And good evening.

Welcome to More than Money.

Happy to be with you.

Gene Dickison, your host, your personal financial advisor.

When I say personal financial advisers, some folks, they make the assumption they see this debonair guy and the guy he's been out around.

And that part is true.

But I've also been diligently serving as a financial advisor.

If you listen carefully, in many shows, I've claimed 780 years of experience, 780 years of experience, I think I look great.

I really do.

I mean, think about it.

That's a long time.

Bottom line is the question has come up.

How in the world of 780 years of experience.

And the answer is fairly simple.

It's a mystery.

It's.

That's what it's.

You don't.

There's no explanation.

You can't figure this stuff out.

It's not like math, because it's a myth.

That's why they call them mysteries.

That's that.

The whole Harry Potter thing.

There's a lot of mysteries.

They're mysteries.

How?

How how do politicians sleep at night?

It's a mystery.

These are mystery and a little tongue in cheek.

Been doing it a very, very long time, Very good friend of mine, a gentleman, Dan Digital, introduced me to the concept of being a financial advisor before the title existed.

He had made himself crafted himself into and remains to this day one of the preeminent financial advisors in the country.

Just fantastic introduced the idea to me when I was running another business, a couple other businesses, and and as soon as I heard it, the concept.

So that's for me, that's, that's what I was called to do.

So if you are so inclined or maybe so skilled that you pick up on what kind of draws someone forward, what kind of of of of motivation or what kind of impetus there is behind what a particular financial professional or any profession, why they do what they do.

It's because I was I was recruited 780 years ago.

I'm extant pretty old too.

But 780 years ago to serve you and hopefully you'll allow us to do that.

Certainly this evening as you listen to our answers to your friends and your your neighbors, but perhaps with your own question.

Send us send us your questions, Gene, and ask MTM dot com and we'll do our very best to serve you.

Let's serve someone right now.

Okay.

Well, our first article tonight is actually just one for your opinion.

We have some conflicting opinions going on.

It says, quote, You don't need savings.

Grant Cardone blasts Dave Ramsey's Save Your Money advice and says real estate is a much safer investment.

This is a head to head.

Look at their polar money tips in quotes.

People save their money because Dave Ramsey said Save your money, save your money.

You need three months of savings, says Cardon.

No, what you need is cash flow forever, because if you have cash flow, you don't need savings.

He goes on to say, Cash flow is the king, the queen and the entire record.

It is the Holy Grail because cash flow allows you to weather storms and problems.

During COVID, I had cash flow during a 2829 when property values plummeted 30% and 40%.

I still had cash flow.

Cardona argued real estate is a much safer investment than having money at a bank.

The only people that lose their real estate are over leveraged.

They have a partner.

It could be a bank or equity that's got a gun to their head saying You have to sell it right now.

You never want to be in a position like that in real estate because real estate is not a liquid asset.

What's your input on this conversation, Jean?

You might want to buckle in.

Grant Cardone is a name that's very familiar in the financial world for saying things that other people don't say.

It is often the case that I knew ideas are what other people are not saying.

It is often the case that contrarian ideas, particularly in investments, can be very, very profitable.

If you're contrarian at the right time, and if you're contrarian for the right reasons, Grant Cardon is made his bones in real estate and then laid claim to being the world's best sales trainer.

And one of the lessons I am sure he is teaching sales people a word that at one point in our history, our our financial history of our country may have been a pretty admirable thing to be called in in this context.

Not so much.

I'm certain one of the things that that is part of his sales training is make sure that you're controversial, get their attention, say things that shock them so that they pay attention to you.

And I have paid attention.

This is one of the reasons why this report is part of our show this evening.

I have paid attention because the danger of of his unwillingness to simply be sound of thought, his unwillingness to see the bigger picture, his unwillingness to be clear about issues that he already knows are contrary to his position is deeply disturbing.

Dave Ramsey is a fascinating gentleman.

He has a TV show.

I have a TV show has a radio, private radio show.

He's here.

He has I think, 500 employees.

I have.

I have well, I have a golden retriever sat back.

Bottom line, is it similar ideas, very different approaches because Dave Ramsey's niche, his target market, his target audience, his target clients are folks who have gotten into financial trouble, folks who have made mistakes, perhaps repeatedly, folks who have gotten themselves deeply in debt, folks who are trying to dig out, folks who are ignorant.

Good use of the word stupid means you can't learn.

Ignorant means you don't know.

But if someone guides you and educates you now, you know, ignorance is very curable.

People who are ignorant make bad choices because they don't know any better.

Dave Ramsey has spent decades, decades counseling people how to get out of debt, how to make better choices, including including having a an emergency fund.

And Grant Cardon says that's stupid.

Well, for Grant Cardone to say that, particularly relative to the clientele that Dave Ramsey is counseling, that is stupid.

These people need to make sound financial choices.

They need to start with the basics.

And while Grant Cardone is very puffed up about his ability to own cash flow.

What if you're not in a position to buy an investment property?

What if you're not yet in a position to invest in anything because you're so deeply in debt?

What if you've made so many financial, financially poor choices that you need to get your feet solid on the ground first?

Telling someone like that that they don't need savings is like telling someone who's got a drug addiction.

You don't need rehab.

You just need to not do drugs.

It's dangerous.

It's inappropriate.

And to be blunt, overextended.

He talks about values and real estate dropping 30 and 40%.

One of the traditional methods of buying real estate is with leverage.

And if the values drop 30 or 40%, that's not the issue.

Painting investment, property for what it is a high risk in rent adventure.

If you out there own rentals, I don't have to tell you about the risk.

You already know tenants are challenging.

And if during 2008 when he references that, the values went down, but he had cash flow.

If during 2008 somebody lost their job, do you think they paid their rent?

Do you think he had the same cash flow?

I can assure you he did not.

I assure you.

Now, could he have scraped by?

Absolutely.

Are there ways to do it?

More conservative?

Absolutely.

But to counsel people on a general basis, to say you don't need savings.

Owning real estate is safer than savings is is absolute insanity.

And Grant Cardone should know better.

And if he could step back for a second and step down from his look at me, look at me.

I'm controversial and start thinking about the real impact he has in terms of trying to serve his clients versus serving his bank account.

I think he will find he will.

He will.

He has the opportunity to positively influence thousands, perhaps tens of thousands in a very, very powerful way.

Or not.

Megs, that was a little snarky.

Okay, I get that.

Maybe the next one I can be nicer.

I don't think this one requires a lot of snark.

Just a change I think this person is debating going through.

It says I'm 75 with 1.5 million invested and have been with my current advisor for 12 years.

He charges 1% for the first 1 million and 0.85% on balances from 1 million to 2 million.

I recently met with an advisor at a big financial firm as I want to cut the fees that I pay.

This company has a plan with no advisory fee and a computer algorithm invests the money in ETFs based on your risk tolerance.

I would have access to an advisor twice a year.

I believe this could save me between 150 and $175,000 over the next ten years.

Why wouldn't someone take this route, this route to save such a significant amount of money?

What should I know or be aware of before I proceed with this?

Jean?

The first thing you should know before you proceed is Thank you.

Thank you for asking.

Before you proceed, the emails that we received that caused me the most agita are the ones who start with I's.

Did past tense.

Fill in the blanks.

I transferred my RMD into a Roth IRA.

That's a bad idea.

That's not legal.

I did this.

That was a bad idea.

I wish you hadn't done that.

This gentleman hasn't done it yet.

So what should he be aware of before he makes this move?

Well, there are a number of things, some pretty important things.

The fee structure that his current advisor is charging is competitive.

It is reasonably appropriate for the amount of money that he is currently investing.

The alternative advisor that he's speaking with has already, in my opinion, either intentionally misled him or doesn't know enough about his or her own business to know that what he's saying is wrong.

No advisory fees.

Everything's done by computer.

It's a gift That's an incredibly exciting business model.

Not for the business because they're going to go broke.

They make nothing and and not for the client, this gentleman.

Because when the business goes broke, you're out of an advisor again.

So if you're focus is simply on I want someone other than me, someone other than himself to direct my investments, make those changes.

And I want to step back and I want the least amount of money that I can possibly see come out of my wallet.

Maybe that works.

But the reality is people businesses do not operate for free.

Someone is being paid somewhere.

And if the advisor starts the relationship with you by saying we don't get paid, that is the red flag that would cause me to exit rather quickly because I know that that makes no sense.

Now, interestingly, you're you're you're concerned about, gosh, it could be as much as $175,000 over the next ten years that you could be losing.

What if I told you, instead of being down 175, you might be working with the right financial advisor?

You might be up 450 to $500000.

What if I told you that you would?

Logically, I would hope.

Say, Whoa, whoa, Jean, how do you even come up with that?

Well, a number of years ago, Vanguard, you may have heard of them, a rather well-respected financial institution, rather large serving.

I've lost track, millions of Americans, for sure.

Trillions of dollars under management.

They did their own study of the value that a financial advisor brings to the table for an investment client, and by their analysis, a financial advisor.

Trusted, effective strategic Financial advisor brings about a 3% advantage edge to an investor versus the costs that they charge.

So in this case, the cost about 9/10 of 1% is what this blended fee has kind of runs out to be.

If that is true, the financial advisor through a number of different influences and impacts that he or she may have on you should be returning to you An excess return of between two and a half and 3%.

So as the cost is roughly 1% and you're getting roughly three, you're not spending $150,000.

Over the next ten years, you'll be gaining about $300,000 above and beyond your fee.

So your fee is paid and you get a bump of about $300,000.

Pretty impressive.

Now, is that true of every financial advisor?

Obviously not.

I think the one that you're interviewing with, that's probably not going to happen when you start out with hearing a sales pitch that doesn't ring true.

Doesn't make sense.

Too good to be true.

It probably isn't good or true, but if your current advisor is not exactly the right one for you.

Interview others.

Interview others with a little more sense of what they can do for you, what benefits they can bring to the table, and can demonstrate those to you to your satisfaction so that rather than regretting what you have paid, you can be excited about the advantages, the value that you have received.

That's the key.

It's not what you pay, it's what you get in return.

And there are a lot of fine financial advisory companies out there that if you pay them one.

Getting three in return is just the start.

It's just the start.

Do a little more homework.

Circle back.

Absolutely.

Let me know where you hit the speed bumps and we'll do our very best to help again.

Make it very interesting.

Hopefully our next one is as interesting.

I think it is.

We started off with a compliment.

It says, I have been watching your show for months and I have learned a lot by listening to you.

I love your humor also.

My question is about savings bonds.

I have about $60,000 worth of U.S. savings bonds that only yield 1.77% interest and won't mature until between 2029 and 2033.

Wondering, should I leave them where they are until they mature or cash them in and put them in my high yield savings account?

I don't need the money immediately, but I would need the money eventually because I am 73 years old.

Thank you for your help.

Well, thank you for your kind words.

Humor.

I rarely hear that on occasion.

That's very, very kind of you.

We take our work and our advice very seriously.

We don't take ourselves very seriously.

So hopefully that works for you.

It seems like it might.

73.

You're quite young.

Quite young.

I like that.

I'm going to need this eventually.

That means you have plans.

You're your goal.

I'm hanging in.

I'm going to be here for a long time.

Good for you.

You may join my triple H Club.

Happy, healthy.

That's one of my newest goals.

And we stay happy and we stay healthy.

And we do all the good things that we can.

Now, someone else may have other plans.

That's up to him or her.

I'm flexible.

But bottom line is, we can do what we can to to set that as a goal and and work really hard in that direction.

This is an interesting question for a couple of reasons.

Number one, you don't need the money currently, but your maturity, what, five, six, seven, eight years out is is a very long time to be suffering.

That's my word with 1.77% returns.

In contrast, if you were willing to commit your funds for a five year period, pulling these out, losing the 1.77, you will end up because they're maturing.

You're you're withdrawing them prior to maturity.

You'll end up sacrificing.

I think it's three months of interest.

Whatever it is, it's a relatively small number because your interest rate is such a small number, you might lose one half of 1% interest.

You won't lose any principal.

But shifting that over a currently a five year commitment could get you somewhere between five, five and a half, maybe even a 6% return.

So if it costs you one half a percent to exit, but in the very first year you get an additional three and a half percent return.

It's a no brainer.

It is literally a no brainer.

It makes perfect sense.

The only hesitation that I've got, we have no idea exactly how much the interest that you will declare, because when you cash these bonds in, you will declare the interest.

It will be taxable interest, reportable, taxable interest on your tax return.

We have no idea what your tax bracket is.

So assuming that 60,000 is the face value, perhaps ten or 20,000 of that is interest that will be taxable to you.

And that's something we have to look carefully at.

If you have a substantially high tax bracket and expect it's going to stay high, then bite the bullet and do it.

If you're in a low tax bracket, you don't have to bite any bones.

It's not going to be painful.

You'll pay a little bit of tax.

You'll give up a little bit of interest, but you'll exchange that for what could be over the next five years on $60,000.

If we pick up an extra 3% a year.

That's roughly 1800 private 2000, because then the math becomes easy over the next ten years with a small sacrifice upfront.

You could very reasonably expect to pick up an additional an additional $10,000 of gain.

That's a lot of money.

And when you're 73 on your way to a 100, an extra ten grand could come in real handy.

You know, organic food stuff like that, or gym membership.

Gym membership.

Fantastic.

I've heard great things about gym memberships.

That was interesting, Megs.

Very, very good.

Where do we go next?

Well, our next question also starts with I enjoy your show very much.

I have a question about IRAs.

I have a Roth IRA with $40,000 in it.

My wife is the primary beneficiary and my son is the contingent beneficiary when I pass.

Does the IRA become an inherited IRA?

Thank you for any advice on this issue.

Well, you're you're quite welcome.

Inherited IRAs are have become one of the nettlesome parts of being a financial advisor, being a tax advisor, being a tax accountant, being a tax preparer.

Inherited IRAs at one point were pretty straightforward, pretty straightforward indeed.

And then about three years ago, perhaps a little more, the IRS decided, you know what, these people are inheriting IRAs and they're not taking the money out.

It's kind of annoying and we're not getting a lot of tax that we really want.

So they went from what was then pretty traditional.

It was called a stretch.

Ira, a grandfather leaves grandson his IRA, and it's got $100,000 in it.

The grandson can take could back then take out a tiny, tiny amount every year until he retired.

So the 100 ended up growing dramatically.

It was fabulous.

The IRS is now come on it.

The grandson's 25.

We're not going to get our money for 50 years.

We don't want to wait.

So they instituted the ten year rule.

And indeed, if you have an IRA, every IRA is attached to one human being.

In this case, it's a husband.

When you pass away, is it inherited Ira, for your wife?

The answer is yes.

And that's an important point, because inherited IRAs have different rules.

Sometimes they're harmful, sometimes they're beneficial.

And a spouse, in this case, his wife, will have the choice.

She can keep it as an inherited IRA if that helps her more.

She can put it into her own Roth IRA, if that helps her more.

She has flexibility.

If she passes, it goes to their son.

There are no more flexibilities.

It is a ten year rule.

The money has to come out by the end of the 10th year.

The rules, the regulations that govern how the money comes out are still in flux.

Years after this new rule was put into place, the IRS is still trying to clarify how these new rules should be applied.

Some folks say you are absolutely required to take a distribution every year until the end of the 10th year.

That's how we currently the our More than money team currently interprets the rules that you must take a a distribution from your R&D.

Between now and and the end of the 10th year prior to that, you could wait until the last day of the 10th year and take it all out.

That inherited IRAs are not converted.

They they they they can't be left to run.

They are all the distributions are taxable.

But they're not penalized.

So if somebody receives an inherited IRA, let's say prior to 59 and a half, they're not penalized.

Now, this is a Roth IRA and a lot of you are already way ahead of me.

They're saying, whoa, whoa, Jean, there's no tax.

Why are you worried about all these distributions?

There's no tax on a Roth.

Well, there's no tax on a Roth.

But an inherited Roth does require distributions.

So even though the IRS has said we're not taxing, you, we understand that.

So we got a 200,000.

Our IRA, you got you're going to take 20 grand out a year.

Make it simple.

You pay no tax.

But that money comes out of the Roth and it goes somewhere.

And in many cases, the somewhere ends up producing income that is taxable.

So the IRS thinks that they have cleverly figured out how to make you drain a tax free account and turn it taxable.

And maybe they have and maybe they haven't always, because if you're in that situation, let's say you're 35 years old, you get a 200,000 are Roth IRA.

You're going to take 20,000 out of a year.

What you might do with that is can is contribute that to your 401.

K, assuming you have a41k, assuming you're not contributing the limit, that $20,000 might end up being tax deductible to go into your 41k plan for the rest of your retirement years and years.

Decades of compounding tax free.

It's a possibility.

It's a strategy.

Lots of great questions.

This evening.

I hope you were as interested as I. I got a little snarky.

My apologies if that was over the top.

I don't think so.

If you have got observations, questions of your own, of course.

Or maybe you thought too snarky and you want to give me a little bit of your own opinion, I would appreciate that.

GENE at ask MTM Dot com works very, very well comes to us and every one of those questions is answered back to you by one of my team.

And on occasion, even I answer some of these back so you might get it straight from the horse's mouth.

Folks, thanks so much.

You spent part of your evening with us.

I hope you've had it fruitful, profitable, perhaps.

And hopefully you'll want to return next week when we're back at this podium for another edition of More Than Money.