09.08.26 Ask An Advisor With Wes Moss

Why the "K-Shaped" Economy is WRONG & What Rising Interest Rates Mean for You Is the "K-shaped" economy an accurate description of what Americans are experiencing today? Wes breaks down why the economy looks less like a "K" and more like an "E" — and what that means for your money, spending, and job prospects. Wes also tackles the burning question on every investor and homeowner's mind: What happens if interest rates keep rising? From the 10-Year Treasury yield to the inverse relationship between interest rates and bond prices, learn how potential rate hikes could impact your mortgage, car loans, and fixed-income portfolio. Mentioned on the show: Axios: The closing of the "K" Remote work -- not AI -- has sidelined recent college graduates 5 Keys To Be a Successful Investor All this and more on the September 8, 2026, Ask an Advisor episode of the Clark Howard podcast. Submit your questions: WesMoss.com/ask Discover the research-backed path to a happier retirement – order The Retire Sooner Method by Wes Moss today at retiresoonermethod.com 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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• 0:49Speaker 03

  Welcome to a brand new episode of Ask an Advisor with Wes Moss. I'm Krista DeBias. Hello, Wes.

• 0:57Speaker 04

  Hi Krista.

• 0:57Speaker 03

  But guess what? Today is not the only episode this week of Ask an Advisor. When we did our little experiment with the questions before, we got a lot of positive feedback. So we decided we're going to try to do a bonus episode that we will air on Thursdays. Maybe once a month, we're not going to promise. We're going to do our best because you have a lot going on. Your new book is out and you also have a whole other full-time job.

• 1:21Speaker 04

  I have four kids.

• 1:22Speaker 03

  Yeah, four kids.

• 1:23Speaker 04

  I have four kids and it's football season.

• 1:26Speaker 03

  Okay. I don't know how you do it.

• 1:27Speaker 04

  Football season in America.

• 1:28Speaker 03

  Oh, I know.

• 1:29Speaker 04

  And we're in the South, so that's a big deal in the South.

• 1:31Speaker 03

  It's a big deal everywhere, isn't it?

• 1:32Speaker 04

  Well, high school football and then of course, college.

• 1:35Speaker 03

  Okay. So please, on Thursday, if you don't normally tune into the podcast, to YouTube, check it out. We have another one of those Q and A episodes with Wes. And today, Wes, you're going to talk about why you have talked about the K-shaped economy in the past, so has Clark.

• 1:52Speaker 04

  Right.

• 1:53Speaker 03

  But you have something new to say about that.

• 1:55Speaker 04

  I think we've gotten lazy and we've just assigned it a letter. And I think it's really misleading.

• 2:00Speaker 03

  So maybe the wrong letter at this point?

• 2:02Speaker 04

  Yes, I think it's, I would be offended. There are a lot of people in America should be offended by the K-shaped economy.

• 2:09Speaker 03

  Okay.

• 2:10Speaker 04

  The fact that we're all in this K-shaped economy. I think it's misleading.

• 2:15Speaker 03

  And interest rates, what happens if they keep rising? You're going to address that as well, right?

• 2:19Speaker 04

  Big time. Very important topic for not just cost, which is the, is immediately everything gets more expensive.

• 2:26Speaker 03

  Sure.

• 2:27Speaker 04

  But what about our 401ks?

• 2:28Speaker 03

  Sure. Okay. And then we will have questions for you. If you want to submit a question to Wes, please go to wesmoss.com/ask.

• 2:37Speaker 04

  Let's start with this. So first of all, I understand for the last couple of years, the K-shaped economy has been the agreed upon vernacular. And I've talked about it. Clark talks about it and it's not totally wrong. It's very exaggerated, in my opinion. It says that we have this certain amount of people where everything's just getting better. And you've got a portion of America that's super wealthy and they're driving everything. And then everyone else is on this downward slide. That's the bottom of the K. And that the economy's squeezing them, the bottom K can't afford anything, their wages aren't going up with inflation.

• 3:19Speaker 04

  And in some respects, there's some truth to that. There is a part of America that struggles and there is a part of America that's got this wealth effect and everything's great. But that's a really, really small sliver of the economy. And the folks that are in the downward part of the leg, it's not a small amount, but what about everybody else in between? If you're sitting here listening, you're thinking, well, I'm not in the upper part of the K. Does that mean you have to be in the downward part of the K?

• 3:50Speaker 03

  Right.

• 3:50Speaker 04

  So I think it's, again, I'm not really offended. It's pretty hard to offend me, but it's offensive if you really think about it. What about all the people that are somewhere in the middle? And I have a new perspective on what is happening in this economy. And there are a lot of bad things happening. We have inflation. We've worried about tariffs. We have oil prices continuing to rise or be stubbornly high because of the war in the Middle East. Put all that together, it creates pervasive inflation. And with the next topic we'll talk about, interest rates keep going up. So that means everything gets more expensive. It also has a big impact on your investment portfolio, particularly on the bond side. And it can hurt stocks if interest rates keep going up.

• 4:35Speaker 04

  But upon further review, and I get to talk to some of the great economists around the United States and some of them have become friends. And I studied economics. It's not my full-time job to do economic analysis, but I love talking to different economists and getting different perspectives. And K is the wrong shape to describe what we are living in right now. And I believe that E is the letter. Now, I was on a radio show this past week and I asked, I was the guest, started talking about the E-shaped economy. And I said, well, K is the wrong letter. I have a new letter. And the host goes, I said, what's the new letter to represent the US economy? He said, F?

• 5:18Speaker 04

  And you could, all day long, you could say we get a failing grade. Sure. But the reality of what describes what we're living in is, think about this economic reality. Consumer sentiment in May of this, just a couple of months ago in the United States in 2026 was decidedly lower. And this is on a scale of basically 40 to 110, decidedly lower. It hit 45 than where we were at the bottom of the pandemic. That means that the consumer feels worse, supposedly, supposedly feels worse than they did at the worst times during the pandemic. Yet, if you look at a chart on consumer spending, it has just continued to go up and up and up and up.

• 6:01Speaker 04

  And now we're spending over $22 trillion as an economy. And it's not just the top leg of the E. And here's, I think, a better way to look at this economy. And I look at it in a relatively positive way. Yes, wealth effect is that top leg of the E. Why do we have a wealth effect? Well, we've had a great stock market and until recently, a booming housing market from a price perspective. Right now, there's more equity in homes in the United States than there's ever been. Over 71% equity in homes in the United States. Now, you have 100% equity if you've paid it off, but that's the average amount of equity in the United States. That's about 35 trillion.

• 6:42Speaker 04

  The United States in 2018 had a total net worth, consumers, all of our families together, of $100 trillion. In 2026, that number is 183 trillion. So in less than 10 years, we have $83 trillion more wealth in the United States. That's created a wealth effect. So that top leg of the E, the letter, is the upper, upper part of America. Yeah, of course, they're doing well, but they're not necessarily driving everything because the middle E, what's called, I think is really missing is, let's call it more middle class or even upper middle class. And what drives that part of America? The job market. We have an unemployment rate that is in the low fours.

• 7:27Speaker 04

  Unemployment rate is in the low fours. So we have a relatively tight labor market and there is very little evidence that the fear of artificial intelligence, college kids are booing at their commencement speeches when anyone mentions the word AI, very little evidence that artificial intelligence has impacted the youth unemployment rate. What's impacting youth unemployment, according to multiple different new economic studies, is remote work. And the friction between college kids wanting to have a remote work and employers saying, well, no, no, not if you're new. The lower leg of the E, which is more descriptive than just an arrow going straight down, that

• 8:09Speaker 04

  was the K, is that, yes, this is a group that's struggling income-wise, but the Bureau of Labor Statistics shows us that we're at an all-time high in those who have second or third or multiple jobs. It's almost 6% of the economy. Economists think that it is maybe closer to 30%. Now, is it a good thing that you're working two jobs? Not necessarily. But the fact that this economy affords for that and those opportunities are there and 25 to 30% of Americans likely are having side money, they can make an extra 100, 200, 300 bucks a week, is something that is a new and positive development in this economy. You put all that together, those are all positive ways to look at those three different legs.

• 8:53Speaker 04

  And that's how I view the economy. I hopefully, I think in a more accurate way.

• 8:58Speaker 03

  All right. Let's go to questions for you, Wes. This one's from James in Georgia. To Wes, the man whose podcast is so helpful, it's worth listening to twice. Could you elaborate more on the dry powder principle? Specifically, the consumption and replenishment of dry powder in retirement? I have three years of estimated spending in dry powder assets. However, how is this money to be consumed? Should I withdraw these assets in proportion to the rest of the portfolio over time? Or should I only access these assets in down markets? And what would trigger such a move? Of the latter, what would constitute a good market trigger to replenish dry powder in better times? And also Wes, Lisa in Florida asked, dry powder, what the heck do you mean by that?

• 9:43Speaker 04

  My father does Wild West reenacting. Reenacting the late 1800s, 1875 to 1885. So if you're a reenactor, by the way, you're very specific on your years. And I did one of these with him recently and he gave me this gun. It's an old, old timey looking gun, but it's a very real gun. And he had another gun.

• 10:08Speaker 03

  That's so fun.

• 10:08Speaker 04

  And we loaded these guns with bullets. And what is in a bullet? It is powder.

• 10:13Speaker 03

  Right.

• 10:13Speaker 04

  It is gunpowder. And that's what makes a bullet go, makes it useful. The minute someone dips black powder or gunpowder.

• 10:23Speaker 04

  In water, it becomes useless. So you, what do we need? We need dry powder, not wet powder, because that's useless. That's where this comes from. It's something like, what can be useful when you need it? And the answer is dry gunpowder, not wet. That's the answer to that, Lisa, but cool to ask.

• 10:39Speaker 03

  What you mean by it, though, is?

• 10:41Speaker 04

  Well, to be talking about dry powder, these are safety assets. Cash, high yield savings, short-term government bonds, even slightly short-term to intermediate bonds, assets inside of your overall investment portfolio that have a very low probability or propensity to go down in price or value, high-quality fixed income, high-quality corporate bonds. They can also count. And the reason we use it, the reason James is asking about this, is that if we have an overall mix of higher-risk assets, stocks, and then we have a portion of our portfolio that's in dry powder, what we use it for, and the reason we want three years' worth of it, is that that's the average amount of time it takes for stocks

• 11:25Speaker 04

  to start recovering from a bear market. And what dry powder allows us to do is instead of pulling from the whole portfolio in a normal year, when both stocks and bonds are growing a little bit, if stocks are down significantly, down 20% as an example, you can take from the portion, the dry powder portion of the portfolio that has likely not gone down, so that we're not pulling from our stocks while they're down in value. Now, James, you ask a really good question, and there's not a perfect answer here, but in my mind, here's when that kicks in. When stocks are up, you don't have to worry about taking just from dry powder, you're taking from stocks. If, if you're down 5%, 7%, even 10%, I'm still looking at withdrawing in a relatively proportional way.

• 12:09Speaker 04

  Once markets are in a correction, or even a little more than that, that's when you start saying, hey, let's lean on the dry powder. So if you're down 15%, you're taking from dry powder, you're trying not to take from stocks. If you're down 20%, you really want to be taking from dry powder. So those are the trigger points in when to use it, and then when to replenish it is when markets have done really well. So if you're rebalancing, you naturally, and you had 60% in stocks, and now it's at 70, well, if you're rebalancing back to your own comfortable allocation and risk tolerance, then you would automatically be able to add back to dry powder and replenish as soon as markets are doing well.

• 12:54Speaker 03

  All right, this came in from Amy in Vermont. Wes, would you consider adding a segment like Suzy Orman had with, can I afford it? My spouse and I fight constantly. We have worked and saved our entire lives, no debt at all. We now have a $3 million net worth, and I want to get my dream car. But my husband always argues that we don't have enough money. We are both 55.

• 13:17Speaker 04

  Amy, first, you'd have to ask Clark and Krista about that to do a new can I afford it segment. Suzy's made a living on telling people, no, you can't. And it makes her great TV, great radio, great podcasts, because it's really, she loves to just yell at people and to say, what are you talking about? Amy, you want a new car? And you've got, you've only have 3 million? And you're 55, you want to spend 50, 80, 100 grand on a new car? Were you crazy? I'm in the business of trying to help people to figure out how to afford things. And it's really common that you have a one partner

• 14:02Speaker 04

  that is reminding the couple to go live a little and do the things you want to do. And it's really common to have the other, have another partner that's the putting the brakes on. You've got a gas pedal and you've got brakes. You're the gas pedal and your spouse, your husband's the brakes. And that's actually a healthy relationship.

• 14:18Speaker 03

  Right.

• 14:19Speaker 04

  If you have two, if you have two gas pedals, Amy, every time you say, hey, I think we should go on this trip that costs $20,000, or I want to go buy this car, maybe you don't end up with 3 million and no debt. The combo has worked for you guys, this back and forth. Now, I would just say, if you're still working, then this, this is totally the time to be buying a new car. And can you afford it? I don't know, probably, as long as you're not paying taxes on pulling money out of accounts, because if 3 million or 2.5 million is all in retirement accounts, and you only have $500,000 in after-tax, and you've got to pull money out in order to buy a new car, then that may be a bad idea.

• 15:03Speaker 04

  So if you can do it tax efficiently, if you can keep your investment pie in a healthy place without depleting one area too much, then it's very likely that it's, it's affordable to do. And as much as it may be frustrating, Amy, it's a, it's probably a good thing to have both gas and brakes in the family.

• 15:24Speaker 03

  And what about, maybe there's a compromise there? You buy a one-year-old dream car, six months old?

• 15:31Speaker 04

  You could make the argument, yeah, but you can make the argument that, what are you really, are you really getting a big discount?

• 15:38Speaker 03

  Well, it depends on the car, but the depreciation can be pretty rapid. Okay, Eric in North Carolina says, this question's for Wes. There are always questions and situations about liquid net worth and total net worth, house and liquid assets. In general, what do you think is a good ratio of liquid net worth compared to total net worth? For example, a client has $1 million in liquid net worth, and they have a house worth $500,000. The ratio is 50%. To me, in that scenario, it's high. What are your thoughts? Is there a rule of thumb that you usually utilize? And P.S., I tried a Honeycrisp apple last week. It was life-changing. For those that don't know, Wes is an apple aficionado.

• 16:20Speaker 04

  That's a cool thing to hear. And Eric, it's funny, he's in North Carolina. That's a great apple state. It's a pretty good apple state.

• 16:28Speaker 03

  Okay.

• 16:29Speaker 04

  It's not Washington State, which is maybe the best. But the fact that you just stumbled across the Honeycrisp is interesting, because that's, that's been around. Now that you've explored that, it's time to go, pink lady. It's time to go, pink crisp or crisp pink. But you have a lot more to explore, my friend. This is a, I want to start with an extreme example. If you're worth $10 million, and 9.9 of it is in a privately-held illiquid investment, and you only have 100 grand in cash, do you feel wealthy? No, you don't. That's an extreme example.

• 17:10Speaker 04

  Illiquidity gives us a sense of not having ready money to use when we need it. So illiquidity is a problem. 50%, I don't have a rule of thumb, but this question makes me think of, I should have a rule of thumb. I'm right, sorry, I need, I need a new rule of thumb, and you've, you've prompted me to do that. It also matters what stage you're in. And it really matters most when you hit the retirement age and you need to pull income out. And that's when, from my experience, as I'm thinking this through in real time, 50% illiquid is probably the max you want, meaning you have 50% that is liquid. That's why in my research, my first Money Green Zone,

• 17:55Speaker 04

  I ask about liquid investment assets specifically. I don't ask net worth, because you could have a $5 million net worth and 500K in liquid money. You feel constrained, and it's hard to get liquidity. You can't pay for groceries with shingles. Doesn't work from the house. You need some liquidity, and over time, going from 50 to 60 to maybe 70% is much healthier than going the other direction. So in my opinion, 50% of liquid or more as a percentage is where you want to be.

• 18:32Speaker 03

  All right, we are going to take a quick break. When we come back, what happens if interest rates keep rising?

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• 20:52Speaker 04

  Welcome back to Ask an Advisor. I'm Wes Moss with Krista DiBiase. We're talking about the topic, what happens if interest rates keep rising? Over the course of the last month or so, we've seen a very big move in both the 10 year treasury, the 30 year treasury. The simple answer is that it's bad. It would be bad for interest rates to keep going higher from here. The obvious, everything gets more expensive. Mortgage rates go back to 7% or higher. The cost to buy a new car, if you're financing it, it gets higher. The cost to buy a house gets higher because to finance anything becomes more expensive. And I think that's the obvious.

• 21:35Speaker 04

  And that's why there's always so much worry and talk around the Fed meetings. Well, what's the Fed going to do? Are they going to raise rates? Are they going to lower rates? The reality is that the Fed doesn't have a whole lot of control over the interest rates that we pay as consumers because they only get to control the ultra short term rate. It's the Fed funds rate. And you can have a Fed funds rate go lower and the 10 year treasury rate still goes higher. And that's the one that really matters to us as consumers, but it also matters big time for our 401ks. And if we're talking about safety assets, dry powder, fixed income investing, conservative investing, where interest rates move, the marketplace itself, that's got a huge impact on the value of our fixed income slash bond investments.

• 22:18Speaker 04

  I'm looking at a chart here and I'm looking at the 10 year treasury yield and we're floating around the very high fours, not quite at 5%, but let's call it, we're knocking on the door of 5%. If you go back to 2020, we were at 0.5%. So they've gone up effectively 10x, 0.5 to 5, almost. I also look back in the course of history and I see that you've got to go all the way back to 2001, 2002, and we have a similar interest rate scenario that we did all the way back then. You keep hearing, oh, rates are as high as they were almost three years ago. They're almost as high as they were 25 years ago. In the early 2000s, when we were in that 5% range, then we fell.

• 23:03Speaker 04

  Rates fell for the better part of 15 years. Then they started going back up with the Fed raised rates, tried to tamp down inflation. Well, there was this sense that we were at peak interest rates and there was a thought of, okay, when are interest rates going to go down? When are we going to get a reprieve again? Where do we go back to low rates? That hasn't happened. And now here we are now more worried about rates going higher from where they are today than going down. And here's how it impacts your investments. From a bond perspective, prices of your bonds move inversely with where interest rates go. Very simple. It's like a giant seesaw. If I could build a visual, it'd be a seesaw the size of a football field.

• 23:47Speaker 04

  And on each end is, one end is interest rates, the other is prices for your bonds. And think about the fulcrum of that seesaw is ultra short term duration. And you think about, if you're sitting on the fulcrum of a seesaw at the very middle, there's not that much movement. You're on the end, if you're sitting at the end of the seesaw, there's a lot of movement, meaning that a 30 year or a 20 year treasury bond or corporate bond moves a lot when rates go up or down. And there's something called duration in any ETF or bond mutual fund or ETF that you own, it's very easy to find the duration.

• 24:25Speaker 04

  And that is the amount that moves up or down by 1% with a commensurate 1% change in rates. I looked at the aggregate bond index. The duration is a little less than six, but let's just round it to six. That means that the 10 year treasury, and not quite to be super accurate, to be the eight year treasury, but let's call it, if the 10 year treasury were to go up a full 1%, that means the aggregate bond index value would go down by about 6%. That's a lot. Higher interest rates are here would be bad in a lot of ways. Now, when we're talking about movements in the bond market though, think about that. That's a terrible year for bonds, down six.

• 25:09Speaker 04

  Down six in stocks can happen in a matter of a couple of weeks.

• 25:11Speaker 03

  Sure.

• 25:12Speaker 04

  Or in a day. We've seen days like that. On a relative basis, your safety assets inside the 401k are still much less volatile than equity, but it's important to understand that if we get another full one percentage point increase in the 10 year treasury rate from, let's call it 4.8 to 5.8, you're going to see the value of our bond portfolios drop by five or 6%. I don't, I'm not making a prediction here. I don't see a full another 1% higher in that rate. I think that we've already had a big climb. Could they go a little higher from here? Maybe, but that'd be a really big move. I don't necessarily see happening.

• 25:51Speaker 03

  Okay. Robert in Arkansas wrote in for you, Wes. He says, I'm a recently retired psychotherapist, but unfortunately I waited until later in life to start saving. I have two 401ks totaling about $550,000. I've always chosen which funds to invest in and currently Vanguard Institution 500 IDX TR, Vanguard Target 2030 and less than 2% in a stable bond fund. At 62, I'm claiming social security and my wife has four more years of teaching before she retires. After plugging my situation into AI, I'm being told to move 20% of my 401k into the stable value fund in case of a large market downturn. My concern is that I started saving later in life, so I'm playing catch up on my finances.

• 26:36Speaker 03

  I'm currently receiving 16 to 20% annual growth, but placing 66K, your three year rule and not AI's 20% rule in the low fee stable bond fund could potentially cost me thousands of dollars a year. What would you do? And thanks for all you do.

• 26:52Speaker 04

  Robert, you're a psychotherapist. I'm currently a financial therapist in a lot of ways.

• 26:58Speaker 03

  You are.

• 26:58Speaker 04

  And

• 26:59Speaker 03

  There's so much of that in your job.

• 27:01Speaker 04

  This is totally human, the way you're thinking. So it's not crazy at all. However, just because you've been getting 20% returns, doesn't mean those 20% returns will go on forever. The stock market giveth and the stock market taketh. And you can't count on 16 to 20% returns. That's not the long-term average. We've had a better than normal market and you're feeling as though by having at least some percentage in conservative assets, then you're going to be missing out. Because you feel behind, doesn't mean you throw away the fundamentals of financial planning. You wouldn't because you're behind. Now, America, by the way, is doing this. People that feel behind, they're turning to betting markets.

• 27:45Speaker 04

  They're turning to Calci, they're turning to sports betting. Like, does that sound like a good idea? The answer is no way.

• 27:51Speaker 03

  No way.

• 27:52Speaker 04

  No way, man. So don't feel as though you need to set aside the fundamentals of retirement planning because you're behind. All that does puts you in an even more precarious situation. If we go through a downturn and now you're 100% equities and you're digging yourself out a really big hole. I just believe we need some stability and those rules of them are there. Those rules that I've come up with over these years are guidelines because they work over time and they try to help you avoid doubling down and then getting both wrong. If you're really looking deeper into your situation, you've got a target date fund that probably already has even more than that.

• 28:33Speaker 04

  The 2030 fund, if you were to open up the hood on that, I bet you that's got 30, 40, 30% plus in fixed income. So just take a look at that. But to have 100% in stocks, I wouldn't feel comfortable with that. Last nuance, your wife is still working, so you may not be in the distribution phase for a little while. So take that into account, which leans more towards, do you really need dry powder just right away? Not if your spouse is continuing to work. So you may have a little bit more time on that, but don't throw out the rules just because you feel behind.

• 29:07Speaker 03

  Also, as an aside, I hate the whole AI financial planning thing. And I loved what you said, because I do think it's kind of dangerous. But I loved what you said to me just privately. You told me, you asked me why AI is not going to take over for financial planners?

• 29:23Speaker 04

  I'll give you the answer.

• 29:24Speaker 03

  What was your answer?

• 29:25Speaker 04

  Yeah. Why wouldn't AI just take over all financial?

• 29:28Speaker 03

  Like, how do you know that specifically?

• 29:31Speaker 04

  I struggle with that. I've, wait a minute, maybe it will. When I first started using it. And then I realized that AI very much is a yes man. Kind of always agrees with everything, gives you a little guidance. As much as I've done this for over almost 25 years and, you know, I'd say relatively educated about this, I still have a financial advisor.

• 29:54Speaker 03

  Yeah. That's very

• 29:56Speaker 04

  And I thought, I was walking to the parking lot and for some reason I was thinking about this and I was thinking, will AI take over financial advice? And I thought to myself, no way. Because if somebody does this every single day and have done this for a quarter of a century. If I still feel like I need someone to talk to and have extra guidance, then why would it, why would real life human advice ever go away? The answer is that, in my opinion, there's no way that can happen. It's too personal, it's too important, it's too heavy to rely on a bot that could be rogue or just reading an article that we could be totally wrong.

• 30:34Speaker 03

  All right, Jordan in Florida says, after a series of life events this year, my 82-year-old mother finds herself with four income streams totaling $70,000 annually from a mix of pensions and social security, while her living expenses are less than $40,000. She has no retirement accounts, but has $850,000 sitting in cash. I would like to help her manage this. She also has $600,000 in long-term care insurance, an $80,000 second annuity she doesn't touch, great health insurance, and owns a $350,000 house near me. What should she do with the 850s she doesn't touch that's just sitting in cash? She doesn't want to live in, quote, "a home" and has no care to travel.

• 31:17Speaker 03

  She wants to have an inheritance for me and her granddaughters and is happy sitting at home reading free library books. That's awesome. Her doctor says she's in great shape for her age and she should plan to be around for a while. Good.

• 31:31Speaker 04

  Krista, what was the number? I know you had said four income streams, 40K in spending, and what did they?

• 31:37Speaker 03

  70,000 annually.

• 31:39Speaker 04

  Jordan, your mom is in great shape and she's four income streams and 70K versus 40 coming in that are virtually guaranteed if these are pensions and social. They're a high degree of safety. This is great. She's in a really good position. So what do you do with the 850? And long-term care? So even healthcare, for the most part, extra healthcare costs is taken care of. The first thing I would say, just because your mom is in her 80s doesn't mean she doesn't need five core pursuits. So I know she doesn't feel like spending the money. She doesn't, maybe she says, I don't care to travel anymore. I'm cool reading free library books.

• 32:19Speaker 04

  I want mom to have more things that she's loving to do in the world.

• 32:25Speaker 03

  Maybe she does. Maybe she loves.

• 32:27Speaker 04

  Maybe she does.

• 32:28Speaker 03

  Her grandchildren, her.

• 32:29Speaker 04

  But from the sound of this, it sounds like I would, I would want to make sure mom is doing more than just reading free library books. But the short answer here is that if she doesn't need the money in any way, doesn't mean there's not still inflation. And it sounds like you're communicative with her about it, which is great. And that's really helpful. It's the money's time horizon is maybe not just your mom's. It's actually the family horizon. So her horizon in her 80s in maybe 10 years, but if you now look at it as your money and your kid's money as well, now the time horizon is 20 or 30 years. You invest differently if you have a 20-year horizon versus a five-year.

• 33:13Speaker 04

  That would mean some sort of balance that is not just sitting there in a CD. Still her money, still have to think about her tolerance for volatility, the value going up and down. But if it were me, and this is all agreed upon within the family, the time horizon would suggest something that would be 50% plus in conservative equities or at least some sort of equities that are diversified. And that's a conversation I would, I would have with your mom.

• 33:44Speaker 03

  All right, and Jay in Florida wrote in with this one. I retired over two years ago at 60. I must have enough core pursuits because I don't know how I ever had time to work.

• 33:53Speaker 04

  All right, Jay.

• 33:54Speaker 03

  That said, I don't seem to get quite enough sleep, an average of just under seven hours. I certainly feel better on days with more, but often find when I have some open task or am behind on schedule on a core pursuit goal at bedtime, I tend to press a little later to get a satisfactory stopping point. I don't lay awake thinking about it in that way, even though fun things can keep me awake sometimes. Based on your research, which is a bigger factor in happiness for the long run? The core pursuits or the sleep?

• 34:23Speaker 04

  Jay, first of all, I think you're getting, it sounds like you're getting enough sleep. I mean, seven hours.

• 34:28Speaker 03

  It's pretty good.

• 34:28Speaker 04

  Now Lynn Moss would say, my wife would say, that's still not enough. Remember, she's like a, you need 10, 12. That's for teenagers and growing, growing boys. Milk, hydration, sleep, sleep, sleep. Seven is not great. That seems pretty good. If you tell me you were getting four hours or five, then I'd see that as a problem. Which one's more important? The habits of the happiest retirees really are meant to work all together. And they're meant to blend together in this web of support. If I had to go choose one in your particular case, or if I were to pit them against each other, your core pursuits are more, even that much more important because they're your

• 35:12Speaker 04

  new structure and they're your new, that's helping you create the purpose that without that, I mean, one of the statistics I, I think about, what is one of the biggest divergence statistics that shows the biggest divergence in a particular habit or question? And it's the, I have a strong sense of purpose. In the retire student method, that chart, it's over 80% of happy retirees say they have a strong sense of purpose, over 80% versus under 40% of the unhappy group. That to me is, that is one of the most striking differences. So tie goes to core pursuits.

• 35:52Speaker 03

  I agree. I would definitely choose that too. Well, that does it for this episode of Ask an Advisor. But remember, this is not the only episode this week. Make sure you tune in on Thursday and we'll have a bonus Q and A with Wes.

• 36:06Speaker 04

  And by the way, it's not the I can afford anything.

• 36:09Speaker 03

  No.

• 36:09Speaker 04

  Segment with Wes Moss.

• 36:12Speaker 03

  Definitely not. Thank you for subscribing. Thank you for reviewing the podcast and all of your comments. We truly appreciate it. Clark's back tomorrow with a brand new episode and we will see you on Thursday.