Is Downsizing in Retirement the Right Move?
by SGL Financial
Our 2 Cents – Episode #227
Is Downsizing in Retirement the Right Move?
Thanks for hanging in there with us! After a short break, we’re back with a brand-new episode of Our 2 Cents. Today, we’re exploring what’s happened with gold over the past year and unpacking the thinking around downsizing in retirement. Tune in now!
- Gold FOMO?:
- Did you buy gold at Costco? The Lewits revisit gold prices and explore what to consider before making an investment.
- Downsizing in Retirement:
- We’re testing the common beliefs around downsizing to help you decide if it’s the right choice for your retirement.
- Quotes of the Month:
- “Always borrow money from a pessimist. He won’t expect it back.” – Oscar Wilde
- “Money is like manure. It isn’t worth anything unless it’s spread around.” – Brooke Astor
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Podcast Transcript
Announcer: You’re listening to Our 2 Cents with the team from SGL Financial, Building Wealth for Life. Steve Lewit is the President of SGL Financial, and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news, trends, strategies, and more.
Gabriel Lewit: All right. Welcome back to Our 2 Cents. You’ve got Gabriel Lewit here leading the charge for today. You’ve got Steven Lewit also helping lead the charge.
Steve Lewit: I’m all excited today about the Fed rate lowering.
Gabriel Lewit: Well, you’re probably going to get your wish. We won’t know until after we record the show, unfortunately, for today.
Steve Lewit: Do you think people get excited about-
Gabriel Lewit: I don’t think so.
Steve Lewit: Why am I excited about it? Well, the Fed is going to do its thing, and it’s like, “Wow, that’s great.” It’s so interesting.
Gabriel Lewit: Well, I think it’s important to know. I wouldn’t say for many, it’s what they wake up for and browse their news.
Steve Lewit: He’s not saying what he really wants to say, I think.
Gabriel Lewit: Well, no. I’m just saying I don’t think it’s as exciting for others as it might be for you, but let me just elaborate since you started us down that path. The Fed is meeting, I believe, yesterday and today on the day we’re recording this show for deciding whether or not there’ll be a rate cut or not.
Steve Lewit: I would buy you dinner, Gabriel.
Gabriel Lewit: I don’t need you to buy me dinner, but-
Steve Lewit: I’ll buy the staff dinner or lunch.
Gabriel Lewit: You don’t need to do that either. We already do that.
Steve Lewit: Okay. Yeah, we do. They’re going to lower rates.
Gabriel Lewit: Well, it’s interesting. That’s what’s widely projected, which we’ll talk about that likely on the next show. Again, we’ve talked about that a lot throughout the year, what that means, but yeah. Inflation also ticked up year over year, starting this last August over August. So that’s also not usually what you want to see when you’re considering lowering-
Steve Lewit: When you’re lowering the rates.
Gabriel Lewit: … interest rates, which is lowering interest rates can speed up inflation, and you’re supposed to try to tightly control that. So it’ll be interesting to see what happens. Stay tuned, folks, because that’s not the true focus for today’s show, and we don’t know yet what they’re going to do. So we’ll talk more about that likely on next week’s show.
Steve Lewit: I was just sharing my excitement. That’s all I was doing.
Gabriel Lewit: Well-
Steve Lewit: I wasn’t changing the topic of the show.
Gabriel Lewit: Some people probably get excited about changing a light bulb or, I don’t know, taking out the trash.
Steve Lewit: Well, folks, isn’t this exciting? What you get excited about? All right. Let’s-
Gabriel Lewit: Oh, my God. I think it’s interesting. I would say-
Steve Lewit: Now that I’ve had my moment of excitement-
Gabriel Lewit: Excitement. Yes.
Steve Lewit: … let’s move on to something even more exciting.
Gabriel Lewit: Well, it may be exciting, it may not, depending on if you bought a gold bar at Costco a year ago.
Steve Lewit: I didn’t, but gold is amazing right now.
Gabriel Lewit: Well, yeah. I’ve gotten some questions from clients, right? Gold’s at an all-time high. Should I buy now? Gosh. We’ll talk about that in a second, but a little bit of background, okay?
So if you had, I think on our show, had listened, we had talked a little bit about buying a gold bar available at your local Costco, of all places. Now, a year ago, that Gold Bar would’ve been worth $2679, and as of just recently here, September 3rd, our data point says that same gold bar, one-ounce gold bar, would be worth $3549.
So you would’ve gained 870 bucks if you turned it in today and sold it back minus your sale margins and all the other things that you’d get from selling a gold bar, right? So it’s up about 32.5%, the price of gold over the last year-
Steve Lewit: Which-
Gabriel Lewit: … roughly.
Steve Lewit: … is amazing.
Gabriel Lewit: Yeah. Now, so what does that mean?
Steve Lewit: But what’s the question? What does it mean and what’s the question that everybody’s asking behind that?
Gabriel Lewit: Oh, should I? It’s the age-old market thing, right? Everybody wants to wait until they see that something’s done very, very well, and then they ask the question, “Should I get in? I don’t want to miss out.” Well, you already-
Steve Lewit: Or-
Gabriel Lewit: Well, should I sell now?
Steve Lewit: Or should I get out, right?
Gabriel Lewit: Okay. Well, most people are still asking now, should they get in?
Steve Lewit: Yes. That is for sure
Gabriel Lewit: For you to have FOMO, fear of missing out, you typically already have to have felt like you’ve missed out because if something has done nothing yet, you’re not going to feel like you missed out on it because it hasn’t done anything.
Steve Lewit: Well, I didn’t buy any gold, you didn’t buy any gold. Do you feel like you missed out?
Gabriel Lewit: No. And that’s why I talk a lot about gold, right? If you look at the history of gold pricing, it is not something you want to buy and hold for a medium amount of time. You either have to decide you’re going to buy it and hold it for a very long time because it goes through really long drought periods and price depreciation periods. It’s having a moment right now.
So if you buy it last year or even right now, you better have a plan to get out of it rather soon because if the environment or the economic situation changes, you might be stuck holding that gold bar at a loss for a possible very long amount of time.
Steve Lewit: Yeah. So if I own gold and it’s appreciated, what do I say to myself? How do I get out?
Gabriel Lewit: Well, to me, it’s not much-
Steve Lewit: Because-
Gabriel Lewit: … different.
Steve Lewit: … it’s always too late.
Gabriel Lewit: No, not really. I mean, you have to ask yourself, if I bought a gold bar at Costco one year ago, the key question is W-H-Y, why?
Steve Lewit: I bought it because all my friends own it, and it’s going up in price, and if the world-
Gabriel Lewit: And I don’t want to miss out.
Steve Lewit: And if the world collapses, I’ll have money.
Gabriel Lewit: Well, that’s a different story, right? So if you’re buying it in case of the world collapsing, then you’re probably not selling it right now because you want to have the gold bullion so you can chop it up and trade it for your corn-
Steve Lewit: Right. And you’re probably-
Gabriel Lewit: … and your wheat.
Steve Lewit: … hiding it in-
Gabriel Lewit: Right? Whatever.
Steve Lewit: You’re hiding it in your bunker with the food and the guns.
Gabriel Lewit: So, if that was your reason for buying it, you don’t need to sell it. All this is materially irrelevant to some extent.
Steve Lewit: And the price doesn’t matter.
Gabriel Lewit: Right. Now if you bought it because you’re trying to make a buck-
Steve Lewit: That would be an investment.
Gabriel Lewit: An investment, then we get into what’s your plan for buying it, right? Am I going to buy it for a short-term profit or am I going to buy it for a long-term hold or a long-term investment?
So gold, over a really long-term period, essentially, close, keeps up with the S&P 500, at least it has historically. But it’s far less liquid, number one, there’s costs associated with selling actual gold that you’re not going to see necessarily if you sell an S&P fund, and also, it’s not very diversified. The S&P is at least 500 stocks, right? Gold is one, gold, asset class, right? So is it a great large percentage of your portfolio investment? I don’t know. I wouldn’t argue per se that I would do a lot of that.
Typically, if you take what’s called concentration risk, you put all your eggs in a single basket, what might you want to get for that risk that you’re taking over a diversified basket? Generally, you would want a higher return. You’re taking on more risk, but you don’t necessarily get that in gold.
So we get back to the short-term nature, right? In FOMO, people don’t want to miss out on something going up. So if you know it’s not a great long-term hold per se, or it’s definitely not a great medium-term hold because it might drop in price and not recover for a very long time, what then should you do with the gold bar that you bought a year ago at Costco, or maybe even six months ago, or a year to date, let’s say?
Steve Lewit: I’m trying to figure that out in my, what would I do?
Gabriel Lewit: You would want to sell it.
Steve Lewit: I think I would want to sell it-
Gabriel Lewit: And capture your gain.
Steve Lewit: I made my money; I gambled my money.
Gabriel Lewit: 32%.
Steve Lewit: I won at the craps table, and now I’m going to take my money and go upstairs and have a dinner.
Gabriel Lewit: Now, will most people do this?
Steve Lewit: No, absolutely not. Because of FOMO, they don’t want to miss out.
Gabriel Lewit: Well, what if it goes up-
Steve Lewit: Goes up to-
Gabriel Lewit: … to 4000, right?
Steve Lewit: Yeah. And it might.
Gabriel Lewit: And it might.
Steve Lewit: And it might.
Gabriel Lewit: And here’s what happens when it gets to 4000, it then comes back to 3500, and people are still thinking it’s going to go back up, so they hold onto it still until it gets to 3000. And then they might sell, they maybe not, but there’s a cycle of emotions which goes back to being very purposeful when you buy it, so you always have an exit plan.
Same when you go to the casino, honestly, right? If you go in and your emotions get ahold of you, you lost the first few hands at the roulette table or the poker table, spins, I should say, at the roulette table, and then finally, you hit big on a couple of them and you’re up double your money, do you take it and run? Or you’re like, “Whew, I’m on a run”?
Steve Lewit: You’re running out the door.
Gabriel Lewit: I’m on a run right now.
Steve Lewit: You’re on the wrong run.
Gabriel Lewit: And then you make that next bet.
Steve Lewit: No. Most people set a limit, “I’m going to lose 200,000.” You know what I do? I say-
Gabriel Lewit: Do you think most people set a limit? Gamblers?
Steve Lewit: Do you know when I speak, I say the word gonna?
Gabriel Lewit: Gonna?
Steve Lewit: Gonna. You’re gonna. Where did I get that from?
Gabriel Lewit: I don’t know.
Steve Lewit: You’re gonna-
Gabriel Lewit: I’m going to keep an ear out for this.
Steve Lewit: Most people are going to set a limit. “I have $300 to lose, and when I lose it, I’m done for today.”
Gabriel Lewit: So, they’re going to set a limit.
Steve Lewit: They’re going to set a limit. They’re going to set a limit.
Gabriel Lewit: Well, anyways, lots of components of gambling related to individual stock purchases or asset classes like gold bar.
Steve Lewit: Would you buy gold or Bitcoin?
Gabriel Lewit: Well, long-term, I’d buy Bitcoin just based on its price potential, right? It’s much higher risk, but it’s also higher return. Anywhos.
So if you have questions, what do I do with my gold bar? Well, think about why you bought it, talk to us if you have questions. We’re here to help you. But just thought that was interesting to share.
But I wouldn’t be buying it now unless you’re planning on holding it for a very long time. You definitely don’t generally want to buy something at its potential peak right after it’s already shot through the roof.
Steve Lewit: And folks, if you own gold, please don’t bury it in your backyard and then do like the gentleman that came into me about a year ago and said, “You know, I bury all my gold in my backyard,” and I said, “I hope you don’t tell anybody else that. You’ll have a lot of visitors in the evening.”
Gabriel Lewit: A lot of holes in the yard, not-
Steve Lewit: A lot of-
Gabriel Lewit: … nothing but squirrels.
Steve Lewit: A of holes in the yard.
Gabriel Lewit: All right, so okay. So moving on here, we wanted to give some context of downsizing in retirement. This is something that comes up quite a bit.
Steve Lewit: A lot.
Gabriel Lewit: Yeah. Go ahead.
Steve Lewit: I just had this conversation yesterday.
Gabriel Lewit: Did you?
Steve Lewit: With a client. Yeah, I did.
Gabriel Lewit: I was waiting for you to move on.
Steve Lewit: Oh, no. I didn’t want to interrupt your flow of wisdom. So go ahead, and then I’ll comment.
Gabriel Lewit: Well, I was letting your comment flow of wisdom continue. Yes. What I was going to say is it as simple as it seems, right? Well, one of those questions I ask a lot of my new potential clients is, what is your plan in retirement for your home? Are you going to move somewhere out of state? Are you going to downsize? Are you going to upsize? Are you going to buy a second home, right?
There’s a lot that goes into where you live in retirement and the situation surrounding that. But today, we wanted to focus more specifically on downsizing and a lot of things that you may or may not have thought of when it comes to the benefits or non-benefits of downsizing.
Steve Lewit: Yeah. So most people that I meet, the reason for downsizing usually is they have a 4000-square-foot house or a 2000-square-foot. Well, 2000 is kind of big, and they’re living in the kitchen and the living room, and those are the only rooms they use.
And it might be an upstairs-downstairs, and you’re getting a little older, and it’s a little harder to walk up those stairs or the laundry’s in the basement. Yeah. So those are the primary reasons.
Gabriel Lewit: Yeah. Well, so there could be a lot of reasons, okay? And let’s talk about some various beliefs when it comes to downsizing things that you may not have thought about that we hear quite a bit. But here’s the first one, okay? A smaller home will lower my monthly expenses. True or false, Steve?
Steve Lewit: Maybe. It may.
Gabriel Lewit: How about generally?
Steve Lewit: Generally, yes.
Gabriel Lewit: Generally, yes. I would agree.
Steve Lewit: Of course.
Gabriel Lewit: I would agree true.
Steve Lewit: Of course. Generally, yes.
Gabriel Lewit: Yeah. So smaller homes often come with, well, if it was a cheaper, smaller home, it may come with either no mortgage. If you had a mortgage before, you sold your house, freed up the equity, bought a cheaper house, you may not have a mortgage anymore.
Steve Lewit: Or the same-price house.
Gabriel Lewit: Well, in this case, if it’s smaller-
Steve Lewit: It’ll save you money.
Gabriel Lewit: … it may be cheaper. Maybe, right? Maybe smaller and fully modernized, right? It also may have lower utilities, okay? You might have less square footage to heat, to cool.
Steve Lewit: Less taxes.
Gabriel Lewit: Right. It might have less property taxes. So generally, smaller homes will lower your expenses, but not always. If you wanted to sell your older unimproved larger home and move to a smaller brand new home, it may actually increase your costs potentially, right? But generally, the month-to-month carrying costs are going to be cheaper. Okay.
Now, common belief number two, I can use the equity from my home to pay off my debt or boost my retirement savings if I sell my home. Yes or no, true or false, Mr. Steve?
Steve Lewit: Oh. Say that again. I can use?
Gabriel Lewit: The equity from my home sale to pay off debt or boost my retirement savings.
Steve Lewit: So, I have a gain. I bought my house at 200,000. Today, it’s worth 500,000. I sell my house, I get 300,000 in my pocket.
Gabriel Lewit: No, no. You might sell it for 500 and owe 100, so you have equity in the home of 400.
Steve Lewit: Yes. You have equity, but then you got to buy another home. All right? So let’s say the other home costs 300 and you have 100 left over, can I use that to support and pay off debts? Absolutely.
Gabriel Lewit: Or boost your retirement savings.
Steve Lewit: Absolutely.
Gabriel Lewit: Yes, you sure can.
Steve Lewit: Absolutely.
Gabriel Lewit: That was a true answer.
Steve Lewit: That’s a real strategy for folks that are a little tight on their budget.
Gabriel Lewit: Mm-hmm. Yeah. Now, moving is hard. We’ll talk more about this. It’s not easy, right? Maybe you’ve got good neighbors, hopefully, maybe you’ve got terrible neighbors, and moving’s great because of that.
Steve Lewit: Well, just…
Gabriel Lewit: I had some neighbors a few years ago that were excited to move, and I was like, “Hmm, was this me?”
Steve Lewit: They wrote me a letter, and I said you’re really a good guy.
Gabriel Lewit: I’m just kidding. Just kidding, but yeah. They actually downsized as well, interestingly enough.
Okay. So, yeah. You can definitely take that equity, and maybe if you were a little light on your retirement savings, you can now spend that equity or invest that equity. Whereas if it was stuck in your house, I mean, to some extent, you could with a reverse mortgage or a HELOC, but we’re not going to get into that per se. But it’s harder to spend your equity from your home when you’re living in it than it is if you downsize, free it up, and then have that available to invest elsewhere.
Steve Lewit: Yeah. And that becomes difficult. A lot of people don’t want to invade the equity of their homes while they’re living-
Gabriel Lewit: Yeah. People are very uncomfortable with that.
Steve Lewit: While they’re living in it.
Gabriel Lewit: Yes, correct.
Steve Lewit: But they’ll invade it by buying a less expensive home and just taking the money and using it.
Gabriel Lewit: It is interesting. Yes. But, yes. That’s very true. Now, true or false: the equity in your home, if you stayed in your home, grows faster, the same, or not as fast? I guess that’s not a true-or-false.
Steve Lewit: Yeah. Where’s the true or false. I was tuned into true and false.
Gabriel Lewit: Let me say this. If you took the equity out of your home because you downsized, will that 100,000 in our previous example grow at a faster rate than had you not freed up the equity and left that equity in your home?
Steve Lewit: How can you answer that question? It’s an impossible question. It could, but-
Gabriel Lewit: Well, I would argue it would.
Steve Lewit: I would argue it would, but it also could not.
Gabriel Lewit: Well, let’s-
Steve Lewit: So-
Gabriel Lewit: … break this down.
Steve Lewit: … that’s a bad play to take the equity out of your house and then put it in the stock market, for example.
Gabriel Lewit: Well, so let’s talk about this. If you otherwise, all else being equal, okay, let’s use the example before. A $500,000 home, you owe 400,000, you’re going to buy a $300,000 home. You’re going to downsize. Let’s assume that was possible for a second, okay?
So whatever other assets you already had, let’s say it was generating your income, right? Okay? And so your house was going to sit there for 20 years if you didn’t move, and that equity in your house would’ve grown at what rate of return?
Steve Lewit: 3%.
Gabriel Lewit: Two and a half-
Steve Lewit: Two and a half-
Gabriel Lewit: … three, right? Keep up with inflation. So if you downsize, you pay off your mortgage. Now, you got that other $100,000 of equity, and you put that in, for 20 years, 25 years, an S&P 500 fund, it’s going to grow at maybe what rate of return?
Steve Lewit: Seven, eight, nine.
Gabriel Lewit: Yep. Eight to 10%. You may come out further ahead financially because the market, if you invested it, all else being equal, not talking about spending it for income or a Ferrari or something like that, right? All else being equal, it may grow at a higher rate than your real estate pricing would appreciate as well.
Steve Lewit: Absolutely. I thought you were going down a different track. What I thought you were saying is, I have equity in my home, why don’t I take an equity loan?
Gabriel Lewit: No. I’m not talking about that.
Steve Lewit: And invest it in the market-
Gabriel Lewit: No. That’s-
Steve Lewit: … which is-
Gabriel Lewit: Then you got interest rates and arbitrage. Yeah.
Steve Lewit: You’ve got-
Gabriel Lewit: I’m not talking about that.
Steve Lewit: … all kinds of risk associated with that.
Gabriel Lewit: Not talking about that.
Steve Lewit: Don’t do that, folks.
Gabriel Lewit: That’s very risky, and generally, you’re not going to usually come out ahead trying to do that, although some people have. People have done that before. It’s a bit of a gamble, but-
Steve Lewit: It’s more than a bit.
Gabriel Lewit: Yeah. That’s no different than saying, “I’m going to take out a loan, a $100,000 loan to buy Bitcoin or gold, and then I’m going to sell that gold in six months and pay back my loan.” Well-
Steve Lewit: Good luck.
Gabriel Lewit: … God willing, it works for you.
Steve Lewit: Good luck with that.
Gabriel Lewit: It’s just like investing on margin, right? In the stock market.
Steve Lewit: Yeah.
Gabriel Lewit: It’s very similar to doing that.
Steve Lewit: Yes, yes.
Gabriel Lewit: Yup. That’s actually an interesting topic for a-
Steve Lewit: We should do that.
Gabriel Lewit: We haven’t ever talked about that.
Steve Lewit: We’ve never talked about that. I just thought of that as you thought of that.
Gabriel Lewit: Yeah. I think I-
Steve Lewit: Isn’t that amazing?
Gabriel Lewit: I think I beat you to it.
Steve Lewit: You did, you did. I’ll get you on the next one.
Gabriel Lewit: By half a second.
Steve Lewit: Got to win.
Gabriel Lewit: Okay. Let’s see. True or false: housing prices and mortgage rates make it hard to come out ahead when downsizing?
Steve Lewit: False.
Gabriel Lewit: You think?
Steve Lewit: It depends on the market. No. You can come out ahead.
Gabriel Lewit: A lot of these aren’t clear-cut, are they?
Steve Lewit: No. But you keep saying true or false, and I would say that’s false because you can come out ahead often depending on the interest rates, and depending on the location, and what you buy, and what you got for your current home, and blah, blah, blah.
Gabriel Lewit: Yeah. If you’re going to downsize and get a new mortgage-
Steve Lewit: That’s a new technical term I termed. Blah, blah, blah. It’s fantastic.
Gabriel Lewit: Yeah. If you’re switching homes and you’re going to downsize and you still need a new mortgage, and your current home has a 2% or 2.5% mortgage, and right now, you’d get a 6.5% mortgage, even if it was on a smaller mortgage amount, you may not come out ahead.
Steve Lewit: Yeah. You’d have to question that decision big time.
Gabriel Lewit: So that is a big challenge right now for many. If they don’t have enough equity to-
Steve Lewit: Well-
Gabriel Lewit: … fully downsize-
Steve Lewit: … one of the reasons there are not a lot of houses on the market is people don’t want to sell their house at higher interest rates, and they don’t want to buy a new house at higher interest rates.
Gabriel Lewit: Yeah. Well, it’s very true. Very true. Okay. A couple more here. Some of these are not necessarily directly financially related, but true or false: better to move now while I’m still physically able rather than wait, if I did want to downsize or think about downsizing?
Steve Lewit: If you’re thinking about downsizing, I always say go ahead and downsize. Just go do it.
Gabriel Lewit: Yeah. Because there is a truth to that, right? If all of a sudden, you can’t move, you’re in a wheelchair or something happens, it’s going to be a lot harder to move, you could hire movers, obviously. But the packing, and it becomes more expensive, or-
Steve Lewit: And you might be selling your house-
Gabriel Lewit: … bigger job.
Steve Lewit: … under pressure and get a lower price. I always think, folks, if you’re thinking of something, take it seriously. If you’re thinking of taking a trip to Hawaii, just go plan the trip and either pull the trigger or don’t pull the trigger. I hate to put it that way, but I’m putting it that way. Either do it or don’t do it.
But in other words, if you’re thinking of downsizing and you’re thinking about it, and then over dinner you’re talking to your maid about it and you don’t do it, just go do it. Just make your life simple.
Gabriel Lewit: I think the whole point of this show is it’s not that simple. Of this episode.
Steve Lewit: I’m making it simple.
Gabriel Lewit: Oh, just do it. Yes.
Steve Lewit: Just do it.
Gabriel Lewit: Yes.
Steve Lewit: I’m on the Nike board.
Gabriel Lewit: Just buy gold, right? Just do it, right?
Steve Lewit: If you’re thinking-
Gabriel Lewit: Don’t think about it.
Steve Lewit: … of buying gold, go to Walmart and buy a bar of gold and satisfy your desire.
Gabriel Lewit: Okay. Well, a $3600 bar of gold is not the same as uprooting your whole life and selling-
Steve Lewit: Then-
Gabriel Lewit: … your home.
Steve Lewit: … go buy a gold stock in something.
Gabriel Lewit: If I were going to argue with you here a little bit.
Steve Lewit: Take a little nibble. If you’re hungry, take a little nibble so you feel better, and then you can make better decisions.
Gabriel Lewit: Yes. Well, let me just kind of give you a couple other last considerations here about downsizing.
Steve Lewit: It’s called the nibble effect.
Gabriel Lewit: Some people are concerned they will lose essentially their support system if you have strong neighbors.
Steve Lewit: Big deal.
Gabriel Lewit: That can be one.
Steve Lewit: And family.
Gabriel Lewit: There’s just a sense of security that comes from the familiarity that you have from living somewhere for so long. That can be very uprooting.
Steve Lewit: Had this conversation with a woman that was looking to downsize and leaving here, going to Phoenix, and one of her things is, “Gee, I have to make new friends, I have to find new places to go. Where do I exercise? Who’s going to style my hair?” And that’s all real.
Gabriel Lewit: Yeah. And-
Steve Lewit: That’s very real.
Gabriel Lewit: … another one would be, will your family come visit you if you don’t have as many extra rooms or if it’s not their family home that they grew up in, right? So there’s a lot of both money-related components to this and non-money-related components, so something to keep in mind. But there is no doubt the financial benefits can be very strong from downsizing or moving to a lower tax date or a combination of these things, but it’s got to be the right fit for you.
Steve Lewit: And it’s a life-changing decision, Gabriel. It’s not something to take lightly because if you leave town and go to a new town, it’s like restarting a whole new life. And that’s a big decision, and that can be emotionally disturbing or agitating or wonderful depending on how you handle it.
Gabriel Lewit: It sure can. Yeah. It sure can. Okay. Well, let’s kind of wrap on that point here about downsizing. If you have a thought about it, if you have questions about it, how does it fit into your plan? Let’s model that out in your plan first and foremost. I’m going to just put my foot back on Steve’s comment here. Don’t do it. Don’t just do it. Let’s stomp down on that idea.
Steve Lewit: You’re always undermining my great ideas, and that’s-
Gabriel Lewit: I think you might just want to map this out a little bit more financially first.
Steve Lewit: Nike made a fortune by saying just do it.
Gabriel Lewit: Yeah. Like play hard in sports just do it, but not just uproot your whole life just do it.
Steve Lewit: I agree. I agree 100%.
Gabriel Lewit: But call us, and we can help you map this out. 847-499-3330, or you can email us info@SGLFinancial.com, click contact us on our website, SGLFinancial.com, and let us guide you through some of these more complex financial or non-financial decisions so we can make sure it’s the right one for you.
Steve Lewit: Absolutely.
Gabriel Lewit: All right. All right. Well, let’s see. As a little interlude here, wanted to talk about some quotes of the month, because I think we didn’t do them in the month. It’s nearing the end of the month. Wow. It’s going by fast-
Steve Lewit: Already.
Gabriel Lewit: Oh. Don’t get me talking about the Bears, by the way. I just was thinking of that. It’s the month of September, and I was excited because the Bears football was back, and I don’t know why I got excited.
Steve Lewit: Should we tell people what we’re doing Sunday?
Gabriel Lewit: Well, you and I and your grandson, my boy, we’re going to go see a Bears game.
Steve Lewit: Who are they playing? I don’t even know who they’re playing.
Gabriel Lewit: They’re playing the Cowboys-
Steve Lewit: Uh-oh.
Gabriel Lewit: …. so it’s a 50/50 toss-up there. I think-
Steve Lewit: Look, the Giants almost beat the Cowboys.
Gabriel Lewit: And the Giants are bad, so the Bears might have a chance.
Steve Lewit: Yeah. Yeah. Right. That’s a good way of looking at it.
Gabriel Lewit: Stop.
Steve Lewit: Give me a bad team.
Gabriel Lewit: Giants are bad, almost beat the Cowboys. Bears are bad, maybe they, yeah. Yeah. We got a chance. Okay. Good. Good, good. Well, okay. Back to quotes of the month here. I always forget who this guy is. Who’s Oscar Wilde?
Steve Lewit: Famous writer.
Gabriel Lewit: He’s a famous writer?
Steve Lewit: Mm-hmm. A humorist.
Gabriel Lewit: A humorist, right? So Oscar Wilde says, “Always borrow money from a pessimist as he won’t expect it back.”
Steve Lewit: That’s great.
Gabriel Lewit: So, if you know a pessimist in your life-
Steve Lewit: Yeah. Good.
Gabriel Lewit: … try to convince them to give you money.
Steve Lewit: Right. And they won’t bother you for a repayment.
Gabriel Lewit: Right, because they’re going to assume, “Hey, you’re probably not going to repay me back.”
Steve Lewit: It’s like lending money to your kids when the kids say, “Yeah, dad. Yeah. Of course I’m going to pay you back.”
Gabriel Lewit: Of course they will.
Steve Lewit: What are you saying to yourself?
Gabriel Lewit: Yeah. I don’t think so.
Steve Lewit: I don’t think so.
Gabriel Lewit: All right. Who’s the next one here? It’s Brooke Astor.
Steve Lewit: This, I don’t know.
Gabriel Lewit: Brooke Astor, let’s see here.
Steve Lewit: Is that from part of the Astor family?
Gabriel Lewit: Let’s see. American socialite and writer.
Steve Lewit: Out of my-
Gabriel Lewit: What? From 1902? Okay, yeah. She’s before my time.
Steve Lewit: Before my time, too. Thank goodness somebody is before my time.
Gabriel Lewit: Well-
Steve Lewit: This is great.
Gabriel Lewit: … Brooke wrote-
Steve Lewit: Made my day.
Gabriel Lewit: … “Money is like manure. It isn’t worth anything unless it’s spread around.”
Steve Lewit: Ooh. Ouch. Ouch, ouch. Let me see.
Gabriel Lewit: Well, what we don’t know is what she meant by that. Does she mean don’t hoard it like Dr. McScrooge Duck? What’s the duck on DuckTales, the old kid show? McScrooge, is it, or no?
Steve Lewit: Don’t ask me about DuckTales. I have no idea.
Gabriel Lewit: Yeah. DuckTales is a kid show that was when I was a kid. Yeah. Scrooge McDuck. Okay. I got my things mixed up, right? So basically, he’s a duck that’s a very wealthy duck, and he just hoards all of his money and doesn’t do anything. He swims in it.
Steve Lewit: Yeah, I get it now. She’s absolutely right. If you hoard your money and just hold on, it’s like hoarding trash, you know? It starts to percolate.
Gabriel Lewit: Well, yeah. I mean, what good is it if you just hoard it all for yourself, right? You don’t do anything nice with it, you don’t help anybody, you’re not thoughtful with it. You’re just Scrooge McDuck.
Steve Lewit: Yeah. It’s a little too subtle for me.
Gabriel Lewit: That’s my interpretation of it. Some might say she was saying, “Let’s give away all the money to people that don’t have the money.” I don’t know. Who knows? But I was viewing it more like, “Just don’t be greedy with your money.” If you have a lot of money, try to help people, which I like that. Very noble thought.
Steve Lewit: I like that. I like that too.
Gabriel Lewit: Very noble thought. All right. Well, we-
Steve Lewit: That’s it for quotes?
Gabriel Lewit: That was-
Steve Lewit: Two quotes huh.
Gabriel Lewit: … the two quotes. We typically do two quotes of the month.
Steve Lewit: I like the Oscar Wilde quote.
Gabriel Lewit: Yeah, but anyways. Okay, so-
Steve Lewit: Who do I know that’s-
Gabriel Lewit: Let’s see. We’re-
Steve Lewit: … a pessimist?
Gabriel Lewit: We’re a little bit short on time here, so I think that’s going to be our show for today.
Steve Lewit: Really?
Gabriel Lewit: Yeah. We’re at, believe it or not, the 27-minute mark, and I don’t think we can cover the other topics we wanted to cover in three minutes and do them justice, so we’re going to have to punt those ones in the spirit of football terms, something the Bears are good at, punting those topics to our next show.
But I think we’ve got a good game plan for that. So tune back in. We’re going to obviously talk about the impact of the rate cuts or non-cuts or whatever’s going to happen here today. We’ll talk a little bit about, well, basically, I like reading articles, and then I like reading comments in the financial articles and seeing what people, normal people, non-financial professional people are saying and thinking. So I thought it would be a good idea for the show to talk about those. It would be-
Steve Lewit: It would be great.
Gabriel Lewit: … kind of fun.
Steve Lewit: But since we have an empty moment here, I got to share one thing, because I’m just so amazed. I was talking about it this morning. We were talking about the downsizing home. You said, “I’m going to rap this,” right? You did say that. “We’re going to finish the subject.” You said, “I’m going to rap this.”
And I was watching America’s Got Talent last night, and they had this rapper who rapped on cue. He went into the audience, and each person would give him an item, and he would create a phenomenal rap about it instantly. A pocketbook, a pen, a hat. Whatever they gave him, he wove this story in a rap, which was fantastic.
Gabriel Lewit: Well, have you ever seen the movie 8 Mile with Eminem?
Steve Lewit: No.
Gabriel Lewit: It’s one of my favorites, actually, back in the day. But they do rap battles in the show, and that’s kind of how he got started, I think. I think it’s a quasi-real story, right?
Steve Lewit: But how do you think that fast? If I have to rhyme a word, it takes-
Gabriel Lewit: Well-
Steve Lewit: … me 10 minutes.
Gabriel Lewit: … because they do this for a living, right? They know words, they write them all down, they write lyrics. I mean, I’m not saying I could do it, but it is a very interesting skill to make that sound good.
Steve Lewit: Worth-
Gabriel Lewit: But, yeah.
Steve Lewit: … tuning in and watching.
Gabriel Lewit: These rap battles, if you go the 8 Mile, the shows, they’re a lot of fun.
Steve Lewit: I’m going to look at that.
Gabriel Lewit: There you go. There you go. Now, you know. All right, everybody. Well, we hope you have a wonderful rest of your week. We’ll be back in touch with you next week.
Until then, stay well. If we can do anything for you, give us a call here, 847-499-3330, or go to SGLFinancial.com. Let us help you build some greater wealth for your life, and that’s what we’re here to help you with. And anything we can do, give us a holler.
Steve Lewit: Be well.
Gabriel Lewit: Until then, stay well.
Steve Lewit: Be well, everybody. See you.
Gabriel Lewit: Bye-bye.
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