11/21/24 401k Changes, Sports Jock Tax, and Building Your Nest Egg

The Moneywise Radio Show and Podcast Thursday, November 21st 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

• 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?

• 0:30Speaker 02

  Securities offered through S E F Securities, Inc., member FINRA, SIPC. Investment advisory services offered through S E F Investment Advisors, Inc., S E F 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

  Welcome, welcome, welcome to the Thursday edition of the flagship Money Wise Show.

• 0:53Speaker 03

  Right here on ESPN Radio. Welcome to the Money Wise Show. We're live from padded radio room off Stockdale Highway. ESPN, Bakersfield, 1230 AM, 101.1 FM, always streaming live, MoneyWiseGuys.com on the old interwebs, World Wide Web.

• 1:13Speaker 03

  Who still calls it the World Wide Web?

• 1:15Speaker 00

  I still laugh when I hear commercials that say WWW.

• 1:19Speaker 03

  WWW, dude. Backslash, HTTPS.

• 1:23Speaker 04

  That's when you know you're old.

• 1:24Speaker 03

  When you still have an AOL email address.

• 1:28Speaker 04

  Yep.

• 1:29Speaker 03

  To any of our listeners out there with an AOL address, get with the times.

• 1:32Speaker 00

  Hotmail.

• 1:34Speaker 03

  My wife still has a Hotmail address. I keep trying to tell her, no, get rid of it. No, she's had it since high school.

• 1:40Speaker 00

  Good grief.

• 1:42Speaker 03

  Welcome to the show. I'm your host, Justin Leland. Sitting here with...

• 1:45Speaker 04

  Frank Lee.

• 1:46Speaker 03

  Frank.

• 1:48Speaker 03

  Frank the Tank.

• 1:48Speaker 00

  I think about him all the time now because I catch the host saying, frankly.

• 1:53Speaker 03

  Frankly.

• 1:53Speaker 00

  I'm like, frankly, oh, it's Frank Lee.

• 1:56Speaker 03

  It is Frank Lee.

• 1:57Speaker 04

  Yep, it is.

• 1:59Speaker 03

  Lisa's name's not Shirley.

• 2:03Speaker 00

  Wow. What a way to start the show frankly.

• 2:07Speaker 03

  Jeez, jeez. I know. Hey, if you'd like to join us on the show, please text into the show.

• 2:15Speaker 00

  Yes, please.

• 2:16Speaker 03

  Please, we need you. 661-396-1000. Call or text into the show anytime. We can get to those questions on air when we get back. And we did get a couple of questions. We'll get to those here in just a quick moment. But I want to give a quick shout out to my co-host here, Frank. Frankly, kicked my butt.

• 2:39Speaker 00

  Oh, fantasy.

• 2:40Speaker 03

  Fantasy football over the weekend.

• 2:42Speaker 00

  He's been on fire, man.

• 2:43Speaker 04

  I have not checked.

• 2:44Speaker 03

  Yeah.

• 2:44Speaker 00

  See, I hate it when they do that.

• 2:46Speaker 03

  Yeah. I didn't even check my team. And oh, yeah.

• 2:49Speaker 00

  Put my roster in.

• 2:49Speaker 03

  I obliterated you, but I never looked at it once.

• 2:52Speaker 00

  Oh, did I?

• 2:53Speaker 03

  Oh, did I?

• 2:53Speaker 00

  I beat you?

• 2:54Speaker 03

  Did I beat you by 67 points?

• 2:56Speaker 00

  And never even had to do anything.

• 2:57Speaker 03

  Oh, and I had three people that were out and injured.

• 3:01Speaker 04

  That's funny.

• 3:02Speaker 03

  Good grief.

• 3:03Speaker 04

  I know I'm against Dustin.

• 3:04Speaker 03

  I think I'm up against Latroy this week. I think that's a goodbye.

• 3:07Speaker 00

  If you can't beat Latroy, man.

• 3:08Speaker 03

  That's a goodbye week.

• 3:09Speaker 00

  Just let that one go.

• 3:12Speaker 03

  I need a bye week. I need to win.

• 3:14Speaker 04

  See. Oh, nice.

• 3:16Speaker 03

  So, as people know, I am a member of the downtown Bakersfield Rotary Club. And past president. Gero was a past president as well. We've always been very in tune with what's going on with the Rotary Club of Bakersfield. And today was our meeting, and I actually, I want to say something really quick. This is kind of off script, so Stephen, you know, just be ready.

• 3:36Speaker 00

  Okay.

• 3:39Speaker 03

  No, great, great meeting today. And as a matter of fact, our speaker today was the new head basketball coach for the women's runners, Cal State Bakersfield. Ari Weidman. She is a dynamo. She is, I, rarely do I go to one of these meetings and I come out like energized, like, hey, I'm ready to go. She was dynamic. She was very like outspoken about, hey, we, this is what we're trying to accomplish with our team. What we're trying to do on the X's and O's for basketball, but beyond that, I'm trying to train these women to be citizens and like, just.

• 4:20Speaker 03

  Right? They're working to win. That's her motto. Work to win and they're putting in the work. So if you have a chance and if you're listening, we are on ESPN radio, right? So I mean, we got a lot of sports fans listening in. If you're a sports fan, head down to the Icardo Center tomorrow. They're actually playing San Diego State. That's a pretty rough draw, right? San Diego State's not a slouch when it comes to women's basketball. Pretty tough draw, but they're playing here at home, Icardo Center tomorrow night, Friday night. Go get yourself some tickets. I think this is going to be a really fun team to watch for the next two, three, four years. They're trying to turn around the program and right now they're 0-1-4, but it's not in the division yet. They're not in the conference yet. So

• 5:04Speaker 03

  they were playing some like Utah State, San Diego State. I mean, they're playing some pretty tough, tough teams. But when they get into the Mountain West, I think it's going to be a little bit, they're going to start getting some teams that they can play.

• 5:17Speaker 04

  Feels like a Coach Carter type of vibe.

• 5:19Speaker 03

  Oh, yes. Yes, very much so. And they're just, yeah, it was pretty motivating. And she's just, she's a young woman. She's 32 years old and she's just fired up to get these girls to play some basketball. So go out there and watch them. It's going to be a fun, fun couple of years, I think, watching this team grow under that tutelage. So shout out to Ari Weidman. Good job. And we got to get her on the show at some point when we can. Yeah, just look her up. Yeah.

• 5:47Speaker 04

  We're all going to feel energized.

• 5:48Speaker 03

  Yes. We can just leave the mics to her and just let her go. You got the hour. Just go for it. And it would be enthralling. It would be a great show. With that, what's going on in the markets today there, Frank? We got some news out from the jobless claims this morning and we're getting some more numbers tomorrow, but what's going on in the markets?

• 6:08Speaker 04

  Yeah, overall, I mean, the markets had a good day. Dow up about 100 basis points. S and P up about 50. Nasdaq just shy about 3.

• 6:17Speaker 03

  Gotcha.

• 6:18Speaker 04

  But as far as numbers go, the US economic data, we had the initial jobless claims that came out.

• 6:25Speaker 03

  And I guess they went, they went down a little bit.

• 6:28Speaker 04

  They went down. Yes, exactly. So it's good. Lower than expectation came out about 213 as actual estimate was about 220.

• 6:38Speaker 03

  Yeah, and so what that's going and what we're seeing on the trend on that on a week to week basics basis, we're seeing, you know, the jobless claims coming in. And the trend for the past seven, eight, nine months has been trending in an upward direction.

• 6:55Speaker 04

  Exactly.

• 6:56Speaker 03

  Right, and what that means is that when somebody gets laid off or chooses to leave an employer but doesn't have another landing spot right away. What that means is that it's taking longer for those individuals to then find work. Right, so the trending upward on that is a sign of a weakening labor market, but it's still in good shape. I mean, 200,000 jobless per week when we're creating about 200,000 jobs a month or more, that's actually pretty good. The unemployment rate's still hovering, what, 4.2, 4.3, somewhere in there?

• 7:33Speaker 04

  Yeah.

• 7:34Speaker 03

  So we won't see those numbers yet for November until the first week of December, so we're waiting for that. But, you know, we're seeing the trends are kind of working in a kind of a softening labor market, which is, you know, bad for you if you're a worker, but actually good, I guess, for stocks and the economy, because it also gives us a little bit of an ability for the Fed to start staying on course with their lowering of interest rates and things like that, that, hey, the economy is doing exactly what we had expected it to do by lowering interest rates. And we're doing that, and we're seeing the fruits of our labor, and it's taking hold.

• 8:10Speaker 03

  So I think, you know, we'll see as the next few months roll out and see what other policies come out, but for right now, the Fed is doing, I think, a bang-up job of trying to thread this needle when it comes to the overall economy.

• 8:28Speaker 04

  Yeah, I mean, you gotta give Jerome credit where credit's due.

• 8:31Speaker 03

  Gotta give Jay Powell some credit, and the other 12 Fed governors. You know, it's not an easy job. It's a thankless job, because you're always on somebody's crap list, let's put it that way. Whether you raise rates or lower rates, somebody's gonna get mad. At you for some reason, right? So being apolitical and out of the political realm and actually kind of looking at the data and doing what they're doing. I find that they're actually doing a pretty decent job. So with some really difficult headwinds and things like that that have been coming across. So it's been very difficult. So for the markets to, you know, this is the biggest jump for the Dow, I think, since November 6th, the day or the day after the election.

• 9:17Speaker 03

  We had the Trump bump and kind of traded a little bit sideways from there, came down a little bit, came back, and then we have another jump today. I think that kind of portends, you know, looking at the economy as a whole, you know, people getting out of cash into stocks. Rotating out of short-term bonds, money markets and things like that, getting into equities. And so that's what you're kind of seeing right now. So we'll see what happens over the next few months and such, but yeah, that's where we're at. As far as, we did get a couple of messages. First one we got late yesterday, right before we went off the air, so we couldn't really get to it, but the question here is, you got it there, Frank? I got it.

• 10:02Speaker 03

  Says here, can Fidelity automatically move you into a target date fund if the current fund you are in is no longer being offered? This happened to me recently without my knowledge in my company-sponsored 401k plan.

• 10:18Speaker 03

  I can answer that. The answer to that is yes, and you were most likely notified. You just didn't know you were notified. Anytime that there's a change in the 401k where a fund is being taken away, or one is being added, or you're being moved from one to another, there's what's known as a disclosure or notice that gets sent out to you either via email, snail mail, or any other number of ways it gets to you. And then there's also an annual disclosure that talks about what's known as a QDIA. That's a qualified default investment action in a 401k. Most of this is stuff that everybody throws away.

• 11:01Speaker 03

  So you get this stuff in the mail, or you get it in your inbox from Fidelity, you look at it, I don't know what this means, you immediately trash it. Right? That was your disclosure. That was your notice saying, hey, by the way, this fund is no longer offered. And you're going to be going into this qualified default fund. So I would find it very difficult for Fidelity to make that move unilaterally without having some form of disclosure. You might not have known it and you might not have seen it personally, or you might not have known what it was, but you probably did receive it. But either way, the answer to that question is yes, if there is a fund that is no longer

• 11:41Speaker 03

  being offered in that 401k, the advisor or the 401k provider, the record keeper can map that over, those funds over from that mutual fund into a like fund or a similar fund or something to that effect that allows, and they do have discretion to do those things when one fund becomes unavailable, right? And so that is, that is legal to do that.

• 12:10Speaker 04

  But it can't be a totally complete different asset.

• 12:14Speaker 03

  Yeah, so, yeah, so it would be very difficult for them to, let's say you were in a, let's say you were in a very specialty type of a fund, like a health services mutual fund or something, very few 401ks offer these kind of specialty things. But let's say that they were getting rid of the healthcare specialty fund and they were replacing it with, you know, a bond fund or something like an international bond fund. Well, first off, that would be very difficult to do because it's, they're not like funds. They don't even have like, they're not even invested in the same types of things, right?

• 12:55Speaker 04

  Same industry.

• 12:56Speaker 03

  Yeah, so if they were to go and say, look, we're no longer going to be offering this healthcare services, you know, specialty fund with these healthcare companies like Pfizer and all this other stuff, but we're going to replace it with, let's say, a small cap fund. Okay, that is similar, you know, ish when it comes to the asset allocation, but going from a stock fund to a pure bond fund or a stable value money market or something like that, it'd be pretty difficult to do that. But yeah, so would be not.

• 13:28Speaker 04

  Learn something every day.

• 13:29Speaker 03

  Yeah.

• 13:32Speaker 03

  So we got another question here and I'm gonna let Frank answer this, but before we get to it, I'm gonna, I'm gonna read the question. We're gonna go to a break. Frank is gonna pull out his abacus and he's gonna do all the math for us and he's gonna come back with an answer, but here's the question. Hey, money wisers, new to trading and was hoping you can share some steps for new traders to take to avoid some common mistakes like trading too often or letting emotions like fear and greed influence the decisions. Your take when we come back.

• 14:05Speaker 00

  Don't forget, Money Wise is more than a radio show. We're an independently owned, local wealth management firm with 60-plus years of collective experience. Our financial advisors are here to help you, Kern County. Together, let's be smart, be safe, be money wise.

• 14:37Speaker 03

  I'm just having questions right now. Steven, I'm questioning, you okay? Is everything okay in there?

• 14:45Speaker 00

  Oh, man. I watched Blues Brothers last night, so it's been stuck in my head.

• 14:49Speaker 03

  You doing okay?

• 14:51Speaker 00

  I'm great.

• 14:52Speaker 03

  Alright.

• 14:53Speaker 00

  And I did just talk to the coach, so.

• 14:56Speaker 03

  Oh, good.

• 14:57Speaker 00

  She's gonna come on early December.

• 14:58Speaker 03

  That'll be great. That'll be great.

• 15:00Speaker 04

  Nice.

• 15:01Speaker 03

  Yeah, she's, uh, she's awesome. Also, happy birthday to Goldie Hawn.

• 15:05Speaker 00

  Dude, that made me feel so old.

• 15:08Speaker 03

  I know, right? She's 79.

• 15:11Speaker 04

  Goldie Hawn?

• 15:12Speaker 03

  Goldie Hawn is 79 years old and I'm like, what? That's not possible.

• 15:17Speaker 00

  I had a crush on her when I was younger and now she's like 80 years old.

• 15:21Speaker 03

  You know another one that makes me feel really old? Okay. You wanna know another one that makes me feel ancient?

• 15:28Speaker 03

  Her birthday is today, Bjork.

• 15:30Speaker 00

  Bjork.

• 15:30Speaker 03

  Bjork is 59 and I'm like, that's, that doesn't compute.

• 15:34Speaker 00

  She looked like she was 16 when she was coming out and...

• 15:37Speaker 03

  She still looks like she's 16.

• 15:39Speaker 00

  I bet.

• 15:40Speaker 04

  I gotta look up these celebrities.

• 15:43Speaker 03

  Yeah, the Gen Z guy over here.

• 15:48Speaker 04

  Frankly.

• 15:48Speaker 03

  And Ken Griffey is 55.

• 15:51Speaker 00

  Yeah, and that's junior.

• 15:52Speaker 03

  That's junior, that's junior.

• 15:55Speaker 03

  I met Senior once, he was a good guy, Ken Griffey Senior.

• 15:58Speaker 00

  Didn't he coach here?

• 15:58Speaker 03

  He coached here for a little while, yeah. Michael Strahan is 53, so happy birthday to all those celebrities, but I'm not that far behind you there, Strahan. Not that far. So, yeah, happy birthday to Bjork and Goldie Hawn, making me feel ancient in the fact that...

• 16:18Speaker 00

  So we'll go back to this last text before Frank busts it out, but says, "Hey, money wisers, new to trading and was hoping you can share some steps new for new traders can take to avoid common mistakes like trading too often or letting emotions like fear and greed influence their decisions."

• 16:40Speaker 03

  Frank, he brought out the abacus, he brought out all of his charts and everything else to give us a breakdown of trading, so hit it. So, let's see what we got.

• 16:52Speaker 04

  Trading is definitely a beast in its own. I mean, that's how I really started out, that's how I got into investments, really, it's just doing my own day trading and everything, but before we get into that disclaimer, that's not what we...

• 17:06Speaker 03

  Not what we recommend.

• 17:07Speaker 04

  Not what we recommend, not part of our values as far as MoneyWise goes.

• 17:13Speaker 03

  But we also understand that there's people out there that are...

• 17:15Speaker 04

  Right.

• 17:17Speaker 03

  You know, minute by minute staring at their Schwab account.

• 17:19Speaker 04

  Exactly, exactly, and if you have the time and if you have the capital, and we're talking about a small amount of capital.

• 17:26Speaker 03

  Yeah, you're not putting your life on the line here.

• 17:28Speaker 04

  Yes, that would be one of my tips is to... Trade with something that you're comfortable losing. And we're not talking about 20% or 30% of your

• 17:39Speaker 03

  Net worth.

• 17:40Speaker 04

  Net worth or anything like that. We're talking miniscule.

• 17:43Speaker 03

  And we're also definitely not talking your IRAs, your 401Ks.

• 17:47Speaker 04

  Exactly.

• 17:47Speaker 03

  Retirement plans that are there to sustain you long into retirement. Right. So when we're talking trading, this is literally kind of your gambling fun money.

• 17:59Speaker 04

  Right.

• 17:59Speaker 03

  You are speculative money that you're willing to lose.

• 18:02Speaker 04

  Right. Getting into the technicals because that's part of what I do is I was very technical.

• 18:09Speaker 04

  My method of trading was technical analysis. So viewing charts, viewing the volumes, price actions. So going back to that first advice is only trading the amount that you're comfortable losing. So for me, if my net worth was what like 50,000, I just like do 1% of it.

• 18:29Speaker 03

  Yeah. So you're like a 500 or 5, you know, something.

• 18:32Speaker 04

  Exactly.

• 18:32Speaker 03

  Yeah. You're not going crazy.

• 18:34Speaker 04

  One, one to 5%. So just because you rather have the, the, the thought of like, oh, like, sure, I made a little bit of money in the trade rather than like, oh my God, I lost, I blew up my account.

• 18:45Speaker 03

  Right.

• 18:46Speaker 04

  Because 90% of the time, new traders will blow up their account, meaning you lose everything.

• 18:51Speaker 03

  And so, you know, going back to like the question here is, you know, what kind of things can he do to, or he or she to do to avoid those common mistakes, you know, trading too often. The first one right there is the trading too often.

• 19:08Speaker 04

  Right.

• 19:08Speaker 03

  Right.

• 19:10Speaker 03

  What is your experience with that?

• 19:12Speaker 04

  I, I think when it comes to trading too often,

• 19:17Speaker 04

  there are certain, there's a term called revenge trading. I think that's when people can really get into the weed of things and just let loose and it ties in with emotion.

• 19:28Speaker 03

  Right. The fear and greed piece of it. Right.

• 19:30Speaker 04

  Exactly.

• 19:30Speaker 03

  Oh, I'm going to get them back because.

• 19:31Speaker 04

  Exactly. If you're down 5% a day, leave it at that, step away, reassess what's going on and then, and then come back in, but don't try to think that, oh, like I'm down 5%. I need to make.

• 19:46Speaker 03

  That back.

• 19:47Speaker 04

  I need to make that back today or?

• 19:49Speaker 03

  Well, and that kind of goes back into kind of similar kind of question of like a different thing rather than trading is like gambling. So the the gambler's fallacy, right of like, oh, my my luck's about to turn around. Right? So it's almost very similar in some ways when you're talking about day trading versus somebody who's maybe going to the craps table.

• 20:11Speaker 04

  Right.

• 20:11Speaker 03

  And like, oh, I lost today, but I'm I'll make it back tomorrow.

• 20:15Speaker 04

  Right.

• 20:15Speaker 03

  There's the gambler's fallacy there, right?

• 20:17Speaker 04

  Exactly. And so for me, when I was day trading, I I figured that that was an issue for me is that I was revenge trading, trying to get back what I lost. And so in order for me to

• 20:32Speaker 04

  not trade as often, I was I had to be more strategic with what I was trading. So that's when I moved into like swing trading, lessen my overall trades per day. And then just making sure that however much I'm I'm trading, it's a small amount. Again, going back to the whole 1% per trade or?

• 20:54Speaker 03

  And I would I would add to that also, you know, if you're starting with, let's say, a thousand dollars. And and that's your starting point. If the next day you're at nine nine hundred and fifty dollars, well, that's your new starting point.

• 21:09Speaker 04

  Yep.

• 21:09Speaker 03

  Right? We as humans, we tend to have this idea of like the high water mark is I started with a thousand dollars. I better get back to that. Well, you might have had a bad day and you're at nine hundred dollars. You lost 10%. You're not going to make that all up in one day on one trade. Like, you have to realize that my new starting point is 900 or 950 or whatever that number is. And that becomes your new that becomes your new high water mark.

• 21:37Speaker 04

  Mm hmm.

• 21:37Speaker 03

  Right? Fear and greed, obviously, as well. You got to make sure you're not paying into that. Thanks for that. But I, you know, one of the things I'm an academic when it comes to this. I'm not a big trader. I don't go in and do the day trading and any of the things like that, because I look at it, you know, academically, and I say, okay, in any given day, if you look at the Dow or the S and P 500. A Monday to a Tuesday to a Wednesday, there's a 50/50 chance that the market's going to be up or the market's going to be down. 50/50, it's a flip of the coin, right? If I wait a week, it's about a 52 to 48, right? 52% up, 48% down, give or take. So that's on a weekly basis.

• 22:21Speaker 03

  We start looking at a month, or a quarter, or a year, or five years, or 10 years. Now all of a sudden, the percentages are in my favor.

• 22:29Speaker 04

  Yeah.

• 22:30Speaker 03

  Right? The longer I hold on to that asset, and the less trading that I do, the more the probability is that I'm going to be successful, right? So if we're doing it for day trading purposes, you're going to be up and down every other day. That's just the way it's going to be, right?

• 22:48Speaker 04

  Yeah.

• 22:48Speaker 03

  But if you're holding on to an asset for a longer period of time, say a month, or a quarter, or a year, your chances of success are quite a bit better. This is why I'm not a big day trader, because it's too much like, it's too much like going to Vegas and rolling it at the craps table.

• 23:04Speaker 04

  Yeah, and it's kind of easy to sort of compare yourself to other traders.

• 23:08Speaker 03

  Right.

• 23:08Speaker 04

  When you're seeing their win streaks, or their profits, and you're like, oh, I can do that. And then that's sort of...

• 23:14Speaker 03

  So when you see the YouTubers, do you realize that probably every single one of those YouTubers, they're only telling you about their successes? Very rarely do you see a YouTuber get on there and say, "Guess what? I screwed up."

• 23:28Speaker 04

  Yeah.

• 23:29Speaker 03

  That doesn't get clicks, that doesn't get views.

• 23:32Speaker 04

  Yeah.

• 23:32Speaker 03

  Right? So take that with a grain of salt as well. When you're looking at a TikTok video about a day trader, and they're talking about all the wins that they have, you got to dig a little deeper, because tell me about your losses. That'll tell me how good of an investor you are. If you can tell me your losses, you can tell me the ones that you made a mistake on, now we can have an open conversation.

• 23:54Speaker 04

  Yeah.

• 23:54Speaker 03

  Right?

• 23:54Speaker 04

  Yeah, I would always, I would always err on the side of caution when it comes to YouTube videos.

• 23:59Speaker 03

  Oh, yeah.

• 23:59Speaker 04

  Because, right, what's their ultimate agenda?

• 24:02Speaker 03

  It did help me figure out how to fix my car's window when it came off the track.

• 24:08Speaker 00

  That's way different when you're dealing with money with your family finances.

• 24:15Speaker 03

  It was the family car. I needed to get the window back on track, so I had to pull off the door panel. It worked great. YouTube was fantastic.

• 24:23Speaker 00

  There's things for YouTube that are perfect.

• 24:25Speaker 04

  We're not saying YouTube in general is bad, just certain.

• 24:29Speaker 00

  TikTok is, yes.

• 24:30Speaker 03

  TikTok's pretty horrible.

• 24:32Speaker 04

  So that's our.

• 24:33Speaker 03

  I can't wait for Congress to ban that thing.

• 24:37Speaker 00

  I don't think that'll ever happen, but.

• 24:39Speaker 03

  I.

• 24:40Speaker 00

  And if it's not that, it'll be something else.

• 24:42Speaker 03

  It'll be something else.

• 24:43Speaker 04

  So you're saying we're not coming out with the Money Wise TikTok?

• 24:47Speaker 04

  We're not gonna, we're not gonna see Stephen dance?

• 24:50Speaker 00

  If you see me dance, it'll be the last time you see me.

• 24:54Speaker 03

  You ever seen the Seinfeld episode with Elaine? There's, there's Stephen.

• 24:58Speaker 00

  He's like, what's Seinfeld?

• 24:59Speaker 03

  What's Seinfeld? He's got all these old band references. What's going on? I don't get it.

• 25:03Speaker 00

  Over there looking up names. What, what is this? Who the hell is Goldie Hawn?

• 25:09Speaker 04

  He's looking at my search history.

• 25:10Speaker 03

  Oh geez. We're gonna take a break. We're, we're way off the rails. We need to take a break to recoup and regroup. So we'll take a break. We'll be right back.

• 25:18Speaker 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 and wherever you want.

• 25:33Speaker 03

  Now we're talking, Stephen.

• 25:37Speaker 03

  Welcome back.

• 25:41Speaker 03

  Welcome back to the Money Wise Show. I'm Justin here with Frank. We got a couple more questions coming through during the break here. So we're just gonna, we're just gonna roll with the questions today.

• 25:50Speaker 04

  I like that.

• 25:51Speaker 03

  This is gonna be a, you know, an Ask Me Anything. The Money Wise AMA.

• 25:56Speaker 00

  While educating Frank from these, these old people that we know about.

• 26:00Speaker 03

  Yeah, Tom Petty, you know, he probably never heard that song before. He probably doesn't even know what Mary Jane even stands for. Nope.

• 26:07Speaker 04

  Crickets, crickets.

• 26:11Speaker 03

  All right. So we got a question in here says, um, go ahead and read it there, Frank. As a veteran, what was it?

• 26:16Speaker 04

  Oh, yeah.

• 26:17Speaker 03

  Yeah.

• 26:18Speaker 04

  So as a veteran using a VA loan for a property, would a duplex be the best way to go in order to then qualify for an FHA loan? Thanks. Love the show, Izzy.

• 26:30Speaker 03

  I don't know if this is Izzy Pop or.

• 26:33Speaker 00

  It's Iggy.

• 26:33Speaker 03

  Iggy, but Iggy, but yeah, Izzy, Iggy.

• 26:38Speaker 03

  Um, this is a great question for Alan Maderos, right? I'm just gonna, I'm gonna, I'm gonna deflect this one because, you know, um, my wife is a veteran. We have, uh, partaken in the VA loan process. Um, I have also bought homes through the FHA process. Um, so I've done both. But the rules on both are different and I wouldn't even be able to begin to tell you the differences between the two and the similarities between the two. Cause you're talking two different, two different loan types. Um, VA has some very restrictive loan procedures, uh, when it comes to, uh, loaning on a property.

• 27:23Speaker 03

  Um, I don't know how.

• 27:26Speaker 00

  I did send the question over to our buddy Alan.

• 27:28Speaker 03

  Yeah.

• 27:29Speaker 00

  So if I get back, I will get back to Izzy.

• 27:32Speaker 03

  Yeah. So I, you know, this question, I would say, I don't know. I know how the VA works when it's a single family home. When you start breaking it down into a multi-family home, a duplex, a triplex, a quadplex, some of, some of those things. Does it still apply? And I don't know the answer to those questions. So Alan Maderos would be your best bet there. And, um, where is Alan's number? I had it right here. I know I had it. It was right here. Uh, give him a call, uh, give him a plug. He was on the show yesterday.

• 28:03Speaker 00

  496-9311.

• 28:06Speaker 03

  I have 324-2427 is the office number. Oh, you just gave it out.

• 28:10Speaker 00

  He's calling to his cell. He doesn't care.

• 28:12Speaker 03

  You just call him at home.

• 28:13Speaker 00

  He gave it out yesterday.

• 28:14Speaker 03

  Just get, just call him at home. Wait until about three in the morning and then ring him. He's still awake at 3:00 in the morning. He's waiting for the bond numbers to come out at 4:00 a.m.

• 28:26Speaker 00

  The rates to go down.

• 28:27Speaker 03

  He's waiting for the rates to go down so he can send out his emails. But yeah, he's a great guy. Great to answer those questions between FHA and VA. I wouldn't be able to answer that question for you, so I apologize. Izzy. Alright. Second question we got. What was the next one there?

• 28:46Speaker 04

  We got it right here.

• 28:46Speaker 03

  Alright.

• 28:47Speaker 04

  Do you have to file sports gambling winnings? If so, if so, how? It's under 10K and is it the same if you win in a different state?

• 28:59Speaker 03

  Great question.

• 29:02Speaker 00

  Grab Latroy?

• 29:02Speaker 03

  Yeah, grab Latroy. Here's the thought, and here's the situation. All income that you receive from any source, gambling, working,

• 29:16Speaker 03

  getting money as a rental income from rental properties, any money that you receive is going to wind up being taxable in some way, unless it's expressly said that it's not taxable. So yes, you do have to file any sports gambling winnings. Now, how much of that, that's a better question for a CPA or a tax professional, but the general rule here is if you have winnings, let's say you go to the sports book and you win, say, 1,500 bucks on, let's say the Lakers and Bronny in the G League beat the Cal State Bakersfield women's basketball team, and you bet.

• 29:59Speaker 00

  That won't happen.

• 30:00Speaker 03

  That won't happen. The girls team here at Cal State Bakersfield would beat the G League team any day of the week, especially if Bronny's playing.

• 30:09Speaker 03

  Isn't his nickname Bricky?

• 30:14Speaker 00

  Oh, these Laker fans are just gonna hate on you.

• 30:19Speaker 03

  Anyhow, so let's say you win 1,500 bucks. And you are with a certain sportsbook. You you you got it through Caesar's Palace or whatever sportsbook in Vegas. They're going to send you a what's known as a W two G. The W two G, the G stands for gambling winnings.

• 30:39Speaker 03

  Right? Any casino, any sportsbook, FanDuel, you know, any of those, you know, DraftKings, any place that does online or in-person sports gambling, if you have winnings, they're going to send you a W two G. Right? Now, can you also write off gambling losses? Yes, you can. The caveat here is if you go to Caesar's Palace and you win a bunch, you're gonna get the W two G. Are they keeping track of your losses? Heck, no, they are not. They're not giving you any kind of a receipt that you lost. It's your job. It is your job as the gambler to make maintain

• 31:22Speaker 03

  accurate records of your of your winnings and your losses. And that doesn't mean going through the casino and diving through the trash and finding other people's tickets that lost, right? But you have to keep an accurate record, right? So and not just like a handwritten note that you, oh, I gambled 1,500 bucks that the Clippers would beat the Grizzlies or whatever, right? No, you'd have to have an actual receipt that proves and shows that you did it. Then you might be able to cancel out some of the the gains from the the gambling winnings with some losses. But again, I'm not a CPA. I am not a tax professional. You are going to need to still talk to a tax professional about this, but generally speaking,

• 32:06Speaker 03

  those are the rules on a federal level. If you're in the state of California, you shouldn't be gambling anyways, right? Not allowed.

• 32:13Speaker 00

  You can gamble now.

• 32:14Speaker 03

  Yeah.

• 32:14Speaker 00

  I mean DraftKings is available here.

• 32:16Speaker 03

  Eh.

• 32:17Speaker 00

  What do you mean eh? There's like eight states and California isn't one of them.

• 32:21Speaker 03

  Yeah, true. But you still have to keep track of it.

• 32:25Speaker 00

  Oh, yeah.

• 32:25Speaker 03

  And it's in each state is going to be different, right? Texas is going to be different from Florida is different from Michigan is different, just like our regular state income taxes. California is going to be different than everybody else, right? So again, I'm not a tax professional.

• 32:39Speaker 00

  So say you were winning in whatever was under 10,000 in Vegas. Is that different in say Atlantic City?

• 32:50Speaker 03

  It is your state of residence.

• 32:52Speaker 00

  Okay.

• 32:52Speaker 03

  It's not where you actually won the.

• 32:55Speaker 00

  It's kind of same as the lottery.

• 32:56Speaker 03

  Right. So yeah, if I, if I bought a lottery ticket in Ohio before I jumped on a plane and flew back home, I'm not getting taxed in Ohio. I'm getting taxed in California for my winnings because I live in California. That's my residence. Right? So that's, that's the.

• 33:14Speaker 00

  That's different.

• 33:14Speaker 03

  Yeah.

• 33:15Speaker 00

  I had no idea about that either.

• 33:16Speaker 03

  Yeah.

• 33:17Speaker 00

  So if you, if you were to buy a lottery ticket out of state, say I was traveling and seeing my grandma in Louisiana, bought a lottery ticket, got home and oh, I won.

• 33:28Speaker 03

  Mm hmm.

• 33:29Speaker 00

  Would I turn that lottery ticket into the California one or I would mail it back to my grandma in Louisiana and say, hey, you won?

• 33:35Speaker 03

  You'd have to, you'd have to actually go. Yeah, you'd have, you'd have to go back or, you know, you claim the winnings from the state, from the organization that.

• 33:43Speaker 00

  That you won.

• 33:44Speaker 03

  That you won it from, right? So if it was like a Louisiana state only kind of a scratcher, then.

• 33:50Speaker 00

  Not like Powerball where it's.

• 33:51Speaker 03

  Right, where it's every state in the union or whatever, multiple states. If you won in Louisiana, a Louisiana state lottery, then you would have to file it with that organization. But then the tax forms that they're giving you, you're going to have to file and say, I'm a resident of the state of California, blah, blah, blah, blah, blah. There's the withholdings and okay, might as well. That $2 million ticket just became 500,000 real quick. Right?

• 34:15Speaker 03

  So that's, that's the only way that that winds up being different. And we've talked about this before and again, we're on ESPN. So the sports reasoning. If you are a professional athlete and you are actually competing across state lines, there is what's known as the professional, you know, the sportsman's tax, right? The jock tax. So if you're playing in New York City, you're going to pay New York State, New York City, New York County taxes for the games that you played in New York. But you play for the Dodgers and you live in Los Angeles, right? Well, you're going to pay for all the 82 game, 81 games that you play here in California, you're going to get taxed on that in California.

• 34:59Speaker 03

  And the games that you play away out of the state of California, you pay taxes in each of those different municipalities. So yes, that is the jack, that is the jock tax. So you will wind up getting hit, get hit with New York and Michigan and Florida and.

• 35:16Speaker 00

  Well, that we had a listener said, is it the same thing as like the NFL forcing people to play in other countries?

• 35:22Speaker 03

  Yeah. So.

• 35:23Speaker 00

  Is that a jock tax?

• 35:24Speaker 03

  No, that, that one's a little bit different. So I'm, I still would like to know exactly how that's done because if they're playing in Frankfurt, Germany, obviously Germany has their own tax structure and everything, but you are, you're a US citizen, you're not a citizen of Germany. I'd like to know if there's a CPA out there that knows this. My assumption is that similar to a businessman that does, you know, business overseas and everything and has some income from overseas, there's probably some taxes that are owed on that on the US level that are then remitted back to the country of origin, I believe.

• 36:03Speaker 04

  Would that, would that also apply to PGA, LPGA, like the golfers?

• 36:09Speaker 03

  It doesn't matter for the PGA because they all play under the banner of the Saudi government now. And so they just get Saudi money.

• 36:16Speaker 03

  I'm joking.

• 36:19Speaker 00

  Not really.

• 36:20Speaker 03

  Live golf.

• 36:21Speaker 00

  Yeah.

• 36:21Speaker 03

  Right?

• 36:22Speaker 00

  Yeah.

• 36:22Speaker 03

  So, um, yeah, I don't know how the, the international piece works, Stephen. That's a great question because I know how it works and maybe, well, how does it work for somebody who plays for the Toronto Blue Jays?

• 36:33Speaker 00

  The Raptors or yeah.

• 36:34Speaker 03

  Yeah. Right? So I, I don't know how the taxes work for, for.

• 36:39Speaker 00

  NFL players who play in international games are taxed at the rate of the country where the game is played. NFL players must still file a US federal income tax return to report and pay any US taxes as well.

• 36:56Speaker 03

  Wow.

• 36:58Speaker 03

  So it's a jock tax internationally as well. So just whatever you do, don't play in Norway or Sweden.

• 37:04Speaker 00

  They're working on it.

• 37:05Speaker 03

  Because 60% of it's going to go away. That game check's going to be gone. Yeah. No, it's, uh, that's a tough one, man. I, um, so yeah, as far as the gambling is concerned, or any of those types of things, you're going to want to make sure that you're keeping very good records of not just your winnings, but also your losses because you're going to want to be able to, you know, it, it kind of cancel those two things out and be able to say, hey, look, I gambled this much. I lost this much and this is how much I made and we're net square and even and we're, we're done. Right? That'd be the best way to do it. Uh, we're going to take a quick break. We'll be right back with more of your questions.

• 37:45Speaker 00

  Are you curious to learn more about how you can be money wise? Check out the Money Wise website at MoneyWiseGuys.com to get more info about what we do and how we can help you.

• 38:03Speaker 03

  So now Stephen is predating my time.

• 38:08Speaker 00

  This is my time.

• 38:10Speaker 03

  You're younger than me. What year was this written?

• 38:13Speaker 00

  I'm not sure when it was written.

• 38:15Speaker 03

  Yeah.

• 38:16Speaker 00

  I just grew up with hippies, so I, this is what I heard.

• 38:18Speaker 04

  Should we ask Jared?

• 38:20Speaker 03

  Yeah.

• 38:21Speaker 00

  This is the Doors, baby.

• 38:22Speaker 03

  I know. See, this is, uh, so Jim Morrison died in, what, 1967?

• 38:30Speaker 00

  Was it that early?

• 38:32Speaker 03

  67, 68?

• 38:33Speaker 00

  Yeah. I know he was young. 27, he's in the 27 club, right?

• 38:37Speaker 03

  Yeah, with Jimmy Hendrix and Janis Joplin and Kurt Cobain and all the rest of them. I do love the Doors though, but that still predates my time. I'm not that old.

• 38:47Speaker 00

  Oh, man.

• 38:48Speaker 03

  We got another question that popped in.

• 38:51Speaker 03

  Steven, I'm gonna ask you this question that popped in.

• 38:56Speaker 03

  If you're Juan, so, uh, if you're Juan Soto, you're a free agent, you're leaving the Yankees, and you're, and you're estimated to get a $600 million contract for however many years it's gonna be.

• 39:09Speaker 03

  And taxes are your only concern. What team do you sign for?

• 39:21Speaker 03

  I don't, I'm, I'm going, yeah, I would say some Florida team.

• 39:25Speaker 00

  Florida, but he's gonna go back to the Yankees, I think. I really just don't want him to go to the Dodgers, because I would like to see other teams be good too.

• 39:33Speaker 03

  Yeah.

• 39:34Speaker 00

  I mean, not all of them.

• 39:36Speaker 03

  I'm just saying, like, some-

• 39:37Speaker 00

  But I don't want every good player on the Dodgers.

• 39:39Speaker 03

  Right, like, so I, I would say, if you're, if you're looking at it from just from the tax perspective of the jock tax, the federal taxes are gonna be the same no matter what, right? But if half of your games are played in a non-income tax state, yeah, Florida sounds pretty good. Arizona sounds pretty good, right?

• 39:57Speaker 04

  Texas.

• 39:57Speaker 03

  Texas possibly could sound pretty good.

• 40:00Speaker 00

  Go to the Rangers?

• 40:02Speaker 03

  That, that would really suck for me as an Angels fan.

• 40:06Speaker 03

  But you'd also have to look and see what your division is. So if you, if you go to Arizona and say you want to play for the D backs. Well, how many of your games are in Colorado and California?

• 40:16Speaker 00

  A lot of them.

• 40:16Speaker 03

  A lot of them. You're gonna get hammered, right?

• 40:19Speaker 00

  Well, you can, you can do what, uh, your boy did and just defer it.

• 40:23Speaker 03

  Push them all back. Yeah, I'm gonna take 680 million dollars. I'm gonna take that, uh, in 30 years when I'm living back in Japan.

• 40:32Speaker 00

  That's genius.

• 40:33Speaker 03

  Yes, that's genius. It's genius.

• 40:35Speaker 00

  I'm, I'm surprised they haven't changed that just because.

• 40:38Speaker 03

  Oh, they're gonna, they're gonna close that loophole. They've got to. They've got to. But, uh, yeah, if I, if I were Juan Soto, I would, I would choose a Florida team. I, you know, even if it was playing for a horrible team like the Marlins.

• 40:51Speaker 00

  The Angels.

• 40:53Speaker 03

  Hey, shut it. Shut it.

• 40:57Speaker 03

  Oh, man. Tomorrow, coming up tomorrow, we have Chris and LaTroy. That's gonna be the dream team. Chris and LaTroy will be, uh, getting down to business with, uh, our chief of police, uh, Greg Terry. He's gonna let us know more at the B-PAL, the Bakersfield Police Activities League. Um, great organization, helping kids and, you know, being in the community and such. So, uh, tune in tomorrow for, uh, Chris and LaTroy and their interview with, uh, Chief of Police Greg Terry. Um, thank you. Honestly, this was a great show. We had a bunch of, uh, questions and things that popped in. These are the great shows. I was telling Frank off air, you know, makes show prep really easy when you get a lot of questions that pop in and you just kind of roll with those.

• 41:36Speaker 00

  Go with the riff.

• 41:36Speaker 03

  It's, it's great. So we love, uh, we love hearing from our listeners, uh, for their specific questions and hopefully we can answer them for you. As always, uh, we are here to, uh, be of assistance to you. Uh, give us a call, 661-847-1000. As always, be smart, be safe, be money wise, and we'll see you tomorrow.

• 41:57Speaker 02

  Securities offered through SCF Securities, Inc. Member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF Securities, Inc. and MoneyWise Wealth Management are independently owned and operated.