5/7/26 Markets in Conflict: Risk, Retirement & Business Succession

The Moneywise Radio Show and Podcast Thursday, May 7th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management LinkedIn: Moneywise_Wealth_Management phone: 661-809-6508 The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

• 0:00Speaker 00

  Live from the basement inside the historic Woolworths Building in downtown Bakersfield. 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? Securities offered through LPL Financial, member FINRA, SIPC. Investment advisory services offered through LPL Financial. LPL Financial and Money Wise Wealth Management are independently owned and operated.

• 0:37Speaker 00

  Now, let's start the Money Wise Show.

• 0:40Speaker 02

  That's right. Welcome to the Money Wise Show. I am your host today, Chris Pelster with...

• 0:46Speaker 03

  Seth Perry. So glad to be here. It's been a minute.

• 0:49Speaker 02

  It has been a minute. Yep. We are live from the basement of the historic Woolworth Building in downtown Bakersfield. For the next hour, you are on News Talk 96.1, 1230 AM, KERN, streaming live at MoneyWiseGuys.com, or your favorite podcast streaming site thing app?

• 1:10Speaker 03

  Where is the place to go? Where is the main?

• 1:13Speaker 02

  All of them.

• 1:14Speaker 03

  Spotify.

• 1:14Speaker 02

  Spotify.

• 1:15Speaker 03

  Apple Podcasts is a pretty big one. iTunes, stuff like that.

• 1:18Speaker 02

  Yeah.

• 1:19Speaker 03

  They've got iHeartRadio, Player FM. I mean, there's about 40 of them. Gotcha.

• 1:24Speaker 02

  Yeah. So this show is locked and loaded. We have no guests. You have the Chris Pelster, Seth Perry Show.

• 1:31Speaker 03

  But we have, we have fish oil.

• 1:34Speaker 02

  We have fish oil.

• 1:34Speaker 03

  We have Trump accounts.

• 1:36Speaker 02

  Trump accounts. We got some questions. We got some comments. How do those get to us? You ask? You can call or text the show 24 hours a day, 661-396-1000.

• 1:48Speaker 03

  And I will say, we had our first caller in probably about two or three years.

• 1:51Speaker 02

  Come on.

• 1:52Speaker 03

  Earlier this week.

• 1:52Speaker 02

  Live on the air?

• 1:53Speaker 03

  Yes, live on the air.

• 1:55Speaker 02

  Beautiful voice.

• 1:56Speaker 03

  All right. So we get a live caller, as long as they're appropriate.

• 1:59Speaker 02

  Yeah.

• 2:00Speaker 03

  They will get a coffee on the house, a reverb coffee. If they want to come down here, be glad to buy them a coffee. Let's get some good discussion going.

• 2:08Speaker 02

  There you go.

• 2:08Speaker 03

  Ask the question live, but make it appropriate.

• 2:10Speaker 02

  But if you don't want to be on the airwaves, text or call in and you can just talk to Stephen.

• 2:14Speaker 03

  I used to listen to Jim Rome, and I would never, I listened to him for years. I would never get the courage to call in because I didn't want to get run. I didn't want to get roasted by him.

• 2:23Speaker 00

  I tried once and I was on hold for about two and a half hours and I said, okay, well I'm not doing that again.

• 2:29Speaker 03

  My boys have never listened. Well, they've listened to like YouTube clips of him, but they know a bunch of his sayings because I'll say them all the time. Come on.

• 2:36Speaker 02

  Steven, they won't let you on the show because they know your, uh, your sports prowess.

• 2:41Speaker 03

  Oh, yeah.

• 2:41Speaker 00

  Oh, he was bashing my dolphins. I wanted to give him something.

• 2:43Speaker 02

  Oh, that's what it was.

• 2:45Speaker 00

  We had a good team.

• 2:46Speaker 03

  Tua?

• 2:47Speaker 00

  No, no.

• 2:48Speaker 03

  Is he not, is he gone?

• 2:49Speaker 00

  Oh, Tua's a Atlanta Falcon.

• 2:51Speaker 03

  Interesting. So who's your guy?

• 2:53Speaker 00

  Uh, we got Malik Willis from the Green Bay Packers.

• 2:56Speaker 03

  Okay.

• 2:57Speaker 00

  Yeah, that was a backup in Green Bay.

• 2:58Speaker 03

  Yep.

• 2:59Speaker 00

  Behind the Bakersfield boy, Mr. Jordan Love.

• 3:02Speaker 03

  Nice.

• 3:02Speaker 00

  Yeah, we'll see.

• 3:03Speaker 03

  Who knows, man? Tom Brady.

• 3:05Speaker 00

  What about him?

• 3:06Speaker 03

  Maybe, I don't know. Didn't he? Who was he behind? Bloodso?

• 3:09Speaker 00

  Yeah, Drew Bloodso. You're going way back now.

• 3:11Speaker 03

  All right.

• 3:14Speaker 00

  Chris is like, stop.

• 3:15Speaker 03

  Chris is very unhappy.

• 3:16Speaker 02

  You guys done?

• 3:17Speaker 03

  Hey guys, Chris has ever stared at you with that intense beard. I know, hey, it's time to shut up. Let's get on with the show.

• 3:22Speaker 02

  Oh, no. I was, I was just taking it in because I get, I get a little bit lost. I get swimming in the matrix when you guys start talking about sports. I, I watch sports. I like sports. I played sports.

• 3:33Speaker 00

  Just like an offensive lineman. Just, just block.

• 3:35Speaker 02

  Yeah. Yeah. We're very simple. We're a very simple, very simple breed, us linemen. Just tell me where to squat down and block.

• 3:44Speaker 03

  Love it.

• 3:45Speaker 02

  Yeah. Hey, there are some, there are some blocking moves and stuff that are pretty complicated. You know, there's some pulls.

• 3:52Speaker 03

  You might have to move to the left.

• 3:53Speaker 02

  Yeah.

• 3:54Speaker 03

  And sometimes they'll ask you, hey, you need to move to the right.

• 3:57Speaker 02

  It's complicated.

• 3:58Speaker 03

  I get it.

• 3:59Speaker 00

  Shuffle.

• 3:59Speaker 03

  Shuffle.

• 4:00Speaker 02

  Hey, and that old steel trap up here?

• 4:03Speaker 03

  Yeah.

• 4:03Speaker 02

  I kept it all straight.

• 4:05Speaker 03

  But explosive power, right?

• 4:06Speaker 02

  Yeah.

• 4:06Speaker 03

  I mean.

• 4:08Speaker 02

  Oh, yeah.

• 4:08Speaker 03

  They're holding off other 280 pound dudes trying to kill the quarterback.

• 4:12Speaker 02

  That's why I almost was good enough to play in junior college.

• 4:16Speaker 03

  Yeah.

• 4:19Speaker 02

  There we go. All right, moving on. Welcome to the seventh day of May. We are gonna go over a little bit about the markets. Obviously, a lot has been going on. It has been a wild ride this year. Sometimes it's good just to kind of take a breather, think about it, take a deep breath, look back over the last year, think about where things are at so that you don't get too sucked into the news media cycle, too emotional about things going on politically, geopolitically, around the world, conflict. It is all troubling, but we try to not let fear enter into our portfolios. We not try to let have greed enter into our portfolios. You want to get those out of there and you want to have a solid plan so

• 5:04Speaker 02

  that regardless of what the news is telling you, regardless of what's going on, even as crazy as some of the stuff going on is, it shouldn't change your strategy, it shouldn't change your your portfolio mix, because typically, most of your goals are five, 10, 15 year goals, and most people can't name what the big stressor was five, 10, 15 years ago.

• 5:28Speaker 03

  Yep.

• 5:29Speaker 02

  You know.

• 5:30Speaker 03

  It's funny you're talking about this. We didn't talk about this before air, but I had I had pulled up a screenshot of today's headlines, because you can get in trouble just getting your investment news from the headlines. So I know the market pulled back about four tenths of a percent today, but we're still in record territory. I believe yesterday closed out a new record for S and P. But yet, these are the headlines. NASDAQ futures tick up as crude oil falls and wait for Iran. That one's not even as bad. The Dow slips below 50,000 as S and P NASDAQ fights to hold. That's like they're trying to hook you in to click their link. S and P pulls back from record as oil prices gain moment. It's just all so negative. And here we're just setting records.

• 6:14Speaker 02

  Yep.

• 6:15Speaker 03

  But what's going on right now is They're supposed to be coming to an agreement with the war in Iran. We'll see. But they're kind of baking that into where they see the future of stocks going. And that's why investors are back to here being positive again.

• 6:31Speaker 02

  Yeah. Yeah. And with all that being said, a lot of people, even with, with the conflict with Iran and everything going on and a little bit of a pullback here in the second quarter, we're into the second month of the second quarter now. You know, year to date, the S and P 500, when you talked about the market earlier, we're talking about the S and P 500, which, you know, we always try to throw it out there and remind you, it's the 500 largest companies that trade on the exchange in the US markets. Obviously, most all those companies have worldwide impact and exposure, but they are US companies, the 500 largest companies. Year to date, up 6.9%. You look back 12 months, up 30%.

• 7:14Speaker 03

  30%.

• 7:14Speaker 02

  30%. So even with all the concerns over the last year, even with all these things, if you stuck with your strategy, you've done very well. If you have some bond and some conservative, your account obviously might not be up 30% over the last year, unless you were full tilt into S and P 500 exposure. But it's one of those things where even if your market, even if the market pulls back a little bit right now and stuff, the rearview mirror, it doesn't, it doesn't necessarily guarantee what's going to happen in the future or anything. But I tell people, like, if your account had done nothing, and you were super aggressive for five straight years or three straight years, and then all of a sudden your account goes down, that's a problem. But when your account is doing really well, depending on how you're invested,

• 7:57Speaker 02

  if you're really aggressive and your account's way up and it comes back a little bit, you don't want to get too emotional, because it's part of it. It's, it's the market has done really, really well. There's been momentum stocks, there's been AI trades, there's been people trying to jump on the bandwagon with some of these technology stocks and stuff. So they've gone through the roof. And if they pull back a little bit, especially when there's maybe a conflict like what we're going through right now, don't be surprised or shocked. You want to think about your short-term goals, short-term money. But then your long-term goals and stuff, you still want to hold really good quality stocks. One of the things that I go through a lot with a lot of our clients, because you can kind of get Sucked into the headlines of the news and then you kind of look at your account balance and it boils down to just looking at your account value every single day, right?

• 8:42Speaker 02

  Which is important. I'm not going to discount that. All of our account balances are important. It's all, obviously at the end of the day, what we need to focus on, but sometimes I think we forget that you are an investor. Even if you're working with a, an advisor, or even if you're in a 401k, you're an investor and you hold lots of different stocks and bonds inside of your account. And sometimes we don't lift up the hood and look at, at the engine. And so I like to sometimes pull up a couple of the different funds that might be in some of our strategies we're using with clients and looking at the actual stocks that you're holding. And I try to tell people, so yes, you know, if you want to watch the news and you're entertained by the news, or you're worried about the news, that's

• 9:24Speaker 02

  fine. But then at the end of the day, look at these 20 companies, these top 20 companies that you're holding. These companies are going to continue to try to make money and make products and goods and services that people are going to buy for the next five, 10, 15, 20 years and stay profitable regardless of some of the different noise or different concerns that we have right now. And so like I said, it doesn't necessarily completely alleviate concerns and frustrations maybe with, with politic, with politics or economic, you know, realities. But I tell people that these companies are going to try to find ways to stay profitable and to make money to help your value of your account stay, your purchasing power stay in place. So that when you go to use this money in five, 10, 15

• 10:08Speaker 02

  years, it's going to be worth more than it is today because of inflation, which we've all felt over the last few years in a real, real way. We've all seen things get more expensive. You know, and you want your money to be growing and working for you so that you can actually enjoy more of it, even though the, the thought sometimes is, well, if my account goes down, I'm not going to be able to enjoy retirement. It's like, well, actually we, we see a lot of times people being too conservative actually limits you to enjoying a little bit more.

• 10:36Speaker 03

  Retirement is not the finish line. When you go to retire, that is absolutely not the finish line. You have the whole rest of your life. So there has to be a growth component if you want to stay competitive and make that money last, for sure.

• 10:48Speaker 02

  There you go. Well, that was a great opening segment, kind of going over the markets and all that stuff. Like I said,

• 10:53Speaker 03

  How about these names, Chris? Cause you brought it up. Google? Do you ever use Amazon? Do we pick up our Apple iPhone? Do we drive a Tesla to work? ExxonMobil, UnitedHealthcare, MasterCard, Costco? These are a few. Netflix, Procter and Gamble, Home Depot. Those are a few of the top 20 companies that are made up of people's 401k plans inside of their mutual funds.

• 11:17Speaker 02

  Right.

• 11:18Speaker 03

  So, these are, these are names we use every single day.

• 11:21Speaker 02

  Right, and so a lot of times, people disconnect, like, when they, when they think about their 401k, or they think about their account, they're not realizing that your performance and your participation is, is boiled down to some of those companies. And a lot of times, that's why people get motivated to buy individual stocks, because, well, I'm, I'm seeing that individual stock. And that, you can do well. I'm not saying that you can't do well buying individual stocks, but by and large, most individuals that go get into that game.

• 11:49Speaker 03

  Forty-five percent, I think, is, is their average versus just if you to put it in an index fund.

• 11:55Speaker 02

  Right. So, a lot of times, it might make sense to lift the hood. If you're working with an advisor, hopefully, he or she can help you understand that. Like I said, I love to do that with some of my clients that are maybe a little bit nervous or whatever, and I kind of go over those different companies, and they go, "Oh, yeah, I use a bunch of those products. Oh, yeah, I, I fly, I travel, I want to do that in my retirement." Well, then, we have some airline exposure, right?

• 12:17Speaker 03

  It amazes me. You'll have a client that, man, they just, they gotta pay off their mortgage. They can't wait to pay that off. They can't wait to pay off their credit cards. They can tell you all the interest rates. And yet, when you ask them, "Okay, so, let's have a look at your 401k." They might have three, four, 500,000 in their 401k, they've been working a long time, they have no clue. They're not even sure how it's invested. That's one thing I've seen a couple of times over the last few weeks, is there, there will be in a target date retirement fund. I saw one recently where the individual has six, seven years until retirement, but they were in a 2010 retirement fund. And that retirement fund is geared towards someone who retired back in the year 2010. So, it's going to be ultra-hyper conservative. And so, we're, we're always happy to do that, to review statements and to give you kind of an idea of where you're at here at MoneyWise Wealth Management.

• 13:03Speaker 02

  There you go, yeah. And that one, that phone number, 661-841-1000. 847100, sorry.

• 13:08Speaker 03

  That's for Chris.

• 13:09Speaker 02

  Uh, yeah, just call, call Money Wise if you want to go over that because sometimes that can also be a helpful tool. And we've done, um, initial consultations with lots of people through the years. We, we hope that this radio show is a good place to get some information and ask questions and different things. But if you didn't want to sit down with somebody, that's what you can do. Uh, the questions to the show though, again, 661-396-1000. Send in that text to Steven or give them a call and chit chat with them. We're going to take a break. When we come back, we're going to go over some great questions that we got from some of you great listeners. Stick around.

• 13:43Speaker 02

  Welcome back. This is the Money Wise Show live on 96.1 and 1230 AM K E R N. You may be streaming this, not during trading hours. We shared some, uh, live updates. Markets kind of still seem to be bouncing around the same levels. So we'll try to give some, uh, updates on the markets before they close. Got to get used to this whole show being back on.

• 14:09Speaker 03

  It's different, huh?

• 14:09Speaker 02

  Yeah, yeah, we're not, we're not after hours giving, uh, closed market updates. But, uh, but anyways, uh, a quick comment came in kind of about our last conversation. So I'll jump into that before we get into the other questions that came in. It says, hey, guys, do you think investors are getting too comfortable right now with everything going on in the world? And what should regular people watch for if the market starts to get a little shaky again? Well, my question would be, uh, what do you, what do you mean with people getting comfortable? Because I work with a lot of people and nobody seems to be super comfortable. But I think maybe the thought is, is that, um,

• 14:47Speaker 02

  I, I don't know. I, I don't think people are comfortable with where things are at. Uh, but, um, but yeah, I mean,

• 14:55Speaker 03

  Maybe just because it's been, the market's been going up for basically since 2022 and. Yeah, we've had some blips in the radar and I mean, it is a war with Iran.

• 15:05Speaker 02

  Yeah.

• 15:05Speaker 03

  Big deal, but.

• 15:07Speaker 02

  So, and then when it says, what should regular people watch for when the market starts to get a little shaky? Again, it's been shaky. We've had some volatility this year already. We've had volatility over the last 12 months.

• 15:17Speaker 03

  AI has brought tons of volatility, even outside of Iran.

• 15:21Speaker 02

  Yep. And it's just been trending upwards. So maybe that's what you're saying is that,

• 15:25Speaker 03

  Yeah.

• 15:25Speaker 02

  that it's trending upwards and the accounts have been going up. Here, here's the thing I always try to say, like, why do we show the 12 month review? Or why do we look back over a 12 month period and talk about the market? Because what I'm trying to get you to understand is when you're, when you're growing your portfolio or when you're investing to, to meet an objective, whether it's a shorter term objective, whether it's long-term growth for income in your future. If your account goes up 30% or anywhere even close to that over a 12 month period, you have to anticipate it's also going to go down. The market does not just go up, it trends upwards, but it's always going to be shaky.

• 16:06Speaker 02

  There's never been a period of time where the stock market has not had ups and downs as it goes upwards.

• 16:13Speaker 03

  On average, one out of every three and a half years is a down year.

• 16:16Speaker 02

  Right.

• 16:16Speaker 03

  That's the historical average. So we're actually, I mean, we're pushing that. So it would be expected and almost welcomed to have some type of a correction.

• 16:24Speaker 02

  And a lot of times people don't realize how volatile the markets normally are. So 10% corrections or 10% moves down in the market happen almost every single year. So even if it's an up year, that's 12% during that year, there's usually, it goes up 20% and comes back down to 10.

• 16:47Speaker 03

  Last year, last.

• 16:48Speaker 02

  And then goes back up a little bit to 12.

• 16:50Speaker 03

  Got hammered.

• 16:51Speaker 02

  Yes.

• 16:51Speaker 03

  16% I think it went down.

• 16:53Speaker 02

  But, but 10% typically doesn't even catch our radars as investors. So I don't know where people's pain points are with what you're asking. You're saying, hey, when should people start looking for it? The thing I will tell people is educate yourself on your own portfolio, your own account balance. What is your risk profile? How are you invested? How is this going to perform during different market cycles? Or if the market pulls back X, or if it goes up X? How do you want to participate? We can't predict it, but we can do stress tests.

• 17:28Speaker 03

  Yep.

• 17:28Speaker 02

  We can look at what your account would do if 2008 happened again. And for most people, if you were barely getting started in 2008, you say, well, I didn't even care about 2008 because I was just getting started and I only had $15,000 in my 401k. Well, now you might have 600,000 in your 401k. So now if 2008 happens again, what is my portfolio going to look like? Am I going to be okay with this level of risk? This level of variance? Do I have short-term goals that I need to address? Am I too aggressive? Or am I not aggressive enough? Even with some of the concerns we're talking about. So as much as possible, educate yourself on your own portfolio, your own situation.

• 18:10Speaker 02

  Don't think about, I need to be looking at the market and looking for shakiness. You need to look at your own portfolio, understand your own risk profile, your stock to bond portfolio mix. Do I have a good diversified mix? Am I going to be okay if the, if the, if the market hiccups in a big way? And it did, it just hiccoughed a couple of weeks ago. Did you freak out? Is it too aggressive for you? You know, that's what you're constantly trying to do.

• 18:34Speaker 03

  You want to, and we spend hours, me and you, I mean, we, we dig in making sure that clients' portfolios are what we would call an all-weather portfolio, that it's going to withstand 2008 happening again. It's going to be okay if things move way in the positive direction. But we basically, it's kind of like a car. If you, if you don't know what the road's going to look like, you don't know if a snowstorm's coming, you're going to be doing a little off-roading, or if it's just flat freeway, you're going to want a well-rounded car. It's like taking a, you have a Tesla, right, Chris?

• 19:06Speaker 02

  Yeah.

• 19:07Speaker 03

  So it's like taking your Tesla, doing a little off-roading in the Kern County mountains. It's probably not going to work out well.

• 19:11Speaker 02

  No, it's not.

• 19:12Speaker 03

  So that's the way we want to design our portfolios and we encourage you to look at your portfolios. And if, if you have a big correction. How are you going to be? Are you too aggressive or not? And then the, the, the magic in it is then matching that to your risk tolerance.

• 19:29Speaker 02

  Yep.

• 19:29Speaker 03

  How much are you willing to stomach if the market drops or falls so much? And then do you have excellent cash reserves? If you need a AC on your, what was it? AC like 15 to 20 grand now for a new air conditioning unit?

• 19:43Speaker 02

  Right.

• 19:43Speaker 03

  Do you have the ability to pay that?

• 19:44Speaker 02

  And then that's what, that's what I mean about being sensitive to your own situation and really your own portfolio. Because if you know, like, hey, I want to retire in a year and right off the bat, I'm going to pull a big, oh, huge chunk out because we want to move to a different state. Well, you may be way too aggressive then because you have to account for the fact that you're going to sell off 20% of your account your first year of retirement. So there's so many little things that each of us as investors have to account for. And we've seen it all. We've seen all situations. We've seen people that come in and go, I don't care. I want to be super aggressive, as aggressive as possible. And then we have to say, hold on a second. Are you going to use any of this? How much income are you going to be pulling out your first couple of years of retirement?

• 20:28Speaker 03

  Are you taking care of a family member? Do you have an aged relative that doesn't have their own means? You may need to have an emergency cushion to help take care of them. We see that a lot.

• 20:36Speaker 02

  Yep. So there's all kinds of things that you have to take into account. Right, right. So, so yeah, you got to take that on all into account when you're, when you're kind of talking about all this stuff and, and, and you know, what a person should be thinking about when they're talking about the markets being shaky. The market has always been shaky. And if you're waiting for the market to not be shaky, we would almost never be investors. So hopefully we kind of addressed that, kind of went all around that, that conversation and it helps you a little bit. Um, the, uh, the next comment that came in, we'll just tee it up, uh, because I love it. It, it's a, it's a 20 year listener to the show. Good afternoon, gents. Big fan of the show. Uh, well, you know, it's a

• 21:18Speaker 02

  long question. So we'll, we'll just come back when it gets back. So again, hopefully that helps people take a deep breath. Uh, thanks for the comment and coming in about the markets and all that stuff. We still have a couple of great questions to get to when we get back. One of them's about leaving your business to your kids and some things to consider on that. So stick around and that's what we'll go over when we get back. Stick around.

• 21:48Speaker 03

  Come on.

• 21:50Speaker 02

  Welcome back to the Money Wise Show.

• 21:53Speaker 03

  Pat Benatar?

• 21:54Speaker 02

  I can't, I can't. Steven, are you playing the guitar in there? Is this?

• 21:58Speaker 00

  I wish. Thin Lizzy.

• 22:01Speaker 00

  Do you remember Thin Lizzy?

• 22:03Speaker 02

  No.

• 22:03Speaker 00

  No? What was the name? I'm the old guy, huh?

• 22:05Speaker 03

  What was that name in one more time?

• 22:06Speaker 00

  Thin Lizzy.

• 22:07Speaker 02

  You are an old soul. Well, hey, when you're going to punk rock concerts at 7, Steven, you are an old soul, okay? My parents didn't let me listen to rock and roll music.

• 22:18Speaker 03

  My brother wasn't in a punk rock band. You knew that? My older brother? Swamp Moose.

• 22:23Speaker 00

  The one, uh...

• 22:24Speaker 02

  Say it again?

• 22:24Speaker 03

  Swamp Moose. My brother Trenton.

• 22:26Speaker 00

  Swamp Moose, I love that.

• 22:27Speaker 03

  Swamp Moose, yep.

• 22:27Speaker 00

  That's gonna be my new fantasy football name.

• 22:30Speaker 02

  Swamp Moose.

• 22:30Speaker 03

  Swamp Moose. Yep. Joel Stallings on drums and Joel's like, I mean, he's a stud.

• 22:36Speaker 02

  Yeah.

• 22:36Speaker 03

  He's out there in the world doing something and...

• 22:37Speaker 02

  Yeah, I think I, uh, I think I entered the mosh pit with Swamp Moose playing and I...

• 22:42Speaker 03

  Did you really?

• 22:43Speaker 02

  I wasn't found for a couple of weeks.

• 22:46Speaker 03

  Pretty sure you, uh, hid some people. You're a big dude coming through the mosh pit.

• 22:52Speaker 02

  Oh, some Jerry's Pizza action for those that are...

• 22:55Speaker 03

  I've actually never been, man.

• 22:57Speaker 02

  Oh, come on.

• 22:58Speaker 03

  Literally never been.

• 22:58Speaker 02

  You need to go down there. I don't... Do they still do concerts down there?

• 23:01Speaker 03

  Oh, yeah.

• 23:02Speaker 02

  Come on.

• 23:02Speaker 03

  I had to stay home and do my Legos, man.

• 23:04Speaker 00

  Get him out!

• 23:05Speaker 02

  Yeah.

• 23:05Speaker 03

  Any Lego honks out there? I'm the only one in the office, apparently, and I get Lego shamed for it, but if you are a listener, you need to relieve some stress? Get a box of Legos. I know they're expensive, but you can use them again and again. They truly satisfy.

• 23:21Speaker 02

  There you go. And he's not even sponsored by Legos.

• 23:24Speaker 03

  I'm not even kidding.

• 23:24Speaker 02

  Maybe you need to...

• 23:25Speaker 03

  Not kidding. If any listeners are feeling froggy and they want to buy me the Lay Bear Crawler Crane that I've been eyeballing for $800... Bring it on down to MoneyWise.

• 23:36Speaker 02

  Now, this is a different level of Legos we're talking about here. Eight hundred dollar crane you want to put together, bud?

• 23:40Speaker 03

  Yes, sir.

• 23:41Speaker 02

  Okay.

• 23:41Speaker 03

  Yes, sir.

• 23:42Speaker 02

  All right, let's jump into a question that has to do with the MoneyWise Show. Uh, good afternoon, gents. Big fan of the show, longtime listener. Congrats on 20-plus years on the air. I've been listening for almost that long. Very cool to see the show grow over the years. The banker guy that comes on once a week, shout out to Sammy, are is so hilarious and really adds what was already a great show, but adding his spin from the banking experience really adds that personal vibe. So, thank you and wanted to pass that along. Maybe when you have time, you can touch base on those who are business owners that want to pass their company over to their kids. Maybe some tips on what should be, what they should be doing five to seven years before stepping away. Long message, I know. Be money wise.

• 24:25Speaker 03

  Love it.

• 24:26Speaker 02

  Yeah, great, great question. First off, kudos for owning a business that your kids want to be involved in because I think by and large, all stats coming out of it, um, realities that are going on are most businesses are not being passed down to kids. Um, it's why we're seeing private equity going in there and swooping up.

• 24:46Speaker 03

  Gobbling them up.

• 24:47Speaker 02

  Gobbling up companies, uh, whether it be electrical companies, uh, air conditioning companies, um, there's a big consolidation happening because unfortunately, the, the, uh, the old days of passing down the family business, family name, uh, to the namesake, to the kids, um, there's just not as much of that going on. Um, you know, I guess we could speculate on why that is, but kudos for you of running a business that the kids want to be involved with. So, five to seven years before the company, uh, you're wanting to step out or wanting to step away. What I basically did was I kind of thought about some kind of more simpler things to start thinking about that maybe, you know, it's not necessarily, I mean, the business plan and this and that is part of it, but.

• 25:29Speaker 03

  Some people look for these super sophisticated plans. But hey, give us the secret sauce. And a lot of it comes down to just some common sense stuff.

• 25:36Speaker 02

  Common sense stuff that you don't think about. So, you, you've been in business, say 15, 20, maybe even more 20-plus years. You have built relationships in your community that are vital to your success, to your referrals, to your company's continued success in your community, right? So start transitioning the relationships, not just the ownership.

• 25:59Speaker 03

  Yep.

• 26:00Speaker 02

  Because if all you do is pass over the ownership and you have not handed the baton of some of the relationships and the key relationships in your community, unfortunately, you hand over a business that's going to start dying off on the vine because there's going to be other relationships that might be closer or more intact. So five to seven years before handing over the ownership, which is what you're talking about, you know, think about clients, vendors, bankers, key employees that need to trust the next generation before the handoff happens. And in all those areas that we just talked about, vendors, bankers, key employees, they, those people don't have a 20-year relationship like they have with you. And so, and plus, they may be going through turnover.

• 26:44Speaker 02

  They may be changing hands. There may be a new set of bankers now that your, your kids are going to have to deal with, that you had this long relationship with this great guy at the bank, and now they have to build relationships with that bank and start their own process. So again, think about transitioning those key relationships, not just the ownership. Another thing that you can start doing is give the kids, you know, and these are probably adult kids, so I hate saying kids, but anyways, you kind of understand, these adult kids, real responsibilities early. Let them lead projects, manage people, solve problems, and make decisions.

• 27:16Speaker 03

  Don't just, don't just hand them the business.

• 27:18Speaker 02

  Right.

• 27:18Speaker 03

  That's going to breed resentment inside of the company. I would have them start from the ground up so that they appreciate and, and love what they're getting handed and the opportunity they're given.

• 27:29Speaker 02

  Yep.

• 27:30Speaker 03

  You do see it a lot where someone will just come in and maybe they go to college, they come back and they take over this company.

• 27:35Speaker 02

  Yep.

• 27:36Speaker 03

  They don't know what the heck they're doing.

• 27:37Speaker 02

  Yep. And there's always going to be resentment. A lot of times when there's a child taking over a family business, right? Cause even if you did start at the bottom, if you eventually work your way up and you're up towards the top, then people are going to assume that you were handed it. But hopefully having that perspective of working from the ground up and doing a lot of the, the thankless jobs maybe at a company and stuff is going to make you that well-rounded person. That's going to be able to take over that business and not take employees for granted, not take all the different positions for granted that are being done in the whole cosum that is your business.

• 28:13Speaker 03

  Like you said, they're building relationships with the customers, but have that individual build relationships within their own company, within their own firm and to earn respect. And you get that by, you don't have to be an expert at everything, but if you know a little bit about every piece of what you guys do from billing, shipping, receiving, I mean, in everything, you know, the more exposure they get, the better they're going to be at running your business and taking over.

• 28:39Speaker 02

  Yeah. And you mentioned kind of this, this is the plan for you, but you definitely want to figure out if the children actually want the business. Sometimes the assumption is they'll take it over, but sometimes the confrontation, conversation needs to happen early and honestly, and, and, and maybe often, you know what I mean? Like those kids are figuring out their paths. And it is one of the reasons that we're seeing the uptick in, in, you know, private equity, buying up different companies and stuff that are maybe good companies, cash flowing. There's that consolidation, going around and buying all these mom and pop businesses. And obviously it's a lot of people's dreams to have the family or somebody in the family take it over. But there's dynamics because if you have multiple kids and only one kid wants to take it over,

• 29:23Speaker 02

  and then the fairness of it to whereas if you sell it and then manage the money well and manage the future well, then it's a easier conversations as far as estate planning. And what happens to the business if I die then? And if it only goes to one of the three kids and there's a lot of complications that come out of that, depending on certain situations.

• 29:43Speaker 03

  Who should they talk to, Chris? If they're, if they're wanting to structure something out, what kind of an attorney would this be?

• 29:49Speaker 02

  Yeah, there's definitely. Business focused attorneys that that that go through all this, you know, like Rob Noriega here in town. There's a couple of other really great business attorneys that you can talk to and hammer some of this stuff out. The, you know, it might not be cheap to sit down and hammer that out with an attorney, but you're getting to pay for their many, many experiences with other business owners, with other families who are going through the same things. And I think it would be well worth it to avoid some unforeseen circumstances of, you know, for, for lack of a better word, ignorance. You know, you just don't know what you don't know until it happens. And if you're wanting to try to smooth out some of this process, then definitely take advantage of.

• 30:30Speaker 03

  What about the business owner out there who knows their child isn't going to take over? And they just want to know, hey, I know I'm going to sell this thing five to six years from now. What should I be doing now? What are some things I need to do?

• 30:43Speaker 02

  The business?

• 30:44Speaker 03

  Yeah. If a business owner is listening to this, they don't have a child they're going to pass it on to, but they know they want to sell their business in five years. They've never done any real planning outside of just their, their own bookkeeping. And what are some proactive things they can do?

• 30:56Speaker 02

  Yeah. Well, let's, let's focus on the kids thing still.

• 31:00Speaker 03

  Okay.

• 31:00Speaker 02

  To answer the question.

• 31:03Speaker 03

  Sure.

• 31:03Speaker 02

  Yeah. So one of the things that you can do, and this actually touches on that. Build this, build the bill, uh, build the company to where it can run without you. Right? Cause if you build the business out to where it can run without you, then whether you sell it to your child or whether you sell it to another company, you can exit out and it can run without you. So build the company out so that it, every decision is still not dependent on mom or dad. And then you can kind of, it's not as fragile then whether you sell it or whether you, you pass it on to your child. Now you say, well then why in the world even have your child involved if it can run without you? Well, there still has to be someone that the, the buck stops with, right?

• 31:47Speaker 02

  And so if you can start to run it to where every decision is not being made through you, the owner, as you step out and a child takes over, it's going to be a cleaner, better transition where you're still not having to, to step in. This goes along with what you were talking about, whether you're going to sell it, or whether you're going to give it to your child, clean up the financials. A lot of times businesses run in a certain way, maybe for tax efficiency, maybe for some different things they're working through with their CPA. But you want to clean up the financials to have things be organized, clear processes in place on how financials are handled. Documented operations will make succession smoother and reduce future conflict.

• 32:31Speaker 02

  This can come along with more of a formal succession plan. Who's taking over what roles? When does ownership transfer? When somebody leaves or disagrees? Or what if this doesn't work out? What's the failure plan? You know, we would hope that if we pass our business on to our kids, it's going to work out perfect and it's going to be great, but

• 32:52Speaker 03

  It can get messy.

• 32:53Speaker 02

  What's the parachute?

• 32:53Speaker 03

  Yeah.

• 32:54Speaker 02

  And maybe what you were talking about is the parachute is I want to take over it, but if in two or three years, it doesn't look like it's working out, what's the parachute? And if you have a plan for the parachute and we're going to just sell it, if it's not an emergency, you can hopefully still get top dollar for it because you've done all these other steps. You have your cleaned up financials. You have good processes in place. You have documented operations and this is what's done. So then if the parachute's pulled and the son or the daughter or whoever's taking over doesn't want to do it anymore, you can still package it together and sell it for top dollar. If you end up having to sell the business in distress because things aren't working out, well, now you're not going to get top dollar for it, right? And that's not what you want for anybody.

• 33:36Speaker 03

  And just shadowing, I mean, all of your business is in your mind. You need to get it into the mind of your, your, your child. And so just spending as much time as possible. And then like I do with my kids with our finances, get them involved. Make sure they're, they're physically actually doing a lot of the transactions, a lot of the phone calls. You're there as their wingman, but you're, you're gradually passing it over to them. One thing I, I have seen is that parents will get a little defensive if, if the child does say, go off to school, they come back and they have a lot of new ideas, especially around using AI to streamline things. Well, that's just, you hear some of the parents, oh, that's just not the way we're going to do it. We've always done it this way. Well, have an open mind to some of these new technologies because they could save you

• 34:20Speaker 03

  a ton of money and make your business more valuable.

• 34:24Speaker 02

  Right. Yeah, and so another thing is, is we talked about a little bit with estate planning and how this can get complicated if you have multiple kids and only one kid is taking over. So start estate and tax planning early. I suggest using professionals, advisors, when you have kind of more complicated situations. So you want to be thinking through this stuff. Waiting too long can create unnecessary tax burdens and legal headaches for the family. So you want to talk through all this stuff and it is a very challenging situation. Like I said, if you have one kid that's taking over the business, how does that work out with as far as, you know, sometimes, you know, inheritances and what you're leaving to kids and all those

• 35:07Speaker 02

  kinds of things. You have to have those discussions and you want to have that plan in place. Another thing to remember, which we talked about a little bit, like, starting from the bottom, you mentioned, Seth, developing leadership gradually. Employees should start slowly looking to the next generation for direction instead of only the founder. So as they're working their way kind of through the ranks, they're building leadership. They're slowly getting some of that experience. And then the other thing, you know, that sometimes people don't think about, and you may be thinking through this as far as your own situation, but you do need to prepare emotionally for stepping away. A lot of times, the funny thing about us as financial advisors, when we talk about people transitioning into retirement, the

• 35:52Speaker 02

  numbers is the easy part. The portfolio is the easy part. Having a strategy and a plan in place is the easy part because it's kind of numbers and it's kind of, you know, using best practices and having a plan in place, the easy part. The emotional part of stepping away from your career, even though there's probably some stresses and headaches that you're definitely ready to get out of your life, a lot of times, people are not emotionally prepared for the big step away from the career. You don't realize the satisfaction, the sense of participation and completion and different things that you get from your career, even though, you know, you're maybe just focused in on some of the headaches and the changes and they're changing everything up and you're just ready to get away from

• 36:34Speaker 02

  That, but then you get away from all of it in retirement and there's a big emotional impact on your life. And we talk about not just retiring from work, but retiring to what? What are you retiring to? What is your plan? What is your purpose? What is your focus? And golf is a great thing. Fishing is a great thing, but it's not everything. And they greatly lack some things, even like even if you say golf, well, if you're going to go golf by yourself, that's not what you were getting from work.

• 37:05Speaker 03

  Yeah.

• 37:05Speaker 02

  If you're going to start golfing with a group, there can be some community there. There can be some, you know, some challenges and let's all try to improve our game. So I'm not saying that golf couldn't be the thing, but I have talked to a lot of people that are like, okay, I golf for seven or eight months and realized that kind of

• 37:19Speaker 03

  Working on cars. I'm going to build that hot rod. I've always wanted to. And then you, you get two or three months into it and you're in the garage by yourself.

• 37:25Speaker 02

  Yeah. And for me,

• 37:26Speaker 03

  It's neat, but

• 37:27Speaker 02

  It would get expensive because of all the drywall I'd have to repair from stuff I'd be throwing around in the garage. So, uh, yeah, working on cars would get even more expensive because, uh, stuff I'd be throwing around. But I mean, that's kind of just a basic little breakdown of some things to consider when you're about five to seven years from retirement or stepping away from your business, thinking about selling it to your kids. But we even kind of talked about even thinking about if you had to sell it, you want to kind of have both of those options in case it doesn't go as planned. So hopefully that can help you out, uh, in, uh, in, uh, you know, in kind of thinking through that. So we're going to take a little break, come back for the last segment. We have another, question that came in, so stick around. We'll be right back.

• 38:28Speaker 02

  You knew three words, dude.

• 38:30Speaker 03

  Now, is it, is Green Day came out with a, uh, like the graduation song? Hope you enjoy the tassel of You know that song? It was our year 98. Isn't that crazy?

• 38:43Speaker 02

  Our, our year.

• 38:44Speaker 03

  Our, this was our year 28 years ago. That was our year.

• 38:48Speaker 02

  I'm gonna get emotional.

• 38:49Speaker 03

  Oh, my gosh. It's been a minute. And now I have, well, you have grandkids.

• 38:53Speaker 02

  Yep.

• 38:53Speaker 03

  Crazy. I have a daughter getting ready to become a senior. This is weird.

• 38:57Speaker 02

  Yeah, grandbabies. Let's talk. I don't.

• 38:59Speaker 03

  Lakers are on Amazon Prime.

• 39:01Speaker 02

  Has that even become, uh, public knowledge here on the airwaves? Is this, is this gone into the archives of our Knowles of the Money Wise Show?

• 39:10Speaker 03

  That you have now have grandbabies?

• 39:12Speaker 02

  Did I out him? Grandbabies.

• 39:13Speaker 03

  I outed, I outed Chris that he's a grandpa.

• 39:16Speaker 02

  And I absolutely love it. I should talk about it more. I should talk about how expensive it is. I should talk about why you need to get your finance, financial house in order because you don't think life's that expensive. Then you finally get rid of the kids. I mean,

• 39:28Speaker 03

  And then boom.

• 39:29Speaker 02

  And then boom.

• 39:30Speaker 03

  I do think that in the back of my mind. I'm thinking, well, she's getting ready to, you know,

• 39:34Speaker 02

  Oh, bro.

• 39:34Speaker 03

  Be less expensive. It's gonna be just as much.

• 39:36Speaker 02

  It's so funny. It's so funny because, uh, like I look at my Amazon cart now, like, and I'm like, Wait, what happened? Like diapers and, and, uh, baby stuff.

• 39:47Speaker 03

  Going back in time.

• 39:48Speaker 02

  Yeah, I have two, two grandbabies from two of our daughters and they're one month exactly apart. They both hit one year. And so I tell people I'm getting to experience what twins are like. Uh, and it's pretty wild when you watch them both for three or four hours, you know, at a time and.

• 40:03Speaker 03

  And it's, is it true, Chris? You always hear it's cool when you're a grandparent because you get to have all the fun, the good times. And then you're like, here you go, go home.

• 40:10Speaker 02

  Yeah.

• 40:11Speaker 03

  Go put them down.

• 40:11Speaker 02

  Cause, cause yeah, I still get to sleep through the night.

• 40:14Speaker 03

  Yeah, you get to sleep.

• 40:15Speaker 02

  Yeah, yeah.

• 40:16Speaker 03

  Take them places and then give them back.

• 40:17Speaker 02

  They have a lot of the same stress and then they go home. But we all made it through. So, so hopefully, uh, you know, those that are out there that are in the, I have young kids stages, you're, you're surviving and you're figuring out how to make it through. I remember those phases, but for my, uh, grandparents out there that are listening, uh, it is a wonderful, wonderful season of life. And so I hope, uh, health and vitality to you and all your families and all that stuff. But I think that's the first time it's been thrown out on the air. So there you go. Uh, we are going to get to this last question. Uh, we have another one that came in. So hopefully we'll cover that in the next couple of days or another one of the team here at Money Wise. Well, we'll jump into that, but, we had one come in to David May from Vicelia. I used to email questions. So thanks for your questions, David May.

• 40:59Speaker 03

  Thank you, David. You should call too.

• 41:00Speaker 02

  It said, did you see the news article about SNAP benefits going to dead people? Another article out of Australia about-

• 41:08Speaker 03

  This is crazy.

• 41:09Speaker 02

  Yeah. Well, he said, "Is another article out of Australia, fish oil supplement tied to cognitive decline? Question mark. I guess we need to be careful about what we spend money on. Thanks." So we'll jump into this a little bit. The fish oil thing, it sounds a little-

• 41:25Speaker 03

  It's a little fishy because a little fact checking on that, not that, maybe there's something else going on, but I think a, a report, a study was released, Medical University of Southern California, April 26th, 2026, but it's only decline if they have numerous head injuries. So I would figure if you have numerous head injuries-

• 41:48Speaker 02

  Probably prone for dementia.

• 41:50Speaker 03

  Pretty much any oil you're putting in your body, whether it's fish or beef oil, it's going to affect your, your, your ability for your brain to heal itself. So if you have a traumatic brain injury, you may want to steer clear of the old omega-3 fatties.

• 42:04Speaker 02

  There you go. So that's the health hour with Seth Perry.

• 42:08Speaker 03

  That's right.

• 42:08Speaker 02

  So that's, uh, so yeah. And then the other one though, that we were going to talk about a little bit with the SNAP benefits. We, we do, um, we don't talk a ton of politics here. We try to, we try to break through some of that and try to remain apolitical. We try to-

• 42:23Speaker 03

  Switzerland.

• 42:24Speaker 02

  Yeah, we try to, to as much as possible, talk about some of that stuff. It, it is important, but we live in a day and age where soundbites, um, half-truths, um, you know, things come out. Uh, what, what, what did you say the other day that I loved it? You said, you said stats don't lie, but statisticians do.

• 42:42Speaker 03

  Statistics don't lie, but statisticians do.

• 42:44Speaker 02

  Yes. And, and because, you know, there's bits and pieces of truth and everything that everybody is saying nowadays. And it's so hard to even understand, um, what, what the truth is on certain stances. So when we talk about SNAP benefits, uh, and it's in the news right now because a lot of those are going away, uh, or, or being impacted.

• 43:04Speaker 03

  A hundred and 86,000 dead people were receiving SNAP benefits and 355,000 people on SNAP benefits were receiving double benefits.

• 43:14Speaker 02

  Double benefits.

• 43:14Speaker 03

  So there is some, there is some cleanup taking place and it's painful, but we absolutely want to make sure the stamps get in the right hands.

• 43:22Speaker 02

  Yeah.

• 43:22Speaker 03

  And the, the actual- Alive hands, I guess.

• 43:25Speaker 02

  Yes. Yeah, living hands is a good thing.

• 43:28Speaker 03

  You killed it today, by the way, Chris.

• 43:30Speaker 02

  We want them to get into the right hands. We are definitely not opposed to benefit programs, but want efficiencies and all that stuff. So there is a lot that you have to go into to really look into see what those issues that they are cleaning up. But most importantly, thanks for the comments, questions. Thank you, listeners, for making the Money Wise Show what it is. And most importantly, as always, be smart, be safe, be money wise.

• 43:59Speaker 01

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