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Inflation is Inevitable: Lifestyle Creep is Optional · Money In Motion with Klaas Financial

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  Speaker 1: And our phone lines.
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  Speaker 2: oh eight three two one thirteen ten. That's six soh
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  Speaker 2: eight three two one thirteen ten. And joining us this
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  Speaker 2: morning from Class Financial our retirement planning professionals, Eric Schwartz
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  Speaker 2: and CJ cost Over. You can learn more about them
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  Speaker 2: online cossfinancial dot com. That's coss k l aa s
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  Speaker 2: dot com. They're telephone number six oh eight four four
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  Speaker 2: two five six three seven. Enjoy this morning from Class Financial.
• 1:01
  Speaker 2: Are turn paying professional. CJ Closs and Eric Schwartz. CJ.
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  Speaker 2: How you doing this morning? Oh, we may have I
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  Speaker 2: see so it looks like there might be a connection
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  Speaker 2: issue there. Eric, how are you doing today? Oh goodness,
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  Speaker 2: we are having interesting maybe some technical issues this morning,
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  Speaker 2: and I apologize for that. It looks like they're both connected,
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  Speaker 2: but I am not hearing my friends from Class Financial.
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  Speaker 2: What we may have to do here is take a
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  Speaker 2: short break. And looks like we are getting some interesting technology.
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  Speaker 2: Is pretty amazing. So well, just a couple of things.
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  Speaker 2: Keep in mind, as I mentioned the telephone numbers to
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  Speaker 2: get on the air six so eight three two one
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  Speaker 2: thirteen ten at six oh eight three two one thirteen
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  Speaker 2: ten telephone number to join us here on money in
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  Speaker 2: Motion with coass Financial. I do see that, Eric, Eric
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  Speaker 2: is with us. Eric, how are you doing this morning?
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  Speaker 1: I am doing great.
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  Speaker 3: Sean, how are you doing?
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  Speaker 2: I'm doing really well and I hope everything's sounding okay.
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  Speaker 2: It looks like we are maybe getting some back there.
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  Speaker 1: Let's check in with CJ. CJC you got connected as well.
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  Speaker 1: Everything going all right on your end?
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  Speaker 4: Yes? Can you hear me? Okay?
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  Speaker 1: I hear you allouding clear? Great to have both of
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  Speaker 1: you along. I'm gonna blame the Canadian wildfires. Why not?
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  Speaker 2: You know, everything everything this morning a little smoky and
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  Speaker 2: a little hazy out there. We're gonna be talking this
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  Speaker 2: week about inflation and how inflation is inevitable in lifestyle
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  Speaker 2: creep being optional. We'll get kind of that insight from
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  Speaker 2: Cjen Eric this morning as we talk with them from
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  Speaker 2: COSS Financial. Don't forget also great opportunity as as we
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  Speaker 2: talk through this great program, a lot of great informational
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  Speaker 2: screat opportunity for a fantastic prize for the class quiz
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  Speaker 2: question the week, Class Financially provided a twenty five dollars
• 2:41
  Speaker 2: gift card to the cheesecake factory. Tell you a little
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  Speaker 2: bit later on in the program how you can win that.
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  Speaker 2: But as a matter of fact, before we get rolling
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  Speaker 2: on this week's topic and conversation, Eric, let's get a
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  Speaker 2: look back at last week's program and get the question
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  Speaker 2: and answer there as well. Oh, I think we lost Eric, CJ.
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  Speaker 2: I apologize if you're with us. I think we lost Eric.
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  Speaker 2: I think we're having some connection issues. Would you be
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  Speaker 2: able to tell us a little bit about last week's
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  Speaker 2: quiz question?
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  Speaker 4: Absolutely? Yeah, sorry about that, everybody. Yeah, So last.
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  Speaker 5: Week, we had a show on long term care costs,
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  Speaker 5: and so it was a truer false question last week,
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  Speaker 5: and it was true or false. Long term care costs
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  Speaker 5: are fully covered by Medacare, and the answer to that
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  Speaker 5: question is actually false.
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  Speaker 4: So congratulation to.
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  Speaker 5: Our winner from last week, and good luck winning this
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  Speaker 5: week's show.
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  Speaker 1: Price listen very closely.
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  Speaker 2: Again, both the question and answer often come up during
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  Speaker 2: the program as much we're going to talk about inflation.
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  Speaker 2: Of course, inflation being inevitable, but lifestyle creep is optional,
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  Speaker 2: and CJ, as we talk about challenge and impacts everyone,
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  Speaker 2: regardless of your income level, our stage of life. The
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  Speaker 2: title of today's show, of course, infilation is an inevitable,
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  Speaker 2: lifestyle creep is optional. When most people hear the word inflation,
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  Speaker 2: we of course we automatically think of higher the grocery store,
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  Speaker 2: the gas pomp, the restaurants, so on and so forth.
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  Speaker 2: But the second part of the title, lifestyle creep, this
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  Speaker 2: is something many people don't even realize is happening.
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  Speaker 1: What exactly do you mean by that, CJ.
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  Speaker 5: Yeah, So this is a great topic because these are
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  Speaker 5: actually two very different challenges, and often they can be
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  Speaker 5: conflated with one another. So inflation is something that happens
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  Speaker 5: around us. Prices rise over time, and that's largely outside
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  Speaker 5: of our control. We can complain about inflation, but we
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  Speaker 5: can't stop it.
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  Speaker 4: Lifestyle creep, on the.
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  Speaker 5: Other hand, is what happens when every raise, promotion or
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  Speaker 5: bonus quietly turns into a new monthly expense. A bigger paycheck,
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  Speaker 5: turns into a bigger house, a nicer vehicle, more vacations,
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  Speaker 5: more subscriptions, more dining out, and before long that additional
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  Speaker 5: income has disappeared. So inflation is inevitable, lifestyle creep is optional.
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  Speaker 5: That is the title of today's show, and you can
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  Speaker 5: kind of understand it right. Inflation happens around us, lifestyle
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  Speaker 5: creep we choose.
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  Speaker 1: It's talking this morning with CJ. Closs and Eric Schwartz.
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  Speaker 2: They are our retirement playing professionals from Class Financial Online
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  Speaker 2: Coss Financial dot Com. That's Coss k l aas Financial
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  Speaker 2: dot com. So I get that part and and Eric,
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  Speaker 2: I guess inflation is external, but lifestyle creep that's more behavioral.
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  Speaker 4: Isn't it.
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  Speaker 3: Absolutely? And can you hear me, Sean, I hear you
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  Speaker 3: coming through?
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  Speaker 1: Sound perfect now?
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  Speaker 2: Yeah?
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  Speaker 1: Absolutely?
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  Speaker 3: Oh awesome. Glad to hear it. Yes, well, sorry about that, everybody,
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  Speaker 3: but that's exactly a chun. I think one of the
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  Speaker 3: biggest misconceptions in personal finance is that as long as
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  Speaker 3: you're you know, once you earn more money, that's automatically
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  Speaker 3: going to solve those financial problems, right, And in reality,
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  Speaker 3: we've met households earning seventy five thousand dollars that are
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  Speaker 3: doing just fine financially, and we've met households earning several
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  Speaker 3: hundred thousand dollars a year who still feel stretched every month.
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  Speaker 3: So the difference really isn't the income there, it's it's
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  Speaker 3: suspending habits and if expenses are increasing, every time income increases,
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  Speaker 3: the financial stress tends to follow people no matter how
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  Speaker 3: much they earn. Right, So very few people wake up
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  Speaker 3: in the morning and decide they're going to dramatically increase
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  Speaker 3: their spending. It often is going to happen gradually over
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  Speaker 3: over time. So you get to raise, you upgrade your vehicle.
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  Speaker 3: A few years later, you move into larger home. Then
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  Speaker 3: of course you needification property, maybe a country club membership.
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  Speaker 3: You're traveling more, you got to get some more streaming
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  Speaker 3: services because you've got to have them all you know
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  Speaker 3: your Amazon bill is out of control, You're going to
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  Speaker 3: nicer restaurants. This list can just go on and on,
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  Speaker 3: and I think as listeners kind of see that long list,
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  Speaker 3: you can see how quickly these things can can add up.
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  Speaker 3: And none of these things are necessarily bad. The danger
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  Speaker 3: is just that each one of them becomes part of
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  Speaker 3: your ongoing lifestyle, and over time, what initially felt like
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  Speaker 3: a luxury, like oh, we're just going to do a
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  Speaker 3: nice dinner tonight, or you know, we're going to take
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  Speaker 3: a nice vacation this year, it starts to feel like
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  Speaker 3: a necessity, and it starts to be not not you know,
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  Speaker 3: just an occasional thing anymore, it becomes something much more frequent.
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  Speaker 2: Now.
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  Speaker 3: At Class Financial, we often talk about managing expectations because
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  Speaker 3: expectations are what drive satisfaction. Many people aren't disappointed by
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  Speaker 3: by reality. They're actually disappointed when reality falls short of
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  Speaker 3: their expectations, and that can really lead to a problem
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  Speaker 3: for folks.
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  Speaker 1: Talking this morning with Eric Schwartz and CJ.
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  Speaker 2: Closs, they are our retirement planning professionals from Class Financial online.
• 7:32
  Speaker 2: Class Financial dot com that's Class k l aas Financial
• 7:36
  Speaker 2: dot com, great website of course, you can schedule a
• 7:39
  Speaker 2: complementary conversation right from class financial dot com. I can
• 7:42
  Speaker 2: call the office right here in Madison at six oh
• 7:44
  Speaker 2: eight four four two five six three seven at six
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  Speaker 2: oh eight four four two five six three seven and CJ.
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  Speaker 2: Looking at it from a financial planning perspective, what makes
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  Speaker 2: this this kind of this creep kind of dangerous?
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  Speaker 4: Yeah, what makes it dangerous is that we often see
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  Speaker 4: it this lifestyle creep during people's peak earning years. So
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  Speaker 4: many Americans experience their highest earnings between their forties and
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  Speaker 4: early sixties, and those years provide an incredible opportunity to
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  Speaker 4: accelerate retirement savings. As a matter of fact, for people
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  Speaker 4: who have listened to our show, The IRS acknowledges this
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  Speaker 4: as well by offering when you get over fifty years
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  Speaker 4: old to do catch up contributions into retirement accounts because
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  Speaker 4: typically you're earning more. You might have felt like you
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  Speaker 4: weren't able to save as much in your thirties and
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  Speaker 4: forties when the kids were young. Now you're earning more
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  Speaker 4: money and can save, but unfortunately, those same years often
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  Speaker 4: become the most expensive years of life. Instead of directing
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  Speaker 4: raises and bonuses towards investments. People direct them towards larger
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  Speaker 4: monthly obligations like what Eric was talking about before, and
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  Speaker 4: the result is that retirement may end up much closer
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  Speaker 4: than they realize, but savings haven't increased enough to support
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  Speaker 4: the lifestyle that they've built. So again, the key here
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  Speaker 4: is it's Eric and I are not trying to sound
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  Speaker 4: like curmudgeons. We understand that as your income goes up,
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  Speaker 4: your lifestyle may go up, and some level of that
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  Speaker 4: is appropriate, but people often think of it as a
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  Speaker 4: one to one relationship. Right, My income went up and
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  Speaker 4: you know, by whatever, ten thousand dollars a year, and
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  Speaker 4: we can spend ten thousand dollars a year more because
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  Speaker 4: I'm already saving enough, right, And so that's something we're
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  Speaker 4: going to talk about, is what happens if my income
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  Speaker 4: expands dramatically, my expectations expand dramatically, and then I retire
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  Speaker 4: on an average savings pattern over all those years, you
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  Speaker 4: start to see the disconnect.
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  Speaker 1: Interesting, is what a fantastic topic this week.
• 9:41
  Speaker 2: As always, don't forget if you miss any part of
• 9:42
  Speaker 2: today's program, you can always head on over to Cossfinancial
• 9:45
  Speaker 2: dot com. That's cost klaas Financial dot com. You listen
• 9:49
  Speaker 2: to this and previous shows podcast, you can also subscribe
• 9:51
  Speaker 2: right online. Not only if I know step out and
• 9:54
  Speaker 2: grab coffee or those type of things. If you want
• 9:56
  Speaker 2: to share the podcast as well, head on over to
• 9:58
  Speaker 2: class financial dot com. Can schedule comp mentric conversation right
• 10:01
  Speaker 2: from the website or give MC call six oh eight
• 10:03
  Speaker 2: four four two five six three seven. No charge for
• 10:05
  Speaker 2: that initial gets to know your appointment dec Laws Financial.
• 10:08
  Speaker 2: It will beat complementary to you. Will continue our conversation
• 10:11
  Speaker 2: with CJ and Eric. We will do that next as
• 10:13
  Speaker 2: Money in Motion with Coss Financial continues right here on
• 10:15
  Speaker 2: thirteen ten doll will u ib a talking with our
• 10:19
  Speaker 2: retirement planning professionals CJ. Closs and Eric Schwartz. Of course
• 10:23
  Speaker 2: they come to us from Coss Financial online Coss Financial
• 10:26
  Speaker 2: dot com. That's Coss k l Aas Financial dot com.
• 10:30
  Speaker 2: I telephone number six oh eight four four two five
• 10:32
  Speaker 2: six three seven. Don't forget no charge for that initial
• 10:35
  Speaker 2: gets to know you appoyment dech loss Financial. It will
• 10:37
  Speaker 2: beat complementary to you. Talking this week about how inflation
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  Speaker 2: it's inevitable, but lifestyle creep that is optional and talking
• 10:43
  Speaker 2: with CG and Eric about how to manage both your savings,
• 10:47
  Speaker 2: investing and planning so your strategy stays on track and
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  Speaker 2: eric is CJ mentioned just before the break there that
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  Speaker 2: lifestyle creep often becomes most pronounced during our peak years
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  Speaker 2: of earning. Does that create some challenges later when folks
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  Speaker 2: get into retirement.
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  Speaker 4: Absolutely.
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  Speaker 3: I think you know, this is probably one of the
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  Speaker 3: biggest retirement planning risks we see, because I think there's
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  Speaker 3: an inherent confidence for folks when they're still working, when
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  Speaker 3: they have a paycheck coming in to spend more freely.
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  Speaker 3: I think it's this idea of well, I can always
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  Speaker 3: make more money, right because you're still working. But as
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  Speaker 3: you move into retirement, it's obviously a different story. Money
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  Speaker 3: is coming from different places, as we've talked about on
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  Speaker 3: the show before, and many people spend the final ten
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  Speaker 3: to fifteen years of their careers earning more money than
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  Speaker 3: they've ever earned before, and the challenge is that they
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  Speaker 3: gradually build a lifestyle around that peak income. And the
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  Speaker 3: bigger problem is that retirement income doesn't fully replace peak
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  Speaker 3: employment income. So if someone becomes accustomed to spending nearly
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  Speaker 3: every dollar that they earn during those final working years,
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  Speaker 3: transitioning into retirement can be really difficult because CG made
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  Speaker 3: a point earlier in saying that, you know, I make
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  Speaker 3: ten thousand dollars a year more, I can spen ten
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  Speaker 3: thousand dollars a year more because I'm already saving enough.
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  Speaker 3: But remember that enough was based on your previous earnings, right,
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  Speaker 3: So if you are expanding your lifestyle without expanding your savings,
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  Speaker 3: you're setting yourself up for an issue there. And for
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  Speaker 3: a lot of folks, especially in those peak earning years,
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  Speaker 3: they may have accumulated substantial assets and still be financially secure,
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  Speaker 3: but if they've built that lifestyle that exceeds their retirement portfolio,
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  Speaker 3: retirement can feel a lot more restrictive rather than what
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  Speaker 3: we would hope, which is, you know, a liberating feeling.
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  Speaker 3: So that's why retirement planning isn't just about accumulating those assets.
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  Speaker 3: It's about making sure that your future spending expectations are
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  Speaker 3: realistic given the amount that you have, you have saved,
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  Speaker 3: and that you've set aside.
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  Speaker 5: Now.
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  Speaker 2: So a really interesting perspective and point there, because I
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  Speaker 2: think a lot of folks kind of view retirement.
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  Speaker 1: And I definitely I think all of us.
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  Speaker 2: Got to do that as well as kind of the
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  Speaker 2: reward for decades of hard work, don't they.
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  Speaker 5: Yeah, that's exactly right, And ideally retirement should be one
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  Speaker 5: of the most enjoyable and fulfilling seasons of your life.
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  Speaker 5: So you finally have more and more time freedom, which
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  Speaker 5: is great. You can travel, you can spend time with family,
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  Speaker 5: you can pursue your hobbies, volunteer, or just simply enjoy
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  Speaker 5: life at a slower pace. But retirement can feel really
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  Speaker 5: disappointing if someone has spent years creating a lifestyle that
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  Speaker 5: depended on a paycheck that no longer exists. In some cases,
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  Speaker 5: people aren't short on assets, they're long on spending habits.
• 13:33
  Speaker 5: There you go, a little play on words gets to
• 13:35
  Speaker 5: short and long terminology. Some people who are in finance
• 13:38
  Speaker 5: will appreciate this. Others they're rolling your eyes right now.
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  Speaker 5: Yeah exactly, thank you, Eric, thank you. I needed somebody
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  Speaker 5: to tell me that. But yeah, so again, they're not
• 13:49
  Speaker 5: short on having assets, they're just over their skis on
• 13:54
  Speaker 5: their spending habits. So we often tell clients that retirement
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  Speaker 5: isn't just a financial transition, it's also a life style transition.
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  Speaker 5: One of the most successful retirement planning strategies that we
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  Speaker 5: see is to gradually increase savings during peak earnings years
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  Speaker 5: instead of allowing every income to increase to flow into
• 14:13
  Speaker 5: your lifestyle expenses. So doing so, when you take those
• 14:17
  Speaker 5: peak earning years and you increase your retirement savings, it
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  Speaker 5: does two things. It increases the size of your retirement portfolio, obviously,
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  Speaker 5: while simultaneously preventing spending habits from out haacing future retirement income.
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  Speaker 5: This is exactly what Eric and I have been kind
• 14:33
  Speaker 5: of hinting at here. It's not that we don't get that, like, hey,
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  Speaker 5: I'm already you already told me how much I needed
• 14:38
  Speaker 5: to save.
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  Speaker 4: Eric, why do you care if I.
• 14:40
  Speaker 5: Take the next twenty thirty forty thousand dollars of earnings
• 14:43
  Speaker 5: and spend it. And to a certain extent, our response
• 14:45
  Speaker 5: would be, we don't, We don't care at all. That's
• 14:47
  Speaker 5: your money. Do whatever you want to do. We are
• 14:50
  Speaker 5: just concerned that our fifty years of experience as a
• 14:55
  Speaker 5: business doing this is going to slap into the reality
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  Speaker 5: of your ex spectations, which is like, oh, when you
• 15:01
  Speaker 5: spend fifty grand a year more for the final five
• 15:04
  Speaker 5: years of your working life, we're guessing you're not going
• 15:07
  Speaker 5: to be okay with spending fifty grand less in retirement,
• 15:12
  Speaker 5: and so by saying, hey, it's kind of systematically every
• 15:15
  Speaker 5: additional dollar that I earn, even in those peak earnings
• 15:19
  Speaker 5: years when I'm already doing a lot of savings, I'm
• 15:21
  Speaker 5: still going to add more to a savings account. Part
• 15:25
  Speaker 5: of what we're trying to prevent is that disconnect between
• 15:29
  Speaker 5: reality and expectation.
• 15:31
  Speaker 1: Talk this morning with CJ. Closs and of course Eric Schwartz.
• 15:34
  Speaker 2: They are are retirement planning professionals from Class Financial and yeah,
• 15:38
  Speaker 2: there's a bunch of financial people that got a good
• 15:40
  Speaker 2: chuck there. We always have a lot of fun on
• 15:42
  Speaker 2: this program. That's one of the great things I mentioned
• 15:44
  Speaker 2: listening to the podcast. If missed today's show or want
• 15:46
  Speaker 2: to get caught up on them, there's a lot of
• 15:48
  Speaker 2: great information up at Cossfinancial dot com for you to
• 15:51
  Speaker 2: do just that, just head on over to class Financial
• 15:53
  Speaker 2: dot com. Again, not only is the information good, it's
• 15:55
  Speaker 2: a good conversation as well, and you learn a whole
• 15:58
  Speaker 2: lot just had it over to Coss Financial dot com.
• 16:00
  Speaker 2: That's cost k l a a s Financial dot com.
• 16:02
  Speaker 2: You can also schedule a complementary conversation right from the website. Again,
• 16:06
  Speaker 2: that's Cossfinancial dot com and their telephone number six oh
• 16:09
  Speaker 2: eight four four two five, six three seven. No charge
• 16:12
  Speaker 2: for that initial gets to know you appointment at Coss Financial.
• 16:14
  Speaker 2: It will be complementary to you. Were going to continue
• 16:16
  Speaker 2: our conversation with c gen Eric, We will do that
• 16:18
  Speaker 2: next as Money in Motion with Coss Financial continues right
• 16:21
  Speaker 2: here on thirteen ten wib a talker this morning with
• 16:24
  Speaker 2: our retirement planning professionals from Class Financial, Eric Schwartz and CJ.
• 16:29
  Speaker 1: Closs.
• 16:29
  Speaker 2: Of course, can learn more about Clause Financial right on
• 16:32
  Speaker 2: the website Coss Financial dot com. That's COSS k l
• 16:35
  Speaker 2: a a s Financial dot com. Schedule a complementary conversation
• 16:38
  Speaker 2: right from the website, or you can call the office
• 16:40
  Speaker 2: right here in Madison at six oh eight four four
• 16:42
  Speaker 2: two five six three seven. Talking this week about inflation,
• 16:46
  Speaker 2: how of course inflation it's inevitable, but more importantly, lifestyle
• 16:49
  Speaker 2: creep is optional. And Eric, just before the break, as
• 16:52
  Speaker 2: we were kind of talking about how this tends to happen,
• 16:56
  Speaker 2: does this should I take away then to say, should
• 17:00
  Speaker 2: spend more than more as you become more successful?
• 17:03
  Speaker 1: Or what should be the be the thought there.
• 17:07
  Speaker 3: You know, Sean, I hope that's the one thing listeners
• 17:09
  Speaker 3: take away from that is not at all what we're
• 17:14
  Speaker 3: suggesting here. I mean, obviously, one of the rewards of
• 17:17
  Speaker 3: working hard and being you know, financially successful is enjoying
• 17:20
  Speaker 3: some of that success. And frankly, I think being able
• 17:22
  Speaker 3: to spend money on things that are important to us
• 17:25
  Speaker 3: as one of the things that keeps people, you know,
• 17:29
  Speaker 3: committed to working and trying to advance. So the goal
• 17:33
  Speaker 3: here isn't to deprive ourselves financially. The goal is really
• 17:37
  Speaker 3: to think more, you know, intentionally about what we're doing
• 17:41
  Speaker 3: with the success in financial rewards that that people receive.
• 17:46
  Speaker 3: So let's think of this more simply. If your income
• 17:49
  Speaker 3: increases by ten percent, maybe you choose to enjoy part
• 17:52
  Speaker 3: of that increase, but also choose to save or invest
• 17:56
  Speaker 3: some of the rest of it. So that's that's very
• 17:58
  Speaker 3: different than just automatically spending every additional dollar that comes in.
• 18:02
  Speaker 3: And you know, this is why it's so important. When
• 18:05
  Speaker 3: you know life's busy life, things move quickly. It's easy
• 18:08
  Speaker 3: to just say, you know, I know what comes into
• 18:11
  Speaker 3: my checking account, and that's what I spend and that's
• 18:13
  Speaker 3: how it works at the end of the month. But
• 18:15
  Speaker 3: if you if you're receiving a raise or or you
• 18:18
  Speaker 3: get a bonus, it's important to stop and you know,
• 18:21
  Speaker 3: pause for a moment and say, Okay, what do I
• 18:23
  Speaker 3: want to.
• 18:24
  Speaker 4: Do with this?
• 18:24
  Speaker 3: How do I want to redeploy this to to reward myself?
• 18:28
  Speaker 3: But I also set myself up for the future. And
• 18:30
  Speaker 3: we're big believers that money should support your life and
• 18:33
  Speaker 3: your values. We just don't want people accidentally sabotaging their
• 18:36
  Speaker 3: long term goals because they never examine those spending habits.
• 18:40
  Speaker 1: Makes a lot of sense and CJ.
• 18:41
  Speaker 2: As we talk about inflation then specifically, you know, I
• 18:45
  Speaker 2: hear a lot about inflation in the media. Inflation itself
• 18:48
  Speaker 2: is that is that the reason why folks should be investing?
• 18:53
  Speaker 4: Yeah, absolutely so.
• 18:54
  Speaker 5: One of the biggest long term risks to your purchase
• 18:56
  Speaker 5: is purchasing power is inflation. So a couple of coffee
• 19:00
  Speaker 5: that cost one dollar two decades ago might.
• 19:03
  Speaker 4: Cost several dollars today.
• 19:05
  Speaker 5: The point isn't the coffee, It's that nearly everything gets
• 19:08
  Speaker 5: more expensive over time. A dollar today simply won't buy
• 19:12
  Speaker 5: as much twenty or thirty years from now. That's one
• 19:16
  Speaker 5: reason why investors generally needs some exposure to growth oriented
• 19:20
  Speaker 5: investments throughout their lifetime. And we say growth oriented, we're
• 19:24
  Speaker 5: typically talking about equities or stock. Keeping all of your
• 19:27
  Speaker 5: money in low yielding savings vehicles certainly might feel safe,
• 19:31
  Speaker 5: but inflation consistently exceeds that return when you're putting it
• 19:36
  Speaker 5: in something safe, which means your purchasing power is actually declining.
• 19:41
  Speaker 5: So from our perspective, a properly diversified investment strategy is
• 19:45
  Speaker 5: one of the primary tools available to investors to combat
• 19:49
  Speaker 5: inflation over the long term. This is key everybody. So
• 19:54
  Speaker 5: I think we know this, but we need to be
• 19:57
  Speaker 5: reminded of it. If I take a dollar and I
• 19:59
  Speaker 5: put it under my man you know, a year, two years,
• 20:02
  Speaker 5: three years, four years down the line, I take out
• 20:04
  Speaker 5: that dollar and I go buy something with it, it
• 20:06
  Speaker 5: will buy me less goods and services. And by the way,
• 20:10
  Speaker 5: our brains don't like that term. It'll buy me less food,
• 20:13
  Speaker 5: it'll buy me less gas, whatever you know, name whatever
• 20:15
  Speaker 5: that good or services, it will buy me less of
• 20:19
  Speaker 5: that than it would have when I put it under
• 20:20
  Speaker 5: my mattress in the first place.
• 20:22
  Speaker 4: That is inflation.
• 20:25
  Speaker 5: It's one of the reasons why it is so critical
• 20:27
  Speaker 5: that we hold our elected officials, you know, accountable to
• 20:32
  Speaker 5: trying to manage inflation. It is one of the primary
• 20:35
  Speaker 5: reasons we have a Federal Reserve Bank that is disconnected
• 20:39
  Speaker 5: from the from the federal government because we need a
• 20:43
  Speaker 5: control over monetary policy. I don't know if everybody remembers this,
• 20:47
  Speaker 5: but part of the dual mandate of the Federal Reserve.
• 20:49
  Speaker 5: One of the dual mandates is stable prices. Stable prices
• 20:53
  Speaker 5: is referring to low or manageable inflation. So this is
• 20:58
  Speaker 5: critical because inflation e roads your purchasing power. Therefore, the
• 21:02
  Speaker 5: takeaway is there's no free lunch.
• 21:04
  Speaker 4: You don't just to get You don't get to just
• 21:06
  Speaker 4: sit this.
• 21:06
  Speaker 5: Out and say I don't like risks, so I'm just
• 21:09
  Speaker 5: not going to deal with any component of risks around
• 21:11
  Speaker 5: my life. It's like, well, did you get in a
• 21:14
  Speaker 5: car this morning, Well, that was risky. Did you walk
• 21:17
  Speaker 5: outside into the sun?
• 21:18
  Speaker 4: That was risky.
• 21:20
  Speaker 5: The same is true with your money. Now there's varying
• 21:23
  Speaker 5: degrees of risk that you get to choose, but there
• 21:26
  Speaker 5: is no path where you say, quote unquote, I'm not
• 21:29
  Speaker 5: going to take on risk because from our perspective would
• 21:32
  Speaker 5: be if you put all your money into a lock
• 21:35
  Speaker 5: and safe, your risk is inflation, right, just the erosion
• 21:40
  Speaker 5: of your purchasing power.
• 21:41
  Speaker 4: So this is part of the.
• 21:42
  Speaker 5: Reason why we exist, as we help people to understand
• 21:44
  Speaker 5: their personal risk tolerance and then match that up with
• 21:47
  Speaker 5: an appropriate strategy that still at least addresses the risks
• 21:50
  Speaker 5: that are happening all around them.
• 21:52
  Speaker 2: Great illustrations putting the stuff into perspective. This morning, as
• 21:54
  Speaker 2: we talk with CJ. Closs and Eric Schwartz of class Financial,
• 21:57
  Speaker 2: the website class financial dot com. That's cos l as
• 22:01
  Speaker 2: financial dot com. Golf for number six, So eight four
• 22:03
  Speaker 2: four two five six three seven. So, Eric, I know,
• 22:06
  Speaker 2: obviously practicality is an important part of this conversation. Let's
• 22:10
  Speaker 2: get into that some of the practical things that people
• 22:12
  Speaker 2: can start doing today to really keep this lifestyle creep
• 22:16
  Speaker 2: under control.
• 22:18
  Speaker 3: Yeah, I think you could break this down into what
• 22:21
  Speaker 3: I would call it. I guess three simple ideas here. First,
• 22:24
  Speaker 3: automate your savings increases whenever your income increases. So if
• 22:28
  Speaker 3: you receive a raise, increase your retirement plan contribution before
• 22:31
  Speaker 3: you become accustomed to having that extra money available your
• 22:36
  Speaker 3: As we've talked about today. Your lifestyle will naturally get
• 22:38
  Speaker 3: more expensive, so automate your savings to keep up with it. Second,
• 22:43
  Speaker 3: monitor your savings rate as closely as you monitor your income. Right,
• 22:49
  Speaker 3: we're all very aware of, you know, how much money
• 22:51
  Speaker 3: hits our bank account from our paycheck on a on
• 22:55
  Speaker 3: a bi weekly or monthly basis, But we don't often
• 22:58
  Speaker 3: think about our savings rate though often, so revisit that
• 23:01
  Speaker 3: and making make sure you are staying on top of that. Third,
• 23:05
  Speaker 3: periodically review your recurring expenses.
• 23:08
  Speaker 4: This is a big one.
• 23:08
  Speaker 3: Many people are surprised, you know how many subscriptions, memberships,
• 23:12
  Speaker 3: monthly charges they have accumulated over the years. Those are
• 23:17
  Speaker 3: incremental expenses that can quietly consume thousands of dollars annually.
• 23:21
  Speaker 3: And it's a really really easy way to clean up
• 23:24
  Speaker 3: your finances.
• 23:25
  Speaker 2: Another thing they like to do is you like, oh,
• 23:26
  Speaker 2: you get a month free or two months free, something
• 23:30
  Speaker 2: like that.
• 23:30
  Speaker 3: Yeah, and then we forget to cancel, Sean, and here
• 23:32
  Speaker 3: we are.
• 23:33
  Speaker 2: Yes, yes, yes, that is that is an important thing,
• 23:36
  Speaker 2: really really good guidance. And as we talk about talk
• 23:39
  Speaker 2: about this stuff and some great advice CJ. As we
• 23:42
  Speaker 2: as we get towards the class quiz question, we can
• 23:44
  Speaker 2: wrap up this week's program. Any final thoughts for our listeners.
• 23:48
  Speaker 5: Well, it sounds like Eric has a subscription problem, but
• 23:51
  Speaker 5: we'll we'll leave that one alone.
• 23:53
  Speaker 3: We'll talk about that later.
• 23:55
  Speaker 5: Okay, fair enough, Yeah, so some final thoughts here to
• 23:59
  Speaker 5: leave our list with. Inflation has always existed and likely
• 24:04
  Speaker 5: always will as a matter of.
• 24:05
  Speaker 4: Fact, back to the Federal Reserve.
• 24:07
  Speaker 5: They their job is not to have no inflation, it's
• 24:11
  Speaker 5: to have a stable prices. They would define that I
• 24:14
  Speaker 5: think is somewhere between like two and three percent is
• 24:17
  Speaker 5: what they would consider as a healthy inflationary environment.
• 24:20
  Speaker 4: So everybody should.
• 24:22
  Speaker 5: Know, like the utopia is that your purchasing power is
• 24:26
  Speaker 5: only being eroded by two to three percent per year.
• 24:28
  Speaker 5: That's utopia. So your financial plan should account for inflation.
• 24:33
  Speaker 5: It's not like it's not going to exist. It's not
• 24:36
  Speaker 5: like utopia is zero percent inflations. Utopia is still a
• 24:40
  Speaker 5: slow erosion of your purchasing power. However, what we're trying
• 24:45
  Speaker 5: to focus on today is that lifestyle creep is not
• 24:48
  Speaker 5: one of those inevitabilities. It's actually one of the few
• 24:52
  Speaker 5: financial challenges that is largely within your control. So the
• 24:56
  Speaker 5: next time you receive a raise, a bonus, and inheritance,
• 25:00
  Speaker 5: HAX refund, or some other financial windfall. Ask yourself a
• 25:04
  Speaker 5: simple question, how much of this will improve my current
• 25:08
  Speaker 5: lifestyle and how much should improve my future financial security
• 25:14
  Speaker 5: or my future financial lifestyle. The people who enjoy retirement
• 25:18
  Speaker 5: the most are often those who learn to balance enjoying
• 25:22
  Speaker 5: today's successes while still still having enough money to enjoy
• 25:27
  Speaker 5: tomorrow's freedom in retirement. We don't want to be sounding
• 25:32
  Speaker 5: like we're again old curmudgeons who don't want you to
• 25:34
  Speaker 5: enjoy life. Please don't take that away from today's show.
• 25:38
  Speaker 5: We just want you to find that balance so that
• 25:40
  Speaker 5: your future retirement can be as joyful as your present reality.
• 25:45
  Speaker 1: Well put talking this morning with CJ.
• 25:47
  Speaker 2: Closs and Eric Schwartz, our retirement planning professionals from Class Financial,
• 25:50
  Speaker 2: Great Data.
• 25:51
  Speaker 1: Start that conversation. They make it real easy to do.
• 25:53
  Speaker 2: You can schedule that complimentary chat right from class financial
• 25:56
  Speaker 2: dot com. That's Coss Klaasfinancial dot com or pick up
• 26:00
  Speaker 2: phone give me a call six oh eight four four
• 26:02
  Speaker 2: two five six three seven No charge for that initial
• 26:06
  Speaker 2: get to know you appointment Tech cost Financial. It will
• 26:08
  Speaker 2: be complimentary to you again. Their number six oh eight
• 26:10
  Speaker 2: four four two five six three seven. I'm going to
• 26:13
  Speaker 2: hold on to that telephon number as well, because it's
• 26:14
  Speaker 2: time now for the coss Quiz Question the Week. It
• 26:16
  Speaker 2: works like this, In just a moment, I'll ask you
• 26:18
  Speaker 2: the class quiz question leak. You will then have thirty
• 26:20
  Speaker 2: minutes from the end today's program to call the Class
• 26:22
  Speaker 2: Financial Office right here in Madison at six oh eight
• 26:25
  Speaker 2: four four two five six three seven. And if you
• 26:27
  Speaker 2: are the first car correct answer, win this week's prize,
• 26:29
  Speaker 2: which is a twenty five dollars gift card two oh
• 26:32
  Speaker 2: the Cheesecake Factory this week's class quiz quench the week.
• 26:35
  Speaker 2: Is this true or false?
• 26:37
  Speaker 5: Uh?
• 26:38
  Speaker 2: Most people experience lifestyle inflation when their income increases, causing
• 26:43
  Speaker 2: spending to rise along with earnings. Is that true or
• 26:47
  Speaker 2: is that false? Telephone number six oh eight four four
• 26:49
  Speaker 2: two five six three seven, first call correct answer when
• 26:52
  Speaker 2: that twenty five dollars gift card to the cheesecake Factory.
• 26:54
  Speaker 2: Whereas that's Class Financial Office right here in Madison again
• 26:57
  Speaker 2: their number six oh eight four four two five six
• 27:00
  Speaker 2: three seven.
• 27:01
  Speaker 1: CJ. Eric. It's great chatting with both of you guys.
• 27:03
  Speaker 1: Enjoy this great day.
• 27:04
  Speaker 2: Thanks Sean, Thanks Sean, Take care guys, news comes your way.
• 27:07
  Speaker 2: Next right here thirteen to ten do Wuibi.
• 27:10
  Speaker 4: This is Money in.
• 27:11
  Speaker 2: Motion with COSS Financial Asset Advisors LLC, a registered investment
• 27:16
  Speaker 2: advisor registered.
• 27:17
  Speaker 1: With the SEC.
• 27:18
  Speaker 2: The contents of this show are for informational purposes only
• 27:21
  Speaker 2: and should not be considered individual investment advice. Class Financial
• 27:25
  Speaker 2: does not offer tax or legal advice. Any opinion offered
• 27:28
  Speaker 2: during the course of this show is the opinion of
• 27:31
  Speaker 2: that particular investment advisor representative, and not necessarily the opinion
• 27:36
  Speaker 2: of Cost Financial