1/10/25 U.S. Presidents Who Had Money Problems

The Moneywise Radio Show and Podcast Friday, January 10th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management instagram: MoneywiseWealthManagement Guest: Michael George, Executive Vice President/Marketing for Safe One Credit Union website: www.safe1.org/

• 0:00Speaker 00

  From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.

• 0:09Speaker 01

  I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me?

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  Securities offered through SEF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SEF Investment Advisors, Inc. SEF Securities, Inc. and Money Wise Wealth Management are independently owned and operated.

• 0:40Speaker 00

  Now, let's start the Money Wise Show.

• 0:43Speaker 03

  That's right. It is the Money Wise Radio Show. I am your host today, joining in the padded radio room off Stockdale Highway, Chris Pelster, joined with?

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  Troy Dinkins.

• 0:53Speaker 03

  And drum roll.

• 0:59Speaker 03

  It is business time. It's Getting Down to Business Friday. We are joined with a radio podcast favorite, Mr. Michael George.

• 1:07Speaker 05

  Thank you for having me.

• 1:08Speaker 03

  Yeah, VP of Marketing for Safe One Credit Union, wonderful bank here in town. If you're looking, and we're going to talk a little bit about rates, go into a topic like you always love to bring. I love this topic timely with some of the things that our nation dealt with this week. And then I also have another announcement. Joining the radio show today for the first time is a friend of mine, a new colleague, Mr. Seth Perry. Hello, sir. Hello. Seth Perry, I've known him for a really long time. He has joined the forces here at Money Wise, a new financial advisor here in the office. And so I forced him to come on the radio show his first week at work, and he's just going to join us for

• 1:48Speaker 03

  the podcast. He definitely has some comedic abilities, but he wanted to join in and just kind of see what this was all about. Plus, it's always fun when Michael George is on. So that's what we're going to do today. We did have some wonderful questions come in. You, the listeners, are what make the show what it is. So keep the emails, comments, and questions coming in. You also can even join the show live for those that still have a radio with live feed, not the podcast world. But you can join the show live or send in the message 661-396-1000. We would love to hear from you and join the conversation if you'd like. So before we do that, we're going to talk a little bit about the markets. We have had,

• 2:32Speaker 03

  you know, kind of a crazy end to the year. We had a positive year on the markets. Everybody's waiting to see what's going to happen with the feds and interest rates. Everybody's waiting to see with what's going to happen with the presidential change and what that brings. And in the middle of all of it, California's on fire. So it's just kind of always something going on, a little bit of chaos all over the place. The markets did cool down a little bit today, probably I think spearheaded by insurance companies might be under a little pressure right now.

• 3:02Speaker 04

  Yeah, the fundamental catalyst is what the fires that were going on.

• 3:05Speaker 03

  Yeah. Yeah. Plus, you know, the market was positive last year. It'd been on a major upward trend going all the way back to when the feds first started playing with interest rates and we saw inflation in 2022. So S and P 500 today down about a percent and a half, roughly the same, just a little bit more 1.6 slide on the NASDAQ 19,161. S and P, I didn't throw out that number. It's 5,0827. Dow Jones is the dumb Dow, we call it, which most people don't like it when we call it that because that's been the longest talked about and focused on index. But it's at 41,938. It's a 1.6% slide as well.

• 3:47Speaker 03

  So just, just a little pressure on the markets. Some of the uncertainty with the, with the fires and how that's going to impact some of the insurance carriers and insurance and financial worlds a little bit married together. And so there's a little bit of a shakeout when there's uncertainty. Sometimes you'll see a little bit of a retreat. But there you go. That's the market numbers. Anything to add to that, Latroy?

• 4:09Speaker 04

  Well, to me, you know, the market's been down since December 6th, about like around 4%. So like I interpret it as a natural reaction. I mean, of course you got, you know, certain fundamental catalysts that are out there that. Uh, you know, begs the behavior of why the market is, is on a downtrend right now, but on a, on a bigger perspective, on like a hundred foot view, looking at the market, this is just a natural reaction. And, um, you know, we'll see, we'll see how this thing rebounds. You know, we had a natural reaction just like this recently here. Uh, we start from October, mid-October, all the way to, towards the end of October, we had that natural reaction, that pullback and it shot back up. So,

• 4:50Speaker 04

  you know, none of us have a crystal ball, but only thing we can do is just look at fact. And the fact is the market in my eyes is, is still in a healthy environment, but it's just a, like I said, just a regular natural reaction in the market. So.

• 5:01Speaker 03

  Well, a little discussion before the show, Michael George threw out there that the jobs, you know, numbers kind of came out and jobs, uh, world is looking a little bit healthy, which is obviously a big, the, one of the biggest components of a healthy economy. And so you are the, the marketing specialist there.

• 5:17Speaker 05

  Sure.

• 5:17Speaker 03

  But I kind of ask you what the pulse is. Yeah. Like what, what are the, uh, what, you know, a local bank, local perspective, you know, kind of what is the chatter as far as rates and what rates are doing? And so you shared a little bit about that. You said the jobs numbers looked good. What, what's kind of in the world of interest rates?

• 5:32Speaker 05

  Yeah. So the jobs numbers look good. And then of course now we'll wait in the coming weeks for the inflation numbers. Uh, the Fed meets towards the end of this month. Towards the end of last year, going into this year, originally it was looked at the Fed would reduce rates four to five times. They've since kind of cut back on that and they're, they're looking at two. Um, the one thing about the, when you see the Fed funds rate and you look at the market, um, there's always two words and who knows?

• 5:57Speaker 03

  Yeah.

• 5:57Speaker 05

  Because you're even hearing some, um, economists talk about rates going back up. So I think what's important is if you're a, a, a financial institution, or even if you're an everyday investor is that, um, don't try to predict what's going to happen, but just be ready to react. And I don't mean like a knee jerk reaction, but, uh, you know, a, a conscious decision based upon what you see in the environment. Cause, um, I'm saying the prediction is to rate the reductions in 2025. Three weeks from now, we might be saying something totally different.

• 6:27Speaker 03

  Right.

• 6:28Speaker 05

  But the main thing is that we're not, it's looks like right now that we're not going to see. Quite as many rate changes as was once predicted. So again, you just have to react.

• 6:37Speaker 03

  Yep. Yep. There you go. So you're going to come back on with your topic, maybe after the break. We had a couple of questions come in that I did want to jump into and get to before we jump into your topic that you brought. So looking forward to that. But you can join in the conversation too, if you have something to add to it. But again, appreciate all the comments and questions that do come in. One of the first ones that I was going to cover says, Happy Friday. Hope you guys can cover my question when you have the time. But a person, can a person transfer their 401k to an IRA without penalty? So the basic answer, a quick answer, easy answer is yes. Yes. Once you separate employment, or even if you haven't separated employment, there can be some circumstances

• 7:17Speaker 03

  where you can transfer 401k or a portion of your 401k, or all of your 401k from a 401k to an IRA without penalty. There can be some nuances, some plans, you have to separate service before you can even move a penny out of it. So each 401k can be a little bit unique or different. But yes, 100% you can take your money from a 401k and transfer it to an IRA without penalty. You can even do it without taxes too. That would be considered what's called a direct rollover. And there's two ways that you can accomplish a direct rollover. You literally put all the paperwork together. You tell your old 401k, here's my new IRA, and they transfer it from

• 8:00Speaker 03

  from one to the other. They will send you a check in the mail a lot of times, but the check will be made payable to your IRA account, not to you personally. So there's no taxes, no penalties. You then put that money right into your bank account. If you don't do that, there can be tax implications, but you can still accomplish it. And how you do that is they send you the 401k amount. Unfortunately, sometimes they'll withhold 20% mandatorily, which that can create a tax consequence, and it gets a little bit more complicated. But as long as you take that dollar amount, and within 60 days,

• 8:39Speaker 03

  Plug that into your IRA as a, you know, not a contribution, but you put it in there as a rollover. It will count as a 60 day rollover, no taxes or penalties owed, as long as you do it within that 60 day window. So it gets a little bit more complicated if you don't do a direct transfer to where the check would be made payable to the institution, not to you personally, but you can even do it if they will only send you a check directly to you. But like I said, it gets a little bit complicated because a lot of 401ks will mandatorily withhold 20%, which means you're only able to roll over and put that new money or that money over into the IRA,

• 9:18Speaker 03

  80% of it, which means 20% of it could be taxable. And if you're under 59 and a half, could be penalized. So obviously work with a financial professional or make sure to do your due diligence and research. If you have a trusted tax professional, maybe they'll help you guide that a little bit. But you do want to think through that when you're doing that. But you know, just, you know, full disclosure, like money wise, like we have helped hundreds and hundreds of people transition into retirement. So that's literally what we do on a weekly basis is folks that want to work with a local financial advisor, or even some are out of state, but regardless, when we're with an advisor, we're rolling money out of their 401ks to an IRA.

• 9:57Speaker 03

  We're discussing investment strategies and finding, you know, strategies that make sense for their situation to create income for the rest of their life. And trying to help them meet as many of their goals as they are going to meet in retirement, right?

• 10:09Speaker 04

  So And just to go behind you too, the phrase for like, if you still work for, for the company and you're like right there pressing on retirement, and you want to take that money out, it's called an in-service withdrawal. So like Chris said, each 401k is different and it's unique. So that phrase is in-service withdrawal. So if they have that option, then that means you can move partially or move, move all of it over into a IRA.

• 10:33Speaker 03

  Yep. Yeah. A lot of times too, when you hit retirement age, so 401ks, like I said, each one can be a little bit different, but most 401ks, as soon as you hit retirement age, 59 and a half, 60 years old, if you want to, you can already move your money out of your 401ks. 401k and into an IRA. If you're starting your transition into retirement, you're starting your planning, you can do an in-service withdrawal, or sometimes it's referred to as a non hardship withdrawal, like no emergency, no anything, but I'm wanting to take this money out and work with my financial advisor, putting strategies together to get me ready for retirement. You can even start that process before you separate from your 401k provider, your employer. So hopefully that answers that question. You know, like I said, there's a lot into it.

• 11:17Speaker 03

  If you're working with a advisor, that can be really helpful. CPAs can help a little bit. But, but, but good luck if you're looking to do that. Another question came in, we'll try to jump to real quick, which it's a very complicated strategy. We've talked about a little bit here on the radio show podcast a few times. But the question is, is backdoor Roth still allowed in 2025? Thanks, guys. So let's talk about backdoor Roths a little bit. Backdoor Roths, it allows high income people to sidestep Roth IRAs income limits. So most people understand the difference between a traditional IRA and a Roth IRA. Roth IRA allows tax-free growth and tax-free distributions down the road when it comes out.

• 12:00Speaker 03

  Traditional IRAs, you get a tax benefit now, tax-free growth, but taxes when it comes out. So there's three tax things you have to think about with retirement accounts like this. Roth is pay taxes now, not later. Traditional IRA is don't pay taxes now, pay taxes later. There's some reasons why you would want to consider each another. Roth IRAs are awesome tools, tax-free growth, tax-free distributions down the road. It gives you some flexibility down the road as far as tax distributions, taxable distributions, some, some options. But the, the, the bad part about a Roth is they have income restrictions. And so right when you finally get to the point where you feel like you might have a little extra money to put money into a Roth IRA,

• 12:43Speaker 03

  you might come up against the Roth IRA income limits. So they say, hey, you're making X amount of dollars, we're not going to let you take advantage of a Roth IRA. So what a backdoor Roth conversion does, which there's actually two. Roth tools and sometimes they use backdoor Roth interchangeably, but one of them is a backdoor Roth is you convert traditional IRA assets to a Roth. That in that situation, there's no income limits or restrictions. So you could be making $500,000 a year and they will let you convert traditional IRA assets to a Roth IRA.

• 13:27Speaker 03

  Now, the problem is, is when you do that, whatever you convert over, you pay taxes on it. Right? So you want to think about these different scenarios of why this would make sense, maybe or maybe not. Sometimes if somebody is between jobs and one year their income's going to be really low, you can actually convert a pretty high amount, convert it over. You don't have to take into consideration tax, I, I, I mean, um, income restrictions that they might have on those. There is another ability, uh, so that kind of tells you that yes, they're still around. They actually came up on the chopping block. Um, I forget when it was 2020 or 2021, um, but it actually got shot down. So, uh, they did keep the backdoor Roth around.

• 14:12Speaker 03

  Um, and so you can still do Roth conversions in the way that I just explained it. Another one that is referred to sometimes is a mag mega backdoor Roth, which is where in a 401k, you're only allowed to put X amount of dollars of your income up to a limit inside of a 401k. If you're over 50, it's a little bit higher, under 50, it's a little bit lower. Um, you know, you can look up those amounts really simply on Google, but, uh, the one thing I'll say is if you go above and beyond the allowable limit, some 401ks will allow you to continue to put after tax dollars into your plan. When you retire and you take all that money out, sometimes they will allow you to take that after tax portion and to roll it into a Roth IRA.

• 14:57Speaker 03

  So I've seen people that have high income, that have all these things that we just talked about that keep you out of a Roth have. Chunks of after-tax dollars in their 401Ks, and they're able to roll it out of their plan into a Roth IRA, and now keep investing those funds for the future, and not have to pay taxes on the growth on those funds moving forward. And sometimes that's referred to as a mega backdoor Roth. So, consider some of those things. The other good thing about a Roth, I mean, a 401K is, if they allow you to either do traditional or Roth, is income restrictions don't matter if you want to do a Roth IRA and your 401K allows Roth contributions. So, a lot of moving pieces there. Hopefully that helps you a little bit with those questions.

• 15:40Speaker 04

  Let me play devil's advocate real quick, though, okay? So, I can move 75 or whatever the maximum is into a Roth from a traditional in a backdoor. So now, that means, some people might think now that means I could, I could put that, replenish that traditional IRA money with the maximum.

• 15:57Speaker 03

  Yeah. Well, so, and, and actually, you bring up another thing I just thought about. So, I was talking about Roth conversions, which don't have income limits. Another way that high-income earners can take advantage of a backdoor Roth is you can put money into a traditional IRA, up to 7,500 bucks or whatever the, yeah, 75. And then immediately, and then that becomes what's called a non-deductible IRA. So, I put money in there. I put it in as a non-deductible IRA contribution, because my income's so high, I don't get to, I don't get to write it off. I have a 401K. I don't get to write off my IRA contribution, but it is now considered a non-deductible IRA, which some people even take advantage of those.

• 16:40Speaker 03

  The benefit of that is the growth inside of that non-deductible IRA gets to grow for 10, 15, 20 years, and I don't have to pay taxes on the growth until I pull it out. I'll never pay taxes on my original contribution amounts. You can get really complicated with this, because now you have dollars in your non-deductible IRA that will come out not taxable. Some of it will come out as taxable. It can get a little bit hairy. You don't want to combine an account that you've done deductions on, an IRA that you've done deductions, and IRAs that you've non-deductible. You can see how it gets a little bit confusing. But, another backdoor, high-income earner strategy is, I do a non-deductible IRA, 7,500 bucks. I immediately...

• 17:25Speaker 03

  Transfer it over to IRA because I'm going to pay taxes on that 7,500 bucks anyways, right?

• 17:30Speaker 00

  Yeah.

• 17:30Speaker 03

  So I immediately transferred over to a Roth as a conversion. And so they call that a backdoor, another kind of a way to think about the backdoor. So you can do Roth conversions. You can do non deductible contributions. Move it immediately over to a Roth. And then the mega backdoor Roth is the 401k after tax dollar situation where that's a little bit trickier because some 401ks, as soon as you get to the maximum amount of the 401k allows you to do, you're cut off. They won't allow you to do after tax dollars. So that just depends on your personal plan.

• 18:04Speaker 00

  Yes, sir.

• 18:05Speaker 03

  So a lot of information there, you know? Hopefully if you're listening on podcasts, you can stop, rewind, play over, send another question to the show if you need. Really, really appreciate that. When we come back, Mr. Michael George has a wonderful topic, timely topic for us to talk about.

• 18:19Speaker 00

  Need to get your financial fix on the go? If so, subscribe to the Money Wise Podcast and catch up on all past shows whenever.

• 18:31Speaker 03

  With music like this, that must only mean one thing. Michael George is in the house.

• 18:38Speaker 00

  Great song.

• 18:39Speaker 03

  He knows him.

• 18:40Speaker 00

  She. She, Steven knows.

• 18:44Speaker 03

  Yep, yeah.

• 18:45Speaker 00

  My favorite album.

• 18:46Speaker 03

  And that brought up another thing.

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  All right.

• 18:49Speaker 03

  There's a, there's a couple of birthdays. Steven is always so great throwing some, some history and some birthdays in there. And so there was a birthday of Mr. Rod Stewart, which.

• 19:01Speaker 00

  You will not hear on the show today.

• 19:03Speaker 03

  Which, well, Michael George, Michael George filled me in that is, is, what's his name? What's his nickname?

• 19:08Speaker 00

  Rod the Bod.

• 19:09Speaker 03

  Rod the Bod.

• 19:10Speaker 00

  Yeah.

• 19:11Speaker 03

  I didn't know that. So, uh, thanks for letting us know that, Michael, that Rod the Bod.

• 19:15Speaker 00

  How old?

• 19:17Speaker 03

  Yeah. And he, the big 80.

• 19:19Speaker 00

  80.

• 19:20Speaker 03

  So if you used to love to listen to Rod Stewart, hopefully, I mean, that's going to make you feel it, you know?

• 19:25Speaker 00

  Poor guy, he never married one good looking woman.

• 19:27Speaker 03

  Yeah.

• 19:27Speaker 00

  Felt bad for him.

• 19:28Speaker 03

  Yeah. Well, he had his, he had his beer goggles on for like seven decades.

• 19:33Speaker 00

  Yeah.

• 19:35Speaker 03

  Oh, sorry. That was bad. All right. And the other reason I said it is I was kind of surprised that this one popped up in the birthday list. 19 years old, Mr. Hayden Deegan, and most people won't even know who he is.

• 19:47Speaker 05

  Yeah, I don't know.

• 19:48Speaker 03

  The son of Brian Deegan from the Metal Militia, dirt bike rider, freestyle extraordinaire. And Hayden Deegan is his 19 year old son who is kicking butt in Supercross and Saturday night is opening night. A1 it's called Anaheim One Supercross Racing. Hayden is a, there's two levels of bikes that they race, the smaller ones and the bigger ones, 250, 450. He was last year's 250 champ. And so anyways, it's his birthday. He's 19 now.

• 20:16Speaker 05

  So the Metal Militia guys are old enough to have kids that old now?

• 20:20Speaker 03

  Yeah, and he has a, yeah.

• 20:21Speaker 05

  Wow, I feel old.

• 20:21Speaker 03

  And Brian Deegan has a daughter who's about four or five years older, or maybe a few years older than Hayden.

• 20:27Speaker 05

  Wow.

• 20:27Speaker 03

  And she's been making waves in the NASCAR world.

• 20:29Speaker 05

  Wow.

• 20:30Speaker 03

  Like the NASCAR trucks and...

• 20:32Speaker 05

  I remember when that first kind of came out, the Metal Militia.

• 20:34Speaker 03

  Yeah.

• 20:35Speaker 05

  Wow, it's that long ago. Wow.

• 20:36Speaker 03

  Yep, there you go. So a little Supercross, we're gonna be getting together, watching some A1. So people maybe don't know that about me, but that's, that's what I love to do, what I enjoy doing.

• 20:47Speaker 00

  It's funny, because ABC sends me like the news of the day and then celebrity birthdays. And it's usually like ranked by, you know, how I'm, I guess how many people follow them on their social media or whatever. And when I was typing it up, I said, I wonder if Chris knows this one.

• 21:03Speaker 03

  Oh, yeah, for sure, for sure. Because he's actually, he's humongously popular. He was known as Danger Boy Deegan. And, and they, they were like YouTube channel and they family, they followed the family around and he was racing many dirt bikes and stuff. And so he's had hundreds of, you know, thousands of followers since he was like five years old because of Brian Deegan. And they've, they've had a very, you know, blessed life. And what's funny too, is he went the, the path of like, most people would have thought like a loser, like, oh, you're gonna do freestyle instead of racing dirt bikes. And he's probably made way more money than he ever would have made going Supercross route.

• 21:41Speaker 06

  I always wonder with that, how much of it, how much of it is the natural talent they were given, or just the environment that they were raised in? You see that with pro athletes, you know, like Kobe's dad playing in the NBA?

• 21:54Speaker 03

  Well, the crazy thing about Hayden Deegan is the kid has crazy heart. Because there's, there's a lot of talented Supercross motorcycle racers. But like that guy has a tenacity like where when he already has the championship boiled up, but if there's two people in front of him, he goes after it. And, and you know, like most people would say like, hey, you already have the points under wrap. Like, you know, play it safe. And he just has a whole different drive and heart, even different than I think his little brother, who, who races too. So it's a mix. Like you even think about like Tiger Woods right now and his son Charlie. And his son, yeah. His son Charlie has like the eye of the tiger. Like he's not only good and obviously he's been blessed to have all kinds of talent around him.

• 22:36Speaker 03

  But he has that same kind of like, oh, you got it six feet from the hole? I'm going to get it three feet from the hole. Yeah. And that was just like Tiger. And what made Tiger so amazing is how he would rise to the occasion when the pressure was on. But before we jump into the topic, we were talking a little bit about the break. And Seth, you had a couple of thoughts or questions that you want to?

• 22:54Speaker 06

  Yeah, just one thing that came to mind when my wife a few months ago recently took a new job. And you know, part of the process is filling out the paperwork for the new retirement plan. And they give you the option, you know, do you want traditional or do you want Roth? And what percent? And so I just wanted, wasn't sure if you wanted to speak to that.

• 23:10Speaker 03

  Yeah, yeah. And what we talked about a little bit is just that everybody's situation is, is super unique. And like you said, is there any rules of thumb? And there's really not because it kind of depends on everybody's situation. I will say that if, if your kind of average earning range, you know, 50 to 150,000 dollars a year in income, and you want to hedge your bets a little bit and have a little bit of flexibility, you might do 10% into the Roth or 20% into the Roth and 80% into the traditional, which is giving you the tax benefit. Uh, one of the things that I, I mentioned is, is if you're a super high earner and you have plans on paying everything off and having a lot less taxable income in retirement, you still may have a similar lifestyle, but lower taxable income.

• 23:54Speaker 03

  Well, then you want to do a hundred percent traditional and get the full tax write-off. If you're somebody that finds yourself in a situation, for whatever reason, you actually don't need a bunch of your paycheck or, or, or income right now, or your income is a lot lower than normal, well, you may do a hundred percent into the Roth. Let's pay the taxes now on these lower. Tax years, tax bracket, you may be a spouse that says, hey, you know what? We can go ahead, because what people don't realize is everybody loves the idea of a Roth IRA more than a traditional, but they don't realize you're paying for it. Meaning, you have to put 24% in to do the 20, you know, you have to do more because you're actually still paying the taxes on that. So it's not an apples to apples comparison.

• 24:38Speaker 03

  If you're saying, well, I would much rather do a Roth. Most people aren't realizing, well, to do that Roth, instead of putting in $22,000, you're actually putting in 27 because you're paying $5,000 in taxes to do the 22. Versus if you do the 22, you're not having to pay that $5,000 in taxes. So hopefully that's not super confusing. But yeah, good, good thing to think about. Everybody's situation's a little bit unique, but hopefully that helps you understand that a little bit. And we went a little long on the last one, so we're going to take a quick break. When we come back, we're going to talk about what Michael George brought to the table.

• 25:11Speaker 00

  If you're a business owner who provides a retirement plan for your employees, contact Money Wise Wealth Management to see if you're maximizing your options and minimizing your liabilities. Money Wise 401K plans are customized to you and your company's needs. 661-847-1000. That's 661-847-1000.

• 25:41Speaker 03

  There you go. Welcome back. It is Taking Care of Business Friday. We are joined today with a fan favorite, Mr. Michael George. We were just talking a little bit about the, when I said that it's a timely topic, not necessarily the, I guess, the, what we're talking about, but it has to do with US presidents.

• 26:05Speaker 03

  So, uh, our, uh, obviously our nation this week mourned the loss of Mr. Jimmy Carter. President Jimmy Carter, served as the 39th president, 77 to 81. He was part of the Democratic Party, longest-lived US president, first to have reached 1-0-0. So congratulations, Mr. Carter. May you rest in peace. Thank you for serving our country. And, uh, and so what, what topic did this spur on for you to think about?

• 26:34Speaker 05

  So, we just had the passing of Jimmy Carter, and then in 10 days, we have inauguration of President-elect Donald Trump. In fact, you may recall in 2016, when he was running for office, there was a little bit of a scuttlebutt because he had previously, um, filed bankruptcy. But when he entered into office, and even when he re-enters office, he'll, he'll be the richest president we've ever had. His net worth is somewhere between 5 and 6 billion dollars.

• 26:58Speaker 03

  Yeah.

• 26:59Speaker 05

  Um, so it fluctuates a lot with him, but, but you know, still the wealthiest president. But, um, you know, when we think of people who've served as President of the United States, we think of them as great people because they are. Uh, but that doesn't mean that those individuals aren't human, and they're not capable of having financial failures. So, um, you know, when it comes to handling finances and fiduciary responsibility, there have been several presidents whose business acumen has lacked, if you will, uh, and it's resulted in financial difficulties for them. So, we're gonna go through a list of some of them today. Uh, there's been numerous. Um, you don't think of like the US president as being destitute and poor, but there's, there's been several. So, we'll just kinda chronologically go through some of them that

• 27:40Speaker 03

  They don't have to pay, they don't have to pay rent at the White House, right? So even if they're horrible with money, they at least have somewhere to live for four years.

• 27:47Speaker 05

  Yeah, exactly. Yeah, there's, and no rent control. So, yeah, that's good. Um, but no, we'll just kinda chronologically, chronologically go through the list of some of them. So, the first one that I'll bring up is, is Thomas Jefferson. He was president, our third president from 1801 to 1801. He was really one of our country's founding fathers. In fact, some people would say he was our preeminent founding father in terms of what he contributed to our country. Some people have called him the greatest American of all time. Um, and he was a true Renaissance man. He was known for his talents in writing, economics, religion, philosophy, horticulture, mathematics, art, culture, on down the line. And despite those talents, as well as being a wealthy landowner, he actually died $107,000 in debt. You'd think, well, that's not much.

• 28:30Speaker 05

  But in today's dollars, that'd be about three and a half million dollars in debt. And there's several reasons why that is. So he was a farmer, so obviously that's a profession that has many ups and downs. So he was, some of his problems were attributed to that. But some of his other financial problems came from his father-in-law and a friend who he co-signed on loans for. In addition, he was also known to lend out money to family and friends who never paid them back.

• 28:55Speaker 03

  Oh, wow.

• 28:56Speaker 05

  And in addition to lending money, not getting back, he also was very extravagant in his spending, whether it was for books, art, parties. He was just very lavish in his spending. So at the, in his life, during his day, bankruptcy did not exist, but there was a brief window from 1800 to 1803 where he did, in fact, file a couple of times.

• 29:21Speaker 03

  Wouldn't they just lock you up in stocks and like throw tomatoes at you or something like that? What'd they do?

• 29:27Speaker 05

  Beat you. Yeah, beat you, yeah.

• 29:29Speaker 03

  They shamed you through the town?

• 29:30Speaker 05

  Yeah, yeah. So, but, you know, he didn't have that option, but when he did have it, he did take advantage. Because you remember, one of the things with Trump years ago was that, hey, he's filed bankruptcy, and I think his was a reorganization. And I thought to myself, well, he's not the only one. There's been several presidents that have done that, from their business side. Now, one way he was able to recoup some of his money, Thomas Jefferson, that is, is that at one point, the Library of Congress significantly burned down, a significant portion of it burned down. And so what Jefferson did is he sold his book collection in 1850 to the US government. And the reason being is that, one, he needed the money, and two, he really felt that the Library of Congress should have books of art, architecture, philosophy, politics, that

• 30:15Speaker 05

  should be preserved in the Library of Congress, both in his day and historical books as well. So he did. He sold a significant portion of his collection to the Library of Congress, well, to the US government. Government, uh, but at the time of his passing on July 4th, 1826, and he died the same day as John Adams, who was a friend, adversary, and then a friend again, uh, he was pretty much in debt. He was destitute. He did not have a way to pay off his debt.

• 30:38Speaker 03

  Yeah. So here's my question, cause I don't know the history of, of, like you said, cause a lot of people don't know the history of, of, uh, bankruptcy and why it was put in place and, you know, a, a legal way for debtors and creditors and all that stuff. But anyways, long story short, if the hundred and seven thousand dollars of debt doesn't go on to the family members after your passing, then he's actually money ahead, right?

• 31:02Speaker 05

  Yeah.

• 31:02Speaker 03

  He just

• 31:03Speaker 05

  Yeah.

• 31:03Speaker 03

  built up a hundred and seven thousand dollar bill. It, it sounds like he had some extravagant, extravagant spending habits.

• 31:09Speaker 05

  And then just says, bye.

• 31:10Speaker 03

  I'm out.

• 31:10Speaker 05

  Bye. See ya.

• 31:12Speaker 03

  I mean, was it, is it really bad?

• 31:14Speaker 05

  If, if, in that case, then, uh, he should have built it up higher.

• 31:17Speaker 03

  Yeah, he should have, should have went for two hundy.

• 31:19Speaker 05

  Exactly.

• 31:19Speaker 03

  I mean, just peace out.

• 31:20Speaker 05

  Set a record.

• 31:23Speaker 05

  So yeah, so he, he was, you know, that, uh, by today's money, three point five million dollars in debt at the time of his death.

• 31:30Speaker 03

  Wow.

• 31:30Speaker 05

  In 1826.

• 31:31Speaker 03

  Yeah, you're like a hundred and seven thousand dollars. That's not very much. It's like in those days it was

• 31:35Speaker 05

  Huge.

• 31:36Speaker 03

  Yeah.

• 31:36Speaker 05

  It was a big amount. It was a big amount. So

• 31:38Speaker 03

  Huge.

• 31:38Speaker 05

  Yeah. Exactly.

• 31:40Speaker 03

  Huge.

• 31:40Speaker 05

  Very good. Um, so he was our third US president. If you move on a couple of presidents to our fifth president, it was James Monroe. He served from 1817 to 825. And at the end of his second term, he found himself heavily in debt because of a, he had a career in public offices. One, didn't pay anything, paid very poorly. And secondly, back then there was no national committee to pay for your bills. He had to pay for entertaining, campaigning, traveling. General protocol was all done on their dime.

• 32:09Speaker 03

  Wow.

• 32:09Speaker 05

  And so, um, in response to this, several years after leaving office, he continually pressured the US government to compensate him, to reimburse him for the thousand dollars that he spent. And eventually he did receive a portion of the requested funds, resulting in his ability to leave a pretty good inheritance for his family. He died on July 4th, 1831. So five years after Jefferson. So to be a founding father, evidently you have to die on July 4th.

• 32:33Speaker 03

  Yeah, that's a rule.

• 32:34Speaker 05

  Founding father. Yeah.

• 32:35Speaker 03

  Yeah.

• 32:35Speaker 05

  Hard to believe.

• 32:36Speaker 03

  Do you even take your country seriously if you don't die on July 4th?

• 32:39Speaker 05

  You can't be a great American unless you die on July 4th.

• 32:41Speaker 03

  You remember that.

• 32:42Speaker 05

  Yep. So, yeah, I'm sure I'll be any other day but July 4th, I can already see it, so. So, uh, so he was our fifth president, uh, moving on to another president, our ninth president. This is an interesting one, actually, um, because he was only in office for 31 days. William Henry Harrison got elected.

• 33:01Speaker 03

  He didn't get his first paycheck, man.

• 33:03Speaker 05

  Yeah, exactly, exactly. He got, he got pneumonia and 31 days after, uh, becoming president, he died. Um, and at the time of his death, he was pretty much insolvent. He had no money. And it's, what makes his story interesting is that, uh, he was actually born into a prominent Virginia land-owning family and farming family. Um, in fact, he originally was gonna pursue a career in medicine because he was from a wealthy family could do so. Unfortunately, uh, his father passed away and because of that, the family then did not have the money for him to continue his studies in medicine. So he, he used some family connections to become a part of the army. Uh, and upon his completion of his duties, he served in various political capacities such as he was Secretary of the Northwest Territory, Governor of the Indiana Territory,

• 33:48Speaker 05

  US Senator, and then he became US Ambassador to Columbia. And while he was ambassador, he traveled abroad and when he came back, he traveled abroad actually for a year. And when he came back, he found out that bad weather destroyed his crops, his sons ran up bills, and collectors were knocking on his door wanting to get their money back. And it didn't help that he had 10 children.

• 34:08Speaker 03

  Yeah.

• 34:09Speaker 05

  So that's, that's a problem right there on many levels.

• 34:12Speaker 03

  Yeah.

• 34:13Speaker 05

  Um, so, you know, having that many kids, having the bills run up, he attempted to reconcile his debts, but at the end of the day, when he passed away, he just wasn't able to do so. So he ended up like Jefferson, like, hey, I'm out.

• 34:24Speaker 03

  See you later.

• 34:25Speaker 05

  See ya. This is somebody else's problem now.

• 34:27Speaker 03

  All right. So who, who's next?

• 34:31Speaker 05

  Okay, so, um.

• 34:33Speaker 04

  One of my favorites.

• 34:34Speaker 05

  Yeah, this, this one's kinda hard to believe, but, um, and some people consider him the greatest American president. So, but even Honest Abe, the great emancipator, uh, he was not immune from financial difficulties. Our 16th president, he's regarded as one of our nation's best leaders, but he truly was not a savvy businessman.

• 34:52Speaker 03

  Right.

• 34:53Speaker 05

  He had, he had financial debt that took him several years to, to reconcile. It all started, he, he worked for a store owner and the store owner said, hey, we're going to expand the business. We're going to make you a manager. Unfortunately, Abe Lincoln did not know that this business was in financial difficulty. So it ended up going out of business and left him looking for work. And then about a year later, he partnered with a friend to buy a store in Illinois. Abe Lincoln had no money, so he had to, he took out loans. He had to borrow the money to finance the venture. And then when it was not successful, debt mounted. What made it worse for him is that then the business partner died, leaving him with all of the debt. Now Abe Lincoln had avenues that he could have used, like bankruptcy in order to, to get out, but

• 35:37Speaker 05

  he said, no, he was going to handle the debt and that's what he did. Over several years, he paid the debt off and then eight years later, he was elected to Congress.

• 35:45Speaker 03

  There you go.

• 35:46Speaker 05

  Rest is history.

• 35:47Speaker 03

  So, so two things that are popping out to my mind when we're sharing these stories so far. A lot of these stories sound a little bit like the Oregon Trail. Like they're doing fine and then business owner gets dysentery.

• 35:58Speaker 05

  Yes.

• 35:58Speaker 03

  Dies and so then the business went, so then that's one thing that I just thought about. The other thing is Honest Abe, it reminds me of like when Dumb and Dumber and they keep all the Post-it notes of IOUs.

• 36:10Speaker 05

  Yes.

• 36:10Speaker 03

  It's like, yeah, I guys, I owe you guys millions of dollars, but

• 36:14Speaker 05

  Yeah.

• 36:14Speaker 03

  It's all on the Post-it notes accounted for. Honest Abe.

• 36:17Speaker 05

  You're gonna want to keep that one.

• 36:18Speaker 03

  Yeah. Yeah. Lambo, 250. My one hole on that one.

• 36:22Speaker 05

  Yeah. It was, we talked on the show before, like some of them have co-signed on loans for friends.

• 36:26Speaker 03

  Yeah.

• 36:26Speaker 05

  That not always a good idea.

• 36:28Speaker 03

  Going back to the foundation of the history of our nation.

• 36:31Speaker 05

  Yes.

• 36:33Speaker 03

  Co-signing loans does not appear to be a good idea.

• 36:35Speaker 05

  Not a good idea. Not a good idea.

• 36:37Speaker 03

  And 10 children, 10 children, you can have workers for your farm, but they're also expensive.

• 36:42Speaker 05

  That's, that's a whole other deal. Like 10 kids.

• 36:46Speaker 03

  Yep.

• 36:46Speaker 05

  Whoa.

• 36:47Speaker 03

  Yep.

• 36:47Speaker 05

  Slow down William Henry Harrison. Yeah. Let's take a new hobby.

• 36:51Speaker 03

  Who's, who's next?

• 36:52Speaker 05

  Okay. And this, this president was actually shortly after Abe Lincoln. It's our civil war hero, Ulysses S. Grant. He became our nation's 18th president and it's actually, it's interesting because Early in his life, his lack of business acumen is what led his dad to send him to West Point. He could tell he doesn't have business sense. He needs to get into another profession. But even at West Point, you know, you think of Elise S. Grant, he, you know, he's one of the great historical figures. He's one of the great generals in our army. But when he was at West Point, he graduated near the bottom of his class. So it just goes to show, just because you're not good in school, doesn't mean you're not going to do something fantastic in life. For Grant, his financial problems didn't actually occur until he left the presidency in 1877.

• 37:37Speaker 05

  After his presidency, him and his wife went on a world tour. And during that time, he just, he neglected his finances. And when he came back, his son talked him into partnering with a business associate. So he did.

• 37:49Speaker 03

  Buck had a good idea.

• 37:51Speaker 05

  Yeah.

• 37:51Speaker 03

  Son, son, Buck. Hey, pops.

• 37:55Speaker 05

  Hey, Dad.

• 37:55Speaker 03

  I have an idea for your money.

• 37:56Speaker 05

  Dad, if I got a deal for you. But unfortunately, this business associate, he embezzled the funds. He was caught and sent to jail. So that left Grant completely broke. So he's desperate for money, but he did, he decided to write his memoirs. And with the help of his friend and a publisher who you may have heard of, Mark Twain.

• 38:16Speaker 03

  Mr. Mark Twain.

• 38:18Speaker 05

  Grant became a bestselling author because of that.

• 38:21Speaker 03

  Boom.

• 38:21Speaker 05

  And so, so when he, he died shortly thereafter, his memoirs came out. But his family inherited $450,000 in royalties, which by today's number would be about 14 and a half.

• 38:31Speaker 03

  Wow, that's awesome. That's cool.

• 38:33Speaker 04

  He died at 63. That's pretty young.

• 38:35Speaker 05

  Yeah. And, you know, my family doesn't have to worry about getting any money from my memoirs, you know?

• 38:39Speaker 03

  You just tell them straight up right now, don't worry about anything coming your way. Let's take a quick break. We got a couple other presidents we'll talk about when we come back.

• 38:45Speaker 00

  Have you been putting off your finances? Seize the day. Call the Money Wise office at 661-847-1000. Or email [email protected] for more information.

• 39:03Speaker 03

  Welcome back. This is the Money Wise Radio Show, Taking Care of Business Friday, which is a segment that will never be carried out without thinking of our Mr. Gero Ellis. We miss you, we love you. Prayers and thoughts, and keep fighting. And so, yeah, we're going to finish up our discussion here, due to the nation's mourning this week of our 100-year-old President Carter passing. We've been talking about some of the Presidents of the past that had financial constraints and issues, which it's glad that, you know, they weren't in charge of like, the biggest nation in the world or anything like that.

• 39:43Speaker 05

  Yeah, exactly. They didn't have an important job, did they?

• 39:44Speaker 03

  Yeah, they made really great business decisions. Yeah, so, yeah, let's continue this conversation. Who's next?

• 39:50Speaker 05

  Sure. We have a couple more. So, we've talked about Thomas Jefferson, James Monroe, William Henry Harrison, even Abe Lincoln, and Ulysses S. Grant. And the next, we'll have two more. The next President that had some financial difficulties was William McKinley. He was only a one-term President from 1897 to 1901. You know why?

• 40:05Speaker 03

  Why?

• 40:06Speaker 05

  He was assassinated, so he couldn't run a second term.

• 40:08Speaker 03

  Yikes. Didn't know that.

• 40:09Speaker 05

  Yeah. He was our nation's 25th President, and he encountered problems just like Thomas Jefferson by co-signing on a loan for a friend. Now, here's the deal. He believed the amount to be $17,000, which would be equivalent to about $600,000 today. But, once the friend filed bankruptcy, then McKinley had major problems. For one, not only was he the Governor of Ohio at the time, which was quite a scandal, but the loan for which he co-signed was not for $17,000, but actually $130,000. So, it was about a $3.5 million loan by today's money, yeah. To make matters worse, he had no choice but to declare bankruptcy. He originally was going to resign the governorship, sell off his property, and return to the law profession, except what happened is, a bunch of wealthy supporters didn't want him to do that, so

• 40:53Speaker 05

  they rallied around McKinley, raised enough money to pay off his debt. From there, he ran for office again. Ohio voters didn't seem to care, because he was re-elected for a second term, and then shortly thereafter, became President of the United States. So, not too bad.

• 41:07Speaker 03

  I love it every time I hear somebody say, "declare bankruptcy," because I cannot get the office out of my mind. Do you remember when Michael Scott declared bankruptcy?

• 41:16Speaker 05

  Oh, oh, the show. Yes.

• 41:18Speaker 03

  Yeah, the show, The Office.

• 41:20Speaker 05

  He just yelled it or something.

• 41:21Speaker 03

  Yeah, cuz he's talking to Oscar, the finance guy in the office. And he's like, I declare bankruptcy. And then he goes, he goes, you know, that's not how it works, right? You can't just, he was, you can't just say it. He goes, I didn't say it. I declared it.

• 41:37Speaker 05

  Bankruptcy. Nice. That's it.

• 41:41Speaker 03

  So if, if you ever find yourself in a point in life, and it happens, by the way, I mean, one of the things, we should actually have a, a great show soon on bankruptcy because there is a, a history of bankruptcy and where it comes out of, and there's a lot of shame and guilt. And I'm not saying that there's not obviously some failures at some point that leads anybody to bankruptcy, but a lot of times people don't even realize it's, it's like the legal way to get out of a financial bind. A company restructures their debts and, and it was a way for it to be done legally where you don't have people killing each other, creditors and debtors and stuff like that. And like, there's a whole history of it. And our country chose to create a legal system of bankruptcy instead of

• 42:22Speaker 03

  having families kill other families because of a debt owed or businesses and creditors and debtor. So there's a whole history of it, but anyways, I just.

• 42:30Speaker 05

  And sometimes the reorganization results in individuals then, um, becoming successful.

• 42:35Speaker 03

  Right.

• 42:35Speaker 05

  More successful than they were before.

• 42:36Speaker 03

  Yeah, I mean, you, you come up with a, a, something that everybody agrees on, even though there's loss and there's, yeah, unfortunately, you know, obviously some criteria wasn't met.

• 42:45Speaker 05

  Yes.

• 42:45Speaker 03

  In contracts and debts, but it's a restructuring to try to make it successful and to move it forward as healthy as possible.

• 42:51Speaker 05

  Exactly.

• 42:52Speaker 03

  There's different levels of bankruptcy. There's

• 42:54Speaker 05

  Exactly.

• 42:54Speaker 03

  All kinds of things to it. But anyways, let's keep going.

• 42:57Speaker 05

  Let's do the last one here. Uh, it's our president from 1945 to 1953, give them hell, Harry. Harry Truman. He was our nation's 33rd president. He was actually one of the poorest to ever reach the White House. His financial difficulties began early in life. He took his family inheritance and he invested in a zinc company that went belly up. So his inheritance was gone. He then partnered on a clothing store, which only lasted a few years. Now Truman's business partner declared bankruptcy, but like Abraham Lincoln, Harry Truman has said, I am going to, uh, Take care of this debt myself. So he did. Um, he paid that debt for many years, even when he was president. In fact, during his term as president, they doubled the presidential salary to help him. And then in 1958, when he was out of office, again, he was having financial difficulties.

• 43:41Speaker 05

  Uh, and that's when the presidential pension was created again to help Harry Truman. Um, one thing to his credit in his post presidential life, he did not, he had opportunities and did not take advantage of some high paying corporate jobs. He thought using his name was beneath, below the office of the president. So you see former presidents now going out on the, on the speaking circuit and making millions of dollars. He thought that was below the office.

• 44:03Speaker 03

  He thought it was below the office, but he set up lifelong payment stream for himself in the form of a pension.

• 44:08Speaker 05

  Yes. Okay. No, he didn't set up, they set it up for him. Yeah. Yeah. They, they set it for him. I'm sure he was in favor as I would be, you know? Um, and then one thing he did towards the end of his life, uh, after his presidential career is that he did sign for his memoirs on his book. He earned an estimated $600,000, about $7 million today that was paid out over several years. But by the time of his death in 1972, he was estimated to be a net worth of considerably below $1 million. So he somehow never really managed money at any point in his life. So, uh, but again, you know, we think of them as great Americans and they are, but they're just like me and you. Yep. Sometimes they can't handle their finances.

• 44:47Speaker 03

  Yeah. If only they would have had a podcast to listen to, to, you know.

• 44:51Speaker 05

  Abe Lincoln would have never gotten in that trouble.

• 44:53Speaker 03

  Yeah.

• 44:54Speaker 05

  Had he listened to Money Wise.

• 44:55Speaker 03

  That's right. Who would invest in a zinc company?

• 44:57Speaker 05

  I know.

• 44:59Speaker 03

  Come on.

• 44:59Speaker 05

  I know.

• 45:01Speaker 03

  Anyways, uh, so the big takeaway I take from this here is, uh, is we have a long, rich history. Bankruptcy's been around a long time.

• 45:07Speaker 05

  Yeah.

• 45:08Speaker 03

  And do not co-sign on a loan unless you're ready to.

• 45:12Speaker 05

  Yeah.

• 45:13Speaker 03

  Put yourself in financial troubles.

• 45:14Speaker 05

  Don't help your buddies.

• 45:15Speaker 03

  There you go. You know, be careful. And I'm not saying never do it because I know people do, and it doesn't always turn into a disaster. But a lot of these stories were based around a co-signing. Uh, we did have a message come in. We'll cover this before we get out of here. Do you happen to know how old Bush was when he passed? I know he had to be close to 100. I know Reagan was in his 90s. Great to hear you guys. Thanks for the comment. Bush was the ripe old age of 94 when he left us. Reagan, 93, and Mr. Carter, the only president to make it to the big 100 spot. 100. Nice. So hopefully you guys will have a great weekend. You got some great sports coming up. If you're a Supercross motorcycle racer fan, get on there, watch A1. Ohio State, baby. Ohio State. Uh oh, we're throwing out some numbers. Okay.

• 45:58Speaker 03

  Enjoy your weekend. Most of all, be smart, be safe, be money wise.

• 46:05Speaker 02

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