Announcer:
West for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly registered representatives securities offered through Cambridge Investment Research Incorporated, a broker, dealer member FINRA, SIPC, investment advisor representative Cambridge Investment Research Advisors, Incorporated. A registered investment advisor Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now, here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning, and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. Well, this is Nate. I’ve got Mike joining me this morning. Pleasant walk up the hill today. We were just talking that it’s very nice out, except we were saying that the gnats and the bugs and are just annoying already.
Michael Steigerwald:
Yeah, always an issue come summertime. But it is great to have the nice weather, for sure.
Nate Kreinbrink:
It is, it is, it is. And again, exciting time of the year for a lot of students, and I think you could throw teachers into that mix as well. Parents maybe have a little bit of different feelings of those. Schools out at the end of this week, I think, for some area schools another week or so, I think, for a few other ones. But again, another school year is winding down very, very rapidly. Iowa side, you’ve got to the start of high school baseball, high school softball, which is always exciting to see the scores in the paper, follow along. Should be another good year with some aerial local teams. Other side of the river in Illinois, it’s that tournament time. Exciting time for those, as well. So hopefully, I want to wish the best of luck to the area teams and make some good tournament runs and great seasons for all those involved.
Michael Steigerwald:
Absolutely.
Nate Kreinbrink:
And Major League, we had Andy Ferguson on last week, and I was giving him grief about the Cardinals being in the last place in the NL Central. Well, that didn’t last long.
Michael Steigerwald:
That was the spark they needed, obviously.
Nate Kreinbrink:
That was the spark they needed because now my Reds are in dead last, and they’re climbing. But we’ll save that for next month. Getting into today’s program, I know Mike and I were talking and sitting in meetings and some of the reoccurring topics that keep coming up throughout that. And that always guides us as far as where we want to go on these weekly shows as far as topics and what to cover. Again, you’ve been sitting in a little bit more, doing a little bit more, preparing a little bit more as far as financial plans and that software that we use in presenting that and going through that. And it’s interesting, once you get into it a little bit more and you get comfortable with what you’re showing, when it basically comes down to, it’s what you have versus what you need.
Michael Steigerwald:
Absolutely.
Nate Kreinbrink:
And playing off of those two things because the more you have, technically you could spend a little bit more. The more you need to have, the more you have to have from that side of it. So, when you break it all down, that’s what it comes down to. And people always ask that magical question, “Well, how much do I need to retire?” And I flip the question right back to them and say, “Well, how much are you going to spend? What are your debt? What are your lifestyle? What are your wants? What are your needs?” And that number will determine how much you have to have, not vice versa. So, again, when you go into planning, it’s a lot of that kind of topics with it and going over with that. It’s always nice to put all the pieces on the table and present that to clients or prospects or whoever in a way, and show them are we even close to retiring?
Michael Steigerwald:
Certainly. And I mean, at the end of the day, every situation is going to be a little bit different. This is not a cookie cutter style of planning. I mean, everyone is going to have different life experiences and different piles at the end of the day when they’re looking at retiring. And of course, different lifestyles that come along with that. So, really what we try to do is take a look at everything big picture, get a good understanding of where your expenses are, when are you looking at stopping retirement, when makes sense for you to start collecting social security. If there’s any other little tax benefits that we can offer along with that, it all plays together because, again, this is all encompassing. It’s not just, “Oh, here’s my big pile of money, and I’m just going to start using it until it’s not there.” We want that money to last. You want that money to last. And the only way to do that is really to get it all out there and create a customized plan for your individual situation.
Nate Kreinbrink:
Right. And I think, too, when you start looking at a household budget, and you start breaking it down into a monthly budget as far as what we have for utilities, what we have for spending, what we have for debt, what we have for groceries, and you start looking at that, you exceed the amount of income that you bring in on a given month, as far as expenses are greater than income, there’s consequences. There’s consequences to say, “Hey, we’ve got to start pulling money from other assets, or we’re going to have to start accumulating debt.” Okay? You continue month after month after to overspend your income. That continues to snowball, and it becomes a problem where, again, you are going to have to either decide that I got to find a way to get more income, or I’ve got to lower my spending and cut something.
Michael Steigerwald:
Yeah. So, I mean, it sounds so basic, but that is really the root of all of this. It’s really, on the most basic level, knowing, tracking, having an exact number of where are your dollars going every month, right?
Nate Kreinbrink:
Right. And I think once you can do that, you can kind of start planning. But again, those simple concepts, again, I’m going to transition into another topic that has been in the headlines for quite a bit of time over the past few months in, is in Washington and this debt ceiling. Are we going to default on our loans basically as a country and what we owe with them? Are they going to reach an agreement? But at the end of the day, that concept is kind of playing out right in front of us in Washington as far as a household income, our country’s income.
We’ve exceeded our spending by doing that. And again, you have different sides. Again, I’m not getting into politically Republicans, Democrats. Again, I think they’re both in agreement that, okay, this probably needs to be extended. This needs to be raised. But there’s also different caveats that each side is looking at, too, which is what is the big holdup and why they can’t agree on when to do this and how to do this. Which, again, now all of a sudden we continue this out without an agreement, there’s some things in play that could be impacted by this.
Michael Steigerwald:
Yeah. And again, it’s also, what are you reading? What are you hearing? It’s everywhere, and depending on what you read and who you talk to, some pretty scary stuff you can run into. And essentially, yes, do they have to come to an agreement? I think both sides understand that. And they know that. This has happened before. This is not the first time it’s reached this level of, I guess, uncertainty. But as the days on the calendar go by and get closer and closer, they have somewhat put a date on there of June 1st, and we’re getting close to that June 1st deadline. So, as much as they know they need to do it and come together, it can again lead into some volatility in the markets, where, as you’re reading and hearing these things and maybe what’s not getting done, is what is causing some of that fear.
Nate Kreinbrink:
Right. And I think when people start thinking about it and some of that that they’ve done, I mean, you look at Social Security checks, you look at Medicare payments, tax refunds, and all this stuff are technically a debt to the US government, which is technically what they pay out.
Michael Steigerwald:
Correct.
Nate Kreinbrink:
If we default on some of that, which debt is going to get prioritized? And obviously I think that you’re starting to look at people’s incomes and people’s health coverage with Social Security, with Medicare, with whatever. Again, I would assume, and I don’t want to assume too much with that, but I would think that they would get prioritized over some of the other debt instruments we do, as far as what they would look to pay out if something should default, and we do not get into an agreement.
Michael Steigerwald:
Certainly. And then, some of the things that I’ve read more recently on this topic have said that if it does get to that point, well, there are other instruments that could come into play and prioritizing those debt repayments will certainly be one avenue that they can do that to make sure it’s just not complete chaos.
Nate Kreinbrink:
Right. And I think, again, you’re going to start looking at, again, the 12th hour trying to come up with an agreement. Again, both sides of the aisle know the importance and the impact that this is going to have. Again, it’s like they’re playing, again, unfortunately, they’re playing chicken right now and deciding who’s going to blink first.
Michael Steigerwald:
Yep.
Nate Kreinbrink:
And again, at some point, and I know David went into this at depth when he was on at the first Wednesday of every month, as far as pretty passionate about this. As far as talking about, again, we need to get to a point, as a country where, again, Republican, Democrat, we need to do what is best for the country to move forward-
Michael Steigerwald:
As a whole. Correct.
Nate Kreinbrink:
We’ve been through, again, 2020 with the pandemic and then some of these supply chain issues, high inflation, losing jobs, gaining jobs, we need to move forward. And hopefully, this is something that, again, can unite us and to do that. Again, it’s an issue that needs to be addressed, and hopefully they will get to that by the deadline and move forward with this. And again, as America, because, again, you’re looking at markets and looking at that, the market is in a wait and see period right now.
Michael Steigerwald:
Right. Correct.
Nate Kreinbrink:
Investors are, again, hesitant to lean which way to see which is going to be the breakout pattern for what the market’s going to do, because-
Michael Steigerwald:
What’s going to happen?
Nate Kreinbrink:
.. what’s going to happen? And again, it’s just, we’ll get there.
Michael Steigerwald:
Yep.
Nate Kreinbrink:
Hopefully.
Michael Steigerwald:
Yep, yep. Most people think that will happen just as it has in the past. As long as they can get to that deadline and they meet it, it should be all good.
Nate Kreinbrink:
Good. And again, we will, obviously, continue to stay on top of this. And again, as something changes and we get a more definitive route forward, we’ll, obviously, spend a lot more time and a little bit more in depth time on this show explaining what happened, how it impacts you individually, and what that means going forward. But before we run out of time, I did want to mention that every Friday, Nelson Corp Wealth Management is wearing jeans for charity. Money raised in the month of May will be into two, the YWCA Children’s Center. Mike, I appreciate you joining me this morning.
Michael Steigerwald:
Yep. Thanks for having me.
Nate Kreinbrink:
Again, Mike, Nate with NelsonCorp Wealth Management, bringing you this week’s Financial Focus. Thanks again for tuning in, and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in the show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly registered representative securities offered through Cambridge Investment Research, Incorporated, a broker, dealer member FINRA, SIPC, investment advisor representative Cambridge Investment Research Advisors, Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.Nelsoncorp.com.