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Mind Over Money: Rewriting Your Financial Script · Money In Motion with Klaas Financial

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  Speaker 1: Thirteen ten WIBA and Money in Motion brought to you
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  Speaker 1: by Coss Financial Online Coss Financial dot com. That's Class
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  Speaker 1: k l aa S Financial dot com.
• 0:10
  Speaker 2: Great website.
• 0:11
  Speaker 1: If you had a chance to visit it recently, head
• 0:13
  Speaker 1: out over there. There's a lot of great information you
• 0:15
  Speaker 1: can learn about COSS Financial, how they can help you,
• 0:17
  Speaker 1: or if you're employer with some great options there also
• 0:20
  Speaker 1: can learn more about the team at Coss Financially. You
• 0:22
  Speaker 1: can also schedule a complementary chat right online that website
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  Speaker 1: Coss Financial dot com that's Coss k l a A
• 0:29
  Speaker 1: Sfinancial dot com and their telephone number six O eight
• 0:32
  Speaker 1: four four two five six three seven. Don't forget no
• 0:36
  Speaker 1: charge for that initial get to know you appointment at
• 0:37
  Speaker 1: Colss Financial. It will be complementary to you again their
• 0:41
  Speaker 1: number six O eight four four two five six three
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  Speaker 1: seven and join us this morning from Class Financial our
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  Speaker 1: CJ Closs and Nate Briby. Briby CJ. How you doing
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  Speaker 1: this morning?
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  Speaker 3: I'm doing great, Sean?
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  Speaker 2: How are you doing? Fantastic?
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  Speaker 1: Going from our soccer guy to our golf guy. Nate,
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  Speaker 1: how you doing this week?
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  Speaker 4: I'm doing great, Happy to be here.
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  Speaker 1: Happy to have both of you along. We've got a
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  Speaker 1: great conversation ed. We're going to be talking about mind
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  Speaker 1: over Money, rewriting your financial script. There's going to be
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  Speaker 1: a ton of great information, a really great opportunity to
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  Speaker 1: listen to the podcast, of course, if you miss any
• 1:13
  Speaker 1: part of it, if you had on over to classfinancial
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  Speaker 1: dot com. Also speaking of opportunities, is gonna have a
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  Speaker 1: little chance for you to win a twenty five hours
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  Speaker 1: gift card to Starbucks a little bit later on the
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  Speaker 1: program with the class Quiz question of the week. Little
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  Speaker 1: tip listen to the program. Just about every show, the
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  Speaker 1: question and answer come up during the program. So not
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  Speaker 1: only do you get some great information if you're paying
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  Speaker 1: close attention, you get a great opportunity to win a
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  Speaker 1: fantastic prize. Again, we'll get to all those details in
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  Speaker 1: just a moment. As a matter of fact, before we
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  Speaker 1: get going on this week's conversation, CJ, let's actually look
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  Speaker 1: back at last week's show and get the question and
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  Speaker 1: answer there as well as the class Quiz question of
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  Speaker 1: the week.
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  Speaker 3: Yeah, thanks everyone for listening, and congrats to our winner
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  Speaker 3: from last week. So last week's Closs Quiz question of
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  Speaker 3: the Week was this. It was a tru or false question.
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  Speaker 3: Retirement account beneficiaries are automatically updated any time you update
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  Speaker 3: your will or trust. And the answer to last week's
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  Speaker 3: question was false. That is not true, by the way.
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  Speaker 3: That's often a mistake that we see, and if you
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  Speaker 3: listen back to last week's show, you all will will
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  Speaker 3: catch on to that. But often we see people update
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  Speaker 3: their will or trust assuming that their retirement account beneficiaries
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  Speaker 3: have been updated as part of that, and that is
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  Speaker 3: just not true.
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  Speaker 1: This is a fascinating caveat and yeah, people can listen back.
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  Speaker 1: It really important one too. Listen back to last week's
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  Speaker 1: program at CJ mentioned just head on over to class
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  Speaker 1: financial dot com. That's Glass a l a a s
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  Speaker 1: Financial dot Com one of the great features on the
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  Speaker 1: website as an opportunity to listen back to this previous
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  Speaker 1: shows podcast as well. Also subscribe online at class financial
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  Speaker 1: dot com. That's gloss k l aa Sfinancial dot com.
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  Speaker 1: As mentioned, we're we talking about mind over money, rewriting
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  Speaker 1: your financial script and CJ we're gonna kind of look
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  Speaker 1: back here. How much does your childhood experience influence the
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  Speaker 1: way folks handle money?
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  Speaker 3: Yeah, if anybody's ever been to a counselor before you know.
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  Speaker 3: Often you're just you're like going back in time to
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  Speaker 3: figure out where did I pick up this habit or
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  Speaker 3: why do I respond to this way to things? Well,
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  Speaker 3: finance is no different. So people make financial decisions often
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  Speaker 3: based on their personal history, which are not necessarily universal truth.
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  Speaker 3: As a matter of fact, one of my mentors said
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  Speaker 3: to me, he said, CJ, you know, in business, we
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  Speaker 3: often make business decisions based on bad experiences we had,
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  Speaker 3: so we like revolt against the bad experiences. But his
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  Speaker 3: comment to me was, just because you had a bad
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  Speaker 3: experience doesn't mean it was a bad decision, and we
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  Speaker 3: should intially just like whipsaw to the other side of things.
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  Speaker 3: But that's neither here nor there. As it comes to investing,
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  Speaker 3: what feels normal to you financially is shaped by the
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  Speaker 3: time and environment you experienced growing up and even early
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  Speaker 3: in your career.
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  Speaker 2: So people form.
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  Speaker 3: Their views about money based on a very small slice
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  Speaker 3: of history, which is just their own. If you grew
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  Speaker 3: up in a household where money was tight, conversations about
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  Speaker 3: finances were often stressful, or you saw your parents struggle,
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  Speaker 3: you're more likely to prioritize security, hold more cash, and
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  Speaker 3: avoid risk because of what you grew up with. On
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  Speaker 3: the flip side, if money was always seemingly stable, if
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  Speaker 3: your parents invested confidently, or you never really saw financial
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  Speaker 3: stress amongst your parents, you're more likely to take risk comfortably,
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  Speaker 3: trust the markets, and focus on growth. Neither approach, by
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  Speaker 3: the way, is right or wrong. They're just different. They're
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  Speaker 3: shaped by what you personally lived through. So as an
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  Speaker 3: example of this, we have some people that we work
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  Speaker 3: with who they're getting older and many of them have
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  Speaker 3: passed away now, but who were children of the Great Depression.
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  Speaker 3: For those who don't know, the Great Depression was in
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  Speaker 3: the late nineteen twenties, early nineteen thirties, and so we
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  Speaker 3: kind of do some math on that. You go, wow,
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  Speaker 3: that's getting close to one hundred years ago, exactly right.
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  Speaker 3: So people who are still alive who were children of
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  Speaker 3: the Great Depression are getting up there in age and
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  Speaker 3: are and are expiring. But as Nate can attest, when
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  Speaker 3: you meet with somebody who is a child of the
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  Speaker 3: Great Depression, I don't care if they have one hundred
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  Speaker 3: million dollars. You are not convincing them to spend much money.
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  Speaker 3: It has seared deeply into their DNA this notion of
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  Speaker 3: it can all go away at a moment's notice. Now
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  Speaker 3: does that mean that we should all live like children
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  Speaker 3: are the Great Depression? No, not necessarily, but there's something
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  Speaker 3: to be learned there, right. That's why often you'll hear
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  Speaker 3: children of the Great Depression say, these darn kids don't
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  Speaker 3: know how risky life really is. Right, So it doesn't
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  Speaker 3: mean one side is right or the other side is right.
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  Speaker 3: Is just to acknowledge what is in your own upbringing.
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  Speaker 3: So bottom line, you're not just managing money, you're managing
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  Speaker 3: your upbringing, your experiences and what you've come to believe
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  Speaker 3: is normal.
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  Speaker 1: It's interesting we've been doing the show for how many
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  Speaker 1: teach you you know, off the top of your how many
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  Speaker 1: years we've been doing this show.
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  Speaker 3: It's like fifteen to seventeen years, is what sticks out
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  Speaker 3: to me.
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  Speaker 1: Yeah, that sounds right to me too. And what's interesting
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  Speaker 1: to me is I think for folks that are new
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  Speaker 1: to the program, first off, welcome to the show.
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  Speaker 2: It's great to have you along.
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  Speaker 1: But I think when people think money in motion, we
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  Speaker 1: think of financial planning, we think of like numbers, we
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  Speaker 1: think of like and for folks that have been listening
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  Speaker 1: to the program for a long time. They'll realize that
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  Speaker 1: is obviously a very important part of this but so
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  Speaker 1: much of what we talk about CJ comes back to
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  Speaker 1: emotions and experiences and behaviors that it's really it's really
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  Speaker 1: fascinating stuff. And speaking up by the way, getting acquainted
• 6:35
  Speaker 1: with the program if you are new. One of the
• 6:37
  Speaker 1: great features of this show, it's you can actually go
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  Speaker 1: back fifteen years or more and listen back to those
• 6:42
  Speaker 1: podcasts at Cossfinancial dot com. That's Closs k l aa
• 6:46
  Speaker 1: s financial dot com. Great website. Not only to subscribe
• 6:48
  Speaker 1: and listen back to this in previous shows, podcasts also
• 6:51
  Speaker 1: a great opportunity for you to get to know the
• 6:52
  Speaker 1: team at Coss Financial. There's separate divisions. You can also
• 6:54
  Speaker 1: schedule a complementary conversation right online at cossfinancial dot com.
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  Speaker 1: That's Closs kla as Financial dot com and Nate kind
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  Speaker 1: of bringing you into this part of the conversation. Once
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  Speaker 1: those beliefs are ingrained, how do they actually kind of
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  Speaker 1: show up in real world financial decisions and behavior and
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  Speaker 1: where do people tend to go wrong with this stuff?
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  Speaker 4: Nate, Sure, Yeah, these beliefs show up when emotions are
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  Speaker 4: high especially during market swings, or say in a stressful
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  Speaker 4: event like retirement. And that's where people go wrong because
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  Speaker 4: we don't make our worst decisions in calm environments. We
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  Speaker 4: make them and stressful ones. In the book Thinking Fast
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  Speaker 4: and Slow, the authors explain why. The authors describe two
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  Speaker 4: systems that our brain functions through and makes decisions through.
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  Speaker 4: System one is fast, emotional, and reactive. Think of this
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  Speaker 4: like your animal brain. System two is slower, more rational,
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  Speaker 4: and deliberate. And when markets get volatile, system one takes
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  Speaker 4: over and is more influential than we sometimes realize. It's
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  Speaker 4: also easier to make a decision as a side note
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  Speaker 4: through system one than system two. If you take an
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  Speaker 4: example like shirred by Ford Stock, it's very hard for
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  Speaker 4: most of us to do a analysis of the company's
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  Speaker 4: balance sheet and income statement, but we may default to
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  Speaker 4: system one that says, I like Ford trucks, or I
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  Speaker 4: like the Ford Mustang, so therefore I like Ford Stock. Right,
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  Speaker 4: that's where we see that's when we see some variable
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  Speaker 4: excuse me, predictable mistakes show up and see things consistently
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  Speaker 4: go wrong with investors. The first is lost a version.
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  Speaker 4: Losses feel more painful than gains. For good. So when
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  Speaker 4: markets drop, the instinct is to get out, even if
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  Speaker 4: nothing in the plan has changed. Second, recency bias, which
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  Speaker 4: is the tendency to place too much weight on recent
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  Speaker 4: market performance and assume it will continue into the future.
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  Speaker 4: So markets rise, we take more risk, markets fall, we
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  Speaker 4: pull back on risk, and this creates a damaging cycle.
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  Speaker 4: The market drops, let's get out. The market recovers, there's
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  Speaker 4: some hesitation, the market hits highs. Then the confidence returns,
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  Speaker 4: which leads obviously to the exactly the wrong behavior, taking
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  Speaker 4: more risk at the top and pulling back at the bottom.
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  Speaker 4: Morgan Housel also has a really good book on this,
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  Speaker 4: talking about the psychology of money, says successful investing isn't
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  Speaker 4: about being the smartest, it's about managing your behavior when
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  Speaker 4: it matters most. That's exactly what successful investors do. They
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  Speaker 4: stick to the plan when it feels the hardest. And
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  Speaker 4: really that's the battle between system one and system two.
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  Speaker 4: So it's not a lack of knowledge that hurts most investors,
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  Speaker 4: it's what happens in those emotional moments when fast thinking
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  Speaker 4: takes over.
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  Speaker 1: Anybody wants an illustration of this, I will use a
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  Speaker 1: Simpsons reference here. Watch the Simpsons movie when Homer's in
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  Speaker 1: the cage in the on the motorcycle when he's trying
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  Speaker 1: to do the whole loop to loop and and Lisa
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  Speaker 1: yels to me, says, Dad, you got to go faster
• 9:47
  Speaker 1: when you're going up. And he said, but that's when
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  Speaker 1: the ski it's the scariest.
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  Speaker 2: There you go.
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  Speaker 3: All's a good Simpsons reference for everything we do on
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  Speaker 3: this show.
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  Speaker 1: And it's so the guys, so much great information on
• 10:01
  Speaker 1: this show as well. We also obviously have a lot
• 10:04
  Speaker 1: of fun with this program. I talked about subscribing to
• 10:06
  Speaker 1: the podcast. Definitely make sure you're doing that. So much
• 10:09
  Speaker 1: great information and such great great conversation as well, you
• 10:12
  Speaker 1: don't want to miss it. Just head on over to
• 10:14
  Speaker 1: class Financial dot com. That's Coss k l a A
• 10:16
  Speaker 1: S Financial dot com. There tough number six O eight
• 10:19
  Speaker 1: four four two five six three seven. Don't forget no
• 10:22
  Speaker 1: charge for the initial gets to know you appointment at
• 10:23
  Speaker 1: COSS Financial. It will be complementary to you again their
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  Speaker 1: number six O eight four four two five six three seven.
• 10:29
  Speaker 2: We'll continue our conversation with c J. Nate and you.
• 10:32
  Speaker 2: We will do that.
• 10:32
  Speaker 1: Next has Money in Motion with Coss Financial continues right
• 10:35
  Speaker 1: here on thirteen ten Double U I B A thirteen
• 10:40
  Speaker 1: ten Double U I B A and money in Motion
• 10:42
  Speaker 1: with COSS Financial. The website it's cossfinancial dot com. That's
• 10:46
  Speaker 1: Coss k l a A S Financial dot com. Great
• 10:49
  Speaker 1: website to learn more about COSS Financial. Also, you can
• 10:52
  Speaker 1: start a complementary chat right online at cossfinancial dot com.
• 10:56
  Speaker 1: Speaking of starting at conversation at COSS financially.
• 10:58
  Speaker 2: You can do it online or you can phone.
• 11:00
  Speaker 1: Give them a call their telephone number six oh eight
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  Speaker 1: or four two five six three seven. No charge for
• 11:05
  Speaker 1: the initial It's no your appointment at Colss Financial. It
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  Speaker 1: will be Complimentaryach you again their number six oh eight
• 11:11
  Speaker 1: or four two five six three seven. Talking this week
• 11:13
  Speaker 1: with CJ Closs and Nate Bribey have Class Financial talking
• 11:17
  Speaker 1: about mind over Money, rewriting your financial script and script
• 11:21
  Speaker 1: and CJ. Just before the break, Nate walked us through
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  Speaker 1: how emotions really do drive poor decisions in those moments.
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  Speaker 1: So why is it so difficult for investors to stay
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  Speaker 1: disciplined even when we know what we should be doing.
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  Speaker 1: It's almost like talk is cheap at that point for
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  Speaker 1: some us, Isn't it right?
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  Speaker 3: Right?
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  Speaker 2: Yeah? You're right.
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  Speaker 3: Well, before I answer that, Sean, you had asked in
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  Speaker 3: the previous segment, you know how long we've been doing
• 11:43
  Speaker 3: this show, and I do think it's around that fifteen
• 11:45
  Speaker 3: to seventeen years. But I looked on our website. We
• 11:48
  Speaker 3: have about ten years worth of shows, which is about
• 11:51
  Speaker 3: five hundred shows on our podcast download page. So there
• 11:55
  Speaker 3: you go, everybody, if you really want to get educated
• 11:58
  Speaker 3: on retirement planning, you have five hundred shows that last
• 12:01
  Speaker 3: about twenty five minutes a pop that you can go
• 12:03
  Speaker 3: back and listen to. But we digress. So good, good question, Sean.
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  Speaker 3: So this really comes down to the gap between knowing
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  Speaker 3: what to do and actually doing it in the moment.
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  Speaker 3: And the reason it's so difficult is because those two
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  Speaker 3: systems that Nate was talking about, they don't operate the
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  Speaker 3: same under stress. In common environments, we tend to use
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  Speaker 3: system too, the rational part of our brain, and that's
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  Speaker 3: when we build plans and think long term. But when
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  Speaker 3: uncertainty hits, when markets drop or headlines turn negative, system
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  Speaker 3: one takes over. This is what often you know, against
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  Speaker 3: psychologists will call, or counselors will call the fight or
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  Speaker 3: flight brain. Right, It's like and by the way, in
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  Speaker 3: many ways it's helpful. If you have a bear or
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  Speaker 3: a lion coming after you, you should probably either fight
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  Speaker 3: or flight.
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  Speaker 2: So it's a.
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  Speaker 3: Very primitive part of our brain. But that primitive part
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  Speaker 3: of our brain doesn't make good life long term decisions.
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  Speaker 3: It makes good short term decisions like I need food
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  Speaker 3: or water, or I need to survive from this bear
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  Speaker 3: or this lion. But often, you know, Nate and I
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  Speaker 3: will see people come into our office that are using
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  Speaker 3: that system one brain, the fight or flight brain, the
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  Speaker 3: quick twitch brain for making long term decisions. It'll be
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  Speaker 3: you know, what, market's gone down too much, it's never stopping.
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  Speaker 3: Everything's going to zero sell and you go, whoa, that
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  Speaker 3: has never happened in the history of the world. And then,
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  Speaker 3: of course what we hear people say are are these
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  Speaker 3: really dangerous phrase that we just talked about two weeks ago, everybody,
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  Speaker 3: So you're gonna see some overlaps and shows here. There's
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  Speaker 3: really dangerous phrase that Nate and I hear from people
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  Speaker 3: is but this time is different. Right, that's most one
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  Speaker 3: of the most dangerous phrases an investing is but this
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  Speaker 3: time is different. The reason it's dangerous is because it's true.
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  Speaker 3: Every time the market goes down, it's a little bit different.
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  Speaker 3: The question is whether or not it's going to cause
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  Speaker 3: the world to collapse, right, that's the question. So the
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  Speaker 3: system one isn't thinking about your long term plan. It's
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  Speaker 3: trying to protect you right now. So even if you
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  Speaker 3: know what you're supposed to do, it doesn't feel right
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  Speaker 3: in the moment. So staying invested feels risky when the
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  Speaker 3: markets are selling off. Selling feels safe, doesn't. It's like
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  Speaker 3: I'm gonna protect what I have and doing nothing feels
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  Speaker 3: like a mistake in the middle of these system ie environments.
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  Speaker 3: And that's what makes disciplined investing so hard. But Nate's
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  Speaker 3: going to be talking about why it's important to try
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  Speaker 3: to stick to your system to rational brain when markets
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  Speaker 3: get volatile.
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  Speaker 1: I love those as we talked this morning with CJ.
• 14:41
  Speaker 1: Closs and Ad Briby of Class Financial, a lot of
• 14:43
  Speaker 1: great information. Don't think you can always listen back class
• 14:46
  Speaker 1: financial dot com. That's coss a LaaS financial dot com.
• 14:49
  Speaker 2: I get.
• 14:50
  Speaker 1: You can listen back to this and apparently five hundred
• 14:52
  Speaker 1: so previous shows a lot of content there for you.
• 14:55
  Speaker 1: Clausfinancial dot com. They're telple number six So eight four
• 14:58
  Speaker 1: four two, five, six three seven, no charge for that
• 15:00
  Speaker 1: initial get to know you appoyment dech Loss Financial. It
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  Speaker 1: will be complementary to you again they're number six oh
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  Speaker 1: eight or four to two five, six three seven. Of
• 15:07
  Speaker 1: course you can also do that complementary chat schedule it
• 15:10
  Speaker 1: right onlin alossfinancial dot com.
• 15:12
  Speaker 2: Yeah.
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  Speaker 1: So, native if behavior, as CJ Is pointing out, is
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  Speaker 1: that biggest risk, how do you actually build a plan
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  Speaker 1: that accounts for that.
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  Speaker 4: Yeah, So it starts with structure and the goal isn't
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  Speaker 4: to eliminate emotion, and we constantly talk about that in
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  Speaker 4: the office. We are humans and we work with humans,
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  Speaker 4: and it's very important to understand how we make decisions
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  Speaker 4: and just understanding that sometimes folks are more comfortable implementing
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  Speaker 4: one hundred percent of a good recommendation rather than zero
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  Speaker 4: percent of our best recommendation. So it's building a system
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  Speaker 4: that works in spite of emotion. That means automating investing,
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  Speaker 4: rebalancing consistently, and having a clear long term plan before
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  Speaker 4: emotions so on show up once again. Morgan Housel talks
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  Speaker 4: about this in his book The Importance of having a
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  Speaker 4: Margin for Air, not running your plans so tight that
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  Speaker 4: any mistake derails you at the end of the day.
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  Speaker 4: Simple systems beat complex strategies because they're easy to stick with.
• 16:07
  Speaker 2: Talking this morning with Nate Briby and CJ.
• 16:09
  Speaker 1: Closs, our retirement planning professionals from Class Financial, I may
• 16:12
  Speaker 1: be picking up a book after the show as well,
• 16:15
  Speaker 1: because some good stuff that you're sharing with us this morning, Nate,
• 16:18
  Speaker 1: don't forget you can learn all about Coss financially. You
• 16:20
  Speaker 1: can get to know CJ. Nate and the whole team
• 16:22
  Speaker 1: at COSS Financial as well. Head on over the website
• 16:24
  Speaker 1: Colssfinancial dot com. That's Coss Hey l aas Financial dot com.
• 16:29
  Speaker 1: They're telephone number six oh eight four four two five
• 16:31
  Speaker 1: six three seven.
• 16:32
  Speaker 2: No charge.
• 16:33
  Speaker 1: But then initial get to know you appointment at COSS Financial.
• 16:35
  Speaker 1: It will indeed beat complimentary to you again their number
• 16:38
  Speaker 1: six oh eight four four two five six three seven
• 16:41
  Speaker 1: will continue our conversation with CJ.
• 16:43
  Speaker 2: Nate and you.
• 16:43
  Speaker 1: We will do that next as Money in Motion with
• 16:46
  Speaker 1: Coss Financial continues right here on thirteen ten double u
• 16:49
  Speaker 1: ib A. This is Money in Motion with Coss Financial
• 16:54
  Speaker 1: right here at thirteen ten double u ib A. Hope
• 16:57
  Speaker 1: you've had a chance to visit the website. If not,
• 17:00
  Speaker 1: at your earliest convenience, head on over to cossfinancial dot com.
• 17:03
  Speaker 1: That's class A l A as financial dot com. A
• 17:06
  Speaker 1: lot of fantastic and important information all online for you.
• 17:09
  Speaker 1: At cossfinancial dot com. You can also schedule a complementary
• 17:12
  Speaker 1: chat right from the website or pick up phone give
• 17:14
  Speaker 1: a call six oh eight four four two five six
• 17:16
  Speaker 1: three seven. Don't forget that initial appointment is going to
• 17:19
  Speaker 1: be complementary to you at COSS Financial again their number
• 17:22
  Speaker 1: six oh eight four four two five six three seven.
• 17:25
  Speaker 1: Talking this week about how childhood lessons and behavioral biases
• 17:29
  Speaker 1: shape your current portfolio and CJS as we as we've
• 17:32
  Speaker 1: talked about some of these some of these behaviors and
• 17:35
  Speaker 1: the and the different different aspects of them that different
• 17:38
  Speaker 1: systems and things, where does this then when we bring
• 17:40
  Speaker 1: into uh a financial advisor? Where do you fit into this?
• 17:45
  Speaker 3: Great questions? So Nate was talking about, you know, kind
• 17:49
  Speaker 3: of Morgan Housel and psychology of money, and and you know, Sean,
• 17:53
  Speaker 3: you made kind of an offcoment. Well maybe I'll pick
• 17:55
  Speaker 3: up a book. Actually, everybody, if you want to really
• 18:00
  Speaker 3: understand the psychology of money. It's probably one of the
• 18:03
  Speaker 3: best books in all of finances, Morgan House's Psychology of Money.
• 18:07
  Speaker 3: He should pay me like a speF for that statement,
• 18:10
  Speaker 3: but it really is true, everybody, just a fantastic book
• 18:14
  Speaker 3: to get beneath the surface to the primitive brain of
• 18:19
  Speaker 3: why our brains aren't actually designed to make long term
• 18:23
  Speaker 3: successful decisions. And therefore, if you can understand the psychology
• 18:28
  Speaker 3: of how your brain responds to money decisions, you can
• 18:32
  Speaker 3: you can help yourself from making bad short term decisions
• 18:34
  Speaker 3: with money.
• 18:35
  Speaker 2: So a big part of our role.
• 18:37
  Speaker 3: Is actually understanding that psychology of money, and it's helping
• 18:41
  Speaker 3: clients manage behavior, not just their investments, because those emotional
• 18:46
  Speaker 3: moments you don't need or I should say, in those
• 18:49
  Speaker 3: emotional moments, you don't need more information, you need perspective.
• 18:54
  Speaker 3: Sometimes the best advice we give is don't do anything
• 18:58
  Speaker 3: right and listen. A lot of times people will say,
• 19:02
  Speaker 3: you know, CJ. Nate the idea that I need to
• 19:05
  Speaker 3: hire a financial advisor and pay them thousands of dollars
• 19:08
  Speaker 3: to give me advice just so that when when things
• 19:10
  Speaker 3: get sick scary, they can say, don't change anything that
• 19:13
  Speaker 3: is very unsatisfying and Nate and I go, yep, yep,
• 19:17
  Speaker 3: I completely get it. But by the way, that's not
• 19:19
  Speaker 3: the only reason we exist. We do roth conversions and
• 19:22
  Speaker 3: qualified charitable distributions and all kinds of things you probably
• 19:25
  Speaker 3: would have no idea how to do on your own anyways.
• 19:27
  Speaker 3: But even outside of that, if Nate and I were
• 19:30
  Speaker 3: to be really directly honest with you on the air,
• 19:33
  Speaker 3: our greatest value actually shows up in the scary moments.
• 19:38
  Speaker 3: We get phone calls, we get emails, and people go,
• 19:41
  Speaker 3: I know what you're going to say, but I just
• 19:42
  Speaker 3: need to hear you say it. And I will tell
• 19:45
  Speaker 3: you that saves our clients from unrecoverable mistakes, because we've
• 19:52
  Speaker 3: done shows on this before. But if you just missed
• 19:54
  Speaker 3: the top best like ten days in the market over
• 19:57
  Speaker 3: a decade, you can cut your return in half. And
• 20:00
  Speaker 3: here's the crazy thing. The best returns in the market
• 20:03
  Speaker 3: happen the days after the worst returns. And the reason
• 20:06
  Speaker 3: that's the problem is because you have to stay the
• 20:09
  Speaker 3: course during the worst returns to get the best returns.
• 20:11
  Speaker 3: So listen, everybody. I cannot overemphasize enough this psychology of
• 20:15
  Speaker 3: money and staying the course to make sure that you
• 20:18
  Speaker 3: can stick with a plan is just critical. So back
• 20:21
  Speaker 3: to Morgan Housel, he makes a great distinction. He says,
• 20:24
  Speaker 3: you know, getting wealthy requires taking risk, but staying wealthy
• 20:29
  Speaker 3: requires controlling that risk, and a lot of that comes
• 20:34
  Speaker 3: down to avoiding those big mistakes.
• 20:36
  Speaker 1: Pretty profound stuff, that's for sure. As we talk with CJ.
• 20:39
  Speaker 1: Closs and Ad Briby, our retirement planning professionals from Class Financial,
• 20:43
  Speaker 1: don't forget the website Class financial dot Com.
• 20:45
  Speaker 2: Help number six So eight four four two.
• 20:46
  Speaker 1: Five six three seven no charge for that initial get
• 20:49
  Speaker 1: to know your appointment at C Loss Financial. It will
• 20:51
  Speaker 1: be complimentary to you. We'll get to the money in
• 20:53
  Speaker 1: motion listener question in corner in just a moment. But
• 20:56
  Speaker 1: Nate one final thing. When you look through kind of
• 20:59
  Speaker 1: these these behaviors and look through it through the behavioral lens,
• 21:02
  Speaker 1: what do the financial like? How do we sum up
• 21:05
  Speaker 1: what financial success really means?
• 21:08
  Speaker 4: Sure, most most clients would probably say it really comes
• 21:11
  Speaker 4: down to peace of mind. Financial success isn't just about numbers.
• 21:15
  Speaker 4: It's about the confidence, stability and having control over your future. Again,
• 21:20
  Speaker 4: Morgan Halsel talks about the real value of money is
• 21:22
  Speaker 4: the freedom over your time it gives you, and the
• 21:26
  Speaker 4: people who succeed long term aren't the ones who are perfect,
• 21:28
  Speaker 4: They're the ones who stay consistent.
• 21:31
  Speaker 1: Fantastic stuff this week talking with Nate Briby and CJ.
• 21:33
  Speaker 1: Closs are retirement planning professionals from Coss Financial. Their telephone
• 21:37
  Speaker 1: number six oh eight four four two five six three seven.
• 21:40
  Speaker 1: No charge for that initial get to know you appointment
• 21:42
  Speaker 1: ach Loss Financial. It will be complimentary to you again.
• 21:44
  Speaker 1: Their numbers six oh eight four four two five six
• 21:47
  Speaker 1: three seven. Mentioned all the great stuff in the website
• 21:49
  Speaker 1: Cossfinancial dot com. That's Coss k laa as Financial dot com.
• 21:53
  Speaker 1: One thing I didn't mention we're about to touch on,
• 21:55
  Speaker 1: which is an opportunity to submit a question be answered
• 21:58
  Speaker 1: right here on the program and the Money in Motion
• 22:00
  Speaker 1: Listener question corner. You submit your question right online at
• 22:03
  Speaker 1: cossfinancial dot com. That's coss k l a as Financial
• 22:07
  Speaker 1: dot com. And Nancy recently wrote the following question you said.
• 22:11
  Speaker 1: She says, recently did a show on tax planning, and
• 22:13
  Speaker 1: I've always been curious to better understand the Medicare penalty.
• 22:18
  Speaker 1: Some of my friends are talking about. Can you explain
• 22:21
  Speaker 1: the Medicare penalty and how it is related to income
• 22:24
  Speaker 1: and Nate take a crack at it. Let's let what
• 22:27
  Speaker 1: do we need to know?
• 22:28
  Speaker 4: Yeah, thanks Nat, Nancy for submitting this. This is a
• 22:31
  Speaker 4: good one and some that people just stumble upon. Unfortunately,
• 22:34
  Speaker 4: when they get that nasty graham from Medicare or Social Security,
• 22:37
  Speaker 4: I'm in the spring not realizing they've gone over this threshold.
• 22:41
  Speaker 4: So what Nancy is referencing is something called the income
• 22:45
  Speaker 4: related monthly adjustment adjustment amount or IRMA. For sure, IRMA
• 22:49
  Speaker 4: is not technically a penalty, but it can feel like
• 22:52
  Speaker 4: one because you pay more and don't obviously receive any
• 22:54
  Speaker 4: more benefits. I always laugh when people say it's a
• 22:57
  Speaker 4: it's a uh. You know, our clients talk about penalty.
• 23:00
  Speaker 4: You know, to us, a penalty is like taking money
• 23:02
  Speaker 4: out from an IRA before fifty nine and a half.
• 23:05
  Speaker 4: But folks can be sixty five and take money out
• 23:08
  Speaker 4: from their IRA and pay a tax and they say
• 23:09
  Speaker 4: that's a penalty. So just a little bit people can.
• 23:14
  Speaker 4: But anyway, the paying more for your part B premium
• 23:17
  Speaker 4: for medicare basically, and what Medicare looks at is you're modified.
• 23:21
  Speaker 2: Adjusted gross income.
• 23:22
  Speaker 4: So unfortunately, this number, this threshold, we're about to share
• 23:26
  Speaker 4: isn't really on your tax return line. Eleven on most
• 23:29
  Speaker 4: ten forties is your adjusted gross income, but there are
• 23:32
  Speaker 4: some modifications to that number to get you to this
• 23:35
  Speaker 4: to see if you're above this specshold. But how it
• 23:37
  Speaker 4: works is they take your modified AGI from two years prior,
• 23:42
  Speaker 4: and if your income exceeds certain certain thresholds, you pay
• 23:45
  Speaker 4: more for the standard part B premium. So in twenty
• 23:48
  Speaker 4: twenty six, here the threshold you should be looking at
• 23:50
  Speaker 4: for married filing joint couples is two hundred and six thousand,
• 23:53
  Speaker 4: and roughly half that for single filers. Now here's the
• 23:57
  Speaker 4: catch that people that catches people off guard. MEDICAI looks
• 24:00
  Speaker 4: back two years, so income you'ren at age sixty three
• 24:03
  Speaker 4: can determine your premiums at age sixty five. And this
• 24:06
  Speaker 4: gets into well, what if I'm still working at sixty
• 24:09
  Speaker 4: three and makeovers that threshold. You can file an appeal,
• 24:13
  Speaker 4: you know, if for a qualifying event such as retirement,
• 24:16
  Speaker 4: to potentially get that penalty or premium reduced to the
• 24:19
  Speaker 4: base rate.
• 24:20
  Speaker 2: Now I did look like this.
• 24:21
  Speaker 4: The there's different tiers if you get too far over
• 24:23
  Speaker 4: different thresholds, but it should be about I think eighty
• 24:27
  Speaker 4: dollars more than the the standard two two premium for
• 24:30
  Speaker 4: Part B is the first kind of penalty threshold as
• 24:33
  Speaker 4: to how much more you'd potentially pay here. So so
• 24:37
  Speaker 4: things like large IRA withdrawals, roth conversions are selling investments
• 24:41
  Speaker 4: in realizing capital gains can trigger the higher premium, and
• 24:44
  Speaker 4: CJ would and I would say like, well, maybe that
• 24:46
  Speaker 4: is a necessary evil. So folks would say, gee, should
• 24:49
  Speaker 4: I really sell that highly concentrated position or do that conversion?
• 24:53
  Speaker 4: I'm going to have to pay more for Part B premiums.
• 24:55
  Speaker 4: It's like, potentially, yes, It's just one of those things
• 24:57
  Speaker 4: that we have to kind of weigh the pros and
• 24:59
  Speaker 4: con and important thing is to understand that generally those
• 25:04
  Speaker 4: that increased premium could only be for one year. If
• 25:07
  Speaker 4: your income goes back below that threshold, you'd be paying
• 25:10
  Speaker 4: the base rate in that future year. Yep. So there's
• 25:13
  Speaker 4: actually five different levels of ERMA like we talked about
• 25:16
  Speaker 4: that can apply depending on your filing status and modified AGI,
• 25:19
  Speaker 4: and the premiums do get more expensive obviously the more
• 25:21
  Speaker 4: income you have. So a lot more to unpacked here,
• 25:24
  Speaker 4: but that's the key takeaway is your income today can
• 25:27
  Speaker 4: directly impact your Medicare costs down the road, so planning
• 25:30
  Speaker 4: ahead really matters.
• 25:31
  Speaker 2: So thanks Nancy for the question. Great question, don't forget
• 25:34
  Speaker 2: you could two can be like Nancy.
• 25:35
  Speaker 1: If you've got a question like answered right here on
• 25:37
  Speaker 1: the program, just head on over the cost Financial dot com.
• 25:40
  Speaker 1: That's coss k l a as Financial dot com. That'll
• 25:43
  Speaker 1: link to the email right on the website. Again, that's
• 25:45
  Speaker 1: Cossfinancial dot com. Speaking of links from the website, listen
• 25:48
  Speaker 1: back to this in previous shows podcast. You can also
• 25:51
  Speaker 1: schedule a complementary chat right online at Cossfinancial dot com
• 25:55
  Speaker 1: or give them a call six oh eight four four
• 25:57
  Speaker 1: two five six three seven. Don't forget that first conversation
• 26:00
  Speaker 1: Class Financial. It's going to be complementary to you. No
• 26:02
  Speaker 1: charge their telephone number six oh eight four four two
• 26:05
  Speaker 1: five six three seven. Go on to hold on to
• 26:07
  Speaker 1: that telephone number now because it's time for the Class
• 26:09
  Speaker 1: quiz question of the week.
• 26:10
  Speaker 2: It works like this.
• 26:11
  Speaker 1: In just a moment, I'll ask you the class quiz
• 26:13
  Speaker 1: question of the week. You will then have thirty minutes
• 26:15
  Speaker 1: from the end today's program to call the Class Financial
• 26:17
  Speaker 1: office right here in Madison at six oh eight four
• 26:19
  Speaker 1: four two five six three seven. If you are the
• 26:22
  Speaker 1: first call with correct answer, you win this week's prize,
• 26:24
  Speaker 1: which is a twenty five dollars gift card to Starbucks.
• 26:27
  Speaker 1: This week's Class quiz question the week Is this true
• 26:30
  Speaker 1: or false? Recency bias when investing is a tendency to
• 26:35
  Speaker 1: place too much weight on recent market performance and assume
• 26:38
  Speaker 1: it will continue into the future. Is that true or
• 26:42
  Speaker 1: is that false? Telephone number six oh eight four four
• 26:44
  Speaker 1: two five six three seven. First caller with correct answer
• 26:47
  Speaker 1: and win that twenty five dollars gift card to Starbucks.
• 26:49
  Speaker 1: Don't forget as well. That's Class Financials office right here
• 26:52
  Speaker 1: in Madison, that number six oh eight four four two
• 26:55
  Speaker 1: five six three seven. CJ Nate, It's always great chatting
• 26:58
  Speaker 1: with both of you guys.
• 26:59
  Speaker 2: You enjoy this. Grea Dan. We'll do it all again
• 27:01
  Speaker 2: real soon.
• 27:02
  Speaker 3: Thanks Sean.
• 27:03
  Speaker 4: Thanks Sean.
• 27:04
  Speaker 1: News comes your way next right here on thirteen ten WIBA.
• 27:08
  Speaker 1: This is Money in Motion with COSS Financial Asset Advisors, LLC,
• 27:11
  Speaker 1: a registered investment advisor registered.
• 27:14
  Speaker 2: With the SEC.
• 27:16
  Speaker 1: The contents of this show are for informational purposes only
• 27:19
  Speaker 1: and should not be considered individual investment advice. Class Financial
• 27:22
  Speaker 1: does not offer tax or legal advice.
• 27:25
  Speaker 2: Any opinion offered
• 27:26
  Speaker 1: During the course of this show is the opinion of
• 27:28
  Speaker 1: that particular investment advisor representative, and not necessarily the opinion
• 27:33
  Speaker 1: of cost Financial