- And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial advisor.

I hope you'll stick with us for the next half hour as we answer the questions that are most important to you.

Perhaps you indeed, perhaps your friends, your family, your neighbors, your coworkers, folks who have reached out to us with their questions.

It makes us the most relevant financial show on television today because we're answering your concerns, your questions, what's top of your mind.

It's a pleasure to do that.

With 780 years of experience, it's always a pleasure to share those...wisdom, a bit of sage wisdom that we've picked up over many, many years, to solve as many of the problems that you're facing as we possibly can.

If you're joining us for the very first time, welcome.

I think you'll find two things that are interesting, maybe a little different, about our financial show.

Number one, it's all about you.

That's pretty unusual.

Most financial shows today are trying to pound the drum about some topic they want to drill into somebody's head or maybe separate some of your dollars from your wallet.

And number two, we don't take ourselves that seriously.

So if you're looking for that typical, tried and true, old-school, dry, boring, almost stodgy financial show, you've got the wrong spot.

You're probably going to want to switch over to reruns of MacGyver.

Something.

That's just a suggestion.

Or if you're interested in getting information about things that are very, very important to the people that you care about, perhaps even yourself, then, with a little bit of lightness to it, you might absolutely want to stick with us.

So, how we do this is pretty simple.

If you have a question about any financial topic or your entire financial picture, you send us an email, gene@askmtm.com, where our entire team is at your service, and then we pick some of those.

We can't possibly answer all of those, but we pick some of those to appear on a future show.

So let's give you a demonstration right out of the gate.

Our financial correspondent Megan is at the ready.

Megan, where do we start this evening?

- Hi, Gene.

Our first question tonight asks, "Are you able to write off all income against losses "and forward 3,000 to future years or just 3,000 total?

"Thank you."

- Oh, very interesting.

In this case, for those of you who are not familiar with the concept, wouldn't that be wonderful if all your investments have always gone up, you've never had to deal with a loss?

That would be fabulous.

If you have had an investment loss, it might be a stock, a bond, it might be a mutual fund, an ETF, it might be a piece of real estate, it might be a business venture, that has had an unfortunate result and you have a loss, and I'm going to use, as a simple example, a $10,000 loss.

In any given year that you've achieved that loss, that that's been locked in, that's been reported to the IRS, you may use that to offset any other gains that you might have in that particular year.

So let's paint this scenario, a lovely scenario.

You did have 10,000 in losses, but you had 15,000 in gains.

Wonderful!

Your net profit is 5,000.

The 10,000 of losses offset the first 10,000 of your profits and you will pay tax on 5,000.

What if the numbers were reversed?

What if you had 20...

I'm sorry, 15,000 of losses and 10,000 of gains?

That's a sadness, of course.

Well, 10,000 of losses offset 10,000 of gain.

No tax whatsoever.

And you still have $5,000 left.

The IRS says you may use three of that, $3,000, against any other income.

Could be earned income, could be interest income, any other income.

So if you use that, you should, you now have $2,000 left.

That is carried forward.

That goes forward to your next tax return, next tax year.

And in this case, since it's only $2,000, it would be usable either against capital gains or against ordinary income.

Either way, it would be used up in that next year.

The reality is, this can be very, very useful.

And in some cases, some sophisticated investors actually plan to take their losses to offset some of their gains, to enhance their portfolio, clear out the weeds, so to speak.

Hopefully, that helped.

Of course, if you have further questions about how to handle gains, hopefully more gains than losses, but either one, send those to us.

Megan, excellent start.

Where do we go next?

- Our next question says, "I don't want my money invested in ESG.

"My investments are in mutual funds "where the fund manager makes all the calls.

"How can I find out who the fund managers are "to communicate my wish for no ESG investments?"

- Well, goodness.

Answering your question is quite easy.

The second part of that that you did not ask is a little more challenging but can be solved as well.

How do you find out who the fund managers are?

It's in the prospectus.

The easiest way is to go online.

Google the fund.

It will give you a complete outline of who the managers are, how to reach them, whether it's emails or websites or telephone, etc.

The likelihood... ..to be blunt, that your opinion about ESG will have any impact whatsoever on the mutual fund manager is as close to zero as I can possibly imagine.

As a matter of fact, there are probably 100 people approaching the fund manager in favor of ESG for every one that's saying, "I'm not interested, "I don't want that."

So the likelihood that you get the result that you're interested in using mutual funds is very close to zero.

Now, what are you looking for?

You're looking for companies that are not environmental, social or governance-driven.

You're looking for companies that are profit-driven, that respect their shareholders, do a good job for their customers, are well balanced, well intended, have great integrity, but they're not an ESG-driven company.

You may do that if you have a clear vision of what that means for you, in terms of what companies actually qualify as not being ESG.

And if you know which companies you'd like to eliminate, you can create what is now called a direct index, a direct index, meaning you get to pick and choose.

You can create, instead of the Dow index or the S&P 500 index or the NASDAQ index, you can create your index.

You go through a list of stocks, say, "I like this one.

Like this one.

"I'll throw those out."

If you start with the S&P 500, maybe you throw out 200 of those companies and you are left with 300.

You have created your own index.

There's virtually no cost for doing so.

It's a very effective way of combining two very interesting ideas, a lot of control on your part and passive investing.

There's not going to be a lot of buying and selling.

You're going to lock it in and let it run, but you're going to lock in what you wish to have locked in, not what a mutual fund manager or an ETF manager or an ESG manager, and there are a fair number of those out there, have selected against your wishes.

So, you get your wishes and you have little or no cost.

And it's very efficiently done.

Set it and forget it.

I think you'll find that to be the answer to your question.

Excellent.

Excellent, indeed.

Megan, what's our next excellent question?

- Our next question is a little bit longer.

It says, "A few years back, in late summer of 2020, "I paid a visit to my older brother, "who is a big fan of Vanguard mutual funds.

"Financially, he's in pretty good shape.

"But as for myself, I never paid attention "to setting myself up comfortably for retirement.

"I mentioned that I had some money in the bank "but not earning interest.

Yes, I know.

I messed up there.

"I was seeking his advice on whether I should invest "in a few mutual funds I had been looking at via Kiplinger.

"The mutual funds I had looked at were, in his opinion, "good ones to consider.

And he said I don't need his advice.

"The issue I have is, unlike my brother, "I cannot absorb the loss if the mutual funds lost money.

"Had I invested in the mutual funds at the time, "they all would have been in the negative now.

"He advised that I wait for the dip to flatten out.

"I think the time has come where the stock market will go "into a bull market phase.

"I'm going to be 72, "and I feel that I should consider investing "in the stock market to hopefully get more gains "than if I invest in mutual funds.

"Lately, I've been looking at stocks from various companies, "such as AMAT, TSCO, ONTO, just to name a few.

"They've all gotten off to a good start "for fiscal year 2023.

"The years 2018 through 2021 were good years "and I ignored 2022 "because everyone was getting hit with the pandemic.

"I currently have $107,000 in the bank "and I get about $3,000 after premium is taken out per month "from Social Security.

"I keep myself on budget "and I'm able to add $600-800 per month to my bank account.

"Had I considered putting money into a CD at 4.5% "five to seven years ago, "I would be in much better position.

"Hindsight surely is wonderful.

"So what would you advise me to do here, "invest in mutual funds, the stock market or CDs?

"I have an account with Fidelity, "but it's inactive at this time.

"Cheers and thank you for your time."

- You're very welcome.

I'm thinking you should have saved your "Thank you" until I answer.

You are asking questions that are so disconnected, disparate in their scope that it's really unsettling.

You absolutely... And I rarely say this because folks come in different flavors, folks come in different attitudes, different skill sets.

But I rarely would say something as direct as this.

You should not be managing your own money.

You simply don't have the skill set, you don't have the decisiveness, you don't have the perspective.

You certainly don't have the background or the training.

You're looking to the wrong people for advice.

You're looking to a brother who basically says, "Yeah, yeah, that sounds pretty good.

You don't need me."

You're looking to magazines.

This is a train wreck.

The fact that you have all your money in the bank likely for you is probably the place to keep it.

But there's simply not enough information here to say that definitively.

What I will say definitively is that you do not have the skills to make these decisions.

You must use a financial advisor.

You must find a trusted, experienced financial advisor to guide you.

You simply have...

There are so many errors in your question that it's kind of hard to tick off.

You go to your brother for advice.

He's a fan of Vanguard.

Being a fan of an investment company would be the equivalent, I guess, in the medical community, "Hey, I'm a big fan of antibiotics."

What?

Why would you even say that?

If you need an antibiotic for a particular issue, sure.

But what if you break your leg?

Well, I'm a big fan of antibiotics.

How about a cast?

What if you need open heart surgery?

I'm a big fan of antibiotics.

You see how it doesn't make any sense?

Being a big fan of a certain tool...

I have 25 acres of trees that I maintain.

I have chainsaws.

And when my wife says to me, "This cabinet is a little loose," I don't go get my chainsaw because I'm a big fan of chainsaws.

So the idea that you're asking your brother, who's a big fan of a tool, makes no sense whatsoever.

You talk about if you had invested in those funds some time ago, recommended by a magazine... Yeah.

I don't think they get paid by any of those mutual funds to advertise.

No, actually, I know the magazine.

Of course they do.

They would all be negative?

Not likely.

Certainly not if you were investing appropriately.

You don't invest and then walk away.

In the MTM model, it's a 90-day review cycle.

Every 90 days, the portfolio is reviewed.

You're talking as if you set something up and then five or six years later, you take another peek.

You simply don't understand.

You mention if you had invested in a CD at 4.5% four or five years ago... Where would you have found that four or five years ago?

Four or five years ago, a five-year CD was paying 1.5%.

Today, a six-month CD pays 6%.

My apologies.

A six-month CD pays over 5%.

There are too many pieces here that simply don't fit.

My fear is that you will be easily led astray unless you have somebody that's walking with you, guiding you.

Some folks use financial advisors as a sounding board.

You need a financial advisor as an absolute guide.

So... Goodness.

Cut it out.

Yeah, cut it out.

Cut out thinking that you can be your own financial advisor.

You simply can't.

And I don't mean that to be harsh.

I mean that to be instructive.

Part of my responsibility...

I am a fiduciary, both with my clients and with my audience.

Part of my responsibility, legal, ethical and moral, is to tell you the truth.

I am not here to blow smoke up anybody's skirt.

It is not a position that I take lightly, and telling somebody how badly they have done.

I believe it was last week we had the inverse of this question, where a gentleman in his mid-70s gave us his investment portfolio and it was perfect, and I was very happy to tell him that.

It was perfect.

This is the inverse.

Please get yourself to a financial advisor, please.

Ooh!

Megs, blood pressure up just a little, but I think I can get through the rest of the show.

Give me a good question.

- Hopefully we'll switch gears a little bit.

This one says, "I am 67 and retired from the federal government.

"I'm currently working a part-time job to earn credits "for Social Security.

Last year on my part-time job, I earned $1,519.88, "which hopefully earned me one Social Security credit.

"I'm wondering, am I eligible to put that sum of money "into a Roth IRA for this year?

Thank you for your help."

- Big smile.

Thank you for shifting gears on me.

Yes.

The answer is yes.

How lovely is that?

Yes.

Yes, you are.

This individual was not part of the Social Security system for his career.

Now he's earning credits.

Good for him.

Earned a credit.

You only need 40, so you're on your way.

And, yes, you can earn a credit and still put that money away into a Roth, up to 100%.

So, 1,500 bucks earned, 1,500 bucks into a Roth, one Social Security credit.

Well done, you!

That's fantastic.

Very, very good.

You're not only on the right track, you're doing it exactly right.

Keep earning.

And, by the way, if you only made 1,500 bucks part-time, that means you're not working very much part-time.

Give me a call.

I know lots of folks that will hire really high-quality people like you and you'll make way more than 1,500 bucks.

Megan, thank you!

Smile returning to our faces.

What do we have next?

- Well, let's see where this one goes.

It says, "I have $300,000 in two savings accounts.

"One is at 3.75%.

The other is at 3%.

"I get $2,000 a month of Social Security.

"My base expenses are $2,500 monthly.

"I am 72.

"My home is in a trust for my children, "but I have no tolerance for losses at my age.

"What should I do?

Thank you."

Goodness!

Mo tolerance for losses.

You're currently $500 a month short on your bills, but you have $300,000, earning roughly $10,000 a year.

So taking some of the interest from your current investments, adding it to your Social Security, that seems to fit.

So risk doesn't seem to fit here.

I don't see where having no tolerance for risk is going to be a hindrance for you.

What I would suggest is that with this sum of money, you may find that doing some shopping for higher interest rates would be to your benefit.

Currently, six-month CDs... And when I say currently, I don't know when you're watching our show.

We record, they air...

The initial airing is just a week or two later but, gosh, you could be on our website three years from now.

So if the numbers don't seem to make sense, give me a break.

You've got to put it in context from a time standpoint.

So from a current standpoint, over 5%, short-term CDs, over 5%.

Guaranteed annuities, over a five-year period, guaranteed over 5%.

There are a number of ways to get a better rate of return.

And in your case, a better rate, 2% better rate, 100% guaranteed, is 6,000 bucks a year.

That's a lot of money.

You have saved a lot of money.

So increasing your rate of return, even a modest amount, and yet staying simply safe, 100% safe, FDIC insured, SIPC insured, guaranteed by an annuity company or guaranteed by a bank.

All of these guarantees certainly fit you, and yet you can do significantly better.

And significantly better is probably why 72 is very, very young.

Hopefully, you've got 20 or 30 more years ahead of you.

And we need to stay ahead of inflation.

So by warehousing, by stockpiling some of the gains that you're having on your investments, you're going to pad your nest egg for the future.

And that's a very wise thing to do.

If you're not sure exactly how to go about all of that, send us another email.

We'll send you the mechanics.

It's very easy.

Megan, how about an easy one next, since that's our segue word from our emailer?

- This one seems pretty easy.

I'm curious about this one.

It says, "We have a young married couple "renting a great house for $600 per month.

"But they're wondering, should they leave and buy a house "so that they can build some equity?"

- This is a wonderful young couple.

I will say, in the interest of full disclosure, I've known this young lady since she started college with my middle daughter, Alyssa.

She's wonderful.

She happens to be married to an associate pastor.

He's a great guy.

This is a wonderful young couple that have a very unusual circumstance.

It does not face very many people.

But I wanted to highlight this for a different reason.

They are currently renting the church parsonage, a lovely home, good shape, more than adequate for everything that they need.

And the rent is only 600 bucks a month.

If they were to buy a home, in addition to the down payment that they need to save, they would have substantially higher monthly payments.

His income is good, a little modest compared to perhaps what he could do in the private sector.

But this rental arrangement helps out tremendously.

Her income is very solid, but she needed to go pretty deeply in debt, very deeply in student debt, to get her PhD.

And as a result, just a few years ago, they were pushing $100,000 in debt and now they're not.

Now, they're not because they've saved so much money by having this low rent that they have been paying way ahead on their student loans, way ahead on their student loans.

They're down now to just a few months away from owing nothing.

So, rent or buy?

Well, up to this point, it's been a blessing that they did not buy.

It's been a blessing that they have this wonderful rental.

They've taken all the money they would have spent and they have built equity not in a home, but in themselves, by paying down their debt.

It has been a beautiful, beautiful thing.

Equity comes in lots of fashions.

It doesn't always have to be in your home.

So in this case, rent, rent for as long as they will rent to you, particularly at that rate, and build your equity elsewhere.

You're doing a great job.

Great is the segue word, Megs.

That means... Pressure's on.

You bring me a great one.

- OK, I'll try my best.

This one says, "Hi, Gene and team.

"Thank you for answering my previous question.

"I hope you don't mind that I have another one.

"My late parents left 50,000 to be eventually used "for my brother's final expenses.

"He is 65, mentally disabled and lives in a group home.

"His rent is paid from his social security, "of which I am his rep payee, "and he doesn't really have expenses "beyond clothing and personal items.

"I just received the $50,000 check for him, "but it's made out to me.

"I have no idea what to do with it.

"My husband and I would like to avoid paying taxes on it "if possible.

"Would an attorney-drawn trust of some sort "be appropriate in this situation?

"I would really appreciate your suggestions.

Thank you."

- Yeah.

Great.

Are you your brother's keeper?

In this case, the answer is yes.

And your parents trusted you with a sum of money... ..just in case.

His needs are modest and probably well taken care of by his Social Security, which you are already handling for him.

I am sad to say that while $50,000 is a substantial sum of money, in the world of trusts, it's not very much money.

And there are few, maybe none, but very few companies I'm aware of, trust companies, that would accept a sum as modest as $50,000 in their trust arrangement.

So even if you had a trust document drawn up, I don't believe it would be advantageous to you.

I think you would find out that you would be handcuffed in trying to find a trust company that would be willing to handle a modest sum of money.

The second kind of collateral problem is that even if you found one, their fee structure is such that you would see that $50,000 eroded rather significantly over time.

I don't think that's the answer.

The check is made out to you, so getting it into a trust means you would make that gift.

Is that legally possible?

It absolutely is.

But I don't think that's the direction that you should go.

I think you should keep the money in your own name.

I think because of the tax situation, you're absolutely right.

Anything it earns, if it comes out to you, it's taxable to you.

And if you're doing it on a year by year basis, you're paying tax year by year by year on a sum of money that may not be needed for a significant period of time.

The word annuity comes to mind.

Tax-deferred annuity comes to mind.

There is an investment platform referred to as a tax-deferred variable annuity, TDVA.

You can invest the $50,000, it will be tax sheltered, tax-deferred until the money comes out, which might be short term.

It might be many, many, many years from now.

And you have an entire menu of investments that you can choose from that you get to customize, to be as conservative, as aggressive as you wish.

Fundamentally, it's your money, and intended to make sure that your brother is not left at his passing without the funds to properly be cared for.

50,000, of course, is more than enough, so you could be very conservative.

That would work.

You could be very aggressive, not likely in your best interest.

But something in the middle is probably your best move.

But you have the funds then segregated, they are identified, they are for that set purpose, they are tax-deferred.

So hopefully your brother lives happy and healthy for 20 or 30 more years.

No taxes are paid until the very final distribution.

I think that's probably the way that you should go.

I applaud you for being willing to take on this responsibility.

It is has been, I'm sure, for your parents, was a challenge throughout your brother's life.

And you are now kind of accepting that mantle.

And in a world where so many families are scattered and not really connected.

to see you be that connected, that's a wonderful thing.

That says wonderful things about you.

I hope I've helped just a little bit.

Speaking of helping a little bit, we covered a lot of ground this week, covered a lot of questions, some very, very interesting ones, some very tough ones.

I hope you learned a lot.

I hope you picked up some ideas.

Maybe even you got the answer to the question that was kind of in the back of your mind.

That happens a lot.

Somebody asks a question, "Hey, that's my question, too."

That works out really, really, really well, he tried to say.

If you have questions about anything in your financial life and you would like to expose this to us, all you have to do is send us an email, gene@askmtm.com.

We have an entire team of financial advisors that answers every single question back to you, the silly ones, the hard ones, the in-between ones.

We'll give you as much information as we can.

There's absolutely no charge.

And maybe you'll see your question on a future show.

Speaking of future shows, I hope you learned enough or were entertained enough that you'll want to come back for next week, when we're here for the very next episode of More Than Money.