Pod Insights The Moneywise Guys 2/10/25 Making Every Penny Count: From Pro Athletes to Smart Retirement Planning About this episode The Moneywise Radio Show and Podcast Monday, February 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
Transcript 0:00 Speaker 00 From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.
0:09 Speaker 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?
0:30 Speaker 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.
0:40 Speaker 00 Now, let's start the Money Wise Show.
0:42 Speaker 03 Welcome, welcome to the Money Wise Show. We are live from the Gero Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. Today, we're your hosts, I'm Sharad Waite and?
1:06 Speaker 04 I'm Sammy Abiyawi.
1:07 Speaker 03 Sammy Abiyawi. Thanks so much for being here.
1:09 Speaker 04 Yeah, excited to be here today.
1:11 Speaker 03 Uh, we've got some great messages, want to get right to it and answer our listener questions.
1:18 Speaker 04 Yeah, we have a couple of them. I'll start with the first one. I've seen a lot of changes in government funding over the years, but what kind of economic and financial impact could these executive orders freezing or redirecting federal funds have on businesses, state budgets, and regular folks, just like me?
1:33 Speaker 03 Gosh, this is, this is a tough question because there's so much political noise going on right now. Uh, you know, this first few weeks of President Trump's presidency and all these executive orders, I think a lot of people's heads are spinning and we don't really know fully what the impacts are going to be yet. We take the tariffs are a perfect example. You threaten, threaten the tariffs and then pulled, pulled most of those back and just today, more tariffs being imposed on steel and aluminum that's being imported. It's really difficult to know what kind of impact. This is going to have, so we could sort of just speculate on what we do know.
2:15 Speaker 03 And that is the markets don't like uncertainty, stock market, bond market. Uncertainty is not its friend, and this does bring uncertainty. I can see there being an impact to some people who maybe doesn't, who don't have a longer term view on their investments of potentially having some losses. This is the, this is the challenge with short term investing is that you can get whipsawed unnecessarily and, and, and realize losses that aren't necessary. You don't need to do that. And so I, I think, you know, the impact on individuals, on the average person is just really difficult to know right now.
2:56 Speaker 03 Certainly, if you're in certain sectors and certain industries, then yeah, there's, there's, there's an impact.
3:02 Speaker 04 Yeah, a couple of things that comes, comes to my mind. First is the Small Business Administration. As a, as a former banker, if funds are halted or stopped for one reason or another. Small Business Administration is one catalyst for small businesses to access to sometimes cheap capital.
3:20 Speaker 04 But also long terms with some favorable terms that are not available in the commercial world of, of, of banking. So that's one thing that I can think of if this thing is halted for one reason or another. It might impact small businesses and their access to borrowings.
3:37 Speaker 03 Yeah.
3:39 Speaker 04 Just for me, infrastructure spending, if we're halting or slowing down our infrastructure, which is already crumbling, in my opinion, all throughout the United States, not just in the great state of California, could be impacted as well. So there, there is a risk, but also shared, I mean, the people in charge today or the current administration.
4:02 Speaker 04 You can't tell me they don't know these risks. So a lot of these decisions that are making, they're probably calculated and they might have some type of a plan for it.
4:11 Speaker 03 Yeah.
4:12 Speaker 04 Right?
4:12 Speaker 03 Yeah.
4:12 Speaker 04 Now, these are campaign promises that they are that are being fulfilled. But also, I mean, regardless of how you see Democrats versus Republicans, whatever, we're not going to sabotage our own country by not having a plan.
4:27 Speaker 03 Yeah.
4:27 Speaker 04 I I believe in that.
4:29 Speaker 03 Yeah, we also have to believe in the checks and balances of our government, the way it's set up. Right now, many of the orders coming from President Trump have been nullified by the courts. So that's why we have an executive branch and a judicial branch. Uh, that is the a way and and then the and then the executive branch. Did I ever say that?
4:55 Speaker 04 Yeah, you said executive, we said judicial.
4:58 Speaker 03 And the third is the Congress.
5:03 Speaker 04 Congress. I don't know how you you called that, but when I took my citizenship test, I remember that.
5:08 Speaker 03 You had to know that.
5:09 Speaker 04 I had to know that.
5:09 Speaker 03 When I took my citizenship merit badge, I had to know that. Now I can't remember what that third branch is. But basically you have Congress, you have the executive branch and you have the judicial branch. And legislative.
5:20 Speaker 04 Legislative.
5:21 Speaker 03 Legislative branch. So the reason we have these three branches of government is because you don't want anyone to have too much power.
5:27 Speaker 04 That's right.
5:28 Speaker 03 And so this is really testing the the limits of the executive branch power. Congress is the one that has really the the holds the purse strings. There Congress is the one that authorizes spending or spending cuts. And so it's just we're seeing the judicial branch taking being over overworked right now, I believe. And so again, it's just a lot of noise. There's so much noise happening. It's not just unique to President Trump either. Every president that comes in wants to make their mark. President Biden, when he came in, immediately did all kinds of different changes too. And and we saw the markets be a little, they were disrupted a little bit, mostly from uncertainty. At the end of the day, I'm I'm a firm believer in the free market and the power of a free market, a capitalistic market. I think that ultimately will win.
6:14 Speaker 03 And so, you know, hang in there, hang in there, people, it's gonna be all right.
6:18 Speaker 04 We will be all right.
6:19 Speaker 03 Yeah.
6:19 Speaker 04 At the end of the day. I always say this, and this is not me blowing smoke, we live in the greatest country on earth.
6:26 Speaker 03 No doubt.
6:26 Speaker 04 Regardless of what you, you're a Republican, you're a Democrat, this is to me as an immigrant, this is the best country I would choose to live in.
6:34 Speaker 03 That's right, that's right, words and all. Got another message, you want to read that one, Sammy?
6:38 Speaker 04 Yes. Good afternoon. This may be a long question, but maybe you can answer it when you have the time. But how does a financial advisor get paid? The more money a client has? Also, how does one become a financial advisor? What schooling did you guys take to become one? Big fan of the show and grateful for the education you guys share. Thank you.
6:58 Speaker 03 Great question. Thank you, listener. I love this question. We've talked about it many times over the years about our industry and how we get paid. One of the most important things I think an investor can understand if you're hiring a financial advisor is how they get paid. You should never be afraid to ask that person that question. How, where do you get your money? It's a very legitimate question and, you know, it's no surprise that the answer to that question will tell you whether or not there may be some conflicts of interest. So we'll start with, you know, what the way that MoneyWise is structured, which we have a fee-based structure. That means we're paid a percentage of the assets that we're managing.
7:38 Speaker 03 That does mean, I guess, in some cases, the more money somebody has, the more we get paid. That kind of puts us on the same side of the desk, the same side of the table as our clients. We want to make them money and the more money they make, the more money we make.
7:54 Speaker 04 That's right.
7:54 Speaker 03 But it's not always the case. For example, at MoneyWise, we have a tiered fee schedule. And that, that fee schedule, the, the percentage that we charge our clients for our advice gets smaller the larger the household assets become. And that, that may sound a little counterintuitive, but, you know, at some point, you're doing the same work for somebody who has $10,000 as somebody who has $10 million in some cases. And so that's why, at least at here at MoneyWise, the, you know, once, once you start getting into the high High net worth into the millions of dollars, our fee goes down.
8:35 Speaker 03 And a lot of the work that we do as financial advisors is upfront. It's in those first few years of relationship where you're doing a lot of that groundwork, getting the investment strategy set up and going and getting their plan set up and start being able to track towards those goals is really upfront. That's why at MoneyWise, our most valuable clients are the clients that have been with us the longest because it costs us money to onboard a client. So that's the first thing to be aware of how a financial advisor is paid. They're generally either fee-based or they're commission-based. And the commission-based advisor generally are using products.
9:20 Speaker 03 They're in our world, they're usually selling insurance or annuities, maybe certain mutual funds, loaded mutual funds, different life insurance products. That is a commission-based structure. And there can be a more conflicts of interest when you're working with somebody who's going to get paid by a product rather than for their advice. The advantage of using a fee-based advisor is that the advisor has a fiduciary responsibility to make sure that your best interests are in play.
10:01 Speaker 03 And it has to be documented that shows that the financial advisor is putting their best interests, the client's best interests, ahead of their own. Not every financial advisor is held to that standard. There are other financial advisors that while they may be licensed, they only need to have, the recommendations need to be suitable. It doesn't need to be, have this fiduciary standard. And what do I mean by suitable? Well, it just means that the product itself is appropriate for that person. That's a very different standard than the fiduciary standard, which Is that it doesn't it doesn't it's not the product, it's what you're offering is the best.
10:47 Speaker 04 Solution.
10:48 Speaker 03 Best solution for that for that.
10:49 Speaker 04 That individual that that person.
10:51 Speaker 03 Yeah, so you know, those are the those are the two main. Models of how we get paid as financial advisors. There are some that are sort of hybrids that can be a mix of those two things. As well as their flat fee or hourly fee advisors, which we we have that here is at MoneyWise as well. So. Sometimes it just doesn't make sense, or there's not necessarily assets to manage. And so in that case, if some advisors can just charge a flat fee for a plan. And then there can be, you know, you just pay hourly rate, just like you would a CPA or an attorney. So, um, yeah.
11:27 Speaker 04 So the great answer and thank you. And so the listener also asks, how do you become one? What type of studies do you have to follow to get to become a financial advisor?
11:36 Speaker 03 You know, it may be surprising to some people that to be a financial advisor, you don't need a college degree. Now, that may not be, you know. I know some financial advisors that don't have a college degree and they're great financial advisors because they may have other things like experience. And years of experience and or or diverse experience working with people. I think can easily compensate for somebody who doesn't have a bachelor's degree. Now, it's most financial advisors do have a bachelor's degree.
12:07 Speaker 04 Sometimes masters degrees.
12:08 Speaker 03 Yeah, MBA, you have an MBA, Sammy. Uh, when you have a master's degree. Then you you generally can qualify for some further certifications or licensing that. Is very helpful in our industry. The the premier. License or certification in our industry is CFP, a Certified Financial Planner. This is one of the top credentials. It's because it requires an enormous amount of of coursework and exams and in many different areas.
12:40 Speaker 04 It's an in-depth uh, study. Like, I mean, we have two on staff today and with the third one going through the process. Which we're very proud of as a company, as a firm, we're very proud of having those two individuals and with the third on the way. Because it does give an edge to your advice.
12:58 Speaker 03 Yeah, it really does.
12:59 Speaker 04 Go into a little bit more uh, studying and and ability to give.
13:06 Speaker 04 Maybe a better advice, but also you finish your responsibility, having that title just goes a little bit more than a regular financial advisor. Would you agree?
13:14 Speaker 03 I agree. With the CFP, you're required to have instructions and pass exams in areas such as tax planning, estate planning, insurance. These are, some of these topics can get very complicated. If you don't have any experience with it, then you need to have some educational background in these, in these fields. So, besides CFP, other really respectable certifications is Chartered Financial Analyst. Some people may have seen that, CFA. This is an advanced investment analyst certification. We see this a lot in the money management world, our CFAs,
13:58 Speaker 03 as well as Chartered Financial Consultants, or CHFCs. This is an alternative to a CFP, but it's more of a focus on financial planning. So, you know, again, working with an advisor experience is very valuable. The certifications are valuable. Now licensing is also important. In our world, FINRA, which is the financial regulatory agency that oversees our world, there are several different series licenses. And generally, you want an advisor that has at least a Series 66 or 65, which is the license that allows you to charge a fee to
14:39 Speaker 03 give advice. It's helpful if there's a Series 7, which is the securities license that allows you to work in stocks and bond, individual trades. And it's a very challenging certification or license. I've gone through the Series 7 many years ago, and it's very in-depth, and you get a really good exposure to the financial investment world. Many financial advisors also have their life and health insurance licenses, which is, again, helpful to have that background in insurance. So, you know, those are, those are the main points
15:23 Speaker 03 to be aware of. You know, for, for somebody to be a, a...
15:29 Speaker 03 Financial planner, it's becoming much more difficult as the years go on because you and we'd have a lack of financial advisors. You and I know this is we've here at Moneywise are always recruiting, basically. We're always looking for
15:45 Speaker 04 Individuals, good people, yes.
15:47 Speaker 03 Yeah, and we've, you know, we've, we've reached out to a lot of them in town and we'll continue to do that and
15:55 Speaker 04 In general, the finance industry has been a go-to after you graduate from college. You get a business degree, you get a finance degree and you go into banking, you go into this finance world. But last 10 years, 15 years, it's been a little bit tricky because a lot of the people don't think of the financial world as sexy anymore, especially younger, the younger population. However, if you, I mean, from my end, it's a very rewarding career because you get to be exposed to a lot of things and you learn a lot of things, in my opinion.
16:24 Speaker 03 Yeah, for sure. I've loved it. It's been a wonderful career for me and I think our advisors here at Moneywise really like what they do.
16:32 Speaker 04 That's true, yeah. Because at the end of the day, to me, it's rewarding because you get to help somebody, either in retirement or near in retirement, or just financial planning to get a budget together or whatever. To me, that's, that's, that's huge.
16:44 Speaker 03 Yeah, and you work with your, you should have a relationship with your financial advisor, which means you see them, you see them regularly and they become a very, a real valuable part of your, of your team, which also might include an attorney. Everybody needs to have at least one or two attorneys on your speed dial for, for life when life happens to you, as well as a banker is a very valuable resource for, especially if you're a business owner, is having a relationship with a banker and your CPA, your accountant, your tax professional. So those are, those are really the, the three or the four-legged stool for your, your financial
17:27 Speaker 03 household in order CPA, attorney, banker, financial advisor. You want to, you want to have just good people that you know you trust, you know how they're getting paid. And you know what value you're getting back from them. So those are, that's great, Sammy.
17:42 Speaker 04 Yeah, great question. Very good. Keep them coming.
17:44 Speaker 03 Yeah, keep them coming. Definitely send them our way. 661-396-1000 is the phone number. We got a lot more to cover. We're going to take our first break of the day and we'll be right back.
17:53 Speaker 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.
18:20 Speaker 03 Thanks for tuning in. We're Money Wise. I'm Sherrod Wade. I'm here with Sammy Abiawi. We're your hosts today.
18:26 Speaker 04 He did it.
18:27 Speaker 03 Yeah, he did. What'd you think?
18:30 Speaker 04 Frank, I've never listened to him.
18:32 Speaker 03 Oh, really?
18:32 Speaker 04 Seriously, until yesterday. And the thing I liked the most is him going after Drake, because I don't like Drake.
18:41 Speaker 03 He did. He definitely went after Drake.
18:42 Speaker 04 I do not like Drake. I don't like his music. I don't like who he is.
18:46 Speaker 03 Yeah.
18:47 Speaker 04 So him doing it, I loved it. And the fact that he has two of his exes, one of them was Crippin'.
18:54 Speaker 03 Oh, yeah.
18:54 Speaker 04 Serena Williams.
18:55 Speaker 03 Oh, yeah. Crip dancing. Yeah, I saw it. Yeah, I thought it was so good. I'm a huge fan of Kung Fu Kenny, Mr. Kendrick Lamar. His, he's the only artist, I, I, but generally listen to music on Spotify streaming, you know, on my phone. And it's the only artist that I got a notice from that said that I'm in the top 1% of listeners, at least his last album. His last, the two albums, Mr. Morale, the big, the, the big steppers, that, that album is just unbelievable.
19:24 Speaker 04 Have you been to one of his shows or concerts?
19:26 Speaker 03 No, but I would. I would die to go to one of his concerts.
19:28 Speaker 04 I'll go with you.
19:29 Speaker 03 Oh, let's do it. I, I've watched it on YouTube. I've watched a couple of his concerts on YouTube and he's, he is, it's just mind blowing how he can remember the lyrics and spit them out. You know, it's, it's like, I don't know how anybody can rap. It's.
19:44 Speaker 04 Gabe was, was following suit with him yesterday. He, he loves, he loves him.
19:48 Speaker 00 Ryan was the same way. He was pumped.
19:50 Speaker 04 Yeah, he was pumped and he was like all dancing in the living room. I told Mary Ann, we have our own show.
19:56 Speaker 03 Kendrick Lamar is super humble too.
19:58 Speaker 04 Yeah.
19:59 Speaker 03 Very humble. Yeah. Uh, he's just.
20:02 Speaker 04 Another great song.
20:03 Speaker 03 Yeah, for sure. Speaking of humble, we have news today. President Trump says that he is going to order the treasury to stop making and stop minting pennies and nickels.
20:17 Speaker 04 Hallelujah.
20:17 Speaker 03 Hallelujah. This has been, I can't tell you, I've been hearing this for so many years. It's very similar to getting rid of the daylight savings time.
20:25 Speaker 04 Yes.
20:25 Speaker 03 This has been going on.
20:26 Speaker 04 I think it's on his agenda too.
20:28 Speaker 03 Good. Make that happen. Cause it's been, it's been going on for years and years. It goes all the way back to late Senator John McCain in 2017. He co-sponsored.
20:39 Speaker 04 Yes, that's right.
20:40 Speaker 03 Currency optimization, innovation and national savings coins. And this was an act that he was pushing, uh, to try to get rid of the penny production. And, you know, they conducted a feasibility study. Before that, in 1990, there was a representative Jim Colby. He introduced the Price Rounding Act, which was, which was an act aiming to eliminate the penny and cash transaction, transactions by rounding prices to the nearest nickel. So all these efforts have just come and gone and with no luck.
21:16 Speaker 04 It's, it's, it's interesting to me. Now I'll, I'll talk from a banker standpoint.
21:20 Speaker 03 Yeah.
21:20 Speaker 04 Now, my nightmare when I was a banker is people coming in with bags and we have to, sometimes we don't count them. We just put them in the vault and then we send them over to the main vault and they, they, they have to weigh them instead of going through.
21:35 Speaker 03 Wow.
21:35 Speaker 04 Or you have to buy a coin, coin machine. But the, the thing is, is you have to order these things. So your convenience store clients that own convenience stores, they have to come and buy these from you. Then you have to carry them and break your back.
21:49 Speaker 03 Yeah.
21:50 Speaker 04 Right?
21:50 Speaker 03 Right.
21:51 Speaker 04 And, and then you go to the store and they give you two pennies. So just forget about it. Just put them in that little thing. I never want them. Right?
21:58 Speaker 03 Right.
21:58 Speaker 04 So from a banking standpoint, if they do this, it's huge. It's music to bankers' ears, man. Because you do not, they're gonna stop handling that.
22:07 Speaker 03 And how many times have you heard also, it'll come up on the news every, every once in a while, somebody loses a lawsuit and they pay it off in pennies?
22:13 Speaker 04 That's right.
22:15 Speaker 03 I mean, what a nightmare. Could you imagine somebody coming into the bank with a hundred thousand dollars worth of pennies?
22:21 Speaker 04 I mean, like, just, just bags and bags and bags of these things. Now, I'll remind us, I'll remind us though. Forcibly, we were forced into, eliminated the pennies and the nickels during COVID.
22:32 Speaker 03 Why is that?
22:33 Speaker 04 Because we-
22:34 Speaker 03 Oh, because nobody wanted to handle or-
22:36 Speaker 04 That's right.
22:36 Speaker 03 Yeah. It is filthy. It's so gross.
22:38 Speaker 04 We actually went away from that and, and for the longest time, we did not have them at the bank. So people will come in and say, we don't have them.
22:44 Speaker 03 Yeah.
22:45 Speaker 04 So just learn how to run a business without them.
22:47 Speaker 03 Without it.
22:48 Speaker 04 Convenience stores, small businesses, they learned how to run that. As clients, as consumers, we learned how to not have them anymore.
22:56 Speaker 03 Yeah.
22:56 Speaker 04 So during a year and a half, or two years of that craziness called COVID, we actually learned how to live without these things.
23:03 Speaker 03 Well, other countries have figured it out too. Canada in 2012 got rid of their pennies. And other countries have already done this, including Australia and New Zealand. Both removed their one and two cent coins from circulation in the 1990s. European nations like Netherlands, Finland and Ireland have all adopted policies to eliminate or get rid of their one or two cent euro coins.
23:29 Speaker 04 So, so I'll bet you a penny. Bet you a penny. Now that President Trump came up with the, the, the comments today, tomorrow or sometime this week, Doge will come out with the statistics of why we should be eliminating the pennies. Hundred eighty-five million dollars in 2023 to produce pennies. Hundred eighty-five million dollars for a face value of seventy-one million dollars.
23:51 Speaker 03 That's just the US?
23:53 Speaker 04 Just, yeah, here.
23:55 Speaker 03 Yeah, so I, looking at the cost of a penny, it's about 3.7 cents to produce one cent, a one cent penny.
24:03 Speaker 04 Yeah.
24:03 Speaker 03 That, this is, this has led to a loss of about 85 million dollars from minting nearly 3.2 billion pennies in a year. 3.2 billion pennies is how many they've minted. So they're losing 85 million a year to make the penny. The nickel, it's even worse.
24:22 Speaker 04 Yes.
24:22 Speaker 03 Production of a nickel costs nearly 14 cents, which is almost three times its face value. So you gotta get rid of the penny and the nickel. Now, the dime is still okay, in my, in my opinion. It costs about five cents to produce a dime. So that makes it a little bit more cost effective, but still, I guess that's still pretty expensive.
24:41 Speaker 04 So, yeah, definitely. And frankly, do you want to handle that? Handle this stuff going in your pocket and you're like, all day long, next to your keys, you know? A penny in 1900s, shared, had the same value as 30 cents today.
24:58 Speaker 03 Oh, really?
24:59 Speaker 04 A nickel in 1950 had the same value as 60 cents.
25:03 Speaker 03 What?
25:04 Speaker 04 Today.
25:04 Speaker 03 Is it because of what they, it was made out of? It was actually made out of nickel?
25:07 Speaker 04 Also the inflation impact.
25:09 Speaker 03 Oh, yeah. Oh, right. Right.
25:12 Speaker 04 So, it, it just doesn't make sense for us to have these things anymore.
25:17 Speaker 03 You know how much it costs to make a $1 bill?
25:20 Speaker 04 I do not.
25:21 Speaker 03 3.2 cents. That's a, that's a deal. Those three cents to print. I guess maybe that still is gonna add up, right? To make $1, 3.2 cents. A $100 bill costs nine cents to make, to print. A $50 bill's five cents. So, yeah, let's, let's get rid of this. Now, something that's interesting is that there's some people that are complaining, saying that this could be inflationary. Because what happens if you get rid of pennies and nickels? You gotta round up or down. With it, you know, if it, instead of, instead of it being, you know, 50, 55 cents, it's gonna have to be 60 cents. Or it'd have to go down to 50 cents. But most companies are just going to round up.
26:03 Speaker 04 That's right.
26:04 Speaker 03 And so you could see, I guess, initial slight inflation from it. But in what I could read, what happened in Canada over 13 years ago, they didn't experience. It wasn't that big of a deal. It really didn't have an economic impact on the country.
26:21 Speaker 04 I, I, I wouldn't know, but I also, I would assume not personally. You know, I'm, I'm just thinking about myself and my expenditures. When I go to the store and it's $9.99, now I'm paying $10, I'm, I'm okay with that.
26:35 Speaker 03 I wonder how it will work when you have sales tax, which is some odd percentage. So if somebody's still paying in cash, you know, how are they going to give back change? They're going to have to just change all of the pricing so that they're taking into account the sales tax. So they will have even numbers.
26:52 Speaker 04 Yeah.
26:53 Speaker 03 Which I, that drives me crazy when you don't. I mean, it's just a trick that retailers use on people to, you know, the 9.99 trick to, to get people to buy something. Cause it's in your mind, you think it's way cheaper than it really is.
27:07 Speaker 04 Yeah.
27:07 Speaker 03 But oh, man, I, I hope this passes Sammy. I hope we can get rid of those filthy coins.
27:12 Speaker 04 Me too. Seriously. I, I personally don't use cash. I use my, my cards or, or my Apple Pay or Google Pay, whatever.
27:20 Speaker 03 Yeah.
27:21 Speaker 04 I don't use cash personally, but when I do, you know.
27:25 Speaker 03 What do you do with your coins? Do you have like a jar?
27:29 Speaker 04 Gabe takes them.
27:30 Speaker 03 Yeah.
27:30 Speaker 04 Yeah. He takes them and he just, just collects and.
27:32 Speaker 03 He's got a piggy bank somewhere.
27:33 Speaker 04 Mm hmm. And then he goes to the bank and just, just, you know, he got a hundred dollars sometimes. One time he got 500 bucks. He collected so much.
27:41 Speaker 03 Oh, nice. Take it to like a coin star?
27:43 Speaker 04 Yeah, I, I prefer not to. I have them roll them because it's a lot more.
27:48 Speaker 03 You put them to work.
27:49 Speaker 04 Oh yeah. Plus you get more, you know, they, they, they take what 10% maybe?
27:53 Speaker 03 Yeah. I'm not sure what the coin star charges.
27:55 Speaker 04 I think it's like five or 10%. There's a percentage.
27:58 Speaker 03 Yeah. Yeah.
27:59 Speaker 04 So he, he did it one time and then he saw how much he got and he was like, oh, I'm not doing this again.
28:06 Speaker 03 That's so much work. Well, that's great. I hope this happens. Get rid of those pennies and nickels. I'm going to take another break today. We're Money Wise. We'll be back in a few minutes.
28:14 Speaker 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.
28:33 Speaker 03 No more change. We're the Money Wise Show. Thanks for tuning in. I'm Sharad Waite here with Sammy Abiawi. We made it through the Super Bowl. Right around this-
28:43 Speaker 04 That was a beating, man.
28:44 Speaker 03 Yeah.
28:45 Speaker 04 That was a beating. I felt bad for Kansas.
28:47 Speaker 03 I felt bad. They looked so sad, too, like, towards the end.
28:50 Speaker 04 Yeah, I didn't even realize. I mean, it did not, it just didn't. They looked sad. They looked weird.
28:56 Speaker 03 Yeah.
28:57 Speaker 04 I don't know. I felt bad. Gabe was very happy.
29:00 Speaker 03 You know, right around this Super Bowl weekend, Antonio Brown came out in the news. You remember Antonio Brown, I'm sure?
29:09 Speaker 04 Yeah, he was a Steeler at one, a Steeler at one time.
29:12 Speaker 03 Yeah.
29:13 Speaker 00 Majority of the time.
29:14 Speaker 04 Until he lost it. He walked out of the field and I remember that vividly.
29:20 Speaker 03 Kind of a hothead, I guess.
29:21 Speaker 00 Oh, yeah.
29:22 Speaker 04 I think he's just crazy, in my opinion. I don't know. Maybe he's got some problems.
29:25 Speaker 03 I think he played 10, 10 or 11 years in the NFL.
29:29 Speaker 00 Oh, yeah.
29:30 Speaker 04 Talented, talented guy, too.
29:31 Speaker 03 Oh, yeah. I mean, you have to be to, you know, just to be at that level for that many years. He was on a podcast over the weekend where he, where it came out that he has filed for Chapter 11 bankruptcy. He actually filed in May of 2024. And he said on the podcast that he had made over $100 million on and off the field and now is declaring bankruptcy. You know, he says he just blew all the money. He says he just blew everything. And it, you know, this happens very regularly, way more than, than people realize how professional athletes can go, can go through a lot of money really quickly. I mean, some of the, some of the biggest examples would be Mike Tyson,
30:16 Speaker 03 who was estimated worth $400 million at one point. He filed bankruptcy in 2003 citing he had debt problems. Evander Holyfield was worth approximately 250 million in his, at his peak. And again, he said because of his lavish spending and failed business ventures and child support obligations.
30:40 Speaker 04 11 kids.
30:41 Speaker 03 Is that how many?
30:42 Speaker 04 11 kids.
30:44 Speaker 03 Holy cow.
30:44 Speaker 04 Lot of baby mamas to feed.
30:45 Speaker 03 Man, Michael Vick, going back to the NFL quarterback. He earned an estimated 25 million a year at his peak. Filed for a Chapter 11 bankruptcy in 2008. He had debts of over 10 million, 10 to 50 million dollars.
31:01 Speaker 04 He came back, though. See, that guy came back out of jail, played at a high level and played for, did he play for Andy Reid again? At the Eagles?
31:12 Speaker 00 I think so, yeah.
31:13 Speaker 04 Yeah, yeah.
31:14 Speaker 03 You know, that is impressive.
31:16 Speaker 04 Yes.
31:16 Speaker 03 Yeah, you know, you have to kind of dig a little deeper to see some of these people who've filed bankruptcy and have come back. Nicolas Cage, who is a very well-known actor, faced foreclosure and significant debt in the late 2000s. He had earned over 150 million dollars. Again, he had unpaid taxes and extravagant purchases.
31:37 Speaker 04 Yeah, I mean, I listened to some of these. I read about some of these. Allen Iverson.
31:43 Speaker 03 Oh, yeah.
31:44 Speaker 00 I remember that one.
31:44 Speaker 04 Most, you know, athletic and just gifted athletes you can ever watch. 200 million dollars. Severe cash problems at one time. Lavish spending, going out and just buying things that you might not need. Spending $5,000 at TGI Fridays in the case of Vince Young, who earned 34 million dollars during his NFL career and just got some financial problems later on. It's Shaq, I don't know if you've ever listened to Shaq.
32:19 Speaker 03 Oh, yeah.
32:19 Speaker 04 So when Shaq became, you know, he got drafted, his dad sat him down and had a talk with him. And that changed for, changed his mind eventually because he was spending money on
32:33 Speaker 03 Yeah.
32:33 Speaker 04 on his high school buddies and other thing and crazy things.
32:37 Speaker 03 We've played, I think, a clip on this show where he said, "I learned a word. Once I started making all this money, I was getting paid, and then I learned a word that I'll never forget. Fika."
32:51 Speaker 03 Which is your payroll tax. He's like, you mean, I gotta pay payroll? I gotta pay taxes on this money? He's, I'll never forget, FICA. What is FICA?
32:59 Speaker 04 Seriously, but and he had that example in his life that that helped him. Some of these athletes don't, and some of these athletes, by the way, Sher, they get taken advantage of.
33:09 Speaker 03 Yeah.
33:09 Speaker 04 By some of the closest advisors they might have.
33:12 Speaker 03 Well, Otani, Shohei Otani had this happen to him, his own inner circle, his translator.
33:18 Speaker 04 Yeah, his translator was betting money, his money.
33:20 Speaker 03 His money?
33:21 Speaker 04 Yeah.
33:21 Speaker 03 Like, taking his, his money, millions of dollars. I think he's, I think he's in jail or serving some jail time.
33:26 Speaker 04 Sentenced to, to, to jail, yes.
33:28 Speaker 03 Like, you imagine somebody like that, this is, you know, the top baseball player in the world could have, can be taken advantage of financially. So it, yeah, it's, it's, it's very easy when you have just so much money coming in. They have these different business ventures and things.
33:45 Speaker 04 That's why I, I recommend for athletes that are going through college before they go get drafted, do whatever. Take some financial classes or some financial education to help yourself understand the ins and outs. Some of these people just made some bad investments.
34:02 Speaker 03 Yeah.
34:02 Speaker 04 You know, some people talk them into some great, great idea about a new investment or new products and they go, you know, and Joba Oil, I go back to that.
34:11 Speaker 03 Yeah, all right.
34:15 Speaker 00 I remember that with Antonio Brown, cause last, I think it was in 2023, he bought like half of a, an arena football team.
34:23 Speaker 04 Oh, yeah.
34:24 Speaker 00 And then didn't pay the coaches and ended up getting kicked out of that arena league. But that was a half a million dollars that he spent just for like 48% of the team. And a year and a half later, he's filing for bankruptcy.
34:39 Speaker 04 So Stephen, maybe you know this, I mean, you, you get drafted as a basketball player, as a football player. You're probably in your late teens, maybe early twenties, and then you, you.
34:52 Speaker 04 You get signed up and all of a sudden you're making millions. Sure, you've seen it in your world as a financial advisor if people win in the lottery.
34:59 Speaker 03 Yep. Yeah, or inheriting a bunch of money that I've definitely seen. There's, there's, we've talked about the sudden wealth syndrome.
35:05 Speaker 04 That's right.
35:06 Speaker 03 Which is, you know, what the mind trip that it is for somebody when they, when they happen upon a bunch of money, a bunch of zeros after they just don't know what to do. It's, you're in a vulnerable spot for a few years until you can sort of adjust.
35:21 Speaker 04 That's right.
35:22 Speaker 03 And you gotta be really careful.
35:23 Speaker 04 So these young people sometimes don't have the best advice. They don't have the best, the best circle around them and they get taken advantage of. Or sometimes they just have excessive spending.
35:32 Speaker 00 Well, that's what, like you were saying with Shaq, I remember when he was a rookie, he had said that the, he spent like a million dollars in one day.
35:39 Speaker 04 Yes.
35:40 Speaker 00 Bought three, you know, sweet cars and something for his mom, a house. And he was like, wait, where did all this money go?
35:48 Speaker 03 Yeah.
35:49 Speaker 00 And he said, that's when we, we used to play that FICA play.
35:52 Speaker 03 Yeah.
35:53 Speaker 00 Quote, cause he said that, I'm glad it happened when I was a rookie because he went on to play another 15 years.
36:00 Speaker 04 That's right.
36:00 Speaker 00 And had to learn the, the hard way, but luckily his parents taught him, sat, sat him down, said, hey, hey, hey. You know?
36:07 Speaker 03 There's a few of those athletes, maybe you can remind me, Stephen, who, who essentially live off of their.
36:13 Speaker 04 Sponsorships.
36:14 Speaker 03 Yeah, but they, and then they, or they, or they live off of just their salaries, but they save all their sponsorship money.
36:20 Speaker 04 So yes, I know Stephen Gronkowski is one of them. Saved a hundred percent of his 70 million dollar career earnings.
36:27 Speaker 03 I mean, come on.
36:28 Speaker 04 Kawhi Leonard still drives 1997 Chevy Tahoe.
36:32 Speaker 03 That's what I'm talking about.
36:34 Speaker 04 Marshawn Lynch got, lived off Skittle, Skittle's endorsements.
36:39 Speaker 00 There was a couple of players that would still stay in their parents' house.
36:43 Speaker 03 Yeah.
36:43 Speaker 00 Because they were traveling so much that they didn't want to buy the homes. They waited until they retired and said, well, why am I going to spend, you know, 200 grand, 500 grand on a house when, you know, I'm not even going to be there.
36:56 Speaker 03 Right.
36:56 Speaker 04 Yeah.
36:57 Speaker 03 There was a, there was a, a HBO, um, what's the HBO NFL show? Hard knocks, remember the Hard Knocks a couple of years ago and one of the players, they highlighted how he was just going around giving financial advice to all the players. That's actually really good financial advice and telling them, telling all these players how they need to manage their money and not spend and you know, budget and that kind of thing is, it was brilliant. It was really, really good.
37:20 Speaker 04 The most recent one is Saquon Barkley.
37:22 Speaker 03 Oh, oh, yeah.
37:23 Speaker 04 Yeah, he just played and he won Super Bowl last night.
37:26 Speaker 03 Yeah.
37:27 Speaker 04 Never spent his NFL salary, lives off sponsorships and things like Nike and.
37:33 Speaker 03 Yeah. And then a lot of them go into business, you know, they start all these other businesses because they've got all this cash and they do really well, like far better in the business world than they do in their professional athlete career.
37:48 Speaker 04 Magic Johnson.
37:48 Speaker 03 Yeah. Magic Johnson's just amazing what he's done.
37:52 Speaker 04 Yeah.
37:52 Speaker 03 We got a couple of really good messages. I want to do this, Sammy, maybe take a break. We'll come right back. We're going to address these, these, these few messages that we've just gotten in from listeners. So if you're out there listening, stick around. We're going to answer these questions. We'll be right back.
38:04 Speaker 00 Money Wise Wealth Management is the only locally owned, independent firm that uses a comprehensive wealth, tax and estate approach, working closely with a highly trusted CPA and attorney. For information on how Money Wise can help you invest and plan for your future, call 661-847-1000. That's 661-847-1000.
38:33 Speaker 03 Welcome back. We're Money Wise. Got some great listener questions here. Appreciate anybody who's listening and keep them coming our way. 661-396-1000.
38:43 Speaker 04 I'll go for the first one, Sherrod. Hi, Money Wise. Five years ago, I did a back, backdoor Roth conversion, $200,000. I paid taxes with some extra money I had in my savings account. I'm 64 and I would like to start converting $50,000 a year for the next five years into the Roth account. But I want to have them tax the 50,000 before I converted. What's your thought? And if I live to see 75, that's probably when I start using that money. I still have my 401k, 1.5 million. I don't plan on moving my 401k even when I retire until I pass away. I'll let my family deal with that. Working with Fidelity, great show as always.
39:22 Speaker 03 Ah, this is great. Great listener question. So Roth conversions can get very tricky. And we always recommend that if you're considering a Roth conversion, get some advice because there are some really good calculators that we use here at Money Wise, other financial advisors, some of them have access to these calculators. But with the right information, you can know exactly when and how it would make sense for you to go a Roth versus a traditional IRA. So for our listeners, just real quickly, a Roth IRA is different than a traditional in that a Roth, you've already paid the taxes on the money that's gone into it, but you get to withdraw it tax-free. Whereas a traditional IRA, you don't pay the taxes on the money that goes in it.
40:07 Speaker 03 So you get that tax break upfront, but then when you do pull the money out, you're taxed at it as at ordinary income rates. So congratulations, this listener went a step further and did a backdoor Roth, which is you have to have under a certain amount of income to be able to qualify to contribute to a Roth. There are some backdoor ways into it by, for example, contributing to a non-deductible traditional IRA and then converting that into a Roth. So really, a lot of the hard work has already been done here. But the question is now, if you want to continue to do a Roth conversion or if you want to contribute to the Roth, you're going to have to pay taxes on that money that goes into it.
40:52 Speaker 03 And you're weighing the benefit of the, or the benefit of...
40:58 Speaker 03 Getting that tax deduction now versus getting it later. You're really, you're going to want to have to run the calculation on that. One thing that I could tell you though, is that if you have a 401k, it sounds like you're still working and you're contributing to 401k. Most 401ks offer a Roth option. So, consider putting some of your 401k, if you still believe that it's to your advantage to contribute to a Roth, then consider a 401k Roth. You can start making contributions into your Roth portion of your 401k. This is great. I think the listener's really smart because they're saying, this is going to be my kids or my grandkids worries my 401k that hasn't been taxed. I'll let them worry about it at that time. And that's where some people definitely would want to consider having money,
41:43 Speaker 03 some of your retirement money that's already been taxed, like a Roth. Because then it gives you that flexibility to be able to pull money out without being taxed on it. Think, you know, down the road in your retirement, maybe you want to buy a car or you want to make a large purchase. If you're taking it from a Roth, you don't have to worry about the taxes on that. Of course, your beneficiaries will thank you if you have your money in a Roth because they can inherit that and they don't have to pay any taxes on it. Whereas if they inherit the traditional 401k or traditional IRA, your beneficiaries are going to have to deal with, your spouse will have to deal with the taxes, but even more so, your kids will have to deal with it, especially with the recent law changes with, in terms of inheriting IRAs,
42:25 Speaker 03 which require your kids to pull it all out within 10 years. Which is, you know, that can be incredibly tax-heavy for beneficiaries. So, great question. Great question. Got another one here, right Sammy?
42:38 Speaker 04 Yeah. Will the tariffs on steel and aluminum affect the cost here in California for business owners? I'm a new fan of Kendrick. I haven't liked a lot of new rappers over the last six or seven years, but started downloading his music during the second half of that boring day.
42:55 Speaker 03 That's great.
42:56 Speaker 04 Oh, wow.
42:56 Speaker 03 Welcome to the Kendrick Lamar Club. Let's talk about tariffs. We mentioned this a little bit in the beginning of the show. I just did some, some real quick research in terms of what we import in the country for steel and aluminum. I was very surprised to learn that we import nearly half of the alum, half of the aluminum that we use, that we consume in the United States, about half of it is imported.
43:21 Speaker 04 Where from do you especially, or is it just all over?
43:24 Speaker 03 I'm not sure where, that's a good question.
43:25 Speaker 04 Yeah.
43:26 Speaker 03 I don't have specific numbers on California, but you have to, you have to believe that California, being the largest economic state here in the country, that that's going to have an enormous impact on Californians. Because, you know, whatever that percentage is, United States, for example, in 2023, consumed about 93 million tons of steel, that which accounted for 13% of its demand. So that means we import about 13% of steel and about 50% of aluminum. And so, you know, that's going to be quite a bit that's going to impact California.
44:07 Speaker 03 So this is a, this is a tricky one, because we, again, we don't know what, we don't know how long this will last. President Trump has shown that he can pull these.
44:19 Speaker 04 Especially with these tariffs, yeah. I mean, I did a quick thing here. Our largest supplier for aluminum is Canada. 50% of the US imports.
44:26 Speaker 03 Oh, there you go.
44:27 Speaker 04 For aluminum, we're coming from, from Canada.
44:29 Speaker 03 From Canada.
44:29 Speaker 04 Then, then China and Mexico, that's 7 to 10%. Russia, not, none recently because of all the sanctions and the war in Ukraine. United Arab Emirates with some, a small percentage of 5 to 7%. So truly, Canada and China are in the lead with Canada being at 50%.
44:51 Speaker 03 Steel and aluminum is in everything. I mean, think of all construction and all that stuff.
44:56 Speaker 04 Yeah.
44:57 Speaker 03 Good questions. Before we go, Sammy, I don't know if you read over the news, the local news reported on Saturday, there was a Honda Civic caught going 125 miles an hour on the West Side Parkway. Got pulled over, got cited for reckless driving and the car was towed.
45:17 Speaker 03 My first thought was, how can a Honda Civic go 125 miles an hour? Did you know that those little cars can go that fast?
45:26 Speaker 04 I mean, 125 on the
45:28 Speaker 03 West Side Parkway.
45:29 Speaker 04 That's, that's, that's very reckless.
45:31 Speaker 03 Very reckless, but also go Honda Civic? Like, how is that?
45:36 Speaker 04 Yeah.
45:38 Speaker 03 That seems, I didn't know they had it in them.
45:42 Speaker 04 They do.
45:43 Speaker 03 Apparently.
45:43 Speaker 04 Apparently they do.
45:44 Speaker 00 You ever watch Fast and Furious?
45:45 Speaker 03 Oh, what do they, they trick them out?
45:48 Speaker 04 They trick them out.
45:49 Speaker 03 That reminds me of the, when Priuses first came out, their same thing happened. There was somebody, who was Wozniak? I think it was Steve Wozniak, one of the co-founders of Apple. He was caught going over 100 miles an hour in a Prius. And he said, because he wanted to let everybody know how fast they were. He was trying to promote them like hybrids. Look how fast a hybrid can go, can go over 100 miles an hour. Man.
46:10 Speaker 04 Oh.
46:11 Speaker 03 Well, good job, Baker for the Police Department, getting that reckless driver.
46:16 Speaker 04 I thought you were going to talk about the high-speed chase in front of our office last week.
46:20 Speaker 03 Oh, my goodness. Oh, so much to cover here. We barely scratched the surface. If you want to tune in tomorrow, Andre Gonzalez, Baker for the City Councilman will be on our show. We're going to talk about what's going on economically in the city. As we leave, remember these three things: be smart, be safe, and always be money wise.
46:38 Speaker 02 Securities offered through SCF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF Securities, Inc. and Money Wise Wealth Management are independently owned and operated.
Previous 2/6/25 Spending on Memories, Voodoo Economics Recap & Laughs with Comedian Tyson Hayes Next 2/11/25 Crystal Palace Rumors & Downtown Revitalization with Andrae Gonzales Page updated November 7, 2026 · transcript and summary are machine-generated
