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Money Monday with Brian James · Brian Thomas

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Speaker 1: Eighth five Here a fifty buck air CD talk station.
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Speaker 1: Very happy Monday too you It made always great at
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Speaker 1: this time of Monday morning. Ato five Money Monday. Brian James,
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Speaker 1: Brian James, Smallworth financial financial planner. He is, and get
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Speaker 1: the break down all the topics that are important to
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Speaker 1: maybe our respective retirement futures. Brian James. Welcome back to
0:23
Speaker 1: my friends. Good to have you back on as always.
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Speaker 2: Thank you, mister Thomas. Appreciate the chance to spend the
0:28
Speaker 2: morning with you and your listeners.
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Speaker 1: And it's good to do that because you give us
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Speaker 1: some great advice. Well, let's start with one of the
0:33
Speaker 1: tragedies of war, the economic repercussions, and global they are.
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Speaker 1: In this particular case, of course, with the straight of
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Speaker 1: horror moves shut down, we all found out how damn
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Speaker 1: critical that little chunk of real estate is to the
0:43
Speaker 1: entire planet. And of course, if you're the Australians and
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Speaker 1: you only have a month's worth of oil backed up
0:48
Speaker 1: because you believe in climate change or something, you're staring
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Speaker 1: down the crosshairs of a real major problem coming fast
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Speaker 1: at you. But oil and gas all up globally because
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Speaker 1: of that, And is there anything else we can do
1:00
Speaker 1: with it, and what should we expect down the road
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Speaker 1: with this one, Brian James, Well, as usual, and.
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Speaker 2: This is these are the headlines we see from time
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Speaker 2: to time that spooked the markets. And as you said, yeah,
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Speaker 2: the countries that don't have a good stockpile of oil
1:13
Speaker 2: on hand are going to are going to suffer more
1:14
Speaker 2: than those that don't.
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Speaker 3: And so we did have that we can see. You know.
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Speaker 2: The one thing I kind of hold solace in here
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Speaker 2: is that underneath this is still as we're sitting here
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Speaker 2: right now, it's still a relatively strong economy, and we're
1:28
Speaker 2: being driven a lot by the headline. So we had
1:31
Speaker 2: a very brief rally reports of the US proposal to
1:34
Speaker 2: de escalate tensions, which which of course include the opening
1:38
Speaker 2: the strait of hormones, which ironically was closed because the
1:40
Speaker 2: war started.
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Speaker 3: But that's a whole other story.
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Speaker 2: But because that represents about twenty percent of global oil flows,
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Speaker 2: any news about that perks the markets up. So what
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Speaker 2: that tells us is that this is the major stimulus
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Speaker 2: that's dragging the market down, and when it becomes less
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Speaker 2: of a headline, then the market is willing to and
1:58
Speaker 2: economies are willing to bounce back.
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Speaker 3: That's where we are right now.
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Speaker 2: But of course the RAN shot that out of the
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Speaker 2: sky and came back with their own proposal that the
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Speaker 2: US proper promptly shot down. So there really aren't negotiations
2:07
Speaker 2: going on here. If there are, that's a question in
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Speaker 2: of itself. If there are negotiations going on, they're not
2:13
Speaker 2: going very well because both sides seem to be presenting
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Speaker 2: exactly what the other side doesn't want. So therefore we
2:20
Speaker 2: have the fog of war and we get a bouncy
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Speaker 2: kind of spook market.
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Speaker 1: Well, I guess that just points out how unrealistic the
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Speaker 1: market ebbs and flows are in connection with long term stability.
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Speaker 1: I mean, if you're gonna if the price oil is
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Speaker 1: going to jump, you know, two, three, ten, fifteen percent
2:36
Speaker 1: on some announcement from somebody, when you can look at
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Speaker 1: the last several weeks of similar announcements, realizing that, well,
2:43
Speaker 1: somebody says something, the other side comes out and says
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Speaker 1: something exact opposite within five minutes. I mean, why would
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Speaker 1: you even bother reacting like, oh, they're just doing it again.
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Speaker 1: It say as if they're playing games.
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Speaker 2: Well, and the reaction is only happening at the absolute core. Right,
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Speaker 2: it's coming from the It's coming from the oil producers
3:01
Speaker 2: who are adjusting prices, like you just said, based on
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Speaker 2: what whoever said something most recently, and the thirty seconds
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Speaker 2: later somebody says something else. Prices do bounce like that.
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Speaker 2: The market, on the other hand, isn't really bouncing as much.
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Speaker 2: It's coming down because the market absolutely hates fog. It
3:15
Speaker 2: can deal with bad news, it can deal with good news.
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Speaker 2: It hates the unknown, and the unknown is very much Hey,
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Speaker 2: we're having negotiations, it's all going to be oversuon. Nope,
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Speaker 2: not having negotiations. That is literally the definition of the unknown.
3:24
Speaker 2: There's just no way to see anything. The good piece
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Speaker 2: about all this S and P. Five hundred is down,
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Speaker 2: it's only down about eight point seven percent from the
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Speaker 2: absolute peak of January twenty seventh. That's a little spooky
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Speaker 2: because it's coming alongside the headlines. But remember the average
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Speaker 2: intra year pulled down is about sixteen percent, meaning in
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Speaker 2: every given year, the average of trough peak to trough
3:46
Speaker 2: market movement negatively is sixteen percent. We had it almost
3:49
Speaker 2: exactly a year ago when there was the initial panic
3:51
Speaker 2: over tariffs. Tariff for a brand new scary thing in
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Speaker 2: April twenty twenty five. Then we decided, Okay, this is
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Speaker 2: going to be a mess, but whatever, we'll move on
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Speaker 2: and deal with it. Market recovered and went on to
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Speaker 2: greater highs. So what we can't have and what nobody
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Speaker 2: benefits from, right, I think there's a notion out there
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Speaker 2: that somebody makes money if the stock market falls apart permanently.
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Speaker 2: That's just plain not the case where the world will
4:11
Speaker 2: not function if the stock market goes away. So there
4:14
Speaker 2: are plenty of people out there with very very important
4:18
Speaker 2: interest in keeping the market alive and keeping people happy.
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Speaker 2: So at the end of the day, that's the longer
4:23
Speaker 2: term view. The short term anybody is anybody's guess.
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Speaker 1: Well, I suppose the key indicator to whether there's going
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Speaker 1: to be some something resolved by way of the Straits
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Speaker 1: of Horror moves is, rather than talk and announcements, it'll
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Speaker 1: be ships with oil in them going through the Strait
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Speaker 1: of Horror moves without getting blown up. Ran I mean, hey,
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Speaker 1: there they are, they're moving through. Now that's the indicator.
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Speaker 2: That would seem like a good idea, right and right
4:47
Speaker 2: right now, we Iran is the one controlling that because
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Speaker 2: the only ones that are making through are the ones
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Speaker 2: that Iran permits through period end of story, and we
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Speaker 2: do not appear to have disabled that from happening. So
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Speaker 2: at this point the ball is theirs. I don't think
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Speaker 2: it's going to stay that way, but that's the moment.
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Speaker 2: That's where we are in a moment right now.
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Speaker 1: Well, a lot of folks fretting about the concerns over
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Speaker 1: the ripple effect of fertilizer supplies not being allowed through,
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Speaker 1: and Iran while allowing some through who paid two million
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Speaker 1: dollars a boat to get it through, fertilizers are not
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Speaker 1: on the list of approved boats getting through the straight
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Speaker 1: of hormones, at least as far as Iran is concerned.
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Speaker 1: So that's not happening. And apparently now is the time
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Speaker 1: when it's so vitally important for farmers to actually have
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Speaker 1: the fertilizer straight of hormones is shut down. It's got
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Speaker 1: let's see here, forty nine percent of the world's exported
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Speaker 1: urea thirty percent of traded ammonia. Russia has also stopped
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Speaker 1: exporting its ammonium nit trade and they won't export any
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Speaker 1: until after April twenty first. That's the announcement and then
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Speaker 1: China also banned exports of nitrogen potassium blends and phosphate
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Speaker 1: fertilizers through August of this year. The farmers need this now,
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Speaker 1: so I guess you and I are going to be
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Speaker 1: talking about inflation in food prices and maybe global starvation
5:53
Speaker 1: as we get more towards the end of summer. Brian.
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Speaker 2: Yeah, and then this is this is unfortunately we've seen
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Speaker 2: this recently in past because when Russia invaded Ukraine, that
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Speaker 2: triggered a natural gas price spike, and that's what natural
6:07
Speaker 2: gas is an important component of fertilizer, so fertilizer price
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Speaker 2: is double and tripled at that point, and that of
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Speaker 2: course trickles through to the prices of corn and wheat
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Speaker 2: surging globally.
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Speaker 3: In twenty nineteen.
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Speaker 2: A few years prior to that, Iran attacked some attacked
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Speaker 2: some tankers in the Hormuz region and we had a
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Speaker 2: spike then as well as the fertilizer markets hit. Then
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Speaker 2: we're hit at that point too. So this is all
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Speaker 2: things we've seen before. It's just tough when you're standing
6:30
Speaker 2: in the middle of the fog to see which direction
6:32
Speaker 2: to step. But the step, as we always recommend, if
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Speaker 2: you've got a financial plan in place. None of these
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Speaker 2: headlines should be impacting how you react to it. Shouldn't
6:41
Speaker 2: be impacting the decisions you make, because you should have
6:43
Speaker 2: a short term plan in place alongside your long term plan,
6:46
Speaker 2: and both of those should reflect the fact that stuff happens.
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Speaker 3: Pardon my face.
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Speaker 1: No, you're right though, and stuff happens. It wasn't that
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Speaker 1: long ago, Brian. We weathered the storm of north of
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Speaker 1: four dollars gasoline around this country as well during COVID
6:59
Speaker 1: when we've had issues. Of course, as a consequence of
7:02
Speaker 1: some green energy strategies, the price has gone up. I mean,
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Speaker 1: this isn't new for us, this this level a price
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Speaker 1: for gasoline. So it's like as if we had short
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Speaker 1: detention span theater. Oh my god, this is totally different.
7:13
Speaker 1: We're all gonna die.
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Speaker 2: Yeah, and that's that's the kind of thing that keeps
7:17
Speaker 2: me employed, of course, But human beings mean I will
7:21
Speaker 2: have a job array of sunshine, yes exactly. But yeah,
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Speaker 2: I mean this is to your point, these are things
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Speaker 2: we've seen before. Now, we did see a few years ago.
7:31
Speaker 2: Of course, we did see gas price spikes to you know,
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Speaker 2: four dollars a gawn a little north of that. The
7:35
Speaker 2: boogeymanner in these parts is five dollars a gallon. Now,
7:38
Speaker 2: people out in California laugh at that because they see seven.
7:40
Speaker 2: And I actually saw eight dollars a gallon somewhere out
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Speaker 2: in California. We don't have to deal with that at
7:45
Speaker 2: that level. But you know, the interesting thing to me
7:48
Speaker 2: is we've undone a lot of those green energy initiatives
7:52
Speaker 2: because that this administration, of course, is moving in the
7:54
Speaker 2: opposite direction, and yet prices are still spiking, prices are
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Speaker 2: still sensitive to global trade. It's nice only about those
8:00
Speaker 2: green initiatives. It's about again, like you just said, the
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Speaker 2: straight of horror moves, can we get the oil where
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Speaker 2: it belongs. You know, there are many, many things that
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Speaker 2: affect those oil prices, and it's not just one thing
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Speaker 2: that's the end all be all. Now, it's interesting to
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Speaker 2: me when oil prices dropped really, really low over the
8:14
Speaker 2: last couple of years, we just quit talking about it.
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Speaker 2: You'd think, as passionate as people are, when it gets
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Speaker 2: to four or five bucks a gallon, somebody would celebrate
8:21
Speaker 2: in or take credit for the fact that they dropped
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Speaker 2: a two bucks a gallon not that long ago. But
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Speaker 2: that didn't happen. We just kind of quit talking about
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Speaker 2: I'm fascinated by that. Nobody even took credit for it,
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Speaker 2: whether deserve it or not.
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Speaker 1: Well, no, I mean, I'm not going to suggest for
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Speaker 1: a moment that Donald Trump is the one that brought
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Speaker 1: around this the north just slightly north of two dollars gasoline.
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Speaker 1: But I think because it is a Trump administration under
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Speaker 1: which that occurred, that at least the mainstream media and
8:44
Speaker 1: most media outlets, not being a real fans of Donald Trump,
8:47
Speaker 1: weren't inclined to even raise that as a reality, like, hey,
8:49
Speaker 1: we should all be celebrating because true.
8:54
Speaker 2: Itself controls a lot of media outlets too, and there
8:57
Speaker 2: are even any social you know, social tweets or anything
9:01
Speaker 2: like that. It just kind of went away. And where
9:02
Speaker 2: are the stickers with him on it saying I did that?
9:05
Speaker 2: And you know, like the Joe Biden ones that were
9:07
Speaker 2: out there.
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Speaker 1: Good point, maybe, because you put the sticker up and
9:10
Speaker 1: then five minutes later we're in a conflict with the
9:12
Speaker 1: rod and the price of gasoline's gone up a buck
9:14
Speaker 1: fifty a gown. That sticker is no longer there serves
9:17
Speaker 1: as a benefits I did it again right ah, anyway,
9:22
Speaker 1: we're gonna fight out. Well, this is also having an
9:24
Speaker 1: impact on summer vacation plans. These economic concerns, socia, security, TikTok, TikTok,
9:29
Speaker 1: bad news, six years left that more with Brian James.
9:34
Speaker 1: Be right back, don't go away.
9:36
Speaker 3: This was your week.
9:37
Speaker 1: Tragedy at Libordia.
9:38
Speaker 3: They made a mistaken it. Talk station.
9:41
Speaker 1: A seventeen to fifty five care CD talk station, Happy Monday,
9:44
Speaker 1: Money Money with Brian James. Brian James smallworth financial. He's
9:47
Speaker 1: financial planner. He's always trying to steer us in the
9:49
Speaker 1: right direction and think about things well that might impact
9:52
Speaker 1: her long term financial planning, like social security, which we'll
9:55
Speaker 1: get to next. But first I listened, Brian James. You
9:59
Speaker 1: an't going to comit. This is a bad thing. Staycations.
10:01
Speaker 1: I love staycasians. Love them. Sleep my own bed, wake up,
10:06
Speaker 1: have my own food, enjoy it, relaxed, don't have to
10:09
Speaker 1: go anywhere necessarily, But I'm free to go anywhere I
10:11
Speaker 1: want on a staycation. I've got no problem with that.
10:14
Speaker 1: And I'm not a big fan of air travel anyway,
10:16
Speaker 1: so I've got no problem with this. But apparently this
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Speaker 1: is a decision. Many people do not want to make
10:21
Speaker 1: having a staycation as opposed to going somewhere.
10:24
Speaker 2: Yeah, so staycations for those of you who have never
10:27
Speaker 2: heard that term, hopefully there's not many of you out there.
10:29
Speaker 2: But basically, let's hang around at home and just simply
10:31
Speaker 2: not go to work, let's get out of our routines. Well,
10:34
Speaker 2: this is emerging in twenty twenty six as we're rethinking
10:37
Speaker 2: our travel plans.
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Speaker 3: Guess why, because gas prices are up. Air travel not
10:41
Speaker 3: only is.
10:43
Speaker 2: A little difficult these days, it's actually not. The prices
10:48
Speaker 2: on air travel has not been super painful. We haven't
10:51
Speaker 2: seen the increases there that we've seen at the pump
10:54
Speaker 2: because demand is actually dropping. Bookings to Europe are down
10:57
Speaker 2: eleven percent year over year. I think there's a decent
11:00
Speaker 2: amount of people who feel like they're not going to
11:01
Speaker 2: be very welcome as they touch the ground there in
11:04
Speaker 2: Paris or London and so forth. With the United States
11:06
Speaker 2: current position and a lot of things, forty three percent
11:08
Speaker 2: of frequent international travelers are cutting back, and there's rising
11:12
Speaker 2: costs everywhere, geopolitical risks rising. Right, why go closer to
11:16
Speaker 2: the fire if you don't have to. But a lot
11:18
Speaker 2: of this, again has to do with cost. We saw this,
11:21
Speaker 2: you know, in two thousand and eight with the financial crisis.
11:22
Speaker 2: We also sought of course in COVID for reasons that
11:25
Speaker 2: had nothing to do with finance. But yeah, again, people
11:28
Speaker 2: are making different decisions. This does have a trickle down
11:30
Speaker 2: effect because there's a lot of economies out there that
11:32
Speaker 2: depend on people swooping in from distant parts and bringing
11:37
Speaker 2: their money with them, So good and bad things is
11:39
Speaker 2: all part of this.
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Speaker 3: Well.
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Speaker 1: Is that true for foreign nationals that might consider coming
11:47
Speaker 1: to the United States. I know we're not real number
11:49
Speaker 1: one on a lot of people's hit parade for the
11:50
Speaker 1: reasons you mentioned before, But are they making comparable decisions
11:53
Speaker 1: in choosing not to travel or is this a purely
11:55
Speaker 1: American phenomenon.
11:57
Speaker 2: No, this is very much. This is very much an
11:59
Speaker 2: impact the economies here from foreign travelers, such as you know,
12:04
Speaker 2: Disney is seeing fewer people coming from abroad just for
12:08
Speaker 2: a lot of reasons. There's a lot of economic things
12:09
Speaker 2: out there that affects everybody, but it definitely will hit
12:12
Speaker 2: the economies here, you know, just like everywhere else. As
12:16
Speaker 2: people make different decisions, staycations are great for the person
12:19
Speaker 2: who here here wants to stay here in Cincinnati just
12:21
Speaker 2: kind of keep it quiet for a little bit. Not
12:23
Speaker 2: so great for folks and whose businesses rely on those
12:27
Speaker 2: foreign travelers.
12:29
Speaker 1: All right, Well, economic realities are a thing. Hey, you
12:31
Speaker 1: got to make the right decisions. If you don't have
12:33
Speaker 1: enough money going to vacations, don't go. I just don't
12:36
Speaker 1: view it as sort of like this, Oh my god,
12:38
Speaker 1: life sucks. I can't go someplace else on a vacation
12:41
Speaker 1: because there's so much to do right in your backyard.
12:44
Speaker 1: I mean, go on the confines of your backyard, take
12:46
Speaker 1: a road trip, going up to Hawking Hills and go
12:48
Speaker 1: see one of the beautiful spots in Kentucky. I mean,
12:51
Speaker 1: doesn't have to cost a lot of money, as long
12:52
Speaker 1: as you're spending time with family and relaxing. Relaxing, to me,
12:55
Speaker 1: is the only point of taking a vacation, and quite
12:57
Speaker 1: often traveling is far less relaxing than just sleeping in
13:00
Speaker 1: and just going num num num num, numb when the
13:03
Speaker 1: alarm doesn't go off. Brian James, let's pivot over only
13:07
Speaker 1: six years. This hitch right in your wheelhouse, because you
13:10
Speaker 1: have to plan for your future. And I have lived
13:13
Speaker 1: my entire life under the mindset that social security will
13:16
Speaker 1: not be there for me when I retire, Brian. They've
13:19
Speaker 1: been projecting the demise and the end of social security
13:21
Speaker 1: for years and years and years, and every year the
13:24
Speaker 1: projections just keep getting worse. In the timeline for how
13:26
Speaker 1: long it's going to be solving get shorter and shorter. Hey,
13:29
Speaker 1: isn't it great our politicians have actually stepped up to
13:32
Speaker 1: the plate and done something to extend the life of
13:34
Speaker 1: the program. Oh that's right, Brian, they had it.
13:37
Speaker 3: Didn't happen a little early on the optimism there, sir.
13:42
Speaker 3: He's wheeze.
13:43
Speaker 1: You know, so many people relying on this and they
13:45
Speaker 1: have been sold a bill of goods in spite of
13:48
Speaker 1: the fact that your social Security form says right on
13:50
Speaker 1: its face that this is no guarantee that the monthly
13:53
Speaker 1: amount we're showing you might get you will get there.
13:57
Speaker 1: It is, and yet we should probably count on getting
14:00
Speaker 1: that because it's listen, how many people are funding social
14:03
Speaker 1: security now versus when it started. Wasn't it like sixteen
14:05
Speaker 1: workers to one retiree.
14:08
Speaker 2: Right, and now we're getting closer to one to one,
14:10
Speaker 2: and that's the real problem. So yeah, So the headline
14:13
Speaker 2: is the projection is now, that's so scurity, And I
14:15
Speaker 2: want to be very careful with these words because people
14:17
Speaker 2: tend to take them and run with them. So Scurity
14:19
Speaker 2: is projected to hit insolvency in six years. Now, what
14:22
Speaker 2: this does not mean. This does not mean that Social
14:24
Speaker 2: Security checks are going to drop. That's not the case
14:27
Speaker 2: because I guarantee you, as I said many times on
14:29
Speaker 2: these airwaves and then meetings with clients, I'm going to
14:32
Speaker 2: be working in these years in the early twenty thirties. Right,
14:35
Speaker 2: the year is twenty thirty two now, it used to
14:36
Speaker 2: be twenty thirty three, thirty four, whatever, And I can
14:39
Speaker 2: guarantee you on the top of my paste up it
14:41
Speaker 2: there is going to be a line for fight GUTEP,
14:43
Speaker 2: which is as everybody else you as well, if you're
14:45
Speaker 2: still hanging around the workplace. There that is the money
14:49
Speaker 2: that's coming out of workers' paychecks and going directly to
14:52
Speaker 2: beneficiaries of Social Security, meaning retirees. So if nothing happens,
14:56
Speaker 2: that dollar amount will be all we can rely on.
14:58
Speaker 2: And that's going to result and benefit cuts about twenty
15:01
Speaker 2: four percent across the board. That's going to impact about
15:03
Speaker 2: seventy five million people. But at the same time that
15:07
Speaker 2: a benefit cut of twenty four percent that is not
15:09
Speaker 2: one hundred percent.
15:10
Speaker 3: There's there are going to be checks coming out there.
15:13
Speaker 1: Well, unsettling for many who are thinking that's going to
15:16
Speaker 1: be their only source of income. But something will at
15:18
Speaker 1: least be showing up. I mean, might you know, long,
15:21
Speaker 1: long time ago, there was discussions about, you know, sort
15:24
Speaker 1: of maybe privatizing this a little bit and letting us
15:26
Speaker 1: to keep that fighto amount that they take from our paychecks,
15:28
Speaker 1: which is not invested long term, does not grow in
15:31
Speaker 1: any way, shape or form, rather than just sending it
15:33
Speaker 1: out to Social Security recipients, letting us have some financial
15:36
Speaker 1: plan like four oh one k roth that kind of
15:39
Speaker 1: control over it, so don't give it to the federal government,
15:42
Speaker 1: put it in your own account, kind of like letting
15:44
Speaker 1: the money flow with the children to school districts, that
15:46
Speaker 1: kind of thing. Will that ever see the light of day?
15:49
Speaker 2: Brian James, Well, I mean that is probably not a
15:54
Speaker 2: major surprise that the all the ideas that currently come
15:57
Speaker 2: out now come out from one far so the political spectrum.
16:01
Speaker 2: And again this happens going both directions, and they get
16:03
Speaker 2: immediately shot down by the other side. So on the
16:05
Speaker 2: Democratic side, you have Senator Bernie Sanders and Elizabeth Warren.
16:09
Speaker 2: Bernie wants to expand benefits, not only fix the problem,
16:11
Speaker 2: but expand benefits and provide them to more people than
16:14
Speaker 2: are currently getting them. Paying for that by eliminating the
16:16
Speaker 2: payroll tax cap, meaning that anybody who earns, if you
16:20
Speaker 2: earn more than one hundred and eighty four thousand dollars,
16:22
Speaker 2: you're not paying Social Security, not paying those fike AT
16:25
Speaker 2: taxes on that dollar mount above one hundred and eighty four.
16:28
Speaker 3: See.
16:29
Speaker 2: He wants to commutely eliminate that and basically not have
16:31
Speaker 2: a payroll tax cap, just like is done for Medicare.
16:33
Speaker 2: There is no cap on your Medicare earnings, but there
16:36
Speaker 2: is on your Social Security. In terms of your taxation,
16:39
Speaker 2: Elizabeth Warren wants to, of course tax the wealthy to
16:42
Speaker 2: fully fund the system. I'm sure that's not a major surprise.
16:44
Speaker 2: Sheldon white House out of Rhode Island. He wants to
16:47
Speaker 2: also deal with the higher income taxation side of things. Now,
16:50
Speaker 2: on the Republican side, you've got Mike Lee Rand Paul
16:54
Speaker 2: All wanting to Ran Paul's a big support of privatization concepts,
16:58
Speaker 2: although he is not currently sponsoring a bill that I'm
17:00
Speaker 2: aware of. Mike Lee is out there wanting to cap
17:03
Speaker 2: benefits on higher income retirees anybody who earns more than
17:06
Speaker 2: one hundred thousand dollars already, and also wanting to put
17:09
Speaker 2: in structural reforms to kind of slow those long term costs. Now,
17:12
Speaker 2: all of these, of course, are very much along political lines.
17:15
Speaker 2: As soon as somebody produces one of these ideas, it's
17:17
Speaker 2: not that they're not talking about it. This gets brought
17:19
Speaker 2: to the floor of Congress frequently. But as soon as
17:22
Speaker 2: somebody brings an idea, it's either got to do with
17:25
Speaker 2: reducing benefits on future retirees or increasing taxation now on
17:29
Speaker 2: current workers, both of the both of those solutions. Any
17:32
Speaker 2: solution fault fits into both of those headings, and it
17:34
Speaker 2: gets immediately, immediately, instantaneously shot down by the other side.
17:38
Speaker 2: We are in just nowhere near solution on you on this.
17:41
Speaker 1: No, and if anybody else hasn't noticed, Congress seems to
17:44
Speaker 1: be a bit of a stalemate over literally anything. I
17:47
Speaker 1: mean literally anything. The political lines are so stark and
17:49
Speaker 1: so divided that I don't think we can really comfortably
17:52
Speaker 1: hope on any agreement on almost any topic. At this
17:56
Speaker 1: point in time, most notably the third rail of politics,
17:58
Speaker 1: which is social securities. So six years, TikTok, TikTok, and
18:01
Speaker 1: next year, Brian, you're probably be talking about, Oh, it's
18:03
Speaker 1: only three years now.
18:05
Speaker 2: Yeah, you know, I've been an advisor now for about
18:07
Speaker 2: thirty years, and this has been a topic ever since
18:10
Speaker 2: the beginning. I remember when I was a baby, advisor
18:12
Speaker 2: didn't know very much. I felt like it was going
18:14
Speaker 2: to happen tomorrow the way that they were talking about it.
18:16
Speaker 2: And these years, you know, yes, we're saying twenty thirty
18:19
Speaker 2: two right now, but that's not that far off. It's
18:22
Speaker 2: not like it was twenty forty five fifteen years ago.
18:25
Speaker 2: It seems to have been in a range of maybe
18:27
Speaker 2: twenty thirty two to twenty thirty six. Don't quote me
18:29
Speaker 2: on that, but every time I brought this up, and
18:31
Speaker 2: it's usually around this time of year, it's the first
18:33
Speaker 2: quarter of the year that they do this big study,
18:35
Speaker 2: and it's always in the early twenty thirty So that
18:37
Speaker 2: has not moved as much as people might think. And
18:40
Speaker 2: we've been here before, Brian. We had a problem in
18:42
Speaker 2: the late seventies early eighties because the math didn't math.
18:45
Speaker 2: It was an error in the formula where the cost
18:49
Speaker 2: of living increases were basically getting duplicated throughout the seventies,
18:52
Speaker 2: and that set us up for failure in the early eighties.
18:55
Speaker 2: And that required the both parties to work together, and
18:58
Speaker 2: it also required President Reagan and Tip O'Neil to come
19:00
Speaker 2: together in the same room and basically force Congress to
19:03
Speaker 2: make a decision to fix it. We're on that path now,
19:06
Speaker 2: but that also didn't happen until we were within months
19:09
Speaker 2: of the program becoming insolvent because that math was set
19:11
Speaker 2: up incorrectly. So we still have a few years away.
19:14
Speaker 2: So don't I don't envision any kind of permanent resolution
19:17
Speaker 2: here until I don't know, twenty thirty, twenty thirty one,
19:20
Speaker 2: something like that.
19:20
Speaker 3: We're not going to do.
19:21
Speaker 2: It within while somebody still has the ability to run
19:25
Speaker 2: for election one more time without having had to deal
19:27
Speaker 2: with Social Security, which is going to be a sacrifice
19:29
Speaker 2: any way you want to tack.
19:31
Speaker 1: Yeah, I share your perspective on that one, Brian James.
19:33
Speaker 1: Don't go away because apparently there's about a trillion dollars
19:36
Speaker 1: in unpaid family caregiving going on. I don't this suggests
19:40
Speaker 1: maybe we need to pay for it. We'll find out.
19:41
Speaker 1: Brian James with one more on this Money Monday. It's
19:44
Speaker 1: eight twenty seven right now at fifty five krc DE
19:46
Speaker 1: Talk Station, fifty five kr Sation eight thirty one. Here
19:52
Speaker 1: fifty five KRCD Talk Station. Happy Monday, Money Money with
19:54
Speaker 1: Brian James. Every Monday eight o five to this point
19:57
Speaker 1: in time, we're going to hear about Bach the Johann
20:00
Speaker 1: Smashing Box, specifically coming up next doctor for Christina Furman's
20:02
Speaker 1: going to join us about the empower Youth Seminar Why
20:05
Speaker 1: Bach is so awesome? Boiling it down two a sense,
20:09
Speaker 1: Brian James, I guess a lot of it als are
20:11
Speaker 1: caregivers for well loved ones. This comes as no surprise
20:15
Speaker 1: to me. But for whatever reason, AARP crunched the numbers
20:18
Speaker 1: and broke down the amount of hours that people are
20:21
Speaker 1: caring for their family loved ones into a figure and
20:24
Speaker 1: determined that it was worth a trillion dollars unpaid they
20:27
Speaker 1: call it. But I'm of the mind that I never
20:29
Speaker 1: considered it to even be a like paid position. What
20:33
Speaker 1: is the point of this and are they suggesting perhaps
20:35
Speaker 1: that because there's a trillion dollars an unpaid family care.
20:38
Speaker 1: Somebody needs to be paid for this.
20:41
Speaker 2: Well, I don't think it's that so much. It's just
20:42
Speaker 2: the overall economic impact of it. Yeah, that's a part
20:45
Speaker 2: of it, because not so much because of you know, well,
20:50
Speaker 2: I mean, I think it's focused on the idea that
20:52
Speaker 2: somebody is sacrificing something. Right, So a lot of us
20:54
Speaker 2: know somebody who is taking time off work, or perhaps
20:57
Speaker 2: they quit their jobs entirely in the extreme situations, and
20:59
Speaker 2: they need to move in with their parents, and now
21:02
Speaker 2: everybody is living off of that one or two Social
21:04
Speaker 2: Security checks that the elderly person has in that situation.
21:08
Speaker 2: So I think it's not so much a headline that
21:11
Speaker 2: there are people out there doing this, it's how many
21:13
Speaker 2: and how much it's increased over time. So the estimates
21:16
Speaker 2: are that this is a trillion dollars shadow economy, up
21:20
Speaker 2: about sixty seven percent from six hundred billion and twenty
21:23
Speaker 2: twenty one, there's about fifty nine million caregivers out there,
21:27
Speaker 2: delivering about fifty billion hours of care per year. That's
21:30
Speaker 2: equivalent to twenty four million full time workers, or seventeen
21:34
Speaker 2: percent of the workforce. And since this is an unpaid workforce,
21:36
Speaker 2: that means These are people who some percentage of probably
21:39
Speaker 2: a decent amount of whom probably would otherwise be working
21:42
Speaker 2: in the actual labor force, the paid labor force, which
21:45
Speaker 2: means we've got issues with taxation, economic growth, and those
21:48
Speaker 2: kinds of things. And if this was a stable number,
21:51
Speaker 2: if this was the same figure we had seen forever,
21:54
Speaker 2: then maybe not that big of a deal. Been two
21:55
Speaker 2: thousand and six it was seven to eight percent of
21:57
Speaker 2: the workforce, about three hundred and ten billion dollars worth
21:59
Speaker 2: of of missed economic benefits there nine to ten percent
22:04
Speaker 2: from about twenty nine to thirteen.
22:05
Speaker 3: Now we're up to sixteen to seven percent.
22:08
Speaker 2: And the reason this is happening, Brian, is this will
22:10
Speaker 2: come as no shock baby er in middle It's exactly,
22:13
Speaker 2: it's baby boomers. It's a phenomenon called peak sixty five
22:16
Speaker 2: where we've got the highest percentage of the population ever
22:19
Speaker 2: turning sixty five, and that's going to happen through the
22:22
Speaker 2: year twenty twenty seven. So we're probably going to continue
22:24
Speaker 2: to see these numbers go up of people exiting their
22:28
Speaker 2: earning careers and moving into a position they may not
22:31
Speaker 2: have a choice about taking care of loved ones for
22:33
Speaker 2: no income whatsoever. And that trickles through to lack of
22:35
Speaker 2: economic growth and taxation as well.
22:37
Speaker 1: Now there may be a lot of baby boomers out
22:39
Speaker 1: there regretting their decision that they were not going to
22:42
Speaker 1: have children because fill in the blank, I'm not going
22:44
Speaker 1: to have kids, don't have time, too expensive, they're going
22:46
Speaker 1: to kill the planet, blah blah blah. And then you
22:48
Speaker 1: find yourself a retired adult, maybe in need of assistance,
22:51
Speaker 1: and you turn around and look for the children that
22:53
Speaker 1: you didn't have and they're not there.
22:56
Speaker 2: That's going to end. And I think that's the current
22:58
Speaker 2: generations are going to go through that too. See that
23:00
Speaker 2: cycle back around in thirty or forty years. That's not
23:02
Speaker 2: a reason to go off and have a kid, because
23:04
Speaker 2: I can't imagine being no kid and informed that that's.
23:06
Speaker 3: Why you exist.
23:07
Speaker 1: I think my dad wanted to have kids because this
23:09
Speaker 1: was the days before television remotes, and I remember as
23:11
Speaker 1: a small child, Dad was the one Brian, get up
23:13
Speaker 1: and turn it to the Channel twelve, Brian, get up and
23:15
Speaker 1: turn it to Channel Night. At least I had a
23:17
Speaker 1: purpose in life as a young person.
23:19
Speaker 3: Grab that antenna and stand on your left foot.
23:21
Speaker 1: Yeah, well, ultimately not left other than the trend here.
23:26
Speaker 1: Is this something that people should be considering, this idea
23:30
Speaker 1: that you may need assistance when they're well planning for
23:32
Speaker 1: their own retirement.
23:34
Speaker 2: Yeah, I think it's definitely something to think about, because
23:37
Speaker 2: the cost of in home help is about eighty thousand
23:40
Speaker 2: dollars per year, and nursing home is more along the
23:42
Speaker 2: lines of one hundred and fifteen thousand dollars a year.
23:45
Speaker 2: I do want to caution people from worrying about you know,
23:47
Speaker 2: that's a big number, but as we do the analysis,
23:50
Speaker 2: for people who have built solid financial plans for themselves,
23:53
Speaker 2: that's not an extra one hundred and fifteen thousand dollars
23:56
Speaker 2: on top of your existing expenses.
23:58
Speaker 3: We build a plan.
23:59
Speaker 2: Obviously, we're going to deal with your living expenses, you know,
24:01
Speaker 2: whatever you want to do during retirement, paying off the mortgage, traveling,
24:04
Speaker 2: all those other things, maybe helping grandkids or your kids
24:06
Speaker 2: or whatever. But this extra expense of this one hundred
24:09
Speaker 2: and fifteen thousand will come after those things. You are
24:12
Speaker 2: not running to the grocery store anymore, you're not traveling anymore,
24:15
Speaker 2: you're not really helping the kids anymore. So a lot
24:17
Speaker 2: of those things come off of the payroll. You don't
24:19
Speaker 2: have to worry about them, and so it's not one
24:21
Speaker 2: hundred and fifteen thousand on top of what you were doing.
24:23
Speaker 2: A lot of it is blended in. That doesn't mean
24:26
Speaker 2: it's you know, that doesn't mean it's not a problem.
24:27
Speaker 2: It's definitely something to plan for, but it's not something
24:30
Speaker 2: to ruin your retirement worrying over well.
24:32
Speaker 1: And another reason, have a financial planner who can talk
24:35
Speaker 1: you off the ledge when you're starting to think about
24:36
Speaker 1: this and oh my god, how am I going to
24:38
Speaker 1: be able to fill in the blank. Brian James and
24:41
Speaker 1: others in his profession are skilled in dealing with clients
24:45
Speaker 1: to either talk them off the ledge or explain how
24:47
Speaker 1: it can be accomplished. It's the appropriate planning. I'm glad
24:51
Speaker 1: I've got one. Brian James, thank you so much for
24:52
Speaker 1: your time each and every week. Appreciate the insights and
24:54
Speaker 1: the thoughtful conversation. We'll do it again next Monday.
24:56
Speaker 3: I hope you have a great week you too, Go Red,
24:59
Speaker 3: Let's make it two series.
25:00
Speaker 1: Amen to that, brother, I'll vote for that. Eight thirty
25:02
Speaker 1: six