Your Investment Strategy Checkup
by SGL Financial
Our 2 Cents – Episode #257
Your Investment Strategy Checkup
Happy Father’s Day to all the dads and father figures out there! A new episode of Our 2 Cents is here! On today’s show, we’re diving into quick hits, sharing our quotes of the month, reviewing the financial focus for June, and launching part 1 of our two-part retirement planning series: what to sell before you retire. Listen in now!
- Gabriel’s Quick Hits:
- How is SpaceX performing, and what does its latest valuation mean for investors?
- The U.S. and Iran work toward a broader peace agreement that could reshape oil supply, sanctions policy, and Middle East stability.
- New Fed Chair Kevin Warsh keeps rates unchanged, but are rate hikes back on the table?
- Quotes of the Month:
- “A father is someone who carries pictures in his wallet where his money used to be.” – Anonymous
- “A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.” – Robert Frost
- June Financial Planning Calendar:
- This June, we’re exploring how to bring clarity and purpose to your investment strategy.
- What to Sell Before You Retire Part 1:
- Inspired by one of the year’s most-watched retirement videos, the Lewits share their insights on what to sell before you retire and how to better prepare for the transition ahead.
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Podcast Transcript
Announcer: You’re listening 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: Hello everybody. Welcome back to Our 2 Cents. You’ve got Gabriel Lewit here and Steve Lewit here. We’ve got a great show lined up for you here this Father’s Day weekend.
Steve Lewit: You told me it was a fantastic show, actually.
Gabriel Lewit:
It’s a fantastic show. Probably going to be our best one ever.
Steve Lewit:
Do you know what’s happening to Do you know what’s happening today that is the most important thing in the universe?
Gabriel Lewit:
Today, the day we’re recording of the day, our listeners are listening.
Steve Lewit: That I’m thinking of.
Gabriel Lewit: I have no clue what you’re talking about. Why don’t you share?
Steve Lewit: The New York Knicks are having their ticker tape parade today.
Gabriel Lewit: Ah, very yes, you are a Knicks fan.
Steve Lewit: And I’m not there, I’m here. Wow.
Gabriel Lewit: You should, you know, the podcast is more important than your Knicks. Come on.
Steve Lewit: No.
Gabriel Lewit: Just the NBA championship.
Steve Lewit: 53 years I’ve been waiting. Do you realize how much suffering this man has had over 53 years?
Gabriel Lewit: Well, you know, you can’t all be winners.
Steve Lewit: No, no, you can’t.
Gabriel Lewit: Uh but yeah, congrats to any Knicks fans out there. Yep. And it’s uh I didn’t watch every s every game, but it was a hard-fought series.
Steve Lewit: Very tough.
Gabriel Lewit: And clearly the better team won.
Steve Lewit: Uh well. You know, people argue San Antonio is a better team. Well, they lost, so they’re not the better team.
Gabriel Lewit: I like to say the better team clearly won.
Steve Lewit: Clearly, clearly, clear. Well, good morning, everybody.
Gabriel Lewit: All right. Yes. Uh good morning, uh, good afternoon, good evening. We’ve got a good show lined up for you here today. We’re going to talk with you about a couple of quick hits first. All right. News to know.
Steve Lewit: I I know it’s top on your list.
Gabriel Lewit: Well, the first one is uh just to give you little updates here, SpaceX IPO’d officially.
Steve Lewit: I knew you were going to say that.
Gabriel Lewit: We’ve been talking about that here, so just to you know close the loop on that. It was um initially at what 135 a share, I think, when it launched and closed the day at $160 on its first day of trading.
Steve Lewit: Yep.
Gabriel Lewit: Uh has reached currently a peak of about $191 and has dropped a little bit from there. Okay, now where it will go from here is anybody’s guess. That’s the nature of individual stocks.
Steve Lewit: Yeah, we don’t know.
Gabriel Lewit: Okay, but if uh if you are interested now in purchasing um you know the shares of SpaceX, you can do that now on the open market.
Steve Lewit: Can’t tell you folks how many calls we got to purchase SpaceX before the offering, uh, which is very difficult to get, but you can get it aftermarket now, and a lot of people are buying it.
Gabriel Lewit: Yeah, I mean look, if you want to have some concentrated position with exposure to obviously space exploration, technology, AI, things of that nature, um sure. Um will it be you know the next um trillion, multi-trillion dollar forever firm? Who knows? It’s already a trillion dollar firm.
Steve Lewit: Yeah, but if you if it floats your boat and makes you emotionally feel like you’re part of something big, take uh a few grand and go for it.
Gabriel Lewit: Why while I why I said the forever trillion dollar firm is there’s um uh you know, IPOs don’t always work out. I had Producer Gabby pull up Rivian here, if you want to pull up the Rivian chart. Okay, so uh when Rivian first IPO’d, people were very excited, right? New technology.
Steve Lewit: What is Rivian? For people who don’t know.
Gabriel Lewit: It’s an electric truck. Okay, trucking, cars. Yeah. Yeah, and it was close to about the same price, $135 or so, it looks like, over here. But it never really actually went up. Its current trading price is sixteen dollars. All right, so it’s it’s lost um 87% since its IPO. Does that mean SpaceX is? No, a very different company. But you know, point is I just wanted to g give a counterpoint to the fact that concentrated holdings in individual companies don’t always work out. And just be cautious, as we’ve always talked about here.
Steve Lewit: And they’re usually very volatile, they go up fast and they go down fast. And you know the rule in the stock market is when everybody’s buying, what you should you be doing?
Gabriel Lewit: Well, it depends. If it’s going up, you should buy.
Steve Lewit: Well, when everybody’s buying, what’s the rule?
Gabriel Lewit: Well, there’s some people that think contrarians would say sell.
Steve Lewit: Sell, right.
Gabriel Lewit: But yeah, it’s more complicated than that.
Steve Lewit: It sure is. Yeah, it sure is.
Gabriel Lewit: All right, the next quick hit for you here is of course the US and Iran situation ceasefire has sort of tentatively reached a uh a a peace deal.
Steve Lewit: Yes. Yes.
Gabriel Lewit: Uh there is a a memorandum of understanding of 14 points, okay, that will give them sixty days to hammer out a more formalized, detailed agreement.
Steve Lewit: Yes.
Gabriel Lewit: A lot could happen in that sixty days.
Steve Lewit: You think?
Gabriel Lewit: Yes. But uh it is it is a progress towards a resolution.
Steve Lewit: Sort of.
Gabriel Lewit: To be determined, but that’s the that’s the news.
Steve Lewit: We’ll see. We’ll see.
Gabriel Lewit: And of course, markets are generally pretty excited about the fact that the um the oil will start farteth to flow again.
Steve Lewit: It’s well, I I’m so thrilled instead of spending a hundred and ten dollars to fill my gas tank yesterday afternoon, I spent ninety-seven.
Gabriel Lewit: There you hey savings in the pocket. Okay.
Steve Lewit: Thank you, uh administration.
Gabriel Lewit: And you know, people do wonder when will oil prices and gas prices come down. It can take a little bit of time if this resolution holds and oil does start flowing. It can be some time before you see that at the pump.
Steve Lewit: Well, let’s hope it holds. I mean, that’s the first thing, and it’s a very tenuous situation because you know you’re dealing with impossible.
Gabriel Lewit: Nobody likes situations. I mean, at the end of the day, so not good for really anybody.
Steve Lewit: It’s not healthy.
Gabriel Lewit: Yep. All right, so that’s the news to know on the Iran deal.
Steve Lewit: Uh the other thing I’ve got to add in here the new Fed chairman.
Gabriel Lewit: Yeah, I was just gonna you beat me to it. I did. They held rates steady for now.
Steve Lewit: Yeah, but he he took a very um
Gabriel Lewit: He abstained from a prediction.
Steve Lewit: No, but uh he’s he’s gonna take a firm stand against inflation. Sure. So, if inflation keeps going the way it’s going, because we had our largest month of inflation in a long time, uh you could see interest rates creep up a little bit.
Gabriel Lewit: Well, I was just reading an article and and of course, um not my area of expertise, but was saying that the expectation is less direction from this Federal Reserve Board and Chair. Meaning uh the old one used to say, hey, we think we’re gonna be here, here, here, right, with rates as they go along. This one is going to not be as forthcoming with expectations of where rates will be headed to supposedly give a little bit more leeway into handling things as they come up versus um predictions.
Steve Lewit: Planning them out.
Gabriel Lewit: But apparently all the big hedge funds and trading firms and algorithms are are gonna struggle with that because they were all basing many of their algorithms and trading strategies based on what the Fed was predicting they would do. So interesting, interesting changes that’ll be forthcoming here with the new Fed chair in in place.
Steve Lewit: Yeah, yeah, it’s good.
Gabriel Lewit: Yeah, it’s all good stuff. All right. Well, just to lighten things up a little bit here before we dive into our main topics for today.
Steve Lewit: I thought that was pretty light.
Gabriel Lewit: Wanted to give a couple quotes.
Steve Lewit: That was light.
Gabriel Lewit: Fairly light.
Steve Lewit: I mean, it wasn’t like light, light.
Gabriel Lewit: More like fun light.
Steve Lewit: Oh, fun light, okay.
Gabriel Lewit: I got some quotes of the month here for you.
Steve Lewit: Uh-oh. You’re gonna I know you’re gonna ask me who is this person?
Gabriel Lewit:
I you think I know everybody? No. All right. The first one here, hold on, gotta find it because I don’t have a memorized. Okay. All right, he is all right, from Anonymous. Do you know who he is?
Steve Lewit: Yes, Anonymous is a very famous man from the historic times.
Gabriel Lewit: Yeah. This one is from Anonymous, but it’s I thought it was funny. Because in the spirit of Father’s Day here, okay, a father is someone who carries pictures in his wallet where his money used to be. I love anonymous.
Steve Lewit: I love Anonymous. How true is that, folks?
Gabriel Lewit: Yeah. Yeah. Yeah. Yeah. Why are you money, more pictures?
Steve Lewit: Well, why are you looking at me like that?
Gabriel Lewit: You’re thinking that about me, and I’m thinking that about my son.
Steve Lewit: You’re right. 100%.
Gabriel Lewit: Yeah. All right. So yeah. Uh the next one, man named Robert Frost.
Steve Lewit: Okay, folks. He asked who’s Robert Frost?
Gabriel Lewit: I remembered after I asked literally as I was asking you.
Steve Lewit: You went to college, and everybody in college studies poetry. And if you study poetry, you have to have Robert Frost on your list.
Gabriel Lewit: Yes, yes. I remembered after I as I was asking. Okay. Well, he said a bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.
Steve Lewit: Uh good ones, too. Gabriel, I’m good. These are great.
Gabriel Lewit: Yeah, yeah. So, uh well, yeah, I mean, there are people that you’re looking for money and banks won’t lend them money.
Steve Lewit: Banks are not your friends, folks.
Gabriel Lewit: And banks will lend you money when you don’t need money or have money. It’s kind of an interesting thing, but that’s what he’s referencing there, I believe. Okay. Well, banks don’t want to take risks.
Steve Lewit: People that lend money, groups that that goes for credit cards, banks. I’ll tell you a short story, very short. So, I this must have been about five years ago. Now, my credit score, Gabriel, is over eight hundred. Okay? I never miss a payment. I I it it’s on automatic. I never miss a payment. And about five years ago, I missed an American Express card payment. You know, I got emails, I got texts, I got my shout. You know, 27 years of never missing a payment didn’t count for anything. That’s that’s my friend is at American Express with a card that gives me everything and charges too much.
Gabriel Lewit: Well, you know, they want their money. So, if you miss a payment, they’re gonna call you.
Steve Lewit: My goodness gracious. You think I robbed the Federal Reserve.
Gabriel Lewit: Yeah. Well, hey, keep that auto pay on. That’s simple. All right. Well, you ready to talk turkey? More more serious, in-depth planning topics.
Steve Lewit: I was kind of getting into fun, but yeah, let’s do it.
Gabriel Lewit: Well, that that would those were the two quotes I had for us for today, so I have I have no others.
Steve Lewit: Well, you this is a June. This is a June month, isn’t it?
Gabriel Lewit: It is, yes. It’s our financial planning calendar of the year. Yeah, so every month we are pick picking apart a topic in greater detail that we had laid out for the year. Basically, the goal here, folks, if you’ve been following along as a consistent listener of the show, is to break all the things you need to do to help manage your finances into easy bite-sized chunks. Yep. And tackle one of those every month. And I know you all can do it. You have the time, but doing it all at once can feel overwhelming. So breaking it up into bite sizes can be an easy way to make progress.
Steve Lewit: By cleaning your garage. Don’t do it all at the same time.
Gabriel Lewit: Yes, exactly. And so, the month here of June, what we’ve got billed for you here is clarifying your investment strategy. I think this is a really good one.
Steve Lewit: This is a tough one, too.
Steve Lewit: All right. And you know, it’s interesting. I’ve had a few new client meetings recently, and one of the topics I always ask is as we’re getting into accounts that each person has or has accumulated, I ask this question, hey, what do you have in that account? Let’s just start with that piece, right? And sometimes people will be like, um, yeah, no, that’s a good question.
Steve Lewit: Oh, it’s been there for a long time, you know.
Gabriel Lewit: And that one always, I I I chuckle a little on the inside because you know, these could be five hundred thousand dollar accounts, million-dollar accounts, and people have no clue what they even have in them.
Steve Lewit: How about the folks that forget they even have it? I had a client walk in, hey Steve, a new client, you know, when we on board we get a list of all their accounts, and I got everything mapped out and everything. Hey, Steve, uh, we forgot to give you an account. Uh okay, how much is in it? Well, it’s $225,000. We I I just remembered we have it.
Gabriel Lewit: Yeah. I mean that’s yeah-
Steve Lewit: It’s like what?
Gabriel Lewit: If you don’t even know you have it, you may not know what’s in it. I mean, that’s that’s probably true.
Steve Lewit: Certainly.
Gabriel Lewit: Yeah, so and then you know, the next question is okay, if they do know what’s in it, you know, oh yeah, I’ve got some uh some stock funds or some bonds or some target date funds, then I’ll ask, you know, why did you what’s your philosophy for investing in that account? Why did you pick what you picked? And that question’s like uhh…
Steve Lewit: Do you get the blank stare?
Gabriel Lewit: I mean, some people actually do have this style.
Steve Lewit: We’ve looked some investors are exaggerating a little bit are really on it and know what they’ve got in their portfolios, but a good majority do not.
Gabriel Lewit: Yeah.
Steve Lewit: You know, they it they have it, they bought something because somebody said buy it or sounded good, and it’s just a hodgepodge of stump of stuff.
Gabriel Lewit: Yeah, yeah. And so let’s repeat those two questions. Uh what do you have in the that account and what’s your investment philosophy behind that? Why do you have it? Okay, those are really at the core of I think this month of June’s focus, which is clarifying your investment strategy. You’ve got to have the answer to those two questions, and not just for one account, for every account that you have.
Steve Lewit: Yeah. Why do you have it? That’s you know, people invest, but what’s the purpose? What is the purpose of that investment? Is it to grow? Is it money going to your kids? Are you are do you need it for income? Are you planning on buying a house? Every investment should have a purpose.
Gabriel Lewit: Well, let’s let’s use this in context of-
Steve Lewit: Let me just add one more thing. And folks, the purpose is not to make as much as I can. You know, we ask people, what’s your goal in the stock market? Is well to make as much as I can. That is not a purpose.
Gabriel Lewit: Well, on an account it might be, but for a for an overall plan, it’s not a great purpose. Let me give an example of that. Let’s say you had two accounts, one has a million bucks in your IRA or 401k, and the other is um, you know you know, let’s say it’s $500,000 in in a Roth IRA. Okay, just for simplicity. And let’s say you plan to retire this year and take withdrawals from your IRA, and you decide you’re gonna go buy the SpaceX IPO with that million dollars, and you need a hundred grand a year, let’s say.
Steve Lewit: There you go.
Gabriel Lewit: Is that a good idea? Well, so you’d say, what do I have in the portfolio? Oh, I’ve got SpaceX IPO, and the question, why do I have it? Well, I wanted to grow-
Steve Lewit: It’s gonna go up, so I want to so I have income.
Gabriel Lewit: But what if it rivyaned, right? What if it drops and that dropped 87% and you have no more money from?
Steve Lewit: No, that’s not gonna happen. It’s gonna go up.
Gabriel Lewit: Right. So, the idea would be if-
Steve Lewit: that account it’s gotta go up.
Gabriel Lewit: If that account was earmarked for two million dollars worth of retirement income over the next 20 years, right? 100,000 a year times 20 years, and you’ve got a million bucks in there, putting into something highly volatile and speculative.
Steve Lewit: Not a good idea.
Gabriel Lewit: I I mean it really wouldn’t be a good match for that account.
Steve Lewit: Now, Gabriel, you’re exaggerating with one stock, but a lot of people have their income money invested very aggressively in the market.
Gabriel Lewit: They do, they do.
Steve Lewit: And it’s not one stock, and they feel, well, I have a diversified portfolio, and over time the S&P has gone up. But that’s that’s a growth portfolio and not an income volume.
Gabriel Lewit: Correct. The S&P 500 itself has dropped 50% before. And if you were pulling $100,000 a year out and there was a 50% drop in that account, it’s called sequence of returns risk, but it could run out far, far quicker because you’re pulling money out while the market’s down and creates a much harder recovery cycle to pull out of if that were to occur. And so again, if we were then to give you some coaching and guidance, we say, you know, you should probably separate those out, right? Accounts that you need for income may be different than accounts you need for growth. And let’s start with that as a top focus.
Steve Lewit: And that becomes the purpose. So, when you’re investing, you don’t invest because it sounds good, you invest because it’s fulfilling the purpose of that investment.
Gabriel Lewit: And I call this giving every one of your accounts, first and foremost, a purpose in your plan, which does require that you have a plan, okay, a written, detailed plan.
Steve Lewit: Yeah.
Gabriel Lewit: And then you can see where it fits in, okay, where it fits into that bigger picture. And then you can really optimize towards a specific goal. So let me go back to my earlier example. Now let’s take this person’s Roth IRA. Let’s say instead of making their IRA SpaceX, they put their IRA in something fairly conservative so that it was there for their income needs and that was going to cover their income for say 20 years.
Steve Lewit: Yep.
Gabriel Lewit: Okay. Now let’s say they’ve got this Roth IRA that’s going to sit there for 20 years untouched. Why? Because in their plan, their million dollar IRA is covering their income for 20 years. So, this Roth IRA we now know is going to sit there for 20 years untouched. Now, what’s the right choice for this investment account?
Steve Lewit: Well, if I have 20-year time frame, okay, and I have a Roth IRA where I pay no capital gains or no taxes, that’s where I want most of my uh high volatility, high gains, aggressive uh growth money. So, I would take that money if I have the appetite for risk, and I would place it in a highly aggressive, diversified portfolio meant to grow. Now here’s the other part. What growth is not a goal. What growth growth? Meant to grow at seven to nine percent, or six to eight percent, or five to eight, but you have to have a number on that. What is the growth goal?
Gabriel Lewit: Well, yeah, you definitely you do want to quantify that. We’ll we’ll talk about that a little bit more. But to that point, right, would would SpaceX be a better choice for this Roth IRA versus the IRA that was being intended to use for income?
Steve Lewit: Absolutely.
Gabriel Lewit: The answer would be yes, right? Because you’ve got 20 years. Maybe we’ve landed on Mars at that point on a SpaceX rocket.
Steve Lewit: SpaceX is worth uh $10,000 a share.
Gabriel Lewit: So so that’s the idea, right? So, you go account by account. So, here’s your action item homework, okay, folks, for June’s financial planning calendar activity, right? Clarifying your investment strategy. Number one, you gotta ask yourself if you have a plan. If you don’t have a bigger picture plan, you’ve got to create one because then what I’m gonna give you next for instructions won’t work. Okay, but the the first step here after you have a plan is go account by account and ask yourself, what is this purpose for this dollar in my plan, right? Am I gonna use it for spending for income? Is it gonna sit and grow? Is it money I never gonna touch because I’m gonna leave it to my my kids or my grandkids in thirty years?
Steve Lewit: Yeah, forget where it’s invested now. Don’t don’t even think about that. You say, okay, I’ve got three hundred thousand dollars here. What what do I want to accomplish with that three hundred thousand dollars? What what is-
Gabriel Lewit: And to your point, other than just grow it as much as possible and purpose in your plan.
Steve Lewit: Yeah, and the purpose might be to grow it as much as possible, but that we have to
Gabriel Lewit: for what would be the question.
Steve Lewit: Yeah, for what?
Gabriel Lewit: Well, I want to for future income, for income now, for legacy.
Steve Lewit: For legacy for my kids. You know, it could be anything, but you have to have the purpose and the quantification of that purpose.
Gabriel Lewit: Well, and I’m just gonna nitpick what you said. Yes, you can just grow money to grow money, but eventually something has to happen with that money.
Steve Lewit: Yes.
Gabriel Lewit: You either spend it now, or you spend it later, or you give it to your kids, or you give it to charity. Once we can identify that purpose, because you’re not gonna just grow it to ten million dollars and then it’s it it sits there, it’s going somewhere someday somewhere.
Steve Lewit: It’s going somewhere someday.
Gabriel Lewit: And we’ve got to figure that out because that’ll help us pick the right investment for it.
Steve Lewit: Exactly. Okay. Exactly.
Gabriel Lewit: Yep. All right. Now let’s say inside of your portfolio.
Steve Lewit: I didn’t feel that was a nitpick.
Gabriel Lewit: Well, I thought it was a little bit of a nitpick.
Steve Lewit: No, I think you just expanded on my great idea.
Gabriel Lewit: There we go.
Steve Lewit: It was good.
Gabriel Lewit: Now, part of this is creating something called an investment policy statement. If you don’t have one, it helps you determine exactly how you want to invest in the account. If you work with us, it’s also to help ensure you we’re on the same page, so you sign off on it.
Steve Lewit: Yeah, so we create for your portfolio.
Gabriel Lewit: Nobody’s gonna create their own investment policy statement for themselves, but the concept is giving yourself a target for a portfolio that you stick to. And then you review it in the future. So, let’s say you said, Gabe, I’m gonna mess uh manage my own portfolio and I’m gonna give it a 70/30 target allocation, 70% stock and 30% bonds, and it fits in my plan and I’m comfortable with that.
Steve Lewit: And I want that portfolio to grow by seven to eight percent.
Gabriel Lewit: Sure. Okay, well, let’s say two years later, um, you look at that account, and it is uh uh 90% stock and ten percent bonds.
Steve Lewit: Equities took off and bonds went down.
Gabriel Lewit: You created quote unquote your own IPS investment policy statement philosophy for that account. You would then do what if this was the case?
Steve Lewit: Well, if I if I want a 70/30 and I’m at 90/10, I have to sell some of a ninety and put it back in the 10 to get back to 70/30.
Gabriel Lewit: It’s called rebalancing.
Steve Lewit: Yes.
Gabriel Lewit: Now, do a lot of individual investors do this?
Steve Lewit: No. No. You know what they do? I’m making so much money. I’m so happy. I’m gonna buy more of that stuff.
Gabriel Lewit: Uh I’m gonna give a real life example here. I’ve got a client I did a plan for. Now, he just he just hired me for a plan two years ago, and it’s very close to the example we were just giving. It’s part of where I was thinking about it. And we agreed that his IRA would be a 70/30 and uh didn’t want us to manage the money for him, so we did a great plan. Gave him a whole instruction set of how to create your own philosophy allocation, rebalancing instructions. Fast forward two years later, he reached back out to me, wanted to review his plan. So, we have started doing that. Turns out his current allocation on this portfolio is uh 85 to about 90% in stock because the market has been terrific. Yep. And he does not want to rebalance it. When you’re making money, you just don’t want to give up on it. But the whole point is it’s now uh almost an all-stock portfolio, and he’s using this for income, and it was more aggressive than we had agreed upon. And that’s just interesting because uh you know, we’re talking about these same concepts, right, about asset allocation and the goal of the money and why we had what we had. But it’s hard for people to do on their own sometimes.
Steve Lewit: Very, very difficult. And you know, also, Gabriel, when planning an investment, uh most people focus on how much they want their money to grow. You know, if if they focus on it at all and they don’t get into it as much as possible mindset. You know, people say, well, I want my money to grow seven or eight percent. And the question is, how much risk are you willing to take to get that seven to eight percent? It’s not only growth, but a good IPS says this is what this portfolio could lose in a really bad market.
Gabriel Lewit: Yeah. So, if you were creating your own investment policy statement, you would take that 70/30 and you would do some research on it and you would benchmark its risk and return characteristics historically so you have a good sense of what to expect from that portfolio.
Steve Lewit: Yeah, so in 2008, a 70/30 portfolio is down almost 30 percent. And now it’s not likely 2008 it’s going to repeat itself, but it could. And if it did and your portfolio is down thirty percent, are you willing to live through that? Can you take income from that? Does it accomplish your purpose? And the answer is no. For most people, I say, well, you could lose thirty percent, and they say, I don’t want to do that. Yeah well, then you can’t get seven or eight.
Gabriel Lewit: Well, that’s really the the idea here, right? Reviewing what you have, how it works, what to expect from it, is it a good fit in your plan? What was the purpose? Should you change it all? That’s all the goal for June’s month here of clarifying your investment strategy. Okay. Um and yeah, that’s that’s the message here, folks. If you if you find that whole concept to be, wow, that sounds like a pain, right? Or what a what a lot of work for that, you know, that’s what we’re here for to help make that easy. And you can of course call us and we can help you, 847-499-3330, or go to SGLfinancial.com to contact us.
Steve Lewit: You know what’s interesting, Gabriel, is people naturally try to do that. You know, people say, Well, I say, well, why do you have so many CDs? Well, well, I need some safe money.
Gabriel Lewit: Yeah.
Steve Lewit: You know, why why do you have that? Uh well, I I like the return on that. I want my money to grow. So, but it’s not a formal or uh how shall I put empirical.
Gabriel Lewit: A little more meat on the bones.
Steve Lewit: A little more meat on the bones. Where’s the beef?
Gabriel Lewit: As you’ve you’ve said that phrase before.
Steve Lewit: Where the beef?
Gabriel Lewit: I have not heard that one before, but uh
Steve Lewit: Didn’t you see those ads for I don’t know, some some hamburger place. Where’s the beef?
Steve Lewit: I I don’t remember that.
Gabriel Lewit: And then they show the hamburger with all the beef in there. Uh I you know. Do you know who Robert Frost is? Who that? Who that? Yeah.
Gabriel Lewit: Who that all right, okay. So, um we may not get through every part of this next topic, but I I thought it’s a fun one, and if whatever we don’t get through today, we’ll we’ll pick up on our next show. All right, but um it was all about here, hold on, gotta find it. Sorry, I buried it under somewhere else. Just give me uno momento, please. Okay, it’s a video on YouTube that was one of the most popular watch retirement videos of the year.
Steve Lewit: This is crazy.
Gabriel Lewit: Okay, which was titled What to Sell Before Retirement. Okay. What to sell before retirement. Now, so now let’s talk about what what that means, right? There are before you retire, right? So, retirement’s a life-changing event. Okay, it your budget is a big deal, right? What you spend money on. All right, and the idea is you know, you might be able to sell stuff that you don’t need and make your retirement better. That’s at least my takeaway of what it is.
Steve Lewit: I concur.
Gabriel Lewit: I’m not gonna nitpick with that, but I concur. All right, so let’s just start with one and we’ll see how much we get through here. If we only get through one, this will be one of our main focuses for next time. But the the idea here is the uh the oversized house is one of the top items to sell before you retire.
Steve Lewit: Definitely.
Gabriel Lewit: Okay.
Steve Lewit: Definitely. Don’t know, Gabriel, why shouldn’t why can’t I sell that after I retire? What’s the problem with that?
Gabriel Lewit: Well, you could. You could. Yeah. I I mean, but the idea is if you’re prepping for retirement and you want to streamline your budget and you want to cut back on extraneous costs and be more fiscally responsible, you could ask yourself, do I still need this big house?
Steve Lewit: And be happier.
Gabriel Lewit: Right? My 4,000 square foot house that had, you know, seven bedrooms or six bedrooms and large basements and three floors and uh twenty, at least in Illinois, you know, twenty thousand a year in property taxes and higher maintenance costs. Uh, do I still need that if my kids are no longer living here if they’re out of the house? Uh do I want that on my budget? Or could I downsize?
Steve Lewit: Exactly. Well, what what most people do, Gabriel, is they live in that oversized house for another five or six or seven years, really not enjoy I mean, they kind of enjoy it, but they i it’s too big, you know. And and if you take care of that before you retire, you you just go on cruise control in the when you shift into that new stage of your life.
Gabriel Lewit: Well, I ha you to answer your question, why can’t you do it after you you absolutely could. I have a client right now that’s been retired, I think, two years, and they are in that process of downsizing.
Steve Lewit: Yeah.
Gabriel Lewit: Right? And it’s typically because you know, a kid’s still in college or something, right? Or, you know, you’re not quite ready to let go of the big home with the family memories, but it it is going to have a very noticeably positive effect on their retirement plan projections. It’s going to reduce their budget. A much lower house is going to free up equity, right? You owe you know very little on, say, uh a big house, you sell it, you take the proceeds, you buy off your new house in full, and you no longer have a mortgage payment. And you just saved a bunch of money.
Steve Lewit: And a lot less to deal with.
Gabriel Lewit: And a lot less headaches, right? So, uh yeah, lots that can go into uh that concept, but that is one of those top things to sell, perhaps, before you retire. Okay. All right, the next one might be any sort of perhaps expensive toys that you have become burdens. Now, an example of this.
Steve Lewit: We used to expensive toys, I think cars.
Gabriel Lewit: Maybe just like a classic car.
Steve Lewit: Who owns a classic car? That’s a waste of money.
Gabriel Lewit: Does uh does that ring a bell for you at all?
Steve Lewit: I I hear bells going off. I have no uh no idea why, though.
Gabriel Lewit: So, folks, Steve uh Steve has a classic car. I do. Is it a burden yet?
Steve Lewit: I not yet. Not yet. If I could get out of the mechanic’s garage and use it, it it’s not a burden. You do I? I can’t use it.
Gabriel Lewit: Well, when you keep paying the repairs while you can’t use it for three years, you might realize it’s becoming a burden. And the idea is to look for things that have maybe been fun in the past or you had big grand hopes for it. Maybe you own a boat and you’re not using it. Maybe it’s yeah, maybe it’s an RV, right, that you keep in your driveway.
Steve Lewit: Boats are a burden.
Gabriel Lewit: Your classic car, right? Can you can you get rid of those, right? Simplify your life, less maintenance, less headaches, less to worry about, free up some cash.
Steve Lewit: More money in your pocket.
Gabriel Lewit: Use that money to travel, right? Uh through airplanes and not through RVs, right? Because actually, I think a proven thing, most majority of people have RVs, they rarely use them. Uh some people do all the time.
Steve Lewit: Some people use them a lot, you know, but uh a lot don’t.
Gabriel Lewit: Yeah.
Steve Lewit: Same with boats.
Gabriel Lewit: Yeah, boats, yeah, are one of those. They well, you all everyone knows the joke about boats, right? The two happiest days of a boat owner’s life.
Steve Lewit: When they buy it and sell it?
Gabriel Lewit: The day they buy it and then the day they sell it. Yeah. Uh so I mean, yes, that’s a pretty classic one for for a reason. All right. Well, that’s we’re gonna continue this, guys, next time.
Steve Lewit: Yeah, because there are much more on this.
Gabriel Lewit: There’s a number of more, it’s kind of a fun one here, but also has some financial relevance.
Steve Lewit: And I think they’re very important.
Gabriel Lewit: Yeah, absolutely. All right. Well, um, hopefully we kept you entertained here.
Steve Lewit: A second car is on the list.
Gabriel Lewit: Yeah, maybe.
Steve Lewit: Oh my gosh.
Gabriel Lewit: Uh, hopefully we kept you entertained and a little bit informed here today, or a little bit informed and you know, or very informed and slightly entertained. Your pick.
Steve Lewit: I’m gonna go put my stuff on the eBay.
Gabriel Lewit: Um go sell your car.
Steve Lewit: I’m I’m gonna go sell a lot of stuff.
Gabriel Lewit: All right. If you have questions for us, give us a call, 847-499-3330, or go to SGLFinancial.com, click contact us. We are here for a free consultation, a second opinion or review, any questions we can help answer for you. Uh, we are absolutely here to help.
Steve Lewit: So, anyone want to buy a uh 1982 Morgan uh beautiful car, beautiful, classic car, just give me a call.
Gabriel Lewit: Steve’s giving it away for free.
Steve Lewit: I might I might be open to a deal. All right, everybody, have a wonderful day. We’ll talk to you on the next show. Be well, everybody.
Gabriel Lewit: Thank you.
Steve Lewit: Bye.
Announcer: Thanks for listening to Our 2 Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at 847-499-3330. Or visit us on the web at SGLFinancial.com and be sure to subscribe to join us on next week’s episode.
Disclosure: Investment Advisory Services are offered through SGL Financial LLC, an SEC Registered Investment Adviser. Insurance and other financial products are offered separately through individually licensed and appointed agents.
