Haven Financial Group Radio
Haven Financial Group Radio - 7/21/24
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You're listening to the new and improved Haven Financial Group radio show, where we bring you comprehensive weekly financial wisdom from the professionals. It's all about helping you solve retirement problems, so you can make your nest egg last. You're tuned to the Haven Financial Group radio show, with your host, Larry Colvig and Kim Carrigan. Your guides to weekly retirement confidence. If you're interested in protecting and growing what you have, let us be your financial safe haven. The full lines are always open at 612-504-8400. Now, get your financial questions ready, because the Haven Financial Group radio show starts now. Good morning, and welcome to the Haven Financial Group radio show. I'm Larry Colvig, founder and CEO of the Haven Financial Group. Thanks for listening. We got a lot to talk about today, Kim. A lot in the news, election year, and all the good stuff that goes with it. Yeah, it's been a busy, busy week. That is for certain, and obviously, these are elections are very important to a lot of people, because we have seen a lot of our economy bouncing around, and of course, depending on how you feel about the candidates, you believe that one candidate or the other may be better for the economy. I'm not sure that we're here to debate that as much as we are, to talk about how you can deflect some of the issues associated with inflation and economic issues here in the country. Happy to have Kyle Thomas with us today. He's a certified financial planner, a member of the Haven Financial Group team. Kyle, hi, and thanks for joining us. Yeah, thanks for having me, and good morning. Good morning to you, my friend. So it was back, really, guys, in about 2021, right, that we really started to feel the rise of inflation. And I'm going to ask you too, because your experts on these kinds of things, tell me some of the first signs that you saw of inflation back in 2021, that maybe we've continued to see, even though I think things have eased a bit. Well, Kim, I think they've eased a little bit. I mean, there's certainly a long way to go, but reflecting on 2021, and then the pandemic, and there wasn't much on the shelves at the grocery store, and what was on the shelf, then the prices continued to rise. And of course, we all remember in 2022 when inflation hit 9.1%. How could we forget about that, of course? We've come down a lot since then in the last three years, for the last two and a half years, but we're well away from that 2% target that the feds are looking at. It's slowing down, but just because the inflation is slowing down, now it doesn't mean the prices are coming down. They remain high. And quite frankly, we see it cause a lot of financial stress for regular individuals, middle-aged individuals, but we serve those that are planning for retirement and close. It can affect them a lot more, especially when it comes to different rates, mortgage rates, what we've seen across the country is credit card. First quarter of this year, $1.15 trillion this year, and household debt at really high, at $17.69 trillion. That's a lot of debt, and that's what people are taking on to adjust for this inflation and high cost expenses. Yeah, absolutely. Kyle, as someone who meets with consumers, and obviously soon-to-be retirees, and some who are retired, tell me some of the feedback you've been getting from people. Yeah, that's a great point. We meet with many people and couples throughout the week, and a big thing that I'm seeing is people wanting to stress test their simulations for retirement with higher inflation rates. So we typically have about 2.5% in there, and that's a little higher than what the Fed is actually targeting going long-term. That's a whole another discussion if we get to there, but people are wanting to stress test for 3% or more inflation. So you just kind of see the sentiment that the average American has regarding where we're going to be going forward for inflation. And that changes the retirement plans a whole lot, because if you're targeting 6% or 7% return on your investments, then your inflation is at 3% or more. Well, half of that return that you got goes to just inflation, so your real return goes down by whatever that difference is. Absolutely. I want to talk a little bit more about that and about the kind of advice that you guys are giving some of the folks who come to visit with you, but before doing so. Larry, you've been in this game for a while. This generation of retirees or soon-to-be retirees, have they seen inflation like this before? Yeah, many of them have, but they've kind of wanted to forget about it. So it kind of brings back some many years back. It affects seniors a lot because no more paychecks. So for somebody that's getting a paycheck, it might not affect them nearly as bad as if they're living off their investments or that pension or maybe they're relying on annuity for income. It really affects them because what they start to do is they start eroding their cash reserves, which are very important for retirement, and then they're forced to potentially draw off of investment or retirement accounts that, thankfully, the markets have been very, very good of late. That's great, but you don't want to draw off those accounts if the market's turned. Again, we know the market goes up and it goes down and drawing it in a bearish market is just the wrong thing to do it, but a lot of people are forced to do it. So adjust those plans. First, have a plan. Adjust those projections. Look at the expenses, scrutinize them probably more than ever. I'm not saying you have to cut things out, but you may have to cut some things out if you're really looking to successfully plan for retirement. Try not to resort to those credit cards that are 20 to 30% interest rates. I'm seeing that more and that is not what you want to do planning for retirement. So it sounds like we're preaching to the choir and maybe we are, but it's just certain things we see on a regular weekly basis. People have felt it. We will get through this. But again, having that plan and modifying it along the way is so important. Absolutely. Kyle, let's talk about the biggest risks that you see for your pre-retirement clients. Yeah, biggest risk for them is just going to be their daily lives, rising prices, harder to finance things. If you wanted to get a mortgage or a car loan, those higher interest rates can really eat at your ability and your purchasing power to get things that are necessities in your life. So some inflation is good. We have to keep that in mind because it drives the economy. But the inflation that we have been seeing is not good. It's a detriment to our society and our economy. So we want to try to keep this strenuous time so away from us as much as possible. But keep in mind that some inflation is good and we just want to try to keep it down. But in terms of for the younger people, you can take advantage of this as well by investing in types of investments like CDs and treasuries because they are having higher interest rates. And you can combat that inflation in a way by having those investments in your portfolio. Sure. So your pre-retirement clients can maybe take advantage. Now that may not be the case, Larry, for those who are already in retirement. But hopefully you've set them up in such a way that they're prepared for this. Talk a little bit about how you guys do a stress test and then you prepare for the idea that there may be inflation. And maybe you never anticipated it'd be 9%. But give us an idea how you go about that. Well certainly we plan for the worst and pray for the best, absolutely. But it does affect the retirees to the degree that they may have to work longer. If they're on the cusp of retirement, maybe working longer is the answer to get a couple more years of income and delaying that retirement date. And a lot of people don't want to do that. But financially we have to look at that. We use these projections. We factor. We've always factored in inflation. And I'm always astonished when people tell me that their financial guy or gal doesn't factor in inflation. You can't do honest and accurate projections because we know inflation is a complete game changer. So we've always factored it in. You want to make sure, again, expenses are accurate. But I saw a statistic here, Kim, that 61% of Americans are spending more on groceries and dining out more, which is very interesting. I don't know how that goes together with a budget because dining out is not cheap. Yet all the restaurants I had to go to seem to be very, very busy. So I don't know. There's sometimes a disconnect with reality and what actually people are doing. But retirement comes quickly. Make sure you're planning for it. And first of all, have that plan. If you don't have one, start somewhere to get somewhere. Sure. Have you guys unfortunately had to look, you know, couples and individuals in the face and say, look, I am afraid that these last couple years mean that you're going to need to stay in the workplace for a little bit longer? Those are tough conversations. Do we have those conversations? We have probably more in the last six months to the last year, more than ever. But part of that is because people haven't planned very well. You know, our observation is though that the age that we work with has done some planning and maybe that would be the best planning. But there are ones that come across. I just last week, I had a couple that some of them thought they were going to retire. But when we ran the numbers, their money wasn't going to last nearly as long as they thought because they were putting garbage into the projections. And it simply wasn't accurate. So again, we want to be as accurate as possible. Sure. Absolutely. All right. So we want to invite our listeners today. And one of the things that are you constantly say is that we're not here to scare people. We just want people to be aware of what the situation is and how this could be affecting your retirement, whether your in retirement already, or if maybe you're someone who's hoping 2025, 26 is the year that you can step away. It would be best probably at this stage of the game that you make sure that your plan that's in place can survive through these kinds of times. And you need a stress test. You need to find out if in fact this in these last couple of years have taken a toll on your plan in such a way that maybe retirement needs to be pushed off just a little bit further. 6125048400. That is the number where you reach the folks at Haven Financial Group. Let me give it to you again. It's 6125048400, whether you have concerns about inflation or you just need a plan in place, a portfolio, then they are the folks that you'll want to talk to. Sit down with them. They are at Haven Financial Group. And just get a sense of what it is that they can offer you and you tell them what it is you're looking for. That first consultation is free. They have fabulous coffee and I hear there's a cookie or two as well. 6125048400, you can go to havenfinancialgroup.com. So gentlemen, when we come back, let's talk a little bit about budget strategies that you give some of your clients or that you would suggest as a result of this inflation. Again, Kyle Thomas is with us today. He's a certified financial planner and a member of the Haven Financial Group team. So glad that he could be with us. And we're glad that you could be with us too. You're listening to the Haven Financial Group Radio Show. Don't go too far. We're gathering more important insights and retirement wisdom. The Haven Financial Group Radio Show will be right back. Stick around. You've got questions? We've got answers. You're tuned to the Haven Financial Group Radio Show with your host, Larry Colvig and Kim Carrigan. Now, back to the show. Welcome back to the Haven Financial Group Radio Show. I'm Larry Colvig, founder and CEO of the Haven Financial Group. And joining me today, Kyle Thomas, a certified financial planner on the Haven Investment Team. Great to have you, Kyle. Here to talk about retirement and all the various things that go with it. And of course, it's an endless conversation weekly talking about inflation. So feel free to give us a call at 612-504-8400. Send us an email. You can go to our site at havenfinanceagroup.com. There's all kinds of practical retirement tools on there. We have a safe Haven community where you can share ideas. Just a really good website that people really find very, very interesting. We've been talking about inflation. It was back in 2021 when we really started to feel the effects of inflation, a result of coming out of the pandemic, a worldwide pandemic, at 1.9.1% inflation year over year here in the United States that occurred in the summer of 2022. We have seen a bit of relief over the last few months. But you know, if you're like me, Larry, you still go to the grocery store and go, wow, that bill still feels pretty darn big. And certainly inflation affects all different aspects of our economy. It affects the financial markets and the banking institutions, but it affects individuals as well. And you were talking about in our first segment, both you and Kyle, the idea of budgeting. So let's talk a little bit about budget strategies for soon to be retirees or retirees when it comes to combating inflation. Let's start with just the idea that you guys are saying that you still have see people coming in and they have big credit card debt. They still are feeling the effects. Well, yeah, you said it right. It affects the financial markets, the banking industry, and the business side of it. But it affects individuals' lives equally or even more. It causes financial stress for Americans it has. You know, you really feel it personally, although I went traded for nothing with all four daughters being home for the summer, and their friends constantly overstocking the downstairs kitchen with snacks and everything else. So you definitely, it definitely hits homes even individually. But that leads to the need, at least you should be budgeting anyways, the need for effective budgeting. Now, nobody wants to hear about budgeting. It's not a fun thing put to put together. We preach this to the younger generation, but equally as important for those that are planning or in retirement, many of them are in a fixed budget. They're on a fixed income. So straying away from that budget can really cause problems. The big big keys here are housing transportation and the food that we've been talking about. We always talk about covering the costs for the things that you want. But then in retirement, you also will try to want to cover the things that you need. And it boils down to income. Where is it going to come from? And budgeting is really a discipline. I had a couple in last week. They have been utilizing the envelope method. First of all, they had put together a great plan. I could confirm that we could tweak it a little bit. And I asked them, I said, "What has been your secret over these years of marriage?" And they said, "We got off to a really tough start." And we followed the Dave Ramsey in this situation. It worked for them. But they developed the envelope where they put money, various monies in each envelope, and it worked for them. And they're still doing it. They're in their mid-60s. They're still using the envelope method. And they explained to me how I actually helped their young neighbors that were struggling as well. In their case, the husband was going to the casino and she was getting all her hair and nails and all the other stuff. And now they have effectively came through with the budgeting. So it's individual. That doesn't work forever. Every way, perhaps Kyle can talk about a couple other ways to budget. But again, it's tracking your spending, finding out where are you spending your money? Is it caribou? Is it Starbucks? Maybe you can cut out a little bit here or here. And you'd be surprised how many if you're really tight in the reins, how you can change that discipline or your habits fairly quickly. Kyle, we heard Larry talk about the envelope method. Can you address maybe some other budgeting methods that you chat with your clients about? Yeah. Budgeting is an absolutely necessary thing to do. And like Larry said, it's not so much fun to do because you realize how much you actually spend on things and you have to stick to the plan. But it actually kind of creates a sense of comfort and relief once you look at it. And you understand where you can spend your money and where you're going with it. But some great budgeting tactics I have is, first, you want to create a plan that's within your means. So just find out what your income is, how much you're saving into retirement and that type of stuff. And then see what kind of discretionary income there is that you can spend there and then create a budget within that. And also create an emergency fund and use it exactly what it's for, emergencies. Keep it to the side unless you have an emergency. And that should be about three to six months of spending of discretionary expenses. After that, I just like to tell people to find some cheaper alternatives. If you're a cub shopper, you know, for groceries, cub has their own brand that you can buy instead of the big marketing, large distributor type brands. If you are a target shopper, you can shop for the good and gather brand versus a large distributor. So you can save dollars in the wrong run by doing stuff like that and pinching those pennies a little bit or you can even grow a garden like I did this year. And I'll be having a lot of BLTs in a couple months. You can ship some of my way, if you'd like, if you get overrun. So yeah, you can just cut a lot of unnecessary expenses, you know, the gym, get some coffee from the grocery store rather than going to Starbucks each day or rent movies rather than going to the movies. So just things like that, you'd be surprised how much money you can save. I think that's so true. You're absolutely right. I think if someone gets on a budget like that and writes everything down very quickly, you realize where you're leaking. And I think a lot of people are very surprised by that. Let me ask you guys this, when it comes to inflation, is it really a budgeting question though, or is inflation more about an income issue? I would say it's actually both. Okay. You have to have income to cover the inflation. You're going to have to draw from somewhere. If inflation's high, you're going to have to increase the amount that you're drawing off whatever investments or wherever you're getting your income. What's interesting is one in four Americans have nothing safe for retirement. And many Americans cannot afford to retire ever, which is a staggering number. There's just a recent statistic I read. And retirement is often a succession of different phases of retirement where your spending might change, the priorities might change, and your budget might change. And you know, I would point this out. You know, there's the pre-retirement age, what I would say is the 50 to 62, where you're going to have different expenses and probably different things than you will in the second phase, which is the ages from 62 to 70, or maybe now you're retired and now you're doing more things, you're able to travel. We want to factor those into your overall plan. And maybe the third phase being that roughly the 70 to 80 range, and then maybe some health care things. And then the late retirement years of 80 and up, hopefully not, but nursing home, long-term care, health care needs, those are all part of it. 70% of us, we've talked, I think a few weeks ago, that 70% of us are going to need some sort of care. You know, is that important? We've discussed that in our proprietary processes as well with folks. Have you factored it in? Last week I had somebody that was pretty much everybody on her mom's side has had dementia. Well, I hope she changes the whole system with her family, but her worry was, I need to plan for that, even though I hope it doesn't happen. So we walk in our process, we're walking through all of these, what ifs, should we plan, do we need to plan? What's the cost of this and that? Inflation being part of it, but then there's all the other aspects of retirement as well. Absolutely. Let me ask you real quickly here, before we move on, inflation adjustable income investments and products. What might be some of those? Yeah, so the federal government actually has some of those. So there's treasury inflation protected securities. That's a big one that we actually use in our portfolios. So you get a bond from the treasury and the return and interest that you get is based on the inflation. So they look at what the inflation was and they adjust that interest for whatever it was. So especially the last couple of years, that's been a great investment to be in, because when we're at a 9% inflation rate, obviously that would have been a nice place to park your money in. So there are vehicles to specifically match the inflation environment that we're seeing. And if I could add to that, we do see people utilize annuities. You knew when I have talked, I'm going to teach a class soon about the truth about annuities. Look for that on our website. Some people use annuities. You don't have to for income. Now, with the federal funds rate and interest rates being higher than they were several years ago, there are some intriguing annuities for income with higher payouts that can help generate more guaranteed lifetime income at this stage today compared to what it was three, four, five years ago. So there are a variety of retirement tools and products that are out there. And we always say it comes down to the education. Nothing's for everybody. Please don't just don't go by the first one you see. It might not be appropriate for you. It might be appropriate, but it starts with education and a discussion to see, is it the right fit? Is it not the right fit? And oftentimes people, they don't look at all. They don't look at everything that goes with it and then they get stuck into something that they really don't want. So education is the key. Absolutely. And if you're looking for some education, maybe as we just heard about annuities or a lot of subject matters that are related to retirement, then absolutely go to havenfinancialgroup.com. You'll see a list of some of the upcoming seminars. They are free, but you do need to sign up so that they know who's going to be attending. And as Larry just mentioned, they are going to have one very soon on annuities. And maybe that's something that you have a lot of interest in. You can also call Haven Financial Group at 6125048400. That's 6125048400. Gentlemen, when we come back, let's talk about inflation. Who caused it? And most of us, even more importantly, what caused the inflation that we've been living with really primarily since 2021. You're listening to the Haven Financial Group Radio Show. Ready to find your financial safe haven? Your dream retirement is in reach. Don't go away. The Haven Financial Group Radio Show will be right back. Are you worried that your financial strategy might be missing something? Well, you're in the right place. Larry Colvig is back and ready to help you find your financial safe haven. Welcome back to the Haven Financial Group Radio Show. I'm Larry Colvig, founder and CEO of the Haven Financial Group. Give us a call. Ask us questions. 6125048400 or visit us online at havenfinanceagroup.com. Again, great to have Kyle Thomas with us today, Kim, certified financial planner on the Haven Investment Team, talking about inflation that it's a fact of life for us, it's reality. There are things you can do to minimize, and we're talking about how to reduce the effective inflation. But again, we know that it's happened before in history. It'll happen again. It's just we have to weather the storm and seeing what's the best way that we can do that. Absolutely. Well, we've been talking about a date. We've been sort of saying that it really spiked in 2021, and then it took a gigantic leap up even higher in the summer of 2022. But I know that off the air, the two of you have said that you believe that inflation stems back even further than 2021 and pre-pandemic. I definitely do. I mean, again, there's a lot of opinions. We're all entitled to our opinions, of course. But I think this can date back to the Bush times, the Obama times. Yes, the easiest ones to blame are Biden and Trump right now because they're engaged in a heated debate and we have an election year and we're worried about the US economy. But this day is back a while longer. Quantitative easing, the printing of money has been going on for quite a while. And that certainly hasn't helped to cause this whole pandemic thing really boosted it more. And let's not forget we have a war in Ukraine. But the federal policies of printing money has been a significant contributor to inflation. I think more than anything, and we've been doing that for quite a while. I grew up drinking Kool-Aid on the farm. And at the end of the day, the more water you put in the Kool-Aid, the lighter the Kool-Aid got. Well, the more you keep printing money, the value of the dollar goes down and it just gets thinner. So this has gone on a while. I wouldn't play the blame game. We certainly have to get some of these things under control from a world perspective and a US perspective. But there's a lot that goes into this whole thing about inflation. Absolutely. Kyle, how much of it do you attribute to geopolitical issues, that being the pandemic or the war in Ukraine, and maybe even some of the issues associated with the Federal Reserve, how much of it do you see as being factors, those being factors? Yeah, yeah. And first, I'll kind of piggyback up what Larry was saying. If you look at our economy starting in right about '08, we went into a great expansionary type of economy starting then. And if you think about currently the last few years, what was driving the inflation, it was the low interest rates. Well, we had low interest rates back in '08 again because the government was trying to try to put money into the economy so it went slow down with everything that was happening. And so ever since then, we've been in that expansionary period. So back in 2020 when COVID happened, the government was pumping out money to combat the effects of COVID with businesses shutting down and people staying at home. So they wanted to make sure that our economy would still run. People started buying stuff with their stimulus checks and excess cash that they had at home. And that led to limited supplies and shortages. So remember when used car prices were just increasing dramatically because the new cars didn't have chips. So people wanted to get the old cars and that chip shortage caused a huge burst into the AI thing that we're seeing right now, I think. So it started maybe in the 2000s, but it was really the light was shining on it back in 2020 from COVID because there was a whole lot of effects that happened then. I hear you guys saying that our interest rates were low and we began to expand and ultimately paid the price. What in your opinion, because of course the Federal Reserve right now, in fact, thinking about more cuts and possibly bringing the interest rates back down, what's a good, comfortable place for interest rates to be for the economy? I think maybe right around, you know, 4%, 4%, 5%. I guess I'm not really sure what they're thinking for it. I know that, you know, they're targeting inflation for 2%. But that federal funds rate, that's going to be kind of a up in the air question that I don't know if we're going to really see for another couple of years. Because at the beginning of this year, they were targeting 6 rate cuts. And now we are in July already and we haven't seen Eddie. And a September rate cut is on the horizon, but who knows what will actually happen then? And we're supposed to have 4 next year. So I think we're getting a better idea of where we're going to go and that soft landing that Jerome Powell's been talking about may happen. Maybe it won't. I'm not sure. But we're getting closer and things haven't fallen apart like a lot of people had predicted. So it's just nice to know that we're getting closer to where we want to be. Larry, I know that we're not here to talk about politics necessarily. We're just talking about the impact of what the economy has on certainly pre retirees and retirees. But this election this fall certainly will have some kind of impact on our economy. No questions about it. No questions about it. The big thing that I see not hardly anybody talking about though is government spending. And we've been spending. I don't care what side of the aisle you're on. It's just spend, spend, spend, spend, spend. Now, don't ruin your Sunday by going out and watch going to look at the us debt clock.org. Please don't ruin your Sunday. But I know we're at least 34 some trillion dollars in debt. And that isn't getting any better with especially all these packages. And I understand stimulus, the pandemic thing, but there was no accountability. I had a couple clients that were in the banking in the credit union industry that actually they retired early because the default rates were so bad on all that money that was sent out. And it was so stressful. They retired early because of no accountability and people that took advantage of the system. And that's our hard earned tax dollars that was wasted. And there's so much waste on both sides. Yes, there's concern, whatever happens this November about who gets in is one better for the stock market than the others. There's one spend more. I know there's great concern. We have a lot of retired military folks. And there's a lot of concern about our military and the lack of in the shape that our military is in and not spending on money on the military and spending money and other things. So there's always two sides to the equation. I'm sure there'll be chaos on either side. It was a terrible thing that recently happened. Obviously this past last weekend with President Trump and the assassination. And we can't overlook that. We're certainly mindful. We don't wish ill will on anybody. And it's a miracle of what happened that he's still with us. We shouldn't wish ill will on anybody and we wish people the best. We can have differences of opinion. But I agree with the uniting of America. And again, there's no place for shooting people or riding in the streets. Well said. And I couldn't agree with you more. Kyle, let me let me ask you a couple of questions here about some of the things that we've sort of discussed. But economists are saying it, you know, that they do truly believe that this round of inflation was related to the pandemic. It's the war in Ukraine. And they talk a lot about just decision-making by the Federal Reserve early on in the pandemic. And then of course, as this has played itself out since the pandemic, where do you stand on that? And do you think there's anything else that has been a factor that maybe retirees should be watching for good or bad when it comes to inflation? Is there one of those factors you think that was the real death nail when it comes to shooting inflation up? Well, I think just COVID itself and having the Fed lower interest rates to zero. And having them be at zero for such a long time, that really drove inflation up, I think. And I mean, when we think about this, when the Fed lowers the rates, they're pressing the gas on a car, right? That's the picture that I like to think. They're pressing the gas on the car to try and get this thing going and jumpstart everything. And when they started to raise the rates, I was critical of Powell, actually, for how it went down. I don't know that it was necessarily the best way to do it. But the inflation didn't stop. It did not slow down as much as they thought it was going to. And we're still seeing the effects of that today. So retirees just need to keep that in mind. And like we said, in a previous segment, that we just have to keep the inflation projections in mind when we're looking at the retirement success rates, because we just don't want to plan for too low of an inflation if we actually have a higher inflation, because that can create problems for these retirees going forward if we're looking out for the next 30 years. Sure. Well, Kyle, I think you kind of answered it there. I mean, I think the chances of all of us living through another pandemic, we certainly hope are much less than the possibility that interest rates could have a huge effect on our economy. So I thank you very much for answering that 612 5048400. That's how you get hold of Haven Financial Group. Do you have questions questions about your portfolio, questions about inflation, questions about your retirement? Be sure you give them a call, sit down with a member of the team and talk through what you hope to achieve in retirement. It is a free consultation in the beginning. And they would love to hear from you or you can go to Haven Financial Group dot com and get in touch with them there. The cost of high interest rates. We've just been talking about it. We want to talk about that a bit more when we come back right here on the Haven Financial Group Radio Show. Don't go too far. We're gathering more important insights and retirement wisdom. The Haven Financial Group Radio Show will be right back. Stick around. You've got questions? We've got answers. You're tuned to the Haven Financial Group Radio Show with your host Larry Colvin and Kim Carrigan. Now back to the show. Good morning again and welcome to the Haven Financial Group Radio Show. I'm Larry Colvin founder and CEO of the Haven Financial Group. Great to have you with us. Inflation, high interest rates, all this positive stuff. But we should remain optimistic because if it is an election year, they're going to solve all our problems this year. We can only hope. From your lips to God's ears, Larry. I know we've done a lot of talking certainly in our last segment about interest rates, but let's take a couple of minutes and talk a little bit about interest rates because when the Federal Reserve, we wait for these days when the Federal Reserve has their big meeting and then Chairman Powell comes out and he talks about what they've decided and sort of gives us some inkling nation as to whether we're close to a rate cut or what's good. I'm hoping you guys can maybe explain to some of our listeners who don't understand exactly what that means. So when there's a rate cut and the Reserve decides they're going to cut rates and how that trickles down to affect them in their personal economy. So what that rate cut means is that there's a federal funds target rate and that is the rate that the banks are borrowing at. So when a bank is borrowing at a lower rate, that means that they lend out money at a lower rate as well. So that means a lower rate for you, the investors and the citizens of the United States. When they're a higher rate, it creates problems for financing and taking loans out and what they're trying to do with higher rates is limit your spending and stop your consumption going out and doing fun things with your life. So that's what the higher rates mean. And when they start to cut them, they're starting to let you do that a little more in their eyes. The government debt will usually increase when the rates are higher because they're giving out treasury bills and treasury bonds for higher interest rates. So one thing I like to keep in mind too is that how are they going to combat that more debt now? And that could be potentially raising taxes. So there is kind of a cost to these higher rates other than the debt that you take on for financing things. And despite the fact that we've seen things sort of cool down just a little bit, Powell is talking about if he continues to see strength in the economy that we may see more cuts this year, right? Yeah, they actually are factoring in a rate cut in September as of now and then maybe one by the end of the year. So it'll be determined by how inflation is measured here in the upcoming months for sure that may or may not happen. How does it affect the average consumer? The bad news is home equity line of credits, interest rates on credit cards, interest rate on mortgages, they've all spiked up and in business, all of those things. The good news is we've been able now or folks should be getting, you know, five plus percent on those high yield savings accounts, CDs, some of those accounts that we were not able to make more than pennies for almost 15 years. So that's the good news. We're able to make some money on that, those liquid bank accounts. If you're not, shop it out and go get something at five plus percent while you can, because they won't stay there forever. And Powell has emphasized the risk of, you know, weakening the common economy. It's been a very slow pattern of the way he's doing things. There is good news, though, because and I would agree with him that there's strength in the economy. The labor market is strong. There has been some easing in inflation and there's a lot of doom and gloomers out there. At the end of the day, the American economy has always bounced back. It's always bounced back. And if it doesn't bounce back, we got bigger, we got bigger problems than we've ever had. So when I hear these, you know, these people on the far right or the far left that, you know, should I take all my money out? Because the banks are going to be all shut down by Wednesday. Make sure you consider the source of where you're getting the information, because there's a lot of, you know, the internet is great for a lot of things. But you can find anything you want about the on either side on the internet. So be extremely careful. If you're wasting a lot of time with doom and gloomers, you might want to hang out with, you know, with somebody different, because their reality is you got to have faith in something. Otherwise, there's there's no hope. And what I'll say is I'll bring it full circle back to having a plan, talking through the plan. We're doing that more than ever with our clientele because of the concern of, can I retire? How long will my money last? How will it all of those factors? And that requires whoever you're working with to be paying attention to what your worries are, what your concerns are. And you should feel that you can ask questions to whoever you're working with and having a good partner to lean on. That's what we like to do. If people will need more attention during these tough times during these worries and concerns, that's what they're paying us to do in some way, shape, or form. So again, if you're not getting the attention you deserve out there, perhaps you should get a second opinion. And there's no cost for a second opinion. And that's what we offer. Come on in, we visit with you with what are your concerns from a financial standpoint to a family standpoint to an employment standpoint. And the more you talk through things, planning for retirement and in retirement, the more confidence you're going to have, the less potential worry. And that's going to lead to better decisions. So I see a lot of people just not getting the attention they deserve, but they're paying for it. I don't care if you're talking investments, if you're talking health care, estate planning, taxes for sure, because tax planning, we talk about that all the time is so important, yet most people just get their taxes prepared and they don't do anything about planning. So what's the old saying? A failure to plan is a plan to fail and we don't want anybody to fail, let it alone somebody that's trying to retire and may never be able to retire. So having said all of that, Kyle, what is it that you're telling some of your retirees who come in about interest rates? We know that chances are very good. We'll see two more cuts. You know, how is that going to affect them? And what do they need to do to prepare? Well, we do try to take advantage of what the interest rates are and what we're given. We do look out to the whole market of the bonds that we can see, so like CDs and treasuries, all of that. And also, if you're at your local bank and you're purchasing CDs through there, I would just urge you to speak with someone. It doesn't even have to be us, but it's nice to get a full scope of what's out there because often these smaller banks, they take a little extra off the top there so you get a lower interest rate. So but there is CDs, I just checked the one year on new SUCDs is 5.1%. A three month treasury is at 5.3%. So there's ways to take advantage of this. So that's something that we implement into the portfolios for our retirees, especially because we don't want to take as much volatility when you get into retirement, right? Because that can cause problems if we have a downturn in the market and you're more exposed to the equities than you need to be. So that's something that we do. And one other thing that we're trying to do is just emphasize getting rid of debt that you don't need, because that's something that can erode at your wealth, especially with the current credit card rates because of those higher rates. So if you carry over debt on a month to month basis, that the annual yield that the credit card companies are getting is just shy of 25% right now on average. So we just want to take care of things and do a checkup on your wealth and make sure that you're taking advantage of the things that's best possible out there. Can I ask you, if we have those two interest rate cuts by the end of the year, how will that affect those CD returns? Well, the CDs will effectively go down on the new issue. So you'll get less interest inside of those CDs. And then if you're actually holding CDs currently, those prices will actually appreciate it. So you would actually have a gain inside the CDs if you were to go and sell them. But we wouldn't necessarily want to sell them. We would want to hold them for their yield and all that. So the bond market is a little confusing, but the yield that you would get on buying new treasuries or CDs or any type of bonds, they would go down. And that would actually potentially drive the stock market up, right? Because that would be the companies that you would be investing in, they get an effect from those rates coming down to. So they get to borrow money at lesser rates. So that would potentially mean for them to invest more into the company rather than borrowing more, right? I think what I'm hearing though is that if for a retiree and you want to get into CDs, and the rates are pretty good right now, now might be the time to do so before these cuts actually occur. I definitely agree with that. I definitely do. If you haven't taken advantage of that, for your liquid monies, we call it your emergency fund, or just your regular spending money, monies you're not going to need immediately, go out and shop those out, take advantage, whether it's short term, three, six, 12 month. These rates were not going to stay this way forever. And again, I think people, if they're not getting some at least five plus percent, there's other options out there. And let's face it, whether interest rates fall, stay the same, whatever, or rise. There are strategies out there, but you need to talk through these strategies to see what you're missing, if anything, and there's ways to protect and secure your retirement dollars and finances. And that's where, feel free to give us a call and get a 6125048400 to talk through these things or set up a time to come visit with us. Absolutely. Or you can go to havenfinancialgroup.com. This has been so informative, you guys. I mean, I think that we certainly didn't want to make this a doom and gloom kind of show and you did not. You've told us all the positive things that can happen to retirees, despite the fact that inflation has been pretty strong, but is slowly coming down, hoping for a better year in 2025. Yeah, Kim, well said, your investment in retirement strategy is one of the most important aspects in your life. It truly underpins your entire life during these golden years, which we want them to be as golden as possible. But it's not easy to keep up with all the changing rules and laws and financial landscape of everything. And yes, inflation and high interest rates, this was not meant to be a negative or a negative nelly type of segment today, but it is real. People are feeling it. Therefore, they should be getting the attention they deserve in any of these retirement areas, specifics to taxes and all the other planning that goes in the retirement. If you don't have a plan, whether small, medium, or large, big family, little or no family, take the time. It doesn't cost anything. It's a laid back atmosphere here. We want to be relatable. It's not a stuffy. We take it very seriously. We also have a lot of fun as well. So again, thanks for listening. Great to be with you again, Kim. Absolutely. Kyle, thanks so much for being a part of the show today. Thanks for having me. Thanks for listening. Have a wonderful week. We look forward to being with you next week. Give us a call at 6125048400 or havenfinanceagroup.com. Investment Advisory Service is offered through Guardian Wealth Strategies, LLC. Haven Financial Group and Guardian Wealth Strategies, LLC, are not affiliated companies. Investments involve risk and unless otherwise stated, are not guaranteed. Please consult with a qualified financial advisor and or tax professional before implementing any strategy discussed herein. 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