And good evening.

You've got more than money.

You've got tickets in your house.

Your personal financial adviser.

Happy to be with you this evening.

And for the next half an hour, I am at your service because you are the reason that we are the most relevant financial show on television today.

Without a doubt, because we address what's relevant to you.

Most financial shows, I'm sure you already know, have their own agendas.

They have something they'd like you to buy from.

Then they have something I'd like to push.

Perhaps just an idea, perhaps an agenda.

But here we are, a blank screen.

We are not to be filled in until you start the ball rolling with your questions.

If you are a loyal viewer, you've seen this happen time and time again.

And our questions that we get from the audience are the most interesting ones that you can imagine.

If you're joining us for the first time and you're wondering exactly how that works, it's very, very simple.

You send us your questions, Gene, and ask MTM dot com.

Jenny and ask MTM dot com.

Our entire team is that.

Then at your service, we answer every single question back to you.

Hard ones, easy ones, silly ones, not so silly.

All of those are responded to.

And then Megan, our financial correspondent, selects a a a selection, a a a crosscut a a variety of questions that we can answer on air that hopefully will give all of you some insights that you can use.

So while there are lots of different questions, there are some things that you'll find that have common threads and for as many of you as we possibly can, we hope you pick up on those threads, maybe take a note or two about the answers that might apply to you.

And if they don't apply specifically to you, send us your question and we're happy to help you specifically.

So let's get right to it.

Let's see where we start this evening.

Megan Exactly that.

Where do we start this evening?

Hygiene.

Our first question tonight says, We are long time huge fans of Gene, Megan and the show.

And appreciate you taking the time to address our question.

We know the timing of stocks is a big no no, but we had extra cash during the pandemic and picked up some airline stocks.

JetBlue and United at what we thought was a very discounted price.

We figured at their prices we couldn't go wrong.

Well, we are currently at a loss for both stocks, but are confused since travel is at an all time high.

Can you provide any insight why most airline stocks have not recovered?

Fortunately, this was fun money, hard earned, but not critical to our lives.

And we plan to hold on to the two stocks.

Thank you and be well.

Well, thank you very much.

Kind words indeed.

And Megan building her own fan base.

I know exactly how I feel about that.

Actually.

I do know.

That's fantastic.

Thank you for the question.

Timing stocks, indeed, is a no no timing.

Stocks require that you make a number of guesses, a number of guesses, predictions that need to be correct.

You need to know that it's the right time that that these stocks have fallen for the right reason and that they are simply being discounted through factors not within their control.

And when those factors return, maybe through a cycle, those stock prices will rise for years in that hasn't happened.

And we hate when that doesn't happen to our loyal fans.

We want them to succeed on every level, wherever they are.

So this is this is not pleasant, but it is very demonstrative here of the risks of trying to guess that's all it is.

Guess where a particular stock, a particular industry and particular segment of the economy may be heading.

And then even if this had worked out, even if they had gone up, now you have to predict, you have to project when you have to guess when they have peaked, because in order to make this the best possible round trip, you've got to buy low, sell high, or at the very least buy relatively low, relatively high.

You don't have to call the bottom in the top precisely, but you have to be able to make that decision.

And whether you are correct or not, folks who bought into Apple stock early on when then when their investments doubled, many of them said, wow, that was great.

They sold and got out not knowing that it would go up ten times, 20 times or a hundred times.

And they lost out on a small fortune, maybe a large fortune.

The airline stocks have struggled for two reasons.

Number one, travel has not returned as quickly as would have been expected.

And number two, their costs are dramatic.

Higher.

Four years ago, fuel oil, fuel, air, airline fuel was at an all time low in terms of cost.

And now it's very much at an all time high.

So even though airline travel has recovered significantly, the net profits have not.

And in almost every case, stock prices are driven by net profitability by what investors believe they can receive for their investment.

This so far has not worked to your advantage.

Will it in the future with these particular companies?

No idea.

Absolutely no idea.

Which is why, for the most part, investing in individual stocks fund money.

Sure, A long term solid investment strategy, not so much diversification, much better start in terms of long term strategy.

So hang on, let them run with any luck at all.

At some point, ill recover and at the very least break even.

And if you decide at some point along the way to sell at least you get a deduction on your tax return.

A small consolation, Max.

Excellent start.

Very nice, folks.

Where do we go next or next question has a couple parts.

It's about a couple in their late sixties that just retired and their advisor made some interesting suggestions that we want your thoughts on.

First, they recommended that they roll over the wife's for three be at Vanguard to a platform of funds with an across the board expense ratio 0.4% higher than the client's existing fees.

Also that also had the husband in an annuity with a sliding 7.5% surrender charge declining over seven years in his Roth IRA with a guaranteed return of 1.5%, this adviser had never asked for their tax return nor no need for either of them to have ever contributed anything to a Roth IRA and also recommended that they start Social Security at 65, even though waiting till 70 was the smarter strategy, but would require withdrawals from the portfolio between 65 and 70.

What are your thoughts on these suggestions, Jean?

Well, I have a suggestion of my own.

It's time for a new advisor.

You know, these are red flags across the board and not just red flags as in well, I kind of he said she said you might lean one way or another.

No, There are several items here that if regulators were reviewing these recommendations, regulators in the form of the SCC, FINRA, the Pennsylvania Department of Banking and Securities, or any state regulatory body that looks at financial advisors would have serious concerns about There has been a movement afoot by all regulators to ensure that folks who are moving money from a retirement plan into an IRA, which is what this advisor did for the wife involved, is done in the best interests.

In the best interests of the participant.

So the wife in this case would have to look at an apples to apples comparison and say, Hey, I've got a pretty good plan.

It's very inexpensive.

You're offering a plan that's much more expensive.

Why would I make that move?

The SCC FINRA might suggest that she should not have and that the advisor made that move for the sole purpose of earning a commission for earning a fee.

Add to that the use of an annuity that has a seven year surrender charge recommendation for the husband in terms of his Roth IRA, an annuity inside an IRA typically not the best move because annuities have relatively high expense ratios, but they are tax sheltered, which is irrelevant in this case because it's inside an IRA that's already sheltered.

That's not a good idea, generally speaking, unless we're talking about the good idea for the advisor who probably earned a commission on that recommendation.

I'm not looking at your tax return is a huge red flag, not taking into account the entirety of their financial picture tells any regulator, anyone, any supervisor or and or regulator that this adviser has not done the required work in order to give a confident recommendation to these clients.

The required work mandates that financial advisers ask enough questions, collect enough information about the entirety, the totality of their client's financial picture, so that the recommendations they make make sense from an integrated standpoint, not just from an investment standpoint, but from an income tax standpoint.

Perhaps even an estate planning standpoint.

That might be a a critical concern as well.

Finally, the recommendation to take such a security early, huge red flag generally indicates a financial advisor who is perhaps desperate to hang on to dollars that they are being paid on most financial advisors, perhaps in this case as well.

They're receiving a percentage of the assets that they manage.

And if this advisor is not terribly good, not terribly successful, perhaps not earning the kind of income that they either were expected to or wish to, all of a sudden having someone take money away is is very upsetting to the advisor.

Whether it's the right thing to do for the client or not.

In almost every case, in almost every case, it is appropriate to wait until age 70.

It is appropriate to draw from your savings IRAs for three B's annuities, wherever they may be, to supplement your income, to pay your bills until you reach age 70 when you get the maximum available.

Social Security not always the case, but in many cases, that's the best way to go.

When we see an advisor recommending against that, recommending against that, it is a huge red flag we have for for huge red flags.

Strike three and you're out.

Strike four is likely worthy of a complaint, likely worthy of escalating your concern above the advisor to their supervisor.

And if you don't get satisfaction there to the regulators, to FINRA, to the SEC, etc.

very disappointing.

There are about 350,000 financial advisors or folks calling themselves Financial Advisors in America today.

I would have hazard a guess 340,000 of them are are solid, hard working.

They want to do the right job and often they benefit their clients.

That still leaves 10,000 who have left behind their mandate that they put the best interests of their clients first and have started putting their best interests first.

And if you think it's just Bernie Madoff, God rest his soul, who has affected these kind of scams or or taken advantage of their clients, I am sad to report that's not the case.

But even a very, very small percentage of financial advisors can do real damage.

You don't have to put up with that.

Make sure you leave the advisor.

Make sure that you escalate your complaints to, at the bare minimum, the supervisors, the advisors, supervisor.

And if you don't get resolution to the regulators.

Not our most fun question makes.

Hopefully we shift gears.

Well, this next question is has a sad beginning, but I think it has a hopeful ending.

This one says I watch your show every week and get great information about money.

I have a question and hope you can give me some input.

My best friend passed away in July and left me $150,000.

She lived in Florida.

I live in Pennsylvania.

The lawyer to the estate did not ask me for Social Security or anything.

Just mailed me a personal check.

I'm wondering, do I have to pay inheritance tax on it in Pennsylvania?

Thank you for your time.

Well, it would make me wonder to.

You are right.

It's a sad way to get money.

$150,000 is a substantial sum of money.

Clearly best friends, indeed.

I'll cut to the chase and put your heart at rest.

You do not only tax the reason that the attorney was not interested in your social Security number is that this 150 will not be reported to the IRS as income.

The state of Florida, the residence state of your friend has no estate tax.

Even if the friend had been in the state of Pennsylvania.

It is typical for estate distributions to be done after the estate tax has been paid.

So in all likelihood year 150 would have been free and clear anyway.

But it certainly is coming from someone who lived in Florida where there is no estate tax.

I should note that if anyone in our audience is looking to do a similar thing, their estate plan sets it up in a way that their best friend, a non-family member, gets a chunk of of inheritance like this.

In the state of Pennsylvania, the estate tax would be 15%, a very substantial sum of money in this case, over $22,000 in tax on that $150,000 distribution.

So the the state of residence of the decedent is what decides whether or not there is a state tax to be paid.

A competent estate attorney.

It sounds like this individual is would have paid that tax in advance in Florida.

It would have been zero.

You are not required to pay income tax on inheritances.

The 150 is yours free and clear.

And and maybe as a remembrance to your your best friend, maybe you decide to use a little bit of that and and do something special, maybe a a charitable gift maybe you can make an impact on somebody's life that will pay it forward from the life of your friend.

Very nicely done.

Nicely done indeed, Megan.

That's certainly helped a lot.

Where to next?

Our next question asks, Can we make an appointment for my daughter?

She's 27, has good income and good savings, and she wants to establish a financial relationship on investment and advice.

No, we don't do that.

Kidding.

I'm kidding now.

I'm kidding.

There are a lot of financial firms that would not be kidding.

Not even a little bit.

If you're talking about developing a relationship, a financial a solid financial relationship between an advisor and a young person, there are a substantial number of firms who would say, No thank you, or maybe not even be that polite, but they would decline this engagement.

They would decline this opportunity to serve this young person.

Why?

Why would they turn down a client?

It is sadly, it's it's pretty straightforward.

The vast majority of financial advisors who are registered investment advisors, that is, they are independent, they are fiduciaries, they are not stockbrokers, they're not insurance brokers.

They are true financial advisors.

The vast majority of them earn their living on a on a percentage relatively small, something 2% or less of the investment amount that they manage.

So what's known as assets under management.

So if you come to them with an IRA rollover and you have $450,000, they are likely to be welcoming you, understanding that they would get somewhere between 40 $509,000 a year every year that they serve You makes perfect sense when you are 27.

The likelihood that you have substantial assets under management is quite low would not be unusual at all if a 27 year old has no investable assets.

They either have savings in the bank, perhaps savings for a wedding, savings for a house, savings for whatever.

So that's not investable.

Or if they have, they are blessed to have a401k or four or three be at work.

They're putting their investable money in that.

So the investment advisor has no assets, nothing to charge one or 2% on and so feels like they cannot get paid.

Now having said all of that, why did I say we can accept that this young lady has a client and others will not?

It is a difference of philosophy.

It is a difference of value.

System is a difference of what we appreciate in the more than money world versus what other advisors may or may not appreciate.

27 year olds do not stay 27 years old.

So in our more than money business model, meeting someone at this young age, investing a little bit of time, no question about that.

And nurturing them, guiding them, answering questions that are largely not investment related.

Hey, how do I save for my new home?

Hey, what kind of interest rates in my facing?

How do I get the best mortgages?

Hey, we're thinking about getting married.

Do I need life insurance?

Hey, we're going to have a baby.

How do we start college?

Funny.

These are questions that will be asked over the initial years of the relationship that produce absolute no income, Absolutely no income.

Why would a business be willing to invest time, money, effort, energy in a client relationship that produces no income?

Well, if they are smart, and for all the financial advisors out there, I know that you watch, I get that I don't blame you.

Pick up some great ideas, pass them off as your own, and everybody wins.

I have no problem with that at all.

Here's way you might change.

Reframe your thinking.

You're not losing money, you're investing, you're planting seeds.

If you can acquire 15, 20, 30 young folks at a young stage in their life, and if you care for them, if you nurture them, if you guide them, prevent them from making serious mistakes when they reach their peak earnings in ten, 15, 20 years, who will they turn to to manage those funds along the way?

Is it possible that this young person will have some referrals to give to a financial advisor?

Answers.

Of course.

Along the way, will there be other people they will bump into?

Perhaps generationally, Perhaps it will be mom and dad that they refer.

Perhaps it will be grandparents, perhaps they'll receive an inheritance.

All of these things are uncertain.

What is certain is that if we do the right thing over and over and over again, we cannot fail.

We cannot fail our company.

We cannot fail ourselves, and we certainly cannot fail our clients.

So 27 years old, welcome to more than money.

We would be happy to assist you.

Megan.

That put a smile on my face, not just because this young lady is about the same age as you are, but because this is the kind of thing that we really take great pleasure.

And so is there a question back there?

We can serve another person?

I'm sure there is.

That's what we do.

This one says, My husband and I enjoy your show for its wisdom and wry humor.

We are considering rolling over some of our retirement plan money, which is invested in a403b plan and A 457 B plan to IRAs.

In our credit Union Bank, we have heard that IRAs are less protected than employer sponsored plans against garnishment judgments and bankruptcy.

Bankruptcy, do you think rolling over some of our retirement money to IRAs makes sense.

If so, would you limit this to a certain percentage due to their being less protected?

I'm not sure if this matters, but the four three B's are my husband's and both he and his employers have contributed.

My plan is the is the 457 B from a large city government.

It contains only my contributions.

My employer did not contribute.

We live in Pennsylvania.

Thank you for your help.

This is a very interesting question.

There are, I would suspect, 2% of the folks that we bump into who would know this, who would be aware of this issue and have any concern whatsoever.

I'm I'm guessing fully 98% would have no clue that the assets that are held in what are called qualified plans for one case for a three B's profit sharing pension plans have an in hand just protection from, gosh, all kinds of nasty stuff, indeed, wage garnishments, lawsuits, etc., IRAs, even though they feel very similar and they are they operate in a very similar fashion.

They do not have precisely the same protection now on a 1 to 10 scale, the protection that you'll get from A, four, three, B, a 457 is perhaps an eight or nine.

The protection you would get from an IRA is perhaps a six or seven.

It is not the difference between ten and zero.

So the concern that you have should be evaluated by what potential risks do you have that you might be sued, you might have a medical loss, you might have a bankruptcy, in which case you would desperately need the maximum protection for the vast majority of people, 98% that doesn't exist.

So the difference in protection is really a moot point.

Or as those of us who are fans of miniature highland cows would say, a moot point.

It doesn't matter a great deal what really matters, a great deal and should be looked at carefully before you make any transitions is not the difference in protection, but the difference in investments, the difference in the types of investments that you have.

You've got three different plans.

You need to compare each of them individually with what an IRA might be able to offer you.

You might find that one of those plans does fantastically well and is very low cost and you don't want to move it.

You may find one of those plans is dreadful, the returns are horrible and they don't do anything at all like what you wish and you absolutely want to move that one.

And there may be something in the middle.

But bottom line is that that kind of analysis, by the way, required of all registered investment advisors all rise at this point by the Department of Labor required.

That analysis is required to be done by the advisor to give you a very clear picture of the pros and cons of moving from a retirement plan into an IRA that is the analysis that I would encourage you to do very, very carefully.

The protection, it's interesting, may have a point if you're already in at risk in terms of lawsuit or bankruptcy, indeed, stay right where you are.

But if you're a normal human being, start looking at this from a different perspective.

Compare apples to apples and see which plan is better for you.

We have covered a lot of ground, a little snark there, a little uplifting stuff, Some really, really good questions.

Your lives are fascinating.

Far more interesting than hearing Jeanne drone on and on about IRS code 451, part B sub, paragraph two.

So thank you so much for sending us those questions.

If you have a question for us, Jeanne, and ask and TMZ.com works very, very well, we answer every single question back to you.

So send those along and perhaps you'll see your question answered on a future show.

But in the meantime, please accept my thanks for spending part of your evening with us and my encouragement that you return next week when we're back in the studio to bring you more questions and answers right here on more than month in a.