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Haven Financial Group Radio Show. I'm Larry Kolvig, Founder and CEO of the Haven Financial Group. Thanks for listening. We got a lot to talk about today, Kim, a lot in the news, election year and all the good stuff that goes with it. Yeah, it's been a busy, busy week, that is for certain. And obviously these are elections are very important to a lot of people because we have seen a lot of our economy bouncing
around. And of course, depending on how you feel about the candidates, you believe that one candidate or the other may be better for the economy. I'm not sure that we're here to debate that as much as we are to talk about how you can deflect some of the issues associated with inflation and economic issues here in the country. Happy to have Kyle Thomas with us today.
He's a certified financial planner a member of the Haven Financial Group team. Kyle High and thanks for joining us. Yeah, thanks for having me in. Good morning, Good morning to you, my friend. So it was back, really, guys, at about twenty twenty one, right that we really started to feel the rise of inflation. And I'm going to ask you too, because you were experts on these kinds of things, tell me some of the first signs that you saw of inflation back in twenty twenty one that maybe
we've continued to see even though I think things have eased a bit. Well, Cam, I think they have eased a little bit I mean, there's certainly a long way to go. But reflecting on twenty twenty one and then the pandemic and there wasn't much on the shelves at the grocery store, and what was on the shelf, then the prices continued to rise, and of course we all remember in twenty twenty two when inflation hit nine point one percent.
How can we forget about that. Of course, we've come down a lot since then, in the last three years, for the last two and a half years, but we're well away from that two percent target that the Feds are looking at. It's slowing down, but just because the inflation is slowing down now doesn't mean the prices are coming down. They remain high. And quite frankly, we see it cause a lot of financial stress for regular
individuals, middle aged individuals. But you know, we serve those that are planning for retirement and close it can affect them a lot more, especially when it comes to different rates, mortgage rates. What we've seen and across the country is credit card first quarter of this year one point one five trillion dollars this year, and household debt at really high at seventeen point sixty nine trillions. That's a lot of debt and that's what people are taking on to adjust
for this inflation and high cost expenses. Oh. Absolutely, Kyle, as someone who meets with consumers and obviously soon to be retirees and some who are retired, tell me some of the feedback you've been getting from people. Yeah, that's a great point. You know, we meet with many people and couples throughout the week, and a big thing that I'm seeing is people wanting
to stress test their simulations for retirement with higher inflation rates. So we typically have about two and a half percent in there, and that's a little higher than what the FED is actually targeting going long term. That's a whole nother discussion if we get to there. But people are wanting to stress test for
a three percent or inflation. So you just kind of see the sentiment that the average American has regarding where we're going to be going forward for inflation, and that changes the retirement plans a whole lot, because if you're targeting six or seven percent return on your investments, then your inflation is at three percent or more, well, half of that return that you got goes to just
inflation, So your real return goes down by you know whatever. That difference is absolutely I want to talk a little bit more about that and about the kind of advice that you guys are giving some of the folks who come to visit with you. But before doing so, Larry, you've been in this game for a while. This generation of retirees are soon to be retirees. Have they seen inflation like this before? Yeah, many of them have, but they've kind of wanted to forget about it. So it kind of bring
back. It brings back some many years back, but affects seniors a lot because no more paychecks. So for somebody that's getting a paycheck, it might not affect nearly as bad as if they're living off their investments or that pension,
or maybe they're relying on annuity for income. It really affects them because what they start to do is they start eroding their cash reserves, which are very important for retirement, and then they're forced to potentially draw off of investment or retirement accounts that thankfully the markets have been very very good of late. That's great, but you don't want to draw off those accounts if the market's
turn again. We know the market goes up and it goes down, and drawing in a variosh market is just the wrong thing to do it, but a lot of people are forced to do it. So adjust those plans first. Have a plan, adjust those projections, look at the expenses, scrutinize them, probably more than ever. I'm not saying you have to cut things out, but you may have to cut some things out if you're really looking to successfully plan for retirement, try not to resort to those credit cards that
are twenty to thirty percent interest rates. I'm seeing that more and that is not what you want to do planning for retirement. So it sounds like we're preaching to the choir, and maybe we are, but it's just certain things we see on a regular weekly basis. People have felt it. We will get through this. But again, having that plan and modifying it along the way is so important. Absolutely, Kyle, Let's talk about the biggest risks
that you see for your pre retirement clients. Yeah, biggest risk for them is just going to be their daily lives. Rising prices, harder to finance things right. If you wanted to get a mortgage or a car loan, those higher interest rates can really eat at your ability and you're purchasing power to get things that are necessities in your life. So, I mean, some inflation is good, right, we have to keep that in mind because it
drives the economy. But the inflation that we have been seeing is not good. It's a detriment to our society and our economy. So we just want to try to keep the strenuous time away from us as much as possible. But you know, keep in mind that some inflation is good and we just
want to try to keep it down. But you know, in terms of for the younger people, you can take advantage of this as well by you know, investing in types of investments like CDs and treasuries because they are having higher interest rates and you can combat that inflation in a way by by having those investments in your portfolio. Sure, so, so pre you know,
your pre retirement clients can maybe take advantage. Now that may not be the case, Larry, for those who are already in retirement, but hopefully you've set them up in such a way that they're prepared for this. Talk a little bit about how you guys do a stress test and then you prepare for the idea that there may be inflation and maybe maybe you you know, never anticipated it be nine percent, But I'll give us an idea how you go about that. Well, certainly we you know, we plan for the worst
and pray for the best. Absolutely, But it does affect the retirees to the degree that you know, they may have to work longer if on the cusp of retirement, maybe working longer is the answer to you know, get a couple more years of income and delaying that that retirement date. And a lot of people don't want to do that, But financially, we have to
look at that. We use these projections, we factor We've always factored in inflation, and I'm always astonished when people tell me that their financial guy or gal doesn't factor in inflation. You can't do honest and accurate projections because we know inflation is a complete game changer, so we've always factored it in. You want to make sure your again expenses are accurate. But you know, I saw a statistic here Kim that sixty one percent of Americans are spending more
on groceries and dining out more, which is very interesting. I don't know how that goes together with a budget because dining out is not cheap. Yet all the restaurants I had to go to it seemed to be very, very busy. So I don't know, there's sometimes a disconnect with reality and what actually people are doing. But retirement comes quickly. Make sure you're planning for it, and as all have that plan. If you don't have one,
start somewhere to get somewhere, sure have you. Guys unfortunately had to look, you know, couples and individuals in the face and say, look, I am afraid that these last couple of years mean that you're going to need to stay in the workplace for a little bit longer. Those are tough conversations. Do we have those conversations? We have probably more in the last six months to the last year, more than ever. But part of that is
because people haven't planned very well. You know. Our observation is though that the age that we work with has done some planning and maybe not be the best planning. But there are ones that come across. Just last week I had a couple that some all thought they were going to retire, but when we ran the numbers, their money wasn't going to last nearly as long as they thought because they were putting garbage into the projections and it simply wasn't accurate.
So again we want to be as accurate as possible. Sure, absolutely, all right, So we want to invite our listeners today. And one of the things you constantly say is that we're not here to scare people. We just want people to be aware of what the situation is and how this could be affecting your retirement. Whether you're in retirement already or if maybe you're someone who's hoping twenty twenty five twenty six is the year that you can step
away. It would be best, probably at this stage of the game, that you make sure that your plan that's in place can survive through these kinds of times, and you need a stress test. You need to find out if in fact, this and these last couple of years have taken a toll on your plan in such a way that maybe retirement needs to be pushed off just a little bit further. Six one two five zero four eight four zero zero. That is a number where you reach the folks that have in financial
group. Let me give it to you again, it's six one two five zero four eight four zero zero. Whether you have concerns about inflation, or you just need a plan in place a portfolio. Then they are the folks that you'll want to talk to. Sit down with them there at Haven Financial Group and and you know, just get a sense of what it is that they can offer you, and you tell them what it is you're looking for it. That first consultation is free. They have fabulous coffee, and I
hear there's a cookie or two as well. Six one two five zero four eight four zero zero. You can go to Havenfinancialgroup dot com. So, gentlemen, when we come back, let's talk a little bit about budget strategies that you give some of your clients, or that you would suggest as a result of this inflation. Again, Kyle Thomas is with us today's certified financial planner and a member of the Haven Financial Group team. So glad that he could be with us, and we're glad that you could be with us too.
You're listening to the Haven Financial Group Radio Show. Don't go too far. We're gathering more important insights and retirement ways. Devin. The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio show with your host Larry Kulvig and Kim Karragan. Now back to the show. Welcome back
to the Haven Financial Group Radio Show. I'm Larry Kolvig, founder and CEO of the Haven Financial Group, and joining me today Kyle Thomas, a certified financial planner on the Haven Investment Team. Great to have you Kyle here to talk about retirement and all the various things that go with it, and of course it's an endless conversation weekly talking about inflation. So feel free to give us a call at six one two five zero four eight four zero zero,
send us an email. You can go to our site at Havenfinancialgroup dot com. There's all kinds of practical retirement tools on there. We have a Safe Haven community where you can share ideas. Just a really good website that people
really find very very interesting. We've been talking about inflation. You know, it was back in twenty twenty one when we really started to feel the effects of inflation, a result of coming out of the pandemic, a worldwide pandemic at one point a nine point one percent inflation year over year here in the
United States that occurred in the summer of twenty twenty two. We have seen a bit of relief over the last few months, but you know, if you're like me, Larry, you still go to the grocery store and go, wow, that bill still feels pretty darn big. And certainly, inflation affects all different aspects of our economy. It affects the financial markets and the
banking institutions, but it affects individuals as well. And you were talking about in our first segment, both you and Kyle, the idea of budgeting. So let's talk a little bit about budget strategies for soon to be retirees or retirees when it comes to combating inflation. Let's start with just the idea that you guys are saying that you still have see people coming in and they have big credit card debt, they still are feeling the effects. Well, yeah,
you said it right. It affects the find financial markets, the banking industry on the business side of it, but affects individuals' lives equally or even more. It causes financial stress for Americans, it has you know, you really feel it personally. Although I went traded for nothing with all four daughters being home for the summer and their friends constantly over stocking the downstairs kitchen with stacks and everything else. So you definitely hit it, definitely hits home even
individually. But that leads to the need at least you should be budgeting anyways, the need for effective budgeting. Now, nobody wants to hear about budgeting. It's not a fun thing put to put together. That we preach this to the younger generation, but equally it's important for those that are planning are in retirement. Many of them are on a fixed budget. They're on a
fixed income, so straying away from that budget can really cause problem. The big the keys here are housing, transportation, and the food that we've been talking about. We always talk about covering the costs for the things that you want, but then in retirement you also try to want to cover the things that you need, and it boils down to income where is it going to come from? And budgeting is really a discipline. I had a couple in
last week. They have been utilizing the envelope method. First of all, they had put together a great plan. I could confirm that we could tweak it a little bit, and I asked them, I said, what has been your secret over these years of marriage? And they said, we got off to a really tough start, and we followed the Dave Ramsey in this
situation. It worked for them. But they developed the envelope where they put money various monies in each envelope, and it worked for them and they're still doing They're in their mid sixties, they're still using the envelope method, and they explained to me how it actually helped their young neighbors that were struggling as well. In their case, the husband was going to the casino and she was going getting all her hair and nails and all the other stuff. And
now they have effectively came through with the budgeting. So it's individual that doesn't work forever every way. Perhaps Kyle can talk about a couple other ways to budget, but again it's tracking your spending, finding out where where are you spending your money? Is it Caribou? Is it Starbucks? Maybe you can cut out a little bit here or here, and you'd be surprised how many if you're really tighten the rings, how you can change that discipline or your
habits fairly quickly. Cow we heard Larry talk about the envelope method. Can you address maybe some other budgeting methods that you chat with your clients about. Yeah, budgeting is an absolutely necessary thing to do, and like Larry said, it's not so much fun to do because you realize how much you actually
spend on things and you have to stick to the plan. But it actually kind of creates a sense of comfort and relief once you look at it and you understand where you can spend your money and where you're going with it. So, but some great budgeting tactics I have is, first you want to
create a plan that's within your means. So just find out what your income is, how much you're saving into retirement and that type of stuff, and then see what kind of discretionary income there is that you can spend there and then create a budget within that. And that also create an emergency fund and use it exactly what it's for emergencies. Keep it to the side unless you have an emergency, and that should be about three to six months of spending
of discretionary expenses. After that, I just like to tell people to find some cheaper alternatives. If you're a cub shopper, you know, for groceries, cub has their own brand that you can buy instead of the big marketing large distributor type brands. If you are a target shopper, you can shop for the good and gather brand versus a large distributor. So you can save dollars in the long run by doing stuff like that and pinching those pennies a
little bit. Or you can even grow a garden like I did this year, and I'll be having a lot of BLTs in a couple of months. You could shift on my way if you'd like. If you get a run, so yeah, you can just cut a lot of unnecessary expenses, you know, the gem get some coffee from the grocery store rather than go into Starbucks each day, or rent movies rather than go into the movie. So just things like that. You'd be surprised how much money you can save.
I think that's so true. You're absolutely right. I think if someone gets on a budget like that and writes everything down very quickly, you realize where you're leaking. And I think a lot of people are very surprised by that. Let me ask you guys this, when it comes to inflation, is it really a budgeting question though, or is inflation more about an income issue? I would say it's actually both okay, because you have to have income
to cover the inflation, you're going to have to draw from somewhere. If inflation's high, you're going to have to increase the amount that you're drawing off, whatever investments or where wherever you're getting your income. What's interesting is one in four Americans have nothing saved for retirement and many Americans cannot afford to retire ever, which is a staggering number. Is just a recent statistic I read.
And you know, retirement is often a succession of different phases of retirement where you're spending might change, the priorities might change, and your budget might change. And you know, I would point this out. You know,
there's the pre retirement age. What I would say is, you know, fifty to sixty two, where you're going to have different expenses and probably different things than you will in the second phase, which is the ages from sixty two to seventy where maybe now you're retired and now you're doing more things, you're able to travel, We want to factor those into your overall plan.
And maybe the third phase being the roughly the seventy to eighty range, and then maybe some healthcare things, and then the late retirement years of eighty and up hopefully not, but nursing, home, long term care, health care needs, those are all part of it. Seventy percent of us. We've talked I think a few weeks ago, that seventy percent of us are going to need some sort of care. You know, is that important. We've discussed that in our propriet tary process as well with folks. Have you factored
it in? Last week? I had somebody that was pretty much everybody on her mom's side has had dementia. Well, I hope she changes the whole system with her family, but she's her worry was. I need to plan for that, even though I hope it doesn't happen. So we walk in our process, we're walking through all of these what ifs? Should we plan? Do we need to plan? What's the cost of this? And that? Inflation being part of it, but then there's all the other aspects of
retirement as well. Absolutely, let me ask you real quickly here before we move on inflation adjustable income investments and products, what might be some of those? Yeah, So the federal government actually has some of those. So there's Treasury inflation protected securities. That's a big one. That we actually use in our portfolio. So you get a bond from the Treasury, and the return and interest that you get is based on the inflation. So they look at
what the inflation was and they adjust that interest for whatever it was. So, especially the last couple of years, that's been a great investment to be in because when we were at a nine percent inflation rate, obviously that would have been a nice place to park your money in, right, So there are vehicles to specifically kind of match the inflation environment that we're seeing and keep if I could add to that, we do see people utilize annuities, you
know, and I have talked I'm gonna teach a class soon about the truth about annuities. Look for that on our website. Some people use annuities you don't have to for income now with the federal funds rate and interest rates being higher than they were several years ago, there are some intriguing annuities for income with higher payouts that can help generate more guaranteed lifetime income at this stage today
compared to what it was three, four or five years ago. So there are a variety of retirement tools and products so that are out there and we always say it comes down to the education, not thinks for everybody. Please don't just don't go by the first one you see. It might not be appropriate for you. It might be appropriate, but it starts with education and a discussion to see is it the right fit is it not the right fit?
And oftentimes people they don't look at all, they don't look at everything that goes with it, and then they get stuck into something that they really don't want. So education is the key, absolutely, And if you're looking for some education, maybe as we just heard about annuities or a lot of subject matters that are related to retirement, then absolutely go to Havenfinancialgroup dot com.
You'll see a list of some of the upcoming seminars. They are free, but you do need to sign up so that they know who's going to be attending. And as Larry just mentioned, they are going to have one very soon on annuities and maybe that's something that you have a lot of interest in. You can also call Haven Financial Group at six point two zero four eight four zero zero. That's six one two five zero four eight four zero zero. Gentlemen, When we come back, let's talk about inflation. Who
caused it? Most even more importantly, what caused the inflation that we've been living with really primarily since twenty twenty one. You're listening to the Haven Financial Real Radio Show. Ready to find your financial safe haven. Your dream retirement is in reach. Don't go away, The Haven Financial Group Radio Show will be right back. Are you worried that your financial strategy might be missing something, Well, you're in the right place. Larry Kolvig is back and ready
to help you find your financial safe haven. Welcome back to the Haven Financial Group Radio Show. I'm Larry Koalvig, Founder and CEO of the Haven Financial Group. Give us a call, ask us question six one two five zero four eight four zero zero, or visit us online at Havenfinancial Group dot com. Again. Great to have Kyle Thomas with us today. Kim certified financial Planner on the Haven Investment Team, talking about inflation that you know, it's
a fact of life for us, it's reality. There are things you can do to minimize and we're talking about how to reduce the effect of inflation. But again we know that it's happened before in history, it'll happen again. It's just we have to weather the storm and see what's the best way that we can do that. Absolutely well, we've been talking about a date. We've been sort of saying, you know that it really spiked in twenty twenty one, and then it took a gigantic leap up even higher in the summer
of twenty two. But I know that off the year the two of you have said that you believe that inflation stems back even further than twenty twenty one and pre pandemic. I definitely do. I mean, again, there's a lot of opinions. We're all entitled to our opinions, of course, but I think this can date back to the Bush times, the Obama times. Yes, the easiest ones to blame are Biden and Trump right now because they're engaged in a heated debate and we have an election and we're worried about the
US economy. But this dates back a while longer. Quantitative easing, the printing of money has been going on for quite a while, and that certainly hasn't helped the cause. This whole pandemic thing really boosted it more. And let's not forget we have a war in Ukraine. But the federal policies of printing money has been a significant contributor to inflation, I think, more than
anything. And we've been doing that for quite a while. I grew up drinking kool aid on the farm, and at the end of the day, the more water you put in the kool aid, the lighter the kool aid got. Well, the more you keep printing money, the value of the dollar goes down and it just gets thinner. So this has gone on a
while. I wouldn't play the blame game. We certainly have to get some of these things under control from a world perspective and a US perspective, But there's a lot that goes into this whole thing about inflation, absolutely, Kyl. How much of it do you attribute to geopolitical issues, that being the pandemic or the war in Ukraine, maybe even some of the issues associated with the Federal Reserve. How much of it do you see as being factors those
being factors. Yeah, yeah, First, I'll kind of piggyback off what Larry was saying. If you look at our economy starting and write about eight we went into a great expansionary type of economy starting then, and if you think about currently the last few years, what was driving the inflation. It
was the low interest rates. Well, we had low interest rates back in eight again because the government was trying to try to put money into the economy, so it went slow down with everything that was happening, and so ever since then we've been in that expansionary period. So back in twenty twenty, when COVID happened, the government was pumping out money to combat the effects of COVID with businesses shutting down and people staying at home, so they wanted to
make sure that our economy would still run. People started buying stuff with their stimulus checks and excess cash that they had at home, and that led to limited supplies and shortages. So remember when used car prices were just increasing dramatically because the new cars didn't have chips, so people wanted to get the old cars, and that chip shortage caused a huge burst into the AI thing that
we're seeing right now. I think. So it started maybe in the two thousands, but it was really the light was shining on it back in twenty twenty from COVID, because there's a whole lot of effects that happened. Then I hear you guys saying that our interest rates were low and we began to expand and ultimately paid the price. What in your opinion, because of course the Federal Reserve right now in fact thinking about more cuts and possibly bringing them
the interest rates back down. What's a good comfortable place for interest rates to be for the economy. I think maybe right around you know, four percent, four or five percent, I guess. I've I'm not really sure what
they're thinking for it. I know that you know they're targeting inflation for two percent, but that federal funds rate, that's going to be kind of a up in the air question that I don't know if we're going to really see for another couple of years, because at the beginning of this year they were targeting six rate cuts, and now we are in July already and we haven't seen Eddie, and a September rate cut is on the horizon, but who
knows what'll actually happen then. And we're supposed to have four next year. So I think we're getting a better idea of where're going to go, and that soft landing that Jerome Powell's been talking about may happen. Maybe it won't, I'm not sure, but we're getting closer and things haven't fallen apart like a lot of people had predicted. So it's just nice to know that we're getting closer to where we want to be. Larry, I know that we're
not here to talk about politics necessarily. We're just talking about the impact of what the economy has on, certainly pre retirees, tirees. But this election this fall certainly will have some kind of impact on our economy. No questions about it, no questions about it. The big thing that I see not hardly anybody talking about, though, is government spending. And we've been spending. I don't care what side of the vale you're on, it's just spend,
spend, spend, spend, spend. Now, don't ruin your Sunday by going out and watch going to look at the US debt clock dot org. Please don't ruin your Sunday. But I know we're at least thirty four some trillion dollars in debt and that isn't getting any better, especially all these packages. And I understand stimulus, the pandemic thing, but there was no
accountability. I had a couple of clients that were in the banking and the credit union industry that actually they retired early because the default rates were so bad on all that money that was sent out and it was so stressful. They retired early because of no accountability and people that took advantage of the system. And that's our hard earned tax dollars that was wasted, and there's so much waste on both sides. Yes, there's concern whatever happens this November about who
gets in. Is one better for the stock market than the others? Does one spend more? I know there's great concern. We have a lot of retired military folks, and there's a lot of concern about our military and the lack of in the shape that our military is in and not spending on money on the military and spending money on other things. So there's always two sides
to the equation. I'm sure there'll be chaos on either side. It was a terrible thing that recently happened, obviously this past last weekend with President Trump and the assassination. And you know, we can't overlook that. We were certainly mindful. We don't wish your will on anybody, and it's a miracle what happened that he's still with us. We shouldn't wish you'll will on anybody, and we wish people the best. We can have differences of opinion,
but I agree with the uniting of America. And again, there's no place for shooting people or riding in the streets. Well said, and I couldn't agree with you more. Call me let me ask you a couple of questions here about some of the things that we've sort of discussed. But economists are saying, you know that they do truly believe that this round of inflation was
related to the pandemic. It's the war in Ukraine, and they talk a lot about just decision making by the Federal Reserve early on in the pandemic, and then of course as this has played itself out since the pandemic. Where do you stand on that? And do you think there's anything else that has been a factor that maybe retiree should be watching for good or bad when it
comes to inflation. Is there one of those factors you think that was the real death nail when it comes to shooting and inflation up, Well, I think just COVID itself and having the Fed lower interest rates to zero that was, and having them be at zero for such a long time that really drove inflation up, I think, and I mean, when we think about this, when the Fed lowers the rates, they're pressing the gas on a car,
right, That's the picture that I like to think. They're pressing the gas in the car to try and get this thing going and jumpstart everything. And when they started to raise the rates, I was critical of Powell actually for how it went down. I don't know that it was necessarily the best way to do it, but the inflation didn't stop. It did not slow down as much as they thought it was going to, and we're still seeing the effects of that today. So retirees just need to keep that in mind.
And like we said in a previous segment, that we just have to keep the inflation projections in mind when we're looking at the retirement success rates, because we just don't want to plan for two lo ofn inflation if we actually have a higher inflation, because that can create problems for these retirees going forward. If we're looking out for the next thirty years. Sure well, Kyle,
I think you kind of answered it there. I mean, I think the chances of all of us living through another pandemic, we certainly hope, are much less than the possibility that interest rates could have a huge effect on our economy. So I thank you very much for answering that. Six one two five zero four eight four zero zero. That's how you get hold of
Haven Financial Group. Do you have questions, questions about your portfolio, questions about inflation, questions about your retirement, Be sure you give them a call, sit down with a member of the team and talk through what you hope to achieve in retirement. It is a free consultation in the beginning, and they would love to hear from you. Or you can go to Havenfinancialgroup dot
com and get in touch with them there. The cost of high interest rates, we've just been talking about it. We want to talk about that a bit more when we come back right here on the Haven Financial Group Radio Show. Don't go too far. We're gathering more important insights and retirement. Please, The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group
Radio Show with your host Larry Kulvig and Kim Karrigan. No back to the show. Good morning again and welcome to the Haven Financial Group Radio Show. I'm Larry Kolvig, founder and CEO of the Haven Financial Group. Great to have you with us, inflation, high interest rates, all this positive stuff. But we should remain optimistic because it is an electioneer. They're going to
solve all our problems this year. We can only hope Rank Kiven from your lips to God's ears, Larry, let's say, I know we've done a lot of talking, certainly in our last segment about interest rates, but let's
take a couple of minutes and talk a little bit about interest rates. Because when the Federal Reserve, we wait for these days when the Federal Reserve has their big meeting and then Chairman Powell comes out and he talks about what they've decided and sort of gives us, you know, some inclined nation as to whether we're close to a rate cut or what's hoping you guys can maybe explained
to some of our listeners who don't understand exactly what that means. So when there's a rate cut and the Reserved decides they're going to cut rates, and how that trickles down to affect them in their personal economy. So what that rate cut means is that there's a Federal Funds target rate, and that is
the rate that the banks are borrowing at. So when a bank is borrowing at a lower rate, that means that they lend out money at a lower rate as well, So that means a lower rate for you, the investors, and the citizens of the United States. When they're a higher rate, it creates problems for financing and taking loans out. And what they're trying to do with higher rates is limit your spending and stop your consumption going out and
doing fun things with your life. So that's what the higher rates mean. And when they start to cut them, they're starting to let you do that a little more in their eyes. Right. The government debt will usually increase when the rates are higher, right, because they're giving out treasury bills and treasury bonds for higher interest rates. So one thing I like to keep in mind too, is that how are they going to combat that more debt now?
And that could be, you know, potentially raising taxes. So there is kind of a cost to these higher rates other than the debt that you take on for financing things. And despite the fact that we've seen things sort of cool down just a little bit, Powl is talking about if he continues to see strengthen the economy, that we may see more cuts this year. Right, Yeah, they actually are factoring in a raid cut in September as
of now, and then maybe one by the end of the year. So it'll be determined by how how inflation is measured here in the upcoming months. For sure, that may or may not happen, But how does it affect the average consumer. The bad news is homeack winning line of credits, interest rates on credit cards, interest rate on mortgages, they've all spiked up,
and in business loan, all of those things. The good news is we've been able nowhere folks should be getting you know, five plus percent on those high yield savings accounts CDs, some of those accounts that we were not able to make more than pennies for almost fifteen years. So that's the good news. We're able to make make some money on that those liquid bank accounts. If you're not shop it out and go get something a five plus percent while
you can, because they won't stay there forever. And Paula has emphasized the risk of you know, weakening the economy. It's been a very slow pattern of the way he's doing things. There is good news though, because and I would agree with him that there's strength in the economy. The labor market is strong, there has been some easing and inflation, and there's a lot of doom and gloomers out there. At the end of the day, the
American economy has always bounced back. It's always bounced back. And if it doesn't bounce back, we got bigger. We got bigger problems than we've ever
had. So when I hear these, you know, these people on the far right or the far left that you know, should I take all my money out because the banks are going to be all shut down by Wednesday, make sure you consider the source of where you're getting the information because there's a lot of you know, the internet is great for a lot of things, but you can find anything you want about the on either side on the internet,
So be extremely careful. If you're wasting a lot of time with doom and gloomers, you might want to hang out with you with somebody different, because the reality is you got to have faith in something otherwise there's no hope. And what I'll say is I'll bring it full circle back to having a
plan talking through the plan. We're doing that more than ever with our clientele because of the concern of can I retire, how long will my money last, how will it all of those factors, and that requires whoever you're working with to be paying attention to what your worries are, what your concerns are, and you should feel that you can ask questions to whoever you're working with and having a good partner to lean on. That's what we like to do.
If people will need more attention during these tough times, during these worries and concerns, that's what they're paying us to do in some way, shape or form. Again, if you're not getting the attention you deserve out there, perhaps you should get a second opinion. And there's no cost for a second opinion, and that's what we offer. Come on in. We visit with you. What are your concerns from a financial standpoint, to a family
standpoint, to an employment standpoint. And the more you talk through things planning for retirement and in retirement, the more confidence you're going to have, the less potential worry, and you know that's going to lead to better decisions. So I see a lot of people just not getting the attention they deserve, but they're paying for it. I don't care if you're talking to investments, if you're talking healthcare of state planning taxes for sure, because tax planning,
we talk about that all the time is so important. Yet most people just get their taxes prepared and they don't do anything about planning. So what's the old saying. A failure to plan is a plan to fail. And we don't want anybody to fail, let alone somebody that's trying to retire and may never be able to retire. So, having said all of that, Kyle, what is it that you're telling some your retirees who come in about interest rates? We know that chances are very good we'll see two more cuts.
You know, how is that going to affect them? And what do they need to do to prepare? Well? We do try to take advantage of what the interest rates are and what we're given. We do look out to the whole market of the bonds that we can see, so like CDs and
treasuries, all of that. And also if you're if you're at your local bank and you're purchasing CDs through there, I would just urge you to speak with someone doesn't even have to be us, but it's nice to get a full scope of what's out there because often these these smaller banks, they take a little extra off the top there so you get a lower interest rates. So but there is you know CDs. I just checked the one year on new issue CDs is five point one percent. A three month treasury is at
five point three percent. So there's ways to take advantage of this. So that's something that we implement into the portfolios for our retirees, especially because we don't want to take as much volatility when you get into retirement, right because that can that can cause problems if we have a downturn in the market and you're more exposed to the equities than you need to be. So that's something
that we do. And one other thing that we're trying to do is just emphasize getting rid of debt that you don't need, because that's something that can erode at your wealth, especially with the current credit card rates because of those higher rates. So if you're if you carry over debt on a month to month basis, that the annual yield that the credit card companies are getting is
just shy of twenty five percent. Right now on average, So we just want to take care of take care of things and you know, do a check up on your wealth and make sure that you're taking advantage of the things that's best possible out there. Cal Can I ask you, if we have those two interest rate cuts by the end of the year, how will that affect those CD returns? Well, the CDs will effectively go down on the
new issue, so you'll get less interest inside of those CDs. And then if you're actually holding CDs currently, those prices will actually a pre so you would actually have a gain inside the CDs if you were to go and sell them. But we wouldn't necessarily want to sell them. We would want to
hold them for their yield and all that. So the bond market is a little confusing, but the yield that you would get on buying new treasuries or CDs or any type of bonds, so they would go down, and that would actually potentially drive the stock market up, right because that would be the companies that you would be investing in, they get an effect from those rates coming down to so they get to borrow money at lesser rates, So that
would potentially mean for them to invest more into the company rather than rather than borrowing more right. I think what I'm hearing though, is that if for a retiree and you want to get into CDs and the rates are pretty good right now, now might be the time to do so before these cuts actually occur. Well, I definitely agree with that. I definitely do if you haven't taken it, advantage of that for your liquid monies we call it your
emergency fund or just your regular spending money. The moneys you're not going to need immediately go out and shop those out. Take advantage whether it's you know, short term, three, six, twelve month. These rates were not going to stay this way forever. And again I think people if they're not
getting some at least five plus percent, there's other options out there. And let's face it, you know, whether interest rates fall, stay the same, you know, or whatever, or rise, you know, there are strategies out there, but you need to talk through these strategies to see what you're missing, if anything, and there's ways to protect and secure your retirement
dollars and finances. And that's where feel free to give us a call again A six one two five four eighty four hundred to talk through these things or set up in time to come visit with us, absolutely, or you can go to Havenfinancialgroup dot com. This has been so informative you guys. I mean, I think that we certainly didn't want to make this a doom and
gloom kind of show it. You did not. You've told us all the positive things that can happen to retirerees, despite the fact that inflation has been pretty strong but is slowly you know, coming down, hoping for a better year in twenty twenty five. Yeah, Kim Well said, you know your investment in retirement strategy is you know what, It's the most important, one
of the most important aspects in your life. You know, it truly underpins your entire life during these golden years, which we want them to be as golden as possible. But it's not easy to keep up with all the changing rules and laws and financial landscape of everything, and yes, inflation and high interest rates. This was not meant to be a negative or a negative nelly type of segment today, but it is real. People are feeling it.
Therefore they should be getting the attention they deserve in any of these retirement areas specifics to taxes and all the other planning that goes into retirement. If you don't have a plan, whether small, medium or large. You know, big family, little or no family. Take the time. It doesn't cost anything. It's a laid back atmosphere here. We want to be relatable. It's not a stuffy We take it very seriously. We also have a lot
of fun as well. So again, thanks for listening. Great to be with you again, Kim absolutely, Kyle, thanks so much for being a part of the show today. Yeah, thanks for having me, Thanks for listening. Have a wonderful week. We look forward to being with you next week. Give us a call at six one two five zero four eight four zero zero or Havenfinanciergroup dot com. Investment advisory service is offered through Guardian Well
Strategies LLC. Haven Financial Group and Guardian Well Strategies LLC are not affiliated companies, and investments involve risk, and, unless otherwise stated, are not guaranteed. Please consult with the qualified financial advisor and or tax professional before implementing any strategy discussed herein and comments regarding it Safe and secure investments and guaranteed income streams only refer to fixed insurance products. They do not refer in any way to
securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company.