There are scenarios we hear about occasionally but never really see them happen in person. These things often seem too good to be true and maybe they are. We’re going to find out how much ‘fake news’ is out there after Joel clears some things up for us.
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What You’ll Learn:
More than seven decades have passed since the infamous ‘Dewey Defeats Truman’ headline in the Chicago Tribune and it got us thinking about how many financial headlines aren’t actually true.
On this episode of Money Wisdom, we’ll ask Joel Johnson about five different scenarios that you’ve probably heard about but likely haven’t ever seen. They all deal with some aspect of financial planning and we’ll find out whether they are fake news or reality.
Family members gathering in a room to read the will to find out who is inheriting what. Does that happen? You’ve seen this scenario in the movies, right? Family members fly in from out of town to find out who got Uncle Bob’s lake house or Aunt Sally’s pearls. Well, this doesn’t actually happen in real life. Let’s discuss what it does look like.
People finding an old investment account they had forgotten about. Does that happen? Believe it or not, this happens quite a bit. Check the state treasurer’s website in any state you’ve lived in to see if there is any unclaimed property under your name. You might find a nice surprise.
Kids working their way through college these days. Does it happen? With the rising cost of education, this might seem like a fantasy, but Joel has seen people that are still working to pay for school as they attend. It’s a quality that we really value.
People successfully timing the market. Is that real? If this was the case, wouldn’t we all have a lot more money? Joel will tell us more about the risks of trying to time the market.
People retiring and then going back to work because they realize they don’t have enough money. Does this happen? You need to work with a financial planner to examine all aspects of your retirement portfolio so you know when you’re ready to retire. Don’t be someone that’s forced to go back to work because you misjudged your income needs.
We also take a few mailbag questions on this episode. We start with a question about a listener that gets company contributions to his 401(k) exclusively in company stock. He sells it immediately and buys something else, but is this a good idea?
The second question asks whether a listener should cancel an expensive whole life policy in exchange for a cheaper term policy. Joel explains what you need to do before you cancel the policy because you are never sure if a new policy will be approved.
The final question comes from someone who just got a large inheritance from her grandmother and she wants to get advice on what to do with that money as to not waste it. Joel gives her a few different options to consider.
That’s all on this episode of the Money Wisdom podcast plus a little more so let’s get started. Here’s the list of main topics we cover (Just click on the timestamp to jump to the specific clip):
[0:34] – Fun fact: It was 71 years ago when the Chicago Tribune ran the ‘Dewey Defeats Truman’ headline.
[2:10] – Today we’ll talk about whether some situations are real or not.
[2:26] – Family members gathering in a room to read the will to find out who is inheriting what. Does that happen?
[3:29] – People finding an old investment account they had forgotten about. Does that happen?
[5:16] – Kids working their way through college these days. Does it happen?
[6:56] – People successfully timing the market. Is that real?
[8:14] – If timing the market isn’t realistic, what’s the strategy?
[10:28] – People retiring and then going back to work because they realize they don’t have enough money. Does this happen?
[12:09] – How Joel helps clients find the answers to these questions.
[13:56] – In the News: WeWork has delayed laying off thousands of people because they don’t have the cash to cover severance packages. Joel gives a great explanation of the company.
[17:29] – Mailbag question: My company contributes to my 401(k) but it’s only done with company stock. I don’t want to have too much so I’ve just been selling it immediately and buying something else. Is this a bad idea?
[19:11] – Mailbag question: We’re trying to figure out the best way to finance our dream home. Which of these options should we choose?
[21:02] – Mailbag question: I just turned 70 and I’m about to retire. I recently looked at how much I need to start withdrawing from my IRAs. It looks like I might have a higher income in retirement than when I’m working. Can they really make me withdraw that much?
“For most of our clients, we’re doing a mix between safe money that can’t go down and money that’s exposed to the market. When times are good, like right now, they’ll do real well in the market. When times are bad, which they will be and the market drops 20 or 30%, they can leave their market piece alone and live off their safe piece.”– Joel Johnson, Money Wisdom Podcast
3 Related Items & Resources:
- Financial Wisdom from Will Rogers + Mailbag Questions
- Taking Complicated Financial Topics and Making Them Simple
- 3 Things You Can’t Trust in the Financial World
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