 19% range, markets trading at about 28 times, that's a little bit like what we saw in the late 1990s and we know what happened then. So that's a little concerning. The markets are perhaps a little bit overvalued, a little frothy. We also know that the economy is at least slowing down a little bit. If you look at the jobs market, the Federal Reserve talks about this and we hear something almost every single day. We're back to a point where there's actually more job seekers than there are job openings. Now that was totally flip flopped a couple of years ago. We had 12 million job openings and only 6 million people looking for jobs. So we got to a point where that was great for the job. If you're looking for a job, you could kind of name your price. Wages were going up. And that is really changed over the last couple of years. We're back to almost parity. We've got about 7.2 million job openings and we have about 7.3 million people looking for jobs. We're back to equilibrium. It's not a robust job market anymore. Home prices, we've seen home prices essentially go back to the flat line. We've had a couple of amazingly strong years for home prices. Now over the past year they've only risen about 1.6%. Speaking of froth, a lot of that froth has to do with artificial intelligence. There is just this massive thought that companies have to spend, I was going to say billions of dollars, actually hundreds of billions of dollars to build out data infrastructure centers, have the technology and the chip infrastructure and the hardware to be able to compute for AI. So you see this huge industry that is hundreds of billions of dollars are pouring into it. And you look at a company like OpenAI and that's a company that's, it's a very young company, but just hit a $500 billion valuation, half a trillion. And it's a private company. It's not. This is not even a stock that trades. If it were a public company, it would be the 16th largest company in the S&P 500. And just like that, it's only been a couple of years. So there's certainly a little bit of exuberance going on in the market. And then of course, you hear this tug of war between the Fed lowering rates or not lowering rates. They meet at the end of October and those economic cooling signs are leading them to very likely cut rates again. So you put that all together, really good stock market slightly slowing economy. Where do we go from here? The way I would look at this is that even though history is on our side, and by the way, the average stock is not as overvalued as I just said. Remember, The S&P 500 is weighted towards the biggest companies. They happen to be the most involved in AI. So the overall multiple, the PE multiple of the market is call it 28, which is high. The average stock is closer to 2122. So it's not as though everything's overvalued. But some of the big players at the top, you could suggest that they are. My message here is that we have to be patient investors. And yes, if we're going to really win the game, we have to participate through all these cycles. We got to participate when markets are undervalued, when they're overvalued. But we also need to be cognizant of our own balance. So if you are somebody that originally said, I'm comfortable only having 50% in stocks and now that's 75% in stocks, just understand that your portfolio has gotten a lot riskier because one area has grown so much more. Just do a gut check. I think here where markets again have done really well, it is a time for reflection, potentially rebalancing. And if your overall plan says that you'd like to be in a range of 50 to 60% in stocks and you find yourself way above that, then this is the time to be cognizant of doing that rebalancing.

[Krista Dibias]

Okay. All right. Speaking of going to your questions here, if you have a question, you can go to clark.com ask and just let us know if you want Wes or Clark to answer your question. Jason in Utah.

[Wes Moss]

And by the way, some of these are what Wes and Krista.

[Krista Dibias]

Sure.

[Wes Moss]

They're asking you, so I might just really. Some of these are just going to come right back to you. Krista.

[Krista Dibias]

I think they're just being nice and I appreciate that. Jason in Utah filled out our form and he says I have 300k sitting in a GM financial right note currently with a 4 1/2% rate. Before I began listening to your podcast, my plan was to use 200k of this money to pay down my mortgage once the interest rate fell below my mortgage rate of 4.375%. The other a hundred K is my emergency fund. This wouldn't pay off my mortgage completely, but it would enable me to see the light at the end of the tunnel. After listening to you, I'm now wondering if this is the best move. I'm a few months from 50 years old, happy almost birthday and have saved enough in my 401k to meet the 5 times my salary goal t row price my 401k provider recommends for 50 year old 100% of these funds are in a target date retirement fund. I I also have another 900k in a brokerage account made up almost entirely of S&P 500 index fund with about 10% in a foreign stock index fund. So no real fixed income balance outside of my 401k. For all intents and purposes, I consider the brokerage account more retirement money. Cash goes in and never comes out. Would it be better to use that 200k to add some balance to my brokerage account instead of knocking off a decade's worth of mortgage payments? The bond funds I'm looking at have uninspiring 10 year annual returns between 2 and 4%. Perhaps I split the 200k up with half going to the mortgage and the other half a bond fund. The plan would be to retire in 15 years or so. There's still time to balance things out. It would just take a few years. Since you caused me to second guess myself, I would much appreciate your thoughts on how I should approach this admittedly good dilemma that I have.

[Wes Moss]

Just make sure. I want to make sure I'm getting that right number 200,000 on the mortgage.

[Krista Dibias]

No, he doesn't say the balance on the mortgage. He says to pay down my mortgage. So pay it down.

[Wes Moss]

Okay, well I've gotten a ton of numbers here from Jason in Utah, but there's some numbers left out, so I guess I'm going to have to make some assumptions here. But here's the way I Look at this. 200,000 in brokerage money and 100,000 in emergencies. That's 300 as I'm jotting this down. 900k in brokerage. So that's also after tax money. So now we're at 1,200,000, let's call it a million and a quarter in after tax money. Then we've got, he's saying five times salary in his 401k. I'm assuming that let's again guess that to be 750,000. So we've got 1,255,000,000 in after tax money and 750,000 in 401k. It's $2,000,000 total. And the ratio here is important. Two thirds of your Jason money is in after tax and that gives you a lot of flexibility. So that's a good sign. And that gives you flexibility. I would say this, and this gives me a chance to kind of go through a mortgage payoff rule that I don't know if we've covered much here is that to pay down the mortgage or get rid of the mortgage, which again, happy retirees either have a paid off mortgage or, or they're getting close to paying off the mortgage. And even though it's a low rate, you still are going to feel more comfortable when you head into retirement without the financial burden of the mortgage. So if your mortgage today was 200,000, I would say that you've got 200k to pay it off, or even if it's 300k to pay it off and you have a million and a quarter of after tax money to do it. And my rule of thumb here is that if you can pay off your mortgage with a third or, or less of your after tax money, then go ahead and do it. Even if it's a low rate at 4.75%. I mean, that's not a nothing rate, but it is somewhat of a guaranteed rate of return because it's gone, the interest payment's gone and you want to do it anyway to be a happy retiree. So if it was 300,000, think of it this way, 300 divided by a million and a quarter, you're only using 25, 4% of your after tax money to pay it off. So I would lean towards, yes, paying down the mortgage. And then if I'm connecting the dots here, Your mortgage is 4.75. You mentioned bonds, right? So when you're looking, and I think this applies to anybody looking at bond funds, I know if you pull out your 401 statement, you've got this 1 year, 3 year, 5 year, 10 year and lifetime rate of return. And you see that for all the funds, when you look at your bond funds, those returns over the last couple of years are not going to look Good, but that's not that relevant. You're looking into the past when interest rates were really low. So bond funds didn't do well because rates rose, prices dropped. So in bonds, Krista, remember, yield is destiny, meaning that where rates are today, that gives us a really good idea of what bond returns should be over the next five years. So if your bond fund is paying 4.5%, it's very likely that you'll get around that over the next five years per year. Yield is destiny in the bond world. But to some extent that's pretty close to the rate on the mortgage.

[Krista Dibias]

So.375. I don't know if that makes a difference. You said four point.

[Wes Moss]

Oh, okay, 4.3. Still, I would say bonds should be in that range from 4 to 5 over the next couple of years. But it's not a guarantee paying off the mortgages. So I would lean towards using some of that outsized after tax money to be paying down the mortgage because of the way your assets are balanced from a tax perspective, way more in after tax than you do in pre tax. And you're already at the financial levels of being a happy retiree. Getting rid of the mortgage is yet another part of that methodology to be a happy retiree.

[Krista Dibias]

Okay. David in Ohio says, I have a question for Wes. My 401k has a combination of traditional and Roth contributions. I occasionally rebalance my portfolio between different, different investment options. How in the world does my 401k provider keep track of which dollars are traditional contributions or earnings and which are Roth contributions or earnings? Seems like an impossible logic puzzle to determine which dollars are invested in which fund as the dollars move around, and therefore which earnings are taxable or non taxable. Do you have any idea how they do this, David?

[Wes Moss]

So this is a. It is a weird logic puzzle because usually when you log in you'll see a just one pie chart, but then the pie chart will have a sliver that is the Roth part and the rest of it is the regular 401k part. Why don't they just have two. Why aren't there just two charts? If you do a rollover into IRAs, you're going to roll the pieces over separately. You would roll your traditional 401 into a traditional IRA if you choose to do so. And the same thing with the Roth, it wouldn't go into a traditional Iraq. So it is a little puzzling. Why don't they just have two charts? And most 401k providers for some reason don't do that. But it's actually not nearly as hard to track as you might think. So every investment just gets its own tax category, and each one of those, as you reinvest, stay in that tax category, and your contributions will stay in either tax category. So really, even though it looks complex and you've got multiple things going in every month, contribution here, contribution there, they just tag. One is 401k and one is Roth. And then once those assets are tagged, it's very easy to see where the appreciation is coming from. So the systems are totally designed to do that. They've been doing it for decades at this point. And this is serious stuff for when K plans are super regulated. They go through very serious audits. They go through very serious checks and balances. And this is not something I see them mess up. So the systems are designed to keep track of the different tax buckets, and even though they don't display it all that well, they're keeping track.

[Krista Dibias]

Derek in New Hampshire says, my niece is 10 months old, and for her birthday and Christmas going forward, I'd like to give her money instead of clothes and toys she'll quickly outgrow or forget about. I'm considering opening a UGMA account for her, but I'd like your thoughts on those accounts versus a 529 plan. I have a feeling college may not be as common or necessary by the time she reaches that age. Would you prioritize contributing to one account over the other? I know the 529 could be rolled over into a Roth IRA later, which is a nice option. We live in New Hampshire. Are there any other types of accounts I should be looking into?

[Wes Moss]

Yeah. This is a question that goes back to Derek about the flexibility of either custodial accounts of the UGMA or UTMA accounts. And most states have both. They're very, very similar. One allows for a broader list of assets to put in them, but just in think of them as a brokerage account for your child. You can put up to the $19,000 level. You can put more in one of these UTMA or UGMA accounts than that, but that's the gifting limit in any year, so it's over. If it's over 19,000, you have to do a gift tax return. But the way I would look at this is that, well, the downside is this, and depends on how you look at as a parent, Derek, which is the money is theirs at either 18 or 21, depending on the kind of account, and then they can use it for anything they want. The pullback or the one ding on these, in my opinion, is that once the interest and once the. Let's call it dividends and interest or capital gain goes above what they call the kiddie tax rate, which is about 2,600 bucks in a year, it starts to get taxed at your income.

[Krista Dibias]

Well, he's the uncle.

[Wes Moss]

Well, if he's setting it up.

[Krista Dibias]

If he's the custodian.

[Wes Moss]

If he's the custodian, then it would go back to his tax bracket. Okay, so there's some tax issues with this. And to some extent that's why I would lean towards the 529 plan, even though it seems like it's more restrictive because it only can be used for education. By the way, I love these. Derek said, I'd rather give them money than clothes. They're going to outgrow. That's such a Clark audience thing to say.

[Krista Dibias]

I love it.

[Wes Moss]

I love it. Smart. It's a smart way to think about it.

[Krista Dibias]

The other thing with those UGMA and utma, if, if the niece does go to school, it does count against her FAFSA. Yeah. Financial aid.

[Wes Moss]

And technically 529 do a little bit, but they're maybe not as. They're not counted as high.

[Krista Dibias]

I think as long as the student doesn't own it. Right. It's the custodian's account. David's account.

[Wes Moss]

I don't know exactly how the formula for fafsa.

[Krista Dibias]

Derek's account. Sorry, Derek.

[Wes Moss]

But here's why I like the 529. Because you can remember secure 2.0 allows for these things to be rolled into Roth accounts. And if you end up putting $35,000 into one of these things as a 529 plan, then that can get converted into a Roth for your niece and then that is a jump on retirement. Still technically use it. You can still leave it in the 529 and still use it for education. But if you educate her over the years to say, look, this is your nest egg for retirement retirement, this goes back to the zero year zero savings plan, which I think that we all have to start thinking about saving even earlier in America because things are that much more expensive, it's in line with that. So I like the flexibility that the 529 plan gives you to potentially convert that into a Roth over time. That could give your niece a huge jump start on retirement. It's way more valuable than some piece of clothing that she's going to outgrow in six months to a year. So I would lean towards doing the 529 knowing that you have more flexibility in the future.

[Krista Dibias]

Awesome. All right, we're going to go to a quick break and we come back. You're going to talk about people who are set but not settled Set but not settled.

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[Krista Dibias]

So you're about to make a trade based on a friend's text, but which u do you listen to is it we could buy a house in Tulum get optioning those options. We could lose everything. Or let's do a little research, get your head in the trade and make the investment decision that's right for you. Learn [e-mail] TradeSmart this episode is brought to you by Diet Coke. You know that moment when you just need to hit pause and refresh. An ice cold Diet Coke isn't just a break. It's your chance to catch your breath and savor a moment that's all about you. Always refreshing, still the same great taste. Diet Coke make time for you time.

[Wes Moss]

Welcome back to Ask an Advisor here on the Clark Howard Show. I'm Wes Moss along with Krista Dibiaz as we dive into more Q and A. This topic I'm going to just call this set but not settled. And it's a topic that comes from you as our listener audience where this is a phrase actually a good friend of mine uses who's also a wealth advisor, very holistic, big picture wealth advisor. He makes the point that and then this is reiterated because of the questions I get here on the show is that even though somebody might have a bunch of money, meaning that they're quote set, they may not be very settled. And I think often when you're in the wealth planning industry and financial advice industry, you're meeting with people because they're a little bit unsettled. So there's a bias towards him thinking people are unsettled because usually they're coming to him because they are.

[Krista Dibias]

Can I ask you a quick question? I'm so sorry to interrupt, but when you say holistic, I assume you mean like he's really doing what you think advisors should do, which is looking at everything. It's not just about the money, it's about the lifestyle. Is that what that really means there?

[Wes Moss]

Holistic should be in my opinion, it's both the financial side and the lifestyle side. But think of the financial side is easy to identify. We all think about investing. It's like how is my portfolio going to be invested? But then there is the coordination with the taxes. And that is part of the holistic circle which goes back to how do I pull money out from the accounts, which is distribution. And then you think about estate planning, meaning who is the money going to be left to? And then what kind of accounts do they need to be in today to make sure that is operable? So think about those are you think about estate, you think about taxes, you think about distribution.

[Krista Dibias]

Well then you do the thing about happiness.

[Wes Moss]

Well and then there's that side of it which is the uncomfortability around being able to spend money and that goes into the unsettled part. So holistic planning should be thinking healthcare, thinking insurance. I mean there are think about all the different disciplines that surround financial planning, in addition to actual planning of the finances, which is another part of it, the planning part that doesn't have anything to do with the investments, that's planning out our spending over time and how much is an appropriate level of spending. So that's holistic financial planning. It's way beyond just sitting down saying, oh, here's what I think you should invest in.

[Krista Dibias]

Yeah. And you ask people about their hobbies and everything. So I'm sorry, carry on.

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Right.

[Wes Moss]

I mean, look, I'm probably even more of a believer in understanding our core pursuits, which is a very much. It's a lifestyle question, like, what are the five to seven things we're going to be doing when we're no longer working? What is our socialization look like when we're in retirement? Because it becomes more difficult when you're no longer working in a company around people all the time. So I'm, again, that's a lot of what I write about, in addition to the financial pieces that make us set. Maybe the reason this phrase has just recently been in my head is that it is a microcosm of what I'm writing about being set financially, which I'm a believer. There's a couple of really important steps there. But then being settled is all the other pieces of the equation. And that's what my friend Mike Parsons talks about, is being set but not settled. He's talking about people with plenty of money but still worried. Plenty of money, still worried. Emotionally, they're just not at peace. And that's the question that you would think, and you've actually mentioned this, Chris, on the show, is somebody will write in and said, I have $5 million, but I'm still worried about this, this, this, and this. Like, shouldn't they just be fine?

[Krista Dibias]

Right. And of course, people. Some people get so angry when they hear that because they're like, I wish I had a hundred thousand dollars in retirement. And it's crazy.

[Wes Moss]

But whether you have 5 million or you have 10 million, which sounds like you should just have no problems whatsoever, those families that seem to be totally set have very much the same list of questions as somebody with 500,000 or a million. Just because they have more assets doesn't mean all of a sudden everything's set. In fact, sometimes there's more problems. And maybe it's just that there's this ambient anxiety in the air and it's 2025, I don't know, a time that there hasn't been anxiety in the air.

[Krista Dibias]

Right.

[Wes Moss]

It's always kind of like that. But maybe this year feels even more so. I mean we've got the politics, which is again, that's always in the air. The Fed, that's always in the air. Maybe this year it's even more so. But then we have technology reshaping the world and we have artificial intelligence. And you've heard CEOs come out this year that are saying that all half of all white collar jobs will be gone in five years. So there's some unsettling stuff happening out there, which I would say that it is even more ambient anxiety. And here's the real problem though. No plan means no peace. That's the reality of this. Retirement is not. Not only is there no plan, if there's no consistency in revisiting the plan, then you're not settled because retirement is not. I think of Ron Popeil, we all remember that commercial. Maybe this dates us how old we are. But remember the set it and forget it commercials. Ron Popeil, the Ronco Showtime rotisserie said it and forget it. It's just not like that. There's too many things that change in the world. Your situation changes, your finances change. So retirement planning is a start of a plan and then a continued version of that. But think about all the different risks that are swirling around in our head. It's that is there a concentration risk? Maybe I've been at a company so long that I have a whole lot in that one stock. Is there sequence of return risk? What happens when I retire? The market then decides to have a really bad two year period. That's sequence of return risk. How do I really get diversified income streams? Solution have multiple asset classes that are paying you income. What about my withdrawal strategy? How much can I pull out safely to live comfortably and still grow the nest egg and protect against inflation? Solution there's follow a version of the 4% plus rule. Tax coordination and distribution. How do you balance your withdrawals from your IRAs, your Roth accounts, your brokerage accounts without creating a tax tsunami? And the solution there, it's coordination goes back to holistic. Coordinate with a CPA or a planning team on a real distribution plan, long term care and healthcare and then the enjoyment and security. This is the other thing I hear from folks that seem like they're set but they're not settled. How are you going to actually enjoy what you've built? Which means how much money can I spend and how much time does that mean with my family and my hobbies and my travel and are you still confident that money's going to last and you don't have the guilt of spending. A lot of times folks that are really financially set, they're there. You're there because you were really frugal. And it's really hard to change that dynamic. And it's not necessarily a bad thing, but it's ingrained in us. And the solution there's is that some sort of plan will give you the peace of mind of not running out of money. And you can say, look, I can take an extra trip to Disney which costs an exorbitant amount of money per day and I can take the whole family down there to Orlando, or I can take a seven day trip to Greenland and then Krista estate Seems again like this ethereal part of holistic planning. Where does the money go? You got a bunch of kids, maybe a couple of the kids are financially in great shape. Maybe you have children that are not going to be financially in great. So who gets what? Once you have a roadmap for that, then you become settled in addition to being set. And that's the payoff of doing planning. And you can solve all those question marks that I just went through. Concentration risk, what about sequence of returns risk, what about reliable income streams? What about the withdrawal method? What about making sure you can pay for healthcare long term? And then ultimately how are you going to peacefully enjoy your money and not feel guilty about it and it comes back to the right planning and then understanding that it's not just set it and forget it, it's an ongoing process.

[Krista Dibias]

Okay, I love that. All right, we're going to go to questions. Andrew in Iowa sent this one and he said, hi Wes, I have a question on how asset fees work. It seems to me like the only two ways to charge an asset fee would be A, the issuing company lowers the fund's price from what it was pocketing the difference, or B keeping the funds price the same, but a fraction of each share is basically forcibly transferred back to the issuing company. And if option A is how it works, that would already be taken into account when viewing price history charts. But with option B, I'd have to do that math myself to find true performance. Which option is more accurate? Or is there a different explanation that I haven't considered?

[Wes Moss]

Andrew, here's how it works. The fee in any etf, fund, mutual fund. So first of all, they do not take shares back to pay your fee. That doesn't. That's not the way it works in today's world. If an ETF has a fee of let's call it a quarter of a percent per year. They essentially divide that up by 365 and they probably actually do it by business day as opposed to calendar days. But let's just do simple math. 0.25 quarter of a percent divided by 365 is 0.00068% per day. And that gets taken out of the price that you see on the chart. So it is a net price of the fee in any particular fund. So so you do not have to recalculate them pulling back chairs to pay for it. It's just automatically done. So what you're seeing is net and it just makes it very, very easy.

[Krista Dibias]

Okay, David in Massachusetts says so this is less of a what do I do? Question and more of a who should I ask? Question. Should ask Krista Little backstory I've been successfully saving for retirement for many years. I've amassed about 3 1/2 million dollars, mostly in a self directed Schwab brokerage account. But I also have some accounts with a Merrill Lynch CFP who is also a fiduciary. Yes, I knew you guys would ask. I'm 58 and starting to think about retirement plans. I know from listening to you guys and doing my research I need to start transferring money from my aggressive investing brokerage accounts and putting into safer things like bonds. But that's where my knowledge runs out. Every time I ask my financial planner, she starts babbling percentages and figures and my eyes glaze over. Even when I listen to you give advice on the podcast, I often lose my ability to comprehend what exactly I should be doing and start drooling mindlessly?

[Wes Moss]

David Guy's funny.

[Krista Dibias]

I love it. My question is, are there any financial planners who can speak in plain, understandable English that a moron like me can understand? As I said, the majority of my investments are in a self directed investment account. I don't want to transfer that entire thing to my financial planner as I will suddenly be paying huge annual fees. On the other hand, I know I need to diversify, but I just don't know exactly what to do or what products to buy. How do I find a person I can talk to, perhaps pay a one time fee who won't give me generalities, but instead very specific things to do in a way I can understand? In other words, how and where exactly can I find a great fiduciary financial planner and roughly how much should I expect to pay? Do I pre interview such a person so I won't End up with someone else I'm confused to speak with. And, and if I do pre interview, what questions should I ask to find out more if the person is fluent in plain speak? Thanks. And I love learning from you guys. This is such a. I just have to say I love this question. No, you should never feel confused when you're talking to your financial planner. I think that is so important like that they put things into plain. I mean I'm totally, I'm totally with this was David right? Yeah, I'm with David on this. Like I need someone to make it very simple for me and I work with Clark and Wes, but as Clark loves to say, I was an English major.

[Wes Moss]

So David, again, it's a really interesting perspective on all this. I'm trying to be plain speaking. I mean, I guess I'm not doing a good enough job because he says he's listening and he's mindlessly.

[Krista Dibias]

It seems like he doesn't know what he should do in his situation. So he wants someone he can talk to.

[Wes Moss]

Let me make sure I'm doing this in a plain spoken way. Our industry, for some reason there is a lot of math in the industry. So I think it is easy for people. It's hard actually for people to be plain speaking because so much of this is about numbers, percentages, ratios and analytics. And it's hard to be able to explain all that without talking about numbers and analytics. And then investment options are infinite and then the way you can choose to invest is also infinite and everyone's a little bit different.

[Krista Dibias]

Can I say one quick thing? Yeah, please. He may be like, I'm a visual learner. And so my planner will I have him like draw me things, write everything really like for me, stack it up and show it to me as well. Because if someone just speaks at me, that is tough for me too.

[Wes Moss]

I am a, I mean the biggest believer in drawing. I think that drawing you love a chart, you love. I love drawing the chart. Chart right there. I love drawing out a retirement plan on a piece of paper or some sort of iPad or whatever it might be. Think about investing this way. David, your core question was how do I get less risky over time? Think of the investing world as just two pieces. Stocks, they're risky. Bonds, cash, they're not. So imagine that's the only two things you have to worry about. Risk, risky assets and non risky. And any portfolio could just be a combo of the two. One of the most famous investors of all time, Benjamin Graham, who was Warren Buffett's teacher, said that most investors would be in great shape at age 30, 60 or 90, with half in stocks and half in bonds. So imagine that's it. They really could think about the investment part of this, which goes back to your risk, is that you've got to find some comfortable level. And Benjamin Graham tells us that whether you're 30, 60 or 90 years old, pretty good starting place. So imagine you have a total stock market index for your stock side, and you just have a Treasury money market for the other side. That's it. Imagine that investing is just that, it's that simple. Now you were also asking, how do you de risk over time? Well, it's pretty simple. Less in the risky bucket and more in the safety bucket. So maybe if you're 50, when you were 50 or 58 now, David, you were 75% in total stock market and only 25% treasury money market. And you say, you know, when I'm 60, I want to make sure that at least half of what I have is really safe and still making me a little bit of income. So you say, I'm going to. I'm going to go from 75% risk, 25% safety. It's a half in risk and half in safety. And it can just be that simple. It really can be that simple. Now, I think the more I talk, the more I'm going to get complicated. So maybe I just leave it there. But there is more to it because you may want to do it gradually and do it 5% per year. But now David's starting to drift off as I do that.

[Krista Dibias]

What about the finding a financial planner?

[Wes Moss]

So there's a couple things. One, if you have a fiduciary already and they're managing some of your money, then maybe that's an okay way to hedge your cost here. Whereas maybe they manage a part of it and then you're still getting direction, you're still getting planning, and then you're managing the other part of it, and there's less of a fee there. So that's a good way to kind of split the difference, if you will. The other way would be to go to a place like a Vanguard that has personal advisor services. And that's a really low. It's about a third of a percent per year. I think it's 0.35% per year. And you're probably not going to get the exact same person, but you'll always get somebody that can help you with some of those planning questions you're talking about. So that's another way to do it in a low cost way. There are advisors that'll do hourly and you may pay them 1500 bucks or $3500 for a custom plan. But the financial advice industry, it's hard to have a business doing that. So there's very few people that do that and do it, I think in the right way because it's just a hard business. It's like every single time you're finding some new family to help is just a one time thing and then they're gone. But remember, right, go back to the set it and forget it. Retirement planning really isn't a set it and forget it. So most of those, those hourly planners would say, look, you've got to come back at least twice a year anyway and keep paying. So there does. In order to do it right and be set and settled, you either do it on your own, do a do a relationship with an hourly planner where you're going to go back once or twice every single year and keep things going, or you opt for kind of this hybrid model where your CFP is managing some of it and you're managing the rest. Or a place like a Vanguard that has a advisor services where you're going to pay a small percentage over time. Okay, I think that was plain speaking.

[Krista Dibias]

I think that was good.

[Wes Moss]

David. I don't know.

[Krista Dibias]

Let us know. David. Okay. Leslie in North Carolina says, hi, Wes. I have $20,000 that I want to invest in VO, but I've been waiting until the stock market goes down a bit so I can get a better price. I've been waiting for several months, but the market keeps going up. Would I be better off just going ahead and investing?

[Wes Moss]

What's Leslie doing?

[Krista Dibias]

Timing the market.

[Wes Moss]

She's timing the market. Timing the market shows up in a lot of different ways. I think when you think of timing, you're thinking of somebody buying and then selling and buying and selling, but just not investing is timing. So she's a Leslie. You're just time in the market. You fall victim to being a human. Hey, I'd like to get a better price. Market seems high. Maybe I'll wait till it corrects. Totally human, totally normal. And it is a hard problem to solve because we want better prices, ironically. What happens, Christo? Prices go down. Market's down 10%, 20%. What's Leslie's probably say?

[Krista Dibias]

Might go down more.

[Wes Moss]

Might go down more. I think I'm gonna wait. What happens? The market goes back up. So what's the elixir? The only elixir I know for this is just to set it and forget it. From a dollar cost averaging perspective, DCA dollar cost averaging is the only way to trick yourself into being invested. This just means that. Okay, look, I missed it. The market's up 10, 15%. I should have, should have known better. Woulda, coulda, shoulda, doesn't matter. So what am I gonna do? I'm gonna take my 20,000, I'm gonna divide it up over the next five months. Four grand a month or four months, five grand a month. And then I'm going to put it to work in whatever investment I'm thinking about. And if the market goes down, great. That means the next time I get to buy it lower. And then it still goes down. The next month I get to buy it lower. So you've solved your problem. On the other side, if the market keeps going up, you've put some money to work and at least that portion is higher. So you've at least tricked yourself into becoming a long term buy and hold investor. And that's the psychological way to try to fight against timing the market.

[Krista Dibias]

Okay, well, that is going to do it for us today.

[Wes Moss]

Fun questions today. They're always fun. This is really good. David made me laugh.

[Krista Dibias]

Thank you for listening. Thank you for watching. Thank you for submitting your questions. And remember, we do have our consumer action Center, Team Cork's Consumer Action Center. If you have questions you don't want them, read on the podcast. You can go to clark.com cac to see their hours and how to reach them and hope the rest of your day is fantastic. We will be back with another episode of Ask an Advisor one week from today.