- Michelle Balconi joins the show to discuss her book, Let’s Chat About Economics. Follow @letschatecon on Twitter for updates on Balconi’s book series. (10:56)
- Find out why Joe might retire. (:39)
- Phishing emails that could be your worst nightmare. (1:00)
- Is it true, can you take spousal benefits from an ex-spouse? (6:33)
- Big Al has another list, this time it’s 5 Retirement Myths Debunked. (23:11)
- Joe puts “Big Al’s big brain” to the test on 8 Things Most Amercian’s Don’t Know About Retirement. (31:40)
Intro: How to teach your kids about economics. What you don’t know about retirement could hurt you. And do you think Anthony Weiner uses Snapchat? This is Your Money Your Wealth.
Today on Your Money Your Wealth, Joe and Big Al chat about economics with Michelle Balconi, co-author of the children’s book Let’s Chat About Economics! Plus, the fellas debunk retirement myths, and Joe quizzes Big Al on the 8 things most Americans don’t know about retirement. The fellas also answer emails on Roth IRAs, 401(k)s, and investing. Now, here are two guys who wouldn’t know Snapchat if it snapped them right in the IPO, Joe Anderson CFP and Big Al Clopine, CPA.
:39 – Joe’s moving to Africa?!
JA: Alan, I got some big news for you right now.
AC: You do?
JA: This could be my last show.
AC: So you mean I get to take over?
JA: Yes. I got this e-mail. I want to share it with you. And I want your advice on this. So it says, “Dear friend.” I won’t say her name, but she is one of the wives of the late president of the Democratic Republic of Congo. “Consequently, upon the assassination of my husband, I am in possession of $58 million. These funds are being earmarked for special projects. This fund has since been deposited in a security company in West African country of Togo, where I’m residing now with my children. It is now my intention to move the said fund out of this place, Togo, to a safer place for the benefit of the children and I, for immediate investment. Based on this, I am asking for your assistance to enable me to take this money out of Togo. However, note that my children and I have agreed to give you 20% of the total fund if you can accept the offering of assisting us.”
AC: Wow. So you could retire on that, huh?
JA: 20% of 58 mill! Also, it will be my responsibility in directing us on a viable business. I’ve got some responsibilities for this newfound fortune.
AC: You got to do something. Now do you have to marry her?
JA: Wait for it. “It is also my intention to relocate and probably take temporary residence in the country pending when all the troubles in my country will be resolved. We advise that you look for a house we will buy as soon as we arrive. To conclude this transaction you will be required to come to Togo to open an account in the bank here in Togo where the security company will deposit the total sum in your favor. From this bank the money will be remitted into your original bank account in your country. Immediately this is done, all of us will depart Togo to your country where my children and I expect to take temporary residence.”
AC: Got it. OK.
JA: Boom, look at that. Found a wife, kids.
AC: 18, 19 million, just like that.
JA: “Please note that I cannot open up a big account in my name because my late husband’s first son, Joseph, who took over power of our country, don’t want to see me or my children. He claimed that when our husband was alive, that I was very close to him than any other wives including his mother. He also claimed that because of my closeness to him I was able to get things from him more than others. As a result he has been monitoring me. In fact, this is one of the main reasons I want my children out of our country and to live with you.”
AC: Wow. (laughs) That’s quite an elaborate email.
JA: There’s a little baggage I guess that goes along with this.
AC: A little bit. But for all that money? So you’re retiring? From the profession?
JA: I am. I am done.
AC: Let’s see, you and 50 million other people got that email.
JA: I don’t know, I don’t think so Al.
AC: You don’t think so? It was written right to you. (laughs)
JA: I think so! (laughs)
AC: It said dear friend and not Dear Joe? I love your podcast? (laughs) I usually get one from somebody in England that has $12 million to deposit. (laughs)
JA: See 12, I have $58 million. See they went straight to the source.
AC: I don’t think I’ve got an offer to get 20, 25%. But you never know.
JA: Yes but I have to travel there. Get them out of harm’s way.
AC: Well you’ve got plenty of vacation.
JA: I do, I have a couple of days banked up.
AC: Yeah, a couple of years I think.
JA: So yep, I just wanted to say goodbye. To my newfound future. (laughs)
AC: So, if you are one of the other 50 million people that got this email…
JA: Too late! I’ve already booked my flight (laughs)
AC: Yeah, Joe has already taken it. However, I will also say, clearly, what they’re trying to do is get your bank account info so they can take money from your account. So be careful.
JA: Oh, really?
AC: Yes. I know, I spoiled it for you.
JA: So when I go over there you don’t think… (laughs)
JA: They’re not going to be there with open arms? Red carpet? (laughs)
AC: Country of Tonga?
JA: Toga? T-o-g-o?
JA: I know Togo’s, good sandwiches. (laughs) That’s all I know about Togo’s.
AC: It’s probably similar. Great sandwiches (laughs)
JA: Yeah but you know what? There are a lot of scams out there. You got to be very careful. When filing your tax returns. As financial advisors as Al and I are, we tend to get, I don’t know, what, half a dozen of these, it seems like, a week.
AC: Yeah, and I like it where they say “dear friend” or they say something like, “through extensive web research we have found you.” But they don’t call you by name. (laughs)
JA: Yes, of course. Yeah, they have our crack research team. (laughs)
AC: They’re utilizing our crack research team. (laughs)
JA: So, anyway, $58 million bucks. That sounds pretty attractive, 20% of that.
AC: It does. I did my math wrong. 20%? That’s about 11 million, I said 17. But still that’s a good figure, $11-12 million.
JA: Well, if I look at, if it was $60 million, 20% of $60 million is 20 million. Er, 12 million. (laughs)
AC: Yeah see I had said 18, I was I don’t know what I was thinking. But anyway, yeah it’s close to 12.
JA: So she knows we’re pretty good with math. (laughs) She coulda given me eight bucks! That’s about 20% of it. (laughs)
AC: We’re thinkin’, “eight bucks, wow this is great! Buy me a cup of coffee and lunch!”
JA: Oh my god, this is a financial planning show and Al and I are a little rusty on the numbers here. We don’t have a calculator.
AC: Well, yeah.
JA: Last weekend though. Last weekend.
AC: Last weekend of Mom?
JA: Yep, Ruthie’s going back to Minnesota. It’s been two months. Two and a half.
AC: This is her winter home. You do know that. You bought a large home in anticipation of this. Does she live on a different floor?
JA: Yes. Yeah, I put her in the basement. (laughs)
AC: Or a little tent in the backyard? (laughs)
JA: No, she’s got a nice little master suite, first floor, so she doesn’t have to walk up the stairs.
AC: OK. So you get your own second floor. You kind of even almost have a third floor, right?
JA: Yeah I guess the deck.
AC: Deck, patio, outside patio. And if you had a basement you’d have four.
JA: Yeah I could dig one, I suppose. (laughs) Oh boy. You know, I’ve got an interesting question from a listener. We were talking about Social Security, I don’t know, a couple of weeks ago. And she was confused on the spousal benefit. She heard that she could collect on an ex-spouse and didn’t necessarily believe us. So the rules on this, Alan, is that if you were married to someone for over 10 years, or 40 quarters, 10 years of marriage, and you haven’t remarried, you can still claim on your ex-spouses spousal benefit.
AC: Or the three, whatever.
JA: Yeah so Rob Rogers and I are going to come up with an app. (laughs)
AC: So you figure out which spouse will be better. (laughs)
JA: Or, you just take a look at your current spouse’s benefit. Then we will have an app that will say this spouse’s Social Security benefit is this, so your spousal benefit would be X, and so just gotta divorce your current spouse, marry this… nice person.
AC: Well then there would be a check, make sure it’s like the 10th year and a day, and then you get an alert: Divorce! Divorce! Divorce! (laughs)
JA: Yes. It’ll beep four times, then the app will automatically go to an attorney’s number. Fast divorce or something like that. (laughs)
AC: And a seeking millionaires website, because you got to trade up.
JA: Yes right, cell phone. 4G. So but the spousal benefit works like this. You can take your benefit or half of your spouse’s benefit – it actually doesn’t work that way, but it’s easier to explain that way. So if you take a look at your spouse’s benefit, let’s say their benefit is $3000, and your benefit is a thousand. What they do is, they give you your $1000 benefit, but then they also increase it to $1500. They give you an extra $500 because that would be half of your spouse’s benefit.
AC: Right, and we’re talking monthly benefit.
JA: Thousand dollars a month, right. So you have to take a look to say I’m single now and if I have an ex-spouse, is that spousal benefit higher than my current benefit? Then you can elect to take the spousal benefit. Now there are some rules that have changed recently, so if you are 62 years of age by last year, 2016, you can still file a restricted application. And what that means, is that you can then claim your spouses or ex-spouses benefit, then let yours continue to accrue or grow, but that individual had to be taking benefits. So there’s a lot to this stuff but just say that we were not lying to you. Yes, you can actually claim on an ex-spouse’s benefit.
10:56 – Interview with Michelle Balconi, co-author of “Let’s Chat About Economics!”
JA: Big Al, very special guest today.
AC: We do, we got a great author, actually that wrote a book that even you and I could understand.
JA: Barely. (laughs) I needed this book, I’m telling you. The book is called Let’s Chat About Economics! It’s basic principles, you know, through everyday scenarios. But it’s a children’s book.
AC: It’s the first book on economics that you and I have ever understood.
JA: Oh my yes. It’s a quick read. And then you get to understand the law of diminishing returns…
AC: Oh, you were paying attention? (laughs)
JA: Yeah, when I read Al, I focus. (laughs) We have the author, Michelle Balconi on the telephone. And I just want to thank you very much, Michelle, for joining us and taking a little bit of time to chat about economics.
MB: Well thank you so much for having me. This is a real treat.
JA: You know, I’m looking at your book right now. You got these little kids, you have these different chapters and they have different stories. What was the genesis behind you writing a children’s book about economics?
MB: Sure. You know, the genesis was a real experience. So I think really powerful writing comes from a personal place. And my husband and I have two children, and a few years ago we were fortunate enough to see Dr. Arthur Laffer, the economist, speak to a room full of people, and he’s a very charismatic communicator in addition just to being brilliant. So based on his speech, my husband and I went home and had a fantastic conversation with our children, who were 10 and 12 at the time. And you know we had this really robust dinnertime conversation about economics based on very simple easy to understand examples that Dr. Laffer gives. And our children came up with their own examples and it was so powerful that I searched for a book that would keep the conversation going. And while there are a lot of, I would call them business minded books that are really great for kids, there was nothing that used real economic terms that could really continue the conversation with our children. So I reached out to Dr. Laffer. He’s a grandfather and great grandfather, and I suggested that we write together and he just jumped on board.
JA: That’s awesome. So with how you bring complex, you know… the law of diminishing returns, it’s like, oh my god, I’ll fall asleep!
MB: Oh I love diminishing returns! I love it! Who wants to work harder than they can achieve benefit from? You know, that’s shoveling the driveway, not in San Diego, but if you’re in a snowy climate why would you shovel the driveway past the side door? That’s what our son told us. You know there are reasons why you do that, but they got him thinking about how hard are you working and what benefit are you deriving – that’s diminishing returns for kids.
JA: Right. And then opportunity cost. I want to go to a tropical vacation. Well, figure it out. Let’s take a look, how are we going to get there? We have a budget. Walk through some of these stories for us.
MB: Well I love these stories, because they come from my family, and I love my family conversation. So the idea with the book is to replicate connecting with your kids because that was a very powerful experience that we had. So these stories revolve around things that families are doing anyway: going to the grocery store, planning a family road trip, deciding on activities in the summertime. And then we’ve given readers charts, graphs, really whimsical fun graphs to illustrate the economic principle. So the example that you bring up, the road trip, how do you go on this tropical vacation on a budget? We’ve created a chapter that teaches the law of diminishing returns and opportunity cost, which is the thing that you gave up. When you make a choice, there was something that you didn’t choose, and that’s the opportunity cost of that decision. So we do it through a good old fashioned family road trip and the chart or graph in that chapter literally illustrates reaching the warmest temperature for the least expense. You know, it’s like bam! For kids, they get it. It meets them where they are. It uses examples that come from their life, and then it encourages parents or grandparents, whomever is reading the book to these kids, to really connect with kids with their own choices. What time do you get up? What are you going to wear? Are you going to have the brownie or the ice cream sundae? You know, there’s an opportunity cost with that. Just meet kids where they are. Talk about their choices, but teach them the real economic terms in the process, and then they will be – like travel, sports – where you’re playing baseball year round, especially in Southern California, getting your 10,000 hours in and becoming proficient. Well, chatting with kids about economics on a daily basis, with the decisions they’re making anyway, allows them to be economic experts.
AC: Michelle, I know you wrote this book for children, but are you finding adults are understanding terms that they never understood before?
MB: Yes they are. Thank you for asking that, because the adults are the secondary audience. Not only do the stories allow the adult, like I said, a parent, a lot of grandparents contact me, they’re reading it with their grandkids. They’re saying they learned or now they are relearning economics and applying it to their everyday choices.
JA: You know Alan had to read a book like this to figure out the Keynesian theory. (laughs)
AC: I did! It was all about fish. It was also kids book, and I finally got it. I think. (laughs)
MB: That’s funny. Well, it’s such a blessing to me I get to work with Dr. Laffer on this really important topic, and we’re actually working together on two additional books, one on democracy and one on immigration. We connect on the idea that economics is not political. It really isn’t. The application of economics is political, and he’s a person that worked years ago with Jerry Brown on developing a flat tax plan. He is the person who voted once for Jimmy Carter, for President Kennedy, and President Clinton twice. He says this in every speech that he gives, obviously he was a part of President Reagan’s administration. He supports good economic policy. No matter who’s using that on either side of the aisle. And that’s what we want to teach our kids, this is not a political book. We do introduce taxes in chapter three, the summertime chapter, because we relate it to kids who are receiving allowance. And then how much are you going to save? It’s spending versus saving, which we introduce with milkshakes and piggy banks, and a great graph for kids that instantly get it. But then mom and dad in the story talk about, “well hey, if we’re paying so much in taxes, where’s your incentive?” We teach incentive. Where’s your incentive to work? And the children in that story go through the same process: should I do double the chores for double the allowance, because now I have to save half my allowance, or should I do no chores for no allowance so I don’t have to give up half of it and then do free stuff? Well, the chapter also teaches that nothing is free. So these are real conversations. These are robust back and forth. That’s why we titled the book let’s chat. It’s a conversation between adults and children, and it teaches them 26 real terms.
JA: The supply demand too is… I think people hear that and they’re like, yeah I know what supply and demand is, but I really truly don’t think they get it. So with with this story of, let’s have kind of a Thanksgiving type of feast, but not in November. They go into the grocery store saying hey, why isn’t there a lot of turkeys here. What’s going on here? So like with our business, of course, we help people with their financial security, and some of that has to do with stocks and bonds, and then helping them understand pricing. You know what is the price? Well it’s all based on the supply and the demand of that particular widget, commodity or whatever, that you want to place in you in that placeholder.
MB: You’re exactly right. And economics, true economics, is the same economics, and the personal family budget, as it is for the employer of those parents, as it is for the state that they live in, and the country they live in. Economics is scalable. So I ,as you can tell, I’m very passionate about bringing this lesson, economic lessons, to children. And the book was written for six to 10 year olds and their parents or grandparents. So establishing that at a really early age and then helping parents, either helping them or reminding them, that economics is around us in our everyday life. It surrounds us. Even if you’re making a decision like a child would, “How am I spending my time after school?” AM I hanging out playing X-Box? Am I in the driveway working on my left handed lay up, I’m trying to make the team. You know those are economic decisions because time is a scarce resource. So, I get really pumped up because I do work with kids in schools. I also actually work with adults and people who have acquired a lot of wealth in their life, and then they’re doing planning to pass them on to their children and their grandchildren. They don’t know how to have that conversation about economic decisions. Well, here’s the platform for you. In four easy to read stories which take less than 10 minutes to read each. With a total of 26 economic terms in there.
JA: And I think at the end of the day it’s, “well, do I want to go through the trouble to try to help my children understand this, or even my spouse or partner or whoever, or do I just buy the thing.” You know what I mean. It’s like, “hey I want the X-Box.” OK. Well I could go through all of this, where I don’t necessarily have a platform, or just buy it. Like Big Al is still buying his kids sneakers. Air Jordans. They’re 30. (laughs)
MB: So you’re part of the shoe game. The shoe game is big in our house. Let me tell you those Nike’s you can buy and sell those things. Our teenage son just sold a pair at a profit. So I understand the shoe game. More importantly he understands economics.
JA: Michelle, I wish we could get a lot more, but we got to go. And I just want to thank you so much for what you’re doing. I think this is awesome. It’s giving people a platform to have really good, positive economic conversations. I think that will put staples in kids lives for a very long time.
MB: That’s what I’m hoping. And economics just isn’t for the professor in the corduroy patch jacket, I’ll tell you that. It’s for everyone.
JA: Hey how do they find more information about this?
MB: Sure. We have a web site that gives more detail about the book, including all of the places that it’s available for purchase, which of course includes Amazon and Barnes and Noble. But if your listeners would go to www.LetsChatAboutEconomics.com they’ll find everything they need.
JA: That’s Michelle Balconi, everyone.
23:11 – Big Al’s List – 5 Retirement Myths Debunked
AC: When it comes to retirement a lot of us only retire one time and so you don’t really know what you don’t know until you do it. So let’s talk to the experts, listen to the experts. Let’s listen to those that have retired and figure out, what are the myths? What are the things that really aren’t true that we think are true? And the first one, Joe, that a lot of people believe is that stocks are not good investments for retirees.
JA: That’s what they think.
AC: That’s what we’re told, we’re told when you retire, you’ve got to go safe. You go to safety because you can’t afford to lose money. And there’s no way to make it back. You don’t have enough time to make your principal back.
JA: Well here’s the problem with that type of thinking, is that your retirement date is not your end date.
AC: think that is a good way to think about it, and particularly, like, let’s just say you retire at 65, and we know what the stats are right now. An individual that’s a male, on average, lives to about 84, a female lives to about 88.
JA: That’s the average.
AC: Average, yeah, half less, half more, that’s actually the median, if you want to be specific, that’s the median age. For all mathematicians out there. And when it comes to a couple, when you put a husband and wife together, the median is around 90 years of age. In other words at least one of them will live to age 90.
JA: So it’s not the finish line, it’s not retirement, and then you have this rope, and then you run, you put your arms up, and then hey I’m finished.
AC: Yeah, maybe in the old days you retired at 63…
JA: And you died at 64.
AC: 68 or something. It didn’t matter. But now retirement can be 25 years or longer.
JA: I think a lot of our listeners, their retirement years are going to be longer than their working years.
AC: In many cases, right.
JA: So yes, you absolutely in most cases – it all depends on your specific situation, how much money that you have of course. But over the long term stocks have outperformed bonds because they have more risk, and with that risk you’re compensated for it. So there’s a higher expected return. And so, you probably need that higher expected return in your overall portfolio to make sure the portfolio will sustain itself over the next 30 years.
AC: Yeah, and that doesn’t mean you should have all stocks. You need to have a balanced portfolio and the way we like to look at it, it takes a little bit of work to figure out what sort of rate of return do you need to make this all work, and then figure out what a portfolio should be to earn that rate of return. No more aggressive than you need to be. And so in other words maybe you’ll have 30, 40, 50% stocks, maybe the rest in real safe type investments, so that when the stock market does correct and we know that it does, it’s just part of what it does, then you’re not hurt as badly. And the other part of that is that you have enough safety that you can liquidate safe CDs, government T-bills, things like that, in times of market correction, so you don’t have to touch your stocks. You don’t want to sell them while they’re down, in fact, that’s actually when you want to buy a little bit more, because then you’re going to get a higher expected return after that.
JA: Yes. Don’t be afraid of stocks in retirement, do not. They’re going to help you, long term, without question. So that helps you accumulate the wealth, it’s going to continue to sustain your portfolio long term.
AC: Another myth. Myth number two: there is no need to worry about health care because of Medicare.
JA: We just talked about that on our TV show.
AC: We sure did. We know that 62% of your health care is covered through Medicare which means 38% needs to come from you.
JA: Right. 40% roughly, let’s round. So that’s a big chunk. So you’ve got to be careful here. What are the statistics? What, if you’re a married couple it’s about $250,000 that will give you a 90% confidence level that you will have enough to cover those additional medical expenses. So we’re talking co-pays, we’re talking about out of pocket expenses here.
AC: But we’re not talking long term care, that’s over and above this. But yeah, that’s what the stats will tell us, that’s what Fidelity says anyway. And other organizations that look at this, is a married couple aged 65 are going to need around $250,000 for medical costs. And just to be clear – it’s not that you have to have $250,000 in the bank for medical, because you’ll be funding some of that through your pensions, through your income, through your Social Security. But that’s how much you’re going to have to set aside. And I think a lot of people that think about retirement planning, they just assume that Medicare covers everything and it doesn’t.
JA: Right. Not even close. 62%.
AC: (laughs) To be exact. Number three: your tax bill will disappear in retirement. That’s a myth.
JA: Yes, that is probably one of the largest myths for most of our listeners.
AC: Yeah, that’s definitely not true, because if you think about it, when you retire, think about where most of your savings, retirement savings, is. Well it’s in your IRAs and your 401(k)s and your retirement plans. When you take money out of those retirement plans, it’s fully taxable in general. And so you have to pay ordinary income taxes on that. Social Security up to 85% of that is taxable. Your interest income, your dividends, taxable, your rental income, taxable. Everything is taxable for the most part, unless you’ve done some tax planning and you move some money from your retirement accounts to a Roth IRA, then at least part of it is tax free. But I think a lot of people assume that taxes aren’t going to be that big a deal, or they’ll be in a much lower bracket and we find just the opposite for those that have done the right thing, and saved money like they’ve been told, they end up in the same or in some cases higher tax brackets in retirement.
JA: It’s most often the case when you’ve done the right thing, unfortunately. Because what we’ve been told is to save as much as we possibly can, and where most people save their money is in the retirement accounts, because you know, hey, that’s what I was told. Get a tax deduction today, grows tax deferred, and I’ll be in a lower tax bracket in retirement. But no, you need to absolutely kind of take a look at, how is your income going to be taxed? What’s your goals? What’s your other income sources and come up with a strategy to mitigate that. We’ve talked about that a million times here.
AC: Here’s another myth. Social Security will replace your work income.
JA: (laughs) That’s what people think, actually?!
AC: Apparently. And this article says that Social Security replaces about 40% of your pre-retirement income that’s not been my experience when I’ve looked at this. I would say it’s more like 25 to maybe 30% of your income is what it replaces.
JA: Again it depends, of course. I mean I would say a majority of the population, that’s probably accurate because there’s not a lot of money saved in these retirement accounts by most people.
AC: Well you’re probably right. So let me rephrase that. Our listeners, it’s probably, maybe 10% of your pre-retirement income. Or your job earnings, or 20-25%. But yeah, you can’t necessarily count on it being a lot. And the whole idea of Social Security is mainly just to make sure you’re not living in poverty. That you can have a place to live, you can turn the lights on, you can have a little food, but it’s not exactly a robust lifestyle, if that’s all you got.
JA: There are all sorts of different strategies that you might want to take a look at too. When you claim your Social Security benefits, so you want to maximize that. The longer that you wait, the more money that you do receive. So if you are looking at Social Security as one of the main sources of income. you probably want to push that thing out as much as you can and work as long as you can to maximize that benefit.
AC: Yeah. The last one, Joe, is this is a myth that annuities are never a good choice for retirees. And interestingly enough, I would say that many people have negative connotations about annuities, including us, because they don’t really end up performing the way that they’re promised, and they tend to be pretty expensive in terms of internal fees. The people selling them often, not always, will often get pretty high commissions. But there are certain kinds of annuities, like lower cost immediate annuities or may be qualified longevity annuity contracts.
AC: Yeah, QLAC. That could be worth a look. The immediate annuity, Joe, you put money in, and then right away you, you get a payment stream like a pension plan.
31:40 – 8 Things Most Americans Don’t Know About Retirement
JA: Okay folks, let’s test the big brain on Big Al.
AC: OK, what do you got.
JA: I’ve got eight things most Americans don’t know about retirement. Are you ready?
AC: Are you going to see if I actually know them, or…?
JA: I’m going to quiz you. I have questions. You answer the questions, and I will tell you if you’re right or wrong.. Question #1: roughly how much do investment professionals say people should save by the time they retire?
AC: How much they should save, as a relationship to their salary I suppose?
AC: OK. I’m going to say 8 to 10 times.
JA: Correct response at least 10 times the amount of one’s last year’s salary. Good job, Alan. Fidelity said that even though professionals disagree somewhat about how much the average person needs to save, because you might say, save 15% of your salary. But that’s not going to do anyone any good if they’re 64 years old and don’t have anything saved. Or if you say hey save 15% of your salary and then you’re like well I was saving 25%. So should I bring it down to 15?
AC: I can spend more, you’re telling me?
JA: Right? No! Save 25%.
AC: Well you are right. I think that 15% is good if you’re in your 30s or maybe early 40s. But if you’re in your 50s you got to get a little more sophisticated.
JA: So check this out though. 19% of pre-retirees age 55 to 65, guess how they answered that question.
AC: Oh, as to how much they save? I don’t know. Five times?
JA: Two to three.
AC: Two to three really.
AC: Wow. OK.
JA: So, ten times folks. That’s the goal. Get to 10 times. If you’re making $100,000. that’s a million bucks.
AC: But every year you get a bonus, you go, “darn! I can’t retire again this year!”
JA: Here we go. Question #2. How often, over the past 35 years, do you think the market has had a positive annual return?
AC: I would say 70%.
JA: The market has enjoyed a positive annual return 30 out of the past 35 years. Historically the U.S. stock market has gained about 7% per year.
AC: 30 out of 35. I don’t have a calculator but that’s probably a little over, about 75%, something like that.
JA: Pretty close to what your answer is. So again gold star for Big Al. Only 8% of overall respondents answered correctly. Those between 55 and 65 did slightly better, with 14% responding correctly. So I think when you ask that question, and all of our listeners heard the question, I’m guessing… what do you think, they’ll probably say 50-50. It depends, though. Right now today, markets were at 21,000, now it’s a little bit under that, but it’s still, all time highs, all-time highs, that’s all we hear, that’s all we hear. So that recency bias is so real, it’s like, “well man, the market’s been up since 09” and this and that. I would say it’s even higher, 90%. And then if you ask that same question in 2008, what do you think the respondents would say?
AC: Yeah. It’s less than 50. We just had what the eighth year anniversary of the bull run. Cause March 9th, 2009.
JA: Did we have a party?
AC: It was this last week, we missed it.
JA: Did you have a cocktail?
AC: I talked to Ann about it. And it’s funny because a lot of people don’t realize the Dow at that point was what about 6,500 points, something like that? 6,800 points? And now it’s over 21,000. I think a lot of people don’t realize we’ve had an incredible run since 2009.
JA: Yeah. You just want to make sure that you’re always defensive. Don’t just start loading up on stocks now. You just got to take care of what you’re trying to accomplish. Question #3: if you were able to set aside $50 each month for retirement how much could that end up being 25 years from now, including interest if it grew at a historical stock market average? You don’t have your calculator, do you?
AC: I’m gonna do this without a calculator. 50 bucks a month for… so that’s $600 a year for 25 years, I’m going to say, $100,000.
JA: It’s a little bit less than that Al. About 40.
AC: 40. OK. (laughs) Give or take.
JA: 60% of respondents answered correctly. Big Al, however, did not. (laughs) However, 47% underestimated how big an effect relatively small savings can be over time.
AC: So two correct, one fail.
JA: Let’s see if you can get a passing grade. Given your current average life expectancy, if you want to retire at the age 65, about how long would you need your retirement savings to last?
AC: OK, well, it depends whether you’re male, female or a couple. So I’ll answer all three. If you’re male, 19 years; if you’re female, about 23 years; if you’re a couple, 25 years.
JA: Very good. That’s approximately 22 years. Given that the average life expectancy is 87 or 85 for men and 87 for women. So right on target. A third of respondents got that answer right. 38% estimated that they would need to make their savings last for about 12 years. Well if that’s your financial plan, you’re blowing yourself up. (laughs)
AC: Well, and of course the flaw with that question is, that’s half the people live to that age. The other half live longer. So you really got to plan longer than that.
JA: The median? Alright. Big Brain.
AC: Only been stumped once in the last century.
JA: Stump Big Al, remember that segment? That was a great one. You got stumped today.
AC: Any time you ask me a question about a movie, I always was stumped, because I don’t know anything. I’ve seen the movies, I just can’t remember anything.
JA: Well did you watch that uplifting movie that told you to watch? Manchester By The Sea?
AC: Oh, that one. No, I’m not gonna watch that one.
JA: It’s a barrel of laughs.
AC: I watched La La Land, I like that kinda thing. It’s got to be happy.
JA: Approximately how much did the average monthly Social Security benefit pay in 2016?
AC: 2016, it was, I’m going to say, around a $1000, $1100.
JA: $1300. I’ll give it to you.
AC: $1300. Close.
JA: It’s pretty good. 43% of respondents answered correctly. Better yet. half of pre-retirees did so, Fidelity pointed out, however, with upward of 75 ways to claim and dozens of factors that influence one’s decisions when they retire, $1300 is just simply the average. So I’ll give it to you Al. So cruisin’ here. We got just a couple more. About what percentage of your savings do many financial experts suggest you withdraw annually in retirement?
AC: Well the standard answer is 4%. However, I will add if you retire younger, like say 55 or 60, you might want to keep it closer to 3%. If you retire later, like 70-75, you could probably get away with a 5% distribution rate.
JA: 42% of pre-retirees answered correctly. And Big Al, of course, you are right on the money there. But check this out, Al. 38% of those 55 and older said they could withdraw 7% or more from their savings annually.
AC: Right, and I’m sure some said 10% because that’s been the historical average of the stock market.
JA: And 15% of this age group felt that they could withdraw 10 to 12% annually. Thanks for blowing that bubble of mine. (laughs)
AC: I stole your thunder? (laughs)
JA: You did! OK, so here we go. A lot of these people 55 and 65, they’re going to withdraw 12%. Well yeah, if you draw 12% on your money, you’re done in 12 years. What do you think is the single biggest expense for most people in retirement, Big Al?
AC: Let me think here, I’m going to say medical.
JA: Huh, OK. Housing, health care, transportation are typically the largest expense in retirement, but housing by far tops the list for most Americans.
JA: Housing for many retirees housing can make up nearly half their expenses.
AC: Alright, well that to me was the obvious answer but in a lot of cases, retirees have paid off their mortgages. And so then it’s cheaper.
JA: 17% of these respondents and 13% of those between 55 and 65 answered correctly. But 69% thought health care would be the largest expense, Big Al. Fail.
AC: I was in good company. You know what I just read, Joe, was a survey of a bunch of individuals, the most hated tax. You would think would be income taxes, but it’s not. It’s property taxes. And it’s property taxes because you have no control over it. It just keeps going up and you can’t come up with deductions, you can’t reduce your income, there’s nothing you could do. Just pay it. And that’s part of the problem with housing, is even if the homes paid off, you got property taxes.
JA: What is your big-?
AC: My biggest expense?
JA: No, not your – I know you got big wallet. I don’t care about your big expense. (laughs)
AC: Vacations. (laughs)
JA: God, since my African… What tax you hate the most.
AC: Me? Income tax.
JA: Yeah, right? I mean property tax, that’s…
AC: I mean that’s the big one. Now of course we live in California.
JA: It’s a big one for Big Al.
AC: We live in California though, prop 13? 6So are our property taxes are somewhat under control, relative to other states. So I’ll put it that way.
JA: All right, here’s the final question, bud. About how much will a couple retire at age 65 spend out of pocket costs for health care to cover the costs of their retirement.
JA: Okay. Only 15% – it’w $260,000 now.
AC: (Laughs) I’ve missed that.
JA: So only 15% answered correctly with 72% underestimating the true amount of health care costs. Overall, 22% including 19% of pre-retirees us underestimated how much they would need to spend by about $200,000.
AC: Wow. So I got, what, five out of seven? That’s passing, that’s over 70%.
JA: I’ll give you 6.
AC: 6? Alright, even better, I got a B-plus.
JA: No actually, I’m not going to give you 5.
JA: C-minus. CPA for over thirty years. Can’t get 8 questions right. Folks, don’t ever call Pure Financial Advisors. (laughs)
AC: We don’t know what we’re doin’. (laughs)
JA: Oh, boy!
42:49 – IRS Tax Audits Are On The Decline
AC: Joe, I’ve got some tax news you can use. Audits: the dreaded audit, the dreaded IRS audit. The numbers of audits are continuing to decline rapidly. In fact, I guess if you look at 2015… er, this is 2016. Excuse me. The individual audit rate fell to .7%, so that’s only 1 out of every 143 tax returns actually get audited, and as recent as 2011, it was over 1%, and most of the audits these days are through the mail. You just get a letter in the mail saying hey you know what, you claimed $75,000 for salary and we got $80,000. So we think you owe us tax on that extra $5000 of income. If you agree, pay it, if you don’t, tell us why not. That’s how most audits are being conducted these days. And it’s all a factor, Joe, of the cutbacks in the budget for the IRS. And each year they they seem to have less and less resources. But that’s good news for everyone else out there, because there’s less chance of being audited these days.
JA: Why is that good news, Al?
AC: It’s good news for our listeners. No one wants to be audited, Joe.
JA: Well I think our listeners are honest, upstanding citizens.
AC: Yes they are.
JA: If they did get audited, there’s nothing to worry about.
AC: But I can’t tell you how many very good people, good and honest people, they just have such fear over an audit and they want to avoid an audit at all costs. And being a CPA, I’ve been to several audits. They’re not near as bad as you might think. They’re not fun. I’m not going to say they’re fun. But they’re not as bad as you might think.
JA: The movies might over do it.
AC: Yeah. A little bit too dramatic. Now when it comes to corporations, it’s interesting, the overall business examination rate was .49%, so that’s even lower. And partnerships and S corporations were under that rate .38, .34. So what’s the lesson there? If you want less audit exposure, you incorporate, or you set up an LLC, as opposed to being a sole proprietor.
JA: Question. Let’s say I have an S-corporation. Would there ever be advice for me to switch to a C-Corp?
AC: Yes, although there’s not a lot of great reasons to. An S-Corp is a flow through entity, so whatever the profits are, you pay for individually. With a C-Corp the corporation pays its own profits and there is no flow through. The downside of the C-Corp, of course, is that you can be double taxed on that income, because corporations have profits they pay taxes on, and if you want to get those profits, you declare a dividend, you pay taxes again. But there are some advantages of a C-Corporation. For example, you could set up a medical reimbursement plan. You have to cover all your employees, but your employees can submit their medical bills, and get a reimbursement. The company can deduct it. So in essence, you get to the deduct your medical expenses. Now most C-Corps don’t have that policy, unless its owned by one person and there’s no employees. You see that a lot of times with professional doctor corporations, that way they get to deduct their medical. In other cases, when you are a technology company and you need venture capital money, they’ll almost always insist that you switch to C-Corporation, because they don’t want to pay taxes on the profits.
JA: Yeah, I wouldn’t ever see the reason to go only because of the health care. Right?
AC: Yeah. There’s not a lot of reasons to do it. And as for that reason when you incorporate, you would almost always go S-Corporation.
Emails: It’s time to dip into the email bag, with financial questions courtesy of Advisor Insights from Investopedia, and you, the Your Money Your Wealth listeners. Today, Contributing to a Roth IRA, 401(k) or both, investing excess cash for the future, retirement contributions while receiving a disability pension and buying individual stocks. Joe and Big Al are always willing to answer your money questions! Email email@example.com – or you can send your questions directly to firstname.lastname@example.org, or email@example.com
46:54 – Joe and Big Al are always willing to answer your money questions! Email firstname.lastname@example.org – or you can send your questions directly to email@example.com, or firstname.lastname@example.org
JA: OK, are you ready buddy?
AC: Yeah what do you got?
JA: Since you failed that quiz…
AC: I got a C. I got five out of seven.
JA: “Where should I move my market earnings to avoid any losses on the funds?”
…is the title of this. “I have earned $1.4 million in stocks. I want to transfer this money out of the market and into a traditional IRA. I don’t need to make more money, I just want to keep what I currently have, and not risk it to losses. Is this a suitable strategy? Signed, worrywart.
AC: Worried about the all-time high market. $1.4 million in stocks. That’s pretty good. So she wants to transfer it to an IRA? Or is it he or she?
JA: Worrywart is the name. Walt. Let’s call him Walt.
AC: Walt. Walt is worried about… I wonder what that means, transfer to an IRA. Does that mean it’s in a 401(k)?
JA: I’m guessing, yeah.
AC: So he wants to transfer that to an IRA and when you have money in a 401(k), and when you leave your employer, that’s an option that you have, which is called rolling it to an IRA, which you can do and it’s tax free. And generally, I’d say most more often than not, people do that, because there’s more investment choices. But let’s just say, we we said his name was Walt, let’s say Walt did pretty well in the stock market during his working years, but now he’s retiring, and he wants to make sure it’s safe. And of course, that’s what a lot of people do when they come to retirement. I can’t afford to lose it.
JA: We talked about this. The retirement date is not necessarily the finish line. And so he’s like, “I’ve got $1.4 million, it’s all in stocks. I’m feeling pretty good. I don’t want to take any more risk. Let me put it in cash. I’m going to move it to an IRA. And then what do you suggest where I don’t lose any money.”
AC: Right. And so to just simply answer the question, you could put it in a CD.
JA: Treasury bills.
AC: Treasury bill, probably shorter term rather than longer term, because there’s more chance of losing principal.
JA: Yeah, Treasury bill, not a bond. (laughs)
AC: Yeah. Right. OK thank you, Mr. Joe Anderson. But really, is that the right thing to do? And the answer is no, because if you’re retiring and your age 65, you’re probably going to need your money for at least 20 years, maybe 25 years or longer, so you’re going to have to have some growth. So I’m all for having plenty of safety in your portfolio but not 100%. It’s not all in versus all out. It’s finding that right allocation for you in retirement.
JA: OK, here’s one for you buddy. I currently own a Roth IRA with my bank which I invest in regularly. My employer offers a 401(k) but no match contribution. Should I still participate in the 401(k) for the benefit of the tax deduction? Or should I continue with my Roth IRA?
AC: That’s a good question. I think when we go through the Joe Anderson order of saving…
JA: Thank you for the acknowledgment there. TM.
AC: Trademarked? (laughs) We usually say start with your employer’s 401(k) up to the match but if there’s no match, there’s not a particular advantage. So actually go ahead and go right to your Roth IRA and fund that. That’s $5500 unless you’re 50 and older,then it’s $6500. And then maybe you go back to the 401(k) and start loading that up.
JA: I totally agree with you. But I think there’s also there’s no match here. So then we have to dive in a little bit deeper. He’s already had, I guess, the discipline to open up a Roth IRA at the bank and contribute to it regularly. So congratulations there, because the 401(k) is a lot easier. It’s already out of your paycheck. Out of sight out of mind. So I like what he’s currently doing so I wouldn’t want him to stop doing that. But yeah, I think a little bit of both is probably the right answer.
AC: Yeah I think I know where you’re going because when it’s 401(k) it comes out of your pay. It’s pay yourself first, it’s automatic. You don’t even think about it and you tend to save more of that way.
JA: Absolutely. Because something might happen next month where he’s putting money in and guess what?
AC: I’m not I’m not going to do Roth this month because the car broke down or whatever.
JA: And then next month, well I’m not going to do Roth this month, or maybe he funds it annually. I can’t do it this year just because of this, or I got that. If it comes out of your paycheck, you kind of start to adapt to spending what comes in. So I think the correct answer is to find out exactly how much money that you should save to accomplish all your financial goals. Save that money and spend every thing else.
51:41 – Alright, ”How should I look to invest excess cash later in life without an immediate need for the short term gains?”
So this individual, 77 years old, and has about $60,000 in cash to invest. He also has three 401(k) accounts worth $250,000. “I don’t need the immediate cash. How do you propose I invest this excess cash – in an index fund? Is that a smart and safe play?” Ooh, 77, using “play.” He’s hip. (laughs)
AC: He is. Look at that. $60,000, $250,000 in the 401(k). Of course we need to know a lot more information to answer that question, but I’ll take it maybe a couple of ways. If you need, or you think you’re going to need the $60,000 within, what would you say, four or five years? Then keep it super safe. You know, go with a CD or government T-bill, something like that. But if you really don’t think you’re going to need it for a while, you could then go to the market. You could go to an index fund. There’s all kinds of index funds. You could go to a total stock market index fund, or any number of things. But I think the real answer is, we need to know a lot more information about your situation before we tell you how to invest this $60,000.
JA: I know. That is the most common question.
AC: We get all the time because people like to compartmentalize their assets.
AC: You like that, I’ve been listening to Joe Anderson. (laughs)
JA: That’s a big word. Big word for Big Al. (laughs) But it’s like oh god! I’m like addicted to other financial podcasts.
AC: So you listen to them all the time. Yeah.
JA: It’s, like, nauseating. The advice that you hear.
AC: Tell what would be a common response with that question?
JA: “Well, you have $60,000, well go to TD Ameritrade and buy Vanguard’s” whatever. It’s just like what the hell are you talking about? You’re 77, what’s a good place to park the money? There’s no way that you can give that advice appropriately. I don’t know, buy Snap. There ya go. Snapchat. That’s my advice. (laughs)
AC: It might go up. (laughs)
JA: It could. IPO was just last week. Imagine that? You ever played with Snapchat there Big Al?
A:C No. My kids use it all the time though.
JA: I’ve never even heard of it. What the hell is wrong with me? I’m not old. Maybe I am.
AC: You need to have kids that keep you young.
JA: Snap, what is that? Is that the one when you get something with bunny ears on it or something?
AC: No, it’s sort of like a way to communicate with each other or a group but then everything disappears.
JA: Is it video?
AC: It could be anything I think, but it then it disappears quickly. So it’s not a permanent record of your life.
JA: So does Anthony Weiner use it?
AC: I suspect. That would be a perfect application for someone that likes to do that sort of thing. (laughs)
JA: Yeah, he should have used a little Snapchat.
AC: Yeah, instead of texting. (laughs)
55:08 – JA: OK… (laughs) “Can I still contribute to a Roth IRA if I have a disability pension?”
This is interesting question here. “I’m married, 56 years old. My wife works, and I’m on disability at home all the time. Can I still contribute to my Roth IRA that I’ve set up before I went on disability?” What’s your answer there Big Al?
AC: When it’s disability income, if that was the only income, no. Did it say his spouse worked?
JA: Well, let’s say if his spouse doesn’t work. But yes I think so. So it depends on the disability policy. Because I have a client that was on disability. And so, it depends on if it’s taxable or tax free to you, there’s this little box on the disability W-2 form. Or 1099 or… it would be W-2, wouldn’t it?
AC: Probably be W-2 if it’s taxable. Yeah.
JA: So yes, but they were able to contribute to a Roth even on disability insurance. Not all disability policies but just FYI, I don’t know. I mean if it’s Social Security disability, then the answer is no.
AC: And honestly in most cases, I would say you can not, but yeah there are exceptions. But in this particular case, either way, if your spouse works, you can use your spouse’s earned income for you to qualify to contribute to Roth IRA. And if your spouse is in a retirement plan, there are limits in terms of you putting money into the Roth IRA. Actually, either way, whether in a retirement plan or not, and that’s what, around $186,000 if you make less than that, to $196,000 whichever one – 96, you can’t do a Roth contribution if it’s jointly, below 186 you can.
57:03 – JA: Got one more e-mail question for you. “I’m trying to determine if I should sell this company stock or not.
If the company’s revenue stays the same when analyzing their statement, and the past three years have been profiting by 10%, but the fourth year is the exact same, if not a few cents more than the previous years, would you sell that stock because of that reason, or would you hold on to see what happens. I know there’s a lot more to look at than revenue, but what is the deciding factor to whether to buy or sell?”
AC: An individual stock? Well, I guess, full disclosure, I don’t, especially when it comes to your retirement nest egg, I don’t really like to invest in individual stocks I think you’re taking more risk than you need to take. However, trying to answer this particular question, there’s a lot of factors that go into the stock pricing.
JA: But here’s the problem with them – sorry to interrupt you. Not your answer, because you didn’t answer, I interrupted you. (laughs) It’s already priced in the stock is the problem. Well if you sell it the market already, they’ve already seen those numbers as well. Because I think his question is “hey, should I hold on here, is the market going to catch on to this?”
AC: So it’s probably priced for being flat revenue, because that’s what’s been happening, and maybe just a slight increase in profits, I guess, is as it says, but that’s already priced in. Now, what could change that? Next year, all of a sudden, you sell a new product, you got a lot more revenue and a lot more profit. The stock price shoots up, but you don’t know that information because it hasn’t happened yet. Or on the other hand, revenue stays the same and now expenses go up, and it starts losing money. The stock starts going down. But again, it’s not known until it happens, so that’s probably a good way to answer it is, the current stock price is reflective of everything known right now. The same thing you’re seeing. So it’s very difficult to make those sorts of calls based upon that.
JA: Right. So you’re looking at all the factors that everyone else is looking at. You need to know information that no one else has, to make the best decision.
AC: Yeah, and that’s not always legal.
JA: Oh. True!
AC: As a matter of fact! (laughs)
JA: That is always illegal.
AC: It’s called insider trading.
JA: Yeah, but I mean they’re trying to get a leg up here. This is what most, I think, individual investors try to do. So I applaud that person, for doing a little bit more research than most, kind of taking a look at what’s going on under the hood. How are the revenues looking over the last couple of years? They’re profitable. So should I continue to hold on this thing or not?
AC: If we go back towards the beginning of my career, which was in the 1980s, I think you probably had a little bit more likelihood of maybe getting a leg up because there wasn’t the same amount of information, public information. I mean there was information, but it was hard to get at. Right now everything’s on the Internet. So it really is hard to get an advantage. But the books like Peter Lynch “Beating the Street,” he talked about going to a mall and seeing what stores really has a lot of people. It’s hard to do that now because everything is public on the Internet.
JA: Yeah but that’s all fodder too. You could go back to ancient times and still the markets are fairly efficient. I’m now saying they’re perfect. And I’m not saying it’s impossible to get a leg up and really do all this research. I mean, all those boys did in 2008, when they kind of found some disparity going on with these mortgages, and how they package them up. And they made billions shorting that stuff. So yeah, it’s absolutely possible, but the probability of sitting there taking a look at a balance sheet of a company that you own a stock in, and making your decisions based on that, it’s very very difficult.
AC: But it’s interesting that I think that’s how most people think you’re supposed to invest. Because when you turn on any kind of financial channel, all they’re talking about, “with this company is doing this and maybe it’s a good buy now” and that’s what people – that’s their frame of reference.
JA: Right. This sounds pretty intelligent too, maybe you should buy steel companies because the current administration wants to build the walls.
AC: Right, our mining companies.
JA: And so it’s like, “OK, well yeah, I think, well Trump wants to build some walls. So he needs some steel to do that. So maybe I buy some steel because those steel companies are gonna be selling a lot of steel.” Yeah but everyone else kind of looks at that as well. That’s why those particular companies aren’t – look at financials. Financials are up huge, just because of the fiduciary rule, the DOL.
AC: They’re doing to take away the regulators.
JA: Yeah, so maybe slow down some of the regulations and things like that. And then the jobs report – Yellen’s going to increase interest rates. Well, it’s already priced in the interest rates.
AC: She told us that in December, she’s going to raise it three times.
JA: Exactly. So that’s why it’s a little bit more challenging. You listen to some very intelligent people, and Al and I are not one of those people.
AC: We listen to them. We try to regurgitate and we do it poorly.
JA: Very very much so. But I think that’s why you just have to have a good, solid, strong investment strategy based, on your specific needs. And just keep it simple. We could get technical. There are certain areas of the market that you probably want to take more advantage of, but not trying to pick individual stocks. You want to buy a big basket of them, such as value companies, lower priced companies, smaller companies.
AC: Yeah, like you said there are certain trends that smaller companies outperform larger companies over the long term, not in every year, lots of years they don’t. But over the long term. Same with value over growth.
JA: Right, small companies did very well last year. Well, they’re doing very well this year.
AC: Yeah but the year before they did poorly. Awful. And the year before that. Terrible. So it’s not every year.
JA: So that’s why you want a little bit in all, just to kind of keep it really simple. That’s it for us today. For Big Al Clopine, I’m Joe Anderson, the show is called Your Money Your Wealth.
So, to recap today’s show: Contrary to the myths, stocks and annuities may indeed be good investments for retirees, but it depends on your specific situation. Generally, you should have 8 to 10 times your last years’ salary saved as you enter retirement and only withdraw about 4% per year in retirement, but most Americans don’t know these things. And, Joe’s moving to the Republic of Congo to manage the fortune of an email scammer. Our thanks to Michelle Balconi, author of Let’s Chat About Economics, for talking to us about our natural economic experts, our kids.
Subscribe to the podcast at YourMoneyYourWealth.com, through your favorite podcatcher or on iTunes, where you can also check out our ratings and reviews. And remember, this show is about you! If there’s something you’d like to hear on Your Money Your Wealth, just email email@example.com. Listen next week for more Your Money Your Wealth, presented by Pure Financial Advisors. For your free financial assessment, visit PureFinancial.com
Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.
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