Marc Killian  00:21

Hey everybody elcome into the podcast. Thanks for hanging out with Jude Wilson and myself here on the Roth guy, welcome in. Roth guy, how you doing, buddy?

 

Jude Wilson  00:27

I’m doing excellent, man. I feel good. Even though the rockets are rocky, I feel great. Yeah, you know,

 

Marc Killian  00:34

it’s a little choppy, little bit. So we thought, well, you know what? Let’s talk about. I know you’ve, you know, been, you’ve been sending some things out to clients and whatnot, and and I asked this question to all the advisors that I talked to all across the country all the time. So I’m gonna start the, almost start this conversation the same way with you, but I will let the listeners know. So we got four items this week. We’re just going to kind of share things to maybe do if you’re, you know, feeling a little, you know out there about some of this stuff. So we’re gonna go through a couple things for you to think about. But let me start by asking this question. Jude, sure, how many of your existing, current clients that already work with you are calling during this kind of volatility? Most people I talk to say it’s just a few nervous Nellies. Not many. Is that the same?

 

Jude Wilson  01:17

That is the most appropriate question. You’re right for us. You’re my family members. Know what I do for a living, so I’ve been getting calls from them. Jude, are you okay?

 

01:29

Right? Right? You know our clients.

 

Jude Wilson  01:31

I think we’ve probably, over the last two weeks, answered maybe four or five calls from people who are a little Yeah, and it stems from what we’re going to talk about today, really having a plan and understanding that that plan is customized to you and your situation. Yeah,

 

Marc Killian  01:50

I’ll give you a great example of that. I was just talking with another colleague, or, I think it was two days ago. Either way, it was a lady was calling a client of his was calling every day last week when it kind of really started ramping up right when everybody when Kramer was saying, we’re going to have a Black Monday, you know, and we didn’t have that, but he said she just, she called like, four or five times, and they got back with her over the, like, the course of two days or something, and she’s like, I can’t take it. The you know, the news says, My the S P is down 15% at the time, it was like, had fallen 15 This was before, I think, the first pause conversation, and before it shot back up a little bit. And anyway, he says, Okay, fine, let’s talk. Let’s talk to it. And he said, well, first of all, why are you panicking? She’s like, because I’m down 15% and he goes, Okay, if you were 100% in the s, p, then you would be correct. But we don’t have you that way, and that’s the same kind of thing, right? People see the headlines and they think this is exactly and so they went through her process and she was down like 2% Yeah. Big difference

 

Jude Wilson  02:55

it is, I tell this to the young advisors that I train. Financial Planning is both about the math and science, but it’s also about the psychology and the emotion. If you’re watching the news and you’re seeing that everything is in red, and the newscasters are talking about it’s Black Monday, and this is the worst drop one day drop this year. Of course, you’re going to get emotional. And as advisors, we have to have a level of empathy when we’re talking to our clients, just like your colleague that you talked to before, and walk them through it, because we can’t just say, Look, that’s the market. It’s 50. It’ll come back. You know, it’ll come back. People want to know, what should I do now? That’s why I’m so glad we’re having this conversation today.

 

Marc Killian  03:42

Well, hey, let’s jump into it. So the first piece gut check, right? So when’s the last time you checked it? Because if you are panicking, let’s be honest, like this is this shouldn’t have come a surprise as a surprise, all right? This administration has been saying, ran on the fact that this was going to be, you know, tariffs were going to be put into place. So if you did not bother to gut check and recheck your plan a little bit, because the last two years, Jude 22% up right in the s and p. So if you just kind of left that status quo, maybe you shouldn’t have done that, right? Maybe you should have kind of had your have your eyes on that a little bit. And again, that’s what you do as advisors for your clients. But for people who are DIY, ing, it or whatever the case is, they weren’t doing this

 

Jude Wilson  04:24

exactly. So I don’t know what percentage of Americans are DYI type of people versus people who see an advisor, but I would tell you this all starts well before any discussion of the administration had about tariffs, it really starts with the basics. And I know most people don’t want to hear that, but it really does start with having a financial plan in a direction, because if you if you just start moving north, that’s not a plan. You’ve got. GPS for a reason, and having a plan gives you the understanding about what to do when things hit the fan, or whether you should even do anything, because it’s been well thought up prior to these things, and these things are going to constantly happen. Yeah, you know so

 

Marc Killian  05:18

that like that story I shared, gut check it, because you’re probably not down 15% or 10% or whatever the number happens to be, because you probably weren’t 100% 100% in whatever you know, indicee you’re looking at that particular day, especially if you’re working with a financial professional. Now, again, if you’re DIY ing it, and you’ve got, you know, everything, you’ve got something like that, well then sure that’s going to be a different animal. But that’s why you need that’s why you need a gut check and to go get a strategy, go get a plan, sit down with an advisor and say, Hey, let’s run some numbers and see where we’re at. I was just looking at my own personal, you know, the account that I kind of play around with, just before we jumped on. And I was like, Okay, it’s not as bad as I thought, because I also have some diversification, which we’re going to talk about next, right, which is getting real with your risk tolerance. And I’ve been saying this, Jude and tell me what you think about this. I feel like this whole thing that’s happening right now is really kind of a a love letter, if you will, for our lack of a better term to proper diversification, because you got emerging markets doing well, you know. But then you have, you know, the certain indices not so it’s like, this is why you need your risk analysis done. This is why you need proper diversification. Because when some things are down, some things are up

 

Jude Wilson  06:31

100% and we’ve talked about this on the channel several times before. You know, our number one philosophy is the bucket plan, dividing your money between now, soon and later. Each bucket has a purpose. Each bucket has a particular rate of return that we’re trying to achieve, and a time frame for that. And so many other people have different strategies as far as diversification. But when I’ve talked to particularly people who’ve called me who weren’t clients. So dude, I’ve been meaning to call you, and now this thing is happening, and I really want to talk to you. The first question I asked them is, When have you ever, have you ever sat down and put together a plan to diversify your assets? And I can tell you, 99% of the time that question is no, because I’ve talked to people over the last two weeks have who have been on each side of the bar bill. I’ve talked to people who said, You know what, dude I am. I’m worried, but I’m so glad that all of my assets are at the bank and in the savings account of money market. And I think to myself, of course, I don’t want to say this to them, but I think myself, oh my god, the last two years you missed the one of the best bull markets, right? And I talked to people who have been on the other side of the bar bill, a new prospect that had contacted us, and 100% of his 401 K and investment accounts were in, were in between the s, p and the Magnificent Seven. So the last two years, he’s done incredibly well,

 

Marc Killian  08:05

and now so much panicking over the last

 

Jude Wilson  08:10

two days, when when the tariffs were announced. Yeah, so I say all that’s to say you have to have a well thought out diversification plan for yourself, whether it’s our strategy using the buckets or something else that makes sense to you

 

Marc Killian  08:26

well, so let’s talk a little strategy here. Jude, because, you know, we have to go silver lining on things. We have to find some ways to because we can’t control this stuff, and we’ve talked about it all the time. We can’t control what administrations are going to do. We can’t control what markets are going to do. We can’t control so you have to find the ways that you can work within, you know, the chessboard, so to speak, right? So are there some smart moves we could be making right now? So let’s run through a couple of bullet points. What’s one that? What’s the first one that jumps out at you? As far as look, we’re in it. It’s down. We don’t know how long this is going to last. So what’s some things to think about?

 

Jude Wilson  08:59

Well, I would divide it into maybe two categories, looking at money that’s in tax sheltered accounts, like your 401, K and IRA, and looking at money that is not tax sheltered, like a regular investment account, okay, the reason being is that in your tax sheltered account, you can move things around without any fear of causing a taxable liability. So when we when we look at non tax sheltered accounts, you may want to look at your portfolio and see what are some of the things that you’ve had huge gains on, like that gentleman that I told you about, who had most of his money between the S P and that Magnificent Seven,

 

Marc Killian  09:39

which is mostly the S and P, exactly. And I can

 

Jude Wilson  09:44

tell you, without even looking at his portfolio, he’s probably got huge gains in those and this may be the appropriate time to start thinking about rebalancing that portfolio, because there’s some gains that have actually come down. And this may be the most appropriate time to look at selling some of those assets and balancing into things that are out of favor, but could more than likely come back in favor. So

 

Marc Killian  10:10

a little tax loss harvesting, not just as a year end strategy, but doing it right now while we’re experiencing, you know, some volatility

 

Jude Wilson  10:17

Exactly, exactly. And to reference, of course, you know, I’m the Roth guy. To reference one of our previous shows, we talked about the rocket Roth strategy. And that basically pertains to, you want to have your most aggressive investments in your Roth because that’s going to give you the highest probability for a very high return and growth of your money. You know, the average portfolio is a 6040 60% equities, 40% fixed income, right? But if, if you want to keep that same 6040, maybe you should look at the Roth and have a majority of your equities in the Roth to give you the highest probability, now is a good time to be looking at that strategy.

 

Marc Killian  11:01

Well, okay, so let’s talk about the Roth for a second, because that’s appropriate with the chat. Because, okay, talking silver linings. Markets are down. You’ve got your regular company sponsored, 401, K or whatever it is that you have and and again, what we talked about this week, folks, please don’t go out and just do anything until you sit down and have a and have a plan and a strategy put together. But let’s say that you know, Roth conversions was on the radar for some of your strategy, right? Converting some of that traditional 401, K, well, silver lining, if the levels are down, because the markets are down, if you do conversion, you’re paying tax on a lower dollar amount, right? Exactly. So now is maybe a good time to re talk to your advisor and say, Hey, we had a strategy convert for conversions. Do we change it, or do we rev it up, or whatever, right? 100%

 

Jude Wilson  11:48

because, you know, the the analogy I like to use is the stock market is like a man with a yo yo in his hand walking up the hill. The Yo yo yo is going to keep on going up and down, but your trajectory is going straight up the hill, and so now, while the yo yo is down, this may be the most appropriate time to look at doing Roth conversions. Because, you know, I don’t believe history actually repeats itself, but it sure does rhyme. And if it rhymes like the other times before, when we’ve had 911, 2008 COVID, then there’s a very high likelihood that the market is going to come back. So if you’re buying these particular investments at the low of the market, or near the low, and it does come back, imagine what’s that’s going to do for your for your Roth, yeah.

 

Marc Killian  12:42

I mean, historically, right? It does, right? I mean, and obviously the big question is always, what is your time horizon? Right? If you’re, if you’re 70, you don’t have the horizon to wait for it to come back. If it this thing, this thing gets prolonged. But let’s be honest To your point, a little while ago, if you’re doing a bucket strategy, even at 70, some of this money still probably later, you know, because you’re thinking you’re going to live to us. You know, 80 you know, 85 whatever the case is, you may not need it for several more years. So again, it’s all a part of the strategy. And so those conversions could be important, because you’re converting them now, you know, you’re paying a lower tax amount, because A, we’re historical tax lows. B, the market is down, so you’re paying lower income. And then when it does come back, which it most likely will, as it usually does, now, the money’s growing raw, you know, tax free in the Roth, right? So, silver lining,

 

Jude Wilson  13:28

100% and the last thing that I’ll say about silver lining is, when you have a well thought out financial plan, it’s not just about the buckets, it’s also about tax planning. We’ve we’ve talked on the show before about tax filters, pre tax, post tax and tax advantage. Yeah, this should all be coordinated together to come out with the best probability, the best solution for the client. Because not only are we talking about having our money in different buckets. But we’re talking also about Roth conversion strategies and how much of your money should be aggressively invested in the Roth versus not, right? This is it for those that are do it yourselfers. Great for those of you that are seeing a financial advisor, a tax professional, these are the type of questions that you should be asking so you have a coordinated financial plan. Yeah,

 

Marc Killian  14:24

yeah, you know. And it was funny, because we got a message into into the program, and it goes well with my other my point about, you know, time to look for silver linings. And it was the person saying, Hey, I’m a pre retiree. I’m not retired yet. I’m still working. I’m still contributing. Should I pay up? You know, scale back my contributions while the market speed? No, right? So it’s like, if you’re still working your dollar cost averaging, right, you should still be pumping in to your, you know, to your company sponsored plan, especially, at least to get the matching money. I mean, that’s just got to be a given. And it’s funny how many times I see that question when markets are volatile, we saw it quite a bit. Back in 22 when it was real rocky for a few weeks. It’s like, should I take advantage of dollar cost averaging, or should I pull back on contributing to my company sponsored plan? And it’s like, no, you should keep contributing, especially if you’re working because you’re buying, you know, Jude, everybody loves a you know, if you’re looking for a TV and it’s 30% off, you’re going to be interested in looking at some TVs. But when the market’s 30% off. Nobody wants to look at it right. Nobody likes the stock market when it’s on sale. You know exactly that’s when you should exactly.

 

Jude Wilson  15:28

I was teaching a seminar the other day, and this just came to my head, but people got a kick out of me saying this. Said my mom was a very good thrift shopper, and she shopped at Kmart, and when the blue light came on, everybody knew that that was a sale, and ran to that when the blue light comes on in the stock market, everybody runs away, right,

 

Marc Killian  15:47

right, right, which you know the old, the old Warren Buffett asset, right? Be be fearful when others are greedy, and be greedy when others are fearful, right? So, so basically, it brings us to our fourth, our fourth kind of main bullet point here, unhelpful behaviors, right? So we started off by saying, I told the little story about the lady who was watching the headlines constantly. It goes without saying, Jude, that’s got to be, what do I need to stop doing? Stop doing right now the number one has got to be, turn off the news, right? I mean, it has to be,

 

Jude Wilson  16:17

turn it off. I, you know, obviously I do this for a living, so I have to watch the news. But over the two days of when the tariffs were announced, when they first came in, yeah, yeah, I watched even more, and I thought to myself, Oh, my God, if you’re just watching this without any understanding of historical norms, what’s happened in the past, having a good financial plan, this stuff could drive you crazy, you know, because everybody’s got to take on it. And if you ask five different professionals what their opinion is on this, you’re going to get 10 different opinions. So number one thing is turn off the news. And

 

Marc Killian  16:59

it’s not just the news anymore, right? Because we have these little things in our hands where we get constant stuff on them. So Doom scrolling, right? I don’t know if you’ve heard that term or not, folks, but it’s a thing, right? When you start looking at stuff on your phone and you just keep you know going, well, if you’re looking up the negative, right, what’s the phone gonna do the algorithm for whatever app you’re using is gonna send you more of the negative? Well, guess what? Now you’re in a real spiral, right? And we’ve all heard this term. Now, don’t do that either. Yep.

 

Jude Wilson  17:30

And then the last thing I would say is don’t panic. I mean, even if you don’t have a financial plan, which we’ve been stressing today, right? Don’t panic, because now is the most opportune time to see a professional that really understands what they’re doing and can build something customized to your situation. Don’t feel guilty. Don’t panic, yeah, take a breath and schedule time to see someone that really knows what they’re doing,

 

Marc Killian  18:00

yeah, no, permanent decisions during during temporary fear, right? Bad, bad, right? Yeah, it’s a bad move. And I’ll give you one more if you like that one, right? I think this is a great line, because, you know, when the markets are doing great, right? We’ve had several, you know, bull runs in the last, you know, number of years, right? We had some pretty good, everybody’s a genius, right? You throw a dart at the dart board like you said, you could follow The Magnificent Seven for a number of years, and everyone looks like a genius when things are choppy, that’s when discipline and consistency beats brilliance.

 

Jude Wilson  18:32

Absolutely, absolutely. That’s that old Mike Tyson quote, everybody has a plan until they get in the ring. I think that’s how it goes.

 

Marc Killian  18:40

Because they get punched in the mouth, until, yeah, so,

 

Jude Wilson  18:43

so when you have a real plan and you have real strategy, it definitely outpaces luck. And that’s the thing,

 

Marc Killian  18:52

consistency, too, right? I mean, back to the dollar cost, averaging tried and true things when the markets are down. These are, these are when those things become important.

 

Jude Wilson  19:01

Yeah, absolutely, because that’s what’s going to see you through the rocky times. And to be very straightforward, that’s where people like myself, my team, other good advisors, that’s really where they earn their most amount of their value. Because you’re right when, when the market’s doing great, everybody feels that dear Warren Buffet,

 

19:23

but all geniuses, yeah, but to have

 

Jude Wilson  19:26

a coordinated plan that looks not only on at your investments, looks at your taxation, looks at your estate plan, looks at your risk management, that is the solution for long term Success, yeah, yeah,

 

Marc Killian  19:40

and especially if you’re younger, right? So if you’re younger, and you’re panicking right now, definitely don’t do that, because you got a long window. You got a long runway. If you’re a little bit older, you know, you’re a little more gray. Okay, I get it right. I get I’m being nervous. But a strategy all those different components that go in there. It’s not just the portfolio and just the investor. Assessments. There’s definitely other things that make up this whole thing called, you know, retirement planning and retirement strategy. So as Jude said before, if it’s not him, talk with someone, but certainly talk with a qualified professional. Don’t just run out and take action from our podcast or Kramer or anybody else that you hear right. Make sure that you see how it fits your unique situation. We got links in the show descriptions below to get yourself some time on Jude’s calendar. If you’d like to have a conversation, you can find him online at a couple different websites. You go to the tax bomb.com Great place to get some cool stuff running there. You can use the calculator for some things. Or you could just go to his main website, which, again, we got the links below so you can book some time onto the calendar. We also have the number there for you to call. It’s on the screen the whole time. So thanks for hanging out Jude and breaking it down. We always appreciate it. My friend.

 

Jude Wilson  20:44

Love it. Hopefully we gave some real value today. Yeah, I hope so shared some

 

Marc Killian  20:49

useful nuggets of information along the way. As always, don’t forget to subscribe to us on Apple or Spotify, or, of course, YouTube. Hit the thumbs up and the notification bell so you catch new episodes when they come out. Hit that subscribe button so that you catch new content as well supports the channel, and hopefully you learn a few things along the way. We’ll see you next time here on the Roth guy with Jude Wilson,

 

Walter Storholt  21:12

financial planning and advisory services are offered through prosperity Capital Advisors, PCA, an SEC, registered investment advisor with its principal place of business in the state of Ohio, centrist financial strategies and PCA are separate non affiliated entities. PCA does not provide tax or legal advice. Insurance and tax services offered through centrist financial strategies are not affiliated with PCA. Information received from this podcast should not be viewed as individual investment advice, product discussions and illustrations are hypothetical in nature and will vary based on many factors, including, but not limited to age, health product insurance carrier and product design. You should consult the insurance carrier website and policy for detailed information, for information pertaining to the registration status of PCA, please contact the firm or refer to the Investment Advisor public disclosure website, www.advisorinfo.sec.gov for additional information about PCA, including fees and services send for our disclosure statement as set forth on Form ADV from PCA using the contact information herein, please read the disclosure statement carefully before you invest or send money you.