What do you do to diffuse the retirement time bomb? The government has a plan, and you won’t like it. Joe was the emcee recently for maybe the biggest name in tax planning — Ed Slott — and his book launch event. We’re replaying as our mentor segment today Joe’s interview with Ed from that event because there are so many “a-ha” moments and good direction toward ensuring that your tax time bomb doesn’t go off all over your retirement.
In our headline, we talk about interest rates and the financial markets. How do you avoid chasing interest rates and instead focus on the big picture? Doug and OG dive into this topic. Plus, we take a call from Nicole, who wonders about her husband’s stock options. We talk options, restricted shares, and planning. How do you ensure that you don’t overpay taxes on these incentives but at the same time don’t end up holding on to worthless options or with an underdiversified portfolio. This type of planning can be messy, so today we help you unwind it all.
Of course, Doug shares his trivia and much, much more!
FULL SHOW NOTES: https://stackingbenjamins.com/diffuse-the-retirement-tax-bomb-ed-slott-1543
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.stackingbenjamins.com/201
Enjoy!
Our Headlines
- Americans Chasing High Interest Rates Risk Falling Into a ‘Cash Trap’ (Wall Street Journal)
Ed Slott
Big thanks to Ed Slott for joining us today. To learn more about Ed, visit Ed Slott and Company, LLC – America’s IRA Experts. Grab yourself a copy of the book The Retirement Savings Time Bomb Ticks Louder: How to Avoid Unnecessary Tax Landmines, Defuse the Latest Threats to Your Retirement Savings, and Ignite Your Financial Freedom.
Doug’s Trivia
- In what city was the Declaration of Independence first read to the public?
Better call Saul…Sehy & OG
- Stacker Nicole calls in with a question about capital losses related to former employer stock options.
Have a question for the show?
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Join Us Wednesday
Tune in on Wednesday when we’re coming to you LIVE from the KIT studios in downtown Boise, Idaho, where Joe and Afford Anything’s Paula Pant are attending the Craft and Commerce conference. They’ll dive into all of their takeaways on this special, behind-the-scenes, no-holds-barred conversation.
Written by: Kevin Bailey
Miss our last show? Listen here: Should You Shut Up About All That Money You Make (or that you don’t make)?
Episode transcript
[00:00:00] OG: Doug, did you press all the right buttons? [00:00:01] Doug: Oh, I’ve pressed several buttons. Some you can’t even see, and one of those buttons has got me fired up for a Monday in America. What are you drinking this morning, og? Oh, uh, coffee question mark. [00:00:16] OG: It’s in a coffee cup, [00:00:18] Doug: so everything’s [00:00:19] OG: coffee. It is summer since it’s in a coffee cup. [00:00:22] Is it not coffee? Actually, it is coffee today. Is it? I’m on a non-drinking kick, so I’m drinking coffee. [00:00:28] Doug: Good for you. Good for you. I have, uh, as you can tell, airplane [00:00:32] OG: mug. [00:00:32] Doug: I have completed my intake of caffeine for the morning. I’m, I, I have no more left, drank most of a pot this morning because I was up extra, extra early. [00:00:43] Thank you dogs. And, uh, I’m ready to go. But you know what we need to do before we dive in is thank the men and women on behalf of Navy Federal Credit Union, who are serving in our armed forces, keeping us safe and ready to have a great week. What say you? [00:01:01] OG: Perfect. I love it. Semper Fi. [00:01:03] Doug: Thanks everybody. [00:01:04] Let’s roll. [00:01:05] OG: Here’s the song that we’d like to do for all the younger set of people, the teenagers [00:01:09] Ed Slott: and what have you. This one’s called Vacation Over [00:01:16] bit: Vacation [00:01:20] Over. [00:01:26] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Show. [00:01:41] I’m Joe’s mom’s neighbor, Doug. Today I’ll be doing a quick tour of the basement for the newer listeners who probably assume we’re here in a big, fancy studio filled with priceless artwork, sitting on Golden Thrones, and that’s just the bathroom. Instead, I’ll take you on a tour of the rest of the basement and once you’ve gotten a lay of the land. [00:02:01] You’ll learn how to avoid unnecessary taxes with IRA expert ed slot In our headlines, is it possible to have too much cash? We’ll discuss that ridiculous notion. Plus we’ll answer a question from one stacker who thought, you know, I’d better call Saul, see hi and og, and then I’ll share some rocky trivia. [00:02:23] And now, two guys who’ve been declared the two best podcast hosts in the world by Joe’s mom, it’s Neighbor, Doug, and og. Yeah, I just introduced myself. [00:02:35] OG: Oh, all right. Welcome to the party. So today it’s just you and me. Joe had a, uh, a family thing. Yeah, sadly. So he’s outta commission for a little bit, [00:02:45] Doug: tending to more important needs. [00:02:46] OG: We’re thinking about Joe and Cheryl and all their family, some family stuff going on. So thoughts and prayers with them. And, and we’re gonna hold down the fort for the next, uh, I don’t know, week two. We have some like hodgepodge stuff. We’ve got some stuff in the can as they say. Your mom says that [00:03:03] Doug: for, I was gonna say for those not in the business, your mind immediately goes where it should not go. [00:03:09] OG: Yeah. Uh, Joe’s recorded some interviews, so we’ll plug him in, uh, a couple of times. He’s got, he’s got a thing with Paula, uh, on Wednesday this week, so that’ll be there. So it’s, it’s kind of, kind of feel normal, but we’re frankensteining a little bit to throw this together. [00:03:25] Doug: Cool. Think I like your characterization of how much fun it’s gonna be with just you and me. [00:03:31] Well, hanging out. [00:03:32] OG: I did say to Mrs. oj, I said, uh, you know, she asked about the show and I said, oh, I think Doug and I are gonna, she’s like, I like the idea of just you and Doug. Like [00:03:39] Doug: that idea. Oh, she thinks about us that way. Does she? Mm-Hmm. No, she’s talking about the show. Oh, okay. Alright. Dream got me all excited. [00:03:46] Just the two best buds of all time. Hanging out for a couple of weeks. [00:03:50] OG: It’s like that scene from, uh. Hangover [00:03:54] bit: classic. We are back. That we are back. We are getting Doug back, and we’re the three best friends that anybody could have. We are the three best friends that anyone could have. We are the three best friends that anyone can have and never ever, ever, ever, ever leave each other. [00:04:14] We’re the best. [00:04:17] Doug: Aw, we’re getting dug back. Okay. You had your Monday warm and fuzzy people. I wanna dive into things here, og, but first we’ve got some wonderful sponsors who help make this show possible and we really appreciate all the stack. We appreciate all the stackers out there who, uh, who support our sponsors. [00:04:36] And, uh, listen to these upcoming ads. You know, we’ve got some ads in the front of the show that help keep the back of the show ad free and keep us doing what we do. So stick around, we’ll be right back. [00:04:48] bit: Hello Darlings, and now it’s time for your favorite part of the show, our Stacking Benjamins headlines. [00:04:55] Doug: og let’s dive into the headlines this morning. There’s one I really, uh, have been looking forward to getting your take on. It’s a Wall Street Journal article from a week or so ago, uh, and it says, Americans chasing high interest rates risk falling into a cash trap. Investors have to decide whether to sit on their cash or redistribute it ahead of expected rate cuts. [00:05:16] This comes to us from Vicki Ga Huang, I’m sure that’s exactly how you pronounce it, uh, of the Wall Street Journal. And, uh, you know, we, we could be. Approaching a bit of a quandary as expected rate cuts are coming and so many people have moved a lot of cash into high yield products, whether they’re CDs or money markets or high yield savings accounts. [00:05:40] Vicki says this, Americans have poured money into cash like investments since the Fed began raising interest rates, driving assets and money market funds to a record $6.12 trillion earlier this month. Whoa. And that’s a heck of a lot of money. But now Wall Street traders are betting rates have peaked, and those investors face a choice, keep sitting on their cash as interest payments shrink or figure out how to redeploy the money. [00:06:04] Deciding when and how to rebalance a portfolio is challenging even for the pros. Well, we’ve got a pro sitting right here, og. What, uh, how does this land with you? [00:06:13] OG: My kind of go-to place for all data is JP Morgan’s Guide to the Markets. It’s free. You can just type in JP Morgan, guide to the markets and, uh, every quarter they produce a slideshow, you know, maybe 70, 80 slides of different data, [00:06:31] Doug: light bathroom reading. [00:06:32] OG: Yeah. It’s, it’s all, you know, it’s not words, it’s pictures. Okay. So it really suits me, but stuff that they think is important and they, they cycle in and out different things. For example, right now they’ve got a, a focus on the weighting of the seven biggest tech companies, you know, and their return compared to the s and p and so on and so forth. [00:06:49] That’s kind of interesting information. But we’re talking about cash. So I’m on the consumer savings tab, which, uh, the most recent quarter is page 21 or slide 21. And a couple of things that I see here. Uh, number one, personal savings rate is now down to 3.8%. I. So the average consumer has, you know, used to save a lot of money back in the pandemic world, and then that’s kind of trickled down and the excess savings. [00:07:14] So if you think about all the savings that we got, excess due to stimulus checks or due to tax refunds or due to saving from not commuting and that sort of thing, that kind of built up and that’s pretty much all been wiped away. So I don’t know who she’s talking about saving 6 trillion, but you know, I think maybe it’s investors. [00:07:31] Is that kind of how you read that, it’s like investors are putting money in cash as opposed to investments? Or do you think that this is actual like emergency fund money? The average person is saving cash? I, I, I feel like this is investment money that’s not, [00:07:45] Doug: well, I, in the [00:07:46] OG: investors, I [00:07:46] Doug: mean, the whole article is geared towards, you know, average Joe lunch pail, you know, that just, I don’t think they’re really talking about like the institutional investors here. [00:07:55] I think this whole thing has to do with just you and I and, and the people living next door to you are the 6.1 trillion. And they’re in a cash trap. [00:08:03] OG: Yeah. I guess the way that I’m thinking about this is that it’s probably a percentage of money that would otherwise be invested. It’s part of the average investor’s portfolio, not cash. [00:08:16] So when I hear cash trap and, oh, you’re making a mistake by having lots of cash, I think, what the heck are you talking about? Having an emergency fund would be a good idea and having it in a high yield account, obviously, except for the stuff that you need tomorrow or you know, the next month or so. That also seems like a pretty good idea. [00:08:33] But I’m, I’m taking this to mean this is people who have an investment portfolio, exclusive of their emergency fund. How I’m, [00:08:40] Doug: I would agree. I would agree. And I thought you used an interesting phrase a, a minute or so ago, which was excess savings. And I think that’s really getting at the heart of this, which is, you know, if your emergency fund is oftentimes recommended to be three months to six months, this is, I think certainly what they’re getting at is in excess of that because it feels like, hey, I’m getting a great return and it’s pretty safe. [00:09:00] And so if I needed 40,000 for my emergency fund, I kinda like a hundred sitting out there in a high yield savings account because I like 5% with very little risk at the moment. But I think what, uh, the author is getting at here and the people from JP Morgan are saying is we think rate cuts are coming and, uh, it Mm-Hmm. [00:09:18] You might consider redeploying some of that excess beyond your emergency funds. [00:09:23] OG: Yeah. [00:09:24] Doug: Back into the market. [00:09:24] OG: And this is the problem when you try to time the market, when you try to have an idea of, well, today I should buy stock, or tomorrow I should sell stock because of insert calamity that you think is gonna have an impact. [00:09:37] It’s, it’s purely a gamble. Sure. It doesn’t mean that you’re gonna be wrong, because there’s plenty of people who have guessed. Right. You know, I mean, I know of people who invested heavily toward the bottom of the covid, you know, when it was down 25, 30%, and they were taking a calculated risk at that time. [00:09:54] And you could say the, maybe the outcome is the same for people that have transitioned money from investments into cash. Like you said, Hey, would I rather have 5% in my money market account risk free? Or would I rather have potentially 10% in my brokerage account? [00:10:08] bit: Mm-Hmm mm-Hmm. [00:10:09] OG: With high variability insert apocalypse du jour, whether it’s wars or election cycles or federal reserve changes or whatever, I don’t feel confident, so I’m gonna take my, my free five. [00:10:21] The problem with this is that you have to figure out how to get back in the market. You have to figure out how to deploy that money back in. And the interesting thing is, let’s say that you timed it out, right? Right. So the beginning of 2020, you’re going, Ooh, I’m feeling pretty, pretty weird about this weird coughing disease that’s happening in the far East. [00:10:40] And, uh, those folks in Italy are really having a hard go of it. I’m gonna take all my money and put it in cash. Well, let’s assume that interest rates were at 5% then, which they weren’t. They weren’t. Right. You’ve missed out on 119% return in the market. I don’t care. You gotta get a lot of years of five to get 119. [00:10:56] And so let’s say that maybe you’re like, no, no, no, no, no. I didn’t do that. I waited until the market recovered and I felt that in 2022, inflation was gonna take over and the market was gonna crater since 2022. The market’s up 15%. You’re gonna probably guess wrong. And if you’ve got enough time, if this is long-term money, the whole idea is have it be long-term investing. [00:11:17] And then you take that, you know the real risk is trying to redeploy that capital at a higher price than what you took it out at before. So if you’ve got excess cash as an investor, by the way, I look at this and I’m like chomping at the bit. I’m loving life because as the market continues to go higher, more and more of that 6 trillion, that record, $6 trillion, people are gonna get a lot of fomo. [00:11:40] And that’s gonna start filtering its way back into the market, which is great for me, who have spent invested this the whole time. Yeah, because as the market continues to trend higher, more and more people are gonna go, oh crap, 5% to your point, it’s gonna go from five to four to three, whatever the rates go to, people are gonna go, oh crap, I gotta get this money back in. [00:11:56] And they’re gonna get hit in the market and it’s gonna drive the price down. Interesting [00:11:59] Doug: you say that because later on in the article, uh, the author says Anxiety is understandable about, you know, trying to decide when to get back in because global instability can lead to market volatility and everybody’s worried about an upcoming election cycle and, and interest rate changes and tensions in the Middle East and other things. [00:12:16] And so we all come up with these reasons to be nervous that something is gonna cause the market to crash. And uh, David Kelly, the Chief Global strategist at JP Morgan says people generally feel negative and pessimistic if they invest based on how they feel they’re gonna hang onto cash forever. Yeah. So he actually is a little bit different. [00:12:34] He’s saying, Nope, people can always find something to worry about and just come up with reasons to keep it in cash. But that can lead to some other issues that get brought up in this, uh, discussion, which I think, I think stackers are gonna like your take on. And it has to do with taxes and fees and inflation because the longer that you have money sitting in cash. [00:12:54] Inflation starts to erode the value of that cash, right? And then your returns or your interest returns on that cash is taxed as income. So those are two big things that sort of erode the value of, or this perceived, Hey, I’m getting 5% on my money. Well, after about three years, you’re not, [00:13:11] OG: well, I mean, if your money’s sitting in a bank and you’re getting interest, interest is taxed as ordinary income on your tax return. [00:13:17] So whatever your marginal rate is, that’s what you’re paying on the interest. If it’s a dividend, if it’s in a money market fund and it’s structured as a dividend, that could be taxed as slightly differently, a little bit more advantageous, but there’s still gonna be taxes. And even if even completely excluding the tax implications, which I think you can’t do, but let’s just say that somehow you did, you know, you just don’t pay taxes or something. [00:13:38] The fact that inflation. I, I just had this conversation with our team about inflation pay adjustments, right? It’s like, Hey, the stuff costs more money. What’s the most recent number? 3.8% or 3.5? So if you’re getting five and paying 10, 20% of that back in taxes, so you’re down to four and then you got 3.5, that’s inflation. [00:13:57] Your net return is 0.5. I think the answer to all of this really lies in where is the money needed in the future? Mm-Hmm. If you need the money, if you’re, if you’re like, this money is to be used for a house down payment in 24 months, boom. Cash. I don’t care what the rates are, I don’t care what’s going on in the market. [00:14:15] I don’t care how many Nvidia calls you feel like buying, at the end of the day, it’s gotta be cash. ’cause it’s, we’ve got a known timeframe. That’s a short period of time. Anything under five years is a short period of time. You wanna take volatility out of it. If the time period is longer than five, you’re like, well, I’m 40 and this is money. [00:14:31] I should, you know, I could be investing in my 401k, or this is money. I could be investing in my brokerage account or my kids’ college fund, but I’m nervous about insert apocalypse, whatever is happening. You gotta take that outta your mind. All you have to do is just look back. The last five years, I, I’m just, I’m blown away that we are almost, you know, what, six months away from the five year anniversary of Covid. [00:14:52] Mm-Hmm. Can you believe it’s been five freaking years [00:14:54] Doug: already? I know it, I know it. [00:14:56] OG: I mean, we’re still talking about it still affects people. It’s still an issue. I get all that, but I. How, how like everyone who’s alive who’s listened to the show has probably listened since around that time. We’ve been doing it since the early 20 teens. [00:15:09] But, you know, COVID, like what was going on, it was chaos, right? [00:15:14] Doug: It was pure chaos. I’m wiping off my cereal boxes from the grocery store. [00:15:19] OG: I’m not sure if I should go on a walk today because my, I see my neighbor down the block and I’m not sure, you know, I mean, we are joking about it a little bit now ’cause it’s kind of funny to think about. [00:15:29] But put yourself back in those shoes. Not only were we petrified to some extent, and some people were a little less than others, but we’re really concerned about our health. And then we’re watching the market go down, uh, you know, just a casual third in 17 trading days. Mm-Hmm. There’s only five trading days in a week. [00:15:46] So like, literally in two weeks and two days, the market went down. A third, one third of all of your money went, poof. That’s pretty fast. Like you haven’t even got a statement yet. It’s like even if you’re like, I just looked at my statement. It’s like you had a million dollars. You’re like, oh, I think it’s fine, mod. [00:16:00] And then the statement comes on March 31, you’re like, oh shit, what happened? You’d haven’t had a chance to even change. It was chaos. And yet, if your money was invested, if that was, if it was 2010 and you’re like, I’m retiring in 2025, that’s, that’s long-term money. I’m retiring in 2030. You’ve been back to even for a long time. [00:16:19] You’ve gained money well above that. Well, well, well above that. And it’s like it never even happened. If you look at that chart, it’s like a little it, the whole thing. It’s almost a nothing in the moment. It feels really concerning. So like the stuff that’s going on right now in Israel and Gaza, that’s very concerning. [00:16:38] The stuff that’s go, you know, the presidential election, very concerning. In five years from now, it’s gonna be like. That’s one little, [00:16:47] Doug: yeah. We need a sound effect for the, actually, maybe we just did it. Yeah. But, uh, you know, I was thinking as you were saying that [00:16:53] OG: from a money perspective, I should say. [00:16:54] Right, right, right. You know, ’cause obviously there’s some other stuff. [00:16:57] Doug: What we’re all essentially saying is you have to try to take emotions out of this stick to your investing mantra that you created your, your, your policy statement that you created for yourself and, uh, and take emotions out. That’s why you’re such a great guide for our stackers. [00:17:14] Because you’re emotionless [00:17:16] OG: like the terminator just, I have no emotion whatsoever. No, I mean, I don’t know that you take emotions out of it. I think it’s totally fine to recognize it, but you can’t act on it. You know what I mean? Like it’s. I don’t know. I remember this Eisenhower quote about like, fear, and fear is, you know, whatever. [00:17:36] And oh, you nailed it. Courage is, yeah. No, I mean it’s, it’s like something like courage is doing, you know, what you have to do, you know, with wet pants, basically it’s like fear is wetting your pants and courage is doing what you have to do with wet pants. Like, it doesn’t mean that the fear doesn’t exist. [00:17:49] Right. You saying a president, [00:17:50] Doug: you feed yourself p said it was okay to pee your pants. [00:17:52] OG: Well, like maybe when he was a general. Okay. Prior, prior to presidency, like, you know, he had this, I’m starting to read this book about D-Day, so I’ll let you know if it comes up, but, um, I don’t know if that’ll be the official, the official dialogue or not. [00:18:05] I think it was Eisenhower. I dunno, it could have been my dad. I’m not sure who it was, but it was one of those two great men or your third grade teacher who said, who said something about it’s totally fine to pee your pants. But my point is, is like you can still recognize that it’s there, right? You can still say, I’m really concerned about what’s going on in this area of the world, or I’m concerned about what’s happening with the election cycle. [00:18:26] Or I’m concerned that doesn’t change the fact that you have to invest for the future. It’s this time is not different. So watch [00:18:32] Doug: the news. Read the news, worry about it if you feel like it, but keep your hand off the mouse. Don’t execute trades. Yes. Yeah. Okay. Alright. Keep your hand outta the cookie chair. I think that’s a pretty good place to leave it. [00:18:44] Uh, if you have a headline that you are curious about getting our take on, please share it with Joe at, we’ll get all the email going to Joe so we, we can flood his inbox. [00:18:53] bit: Yes, [00:18:53] Doug: Joe at sacking Benjamins dot com. Uh, I wonder if one day I’ll ever get an email address. I don’t like the look on your face. That’s, uh, I’ll check [00:19:01] OG: with corporate. [00:19:03] Corporate said no. [00:19:05] Doug: Wow. [00:19:05] OG: You [00:19:05] Doug: got, you got a direct line to corporate, don’t you? [00:19:07] OG: Hold [00:19:07] Doug: on. [00:19:07] OG: It’s like those YouTube videos. Do we think we should give Doug an email? No, but he really wants one. That would be a terrible idea. They talked about it, they decided No. [00:19:20] Doug: Uh, yeah. Okay. It’s happened before. Not the who’s, uh, [00:19:23] OG: who’s Joe interviewing? [00:19:24] Uh, here’s, I know you already said it earlier, but, but I [00:19:26] Doug: can’t. Yeah. So thanks for listening to the intro. We have Ed Slot today, who is always Oh, IRA expert. Yeah. Just an amazing guest that we have. He always shares so much really useful, actionable tips and he’s super entertaining to listen to. So, uh, big fan. [00:19:41] Can’t wait to listen to that. But first, the most important part of the show. [00:19:46] OG: Ah, yes, indeed. This is time that I get to tune out for a few minutes. [00:19:50] Doug: Do you even know what the most important part of the show is? [00:19:53] OG: Yeah, it’s the spot. After I get done talking and before I talk again, I get to tune out. [00:19:57] Doug: Alright, go take a nap. [00:19:58] Fluff up that pillow because stackers here is today’s trivia question. Hey, there’s stackers. I’m Joe’s mom’s neighbor, Doug here in the basement. We like to keep things simple. Aside from our recording equipment, we got a couple of nice black leather couches in case any celebs. Stop in to chat. Oh, speaking of celebs, over here is a framed photo of famous Texan George Foreman in his prime. [00:20:20] I know you can’t see it, but basically picture my exact build, but with his face in this corner. Uh, over here we have a professional level dartboard, and of course we have a mini fridge full of ice. Cold shiner, Bach, and we’re in Texas. It’s the law and wine coolers for the ladies and O Jeep. This entire armoire on the other wall. [00:20:40] I’m glad he’s asleep. He didn’t hear that. This entire armoire on the other wall is filled with snacks. We got hot Cheetos, three tubs of beer nuts, a jar of random loose candies that are all stuck together and about 30 cans of peaches. I like to eat one whole can before every recording ’cause uh, someone told me that the syrup is good for your vocal cords, and obviously it is. [00:21:03] I mean, speaking of taking care of your voice on this date in 1776, the Declaration of Independence was read aloud to the public for the very first time, the reader, John Nixon, was a financier who had served as a militia officer in the American Revolutionary War. Today’s trivia question is in what city was the Declaration of Independence first read to the public? [00:21:28] I’ll be right back after I do some lung stretches. [00:21:40] Hey there, stackers. I’m Songbird and interior decorator. Joe’s mom’s neighbor, Doug, while the second Continental Congress voted to approve the Declaration of Independence on July 4th, it wasn’t read aloud to the public until the eighth. Even the founding fathers had to do a read through. Imagine if they thought it’d make it to a podcast. [00:22:00] They weren’t prepared for that. I bet it would’ve over a billion downloads by now. Today’s trivia question is, where was the Declaration of Independence? First read aloud the answer before Colonel John Nixon began. The reading bells rang out across the town to signal to the public that it was about to begin. [00:22:17] After the event, the bells continued to ring out throughout the night, driving everyone out of their damn minds. Before dc the United States Capitol, much like the Bobblehead collection we keep here in the basement, moved several times. However, it was the very first Capitol Philadelphia, where the Declaration of Independence was read aloud for the first time, and now here to teach us how to pay only the taxes. [00:22:42] You absolutely have to. It’s today’s mentor ed slot. [00:22:46] Joe: Ladies and gentlemen, the man of the hour. Let’s say hi to Ed Slot. [00:22:50] Ed Slott: Well, I’m dressed for it. See that you’re, is is that Green for Profits Ed? That’s right. Money Green. I don’t know if you notice, I have a new book, subliminally, not making a big, big out of it. [00:23:03] Had no, had, would’ve [00:23:03] Joe: never known. Would’ve had no idea. And the cover might be green, stuff like that. You know, really. Right. You’re way above doing something like this. Yeah. Right. I mean, yeah. I wanna start where you start on this project Ed, and let’s chat for about 15 minutes about some of the important themes in this book. [00:23:20] For those of us that have been planning our taxes for a long time, we think it’s this static thing, right? The taxes are always gonna be the same, but you say that in 2019, some of that bedrock started to get pulled out from underneath us. What changed in 19 and 20? [00:23:36] Ed Slott: Well, it starts with the same reason always. [00:23:39] Congress needs money. That’s always the beginning of everything with taxes. Sure. And they needed a lot of money and they still need even more. I mean, the debt now I, I don’t even know. 34 trillion, what does it even matter anymore? I mean, 34, I used to say it was a phone number, but now it’s bigger than a phone number. [00:23:59] Even with the area code and the one, so this money, the whole country is living on a credit card. So Congress is always looking for revenue. So they look for the easy pickings, the low hanging fruit, and you know who that is? Everybody that did everything right that we were told to do, put money in IRAs and 4 0 1 Ks tax deferred accounts. [00:24:24] Now Congress has pulled out the rug from many of the people change rules that were in place that people relied on, and with their estate planning and beneficiaries that they relied on for decades. Congress took away what we used to call the stretch IRA. The ability of beneficiaries for these tax deferred accounts can actually could in the past, actually build over 20, 30, 50 years for your family. [00:24:50] What a legacy. Uh, Congress didn’t like that they needed money. They wanted their money quicker, so they got rid of that whole system. And that started in 2020 with something called the Secure Act. Now after studying taxes for over 40 years, I can tell you anytime that Congress has ever named a tax law, you can almost always bet that whatever they name it, it will do exactly the opposite. [00:25:18] So when I like, for example, how’s that Budget Reconciliation Act going? That was a good one. That was a great one from Congress. What a sense of humor. Bum. Uh, then when I saw they came up with Secure Act, I said, secure, hold on to your wallets. And sure enough, they want their money sooner. So almost all the buildup in these accounts, and remember you had a big buildup from the stock market the last decade or so, not today, but the last decade or so, and all of this money is growing, not at, it’s growing for you, but also for your silent, not even silent, maybe majority partner. [00:25:58] Uncle Sam, that’s not a good plan. All of this money starting in 2020, the big overhaul of the rules, uh, has to come out by the end of 10 years after death. So whenever you push all this income, like out of a giant fire hose into a shorter window. The taxes are going to eat up most of everything you and your family counted on. [00:26:20] And then came secure too, which means they needed more money Congress and then came IRS regulations. And the combination of all these tax laws is like wind shear on your retirement savings and all of a sudden Congress is counting all the revenue. But there are some good things in here, especially secure 2.0 to take advantage of. [00:26:44] You know when they take the rules away, when they take the strategies away, they being Congress, it opens up new doors like anything in life. So it probably is good that it forces us to do the better planning we should have been doing all along IRAs, were always a lousy wealth transfer estate planning vehicle ’cause they’re loaded with taxes. [00:27:07] I’ve been saying that for years. Matter of fact, last year I did a a column in investment news. I write for them every month for years. I titled the column Stop Contributing to IRAs. Ed, you blew up the internet with that one, by the way. Yeah, yeah, they told me, uh, actually they put it on their site right in the beginning of January. [00:27:27] That was the top viewed article of all articles for the whole year on investment news, not just retirement or tax planning of investments, everything. And I think it was the title, I guess you might call it clickbait, but possibly there was a story behind it that IRAs are just, they’re just too hard to, it shouldn’t be this way, that it’s so hard to get your money out without a penalty, excessive or unnecessary taxes. [00:27:54] And every time that hits, it takes out of you and your family what you counted on for retirement and to pass on to loved ones. So I redid this and I said, the retirement savings time Bob takes louder. Louder. Why? Because I’m worried about future higher taxes. I’m worried about the uncertainty of what future higher taxes can do to your standard of living in retirement. [00:28:21] I’m worried about higher taxes. You know, some people say, Joe, that, oh, in this is I call the big lie or the big myth and you know where I’m gonna go. They say, well, it’s not a big deal. Won’t I be in a lower bracket in retirement? Do you get that a lot? [00:28:36] Joe: R? Absolutely. All the time’s not true. I mean, that’s retirement planning. [00:28:39] Retirement planning. Myth 1 0 1, right? Right. [00:28:43] Ed Slott: Because people forget, you know, if you do nothing, the account continues to grow and everybody likes looking at their statements. I remember having a client years ago brought me in the statement, he hit a million dollars, says, look, look at my IRA. I said, what are you show that’s not yours. [00:28:59] This is temporarily on your letterhead. You’re not keeping any of that. Most of that is going right back to Uncle Sam through income taxes, estate taxes. You wanna be in control of your tax rate, and that’s what this book does. It helps you control how much you pay and when you pay, you want your plan, not the government plan. [00:29:20] If you do nothing, and some people ask, I say that in every seminar, by the way, you want your plan, not the government plan. And people sometimes ask Ed, uh, what is the government plan? Maybe I’m interested. No, you are not interested. But if you need to know what the government plan is, it’s easy. Do nothing. [00:29:42] Let it all happen on the government’s timetable. What’s, and then what’s it? You have required minimum distributions at age 73, and then you are on their plan. You have to make the tax laws work for you rather than against you, and this gives you that plan to move your money from tax deferred accounts or what I like to call from forever tax accounts that are forever taxed to accounts that are never taxed. [00:30:07] I love tax free and you will too. I never had anybody complain. All my money’s in tax free. I can’t give anything to the government. You ever get that complaint? [00:30:19] Joe: I don’t think so. No. It’s funny because when I first saw that headline that you had online, I thought Ed’s finally gone on a bender. He’s finally, he’s finally gone. [00:30:28] But I wanna get to what you really meant there, because as you alluded to, there’s a ton of opportunity here that people need to take advantage of. But let’s start with this because most of these opportunities, ed, are around, to your point, tax rates. And there’s something we’re gonna hear from both candidates as we lead up to this election, right? [00:30:47] We’re gonna hear over and over that taxes are high and we need to lower taxes. [00:30:52] Ed Slott: That’s not gonna happen. And as a CPA, I have to believe, ’cause this is how I was trained in something called, it’s a four letter word, so watch it uhoh something called math. Oh, that’s crazy talk. Yeah, I know. It’s crazy. I have to believe in math. [00:31:10] I see the debts going up. At some point, these accounts are gonna be hit with what I call this ticking tax time bomb. Say that three times fast. The ticking tax time bomb. And that’s the tax building up in these accounts. And you can’t sit there and ignore it. It’s like the sign, uh, my dentist has in her office. [00:31:30] She used to have a sign that said, oh, ignore your teeth, and they’ll go away. Uh, that’s what’s gonna happen to your retirement savings if you don’t take action. And there are advantages you can capitalize, as you just said, Joe. Two great things happening today, and I’ll address the tax rates. Number one, you’re right, everybody complains, all the pol. [00:31:51] Oh, the taxes are so high, they’re not going lower. Maybe they won’t raise them as much, but they might have to, again, due to the math problem, the debt problem. But even if they don’t do anything, and Congress is famous for that, kicking the can down the road. If your account keeps building, you will pay more because you have more that will be taxed in higher brackets. [00:32:16] Sure. And because it’s just gonna, uh, creep up the brackets, but right now we have the lowest tax rate. So everybody, like you said, all the politicians, oh, taxes are high. Have to tell you we’re in the lowest tax rates you may ever see in your lifetime. In fact, on page 28 of this book, just to make the point, I give you the history, the complete history here of the top federal tax rates going back to the 16th Amendment in 1913 when we started our current tax system right up till 2024. [00:32:48] And I highlight the years many people watching here were born, including me. Maybe you too. The baby boomers, these are the people born 1946. Through 1964. And if you look at that chart of top rates, just as a comparison, the top federal tax rate for each of those years exceeded 99.0. No, you heard that right? [00:33:14] No static 90% except for the last year, 1964 when they dropped the top federal rate all the way down to only 77%. Now I’m just relaying what I heard ’cause I, I wasn’t there then. I was 10 years old watching the Beatles on Ed Sullivan, but I’m told when they dropped the rate down to only 77%, the whole country did a happy dance. [00:33:41] Our top rate isn’t even half of that amount now. Now is the time to strike. You know, mark Twain had us saying history doesn’t repeat itself, but it rhymes. What I’m really saying, those who don’t learn from history are bound to repeat it. So this is an action plan to move your money to tax-free territory, get the taxes on sale, but it means paying some taxes. [00:34:05] Now, nobody likes to do that, but you have another benefit, not only low tax rates, you have another great thing happening, and this is gonna throw some people inflation out. People say inflation, have you seen the price of beans and everything else? Yeah, yeah, yeah. It’s up. You know, inflation means things cost more, but you know what else it means. [00:34:29] And that may be bad, but inflation. When it comes to taxes is great. Like Frosted Flakes. Great. That’s how great it is. Why? Because each year when the cost of living index inflation goes up, the brackets expand, the rates stay the same, but more money can be pulled out at rock bottom rates. Now is that time, that’s why I say it’s ticking louder because we may not have this system in a year or two. [00:34:58] It’s so [00:34:59] Joe: interesting, all the different places where people can find new savings opportunities here with Secure 2.0. But you can’t, to your point, you can’t sit still. I wanna start off with where you began this interview wi, which is when you said don’t save into a normal retirement plan. You’re not saying don’t save, you’re saying go the Roth route, I believe. [00:35:21] Right, right. Go tax free. Uh, how is that different now with Secure 2.0 than Ed? Well, [00:35:28] Ed Slott: uh, uh, Congress, luckily for us, I shouldn’t even say this, but the heck with it. Luckily for us Congress are the worst financial planners on Earth, so why shouldn’t we take advantage of that? They’re shortsighted. Don’t you be shortsighted. [00:35:43] What do I mean? Insecure 2.0 and a little insecure. In the first package and all these changes, Congress went all in on Roths. I call it Roth amania. Some people call it Roth Ification. They want more people to put more money into Roths. They have benefits now to Roth 4 0 1 Ks, no RMDs and Roth 4 0 1 Ks, all new this year. [00:36:06] Matching contributions can go to Roth 4 0 1 Ks. Congress wants us to have Roth set IRAs, Roth Simple IRAs, Roth matching and Catchup contributions. Uh, 5 29 to Roth Rollovers. Roth Roth. Roth. Roth. Roth. Why do they like the Roth so much? Because it brings in revenue. The only money that can get into a Roth IRA is already taxed money. [00:36:33] So they get their money upfront. Let’s take advantage of that. They like the idea that we’re willing to pay tax, but if we can get it out at lower rates, you and your family will always have more. One of my always rules the two of them is the theme of this book, Tax-Free is always better. Non-negotiable, always true. [00:36:54] The second one is the key to keeping more and protecting more of your retirement savings from taxes, not only tax-free is always better, but always. Always pay taxes at the lowest rates. That’s so simple. It’s like the, the stocks buy low and sell high. In fact, the old comedian, if you remember Henny Youngman once said, years and years ago, I’m putting all my money in taxes. [00:37:20] The only thing sure to go up, he was right. It’s so I’m saying take advantage. Congress is giving the store away. They want people in Ross, they don’t look beyond their 10 year budget cycle. So only they only see, imagine if a business only saw revenue and didn’t even deal with expenses. That’s Congress. Uh, you know, they said, uh, we don’t care if everybody does Roth in 10 years, we won’t be here. [00:37:46] We’ll do other things and the whole country will be, uh, tax free, fine money. And [00:37:50] Joe: on a very, very basic level, and I know we could get it. I mean, we could have four hours on all the opportunities with the Roth. Oh, so many opportunities now. But the very basic one I think everybody can take home tonight is. [00:38:01] If you have the Roth option on your 401k oh always and you can just straightforward put that money in, do it is exactly where you’re [00:38:08] Ed Slott: right. It used to be people say, well, I don’t know about the Roth 401k ’cause they’re still RMDs not anymore secure. Two changed that. So it’s one of the new breaks I have in the book that Congress provided. [00:38:19] People used say, well, yeah, you know, the company has to put the match into the taxable, the, the tax deferred, the 4 0 1 yes. Not anymore. So if you could push everything into a Roth world, one K, you’re gonna be way ahead. Now, some people said, but then I don’t get my deduction. That’s not a real deduction. [00:38:37] It’s not even a real deduction. It’s an exclusion from income. If you go to a 401k, for example, if you make $50,000 and put 10,000 in an a regular 401k, your W2 will only show 40. You’re only taxed on the net. If you go to a raw 401k, you’re taxed on the gross, the 50. That’s where Congress gets their money. [00:38:58] And people call that, well, I got a deduction. No, that’s not a real deduction. Any deduction for a 401k is really just a loan you are giving to the government that will have to be paid back at the worst possible time, probably at higher rates in retirement. You want certainty. You want to make the tax laws work for you rather than against you. [00:39:21] And the same thing with I IRAs go wrong. [00:39:24] Joe: Pay the bill now. There’s so many pieces where we can go. I think people wanna read your book to look at the, uh, charitable giving has changed. Yeah, that’s become exciting. You’re charitably inclined. I don’t want to go there though. I don’t wanna go there though. [00:39:37] What I, where I really wanna go because I know there’s gonna be a lot of people that are hanging out with us or watching this later that wanna know about this. Require minimum distributions on the march. These are changing. Talk about the changes to RVs. Yeah. Well now [00:39:50] Ed Slott: it’s age 73, so that’s good. In some respects, you can do more things before you’re constrained by the government plan. [00:39:58] Yeah. Where on their schedule. But do things now. Don’t wait till 73. Get that money out. Take Unrequired distributions and get them out at lower brackets. You never wanna waste a low bracket. Look at the tax brackets. We have unheard of 12%, 22%, 24%. Every year that you don’t use the full amount of those brackets. [00:40:22] It’s a year. You’ll never get that back. Mm. It’s like playing a baseball game, but you only have one inning. [00:40:29] Joe: 90. This is interesting again because, ’cause I think what you’re saying is just because we can push that back doesn’t mean we should. No. We should be tax planning it younger. [00:40:38] Ed Slott: Yeah, you can get that money out. [00:40:40] And I’m not saying just put it, uh, in another account or spend it, convert it to a Roth. Move everything to tax-free territory I call Roth Tax Insurance. It’s insurance against the uncertainty of what future higher taxes can do to your standard of living and retirement. I even have a lot in here on, and I don’t even sell life insurance. [00:40:59] I don’t sell any stocks, funds, funds, insurance, annuities. I’m a tax advisor, but I have a whole chapter here called the Power of Life Insurance. I’m talking about permanent life insurance, bringing down those IRA values, which are tax deferred, not tax free. And building up in tax free Roths, building up in tax-free cash value and life insurance. [00:41:20] So all your savings stick with you a hundred percent. No more sharing with Uncle Sam. That’s how you keep more of your [00:41:28] Joe: hard-earned money. I remember when I was an advisor, I’d have some clients who had lots and lots of cash flow. They were saving everywhere for their goals. And the ability to incorporate a life insurance policy strategically was a thing. [00:41:43] Ed, as you know, people because they only have half the information they often don’t wanna do, but it’s way the hell better than an annuity. [00:41:50] Ed Slott: Well, uh, you know, all things have good places for it. And I have everything, all of those things in the right place. Like I was just doing an interview earlier today down at the, uh, New York Stock Exchange and somebody asked me about that, about the annuities, and I said, well, I’m not a product person, but I, you know, the basic idea with annuity, you don’t wanna worry about the ups and downs of the volatility in the market. [00:42:12] Yeah. So you want guaranteed income and there’s a place for that. Sure. But the only thing better than guaranteed income for life is what I have. Guaranteed tax free income. I have some annuities in my Roth IRA. So if I ever need income, it’ll come from the Roth tax free and it’ll be guaranteed. So these are things you can do. [00:42:34] I go through all of this in detail in the book. You can, you know, go over this, as you said, get educated so you can be a better consumer. As with anything, yes, we would never put the book on the screen right now. No, we would never, I’ve never even put it on my [00:42:47] Joe: books. Why? Never, never do that. How did that get there? [00:42:51] You know what’s funny is for those of you, uh, experiencing Ed for the first time, I love the way he does the verbal mic drop. And for a guy that’s been doing radio and television stuff for a long time, just tax free, bam. It’s like, ed, you took the mic and you dropped it right there. [00:43:09] Ed Slott: Well, that’s what it’s all about. [00:43:10] People wanna keep more of their hard-earned money and they want guarantees. They want certainty. Yeah. The tax law today does not give you that. The only place that it’s certain is if you can get it in income tax free territory. And that’s what I show you how to do. And that needs to be done now before these opportunities go by the wayside. [00:43:30] They’re scheduled to go away. The rates are scheduled to go up in 26. We don’t know what’s going to happen. But I do know at some point Congress is going to go after the low hanging fruit, the easy marks, people that are building in their tax deferred accounts because they know that that money, they Congress knows that money has not yet been taxed. [00:43:50] So people that are still building IRAs and 4 0 1 Ks are basically sitting ducks. If they do. [00:43:57] Joe: That is a small, very small sample. You can see how thick the book is, everybody, but that’s a little tiny sample of the awesomeness, of diffusing the time bomb. And, uh, thanks for making this book yet another instant Amazon bestseller in retirement planning. [00:44:12] Thanks, Joe. Great job. Thank you very much. [00:44:16] bit: Hey, hey, this is Tiffany Grant from The Money Talk with TIFF podcast. And when I’m not sprinkling business and money gyms everywhere, I’m Stacking Benjamins. [00:44:29] Oh, that wasn’t my part. I’m sorry. Carry on. [00:44:33] Doug: Ed Slot og, how about that guy [00:44:36] OG: superstar pro extraordinaire. Basically do what Ed Slot says. [00:44:41] Doug: Listen to all the stuff we say, but do what he, what he does. Yes, but do what he says. Do as I do not, as I say [00:44:48] OG: something. Do as do as we. I Ed slot too, [00:44:51] Doug: right? And pee your pants and it’s okay. [00:44:54] Don’t have to worry about it. Hey og, let’s take a caller on the, uh, better call sa see hi and OG line, and let’s see if we can’t help out. Nicole. [00:45:06] caller: Hi, Joe and og, thank you for all your work with increasing our financial literacy. My name is Nicole and I’m calling from Pacific. [00:45:17] My husband is in the tech world and has worked on a number of startups, some of which have succeeded and some of which have not. His last one unfortunately, did not end up doing very well and ended up filing for a bankruptcy about a year after he left it. Before he left, he was awarded some stock options for his time at the company, valued at about $4,000. [00:45:38] However, now after the bankruptcy has been filed, the value of the statement on his accounts for those stock options is a mere 38 cents. We always took all this money as a bonus, so while unfortunate it’ll not devastate our financial plan, however, is there a silver lining that we can still use the sale of those? [00:45:56] 38 cents now to claim a capital loss of the $4,000. What is your recommendation for these type of stock options if a company is not offering it as part of a compensation, but selling them to you as an employee? Thank you so much for all your help. [00:46:13] Joe: Thank you so much for that, Nicole. And I think og, that is definitely the world of startups. [00:46:18] If you’re in the world of startups, sometimes you’re gonna hit it big. Like we talked about. You know, the rollercoasters with the biggest hill gonna have the biggest drop. Mm-Hmm. But sometimes it’s wonderful. Sometimes, uh, not so much. But can Nicole make lemonade outta these lemons with these stock options? [00:46:33] OG: Well, probably not. When it comes to stock options, they’re yours under a certain amount of circumstances, right? Vesting, or you’ve been with the company a certain period of time, but it also requires you to purchase them at the price that they told you that they were offering them to you at. So for example, a lot of times what’ll happen is they’ll say. [00:46:54] Your bonus is you get to buy 20,000 shares of our company at a dollar a share. Now, we hope that in 10 years from now when these expire, the stock will be worth $25 a share. You’ll buy ’em for a dollar. You’ll immediately sell ’em for 25, bought a boom, bought a bing. You’re a gazillionaire. Life is great. [00:47:15] If you wanted to, you could buy those after the vesting period. You could buy them anytime you wanted. But what most people do is they, she might be [00:47:22] Joe: able to buy them right now. Yeah, and lose a bunch of money. Yes, [00:47:26] OG: you could, but you could. The good [00:47:28] Joe: news is you’ll save on taxes. [00:47:30] OG: You’ll save on taxes. You’ll save a ton on taxes. [00:47:31] You’ll save 1200 bucks in taxes to buy $4,000 worth of stock. That’s how that works. If there are restricted shares and it’s part of your compensation and then you own them, then you can sell it. Also, a lot of times, if it’s a startup, it’s not publicly traded. So there’s, uh, some restrictions around selling in terms of, you know, when you can and to whom, so and so forth. [00:47:52] So you might have an issue with trying to find somebody to buy your bankrupt company for 38 cents, even even at that price. Like, does anybody want it for 25 cents now? I’m good. It’s worth zero. I mean, the reality is, is that a bankrupt company stock is worth nothing. That’s part of the deal. So even uh, buying it for 38 cents or trading it to somebody for 38 cents would be a bad idea. [00:48:12] So the answer to your question is if you’ve already purchased them and they were in your name, then yeah, you could write it off. If the stock has gone bankrupt and it’s worth zero, you can, you can write that off. If it was an option and you haven’t exercised that option yet, then no, you can’t because it’s not yours yet. [00:48:28] It’s, it’s a contract. It’s still a potential, if that makes sense. That’s why stock option planning is so important because. Not only are there different types of options, but there’s different tax treatment of options when you acquire them. When you sell ’em, how long you hold onto it. There’s different tax implications in the years that you deal with stock options, depending on the different types. [00:48:55] So there’s a lot of moving parts there. The most common is restricted shares, and that’s part of your compensation. A benefits package, you know, a bonus package. We generally recommend if you have restricted shares that you sell your restricted shares when you vest them, largely because this is the question you should ask. [00:49:12] If I got a cash bonus of $10,000 today, what I buy my company stock with it. And most of the time people say, no, I have a bunch in my 401k and I’ve got a bunch of options. I wouldn’t buy more of it today. Well then that’s what’s happening, right? Is they’re saying, here’s a bonus, we’ve prepurchased company stock for you in case you wanna keep it. [00:49:29] You’re like, no, I’m good. I’ll take the cash please and diversify it. There’s a lot of other reasons for that. Uh, especially if you’re in a successful company. The other extreme happens, so you get some options. Maybe you get some bonuses that are restricted shares, maybe some money in your 401k company does really well. [00:49:46] And now you get a little bit more, you get promoted, you get a little bit more, you got the ESPP plan, which allows you to buy a little bit at a discount. So you do a little bit of that, and then all of a sudden you show up in my office and go, I’ve got a problem. I’ve got $4 million of my company stock at a $108,000 cost basis, and I know I should diversify it, but if I do, it’s gonna cost me a million dollars to do it. [00:50:06] Now what? [00:50:07] Joe: Yeah. But if I don’t, my entire asset portfolio is 4.1. I’ve got 4 million in the stock. I’ve I’ve got very little outside. Yeah, I’m screwed. Either way, I’m screwed no matter what. And [00:50:17] OG: that is the giant conundrum that people find themselves in when they don’t have a strategy going into it and everybody says the same thing, ah, that’ll never happen to me. [00:50:27] bit: Yeah. Okay. [00:50:28] OG: I mean, it’s not the worst problem to have, right? Wake up and get your statement from your 401k or get your statement from your brokerage account and be like, holy crap stock’s doing great. I’ve, I’ve got a million bucks a company stock. But then you go, oh crap, I got a million bucks. A company stock. [00:50:42] Doug: Well, remember our guest a couple of months ago, Michael Balter, that happened to him at Intel, wasn’t it, Joe? [00:50:46] Joe: Yeah. He ended up with really those handcuffs. Too much money in one place. [00:50:50] Doug: Yep. [00:50:50] OG: Yeah. And so it’s a blessing and a curse, and as companies innovate and as they try to create new ways to reward employees, you’re gonna see more and more of this. [00:50:59] And hopefully you find a, an organization that is successful and you hit it out of the park, but you still have to have a plan for it along the way. [00:51:07] Joe: We look at this a little bit like, you know, the analogy that I like is a conveyor belt that you put a percentage of your portfolio you’re gonna keep in stock. [00:51:14] Let’s say it’s five to 10% of your entire portfolio, which means is you have more money, the dollar value goes up, so you’re not avoiding your company and you certainly can add to the position, but you’re just keeping it in check so you don’t end up. OG with the problems that that you talked about. But besides that, I love the ESPP because I get the discount and if the stock just manages to do something, do nothing. [00:51:39] If the stock just manages to hold its own, I will get a 10 to 15% discount. But I certainly wanna sell it right away ’cause I don’t wanna go over that percentage. And then to your point, the same thing with the restricted chairs. I’m not gonna tell them, no, don’t give me RSUs or don’t give me options ’cause I don’t, I don’t wanna load up, no, get ’em and make it a conveyor belt. [00:51:57] Use that conveyor belt and then that also, I would think, oh gee, because you’re doing that every year, makes that tax burden, you know, you’re always gonna have a tax burden. I don’t want the tax tail to wag the make money dog, but your tax burden’s gonna be a little more consistent, I would think if you do it every year, [00:52:13] OG: well you have some flexibility there and obviously you can time things out the way that you want it. [00:52:16] I’ll add some more complexity to it as you move up in your organization and as more and more of your pay is based on the results of the organization, so you get more and more incentive type compensation. Stock and that sort of thing. You run into a scenario where you start being limited in your options as, or your opportunities, I should say. [00:52:33] I don’t wanna confuse the terminology here. You, you start being limited in your opportunities to buy and sell it. So as you get to a certain point in your organization, that will come with some restrictions too, or could come with restrictions that are like, okay, well you can only sell this stock four times a year and only on these four days. [00:52:52] You know, it’s like, you know, and you go, well, how, how can they tell me what to do? Well, it’s because you know too much. You’re too involved in the day-to-Day decisions. To, you know, be trusted with making your own decisions impartially, and then you have to report it. There’s, you know, so it can get outta hand in a hurry and then you go a couple years of not selling it, you move up in promotions and all of a sudden now you’re restricted from being able to sell stuff [00:53:14] Joe: whole different [00:53:15] OG: ball. [00:53:15] It’s a great problem to have. Yeah. Trust me, I love it when people show up in my office and go, I got all this money and I dunno what to do with it. Well, and hopefully Nicole, we’ve got all sorts of ideas, [00:53:24] Joe: you know. Well, and I bet that’s why Nicole and her and her husband play this game is, is to have those from time to time as well, right? [00:53:30] Yeah, [00:53:30] OG: no, it’s fantastic. But just like you have to have a strategy for rebalancing your normal portfolio, you have to have a strategy for this. This is all part of your, it’s all part of your net worth. [00:53:39] Joe: So Nicole, that’s the way that we think about it. Uh, sorry to hear that this one didn’t work out, but I’m sure that based on what you said, your husband’s onto the next adventure and, um, good luck on that one. [00:53:51] Stacking Benjamins dot com slash voicemail if you’d like to ask a question, maybe other people are wondering the same thing that you are wondering. Again, Stacking Benjamins dot com slash voicemail. If you’re not here though about stock options or about even just investments, you’re like, how does this all dovetail together? [00:54:07] So I meet my goals. Well, OG and his team are comprehensive financial planners and they are accepting clients right now. So head to Stacking Benjamins dot com slash og and that is the link to OGs team and their calendar for a first meeting where they can ask you exactly what you’re focused on and they can help you figure out how they can interface with you to help you make better financial decisions going forward. [00:54:35] Doug: og now that we help Nicole out, uh, it’s time for my second favorite part of the show, which is when we get to go on the back porch and pour some bloody Mary’s Crack a beer. [00:54:43] OG: Bloody Mary’s White. Kick your [00:54:45] Doug: shoes off. What have, uh, let, let’s do a speed round. Let’s make a quick today, but let’s do a speed round of what we’ve been watching, like super quick, like eight seconds on each one. [00:54:55] What do you got? [00:54:57] OG: Uh, hold on, let me find the name of it. [00:55:02] Doug: You, you heard me say speed round, right? [00:55:04] OG: Uh, two things on Netflix. Uh, one I watched the entire series of a man in Full Jeff Daniels and a few other characters that you’d recognize. Kind of a weird movie, honestly, I don’t know. Not sure about it. Um, but you went all the way through it. [00:55:22] It was eight episodes, just kind of burn through it. Yeah. Uh, popcorn stuff that’s always on is, uh, I’m watching the series of Long Meyer. On Netflix. It’s a, he’s a sheriff in Wyoming and it’s, it’s not very good either. No, it’s not. I think we got [00:55:39] Doug: through about six or eight episodes of that and then I, we fizzled out. [00:55:43] Yeah. [00:55:44] OG: Yeah. Kind of the same stuff. How about you? [00:55:46] Doug: Um, well, most recently I’ve been into Franklin because a Stacking, Benjamins B Joe recommended it so strongly and, [00:55:55] OG: and, [00:55:55] Doug: and, uh, independence Day. It’s actually, so the show is good. Michael Douglas is horrible. Like, how did this guy get to be an a-list actor? He, he cannot sell being Ben Franklin at all [00:56:09] OG: because all you hear is like Gordon Gecko. [00:56:11] Yeah, right. Greed, for lack of a better term, is good. [00:56:14] Doug: There’s so many things. He is good in, you know, a game that he, uh, excuse me, a movie that it doesn’t get talked about enough for him is the game. It’s gotta be back from, like, I [00:56:23] OG: thought about watching that this weekend with my boys. The game. Yeah, because it’s Sean Penn’s in it, right? [00:56:28] Isn’t his brother? Yeah. Sean Penn’s the brother. That’s the. That’s the birthday surprise. Correct. If you haven’t watched the movie, no spoilers because you, you, you need to. Yeah. You can’t. If you haven’t watched it, you, you’re full. It’s a [00:56:40] Doug: ride, isn’t it? [00:56:41] OG: Oh yeah. It’s, I mean, [00:56:42] Doug: the whole thing. [00:56:43] OG: It is a great, yeah, it’s a great dra. [00:56:46] Suspense drama. Suspenseful drama. Is that what you got? [00:56:48] Doug: Yeah. Yeah. I think that that’s, it’s definitely suspenseful. Yeah. It’s mostly suspense. A little bit of action. Yeah. And, uh, you know, would highly, highly recommend that. In fact, now that we’re talking about it, want to go back and watch that. And I’m gonna finish Franklin, because I’m six episodes in out of eight. [00:57:02] So just now I’m a completionist. I’m gonna see if [00:57:04] OG: you could pull it [00:57:05] Doug: off. I’m gonna do it, but, and ’cause you know, there’s the historical aspect, like are you gonna learn some stuff in there that you didn’t learn in high school history class? And so that part of any of those historical dramas, I always appreciate, I’ll keep going, but it’s just, it’s a little bit cringey every time. [00:57:19] There’s definitely [00:57:19] OG: no sensationalism in there though, right? No. It’s like, it’s all exactly factual. Super [00:57:23] Doug: straight by the book. Yeah, exactly. I think people were taking notes on dialogue back then. No Hollywood. No Hollywood. Yeah. So yeah, that’s, that’s what I got going on. So, uh, watch Franklin, if you’re into the historical side of it, not for the acting, definitely go watch the game and sounds like Longmeyer is a bit of a pass unless you’re really into, you know, you need more Yellowstone type fix. [00:57:48] OG: It’s not even close to you as good as he hostile. It’s not, it’s [00:57:50] Doug: just out there. Is it Taylor Sheridan though? That show might be Taylor Sheridan. Same producer. I’m not sure. Anyway. Okay. That’ll wrap it up on the back porch, which is perfect ’cause I just pounded my beer. It is time to get outta here. [00:58:04] OG: So Joe’s gonna come up on Wednesday. [00:58:05] He’s got a special thing with Paula that they recorded a couple of weeks ago. And then, uh, you and I will be back a week from today with a another fantastic, uh, Doug and OG show. What do you think about that? [00:58:19] Doug: I’m already getting fan mail, asking for more of just the Doug and OG show, so, which is weird. [00:58:25] It’s gonna be awesome. [00:58:25] OG: You don’t have a, because I still don’t [00:58:27] Doug: have an email address [00:58:29] OG: based on all this, uh, you know, hodgepodge of stuff we did today, Doug. Doug E. Fresh as I like to call you the Big D [00:58:35] Doug: Oh, that’s the best one yet. Let’s stick with that. What [00:58:39] OG: should we have learned today? [00:58:40] Doug: What’s stacked up on our to-do list for today? [00:58:43] First, take some advice from Ed’s slot. As usual, the tax time bomb is always ticking, and once again, the rules on how to diffuse it are changing, so it’s time to revisit your tax strategy to make sure you’re in the best position to survive. Second, if you have bazillions stashed away in a high yield cash vehicle that exceed your emergency fund and long-term goals, it might be time to reevaluate how that cash is working for you. [00:59:10] But what’s the biggest to do? I gotta submit photos of the basement to Dwell Magazine. I bet they’d love to get a peek inside a famous podcast studio. Oh, but uh uh, first I gotta get rid of Mom’s Unmentionables from the Dryer Rack. [00:59:27] Thanks to Ed Slot for joining us today. Wanna learn more about Ed? Of course you do. Head to ira help.com, or if you wanna watch the whole virtual book launch party, you can find that on YouTube. Don’t worry. We’ll include links in our show notes at Stacking Benjamins dot com. This show is the property of SB podcasts LLC, copyright 2024, and is created by Joe Saul Sea High. [00:59:53] Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. Oh yeah, and before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know. [01:00:15] This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.
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