03.17.23 Ask An Advisor With Wes Moss

How Oil Price Shocks Impact the Market & AI Isn’t Killing Jobs—It’s Burning Us Out As we face one of the largest oil supply disruptions in history, Wes Moss explores how geopolitical shocks in the Middle East impact your wallet and the stock market, while reinforcing why long-term longevity beats market timing every time. Also, a new crisis is emerging in the workplace – AI-driven burnout. Contrary to fears of job loss, recent data across 443 million work hours suggests that AI tools are actually expanding our workdays and increasing weekend labor. Wes discusses why the real risk of the tech revolution isn't a lack of work, but rather the challenge of balancing an "always-on" culture where every task is now achievable. Mentioned on the show: Do You Really Need To Rebalance Your Portfolio? Plus, Christa shares your #AskWes questions and Wes gives his take. All this and more on the March 17, 2026, Ask an Advisor episode of the Clark Howard podcast. Submit your questions at clark.com/ask. We hope you enjoy our weekly Ask An Advisor episodes. Let us know what you think in the comments! Learn more about Wes: BOOKS BY WES MOSS Wes Moss, CFP® Wes Moss - Clark.com Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:00Speaker 00

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• 0:50Speaker 03

  Welcome to Ask an Advisor. Were we here on Team Clark helping manage your money, your investments? We talk about how you can save more, spend less, and Clark handles the not getting ripped off part. We usually don't get into that on Ask an Advisor, right Wes Moss?

• 1:05Speaker 04

  We don't, but we do deal with markets constantly and there are periods of time where you feel a little bit like that. And we're going through one of those times right now with the International Energy Agency just said that we are in the middle of the largest oil disruption and supply disruption in the history of global oil.

• 1:27Speaker 03

  So much happening in the world, war, lots of stuff to get to, but how's that going to affect us? And so I think a lot of people are very worried right now. So really I'm looking forward to getting your take on that. And then later on, after, of course, you're going to take questions from all of our listeners, we are going to talk about AI and not in the way that it's normally talked about because all the talk is about AI and job loss. Of course, innovation, but job loss on most financial shows, but you have a different angle for us.

• 1:57Speaker 04

  And it's been wreaking havoc on different sectors in the stock market. Software is an example, down 20, 30, 40% because the worry that AI is just going to take and replace what these software companies are doing. So there's been. Been a lot of disruption with artificial intelligence and how it's changing the job market. And there are new studies, brand new, that I've just found because I think it's been, it's so new that it's kind of the first time studies are coming out about how much we're using AI and what it's actually now doing to the labor force. And it is, it's almost the opposite of what you might think. It's almost crushing us from a workload, which is totally the opposite of what it was supposed to be doing.

• 2:40Speaker 03

  For sure. All right. But before that, we're going to talk about what's happening in the world.

• 2:44Speaker 04

  Let's talk about the geopolitical events of the day. We're in kind of week two approximately. We have seen, the IA just came out recently and said that we're in the middle of the largest oil disruption, supply disruption that they've ever seen. And that's a global issue. And remember that even though we have plenty of oil in the United States, we have, we produce more oil here than we even consume. So we're actually a net exporter. The price of oil is determined globally. So if there's a supply disruption halfway around the world, which is exactly what's happening, it reverberates right back here to the United States.

• 3:26Speaker 04

  And it's really difficult, even with the release of the Strategic Petroleum Reserves, which we've heard about also, there's only so much that can do to help curtail prices of oil. If we go back to, let's say, the end of last year, Krista, oil prices, and this is by the barrel, were in the mid 50s. And that translated to prices at the pump in the $2 range, 280, 290. So we had some real relief at when we're filling up our cars. I know that Clark doesn't do that because he drives a Tesla. But for those who still use petrol or gasoline, it was relatively inexpensive last year.

• 4:06Speaker 04

  And now, the minute you see oil prices go up, the minute you see gas prices go up. And for every $10 per barrel, it's about 25 cents per gallon at the pump. And we have seen oil now go In the hundred dollar range. So in any given day, depending on when you're listening to this, the swings in oil have been so dramatic, again, somewhat unprecedented to see prices move this much, where we can see $120 per barrel oil in the morning and then $85 barrel oil in the afternoon. So depending on the hour you're listening, we could be at $130 in oil, we could be at 85. Really just depends on the news headline of the minute and the hour.

• 4:52Speaker 04

  What I do know is that the situation that we're in with the US at war in Iran, engulfing the entire Middle East, which impacts the critical oil choke point in the world, which is the Strait of Hormuz, where 20 to 25% of the entire world's oil is moved through. When that is shut, that means that a quarter of the world's oil is not moving. Yeah. That's a very, very big deal. What also doesn't get talked a lot about are all these other, let's call them chemicals and fertilizers and other distillates that come through that strait. So it's not just oil. It's a supply chain that involves even more than that. So it's very disruptive and that means that even if there's, let's say, movement and healing

• 5:36Speaker 04

  and traffic starting back up again, it's going to take a while for the oil market to kind of find its footing. So we're going to be in these reverberations of higher oil prices for potentially quite some time, even if there is a solution. So the question is, what does that do to the stock market? The minute you see oil go up, you typically see the stock market go down. It may be good for oil companies on that given day. You'll see red all on the screen with almost every sector, but you might see oil companies up a little bit when prices are up. But the vast majority, because oil is such a big input in our lives, 95% of products that are manufactured have some level of oil in them or derivative in them. So it's inflationary as well. We've been

• 6:21Speaker 04

  looking at inflation is an issue that the Fed has continued to try to deal with. So an oil shock impacts the economy and it impacts the stock market. Impacts your 401k. The question is, what happens when we go through these shocks? The Federal Reserve keeps a list of geopolitical events. They are typically war-related. Almost all of these are war-oriented or standoff-oriented. And we go back to history to say, how does the market do? What happens to stocks when we get a war-like or geopolitical shock? And we can go back to the, because the Dow Jones was around in the early 1900s.

• 7:04Speaker 04

  We can go back and look at the Dow Jones and how stocks did all the way back to the first geopolitical event, which is the Russia-Japan War, which was well before World War I. And then World War I, and then World War I escalation, and then Germany invades the Eastern Bloc, and then World War II, Pearl Harbor, etc. And we go all through. There's about 25, let's call it two dozen geopolitical events that we can measure. Falkland's War, Iraq invades Kuwait, and then the Gulf War, and then the Bosnian War, etc. So the day that this happens, it's usually not good for stocks, as you can imagine. And we just saw that the beginning of the disruption. Here, we saw the market down a couple of percentage points.

• 7:49Speaker 04

  And we've had some thousand-point swing days in the Dow as well. But the real key here is to, as we all know, investors are typically, successful investors are participators as opposed to those who are perfectly timing the world. Right. And participation is the key, and longevity is the key. And we want to go out and look, well, okay, even though we have this shock typically the day of or the week of even, what happens to markets three months later, and six months, and 12 months, and even 36 months later? And the news there is pretty good, even in situations like the Gulf War as an example. There's really kind of two different, this is late 1990 and early 1991,

• 8:34Speaker 04

  where first it was Iraq invades Kuwait, and then it was really the Gulf War. We saw oil prices double then. Oil then was $20 a barrel, doubled to over $40 a barrel. Stock market down. 18%, so really big correction in stocks. But what happens on average over time, markets recover pretty significantly and they get back to more like their normal long-term averages. Three months after these shocks, on average, markets are up a little over 2%. And six months later, markets are up about 5%. And a year later, after these shocks, on average, markets are up 11.3%, which sounds

• 9:17Speaker 04

  a lot like the normal long-term averages during those periods of time anyway, even without the shocks. So the shocks are scary and they do impact the world. In many cases, it's because oil prices are going, go up, makes everything more expensive. We're worried about inflation. We don't know when things are going to end and when the reverberations will stop. But ultimately, history has shown us over and over and over again, really, once every three to five years, we have one of these shocks. The market has found its footing and recovered. And I think it's always important during periods of time of this extra volatility that we remember that. So that's the takeaway here today is we, even though we're in the middle of a shock

• 9:59Speaker 04

  that may reverberate for a while, we need to be patient and know that markets eventually find their footing.

• 10:05Speaker 03

  I'm guessing too that the volatility is even worse now because we have, first of all, it's so much easier to buy and sell your own stocks than it used to be. And then you've got social media and people feeding into the frenzy when something happens in the world. So I'm guessing it's just easier access for people to try to time the market and try to make these moves when slow and steady is usually best, wouldn't you say?

• 10:28Speaker 04

  It depends on how you look at it. To some extent, we get bad news quicker and there's more reaction and then we get good news quicker too.

• 10:36Speaker 03

  True.

• 10:36Speaker 04

  And that's why the whip sawnness is perhaps even greater today than it was. The levels we end up. Hitting both on the low side and the high side tend to be even quicker recoveries. At least that's felt that way over the last five to 10 years.

• 10:53Speaker 03

  The whip saw on us. I like that. All right. You ready for some questions?

• 10:56Speaker 04

  Yes, let's do it.

• 10:57Speaker 03

  This one came in from Doug in California. You've recommended to keep some powder dry for opportunities when the stock market is crashing. This is not for everyone, but if an investor has followed all of your other recommendations, this may be a good financial step. Is there a mathematical formula for investing in a falling stock market? As an example, if the stock market falls 20% from its high and then I invest, say, 25% of the funds allocated for this investment, 30% down, say, 40% of the investment. What do you think?

• 11:28Speaker 04

  Doug, it is really, I think this question is about rebalancing.

• 11:32Speaker 03

  Mm hmm.

• 11:33Speaker 04

  Because if you think about this, Doug, anytime there is a big shock in your portfolio, let's say the stock side goes down, or maybe it's the international piece or the US piece is down disproportionately to the rest or how you originally set things up or how your kind of target goal of where you feel comfortable. Well, if there is a big movement in equities and you look at your portfolio and your allocation is way off, then rebalancing in itself, it's not necessarily saying because the market's down a certain amount, it's saying that my now my allocation is off.

• 12:07Speaker 03

  Mm hmm.

• 12:08Speaker 04

  Then it is totally normal. In fact, rebalancing is a way to automatically have yourself do this. Then when your piece of the pie, which was supposed to be 70% in stocks, let's say, as an example, and now it's 63%, is it prudent to add and go back to 70? The answer is yes. In fact, that's exactly what rebalancing is. I don't believe that in a garden variety, down five or even 10%, and these are moves that happen quickly and all the time. I think you still stick to your allocation, but be open to rebalancing. That is really the kind of what's behind rebalancing over time. When markets do get down 20%, though,

• 12:53Speaker 04

  it is time for you to really pay attention to adding back to the very area that is down that much. And we're talking about something down that much, we're almost always talking about stocks. So that's when I would say you can get even more interested in being more proactive around adding to the area that's down, buying low in this case. But I wouldn't be rebalancing, and I don't have a rule of thumb, is just because the market's down 3% or 6% or 8% that you automatically

• 13:21Speaker 03

  It's time to go.

• 13:22Speaker 04

  go back into stocks. I think you keep your long-term allocation that you're comfortable with. If it gets way off, you rebalance back to it.

• 13:29Speaker 03

  All right, this is from John in Illinois. Wes, I've been fortunate. I have a fidelity account that has amassed $4.6 million. Of that, $4.2 million is in a defined benefit plan. And of that, which $425,000 is in a 401k. And $25,000, that's a Roth 401k. I also have another $30,000 in an HSA. I'm very fortunate that I will be one of the few that still have a pension as well that will provide us $9,500 a month.

• 14:00Speaker 04

  John is doing great in Illinois.

• 14:02Speaker 03

  People are jealous. And I am presently planning to take a 75% survivorship when I retire in about three years. I also have $50,000 in a high-yield savings account and I'm 62. I know I have enough to retire today or when required in three years, but we've decided to pay out approximately $125,000 a year to my three children in order for them to purchase their houses over the next three years. My son is sitting here, my 20-year-old son, don't get any ideas. We still have $350,000.

• 14:31Speaker 04

  I like this idea, Mom.

• 14:33Speaker 03

  Yeah, we still have $350,000 on our mortgage, which I plan to pay off once I'm not in the 35% tax bracket. And we have a $4,000 monthly house payment. It seems the only way to provide my $125,000 gift to my kids is through a withdrawal from retirement, and that comes with about a 30% FICA tax. Is there a good way to avoid this or another vehicle to provide this? We definitely want to gift the money to our children now versus later. You can't take money to the grave.

• 15:02Speaker 04

  Can't take it to the grave, John. And as you can see here, I'm taking notes and I'm doing some math for you. It sounds to me, John, you're in a fortunate position to be able to help because it is so, think about the problem that John and his family are facing is it's really hard to buy a house.

• 15:20Speaker 03

  Yes, it's so hard.

• 15:21Speaker 04

  You'll be 30 and making a great living and still

• 15:24Speaker 03

  First time home buyers.

• 15:25Speaker 04

  It's still really hard to buy a house, right? Rates are higher, home prices are essentially as high as they've ever been still. So it's really hard to be able to come up with a down payment of 10% or 20% and I get it. And you're in a position to help.

• 15:39Speaker 03

  Very generous.

• 15:40Speaker 04

  If you'd like to do $125,000 a year and do it for three years for three kids, the way I'm looking at this is it's basically about $42,000 a year to each child for three years. And as you listed out your assets, I was paying attention to the location of those assets. We think about how much we talk about tax planning and where assets are. Are they in retirement accounts? Are they in Roth accounts? Are they after-tax accounts? And you've got all this money, 4.6 million. And from what I'm hearing, everything except 50 grand, John, is in a retirement account. Yeah, 25 in a Roth, that's not going to help much here.

• 16:26Speaker 04

  50K in an HSA or I'm sorry, a high-yield savings account. I don't think you ever want to, you could potentially use the HSA money, but I'd say no, don't do that either. So it really has to come from your retirement accounts. The defined benefit plan is treated as a retirement plan. So when you pull money out, it's going to be taxes at ordinary income. He said FICA there, it's not, he probably just means federal taxes.

• 16:54Speaker 03

  Right, I think so.

• 16:55Speaker 04

  Not FICA, which would be your wage taxes, your social security taxes on your wages. So the good news is this, this is how I see this happening. There's very little way to get around. I'm even thinking, maybe you could give them a family loan and let them pay it back.

• 17:12Speaker 03

  You could forgive each year too and give.

• 17:13Speaker 04

  Yeah, but they still have to get the money.

• 17:15Speaker 03

  Right, they have to get to it first to do the loan.

• 17:17Speaker 04

  So he's still got to get the money.

• 17:18Speaker 03

  Unless they took loans, but they didn't want to do that.

• 17:19Speaker 04

  I think they're trying to avoid that, right? So John, you still, even if you did a family loan situation, they've got to have the capital and it's got to come from somewhere. It's got to come from retirement accounts. So either way, you get taxed. So the, the good news here is that you're going to be fine in retirement, no matter what. You've got this 9,500 bucks a month plus another 4.6 million to produce income for you. So you're totally in great shape. I think the issue here is that probably one of the best things you can do is think about spreading this out, one, over time. Maybe it's not just in the next three years, maybe you do it over five.

• 17:58Speaker 04

  And I think your main thing to do here, John, is watch your tax bracket buckets. And if you find yourself with a hundred thousand dollars worth of room before you get to the next bucket, then it's probably an okay time to be gifting because you're still at the same tax rate. And it's a little bit like thinking about a Roth conversion. But the minute you go over into the next bracket and think about there's the 24 bracket that jumps all the way to the 32, then you want to avoid having income which gets created by pulling money out of the retirement accounts.

• 18:37Speaker 04

  You want to be careful that you don't go from 24 all the way to 32 and even higher. So this is a tax bracket income management situation for you. Sounds like you can totally do it, but I would just be careful about going too high in those buckets. And the only solution there would be to spread it out maybe a little longer than you're thinking.

• 19:00Speaker 03

  And maybe work with a CPA to make sure everything's right?

• 19:04Speaker 04

  Or a financial advisor. I think this is, this is both. I would say you should be working with a CPA or your CPA on this in coordination with a financial advisor on these withdrawals because the withdrawal adds to your adjusted gross income.

• 19:20Speaker 03

  Okay. Bert in Georgia sent this one. And Wes, do you think much of the continued growth of the S and P 500 is due to automatic 401k payroll investing from employees and employers? What could disrupt this momentum?

• 19:33Speaker 04

  I'd say it's the fault of one of my, my author good buddies named David Bach.

• 19:39Speaker 03

  Oh, yeah.

• 19:40Speaker 04

  He's actually coming out with a new version, the 2026 version of a book called The Automatic Millionaire. And that automatic millionaire was so good at making sure people said, look, just put this thing on auto, auto save. And the easiest place to do that is in a 401k.

• 19:59Speaker 03

  So you're going to hold him solely responsible. That's good. I think you'd appreciate that a lot.

• 20:04Speaker 04

  It's a good thing. I think he contributed to that.

• 20:06Speaker 03

  I do too. I think Clark did too.

• 20:08Speaker 04

  And I think Clark did too. I think we, we all did in the financial community because it just, it's one of the few, you just cannot dispute that automatic savings is a wonderful thing relative to trying to remind yourself to always be saving.

• 20:21Speaker 03

  Yeah. Do it first and you never see the money. That's been important. That's worked for me for sure.

• 20:25Speaker 04

  So Bert, there are 70 million people in America that are participating in 401k plans. 70 million people putting money in. Most of that automatic. The way I've looked at the math on this, because I've thought about the same question too. And here are the rough numbers. About a half a trillion, 500 billion of 401k contributions are going in every year. Okay. And by the way, there's about 10 trillion in 401k assets. So that's what, 5% every year? Now that's just 401k assets. There's another 20, 30 trillion dollars of liquid assets in the United States, which is hard to even get an accurate picture on.

• 21:11Speaker 04

  But we're contributing as Americans about a half, 500 billion in 401k and another 1.5 trillion in other investing. Let's say outside of retirement accounts. So we're putting in about $2 trillion.

• 21:29Speaker 04

  That's how much we're saving. Thank you, Clark. Thank you, David Bach. And we're

• 21:33Speaker 03

  Thank you, Wes.

• 21:34Speaker 04

  We're pulling out about $1 trillion. So the way I see that is that we still have this tailwind of more money going in than is coming out and it's a supply demand market. So more people buying and less people selling.

• 21:53Speaker 04

  Would tend to help to push the market higher over time, over time. And that is such a massive weight. It's such a big pool of people, 70 million plus all these other people, another 20, 30, 40 million people that are saving in other capacities. I think that it's really hard to disrupt. But it also doesn't mean that we're not going to have oil shocks like we're in the middle of today. Other economic shocks, higher interest rates, demographics are slowly changing and people are slowly in mass getting a little older. So there's an argument that more money is going to be pulled out because less people are saving.

• 22:35Speaker 04

  That argument's been being made for 10 or 15 years now, and I haven't seen that really happen all that much either. So there's two ways to look at this. The net inflow to the US stock market, and by the way, not everybody's putting every dollar into stocks either. That's the other thought here. But the net inflow in itself is not responsible for the market going up. It is perhaps a small piece of the equation and a tailwind that has seen a rising market over time. And it's such a massive footprint that I don't see a disruption in that particular piece of the equation anytime soon.

• 23:12Speaker 03

  I hope not because I love that people are automatically saving like that. That is what you always talk about.

• 23:18Speaker 04

  And it's on auto save. I mean, it takes a lot of effort. Think about how much effort it takes to stop doing that.

• 23:24Speaker 03

  Oh, yeah.

• 23:24Speaker 04

  How many people right now can just go log into your 401k account? I know that I'd have to probably go remember my password and go log in. And because I actually just did this the other day, I remember then having to go and figure out the contribution and then trying to figure out which area that I can go and change the contribution or see the contribution. It like takes a little bit of time. Any anytime there's some friction in what we do, it tends to not get done. And the good news is there's a lot of inertia of people saving.

• 23:59Speaker 03

  That's great. Well, coming up next, we're going to talk about AI, but a different angle than you've probably heard before. Is it making us work harder?

• 24:06Speaker 04

  We'll see.

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• 26:53Speaker 04

  Welcome back to Ask an Advisor. I'm Wes Moss, along with Krista DeBias, here on The Clark Howard Show, Ask an Advisor Day. And we're going to jump into, I mean, is there, there's plenty to worry about in the world, isn't there?

• 27:08Speaker 03

  Yes. I would say so.

• 27:11Speaker 04

  Oil prices going bananas has been the worry of the day. But the worry of the year has not gone away at all. In fact, it's not going away, really, in our lifetime. And that is about artificial intelligence and what that does to the workforce, what it does to the economy, what ultimately how this impacts you as an investor and your 401K, as how I think about it. But also, because I'm still in the workforce, I've got young kids, I want them to be able to have a job when they grow up. I have a company, I've got, I'm in the middle of work life, like a lot of you listening. And I think about, especially over the last couple of years, what is this going to do

• 27:55Speaker 04

  to this technological revolution? What is it going to do to our jobs and then our kids' jobs? So I think that you have to have your head in the sand if you're not thinking about this.

• 28:08Speaker 03

  My son, I mentioned earlier, my 20-year-old son's in here, he was a software engineering major, and he's switched to business because of all this.

• 28:15Speaker 04

  So here's my take on what's happening. And this is A brand new study that just came out and it was it was published. It was talked about in the Wall Street Journal, but it was also it's been in a lot of other. It's we went and actually looked at the actual study from it's Active Track Productivity Lab is the company that did this new study. First of all, here's the the short way I would like to set this up. AI isn't killing jobs. It's burning us out with more work, a lot more work. That's what's really happening. You you've seen CEOs say 50% of all white collar jobs will be gone in five years. And we're a couple of years into AI now.

• 29:00Speaker 04

  And I was looking around at a meeting just this past week and I was saying to our team, wait a minute, I think we need to hire some people. We have to hire more people because there's so much more to do. If you think about, this is the one way I look at the world that we live in. And think about your job right now and think about you get to the end of the day. You come home. Do you feel like there was still more to do?

• 29:28Speaker 03

  Oh, yeah.

• 29:29Speaker 04

  Oh, yeah, is the answer. And I think that we are gonna and any given day, or let's say tomorrow, I'm gonna look back and I'm gonna say, oh, there was more work to be done. And that one phrase is, I think, the answer to what is gonna happen with the technological revolution. And this study, to me, is a is very, very strong evidence that that's gonna be the case. I think at the end of the year, we're gonna look back and say, wow, I didn't realize there was so much to be done and there was so much more we could do.

• 30:06Speaker 03

  Is this mainly with white collar jobs, would you say?

• 30:09Speaker 04

  It's with every job in every company in every industry.

• 30:14Speaker 04

  So here's what happened. ActiveTrack looked at, it was a giant sample set. They analyzed 443 million hours, digital activity from 164,000 workers, over 1,100 employers. And there's another study from Berkeley, the Haas study. It's in the Harvard Business Review that shows when AI shows up, the workday doesn't shrink. It swells. It grows. It expands. So here are some of these more work stats. So they looked at companies 180 days prior to them implementing AI tools for their employees. And then 180 days after they implemented AI tools. After the AI adoption, what happened?

• 30:59Speaker 04

  Time spent in email jumped 104%. Messaging time, back and forth with your team, up 145%. The use of business management tools, up 94%. Krista, weekend work, this is weekend hours, okay? On Saturdays, up 46%, up Sundays, 58%.

• 31:25Speaker 03

  We don't like that.

• 31:26Speaker 04

  Wait, I thought we were supposed to be doing less.

• 31:28Speaker 03

  Right.

• 31:29Speaker 04

  Isn't AI gonna just do our job for us and we can go home at noon? The answer is, it's the opposite of that.

• 31:34Speaker 03

  I'm confused by that.

• 31:36Speaker 04

  It's because there's always more work that you never thought you could do to be done.

• 31:41Speaker 03

  Hmm. Instead of spending your time taking notes in a meeting, AI is taking them for you and you can then work on something else.

• 31:48Speaker 04

  Work on those notes as opposed to assimilate those notes.

• 31:51Speaker 03

  Got it.

• 31:52Speaker 04

  Everything in the world, almost any problem that you can think of today, that was not the case last year or the year before, is now figure out-able. So there's, there's anything you can think about that, oh, maybe I should do this. How many times do you think, ah, gosh, I could have done that, should have done that, would like to have done that. I don't know if I know really how to do it. Now, everything is figure out-able.

• 32:16Speaker 03

  Mm hmm.

• 32:16Speaker 04

  And it creates more work because there's nothing we can't do. And companies are not ever going to say, wow, we got the same amount of work done in six months as we did last year. Everyone just go take the next six months off. No, no, no. We're gonna keep going because we're gonna double the amount that we did. From the year prior, and that's the reality of the world now that we're living in. I think these several studies really show that. Collaboration up 34%, multitasking up 12%. So now, the bad news, everyone, is that it is leading to burnout. It's leading to a very scientific term called brain fry,

• 32:56Speaker 04

  which I don't really know what that means, but it's probably some of the cousin to burnout because people are maxing out what they're doing. They're working more, they're working more hours. So I think that the real risk, as we move forward in this technological new corporate and small business world, is that the real risk isn't no work. The real risk is being able to balance almost too much work. And here, I'll leave you with one last number. Think about the technology teams. There's a couple, there's a couple hundred, let's call it 1,000 or 2,000, really, really big companies. The vast majority of businesses in America, 38 million of them are small businesses.

• 33:40Speaker 04

  28 million of those businesses are solopreneurs. Another six and a half million are one plus, one, two, three people. If you think about big, let's say, technology teams being able to shrink from 1,000 people down to 500, that's, you know, that's several, it could be several hundred thousand jobs that are, that go away. But going back to the conversation I was having with our team the other day, like, oh, I think we actually need to hire a couple of people. So does every single other business in America in every single sector, if they don't want to be left behind. So I think that we may lose 500,000 jobs due to tech efficiency. And we, and then we're going to have 5 million open jobs for all the small businesses in America.

• 34:24Speaker 04

  So that is my take. I've been thinking this way now for a while. This active track and the Harvard Business Review study give me more evidence that that's really what's happening.

• 34:37Speaker 03

  All right. You ready for some questions?

• 34:39Speaker 04

  Yeah.

• 34:39Speaker 03

  Spencer in Illinois wants to retire early. He says, hi Wes, I know you're a big proponent of having dry powder as you approach retirement. I'm curious to hear your commentary on dry powder and risk in an aggressive early retirement strategy. I'm currently 33 with just shy of $1.1 million in total invested assets.

• 34:59Speaker 04

  Oh Spencer.

• 35:00Speaker 03

  I know. A mix of tax-deferred, post-tax and brokerage. My dry powder is essentially zero. My target retirement spending is around $75,000 a year. I'm looking for around $2 million in total assets. I project I will hit that number by 40 with my savings rate of $81,000 a year and a 100% stock portfolio. How do you balance diversifying the portfolio in dry powder when growth is needed? And I will add, I'm completely flexible in my retire early date and earning additional dollars part-time. I realize my investing age is young, but my total asset number is approaching.

• 35:36Speaker 04

  Spencer, I think you're going to like the Retire Sooner Method.

• 35:39Speaker 03

  Mm-hmm.

• 35:40Speaker 04

  Because that's

• 35:41Speaker 03

  Your new book?

• 35:41Speaker 04

  That's coming out in a couple of months because you are... Listen, it's not that I don't like the FIRE movement. I think it's a great aspirational, it's a good idea. But Retire Sooner Method is kind of what you're looking to do right now, which is a realistic version of FIRE. It's a realistic version of FIRE. And you need to have pretty significant assets to be able to do it. And the key of what you just said there in your email, Spencer, is that you're super flexible around your date.

• 36:10Speaker 03

  Yes.

• 36:10Speaker 04

  That's a very smart statement by you, Spencer. You said I'm a big proponent of dry powder. I'm a bigger proponent of retire sooner. So I know that there's some mechanics behind dry powder and we get a lot of questions about it. But I'm a proponent of retire sooner. And we're going to be talking a lot about the Retire Sooner Method throughout this year. But you're in that jet stream of retire sooner. You do not need dry powder if you're 10 years from retirement. If you're 20 years out, Spencer, you don't need any of the dry powder. Where dry powder comes in is when you're getting within three years or sooner of when you're going to totally stop working, have to rely on your actual investments.

• 36:55Speaker 04

  Because remember, the 4% plus rule of thumb is predicated on a balanced portfolio. If you go back over the course of history, 100% stock portfolio that you are withdrawing from has a lower probability of lasting than a balanced portfolio taking out higher amounts. So there's some quantitative piece to this that balance helps you sustain your portfolio and your withdrawal rate. How do you max out what you're pulling out from the assets without running out? And even though stocks been the best asset class over time from rate of returns perspective, there's some really big drawdowns and drops that can really mess up your plan if you're relying on the portfolio.

• 37:39Speaker 04

  So you don't really need dry powder today in your 30s. If you choose your retirement date and it's in your mid 40s, you're going to want some sort of dry powder then. But Spencer, I don't think you need it today.

• 37:53Speaker 03

  Okay. Bill in New York sent this one in. Hey Wes, first things first, the Snapdragon apples are good, but have you tried Cosmic Crisp apples yet?

• 38:03Speaker 04

  Bill.

• 38:04Speaker 03

  They have more flavor or more crisp and in the Clarkiest of ways are about half the price. In my area, I'm finding them at our favorite grocery store, Aldi.

• 38:13Speaker 04

  Okay. All right, Bill. Should we just tackle that first? Bill, where I live, they're pretty much the same. They're about $2 a pound. The Snapdragon and the Cosmic Crisp? I bet you.

• 38:26Speaker 03

  When's the last time you were in an Aldi, Wes?

• 38:29Speaker 04

  It's been a couple of months, but I was in an Aldi in Maryland.

• 38:32Speaker 03

  Okay.

• 38:33Speaker 04

  I've been in Aldis many times.

• 38:35Speaker 03

  Okay.

• 38:36Speaker 04

  The Snapdragon, I'd love to know what Clark would choose. If I'm a betting man, he would totally X out the Cosmic Crisp.

• 38:43Speaker 03

  I guarantee that Clark would choose in the apple that would taste best to him is the one that was cheapest.

• 38:48Speaker 04

  Probably.

• 38:49Speaker 03

  It would influence his olfactory senses.

• 38:52Speaker 04

  Bill, these are both approximately $2 a pound.

• 38:57Speaker 04

  My experience is that Cosmic Crisp is actually a little more, even though it's supposedly a tiny bit less. But the Cosmic Crisp is like a vanity apple. It's a marketing apple. It's like a Disney character apple. It's not a real apple. It was fabricated in a lab, as far as I'm concerned, and probably the Snapdragon was too. But there's something grittier about the Snapdragon, and that's my choice. Each apple to his own, my friend. Let's keep going.

• 39:24Speaker 03

  You recently mentioned that a ridiculously low percentage of the population maxes out their 401K. For me personally, my current company has this true-up plan for the company match in case you max out your 401K early in the year. Unfortunately, this process takes about six months to get to the original match invested. So I ended 2025 with contributions of just over 23,000. I have friends who would have to forfeit their company match altogether if maxing out early, so they're doing something similar. I'm curious if the data would change if we were looking up the percentage of people who contributed 22,000 plus. Third, I'm a 40-year-old who has become very interested in becoming a CFP. I've been in sales since college, various industries, none of them the financial space.

• 40:09Speaker 03

  But over the last few years, I became a little obsessed with personal finance. I'm curious if you have any advice for an old career changer like myself to get started on the right track. I'm not interested in selling life insurance or annuities, and I'd be able to take a pay cut, but less than 90K per year would be difficult due to the cost of living in my area. If you can already tell, I love the show. Keep up the great work.

• 40:30Speaker 04

  Bill is a cool dude, and I hope you're going to be listening to the answer here. Nobody's brought this up in the last year and a half I've been doing this. And it's a very helpful question because you're running into a situation, and it's something like 14%. It's a little less than 15% of Americans max out their 401K. And the way most companies match is that they match you every single month. So the match only comes when you put money in, and then you get the match. But if you are a big earner and you have a really high percentage savings rate, you may have maxed out your 401K plan in six months. Okay?

• 41:15Speaker 04

  Then you've only gotten matched those six months. The other six months, you don't get it. Now, in your company bill, you get what's called a true up because some companies will say, well, if you max out early and you don't get your true match, then we'll true you up. But it takes another six months usually to do that. So you've missed out on market growth for like a whole year.

• 41:33Speaker 03

  Right.

• 41:34Speaker 04

  So the answer to that is it's if you're true up, at least you're getting the free money match. But in some cases, it may be better to just do this systematically and spread out your 401k max contribution, depending on your age, so that it approximately fills you up by the last month of the year.

• 41:56Speaker 04

  How many more people would be maxing out because they get hit in these true up situations? I don't know. Probably not a lot more. If 14% of Americans max now their 401k and they count people that get to 23, 579 because they're they just missed out the max. Maybe another percent or two. It's really, it's a lot of money for people to save. And most people are not able to do that. That's why only 14 or 15% of people do. So I don't think the number changes much. Bill, last question is a simple one. Let's say you're 40 and you want to be a CFP. There are very few careers and jobs that are as well suited and welcoming as a mid-career

• 42:39Speaker 04

  change to be a CFP. It's a really good industry that you could start at 50 if you want it. So at 40, I'm not going to say you're a spring chicken, but it's totally attainable because you could have a 20, 25 year career as a CFP, which is super long. You're not too late to be thinking about making a career shift at all. And if you get a CFP, you're going to be able to earn that 90 minimum, I think, pretty easily, even as like a brand new person at a firm.

• 43:08Speaker 03

  Wonderful. Okay. Nick in Michigan says, I have a 401k, Roth IRA, a brokerage account, and a high-yield savings account. For my personal investments in my brokerage account, why would I choose to diversify with a bond ETF? I currently hold BND as a percentage and not just put Into my high yield savings account. The return rate on BND doesn't seem swell and my high yield savings account has a guaranteed return rate of around three and a half percent. I understand the tax implications of now versus later, but is that the only reason? To avoid present day taxes, the security of a high yield savings account for the safe portion of my investment seems smarter. Put simply, if I won an 80 20 brokerage, can my high yield savings account count toward that 20 that would normally be in a bond ETF?

• 43:54Speaker 04

  Nick, in Michigan, it's very much about locking in a, an interest rate, Nick. First of all, on the surface, what you're saying totally makes sense and it's not the worst thing in the world if you're not doing bonds. I get, I get it. But imagine this, bonds are paying you 4% and your high yield savings account is paying you 4%. And you say, okay, why don't just do the HSA? Well, let's say that next year, the Fed has lowered rates and now HSA is paying 2%. Now you're getting 2%. Your bonds are still getting four. It's about locking in an interest rate is reason number one, why I still like diversifying with bonds slash fixed income, because you're locking in longer periods of time with rates.

• 44:39Speaker 04

  Number one, number two, the diversification that comes, remember if rates go down, not only you're getting a locked in rate, but you're also usually getting some appreciation, the seesaw effect of rates going down, prices going up. So there's some, the zig versus the zag of equity markets with fixed income to me is another variable why I like using bonds and not just high yield savings accounts.

• 45:01Speaker 03

  Okay, well, that's going to do it for us today on the Clark Howard Show, Ask an Advisor. Again, if you have a question, go to Clark.com/ask and let us know if it's for Wes or for Clark. Covered a lot today, Wes.

• 45:14Speaker 04

  Fun, fun show today.

• 45:15Speaker 03

  Lot of great stuff. Thank you.

• 45:17Speaker 04

  Questions coming.

• 45:18Speaker 03

  Hope you will subscribe wherever you listen, or if you watch our YouTube channel, please subscribe there. We have a lot of great content on there in addition to Ask an Advisor and Clark's podcast. Clark will be back with us tomorrow and hope the rest of your day is great.

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