transcript

Speaker 1:
[00:00] Spring always flips a switch for me. I love cleaning out closets, reorganizing my space. It makes me want to spread that over to my financial life. And you know, I love a clean and tidy financial life. That's where Monarch can be a game changer. Let Monarch do your financial spring cleaning for you. One dashboard that gets your entire financial life organized. No more clutter, no more mess, no more scattered logins, just accounts, investments, property, and more, all in one place. And you can get your first year of Monarch for half off, just $50 with promo code Jill on Money. And what's cool about Monarch is you can see your cash flow laid out. You might be surprised just how much of your income is quietly seeping out towards random spending. Monarch makes it obvious, and you'll likely adjust your spending because of it. And there's a great weekly AI recap, which flags spikes before they become habits. That's huge. Monarch isn't just tracking. It helps you plan ahead, set goals, and actually understand your money with AI that's tailored to you. Use code Jill on Money at monarch.com to get your first year half off at just $50. 50% off your first year at monarch.com with code Jill on Money. Hey gang, you know I used to think the hardest part of health care was getting the appointment. Turns out, it's just the beginning. Waiting on those referrals, dealing with insurance approvals, trying to interpret test results, and then somehow making sure every doctor's on the same page. That's why I was so happy to learn about Solace. It's a platform that connects you with a dedicated health care advocate who helps you navigate all of that in a real hands-on way. A Solace advocate can find the right doctors and schedule appointments, fight denied insurance claims to help get care approved, and make sure your doctors stay coordinated so nothing gets lost in the shuffle. They can also join your appointments remotely, translate medical language into plain English, and break down test results and treatment plans so you actually understand your care. These are experienced health care professionals, often nurses with years of experience, and they've already helped tens of thousands of people get better care. Go to solacehealth.com to see if you qualify. It takes about two minutes, and it's covered by insurance. That's solacehealth.com. Must be 18 or older. Advocates do not provide medical or legal advice. Welcome to the Jill on Money show. It's Thursday, April 23rd, and we are here guiding you along your financial journey, wherever that journey might take you. And I want to just be clear. It's your journey. What is on your mind is what's important to us. So if that's a question and you're a little embarrassed about it, don't be. We can always change your name. You come on the program. It's fine. If it's just you're feeling shaky about a decision coming up, that's fine. Let us help you because so much of our financial life is wrapped up in emotions. And so if you just need us to kind of be the emotional sherpa, let us carry that emotional load for you. Get in touch with us. Go to the website, jillonmoney.com. Click the Contact Us button, which is always in the upper right-hand corner, wherever you navigate on the site. Write us a note. If you would like to join us live, check the box. Mark will do everything else. Hey, while you're on the website, please subscribe to the free weekly newsletter. It comes out on Fridays, and it also entitles you to our blog. So we'd love for you to do that, because I don't know why, Mark, we haven't really monetized that yet, but maybe someday we will. Who knows? We could be entering a whole new phase here, where we have massive ads on the website. You know who I'm hoping to be a sponsor, Mark? A bourbon company. That would be my number one first choice. Who do you want to sponsor us?

Speaker 2:
[04:09] Yeah, I mean, I can get on board with a bourbon. Yeah, I've been a bourbon a while though. Lately, I've just been drinking scotch.

Speaker 1:
[04:14] Okay, well, we could have a scotch company, but it's hard because scotch is more expensive now with tariffs, et cetera. So isn't it a U.S.-based thing, a better product for us?

Speaker 2:
[04:26] You're right. It is very expensive. When we just came back from Europe, I was checking out the duty free. I mean, it seems like there's no more deals to be had.

Speaker 1:
[04:33] Yeah, I'll tell you what, though. You got to drink at home. Going out to a restaurant and drinking, that is expensive. That is very expensive. In fact, my wife just said, I want to go on a pre-summer diet. I said the first thing I said was no more drinking out. That's like a good financial and health diet. No more drinking outside of the home, because I'm not paying $21 for a mixed drink anymore. I'm done. I'm out. I'm done. Hey, let's get on with it. Let's talk to Don who joins us from Texas. Don, bourbon or scotch or other liquor?

Speaker 3:
[05:07] Definitely bourbon over scotch, but I'm a huge wine guy.

Speaker 1:
[05:11] Oh, all right. So we got to get a wine. But do you like domestic or are you into the import ed?

Speaker 3:
[05:17] Well, I lived in southern France for a while, so I'm a little bit biased with Burgundy in particular, but there's some amazing wineries here, especially in Napa, California.

Speaker 1:
[05:30] Mark, get on that. Get us in California Vineyard to sponsor the show. So Don and I can sip our white Burgundies and have a nice little afternoon together. Don, what brings you to us besides talking about liquor?

Speaker 3:
[05:44] Yeah, so it's kind of a dilemma that I'm looking for some help with. Just to kind of give a little bit of background to the story is that I was an executive leader for a large corporation for many years. And about a year and a half or so, the company reorg downsized too. So from that standpoint, and by the way, I'm 63 years old, way too early to retire. I started my own consulting business around the arena and the consulting businesses really started to take off. But I mean, I used to make a lot of money, $400,000 to $500,000 per year. It's been a huge transition for me, but kind of the dilemma is this is that I have two daughters that are in college. One is 20, one is 21. One graduates in a couple of weeks, the other one is in their third year, too. So they have some debt, pretty significant debt of about $100,000 each, and obviously their parent plus student loans. So I'm kind of caught in a dilemma with meaning with my decrease in salary. It's much different than it was before. Can I afford to help pay for some of that to help them out? And the other piece of this too is I have a fairly large amount of money in a traditional IRA. At the same time, do I need to focus on converting some of the traditional IRA to Roth? Or can I do a little bit of each, help my kids out? Or do I focus on my retirement? So just looking for some advice here.

Speaker 1:
[07:35] Really interesting story. So a year and a half ago, you get downsized, you crank up your... So you go from making 400 or 500 grand. What are you making now in the consulting business?

Speaker 3:
[07:45] Yeah, it's probably going to be about 150K this year.

Speaker 1:
[07:48] Okay, great. And that's after your expenses? Kind of like real money?

Speaker 3:
[07:54] Well, that's before taxes, so it's not quite real money. So about 25-30% less of that.

Speaker 1:
[08:01] Okay. And are you married still or is this partnered?

Speaker 3:
[08:04] I'm single divorced.

Speaker 1:
[08:06] Okay. Are you on the hook for the kids? Anything here like it's part of your agreement with your ex? Or is this just, no, we're clean, but each of the kids now has 100 grand in debt?

Speaker 3:
[08:19] It's the second part of that. Very, very clean. We did, by the way, we did save about $80,000 each for the kids, not, you know, they did have a choice to stay in state or, you know, pick up, you know, on a state very expensive school. But so I'm at the, and we're both at the same understanding that if we can help out, I'm just, you know, as a dad, I just want to make sure that they're not stretched. You know, it's going to be a challenge for them. I get it.

Speaker 1:
[08:45] I know. And you wish they had made a different choice, but now they'll see what the outcome of that choice is. So you mentioned you've got a traditional IRA, Don. How much is in there?

Speaker 3:
[08:55] Yeah, I've got about 1.2 million.

Speaker 1:
[08:58] Okay. Do you have any Roth assets or not?

Speaker 3:
[09:01] I mean, Roth assets are minor. It's like 25K.

Speaker 1:
[09:06] Okay. Brokerage account?

Speaker 3:
[09:09] Yep. I've got about 300,000 in brokerage accounts.

Speaker 1:
[09:12] Okay. And what about safe, boring, you know, cash accounts?

Speaker 3:
[09:17] Yeah, around 50K.

Speaker 1:
[09:18] All right. Do you own in Texas?

Speaker 3:
[09:21] Yeah, I own my house, but I still have, you know, I still have a balance on there.

Speaker 1:
[09:28] How much is the house worth?

Speaker 3:
[09:29] It's worth about 600K.

Speaker 1:
[09:32] And what's left on the mortgage?

Speaker 3:
[09:34] Right around 300K.

Speaker 1:
[09:36] And the interest rate?

Speaker 3:
[09:38] 4.99.

Speaker 1:
[09:39] Okay. Not terrible. So right now, when one of the kids graduates in the spring, you said two girls, right?

Speaker 3:
[09:47] Yes.

Speaker 1:
[09:48] Okay. Does she have a job yet or not?

Speaker 3:
[09:51] No, that's part of what dad is helping her with right now. So yes, definitely a dilemma trying to get her launched.

Speaker 1:
[10:00] Okay. And will she come live with you or with your ex after graduation?

Speaker 3:
[10:06] No, she's a New York City girl now since being in college there, and she wants to stay. But we know it's crazy expenses. So that's kind of another part of what we're trying to help sort out.

Speaker 1:
[10:17] Mark, do you have a room that you can rent out to Don's daughter? Is there any space? How does your daughter feel about speaking Mandarin to a seven-year-old? Does she feel willing to... Okay. So she has gone to an expensive school in New York, no job yet. That's the key. That's the killer, isn't it?

Speaker 3:
[10:38] Yes, it is.

Speaker 1:
[10:38] And will she live with four gals from college in a horrible apartment that's cheap? Because that's what she's going to probably have to do.

Speaker 3:
[10:46] Well, that's exactly on point with where... She's there right now as her last year, sharing with three others and it's still very expensive near campus. So it's going to be at least one or two. She thinks one, but I'm going to say it's probably closer to three roommates.

Speaker 1:
[11:03] Dude, my niece, when she graduated, she was a teacher. So she had three roommates and they were smushed in, but they were all teachers. So they had jobs, but it was not a lot of money. So unless she's going to be an amazing bartender and she'll have to... She's going to have to do something, at least to just make some money. So you're going to work until... How long do you think? Like you're 60, 70.

Speaker 3:
[11:29] Yeah, yeah. I'm a business guy. I'll probably, you know, after the Social Security 70.

Speaker 1:
[11:35] OK. And what's the Social Security benefit at that time estimate?

Speaker 3:
[11:39] Yeah, about $5,100.

Speaker 1:
[11:41] OK. And any pension or no?

Speaker 3:
[11:44] No pension.

Speaker 1:
[11:44] OK. So let me just make sure I got it right here. One point two million in a traditional little bit. Twenty five grand in a Roth, three hundred grand in a big brokerage account, fifty grand in cash. House is fine. You're managing. You got this hundred fifty grand or so from the income. Are you putting money away for yourself from that hundred and fifty? Do you have a retirement plan? What are you doing for yourself right now?

Speaker 3:
[12:08] Yeah, I mean, as this is grown over the past year, trying to figure this whole thing out, I haven't started. I mean, I'm putting some I'm putting extra into my Charles Schwab brokerage account.

Speaker 1:
[12:21] OK, that's fine. So here's the here's the issue done. You started by saying like you kind of want to do a lot of different things. You want to help the kids. You want to help relieve them of the debt, even though you gave them the choice to stay in state and they unwisely did not listen to you. What I definitely know is no do not think about converting your IRA because we need the cash. We need your cash available. And I don't think you should continue. I don't think you should be soaking up the money that you have outside by converting right now. How much do you how much you spend right now? What's your expenses?

Speaker 3:
[12:59] Yeah, it's it's about about $6,500 per month. And I'm I'm really very budget regimented. OK, you know, there are some outside expenses sometimes. That's fairly accurate. So, yeah, I don't have any credit card debt.

Speaker 1:
[13:17] How are you doing? You're what are you doing for medical? What are you doing for health insurance right now?

Speaker 3:
[13:21] Yeah, I have my my own insurance right now. I'll be able to obviously, you know, within about a year, you know, have a chance to go to Medicare.

Speaker 1:
[13:30] So, yeah. OK. So sixty five hundred also includes a little bit of money for the kiddos every now and again.

Speaker 3:
[13:37] Yeah, it does.

Speaker 1:
[13:39] OK. So, you know, your cash flow right now is OK, right? Like at one hundred and fifty gross. Pretty good, right?

Speaker 3:
[13:48] Yeah.

Speaker 1:
[13:49] OK. Mark, why don't you tell Don whether or not he can help his kids out?

Speaker 2:
[13:55] I know he would love to, but it's not. I don't think it's the smart financial move right now. I mean, you know, we can always look at this again later on down the road. But I think for where you are and the fact that you want to work for seven years, your retirement is good, but it's only good if you preserve what you have, in my opinion.

Speaker 1:
[14:12] I think I would agree with that. What I would say is this. You can say to the kids and it sounds like you've got a good, open relationship with them. So you can say to them, hey, look, remember, mom and I said to you guys that we had this much money. You guys chose to go to fancier schools. So we're going to be there for you if the blank hits the fan. But for starting out, we can't really help you. Divorce is expensive, right? So you both have different choices here. And I presume that had you stay together, that it might be a slightly different scenario just because you're maintaining two households, right?

Speaker 3:
[14:51] A huge different scenario.

Speaker 1:
[14:53] Absolutely. So now, what you can say is, I hope that I can help you in a few years. I just started this business going. In the last year and a half, you know I had this un... Honestly, if you were still making 400 or 500 grand a year, and you were gainfully employed, and you were going to kind of chug along for another seven years doing that, I might feel differently. But at 150 right now, I think the answer to the kids is, I think we'll be able to help you down the line. I can't do it right now. I'm still rebuilding after I got blown out a year and a half ago. And we want you to do the best you can. I'll help you with budgeting. I'll help you with certain things. But you're going to have to manage this. This was your choice. Very easy for me to say, do you know why? Because I'm not a parent. And that's why I made Mark say it. So I didn't have to. But I think you know that. I do. I get the sense that you kind of know that down deep. If you were 73, and you were like, you know what? I'm going to pull some money out of my traditional IRA. I'll help the kid. But you couldn't do anything meaningful. Do you know what her payment is going to be when she, I was about to say retires, when she graduates?

Speaker 3:
[16:05] It's going to be at least $1,000.

Speaker 1:
[16:09] I mean, I think that if you look at what, okay, so what she needs to do is obviously get a job, but she can't be fussy about it either. You know, she's going to have to figure out a way to live in New York City on $5,000 a month. So that means, how is she going to make $60,000? She's going to take a job, not the perfect job. She has, you know, now we are talking about, you know, I probably imagine six, seven weeks until she graduates. She should be like scouring the neighborhood. She should be doing things like, you know what? I don't care. I'll be a dog walker. I'll do this. I'll do that. But like, if she wants to stay in New York and not live with you, either of you guys, then this does land on her. You know, these are the tough choices. Unless you tell me, you know, if she were an actor and you said, I want to try to help her for a year while she does auditioning, fine. But like, even that, you're not in the position to do it. Is your ex in a better or worse or similar financial situation as you?

Speaker 3:
[17:10] I would say it's similar. Yeah, very similar.

Speaker 1:
[17:13] And you guys are on the same page. Will it be hard? Could you say to your ex, look, man, I can't shoulder this right now, and you can have a unified front on it?

Speaker 3:
[17:25] Oh, absolutely. Yeah. She would definitely be in the agreeance with this whole thing too. Hey, and by the way, you're saying everything that what I thought and has been of what my strategy is. This has really helped me solidify that I'm thinking in the right direction. And by the way, there's been conversations almost daily about, you said, dog walker?

Speaker 1:
[17:47] Yeah.

Speaker 3:
[17:48] Anything to get a job, if you want to live there, absolutely have to get some employment fast.

Speaker 1:
[17:55] I think that for many parents, you know the answer. It's just hard to swallow it. And also, the circumstances have really changed. That's the other piece of this to me. Wow. The things that you thought were going to happen for life, if I spoke to you two years ago, I don't think you would have necessarily thought this is where you'd be, but here's where you are. And also kind of cool, you got the consulting thing up running, you're paying your bills, you're doing what you need to do. This is all great. I think that by the time if we push out into like age 70, you're collecting social security, maybe things are going well, maybe you're going to keep working. Maybe you got a nice little side hustle for a while, and then maybe you'll make a choice like, hey, you know what, I'm still working, and I can help the kids because of that. So that could be a different choice in the future. I think for this minute, I wouldn't count on it.

Speaker 3:
[18:48] I love your advice. I appreciate it.

Speaker 1:
[18:51] Thank you. I'm going to come visit you in Texas.

Speaker 3:
[18:54] We'll get some barbecue together and some bourbon.

Speaker 1:
[18:56] I love that. Bourbon, scotch, and beautiful wine from Provence. Hey, thank you so much for getting in touch with us, Don. Are you struggling with this concept around how much to help your kids or not help your kids? Are you feeling guilty? Let me take that off you. Mark, do you feel guilty about that? You don't feel guilty. Mark would not feel guilty, I don't think. You don't have guilt. A little bit. What's your guilt factor? What do you feel guilty about, Mark? What's the thing that would make you feel guilty?

Speaker 2:
[19:27] Oh, I don't know. I need a minute or two to think about that.

Speaker 1:
[19:30] Let me get you on the couch. I'm Mark's therapist. He's not a therapist kind of guy. So this is it.

Speaker 2:
[19:35] You never know. Theo's turning me into one.

Speaker 1:
[19:38] Oh, brother. Listen, gang, if you got some questions, we're here with answers. Get in touch with us. Go to jillonmoney.com. Click the Contact Us button. Write us a note. Come on the air so we can talk it through. It's so much better when you do that. Don't forget to check out all the great content that lives on the website. We have another podcast. We've got a blog. We've got videos. We've got resources. It's all there. You can subscribe to us on the Audacy app or wherever you find your favorite podcast. Try to put your hands metaphorically on someone's back. Change your work. Change your wealth. Change your life. Thank you for listening. We'll talk to you tomorrow.

Speaker 4:
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Speaker 5:
[20:38] Hi, my name is Lloyd Lockridge, and I'm the host of a new podcast from Audacy called Family Lore. In this podcast, I'm going to have people on to tell unusual and sometimes far-fetched stories about their families.

Speaker 1:
[20:50] I've heard my whole life that she invented the margarita.

Speaker 5:
[20:52] And then, we're going to investigate those stories and find out how much of it is true.

Speaker 1:
[20:56] He gets a patent one month before the Wright brothers.

Speaker 2:
[20:59] Oh my God!

Speaker 5:
[21:00] Please follow and listen to Family Lore, an Audacy podcast available now on Apple Podcasts, Spotify, or wherever you get your shows.