Personal Finance Special

0:00This is Invest Talk from KPP Financial. Helping investors make sense of the markets one day at a time. And now here are Justin Klein and Luke Guerrero. Good afternoon fellow investors and welcome back to a special edition of Invest Talk. Today while you're listening to this, Luke and I will be at a wedding. And so we decided to pre-record a special episode on personal finance. There's a lot of topics to unpack. I'm going to get to many during this hour. But with that in mind, I want to remind all of you to go to Invest Talk.com and sign up for our retirement summit coming up on October. Is it 24th? It's the 24th. 24th. That's the memory correctly in Irvine, California. So I encourage you, we're more than half full.

1:02So the spots are filling up fast. So make sure you go and check that out. Well, let's get started. Luke, we're first topic we're going to discuss today is kind of a cross between personal finance and investing. And it's really about dividends and dividend yields. But when people get to retirement, there are a lot of them are focused on income. How do I get income? Dividends is part of that. Maybe it's bond interest. But you know, the problem with today's market is that dividends have declined pretty dramatically across the US stock market. The average yield is only around 1%. So it's difficult to get that level of income just by dividends alone, especially when you're looking at what sectors pay dividends. It's a high dividends. It's pretty narrow. A lot of those can be value traps.

2:03And so how do you think investors should think about collecting income from their equity holdings in this new environment? Well, there's something that I actually preach for a while because I never understood this obsession with dividends. I get it. People think I think a lot of people think that when they get dividends, it's actually new money coming to them. When in reality, it's cash leaving the company and theoretically speaking, the value of your share should adjust by the amount of cash that leads to the company. It's not always one for one, but that certainly does happen. But then people are also trading in this defined income stream and giving up the optionality of when they want to have a taxable event. I've always told people you can structure a portfolio not around dividends and still get income for it by divesting from your long term capital gains, meaning you choose when the income stream comes to you and you choose when you're incurring that taxable event. That has, I think, over the past couple of decades become something more on the forefront. The reason being is before the 90s, you have to remember not a lot of share bybacks because it was viewed in Washington and by regulators as trying to manipulate stocks.

3:13A lot of that changed in the 90s. And so as you're seeing this progression, I imagine that the traditional dividend income focus portfolio is definitely going to continue to be less and less prevalent. A lot of you will don't know that this is actually a byproduct of what I believe was under the Clinton administration, trying to limit executive pay. And so they instead of just paying straight salary, a lot of companies started to give stock-based compensation to kind of make up for the difference. And what that did was really incentivize these executives to kind of maneuver for more short-term gain when it comes to earnings per share, et cetera. And so money has flown more towards those talk bybacks since then as opposed to the dividends. And that's why you continue to see dividends plung to an all-time low. But when it comes to the buybacks, those continue to move closer to an all-time high.

4:20And that's actually where most of the return of capital shareholders is coming from now. Totally yields, we're roughly about 2.5% in 2025 with more of it coming from the buybacks of about 1% dividend, about 1.5% from a buyback. I think the critical thing to remember, too, lastly, is that the difference between dividends and buybacks is one tends to be timely and more stable. The other obviously open to market forces and when companies depend to decide to buy back shares. So a lot of things obviously changing, it doesn't mean you still can't get income from your strategy. Yeah, we're headed into a short break. Are we a member? You can call any time at the Invest Talk voice line. Number is 888-99. This is a special Invest Talk, best of caller questions compilation program.

5:22Remember, the Invest Talk phone lines never close. Please call with questions, 888-99 chart. And now let's pivot over to a topic that is often misunderstood and that is college savings, whether that's for your child or grandchild. The 529 is the most popular way for parents, grandparents, family members to help fund a child's education, especially post K through 12. And it's because it promises tax free growth, tax free distribution on qualified expenses, et cetera. And so it is the heavy weight within the industry. But it's also not the only way that you can save for college. Now, a lot of people, you know, they're hating the tax ban that's understandable. But Luke, what about just simply saving in a taxable brokerage account on top of the 529?

6:23Yeah, I think that's people have kind of thrown the idea of a taxable brokerage account away because they think it costs them more because they have to pay taxes on it than a 529 would then in a FSA would an HSA, your IRA, your Roth account. And therefore they think that it is inherently worse. And when if you think back to what we just talked about, about, you know, investing in stocks and then selling them rather than recognizing the defined income stream with the taxable brokerage account, you get more optionality. Now more recently because of what was the secure 2.0. I think that was included in there. You have a little bit more optionality in terms of you being able to roll over your excess 529 funds, I think up to 35,000 dollars into a Roth for the beneficiary. But I just would encourage everybody to realize the benefits of using a taxable brokerage account, not just for saving for your kids college, but writ large because you have that ability to realize that plans change sometimes.

7:27And maybe you didn't need to save as much because your kid did an incredible job and got so many scholarships. And now they can use the money for something else. It can still be their money. But there's that optionality that I think people don't really consider when thinking about this because they think to themselves, I got to pay taxes. Yeah, what if something bad happens, God forbid, and you need that money. Well, if you want to take the money out for non-qualified expenses, there's 10% penalty in a 529 versus taxable account. You can do whatever you want with it at any given time. And then even when it comes to actually once they do get to college, what expenses actually qualify as a distribution, maybe not all of them, right? Maybe there are other purposes you want to support them with when it comes to their college experience that don't qualify. So at a taxable account, you can go spend it on whatever you want. So I think that's a big factor here that most people are not taking to account.

8:32And then what happens like you said, to get a scholarship, or maybe they want to go to a cheap school, you know, they want to go to a community college to start off and then transfer after that. Maybe they need to and you save too much. Now what do you do with that money? Yeah, I mean, that's a great point. And continuing on my I swear, we didn't go into this thinking Luke's theme of the day is just going to be talking about giving yourself more options. But not only the optionality of what you spend it on, but what you invest in, right? Depending on what 529 plan you have, it can be incredibly restrictive. And up to whatever the plan creator decided the fund options should be. Sometimes those are really good funds. Sometimes they aren't as good. And obviously you shouldn't use those 529s because there is a benefit here. You don't have to use the one in the state in which you are. But giving yourself the ability to choose investments that fit not only the risk tolerance, time horizon, all those things you think about when you're constructing a portfolio in a brokerage account for his 529 is is is is some of the people often don't think about.

9:40Yeah, it goes back to what I say often one of the biggest mistakes I see whether it's about college savings retirement savings, whatever that is, is that most people one of the biggest success you will make is is they only focus on the taxes. How do I avoid paying taxes? And what it's to say there's good problems and bad problems. Exactly. There's good problems and bad problems paying taxes is typically a good problem, which means you made money, all of that nobody wants to pay the tax. If you don't have to, but you with a lot of tax deferred vehicles like a 529, you're giving up that optionality. And so when you go and you invest in a tax brokerage account, yes, you might be paying a bit more in tax, but you're paying for that optionality as opposed to having your your your your hands tied. And so this can spread this this lesson can spread out to the rest of your financial life is focusing on yes taxes are important, but they are not the only factor you consider it's part of a balanced analysis of really any financial decision.

10:52I will say though I do think in terms of the penalty and correct me from wrong isn't the penalty isn't a kind of like a Roth with the penalties only on earnings. So your contributions can come back. Let's see face it terms that penalty plus orning objects on earnings. Yes, on earning. Yeah, so just on earnings. So it's similar to a Roth IRA where people think they can't touch any of their retirement money at all. You're just talking about the earnings versus the versus the contributions. Yeah, yeah, 529s we're not we're not bashing 529s. No, we're trying to give we're trying to show you here is there's a balanced approach and there's also it kind of reminds me of when people say should I invest in a Roth IRA or traditional IRA. Well, it might be good to have a little bit of a both over time. So depending on the year, maybe some years you take money out of the IRA, some out of the Roth IRA, maybe do some conversion in certain years. And so there's a tax diversity here and same thing with 529 versus a taxable account is when they get to college, you know, some years there may be other expenses that don't qualify for a distribution reform of 529 and you still have that optionality to pull from that taxable account.

12:03Yeah, I also think there's a it also matters where you live, right? So there's 13 states that do not give you, you know, they've no state income tax. So you don't have to have anything to deduct against not 13, but there are certain states that don't have income tax. So you don't have anything to deduct against any certain places New York City, for example, I think it might be one of them. I could could remember this incorrectly, but there are some cities that also provide you tax deductions if you only use their specific plan. So depending on where you live, not only if you want to use a 529, but which one you might use, you might come to an entirely different conclusion. That's definitely true. Well, I think we did a good job covering this and we'll move on to a break reminding you to head over to investtalk.com and sign up for our retirement summit coming up here on November 20.

13:05I'm sorry October 24th. That November October that date, right? You're going to be showing up to our office and for the wrong day, expecting us to give them all this great information. You know, I think I think for a lot of people, they don't think about the whole picture, right? We focus a lot on investments on financial planning, but we're going to talk about real estate. What else are we going to talk about? We're going to talk about tax trust and wills. You're not going to just have to listen to us drone on. I think it's going to be a three great guess. I think it's going to be really exciting and we can't wait to see you guys there. I do want to let you know we have a wonderful interview coming up. I believe we're publishing that either tomorrow or the next day. And that is on from Anthony Katz. He is the founder of Hyperice and I think it's a great interview talking about the various aspects of entrepreneurship, growth of his industry, how it's evolving, sports medicine, all of that and encourage you to tune into that coming up here tomorrow.

14:12The Invest Talk Retirement Summit is coming to Irvine, California on Saturday, October 24. You are invited to join KPP Financial and guest experts in tax, estate planning, real estate and financial planning for an exclusive in-person event. It will focus on five key decisions that can shape your financial future. Attendance is complimentary and seating is limited. Reserve your place now at investalk.com. All right. Now we're going to move on to another tax advantage type of account that is very popular and that is an HS and health savings account.

15:14Now it's not as popular as a fire of 29. Mainly because a lot of people don't qualify to put that money in. And the main reason is because they don't have the option within their company to opt into what's called the Hyde The Doxable Healthcare Plan that would allow you to make HSA contributions. Now those contributions are subject to annual limits. But it is something I think most people should think about at least talking to their employer if it's not available to try to open that up as an option. But I think it does depend on who you are whether this makes sense or not. Yeah, I mean it doesn't make sense for me. I used to have a Hyde The Doxable Healthcare Plan which is with an HSA back in the day. I used to be a bit more of an aggressive skier than I am now with my cats. I can't put my life in danger as much. I would say it would be mad at me. But the point being a couple of ski injuries I had two years in a row where I hit my head a little bit needed to see if you scan and boom you're blowing straight to that $34,000 deductible and that wipes away any benefit of what you're saving or your employer is giving you that year.

16:21So it's not right for everybody what you do in life how you choose to live your life certainly certainly matters in in meaning if you're using healthcare more often it probably doesn't make sense if you never go to the doctor and don't get injured then it would make sense. Yeah, it makes I think most sense for people who are young and healthy that don't have a lot of out of pocket expenses on a regular basis. I would be one of those right where I I snowboard but I don't do a lot of blacks I don't go crazy so I probably you know I've never really gotten seriously injured luckily and my exercise is basketball so you know my spring ankle here and there but you know I think I'll be okay hopefully. But yeah so it kind of depends how you are you know the good thing about when you put money into an S.A. is that unspent funds are not for fitted or for fitted you just keep accruing them over time and eventually hopefully never but maybe you you have some medical expenses that you can spend them on and it's not just for you you it's for your spouse your dependence you can spend this money on debt.

17:34And then you can spend this money on dental vision prescription costs things like that anything that that qualifies as a medical expense and so the good news is you put the money in that's a tax deduction on for that particular year the money can grow tax free and then once again if you take the money out it's for qualified expenses it's tax free so it's one of those rare triple tax free accounts that I think everybody should take advantage of if like you said they're not doing extra money. They're not doing extreme sports on a regular basis which for most people I think they they don't they don't fall into that category I think also you have to remember you know you can really the the health care expense term is used incredibly liberally here and so this can reimburse you for pain relievers allergy medicine medicine glasses sunscreen so the list is pretty wide it doesn't cover everything right so like gym membership even though technically that should make you healthier that's not that's not cover their elective cosmetic procedures so if you you know wanted to get a nose job you can't use your HSA funds for that but regardless the the breadth of things you can use it for beyond even going to the doctor is is very wide and as you mentioned I think the biggest benefit though and I tell my my fiance this all the time she has an HSA and is not an extreme skier is let it grow but I grow there's no limit here you can

19:02you could reimburse yourself for something 20 years after the fact as long as you keep receipts which for the big expenses you should and so the big benefit of of any type of account like this any account is if you let it compound so if you have an HSA highly encourage you don't use it like a bank account unless you absolutely need to don't reimburse yourself unless you absolutely have to because down the road you want that money to be to be large right there can be a gap between when you are retiring and when you get a Medicare coverage perhaps the fact that you decided to grow this HSA when you're younger means you can retire five years earlier without worrying about medical expenses so just another type of account with a big tax benefit but always only for the people for which it makes sense medically and for the people that use it to its fullest potential when even if you do say you stay healthy and you don't really need this money once you at 65 you can withdraw the money without the 20% penalty so it you know it's taxable to you but it so kind of ends up being like an IRA so continue to save in it and you have a lot of flexibility especially after the age of 65 are we going to a quick break and we'll be back with our next topic

20:25this is Invest Talk made possible by KPP financial Invest Talk listeners and KPP clients alike are invited to take advantage of the many products and services of KPP financial for example the Invest Talk radio program and its podcast replace the new online training experience Invest Talk Academy and the KPP premium newsletter distributed to subscribers each Friday learn more anytime at Invest Talk dot com the phone lines are open now and you can call with your questions 888 99 chart investing can be daunting and doing it all by yourself can be unmanageable the best time to get a second opinion is before disaster strikes not after if you've built a portfolio over the years but aren't sure whether it still fits where your headed KPP financial can help our team can review your current investments identify potential risks or gaps and give you a clear picture of where you stand schedule your free portfolio review at Invest Talk dot com got a question for Justin or Luke you're the best person to ask is I wanted to pick your ring about Apple what did you think about their earnings call this is a good time to add to my position call Invest Talk 888 99 chart

21:53at KPP financial accountability means more than advice it means we invest alongside you through our parallel investing approach when we recommend an investment for clients one or more KPP principles invest their own capital at the same time same day same price same percentage if your portfolio moves ours does too that is alignment that is transparency that is the KPP difference visit Invest Talk dot com to get your free portfolio review we all have those closet go to we wear on repeat that's where quince can help quince creates high quality timeless wardrobe staples using premium materials like organic cotton marina wool and 100% Mongolian cashmere I absolutely love my tan gene jacket the first time I wore it I couldn't believe the quality especially given the low price and when the temperatures start to drop quince makes it easy to build on your everyday staples with premium down jackets and classic wool outerwear versatile layers designed to keep you warm and comfortable all season long quince charges 50 to 80% less than similar brands by working direct

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24:28at our retirement summit coming up in in a few weeks that we've talked about which is she does litigation around trust so she's seen all of the pitfalls and and problems that arise when you don't do the right thing you don't update your documents so we're going to dig into some of the myths and what you should do about them and what the reality is I guess it is a better way to put it now the first miss look is that you the will and trust always has the final say and this is very common for our clients something we talked our clients all the time about because we have clients with IRAs Ross IRAs trusts 401k's things like that and what they put on the beneficiary form for those accounts super seeds whatever the trust says so we always say it's probably better to focus on that but make sure making sure that those are

25:29how set up the way that you truly want and even align with the trust in some way shape or form is probably the best way right yeah absolutely I think that people people oftentimes set their beneficiary when they open something up to be at a life insurance policy or an account and then they forget about it down the road as an example when I first got out of college I got life insurance from my previous company to have to pay anything for it and I made the beneficiary my college best friend luckily they didn't try and kill me for the life insurance money but you know five six years later when you have a nephew or maybe you have a wife or kids or a fiance and you just completely forgot that you know your life insurance policy goes to a guy named Zenzan and it's hard to keep track of these things and so putting that into you know using the legal system for something like a revocable trust where you are establishing separate shares for each child

26:33it can be something that's really helpful there you make the trust itself the beneficiary of these policies yeah so make sure you treat your benefit the beneficiary designation as a coordinated plan a comprehensive estate plan your beneficiaries on your investment accounts is part of that estate plan it's not separate it's part up so you have to think about right where that money is going who's it going to is that who you wanted to go to how does that compare to you know where all your other assets might go and how you want that to be distributed upon your death if possible and then there's the contingent beneficiaries right a lot of people forget those where it's you know your spouse is your is the beneficiary yeah that's fine but what happens if God forbid you guys dying to play crash right what happens next where does that money go you don't want to be that to be thrown into probate you want to have contingent beneficiaries as well and so make sure that all of those beneficiaries are part of your broader intent with your will and trust

27:44let's move on to myth number two and that is once you name the beneficiaries that's all you have to think about you're done right you like you said you set up that account you you you write in your beneficiaries your contingent beneficiaries and you're done well the reality is over time life changes right the people that you wanted to have that money five 10 20 years ago may not be those people today like you said you might have more kids grandkids nieces nephews whatever that might be you want to make sure those are updated and then what happens to those people for example if you have let's say you have three children and those are the beneficiaries of your IRA well God forbid maybe one of them passes away well you might think okay well that money is now going to go to their kids if you pass away no actually if one of them passes away now that third the you know one third that was supposed to go to them is now split between the other two beneficiaries and so you might bypass the your grandchildren where you really wanted that

28:52money to go to right so you got to make sure it's updated consistently yeah and then there's the other part of what if and again this is all this is all horrible to think about right yeah but you have what you'd like to think about any of this but the last thing you want your family to be doing when they should be grieving is fine right yeah having this all laid out is important and what happens if you're leaving your money to your kids and all of a sudden these miners are inheriting incredible sums of money millions of dollars you know what what do you do there and something that happens to 50% of us what about divorce yeah right some states automatically sever a former spouses beneficiary designation the day a divorce is finalized some don't I don't think if you get remarried your current spouse would appreciate part of your estate going to your ex-wife and so some of these things some of these things you don't want to think about because they're ugly but it's better to just deal with them up front

29:52yeah and I've seen it first and I remember personally one of my personal experiences with this was actually my grandmother she shouldn't really have a everything kind of written out what happens when she passes and I remember my my mom and her siblings they kind of battled over how it was all going to be distributed there's a lot of contentiousness I remember them asking me what I wanted and I literally said I just want a gold whales tale necklace that she always wore I still have that and that's the only thing I want it so I was not luckily involved but I remember you're in the stories and it was all because this really wasn't spelled out and so this is something you have to review consistently and not just your beneficiaries on your IRA or your Roth IRA but other types of accounts as well there are a lot of I know we do this for our clients is we set up not just taxable

30:53brokerage accounts but transfer on death accounts meaning yes the taxable account yes it's in somebody's name you have full control over it but there is now a beneficiary on that account in case something happens to them so that so nothing's kind of thrown into probate or anything like that and so if you have a taxable account I encourage you to move it into a TOD and name a beneficiary and then if you do have a TOD account like just like your IRA make sure that's updated on a consistent basis and let's move on to number three which is the more complex a plan is the more bullet proof it is the more security you have and and your loved ones have and I think the simple answer to that is more words doesn't make it airtight in fact in some ways it can actually make it more more up to interpretation right and so making sure that the assumptions are updated

32:02and the the the legal documents are are in place is even more important than just having something that's super complex yeah I mean as your life can change as who your intended beneficiaries can change over time so to do laws and so if you build this incredibly complex that network of paperwork and trusts and laid out beneficiaries and then the law changes well your complex trust that you now have to unwind if you can at all is built upon these old assumptions and you know sophisticated structures can become pretty obsolete pretty quickly you can within this system because it's you know thousands and thousands of pages realize or not realize that's the bigger problem that you didn't include everything within this complex system of documents that you wanted to as well so it's not just about building it out initially

33:02it's also about being able to update it when needed right beneficiaries laws it's also about being able to understand it down the road and as with anything the more complex you make something the harder more difficult it is more work it takes to understand and therefore more work it's going to take to update it and most of us as people when we see something like this that's unpleasant to begin with it takes a lot of work we tend to ignore yeah and you ignore or don't even to keep up with kind of changes like you said to the the laws a good example is two decades ago the federal estate tax exemption was one million dollars per person now it's 15 million so 30 million for a couple so if you're if you if you build a trust and it's designed for a 15 million dollar per individual tax exemption well in a decade that's probably going to change and you're going to need to update it so make sure you're figuring that out and updating it and then also ignoring certain assets that goes back to my my grandma's biggest issue was is that yes she named a couple things but she

34:07didn't update it and she didn't include all the things that the the kids might want my battle over and so if you ignore certain assets well that could throw everything into disarray and there could be lawsuits on you know between siblings between family members to get their hands on whatever asset you might have missed and then I think the other one to me is forced to gather this I like this one because just because you think they should have it doesn't mean that that it makes sense for them to actually deal with that asset for example it's a piece of property you know are they going to all agree or is it going to be a battle on what to do with that property so make sure you understand those potential pitfalls now let's go on to number four and that is that your attorney is going to look out for you and call you up when like we said laws change or your particular situation might change they don't know that they don't know when your life changes and so they're not going to be proactive right here's a fun fact that attorney

35:13likely has more clients than just you yep and every single person who is there by the way if they don't have any clients except you and you're not an incredibly wealthy person that brings them a lot of business you should probably find a different estate attorney but they have multiple clients and if they were responsible for noticing issues for every single person they would have an impossible job you have to be proactive here you have to do these self reviews you have to make sure that you are creating this effective plan that maps out who receives what and you are doing it in a plain and understandable way and then you have to know that as as awesome it is when life developments happen you get new jobs you have more assets not everybody's going to know that you have to bring this to the people that are trying to help you and an attorney is certainly one of those things and going back to the infighting when our lives eventually come to an end yes we don't want our families fighting we also don't want the single source of truth in a complex and messy

36:15situation to be this person that maybe none of them is interacted with before and so understanding that dynamic is kind of critical for figuring out where they fit in this whole business yeah so make sure you're doing your own self review of who the beneficiaries are how it should be distributed and then when you're you're speaking to your attorney if you're going to go update these things make sure that you're keeping it simple okay this is what you want this is how you want it to go and ask them questions that are more open ended like would this work in my particular situation so that they can advise you on whether or not this is the right path to go go down make sure that you are clearly stating what your end results goal will actually be and then bring in your statements make sure everything is account of our all your assets are accounted for they cannot help you if you're not giving them the proper information now lastly let's talk about that a good

37:20plan is built to last a lifetime that's the myth right if you build a plan it's designed forever and that is far from the truth we've kind of talked about that but we know that over time your this is a living document right usually that's why they call them living trust so that you can edit them and adjust them over time so use that use that flexibility and continue to update it right it's kind of similar to when i'm talking with clients about their financial plan and we're talking about what they might want to do in the future a lot of people their biggest purchase is a house they're saving for a house if somebody if client tells me i want to buy a house my next question is is it in the next five years because if it's not in the next five years and you don't have a definite plan five ten years of how much you want to spend where you want to live it might not exist because nobody knows where we're going to be five ten fifteen twenty years from now and so you have to take this opportunity to realize that this isn't a one-size-fits-every part of my life situation

38:26and plan for those next five and ten years and constantly revisit because your life changes the legal system changes your assets change your family changes right not set it and forget it it's set it and revisit it yeah so just like your investment accounts you know that's usually more interesting for people to focus on consistently uh these are documents that you should be actively on a regular basis it should be always thought of in context to as you said major life events as life evolves so don't ignore them don't put them in a drawer and forget about them make sure you actively engaged now i think that wraps that segment up and we are going to move into our final segment but i do want to let you know we have a wonderful interview coming up i believe we're publishing that either tomorrow the next day uh and that is on from anthony cats uh he is

39:29the founder of hybrace and i think it's a great interview uh talking about the various aspects of entrepreneurship growth of his industry how it's evolving uh sports medicine all of that and encourage you to tune into that coming up here tomorrow now with that said we're going into our final break and we'll be back with our last segment next invest talk is ready 24-7 for your finance and investment questions my five-year-old son and i listen to your podcast every night so thank you very much we put me down just in line is here and ready to tackle your questions is it a good idea to sell your losses in a raw IRA and just use whatever you have left to reinvest into better stocks wondering what you thought about this read if it would be a good time to get in i wanted to pick your rainbow apples what did you think about their earnings call did this have a time to add to my position don't forget to call invest talk 888 99 chart

40:35got a question for Justin or Luke you're the best person to ask it i wanted to pick your rainbow apples what did you think about their earnings call did this have a time to add to my position call invest talk 888 99 chart recently i needed to pull together a co-hearant research picture from a messy pile of earnings transcripts filings and my own scattered notes on a handful of companies normally that takes hours of brutal manual work but i used clawed as my thinking partner i just pointed it at my project folder it didn't replace my workflow it extended my thinking clawed co-work brings clawed codes agentic power to everyone no terminal required pointed at a folder on your computer or connect tools like google drive and gmail describe what you need and it handles the rest clawed is the AI for problem solvers it's the collaborator that understands your entire workflow

41:38and thinks with you not for you whether you're debugging coded midnight building a financial model or strategizing your next business move clawed extends your thinking to tackle the problems that matter ready to have an AI that can tackle real work try clawed co-work today on any paid plan at clawed dot ai slash invest that's clawed dot ai slash invest and check out clawed pro which includes access to all the features mentioned in today's episode clawed dot ai slash invest all right let's move on and preview something we'll be talking about at our retirement summit and that is putting all of this together into a broader plan now that sounds for a lot of people sounds kind of boring but it's really about giving people peace of mind not and not just peace of

42:40mind of whether they can have enough money until full life expectancy that's certainly part of it but it's all about how you are going to utilize that money for your various end goals and that's what we do when we build a plan there's the retirement slice that is part of your end goal but it it might be other goals as well like paying for a kid or grandkids education maybe it's some charity that you want to give money to maybe it's a setting side of money money to travel whatever that might be financial success isn't just a raw number right absolutely I think people tend to focus on the wrong thing when they think about retirement they think about how much money do I need do I need two million dollars three million dollars four million dollars and that's approaching the problem incorrectly they're ending at the number and then trying to figure out or rather starting at the number then trying to figure out how to get there we should really be doing is saying how much

43:41money am I going to spend what is the general consumption level I expect in retirement and then how do I get there how do I build a portfolio to systematically grow over time and then reduce risk and make it more focused on income so that I can utilize it in my retirement for what my expenses want to be because at the end of the day we're not all trying to reach some number on a sheet we're trying to reach some type of lifestyle some type of enjoyment in our in our retirement yeah two thirds of Americans say money is a tool for creating the life that they want like you said that can mean a lot of different things they can be caring for a loved one it can be just having some level of security for preparing for some unexpected event it could be pursuing meaningful experiences maybe that's giving a charity maybe that's traveling whatever that might be so supporting important causes building some sort of a legacy maybe it's passing money on to the next

44:43if kin or building some sort of charity that can give back and support education for for kids with come from difficult background whatever that might be for you maybe it's giving to cat organizations so that you can save cat lives I know Luke would probably be a big fan of that right I do give to cat organizations spend a lot of time saving cat lives but that's that's that's critical piece too right that I think that overall number tends to ignore when people are building that that financial plan you have to start and I think that's where this survey is really getting at is most people are starting to realize they shouldn't be thinking about the number but what that number is supposed to help them achieve which is essentially a way for saying what I said before which is how much you're spending in these various categories and then how do I build something out subset I can achieve that level of spending that is easier said than done when you're older because you know who knows what the next 40 years of inflation is going to look like for a 20-year-old

45:46versus one of the next five years going to look like for somebody who's 60 that makes it easier that's why when we we model these things out we do it on probability distributions and check in every year to see if we're on track because we could all be transacting in buttons in the 2060s who knows the future is incredibly uncertain as are what your expense levels will be will be but I think that what I see from this is people getting their mind or starting to get their mind framed properly in terms of how they can achieve those goals yeah especially post-COVID a lot of people have kind of reassessed I think their lives and what they want out of it and you know this is a part of that process building a plan it's a move forward really with clarity and confidence because like you said it's not just about oh I want to hit certain number but why do you want to hit that number what is the end result of hitting that number when it comes to boots on the ground on your your financial life day to day and for you know that the years into the future so

46:52financial success is is broader than just a single number well it's also hard to do to do it alone right and so that's why we wanted to talk about this at our summit so we hope to see some of you there we're excited for that well I think that about does it for this special edition of invest like I said Luke and I will be at a wedding but we are hopefully brought you some value today and a good preview of our upcoming event so thank you all and tune in next time to invest talk here's a quick heads up for our Southern California listeners KPP financial will be hosting an invest talk retirement summit it's happening on Saturday October 24th in Irvine California we'll be joined by guest experts in tax and estate planning financial planning and real estate they will appear in person alongside the KPP team it'll be a focused discussion of five key areas that can shape your financial future seating is limited attendance is complimentary and guests are

47:55welcome so don't delay reserve your seat now by visiting investtalk.com invest talk is a trademark of KPP financial because of the nature of the interactive dialogue inherent in the format of this program it's important for the listener to understand that not all comments made will apply to them specifically nothing said she'll be taken to be investment advice or shall statements on this program be considered an offer to buy or sell security because such advice is rendered solely on an individual basis and at times will require that the investor review a prospectus before investing invest talk is a copyrighted program of client, pavlyse and piezley financial a registered investment advisor firm which retains all rights for more information regarding KPP's investment advisors call 1-800-557-5461 thank you for listening and your comments and questions are welcome on our 24 hour listener line at 888-99 chart