Keep it Simple

Tune in to 'Keep It Simple' with host Adam Morris, Janet Griffith, and Joey Badinger from Asset Builder to explore the intricacies and advantages of Roth conversions today! The discussion covers the fundamentals of what a Roth conversion is, the benefits, including tax optimization and managing required minimum distributions (RMDs), and its strategic advantages in certain market conditions. The team also challenges common myths about Roth conversions and emphasizes the importance of planning and asset location. They provide actionable insights for both novice and experienced investors, underscoring the significance of financial planning in securing a tax-efficient future. 01:07Demystifying Roth Conversions: What You Need to Know 03:45Roth IRA Basics: Understanding the Fundamentals 09:13The Advantages of Roth Conversions for Future Planning 11:59Inherited IRAs and the Impact of Recent Legislation 16:57Maximizing Lifetime Wealth Through Strategic Tax Planning 18:32Leveraging Roth Conversions in a Down Market 22:54Exploring Asset Location in Investment Strategies 27:03Debunking Myths Around Roth Conversions 29:17Optimizing Roth Conversions for Different Tax Brackets 36:02Strategic Planning: Roth Accounts and Estate Planning 40:22Investment Wisdom and Financial Literacy Evolution

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In this episode of 'Keep It Simple,' the team discusses strategies for tax planning in anticipation of the expiring provisions of the Tax Cuts and Jobs Act of 2017, set to phase out by the end of 2025. Joined by advisors Adam Morris, Janet Griffith, and Joey Badinger, they explore potential changes in tax rates, deductions, and credits, emphasizing the need for individuals and businesses to plan ahead. The discussion extends to the implications for estate and gift taxes, and the episode offers insights into making strategic decisions to optimize tax positions. The advisors remind listeners that while they are not tax professionals, their insights aim to prompt thoughtful consideration and consultation with tax experts. Key topicsinclude maximizing tax brackets, leveraging charitable donations, understanding the shifting landscape of deductions, and the importance of early planning for estate taxes. 00:34Special Topic: Tax Planning for the Tax Cuts and Jobs Act of 2017 01:09Understanding the Sunset of Tax Provisions 04:08Strategies for Tax Optimization Before 2026 12:25Estate and Gift Taxation Changes 14:11Long-Term Tax Planning Strategies 23:31Utilizing Capital Gains and Loss Harvesting 26:35Conclusion and Next Steps

Ever thought about the countless variables that influence your investment decisions and how mastering the art of simplicity could be a game-changer? Join us, Jared and Adam, as we dissect Morgan Housel's enlightening book, "Same as Ever". Filled with bite-sized wisdom, this book reveals the power of long-term thinking, the beauty of focusing on constants over variables, and the potential traps of emotional investing. With Jeff Bezos' business strategy as a case study, you'll understand how these concepts work in the real world.

Life, just like history, is unpredictable - small moments can drastically alter its course. From the Revolutionary War to the sinking of the Lusitania, we illustrate how seemingly insignificant factors can have enormous impacts. Drawing from these historical events, we delve into the importance of humility when predicting future trends, particularly for investing. After all, acknowledging our inability to foresee every detail could be the key to avoiding costly financial mistakes.

In our final segment, we invite you to step back and look at the bigger picture, both in terms of your investments and life in general. We draw parallels between the roller coaster rides of the market and life, discussing the significance of managing expectations and practicing gratitude in cultivating happiness. Furthermore, we delve into the backstory of Housel's other book "The Psychology of Money," sharing how personal experiences, including a near-death experience, shaped his views on finance. As we wrap up, we leave you with a powerful story from the book that underscores the impact our financial decisions can have. Join us in this insightful journey as we navigate the often unpredictable, yet rewarding world of investing.

(00:00) - Morgan Household's Book on Behavioral Finance Lessons (12:13) - Unpredictable History and Future (25:20) - The Importance of Perspective and Mindfulness (37:16) - Spread Knowledge and Share Personal Story

Gear up as we guide you through the fascinating world of financial trends, market volatility, and the simple pleasures of life, like attending a Baylor football game or organizing one's garage. We guarantee our casual yet in-depth discussion will not only enrich your understanding of asset classes and diversification but also shed light on the importance of gratitude in our lives. We'll chew over everything from fresh perspectives on investment strategies to the delights of ordering a pizza when you're worn out.

This episode is a treasure trove of insights into the performance of various asset classes in the third quarter, the volatility of markets, and the benefits of premium investing. We peel back the layers of market performance, revealing what's behind the numbers, and explore the strategy of buying and holding funds that target specific characteristics of stocks. Be prepared to question conventional wisdom as we debunk the reliability of market forecasts and underline the long-term stability of value stocks.

In our final segment, we reflect on the transformational power of gratitude. We share our thoughts on how an attitude of thankfulness can positively impact our lives and relationships. We discuss how social media has influenced our perceptions of gratitude and provide insights on cultivating a genuine sense of appreciation. Wrapping things up, we open the floor for your questions and comments. Don't miss out on this episode brimming over with thoughtful discussions, practical recommendations, and invaluable investment tips!

(00:00) Quarterly Review and Current Trends (08:41) Asset Class Performance and Diversification Importance (18:17) Market Volatility and Rebalancing Strategies (26:51) Premium Investing and Stock Characteristics (31:42) The Changing View of Economic Growth (42:44) Adam and Janet's Farewell and Appreciation

Join us as we navigate through topics such as the current Middle East situation and the looming tax season. As we approach tax season, we share insights on how to provide a smooth, fast and easy process for our clients in the preparation of their taxes. Furthermore, we discuss the unpredictability of the markets and the multiple factors that go into the evaluation of a share price. Despite the ongoing events in the Middle East, we unravel why markets continue to rise.

In this captivating conversation with Peter Zahan, a geopolitical strategist, we analyze the macroeconomic view of markets, economic trends, and population changes across the globe. We dig into Russia's military strategy and the necessity for them to retain land in Eastern Europe. Also, we explore how population trends in western Europe impact their economy. The conversation wraps up with an inviting suggestion to relax and enjoy a bonfire, with smores of course!

We also explore the lighter side of life as we chat about our plans to see comedian Nate Bargatzi, the high water bill due to extreme temperatures in Plano, and our busy weekend filled with plans for pickleball. We underline the importance of taking care of oneself and avoiding injury. We further analyze the 'Four Pillars' book series by Joseph Bernstein and emphasize the importance of avoiding overconfidence when making personal trading decisions. We delve into the difference between wealth and riches, and discuss how wealth is built over time through wise investing and allowing your money to generate interest. Listen in for an enlightening conversation!

(0:00:01) - Tax Season and Market Predictability (0:06:11) - Recommendations and Anticipation (0:12:14) - Nate Bargatzi Show and Water Bill (0:14:09) - The Psychology of Investing (0:25:36) - Emotions and Influence in Investing (0:34:55) - Emotional Management in Investing Importance

Prepare for a journey that will arm you with timeless investing principles. This episode is set to demystify the complexities of investing as we unpack the enduring principles outlined in "The Four Pillars of Investing" by William Bernstein. We shed light on the intricate link between risk and reward, revealing why the brightest markets often yield the lowest returns, while the bleakest ones offer the highest. We also address the emotional turmoil that most investors face when grappling with the idea of higher risk for higher returns.

Take a deeper look at the fascinating world of small and large cap stocks. We scrutinize their differences and dissect the historic trend of small cap stocks yielding higher long-term returns. As we navigate through this, we also touch on the potential implications of the US holding larger equity value than the rest of the world and the possible pitfalls this might pose for US investors. Discover the indispensable role of global diversification in maximizing returns and why it's crucial for every investor.

Surely, you've heard the phrase, "this time it's different"? We'll explore why this mindset can be an expensive mistake, drawing from the canal revolution in England as a case study. Join us as we delve into the dangers of market frenzy brought about by inexperienced investors, and how understanding the principles of security valuation can serve as your compass. We also illuminate how current market conditions may lead to a bubble and the protective shield indexing provides. Then, we delve into the universe of returns, pulling data from various indexes. Remember, understanding bear markets and staying committed to your allocation is critical for any investor. You won't want to miss this episode!

(0:00:01) - Exploring the Four Pillars of Investing (0:13:01) - Small vs Large Cap Stocks (0:26:22) - Market Bubbles and Long-Term Data Understanding (0:37:44) - Understanding Risk and Return in Investing (0:46:30) - Contact and Sponsor Information for Podcast

Join us as we unravel the often intimidating topic of cybersecurity, offering straightforward advice on how to keep your digital life secure. We discuss simple, effective techniques that can drastically reduce your chances of falling victim to cyber attacks. From anecdotes we've gathered from our clients to our personal experiences, we're shedding light on the reality of cybersecurity. We explore the struggle of trying to have zero digital footprint and how you can make yourself less appealing to those with malicious intentions.

Listen in as we further discuss the importance of software updates and strong passwords, two fundamental pillars of cybersecurity. We shed light on the risks of neglecting software updates and how using programs like LastPass can help you create and store unique, difficult-to-guess passwords. We also talk about "brute force attacks" and why they're a serious concern. Continuing on, we delve into measures to ensure your protection online. We touch on the importance of backing up information, using VPN services, and steering clear of unsecured Wi-Fi networks. Don't miss out on this insightful conversation that will empower you to take control of your cybersecurity!

(0:00:01) - Simple Techniques for Cybersecurity (0:07:00) - Software Updates and Strong Passwords (0:19:50) - Cybersecurity Measures for Protection

Get ready for an insightful discussion as we explore the intriguing intersection of artificial intelligence (AI) and the stock market. We start off by examining the surprisingly strong performance of Democrats over Republicans in the stock market, and the role tech stocks play in this equation. We raise questions about potential insider trading, providing a thought-provoking angle on the information disparity between politicians and the public. This episode also delves into the attention-grabbing headlines that fuel curiosity and speculation about AI's role in the stock market.

As we proceed, we highlight the importance of cautious investing, discussing the recent surge in market strength driven by mega-cap tech stocks. The conversation steers you away from impulsive stock picks and underscores the need for comprehensive research and secure valuation methods. The discussion further illuminates the role of AI in investing, citing the East India Trading Company as an illustrative example of leveraging new technology for significant gains. From exploring the concept of diversification to understanding the investing mindset of today's youth, we leave no stone unturned in this exciting episode.

[0:00:01] AI's Impact on Stock Investing [0:12:49] Risks of Speculating on AI Stocks [0:24:53] The Role of AI in Investing

In this episode, we delve into the final segment of our review of “The Psychology of Money” by Morgan Housel. But before we do, we provide a brief overview of the Southern LA Bank's crash, caused by a drying revenue stream for clients and miscalculations about interest rates. Understanding your banking choices and conducting research is crucial, and remember the distinction between brokerages and banks.

We explore the disparities between day traders/short-term investors and the needs of long-term investors. Long-term goals should not mimic short-term strategies. Time horizons are key, offering success predictions. The media's focus on pessimism caters to our planning for worst-case scenarios, while optimism often raises suspicions of sales pitches. Progress is gradual, setbacks sudden. Don't solely heed pessimism; avoid overreactions.

Our worldview is limited, leading to shaky decisions based solely on personal perspectives. This is evident in active vs. passive investing—actively managed accounts tend to yield less over time. Embracing humility in finances, relinquishing ego, and managing money for peace of mind is vital. Humility matters in success. Outcomes are shaped more by behavior than portfolios. Care for yourself; small actions accumulate. Focus on control, release what you can't. Join us for insights on mindful financial management on this episode on Keep It Simple!

Click here to connect with the Asset Builder team

[00:00] Show intro

[00:29] Welcome to the show!

[01:07] Overview of Southern LA Bank crash

[12:02] Chapter 16 [17:24] Chapter 17

[22:50] Chapter 18

[27:42] Chapter 19

[32:03] Giveaway: win this book!

[32:50] Outro

In this episode of Keep It Simple, hosts Adam and Joey continue to talk through "The Psychology of Money'' by Morgan Housel. Adam and Joey delve into the concepts of rationality and reasonability in financial decision-making. Chapter 11 of the book centers around reasonable vs. rational decisions. While some investors might be comfortable taking on more risk, adopting a double leveraged portfolio, although rational, may not be reasonable for most due to its extreme volatility. They stress the importance of constructing an investment portfolio that maximizes returns while allowing one to sleep soundly at night.

This episode highlights the inverse relationship between reward and risk, underlining that higher rewards often entail greater risks, which might not always be immediately apparent. The hosts draw on historical perspectives to explain that change is a constant, and history serves as a guide for the future, despite the presence of unforeseen events. Real-life instances involving clients' market concerns are shared, advocating for a balance between knowledge of historical patterns and preparedness for surprises.

Adam and Joey advise against over-reliance on one's expectations and suggest building a strategy that incorporates diversification. Recognizing the inevitability of being wrong at times, they stress the importance of a margin of safety. The podcast underscores the difficulty of forecasting one's future self due to personal growth and change. Regularly revisiting and aligning goals is recommended to avoid divergence.

Basing goals solely on trends is something to be cautioned against, and Adam and Joey highlight that everything in life involves trade-offs. They use investment scenarios to illustrate the trade-off concept, like choosing between low returns and avoiding high interest rates. Emotion-driven reactions are discouraged, as they can lead to mistakes. Overall, the episode promotes a thoughtful, reasoned, and adaptable approach to financial planning and decision-making, grounded in both historical knowledge and an understanding of one's evolving self.

Click here to connect with the Asset Builder team.

[00:00] Show intro

[00:29] Welcome to the show!

[01:14] Chapter 11

[08:13] Chapter 12

[14:22] Chapter 13

[21:13] Chapter 14

[28:12] Chapter 15

[33:56] Wrapping it up