- And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial adviser, offering you all of my 780 years of experience.

One of the life's great mysteries.

How is that possible?

It's a mystery.

That's why they're called mysteries.

Hard to explain.

But all of that's available to you and everything that we have to bear, to answer all the questions that you may have about your financial life.

We bill ourselves as the most relevant financial show on television and radio, and I think we've proved that week after week, after week, not because of what we come up with.

I think what we come up with is pretty interesting stuff, I must confess, but what you come up with, the questions that you ask are far more interesting than what I would come up on my own.

And to be honest, a lot of the financial stuff, if you're just talking about topics like IRAs, Social Security, Medicare, home mortgages, it can be dreadfully boring.

It's boring in isolation, in general terms.

But if it's applied to you, if it's applied to a question that you have that's important in your life, it's not only not boring, it might be financially life-saving.

It might prevent you from making a mistake that could devastate your financial future.

So, when we focus all of our efforts on answering questions that are important to you, yep, makes us the most relevant financial show on television today.

Proud to be on PBS39.

Proud that they share our show with so many PBS stations around the country.

And we're getting responses from pretty far afield.

It's fabulous.

So thank you for sharing part of your time with us.

We hope that we will continue to earn your viewership by providing good information, relevant information that answers important questions that you ask.

Every single question is answered back, every single question, even the hard ones.

All you have to do is send them to us, Gene@AskMTM.com We'll make sure that we get you the information that we have available and perhaps, perhaps you'll be a question that we answer on air in a future show.

So let's get right to it.

Let's see what questions have come in that are being aired this evening.

Megan, where do we start this evening?

- Hi, Gene.

Our first question tonight says, "I heard you talk about an investment in stocks where "you make money even if the stocks go down.

"This sounds too good to be true.

Can you please explain?"

- My goodness.

Short and sweet.

Good thing I wasn't taking a sip right about then.

Bottom line is, yeah, there are investments where you can turn a profit, whether the stock market goes up or down.

These are not unusual.

They're not too good to be true.

They're not even particularly cutting edge.

The use of options in the investment market have been around for decades and decades, and decades, and it has always been possible for you to bet on the direction of the market.

Generally, it's done through stock market indices, indexes.

The S&P 500 is a very common one.

The NASDAQ, of course, the QQQ.

There are many, many indexes out there that you can choose, but you may use options on an index to bet either the market's going to go up, or the market's going to go down.

So if you're betting the market goes up and it does, you win, you turn a profit.

If it goes down, ooh, you lose, you don't turn a profit.

If you bet against the market that it's going to go down and it goes up, you lose.

This is a conundrum, unless we marry those two approaches into one investment vehicle.

And this, again, not terribly cutting edge, not even terribly sophisticated, pretty easily done mechanically.

It is simply the willingness, or the mechanical ability of an investor to buy an option that says, I'm betting the market will go down, and if it does, I'll turn a profit, and I'm going to buy a similar option betting the market will go up.

And if it does, I will turn a profit.

You say, "Now, whoa, whoa.

Why wouldn't everyone do this?"

Well, there's two very good reasons.

Number one, there's a cost involved.

Buying these options is not free.

Betting against the market has a cost.

Betting for the market has a cost.

So there are costs involved.

You must be aware.

You must be willing to pay those costs.

And number two, these actions limit both your downside and your upside.

So for someone who thinks that the stock market on average is going to do very, very well, they should not do this.

They should not engage in an investment that provides this kind of dual protection, so to speak, because if the market does very well consistently over many, many years, they will make more money being purely in the market.

So there are reasons to do this.

If you're very conservative investor, if you want to hang onto your principal, you want to have an opportunity in a choppy market, as we've been experiencing, to have a profit either way, "hedging your bets" is a very, really a very appropriate phrase to use in this case.

If you are interested in hedging your bets, it's something you should absolutely explore.

Send us an email.

We'll give you more details.

If, on the other hand, you have time, 10-20 years, and you think the stock market is on average going to do very well?

This is not for you.

You want to bet on the upside.

Interesting.

Great start.

Short question, long answer.

Let's see what pattern we follow with our next.

Megan, what's up?

- Our next email says, "Thank you for a great show each week.

"My question is about market timing.

"I have some money on the sidelines not currently "invested, some in a retirement account and some in "a non-retirement account.

My wife and I are both 58.

"We are interested in investing the money in the stock market, "and won't need the money for at least ten years, perhaps 20.

"I work from home and have the ability to listen to the "financial talk shows in the background each day.

"This may not be a blessing.

"When I hear three guests on the show, "I often hear five opinions, lol.

"One recurring theme I hear is about support levels "and resistance levels.

"Specifically, I hear that market is likely headed lower "with an expected support level of the S&P 500 "of about 3,200.

"We are not trying to time the market perfectly, but is it "responsible to wait until a short-term lower level "over the next six months?

"Thank you both for your thoughts.

God bless."

- Well, God bless you, and thank you very much.

And as you will see when emails start out complimenting the host, yeah, they generally make it on air.

No, I'm kidding!

But it's very nice to hear.

Buttering up the host works very, very nicely.

Market timing is a topic that's been around since the beginning of markets, since there was the opportunity to buy low and sell high, and, oh, by the way, the same opportunity to buy high and sell low, which sadly the average do-it-yourselfer does rather easily, the buying low, selling high.

Different question.

So from a market timing standpoint, the idea is, are there certain technical analysis that can be done that will indicate with some real confidence the direction of the market?

No.

Pretty straightforward.

If there were an effective, useful, profitable market-timing system that had been developed by almost anyone, they would have all the money.

They would simply use their market timing to turn a profit, profit, profit, profit.

They would never have a downturn in their cycle.

That has never happened.

It's not going to happen.

For those of us who have been doing this 780 years, we would be honest if we were to confess that we can't predict, using technical analysis or tarot cards, or the Ouija board, or a snow globe.

We can't use any of those tools to predict what the market will do between its open at 9:30am Eastern Standard Time, and its close at 4:00.

Can't predict.

So how is one to predict over the course of months or years?

The answer is, you can't.

So for those who are not trying to market time, you said precisely, imprecisely, precisely, irrelevant.

It's not going to work.

So don't despair that you don't have a system that doesn't exist.

Use a system that does exist, and use a system that has been proven to be very useful, very advantageous.

And over the course of time, you mentioned 10-20 years, will allow you to invest quite confidently and put this issue to rest.

Now, the part that I'm not sure I can have you put to rest is the whole idea that you're listening to three different news cycles with five different opinions.

It's dreadful.

It's absolutely dreadful.

And because we've gone to a 24/7 news cycle, there has to be breaking news about everything.

And how do you get somebody's attention unless you're saying something dramatic, even if it's wrong?

Even if you don't even really yourself believe what you're saying, you got to get the audience.

And to be fair, most of those news shows, they don't have the audience.

It's dwindled away, and for good reason.

Competing opinions ending up with a paralysis, sometimes referred to as "analysis paralysis".

I've looked at it from so many different directions.

I haven't done anything, doesn't work.

So here's what you do.

I'm going to pick a number and say that you're sitting on $120,000.

You'll see in a second why I picked that number.

You're sitting on $120,000.

You wish to invest in the stock market.

You wish to have that money invested for 10-20 years.

And you want to make sure that you're not simply going in and seeing the market kind of crater immediately.

And your 120 goes to 60 overnight and you're pretty unhappy about that.

Here's what you do.

It's called dollar cost averaging.

For folks who have been around a while, they go, "Oh, I've heard of this.

"This has been around forever."

Indeed.

And it's been around forever because it works rather nicely.

If we have $120,000 to invest, what I would do, New Year here, I would say take $10,000 per month and invest it in exactly the investment in the market that you wish, it might be an index, the SPY, the S&P 500 index, it might be in a particular basket of stocks.

It's very easy to buy fractional shares of stocks these days.

So you could pick ten companies that you wish.

Doesn't matter what their share prices are.

You send into your account 10,000 bucks.

It will be able to buy fractional shares of each of those ten stocks.

And you do that every single month, preferably on the same day of each month.

So you're doing this every 30 days.

Some months will be a little higher in the market, so you'll buy a little less because the prices are a little higher.

Some months, the prices will be a little lower and you'll buy a little extra.

You'll get a bit of a bargain.

On average, you will do very, very well.

And more importantly for you specifically, because you've got 10-20 years, I can...

Very rarely is a financial adviser legally permitted to use the word "guarantee".

But I can guarantee you, if you follow this pattern, you will look back in ten years with no memory whatsoever of what level you put that money in, because the money will have grown over time to whatever the investments take it to.

And the initial starting point so far in your past...

I get it, it's today for you now.

But in 10-15 years so far in your past, you will not remember and it won't be particularly relevant.

And the younger you are, you've got 10-20 years, think what that means to somebody who's 25 years old investing for their retirement 40 years from now.

Should they worry about market timing even to the extent we've had this conversation?

Not even a little bit.

They should dive in.

Keep diving in.

Swim around that pool for a very long time and do very, very well.

Interesting question.

I'm really glad you listen to those shows and find them every bit as annoying as we do.

Megan, excellent.

Where do we go from here?

- Our next question also starts off with a compliment, so I'm sure you'll like it.

"It says, Greetings, Gene.

"Our week isn't complete until we get a dose of your good "humor and your sage wisdom of 780 years.

"Thank you for all you do for the community at large "and for us, specifically, your loyal listeners.

"You're the Energizer Bunny of financial advisors, "and we're addicted to you on PBS's Channel 13 NWAEB Radio.

"Here's the question for you.

"We were recently blessed with an absolutely "wonderful baby grandson.

"We would like to start a 529 plan for his schooling.

"Please verify if our understanding is correct.

"If one of us is the owner of the plan and the other of us is "the successor owner, with our grandson as the beneficiary, "does that mean that all of the funds in the new 529 are "contributions and the growth will be excluded from "calculations for the FAFSA application form?

"Also, if excluded, would it then be better for the parents "of our grandson to not open up their own 529 plan for "their son, but to instead contribute to the one that we will be opening for him in order for those parental assets "to be excluded as well?

"In addition, do you have any other helpful thoughts "about 529 plans?

Keep up your great work.

"You are most definitely appreciated."

- Well, goodness, you couldn't tell because the camera was on Megan, but I was blushing that entire time.

Well, maybe.

Kind of.

That's very kind.

Very, very kind.

We do our best.

Congratulations!

Grandson.

Fabulous.

529.

Outstanding.

Wonderful idea.

38 sets of Legos at about $200 apiece?

No, 529 plan.

Help out with the education.

529 plans are extremely flexible.

They have tremendous advantages.

We'll circle back to those here in a second.

But let's jump into your question.

One of you is the owner.

Yes.

It's not a joint account, almost every 529 plan I've ever bumped into as a single person as an owner, as a spouse, grandparents, the spouse, successor owner.

Perfect.

Perfect.

Something happens to me, goes right to Diane, if that is her real name, and nothing changes.

Beneficiary, still the grandson.

Everything is as it is.

And by the way, we've had this question a number of times.

What happens if I have it, I'm gone, successor owner Diane has it, what happens if she's gone?

She's allowed, once I'm gone, to name her own successor owner, likely in our case, three daughters, likely a daughter.

So the ownership of the 529 plan has real continuity to it.

Perfect.

Your question about applying for financial aid is kind of a double-edged sword.

Should the parents contribute to grandparents so that it's not reported on the financial aid application?

The answer is, probably yes.

Is that always the best way to go from a family dynamic standpoint?

Not likely.

Now everybody's different.

So some kids are much more independent.

"Mom, Dad, you do yours.

We'll do ours."

Excellent.

That works.

That works just fine.

If you want the maximum financial advantage, probably.

But it's only a financial advantage if you're actually going to get financial aid.

Now you say, "Wait a second, doesn't everybody get "financial aid when they go to college?"

Not someone who's got grandparents starting a 529 plan when they're born.

If the family is committed to saving significant amounts of money over the next 18 years plus, it may very well be that the child not only doesn't qualify for financial aid, but doesn't want to, doesn't need to borrow money.

Now, merit, of course, tons of merit money available, tons of merit money available.

I said it twice for emphasis.

Many of the best colleges that you can possibly think of have merit scholarships available.

Our daughter's very fortunate because they worked really, really hard in high school.

They qualified for merit scholarships and saved tons of money.

There are lots of ways to get college education very inexpensively.

And let's be honest, 18 years from now, is college really going to look the way it does now for your grandson?

And the answer is, I'm not that sure.

If ten years ago, you'd told me that huge numbers of people were getting their degrees online, never actually living on a college campus, I would say, "That's probably not going to happen.

"Kids like going away, they like this, they like that."

Yeah, tight up to the point where it costs them $150,000-200,000, and then, they find out that they can get the same college degree for a fraction of that amount?

Maybe I wouldn't have guessed that.

Would I have guessed that the community colleges, particularly in our area, have done such an incredibly good job of providing educational opportunities on just countless types of in-demand professions, in-demand studies and in-demand academics at incredibly reasonable prices that lots of folks are cutting the cost of four-year college in half by using the resources of community college for the first two years, transferring to a four-year school and getting a diploma that's issued by the four-year school at half the cost or less.

So there are a lot of ways that the inevitable, we have to apply for financial aid is not so inevitable.

And I don't know that I'll be surprised if, in 18 years, your grandson does all of his higher education virtually, all of it virtually.

Now, I mentioned 529s have tremendous advantages on lots of levels.

Keep in mind that we used to call these college funds, because until just a couple of years ago, the funds were only available for expenditures, tax-free expenditures, post-secondary, post-high school.

Completely changed.

Now it can be preschool.

So starting in 529 plan now, very, very good idea.

The funds may end up being used for a four-year school, a community school, a trade school, a culinary institute, a carpenter's apprenticeship program.

It can be used for a wide array of training or preschool.

So tremendous, tremendous advantages.

And I say starting now, newborn, great idea.

How about starting before your children are born?

For those of you out there who have young ones who are recently married or maybe they're engaged, maybe they're thinking about starting a family, starting a 529 plan before they have children gives it even more time to compound and gain that tax advantage or tax deferral, and tax advantage for a longer period of time.

And if you're kind of scratching your head right now and you're saying, "How do I set up a plan for "a child that doesn't yet exist?"

Gene@AskMTM.com is the proper email address to send me that question because we can show you how to do it.

Megan, what do we have back there?

- Our next question says, "Hi, Gene, I love your show.

"You have often talked glowingly, it seems, "about the benefits of Roth conversions.

"I'm currently saving for retirement in a 401k and "a Roth, and I have a rollover 104k from a previous job.

"Given the market downturn, I was wondering if it would be "smart for me to convert the rollover into the Roth, "as it will never be a smaller amount than it is now, "or perhaps sometime next year in theory?

"I am unsure of the tax considerations and/or the "pros and cons if I did this.

"For reference, I am 42 years old.

"I earn approximately $75,000 and the rollover value "is approximately $45,000.

"I would love to know your thoughts.

Thank you so much."

- Again, very, very kind of you to compliment our show.

I think you've given me all the detail I need to confidently say to you, do a Roth conversion.

And you're absolutely right.

You've drawn the right conclusions.

The value of the IRA, the value of the 41k has been driven lower, probably 15-20% lower than it was a year ago.

That's 15-20% lower income taxes, as well.

So $45,000 a year ago was 60.

If you're in the 15% bracket a year ago, it would have cost you $9,000 to convert.

Now, if you're in the 15% bracket, $45,000 costing you... Less, a lot less.

You get the idea, about $2,200 less.

That's a lot of money.

That's way better than a sharp stick in the eye.

So save that money.

Do the conversion now.

42 is a great age to do that.

You're going to want to look at this as retirement money maybe 20-30 years down the road.

Plenty of time to recoup that.

Hopefully you can pay the income tax bill out of funds not in the IRA, so if the tax is $7,000, for example, hopefully you have $7,000 elsewhere, if you don't, yes, it can be paid out of the conversion amount, but you don't want to.

You want as much money in that Roth conversion account as you can possibly get so that that has the maximum benefit for you 20-30 years down the road.

So that's the ideal, at least to the greatest extent, that you can pay the taxes from funds that are outside the IRA.

Having that amount of time, doing it at a low point in the market, doing the conversions, kind of, "suck it up, buttercup, pay the tax," go, "I hate this," and then have a big chunk of money, hopefully the whole $45,000 that can grow tax-sheltered, and then, be spent tax-free for the rest of your life.

It's a huge opportunity.

You must take advantage of it.

Now I'll answer a question you did not ask, but maybe you should have.

You're in a 401k now.

Perhaps you've got some of that money going into the Roth portion of the 401k.

Perhaps not.

If you have not selected at least a significant chunk of your contributions to go into the 401k Roth section, the Roth portion, you should.

Yes, you're going to pay higher income taxes today.

But again, it's going to give you 20-30 years of tax-deferred, hopefully tax-free compounding between now and your retirement.

And you'll end up having given up a little bit of money right now when you're quite young, to gain a lot of money, income tax-free when you're in your retirement years.

I think you've got a tremendous opportunity in front of you.

You're very, very wise in your thinking.

Not just that you think I'm a great guy, but in your thinking about, "Now's a good time to do this."

So take those actions as soon as you are able, if you're working with a financial adviser, should be able to be done literally in a day or two.

Couple of signatures and journaling from one account to another.

If you're doing it on your own, might take a little extra time, but make sure you get it done.

It's a good New Year's resolution.

We've covered so much great ground, not just the compliments, but the great questions.

People have interesting lives.

They are faced with interesting financial challenges and opportunities, tremendous opportunities.

That last question, it's an opportunity to shift from what's a good plan to a spectacular plan with plenty of time to benefit from it.

So opportunities, challenges, they're all the same.

We're all faced with opportunities and challenges on a daily basis.

Your advantage is you've got More Than Money.

And if we can assist you and you assist us in staying the most relevant financial show on TV, all you have to do is ask, you send us your emails, Gene@AskMTM.com, and our team answers every single one back to you, even the really hard ones.

I hope you've learned a lot.

I hope you've gained a little more perspective that might help you immediately or help someone that you love.

But mostly, I hope that you were encouraged enough that you'll return next week when we're back in the studio for another edition of More Than Money.

Goodnight.