Show Notes

• 00:00 – Intro: This Week on the YMYW Podcast
• 00:56 – 39 & 36 With Nearly $1M. How Are We Doing? (Mike, Tampa, FL)
• 07:30 – Watch How to Cruise Into Your Retirement on YMYW TV, Download the Cruising Into Retirement Checklist and Guide
• 08:14 – Hoping to Retire in the Next Couple of Years. How Should I Manage Deferred Comp and Withdrawals? (Kate, CA, 55)
• 16:23 – Download the Withdrawal Strategy Guide for free
• 16:56 – Roth Conversions Prior to IRMAA for Alex in podcast 510? (Thomas, YouTube)
• 18:54 – How to Pay Roth Conversion Taxes Before Filing 2024 Taxes? (PoolMileThirty, YouTube)
• 21:39 – Paying Roth Conversion Tax in December vs. January (TacticalTruth, YouTube)
• 22:53 – How To Avoid Child’s Ex Taking Half of Gifted House? (Emjay, YouTube)
• 23:53 – Will Kids Keep Stepped Up Basis If They Build New House on the Property? (Thaigera, YouTube)
• 27:53 – Gold Doesn’t Grow? That Didn’t Age Well (Eldon, YouTube comment)
• 29:39 – Outro: Next Week on the YMYW Podcast

Guides | Blogs | Educational Videos | YMYW Newsletter | Subscribe on YouTube

Watch today’s podcast episode on YouTube

Transcription

Intro: This Week on the YMYW Podcast

Andi: Mike and his wife in Tampa are 39 and 36, they’ve got nearly a million bucks saved. Are they on track for retirement? Kate in California is 55 and hoping to retire in the next couple of years. How should she manage deferred compensation and retirement withdrawals? That’s tod ay on Your Money, Your Wealth podcast number 514. Plus, Joe and Big Al answer questions from our YouTube viewers on considering IRMAA when making Roth conversions, paying Roth conversion taxes quarterly or in December or in January, protecting a gifted house from a child’s ex, and the tax impact of rebuilding on an inherited property. Finally, 8 years ago, Joe and Big Al said you shouldn’t have more than 2% of your portfolio in gold and one YouTube viewer said that did not age too well. What do the fellas think today? We’ll find out. I’m Executive Producer Andi Last, and here are the hosts of Your Money, Your Wealth, Joe Anderson, CFP® and Big Al Clopine, CPA.

39 & 36 With Nearly $1M. How Are We Doing? (Mike, Tampa, FL)

Joe:  All right. We got Mike from Tampa, Florida. “Big fan of the show. Thanks for taking my question. I know you mentioned getting some younger callers and I recently found your podcast.” Oh, that’s why Big Al, you put a calling out there.

Al: I did.

Joe: – You need some younger callers. And then now we got the FIRE movement just blowing us up.

Al: You know what? We also need my cousin who loves our show. She was telling me over Christmas, she said, I feel intimidated to ask a question because I don’t have millions. And I said, well, send it in because we’d like to answer everybody’s questions. So we’ll see.

Joe: Yeah. Let’s see if this guy’s got millions.

Al: Okay.

Joe: “I wanted to see how you think we’re doing.” All right. “I’m 39. My wife’s 36. I recently transitioned to the private sector a few years ago. Total compensation, make about $300,000 to $350,000. I was making a third of that 3 years ago. So brand new to make to great money. My wife makes roughly $300,000 total.” Wow, they’re just slumming it.

Al: Hopefully they don’t want to retire early.

Joe: “We have two young kids, a 4-year-old and a 2 year old. Our estate documents are in order, and we have $1,000,000 in life insurance. And my wife has $1,500,000. As far as the accounts, total of roughly $104,000 in cash, $878,000 in investments not including the restricted stock and here’s the breakdown, cash $102,000, Capital One to pay the bills $2000, Schwab brokerage with low cost index funds $180,000, Wife’s 401(k) that’s maxed- maxing out is $285,000. We got a Fidelity brokerage account $218,000, Husband 401(k) $66,000. Let’s see, daughter’s 529 $35,000, son’s 529 $30,000. Husband prior retirement account government, no pension, but compounds at 8% as long as I don’t roll it over, $64 000. Wife restricted stock is $100,000. Other assets liabilities, we bought this house a year ago at 6.99% for 30 years- Ouch -for $770,000, we put a big chunk down. Probably have about $300,000 or so in equity. Both cars are paid off. Here’s the kicker. I have large student loan debt from a private grad school. I have roughly $300,000 in student loans. But the good news is, on the pay program, we have about 9 years left. I’m currently making about $500 a month in payments, but with my new higher income, my payments will be about $1200 to $1300 a month since we file separately. A good amount each month but not crippling. With two kids in daycare plus the rest of our overhead, our monthly expenses are probably $12,000 to $13,000. We’re both maxing out 401(k)s and with my monthly bonus, I’m able to now stock away an additional amount anywhere from $5000 to $10,000 a month. My goal is to have the two kids’ 529 at $75,000 or $80,000 by the time this year- next year. Which will include a 14-to-16-year runway before they go to school and assuming an 8% compound that would give me $250,000 to each for college which should be enough. Once I get that done, I will transition back to dollar cost averaging to the Schwab account. How am I doing? No desire to retire anytime soon, I can see us both cutting back at around 60, 65, but I think I’ll always do something part time, like consulting. Hoping to be in a net worth around $5,000,000, $10,000,000 by the time, assuming able to continue to stay at the incomes we’re at and put away the money at the same rate. Any thoughts or feedback would be great, appreciated, Mike from Tampa.”

Al: You think they’re on a good path?

Andi: A FIRE guy.

Joe: Well, they got a lot of stuff going on here.

Al: They do.

Joe: He’s got $300,000 in student loan debt. Got a huge pay increase and so instead of paying a few hundred dollars a month, now he’s paying like $1500 a month. $1500 a month. So that’s-

Al: I call it $18,000?

Joe: -$18,000.

Al: You need a calculator for that?

Joe: No, I was doing some other math there. What interest rate on the loans?

Al: I’m not sure that they said.

Joe: So it’s going to take 20 years or so to pay off those loans at that rate.

Al: I think that the payee program pay as you earn. I think it’s, I think you pay 10% of your discretionary income for a 10 year period. I’m not sure you have to pay it all off. I’m not that familiar with them. Maybe forgiven. What I do know is that there was a bunch of requirements to qualify and they stopped the program, in July of this, of last year, 2024. But I think maybe it gets forgiven. I’m not 100% sure. But even putting that aside, Joe, they’re, if they’re saving full 401(k)s, so that’s almost $50,000 a year, and they’re saving, he said, between $5000 and $10,000 a month. Let’s just take the midpoint $7500. That’d be $90,000. They’re saving $150,000 a year, even with the student loans. They’re making $600,000, that’s 25% of their savings. The math should work out.

Joe: Yeah, I think 25% of their earnings, for sure.

Al: Yep. Yep. So I’d say keep doing what you’re doing.

Joe: Right. What’s the question? How are we doing? You’re doing awesome.

Al: You’re doing fine.

Andi: So these are young people that just called into brag.

Joe: Atta boy. Way to go.

Al: Atta boy, that’s right.

Joe: Thumbs up.

Andi: And they’re not planning to do FIRE, but could they?

Al: Well, they didn’t ask that. So we’re not going to, we’re not going to go there. But yeah, you guys are doing fantastic. You’re in the top 1% plus of people that we talked to, people in the country, people in the world. So keep it up.

Watch How to Cruise Into Your Retirement on YMYW TV, Download the Cruising Into Retirement Checklist and Guide by Friday, Jan. 31, 2025!

Andi: When it comes to your retirement plan, are you the captain of a sinking ship? Many of us need a life vest: we’re ill-prepared and traveling without a compass. By plotting a good course and using proper tools and strategies, you can cruise into retirement. This week on YMYW TV, Joe and Big Al show you how to be proactive and keep your retirement afloat with the steps to prepare, adapt, and remain on course. Watch How to Cruise Into Your Retirement and download the companion Cruising Into Retirement Checklist and Guide from the podcast show notes – it’s only available for a limited time, so download it before this Friday. Just click the links in the description of today’s episode in your favorite podcast app to watch How to Cruise Into Your Retirement and to download the companion guide for free.

Hoping to Retire in the Next Couple of Years. How Should I Manage Deferred Comp and Withdrawals? (Kate, CA, 55)

Joe: All right, let’s go to Kate from California. “Hey guys, just started listening to your podcast and loving it.” All right. “Hoping you can help me with this situation and get a spitball analysis. I’m currently 55, single. I have two kids, 18, 16. My financial assets are as follows. We got overall net worth of $6,000,000 including $1,700,000 is my primary home with a $550,000 mortgage, $1,300,000 in a 401(k), $1,400,000 in an IRA, $1,200,000 in a brokerage account, $1,300,000 in deferred income and a work brokerage account invested in S&P 500 fund can be distributed annually over 5 or 10 years. Got $120,000 in HSA and $50,000 in a Roth. I’m hoping to retire anytime in the next couple of years and was wondering how I should manage my withdrawals. Expenses are going to be about $140,000 pre-tax. My plans are to continue maximizing my contributions to the 401(k), backdoor Roth, HSA, and about $40,000 in deferred income. My effective federal tax rate is about 28%. If I target 58 to retire my current though is to leverage my deferred over 5 years and then use my brokerage account for a year or two while converting some IRA 401(k) to Roth account with a goal to reduce my RMDs. This would bring me to age 65 and then I’ll start Social Security. Not sure if this is the best tax in IRMAA strategy. I would appreciate some guidance.” Okay. I like this question. Good news is, so she’s in the 28%, she’s single, correct? 55, single, two kids. All right, so she’s got this deferred comp at $1,300,000 that she’s going to continue to put around $40,000 a year in so she gets a deduction of $40,000 per year but then all of that money has to come out over each a 5 year or 10-year period.

Al: Correct. You have to elect.

Joe: And she has to elect before she defers, so.

Al: Correct.

Joe: I wonder if it’s, if, is it 5 or 10? What does, what did she elect?

Al: Well, she’s planning on 5. That’s what she said. But then there’s, ways Joe to sometimes change the payout period. But then, you can’t get, you have to wait. There’s a waiting period. So it’s plan specific. It depends upon the plan. I think where you may be, go, where you may be going is. If she could defer it over 10 years, wouldn’t that make a lot more sense?

Joe: I think 10 years is better.

Al: Me too, because she doesn’t need 5 years to cover expenses. I think you do 10 years and then you’d still have probably room to do Roth conversions in all 10 years instead of having way too much income up front and then doing Roth conversions on the backend. If it can be changed, if it can be changed, right?

Joe: And it’s already $1,300,000, let’s say it goes to $1,500,000, I don’t know, what’s, 5 years on $1,500,000, I mean that’s several hundred thousand dollars of ordinary income that’s going to be on the tax return regardless over that 5 year time period.

Al: Right. So that’s $300,000 of income and she only needs $140,000. So you, we, one of the things we don’t like about RMDs is when you have way more income than you need, cause you’re spending tax on dollars you don’t really need. If you can defer that out, RMDs, we try to get, we try to reduce those through Roth conversions. In a deferred comp plan like this, if you could do a 10 year, because you’ve got plenty of income, it’s a, it’s just a much better approach, but. But you’re right, Joe. Every year you defer, you have to elect, but sometimes there’s ways to change those.

Joe: But, all right, so let’s say she does the 5 years, she gets the money out, she’s going to be in a pretty high tax bracket, like $300 some odd plus income and a single taxpayer. You’re up there, from a percentage standpoint. So you get most of that done, all of your other assets are now growing, and then you can switch up your overall distribution strategy. I mean, I love deferred comp in a sense that you could reduce taxes today, but then it just handcuffs you in regards to like a tax efficient distribution strategy. Because over the next 5 years, there’s nothing else she can basically do because she’s at the top of the bracket. And then she can start thinking about, all right, well, now how do I create the income from my other assets? She’s got $1,200,000 in a brokerage account. So then you can start thinking about, all right, well, now I can live off the brokerage account and then just start doing conversions to the top of the 24% bracket or higher, because she’ll have plenty of assets. The RMDs as they continue to build and grow, she’s got one, call it two and a half-

Al: Yeah, call it $2,700,000?

Joe: Call it $3,000,000 over 10 years. That could be $6,000,000.

Al: Yep, and she’s only, let’s see what she’s 55. So it’s going to be it could double twice. It could double twice.

Joe: So, I don’t know. Let’s say you got $10,000,000 now in retirement accounts. That’s at least $400,000 of income. That’s all ordinary. So you’re going to lose half of, she’s going to lose half of the deferred comp plan in tax because that deferred comp payment is going to give her $300,000 of income. So $300,000 of income as a single taxpayer, I don’t know, what, where does she live?

Al: Ah, let’s see-

Joe: California. All right. So there you go. 50%. So, so $300,000, a good portion of that’s going to go to tax. She’s going to live off the rest. She can save the scraps. So she’s going to lose quite a bit of that to tax over that 5 year period. And then the compounding effect of the retirement accounts. So she has to get the money out, but she can’t pull the money out of the retirement accounts as she’s taking the deferred comp over a 5 year period. Because of the tax rate she’s in.

Al: Correct. Yeah, that’s why-

Joe: The 10 years she could probably start, you know, at least slowly dripping some of this, some of these dollars out.

Al: Yeah, I mean, I think that’s our best thought that we have for you is try to switch from the 5 year to 10 year to the extent possible because it’s going to work out much better tax wise for you.

Joe: Either way, she’s fine. Awesome job. I mean, wow. With the amount of money that you’ve saved, congratulations. You’ve really done a phenomenal job. The bad thing is, the good news is she’s, she saved a lot of money. The bad news is that the government really loves her too, right? Because where she saved her money and where the money’s sitting is that they’re just like, oh my gosh, we love you because you’re going to help pay some of the bills here.

Al: Yeah, we got a 5-year payout. Ooh. And then we got RMDs coming. Yeah.

Joe: But yeah, I think you just got to tweak a little bit of what you’re currently doing, run some numbers here. You know, even those RMDs could even be, if she thinks that taxes are even going to go higher, the sooner she gets the money out of those retirement accounts, the better off she’s going to be.
Tax rates are pretty low. Are they going to change? Does it make sense to pay it at 32%? 37%. Could it go to 39.6% or higher? Could there be, you know, I don’t know. So there’s a lot of things to consider, but she’s, she- She’s got plenty of money, she can do whatever she wants, and she’s gonna help out the government. Alright.

Download the Withdrawal Strategy Guide for free

Andi: Our Withdrawal Strategy Guide will tell you more about sustainable distribution rates, optimizing from which accounts you make your withdrawals and when, the impact of market volatility and inflation on your retirement spend-down plan, and tax-saving strategies to make your money last longer in retirement. Grab the Withdrawal Strategy Guide from the podcast show notes. When you shift from saving for retirement to spending in retirement, your financial strategies need to change. Click or tap the link in the episode description to download the Withdrawal Strategy Guide and learn how to identify the most efficient plan for when and where your retirement income will come from, and which tax-smart tools allow you to keep more of what you’ve earned and give less of it to the IRS. Get your copy for free, then share the show and the free financial resources with your friends, family, and colleagues. And if you’ve got money questions or want a Retirement Spitball Analysis of your own, just click or tap the Ask Joe & Big Al link in the episode description.

Roth Conversions Prior to IRMAA for Alex in podcast 510? (Thomas, YouTube)

Andi: Can we go to YouTube questions?

Joe: Yeah. Fire away. Let’s go.

Andi: Alright, so we have a YouTube question from Thomas who left this on podcast number 510, which was ‘defusing a future tax bomb with Roth conversions’. He said, “For the spitball on Alex and Spouse, shouldn’t you also consider the advantages of doing conversions prior to IRMAA look back years or is this couple not retired- required to add Medicare, assuming at least one is a federal retiree?”

Al: Well, let me give you a little bit more cause referring back to the email. They’re in the 24% tax bracket Joe, today. They will be in the 24% tax bracket under current tax law in the future with RMDs. So we suggested keep converting to that 24% bracket. And so this question is, well, what about IRMAA? Maybe you should only do it until you’re, you know, 65, right? So I think that’s the question. And to me, the answer is, yeah, it’s better before 65 because you don’t have IRMAA, but you have to consider the extra Medicare tax that you pay as an additional tax. And if it still makes sense to do it, then you continue doing it, even though your Medicare payments, monthly payments are going to be higher.

Joe: Yeah, to say that a different way, if I increase my Medicare by $200 a month, so that’s it, that’s an added tax. So to do the conversion, you’re going to pay X amount of dollars in tax, and then, hey, I might have put myself in another IRMAA bracket that I’m paying a little bit more Medicare. You have to do the math to see, does it make sense to pay that extra premium in Medicare? Versus have a low Medicare premium, and then when RMDs hit, you’re going to be stuck in these higher IRMAA brackets for life. So it’s just figuring out, hey, does it make sense to pay the piper a little bit for a couple of years? Then I can potentially save myself a ton of additional tax and additional IRMAA premiums if I do this thing correctly. So.

How to Pay Roth Conversion Taxes Before Filing 2024 Taxes? (PoolMileThirty, YouTube)

Andi: All right. Next question is from PoolMileThirty on a two-year-old podcast clip called ‘when to pay Roth conversion taxes without penalty.’ And I think this one is coming up because we’re now approaching tax time for 2024. “I need to pay on January 15th. Will I be getting a form from my financial institution? I’ve never paid any other time other than April. So I don’t know how to make that early payment. Can you tell me how to go about making that payment before I file my taxes in April? Thank you.”

Al: Yes. I think the question is referring to when you do a Roth conversion, it may put you, you may owe taxes. And you may have to make an estimated payment. There’s reasons why you wouldn’t have to, but in many cases, you have to make an estimated payment and it would be January 15th. If you made that Roth conversion in Q4 of last year. You pay it through an IRS form. It’s a 1040ES, estimated payment. So 1040ES, and you can down that- download that online, print it. Cut it out, write yourself, write a check for the amount to the IRS and put it in an envelope and mail it. It’s not going to come from your financial institution. You’ve got to go ahead and get it. You can get it from your accountant. You can download it yourself, but that’s generally how you pay it. You can also pay online. Some people like to do that, some people don’t, but that’s how you, that’s how you, have to take the initiative yourself or you have to ask your accountant to help you with that.

Joe: Well, he’s asking- is he asking for a tax form or how much the tax is going to be?

Al: He’s asking for a form. He thought his financial institution might send it to him. This is where, if you have an accountant, we’ll help you, we’ll figure out how much you should pay, and then we’ll give you the form to pay it. If you are preparing taxes yourself, let’s say on TurboTax or some other tax program, then you would have to do a little tax projection for the following year to see how much it is, print out the form, and then go ahead and cut it out, send it in with your check.

Joe: So, but he did a Roth conversion, so he’s always paid taxes in April. He’s like, all right, since I did a Roth conversion, I’m going to have to pay money in April 15th. And is there going to be a form? How much money do I pay? How do I go about paying it?

Al: Well, he’s responding to something that we talked about on paying it January 15th. I think that’s what the question is.

Joe: Whoever this person is, is he asking a question about a question that we answered? Or is he commenting on a question that we answered to someone else?

Andi: Yes.

Al: Yeah, he’s commenting. So I probably talked about when estimated payments are due. And then I said, if you end up owing taxes, you may have to make a quarterly estimated payment. So he’s asking how to do that.

Joe: Sure.

Paying Roth Conversion Tax in December vs. January (TacticalTruth, YouTube)

Andi: All right. And then the next one is actually on that same video. Somebody says, this is somebody named Tactical Truth who says, “So, make a Roth IRA conversion in January and you can pay the taxes equally across 4 quarters. Make the Roth IRA conversion in December and pay the entire tax amount for the conversion by January 5th of the following year. Is that correct?”

Al: Yes, January 15th. But in either case, with the first question and the second question, your fourth quarter income is higher if you make that Roth conversion in the fourth quarter. So you have to, it gets more complicated, but you have to do the annualization method on your tax return, or you have to have your accountant do it so that you’re not penalized to show that you had uneven income throughout the year. But that’s the correct statement. We still like Roth conversion though generally in January, just because you get another full year of tax-free growth, regardless of the extra tax that you pay over the course of the year.

Joe: Yeah, the market does 10%, and I’d much rather be in the market in January than in December. Because you get the full year of that growth tax-free, versus doing the conversion in December, you’re only going to get, you know, one month of that growth. Or this year, you would have took a loss.

How To Avoid Child’s Ex Taking Half of Gifted House? (Emjay, YouTube)

Andi: The next one is from emjay on, ‘best way to help adult kids buy a house’. emjay says, “How do you best protect against your child’s de facto ex taking half of your housing gift if they later split up?”

Al: All right. So I guess he wants to give money to his kid, but his kid’s married and wants to make sure that it stays with the kid if they split up. Is that the, what you’re saying?

Andi: Basically yes. But it says the child’s de facto, so it sounds like they’re not married. They’re living together.

Al: Yeah, well, I guess it depends upon the state whether it’s a community property state or not for one thing. Depends upon the laws of the state, but I think what most people do in a case like this where you want to be ultra safe is you would just set up separate property or maybe even set up a trust. So it’s in a trust. I mean, there’s ways to protect income. This is actually more of a legal question probably than- than a financial question, but, yeah, there are ways to help protect the assets that you give to your kids.

Will Kids Keep Stepped Up Basis If They Build New House on the Property? (Thaigera, YouTube)

Andi: Okay. Thaigera on a Peter Keller video on ‘Step-Up in Basis Explained’, says, “If I leave my real estate to my children when I expire, then they get it and demolish the old house to rebuild a new house on the same land. Will they be able to keep that new stepped-up basis on the total value when they sell the property?

Al: The answer is yes, they keep that basis, plus any new improvements, building a new home would actually add to that basis. So it would be a greater amount than the stepped-up basis when they received it.

Joe: Wait a minute, I don’t know if I understand the question. Let’s say, she has a house. She bought it for $100,000. It is worth $1,000,000, right? She dies. The kids inherit the house. Then they demolished the house and then they build a $2,000,000 house on that lot and then they sell it. Is that what he’s asking?

Andi: Yes, exactly.

Al: Yeah. Yeah, so then they’d have a $3,000,000 basis at that time. Right? Because it’s the original million-

Joe: Well, no. It would be worth, the higher the two, the basis would be. Because they sold the- they took down the house, which was worth $1,000,000. And so you’re saying if they build a $2,000,000 house, they would have a $3,000,000 basis on a $2,000,000 home?

Al: Well, if they build a home for $2,000,000, you’re, well, first of all, you have to consider the land part. Right. Cause you’re only, talking about-

Joe: I’m just saying total value. Total value.

Al: Yeah. Yeah. Yeah. Yeah. So that the, whatever basis that you inherited, whatever it’s worth when you inherit, it becomes your basis. And if you haven’t sold it, you still have that basis, right? Basically you’ve improved it. So any improvements that you add to that would add to that basis that you inherited.

Joe: Okay, I buy that. So if they sold it when she died, and she bought it for $100,000, the basis is now $1,000,000. So if they put $2,000,000 of cash and built whatever that they wanted to on their property, you know, they put an extension on it, they built this and that, whatever, the basis is $1,000,000. Now the $2,000,000 of improvements in the basis now would be $3,000,000.

Al: Right. Now, if they did this, like if the person that passed away gave them the property before he or she passed away, then it’s the $100,000. There’s no step-up, right? Plus the $2,000,000. But if they wait till after they pass away and it’s inherited, it’d be $1,000,000 step-up. Plus the $2,000,000 that they put into it.

Joe: Or let’s say if, she’s still alive and they want to do all this remodeling and things like that, and they think they’re going to get a larger appreciation, keep it in mom’s name, do all the work to the house. And then let’s say, now it spikes up in value even more, you know, let’s say there’s a flipper. Keep it a mom’s name, because if mom passes, and then they inherit it, they get the full step-up. So, for this example, it’s $1,000,000, they go in there, renovate it, they do all sorts of stuff. You know, with the, what was it? What’s the name of the, like renovation shows you hire? Canterbury Farms or,

Al: I don’t know.

Joe: No, you guys don’t know. Alright.

Al: There’s lots of renovation shows.

Joe: Joanne and-

Al: Oh, yeah, What? Yeah, I know who you mean.

Joe: And Chip.

Al: Or Chip? Yeah. Chip and Joanne. I don’t know what this show is called, but yeah.

Joe: Joanne, hire them, have them come in and make your house absolutely gorgeous. And then you can sell it, you know, for $1,000,000 more than-

Al: That’s right.

Joe: So, you get a full step-up in basis at that.

Al: Yep.

Gold Doesn’t Grow? That Didn’t Age Well (Eldon, YouTube comment)

Andi: Alright, and one final question. Actually, this one is a comment. This is from an 8-year-old TV show, and the clip was called, How Much of My Portfolio Should Be in Gold? And you guys said, basically, no more than 2%. It has no expected rate of return, and it does not grow. And Eldon said, “well, that didn’t age too well. So what’s your take on gold now, 8 years later?”

Joe: There is no expected return on gold.

Al: Gold can go up and down and fluctuate. And if you look back 8 years, it actually did pretty well. But you can look back in history, gold is generally considered to be like an inflation hedge. And if you look back the last 100 years, it actually hasn’t even done as well as inflation. We don’t think it’s a great investment long term, but yeah, there’s periods of time when it can do rather well, you just never know when that’s going to be.

Joe: But there’s no dividend, there’s no coupon, there’s no-

Al: That’s right, it’s a, commodity.

Joe: It, so when, we say it has no expected rate of return, because that’s the truth, it doesn’t, it’s whatever someone else is willing to pay for it. So that doesn’t necessarily mean we don’t think that there could be appreciation, but there is no expected rate of return. Because you’d have to take basically the present value of future cash flows of a, of an investment is really kind of what determines expected return there is none in gold.

Al: That’s a true statement.

Joe: That is a very true statement.

Andi: Alright, that covers it. Thank you for answering the YouTube questions.

Joe: Alright, yeah, and that’s it for us today. Thanks so much for the show. Thanks for joining us. Join us again next week. For Big Al, Andi Last, I’m Joe Anderson. Show’s called Your Money, Your Wealth®.

Outro: Next Week on the YMYW Podcast

Andi: Next week Big Al returns from his Australia New Zealand holiday, and I’ve asked the fellas to spitball on whether Old Bear should marry his honey, how Sebastian should navigate the financial aspects of separation, determining how much is enough for retirement and when can you take your foot off the gas, and more. Join us, won’t you please? Follow YMYW in your favorite podcast app, leave your honest ratings and reviews in Apple Podcasts and all the other apps that accept them, subscribe, watch us, and join me in the comments on YouTube, and don’t forget to tell a friend we’re making fun of finance over here at Your Money, Your Wealth.

A spitball is great to find out if you’re on track for retirement, but please, don’t base your entire financial future on it. Schedule a free financial assessment with the experienced professionals on Joe and Big Al’s team at Pure Financial Advisors. They’ll do a comprehensive review on everything from your asset allocation to your yield, to help you have zero concerns in retirement. Click or tap the free assessment link in the episode description or call 888-994-6257 to schedule yours.

Your Money, Your Wealth is presented by Pure Financial Advisors, a registered investment advisor. This show does not intend to provide personalized investment advice through this podcast and does not represent that the securities or services discussed are suitable for any investor. As rules and regulations change, podcast content may become outdated. Investors are advised not to rely on any information contained in the podcast in the process of making a full and informed investment decision.

_______

Listen to the YMYW podcast:

Amazon Music

AntennaPod

Anytime Player

Apple Podcasts

Audible

Castbox

Castro

Curiocaster

Fountain

Goodpods

iHeartRadio

iVoox

Luminary

Overcast

Player FM

Pocket Casts

Podbean

Podcast Addict

Podcast Index

Podcast Guru

Podcast Republic

Podchaser

Podfriend

PodHero

Podknife

podStation

Podverse

Podvine

Radio Public

Rephonic

Sonnet

Spotify

Subscribe on Android

Subscribe by Email

RSS feed

See All Platforms