You've got more than money.

You've got Jeanne Dickerson, your host, your personal financial advisor.

Happy to be with you this evening.

Happy to be with you every single time that we're together.

I know you could be doing all manner of things.

You have tons of choices, and you're choosing to spend some of your evening with us.

That means a great deal to me.

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And we're happy to be bringing you this edition of More Than Money.

If you're a loyal viewer, you know exactly how this works.

I prattle on and on for a few moments.

Give me a kind of a set up, a little chance to settle in, maybe a sip of coffee.

That.

Maybe a little something stronger.

No judgment here.

Bottom line.

But if you are so inclined, as you've seen in past episodes, you may wish to have a pad and pen at hand.

Make a couple of notes on maybe an idea or two that may help you.

You may end up with an eye or two that may an idea or two that may help someone that you care about, somebody in your family, someone further afield.

And goodness, we're happy to do all that.

Speaking of further afield, just a reminder as our PBS productions are available to you, not just on our initial broadcast, which we do at Tuesday evenings at 730, but they're available on our PBS website.

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So you've got the opportunity to see us in many different ways, in many different factions.

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So share our show when you have that opportunity.

If you're just joining us for the first time, welcome.

A couple things that you should know.

The title of the show is More Than Money.

I think you know that already, but the impact of that is that we're far more concerned about you as a person, you as a person of your a part of your family.

We're much more interested in making sure that we have a positive impact on you.

And the money piece then normally takes care of itself.

780 years of experience helps a bit, but goodness, there's almost no topic that we haven't covered from 100% financial to about 2% financial.

So you can't throw a secure ball.

Send us your emails, gene.

At MTM, we answer every single question back to you.

We have a tremendous team of financial advisors doing exactly that.

No cost, no obligation, no pressure.

You just get your good information and and hopefully it's useful for you.

And goodness, we we pick a few of those to air on future shows and share with our entire audience.

And we have audiences, folks that are watching from coast to coast and from border to border.

We are very, very blessed to have that kind of a reach.

And PBS offers us that, and and we take full advantage.

We're in season eight and there's no stopping us now.

Speaking of no stopping us now, one of the components of our show, one of the the most important components of our show that everyone out there seems to appreciate, even, admittedly, maybe even a bit more than me.

That's terrible.

But but somehow I will.

I will soldier on is our financial correspondent and returning to our studio, financial correspondent.

Megan.

Megan.

Good evening.

Where do we start?

Good evening.

Jean.

Happy to be back.

We have a great question to start tonight.

And some really kind words.

They start off by saying, I try to watch your show regularly and appreciate the education that you provide.

I have also encouraged friends and relatives to become fans as well.

I find your commentary down to earth and thoughtful, and appreciate the humor and humility you inject into your broadcast.

My question is whether we should diverse.

We should diversify our retirement portfolio to include an right.

My husband is 75.

I'm 71.

We both work part time, earning about $40,000 annually.

Between the two of us.

We have $400,000 in conservative retirement investments, including IRAs, about $13,000 in old savings bonds, which will mature periodically starting in 2027.

70,000 in cash savings approximately $6,000 monthly in combined Social Security and my pension of $4,000 per month.

And we own our home.

We have wills, power of attorney and medical directives in place, naming both of our daughters equally on all documents, a concern about the man in high office and his cronies feathering their nests at the expense of ordinary folks like us, and then possibly scuttling or downsizing social security has us looking to diversify our portfolio.

Exploratory reading suggested that in diversifying portfolios, one should consider not only stock and bond investments, IRAs, cash and money markets, but also precious metals and real estate.

What are your thoughts on this gene?

Well, first of all, thank you for the kind words.

Very, very kind indeed.

Humor and humility.

I'm very proud of my humility.

I think I'm the very best at being humble.

Old joke.

My apologies.

The bottom line for this question is the bottom line to start is congratulations.

Goodness the two of you have done wonderfully well.

You have done a number of things that are that are extraordinarily beneficial, both to you and certainly to your family as you go forward.

Your cash flow is extremely strong, wonderful social security and and your pension 10,000 a month.

Fantastic.

No debt outstanding.

That's a great place to be.

You have large savings and you live within your means.

All these things are absolutely outstandingly well done, including I should I should mention that it's not your question, but it's something that highlights an advantage to everyone listening.

Everyone watching.

You have a complete estate planning package.

You mentioned that you have your wills, your powers of attorney, and your medical directives.

A lot of folks think about estate planning and they think wills.

I think I have a will.

I think it's in the safety deposit box.

Or maybe it's under the bed, or maybe I don't know where it is.

And maybe I made it 30 years ago before we had children and now we have grandchildren.

So wills are one document that you need powers of attorney for sure.

You need medical directives.

Absolutely.

You need.

So when we talk about estate planning documents, plural, we absolutely mean that it is not appropriate to to think as, as as was once thought common.

I have a will.

That's a good start.

It's better than zero documents.

Indeed.

But in terms of having a complete package, you need all of those documents.

And if you have beneficiaries that are minor children, anyone under 18 for sure, 21 perhaps, maybe older, depending on the circumstances, you may also need a fourth document, a trust.

So that's something that you should be you all should be aware of.

These folks are obviously aware of and they've done a nice job.

So let's start talking now about this diversification thing.

And the issue of the term REIT.

Our real estate investment trust.

Is it an appropriate diversification tool?

The answer is maybe.

Maybe we don't know enough about their financial goals to determine whether or not adding any other type of investment beyond stocks, bonds and cash would be appropriate.

As a matter of fact, we don't even know if stocks, bonds and cash is appropriate.

We don't know if those items are appropriate because we don't know what the objective of of their retirement investments are.

We can make the assumption it's to produce an income in their retirement.

That's an assumption that may be false.

If they have $10,000 a month of income, is it possible they don't need any more income at all?

Absolutely.

Is possible.

Is it possible they mentioned their two daughters?

Is it possible that their real objective is to build assets so that when they pass, those assets can enrich their daughters lives or grandchildren's lives?

Answer is, of course that's possible, in which case we should be talking about talking about ends of the spectrum.

Hey, we don't need to take risk.

We don't want to.

Maybe it's only CDs.

You should be looking at FDIC insured guaranteed income stream, guaranteed interest rates that may fit rather well.

The opposite end is we don't expect to ever need this money.

We're going to invest in the stock market.

We're going to invest in aggressive growth.

We're going to invest as if as if we were the same age as our children.

So different pieces of the puzzle must all diversification include precious metals, real estate and other.

What are in our industry are called alternative investments.

The answer is no.

Absolutely not.

There's no knee jerk reaction.

There's no painting with a broad brush.

There's no rule of thumb that says, we've got to diversify across all of those different types of assets.

Can you be appropriately invested and have stocks, bonds and cash answers?

Sure.

Absolutely.

Sure.

So designing an investment portfolio is very much science and art.

It is the science of 780 years of studying markets and studying how investments work.

But it's the art of understanding what's most important to you.

What are your financial goals?

What are your time frames?

What?

What are your emotions around investments so that we can understand exactly how to craft an investment portfolio that fits you and fits your financial goals, and serves you and your family?

I appreciate the question very much.

I appreciate the comments, the compliments very, very much.

But bottom line for all of us is approaching an investment program.

An investment platform requires very careful thought, both from a what is possible standpoint and what is appropriate.

Oh fantastic.

That was a wonderfully appropriate way to start the show.

Where do we go next?

Well, we're definitely switching gears.

Pun not included.

But this is about a vehicle.

If you are leasing a car, what's the point of paying thousands of dollars due?

At least signing my contract says tax title fees and licensing.

But then wouldn't I have to pay that again at the end of the lease period if I buy it?

Please explain this to me like I'm 16.

Why would anyone lease a car?

Thanks.

It's been a while since I've explained something to a 16 year old.

But I will do my best.

We'll do my best.

Okay.

Why would anyone lease a car?

I'm going to.

I'm going to circle back to that.

I'm going to come back to that here in a moment.

Your concern about the fees.

Very appropriate, very appropriate.

There are leases, automotive leases that, in my opinion, are.

Terrible, nasty.

The financial side of them are so egregious that I wouldn't recommend any of my clients take advantage.

I have seen leases where the monthly payment is fine, but the fee structure, the up front out of pocket is dreadful.

You could basically pay for a third of the car right up front with what they want as a deposit on a lease of a car that you don't own.

So yes, I have similar concerns to your concerns.

I have experienced scenarios where I'm very unhappy with the lease company because I think they're being flat out greedy.

Now, do I understand why they do it?

I absolutely do, I absolutely do.

The fee structure on leases for cars that are very popular, for cars that are very much in demand, or cars that are very much in limited supply, they can charge whatever they want because someone will pay that.

And if you will.

Well, it's what the market will bear, so to speak.

So if someone wants a particular type of automobile and it's maybe a high cost automobile, difficult to find automobile, specialized automobile, and you're going to pay a lot upfront, you're going to pay a lot.

If you decide to buy the by the car later, you're going to pay a lot monthly.

The inverse of that is that many, many, many leases have nothing up front.

There are no very minor fees, up front documentation fees.

There's no great out-of-pocket up front.

And the monthly fees are pretty standard.

What's the difference?

Well, the difference is a lots of vehicles, reasonable demand and the interest, the motivation of the dealership to keep those cars moving.

So as many lease as many as they possibly can.

Lots of folks are not particularly aware that in the automotive industry today, selling cars is not terribly profitable.

It makes some money, but it's not terribly profitable.

Leasing cars makes a better profit, but it's not terribly profitable.

Where are they making money?

Service.

Yeah, service.

Service and warranty work.

So if you're leasing the car for three years, it's likely likely going to be under warranty for the entirety of that three year period.

They're going to be doing warranty work changes, yada yada, yada.

And if you keep buying, keep a car for a longer period of time.

The profitability on the service side is extraordinary.

So for a dealership, their motivation is put as many cars out there as possible, as many cars as possible, don't make a whole lot of money on the sale or the lease, but make a whole lot of money on the service side.

So that leads them to to make it as easy as possible to get a car.

And then they're prayerful that you return for service.

Now let's let's return back to the fundamental question why in the world would anyone lease a car understanding all this?

Well, I give you there are half a dozen reasons or examples.

I'll give you one.

If your mom came to you at 80 years old and said, I don't know whether I should buy or lease, buying the car is going to cost $45,000.

Leasing is going to cost way less on a monthly basis.

Not really sure.

You may very well determine after a short conversation.

Mom, how many miles a year?

Do you drive?

6 or 7.

7 or 8?

Do you?

Is your car up to date on all the safety features?

No, of course not.

My car is older, so if you had someone who did not want to give up a lot of their capital, your mom in retirement, who wanted the peace of mind of having a new or nearly new car three years old or less, that's under warranty, never has to be surprised about some sort of service.

Gosh, they have to replace something that cost me hundreds of dollars thousands of dollars.

If you had someone that wanted, you wanted to have the most modern and up to date safety features so that you could be confident that your mom has the best possible opportunity to be safe as she goes about her modest travel amounts.

You have just talked yourself into a lease, low annual payment or low annual mileage safety features.

Very important.

No surprises on the maintenance side.

And at the end of that three years, some people do.

For some do two three is pretty common.

At the end of that three years, the keys go back to the dealership.

They're thrilled to death.

They will resell that card.

It's only got 15 or 20,000 miles on it.

To somebody who loves someone who loves buying those kinds of cars, the depreciation is already down.

The price is already down, but it's barely broken in.

You're singing my song and she gets the keys to a brand new, up to date, modern, super safe vehicle that has no maintenance worries whatsoever.

That's the reason why someone might want to lease.

So 16 I think of a 16 year old would figure that out, or at least listen to it and and be be understanding and be understand.

Thank you so much.

Good question.

Interesting question.

We don't get it often, but it's one that comes up on occasion.

Speaking of coming up, what comes up next for our financial correspondent Miss Megan?

Our next question reference is an old show you had.

It says I saw an episode where you discussed leaving money to a grandchild if our children should pass first.

It was in three stages with three different handlers first, immediate needs in education, then more at age 25 and the rest at age 35.

I'm not remembering, but they do ask how can they see this again?

So I can answer that on our website.

More than money online, we have a media section and there's a TV show archive.

I post the episodes in date order, so if you would kind of remember when you saw it, you can look for it there, or you can email myself or Gene if you need more help, but I'm pretty sure Jean's going to read it for you right now if you're watching, but just so everybody knows.

So go ahead Jean.

Yeah.

Thank you.

First of all, thank you for being a loyal listener.

Thank you for remembering that we talked about these kinds of things.

And thank you for circling back, because that gives us a chance to reintroduce a very, very important set of guidelines that we did develop live on air.

So this is not just for you.

This allows folks who are maybe just discovering us for the first time, or for folks who this is very common.

I heard it before.

I heard it a year or two ago, but I didn't need it then, so I didn't pay close attention.

So now my family has grown, my family has evolved, and now I feel like I could really use this information.

Can you help in?

The answer is of course.

The concept here is very, very simple.

If if there are minor children at the passing of someone who wishes to leave their money, a grandfather wishing to leave money to a granddaughter, perhaps the granddaughter is, I don't know, two, two and a half maybe, and obviously not in a position to accept the funds directly, not in a position to manage those funds herself.

It is incumbent upon a grandfather to set up a trust.

And that's exactly what we're talking about here.

We are leaving money to the grandchild who is not yet an adult, not yet able to protect themselves, not yet able to make adult decisions.

So we set up a trust.

We name a trustee that might be a close friend.

It may be if it's a grandparent setting up for a granddaughter, it might be the the, the child, the daughter, the mom or dad of the child.

It may be a close friend.

It may be a trust company.

There are lots of those out there, some high quality ones indeed.

So the bottom line is the money goes into the trust.

And the trust that you design tells exactly the trustee exactly what they can and cannot do with that money.

So it will describe I'm kind of riffing here a little bit, but it might describe, hey, you can use all of the money if you need, if necessary for medical purposes.

You can use a great deal of it for educational purposes, for health, for welfare, any of those kinds of vital issues.

The entire trust can be used instantaneously.

More commonly, it's not the case.

More commonly, that money is used for very specific items as the child grows, but then at at certain points in their life, the money is distributed.

So let's use a simple number.

I'd say there's 900,000 in the trust.

The child has now turned 21.

In very common terms, a third of that money, 300,000, goes to the child at age 21.

That's pretty young.

You get to decide the ages.

I'm giving you an example, but you get to decide the ages.

At 21, $300,000 is a fortune.

And at 21, most young people, not all most dumb is a box of bricks.

They've had no experience.

It's not their fault.

They were.

They are likely to make some mistakes.

They are very likely to make some financial mistakes with this big block of money.

That's not a tragedy.

We all made significant mistakes, not all of which were financial when we were 21.

Bottom line is they will do what they do and hopefully along the lines along the way.

They have had some interaction with their trustees, some interaction with the financial advisor, some good guidance about how these things should be handled.

Hopefully along the way that has happened, because if it has happened, that reduces dramatically the probability that they do make big mistakes at age 21 and hopefully they don't.

The point is, at that point they have control over a major block of money, but the two thirds of the money has still been held in the trust, not what happens very typically about age 25 could be 25, six, seven.

You get to pick 4 or 5 years later, the next half of the remaining money, again, 300,000 roughly goes to the child.

A child now 25, 26, a full grown adult.

Absolutely.

With now lots of experience with handling money, lots of experience now at their age with paying bills, having a budget, trying to buy a house, maybe student loans.

There's the entire raft of what young people are faced with financially.

They are understanding rather directly and rather personally.

So this 300,000 generally gets much more attention, much more careful attention than the first block.

So the first block, we hope they do well.

We hope we give them enough good guidance.

But the reality is that they're going to make some mistakes.

The second block, they have learned a tremendous amount from experience, and now they are much less likely, much less likely to make any of those kind of major mistakes.

And they will put that second block to much better use.

That's the idea.

The last block typically comes at age 30.

Some folks use 21, 25 and 30.

Some use 25, 30, and 35.

I have seen trust that are set up where the first the initial block comes out at age 60.

Mom and dad kind of figured their son's not that bright.

They were going to make a lot of mistakes, and they decided they were going to push this off as long as they could to protect their own children.

But typically 21, 25, 30, 25, 30, 35 that last block at that point, likely they the individual has bought their house, paid off their loans, done all the basics, and now this last block of money likely will have a much bigger impact on the grandchildren.

Children that you may never have met, that you this trust may have set up when the child was seven and now 20, what, 28 years later with their own family?

They might be using that last block to provide for their children's education and financial stability for the future.

So lots of different choices that you can make.

But the fundamental structure is very, very simple money that is managed and protected when the child is young, money that is distributed over in my examples, three blocks, three different time frames so that the the recipient, the child that is now an adult gets to learn, make decisions, make mistakes, get some experience, and then put the bulk of it to very effective use for themselves and for their families.

The trust can be designed very precisely.

This is your opportunity to have great influence even after you're gone from beyond the grave, as we say.

So you can put in all manner of guidance, all manner of boundaries, all manner of opportunities.

That's up to you.

Work with a trusted experience.

The state planning attorney.

This is not a door yourself project.

This is not for your attorney friend who basically helps with real estate transactions.

This is something that you need designed.

It's something that you need to have tremendous input, and a lot of thought has to go into it as well.

So trusted, experienced estate planning attorney, trusted, experienced, financial advisor, trusted, experienced tax advisor as well.

If you put that team together, you're going to be just fine.

Thank you so much for those questions.

Thank you so much for spending.

Part of your evening with us means the world to us.

The ability to serve you.

Service is a word that we're very proud of and the ability to serve thousands, tens of thousands, hundreds of thousands of you is is tremendous.

So we thank you for that.

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Jean Jenny at Ask MTN Jean had asked me and then we'll see you next week for another edition of More Than one.