Game, Set, Money
by SGL Financial
Our 2 Cents – Episode #264
Game, Set, Money
Don’t double fault your finances! A new episode of Our 2 Cents is on the court. We’re covering the Korean stock market crash, our August financial planning calendar, and the financial lessons we can learn from tennis. Tune in now!
- Gabriel’s Quick Hits:
- Illinois tolls are on the rise in 2027. Here’s how much you can expect to pay.
- Can you guess the 5 most expensive cities in the U.S.?
- South Korea’s Stock Market Crash:
- What’s behind South Korea’s Kospi index market collapse, and what can we learn from it?
- August Financial Focus:
- This month, we’re taking a closer look at estate and legacy planning and why it matters.
- Tennis (Financial) Lessons:
- What do tennis and financial planning have in common? Here are a few lessons from the court.
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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: Well, hello everybody. Welcome to another episode of Our 2 Cents. You’ve got Steve Lewit here and Gabriel Lewit here back with you for another round of amazing news and information tidbits that you need to know. And also, Steve’s talking about Liberace for some reason. But I don’t know why.
Steve Lewit: Well, it was one of this strain of thoughts. First, it came up Ed Sullivan because producer John here said, “You guys have a good show.” And I said, “Well, Ed Sullivan would say show.” And then Ed Sullivan had Liberace on his show often, and Liberace was a hoot. He was a guy who played in fancy costumes and a very evocative, a big candelabra on his piano.
Gabriel Lewit: Is this who you style yourself after?
Steve Lewit: Oh gosh, no. No, but it’s amazing to me that I think everybody should know this. And of course, at your age, this is like foreign territory to you. And someday we should have a nostalgia conversation where I can teach you what a typewriter is and what Liberace was and all the things that you missed, like a home telephone, what that is.
Gabriel Lewit: You do know that I had those things, right? Typewriters, home telephones.
Steve Lewit: Did you have a typewriter?
Gabriel Lewit: Well, I mean, I knew what they were. I grew up in PC world.
Steve Lewit: A phonograph.
Gabriel Lewit: I did not have that. But my kids don’t know what CDs are.
Steve Lewit: Yeah, they don’t.
Gabriel Lewit: It’s kind of funny. What’s that? What’s a tape player? Producer Jon’s looking at me like, damn we’re old.
Steve Lewit: Well, if you think you’re old, how do you think I feel?
Gabriel Lewit: Anyway.
Steve Lewit: It’s like sometimes I’m talking to you, and you give me that blank stare. It’s like, “What the hell, dad? Are you sure? Are you okay, dad?” Yeah, it’s okay.
Gabriel Lewit: Well, anyways, we’ve got a great show lined up for you today. We’re going to start off with a couple of just quick financial tidbits for you. And if you hadn’t heard-
Steve Lewit: Well, before the tidbits, I just want to say that although I wasn’t a Dolly Parton fan, she was an absolute icon in the music industry and it’s sad to hear about her passing.
Gabriel Lewit: Yes, indeed. It’s very sad. Very sad time.
Steve Lewit: Yup.
Gabriel Lewit: And now that we’re officially depressed-
Steve Lewit: No, I don’t mean to depress us, that’s just part of life.
Gabriel Lewit: I can get pepped back up to talk about what we’re going to talk about.
Steve Lewit: Okay. We can talk about Liberace then.
Gabriel Lewit: Oh goodness. Yeah. So, we were going to talk a little bit here about some financial tidbits that we thought would be interesting and informative. If you didn’t know, the Illinois tollway has recently massively increased its tolls by 45 cents per toll-
Steve Lewit: That’s incredible.
Gabriel Lewit: … up from 75 cents. And this is part of a massive 15-year, $26.5 billion capital spending plan. So, supposedly they’re going to do some road improvements, I’m assuming, which is what this is going to pay for. But that’s part of the running joke in Illinois, right? What are the two seasons we have? Winter and construction season. So, hopefully they’re going to put this to good use. Roads are like this, those projects that never end, they just go in circles. Fix one road, fix the next, fix the third, fix the fourth, go right back to the first and around and around we go. They’re still fixing 53, Illinois 53 for God knows how long.
Steve Lewit: 18 years already it feels like, yeah.
Gabriel Lewit: Anyways, but yeah-
Steve Lewit: I read somewhere, I hope I got this right, is that the Illinois tollway was supposed to at some point be free. That all these tolls were to pay for it and then there would be no tolls, but that doesn’t seem to be working out very well.
Gabriel Lewit: Well, if let’s say they thought it was going to be free because it would pay itself off, then it turns out there’s more expenses that need to get paid. And so, they do new tolls for the new expenses, and before you know it, there’s just never not a toll. They could raise taxes on you. They could do that too, but people would probably object to that as well.
Steve Lewit: Let me give you another tidbit if you don’t mind. I was visiting my brother in New York. So, in New York folks, if you can use the subways are terrific, they really get you all over the city. So, I haven’t used the subway in 25 years. Now, when I went on the subway, it was 50 cents. You know what it costs for a subway ride?
Gabriel Lewit: $2?
Steve Lewit: $4.50 to get on the subway.
Gabriel Lewit: Well, as they say-
Steve Lewit: So, the tollway is a bargain.
Gabriel Lewit: Inflation is the silent thief. It just ticks-
Steve Lewit: Not so silent.
Gabriel Lewit: … ticks away. Well, it doesn’t make any noise per se, other than you screaming in frustration.
Steve Lewit: $4.50 to get on the subway.
Gabriel Lewit: Well, everybody knows that you got to get the passes for consistent ridership. If you’re just one of those guys paying for an individual. It’s like a ski lift ticket.
Steve Lewit: Well, $4.50 is-
Gabriel Lewit: You go to the ski resort; you go one time for three days in a row and you’re going to pay basically the same amount as a season pass for someone that lives there. And they know that and that’s why they do that by the way.
Steve Lewit: I don’t think they have a pass.
Gabriel Lewit: Of course, they, they must have it. Chicago back when I lived downtown on the L, they had a, if you paid a single fare ridership, it was way more than if you had some kind of recurring pass. I guarantee you they got some kind of pass.
Steve Lewit: I’ll check with my bro insist, but they put their credit card right on the thing and bing, boom, you go through.
Gabriel Lewit: I bet they’re not big-time subway riders.
Steve Lewit: All the time. All the time.
Gabriel Lewit: I don’t know.
Steve Lewit: They love the subway.
Gabriel Lewit: Well, speaking of New York City, my second tidbit for the day in news that will surprise absolutely no one, one of the most expensive cities to live in the US is?
Steve Lewit: New York.
Gabriel Lewit: New York City.
Steve Lewit: New York.
Gabriel Lewit: Okay. Came out number one on the list. This article says the five most expensive cities in the United States and number one on that list again is Manhattan, New York. So, the population 1.6 million and the median home value $1.1 million, the average home price, $2.9 million.
Steve Lewit: Yeah. And you don’t get much for that.
Gabriel Lewit: I didn’t say large home.
Steve Lewit: One bedroom, two bedrooms, $1.5, $2 million.
Gabriel Lewit: Yeah. Number five, San Francisco, California. Number four, Brooklyn, New York. Number three, San Jose, California.
Steve Lewit: Really? Wow.
Gabriel Lewit: And number two, Honolulu, Hawaii.
Steve Lewit: Wow.
Gabriel Lewit: Okay.
Steve Lewit: That surprises me. Yeah.
Gabriel Lewit: That one doesn’t surprise me that much, it’s an island.
Steve Lewit: So, is New York number one?
Gabriel Lewit: Manhattan.
Steve Lewit: Manhattan is number one.
Gabriel Lewit: Brooklyn number five or four, whatever it was.
Steve Lewit: Yeah. Brooklyn has just gone through a total renovation.
Gabriel Lewit: Yeah. Well, that’s what towns and cities do.
Steve Lewit: Lots of young people, party town I don’t know where they get the money from. Hi, mom. Hi, dad-
Gabriel Lewit: Maybe.
Steve Lewit: … please send money.
Gabriel Lewit: Well, they do make more money when they work there too, which is good.
Steve Lewit: Yeah, but that’s not enough.
Gabriel Lewit: Well, those are our little tidbits for you today. I hope you found those interesting and maybe depressing at the same time, especially on the polls.
Steve Lewit: Well, Chicago’s not on the list, that’s a good thing.
Gabriel Lewit: No, Chicago’s not bad, not bad. Okay, so in more significant topics here today, we’re going to talk about a slow motion or not so slow motion collapse in South Korea’s KOSPI Index, which is one of their stock market indexes in South Korea called the KOSPI. I don’t know if I’m saying it right. KOSPI, KOSPI, who knows. But it erased $2.5 trillion in market value in a very short amount of time.
Steve Lewit: Went down 40% in what, four weeks? Six weeks?
Gabriel Lewit: Six weeks in June and July.
Steve Lewit: Yeah.
Gabriel Lewit: Imagine.
Steve Lewit: And folks, the reason we’re bringing that up is I don’t know if it’s indicative of the US market and AI, but that was all AI driven.
Gabriel Lewit: It was very predicated upon AI. The hype was there and then the bottom fell out. And so, it’s just a caution tale, a cautionary tale about being smart with your money, how you’re invested, your asset allocation, your risk exposure, how close you are to retirement. If you’re a 21-year-old and you lost $10,000 in a 40% decline, that’s going to hurt no matter what. But if you’re a 65-year-old and you lost $2 million nearing retirement, that’s a much bigger world of pain. So, these types of cautionary tales can be reminders for us that what goes up sometimes and often does go down.
Steve Lewit: And could go up quicker and down faster if you use what are called leveraged ETFs.
Gabriel Lewit: Yeah. There could be some additional reasons why this occurred, and we’re not doing a extensive analysis here of the KOSPI index.
Steve Lewit: Explain real quick what a leveraged ETF is.
Gabriel Lewit: Well, leverage ETFs use debt or margin or other structured, called derivative products or other things to, essentially, they can magnify your gains and they could also magnify your losses.
Steve Lewit: Yeah. So, if the market like a leveraged ETF for an S&P, S&P goes up five but you get 10 or 15 on the upside, but it goes down five and you lose 10 or 15. So, if there’s a lot of leverage ETFs in the marketplace, which was the case in the KOSPI KOSPI or whatever it is, that could drive a big loss quickly.
Gabriel Lewit: Yeah. And I think what was interesting in the article, which again isn’t going to be a main focus of us trying to investigate what happened there, but people were surprised and shocked that it happened. That was the takeaway as they interview people. “Oh my gosh, how could this happen? We didn’t think this was going to happen. I have to cut back on my lifestyle now.” What that tells me is people were not smart or thinking through proper financial planning if they put all their eggs in this basket, this booming basket. And then if that boom busted as it did, and they’re all of a sudden having to downsize their lifestyle and do all these other things, it maybe perhaps was not well-thought-out.
And so, it’s just again, a cautionary tale, these things do occur. Make sure you review your plan if you feel you might be over leveraged, not necessarily even with leverage, but just overly concentrated in AI or technology if you’re nearing retirement. These are things that we can help guide you through, make sure you’re making sensible planning decisions.
Steve Lewit: Absolutely.
Gabriel Lewit: So, that’s our takeaway from the KOSPI KOSPI, as you said, KOSPI KOSPI. Okay, so earlier this year and consistently throughout the year, we’ve been talking about specific topics you want to focus on each and every month, call it an annual financial planning calendar. And we want to use this opportunity here for the month of August before it’s behind us, believe it or not we’re in the last week of August here. We almost missed it, but we had our August financial planning calendar items for this year that we want to make sure we share with you. Again, to keep you on track, the idea here was, as the phrase goes, how do you eat an elephant, one bite at a time?
Well, A) you shouldn’t be eating elephants period, but if you were, that’s how you would do it. So, when you have a large complex thing, how do you tackle it one small piece at a time? And so, this annual financial planning calendar could feel overwhelming for many people. So, we were breaking it down into bite size chunks here month over month. So, what we’re going to talk about this month in August is a little bit about estate and legacy planning and some best practices for you here in the month of August for you to take point on and make sure you can complete.
Steve Lewit: I like your dietary direction. It’s really very interesting.
Gabriel Lewit: Yes. You don’t commonly see elephant listed anywhere.
Steve Lewit: No, I’ve never seen an elephant.
Gabriel Lewit: No, you don’t. Yeah. Okay, so estate and legacy planning, one of the four core pillars that we focus on here at SGL Financial. So, if you are aware, we have a four-pillar comprehensive holistic financial planning process here. One of those four pillars, the fourth pillar is estate and legacy planning. And so, what does that mean in a nutshell, Steve, if you were just to say, what is estate and legacy planning just to set the stage here for us?
Steve Lewit: Well, first of all, let’s be clear everybody has an estate. So, if you own anything and have some savings, you have an estate because many people think, “Well, I don’t have an estate, that’s rich people.” No, everybody has an estate. And unfortunately, we all pass on at some point, Gabriel, and that estate has to pass to our-
Gabriel Lewit: I know you’re trying to prevent that.
Steve Lewit: I am the leader of longevity.
Gabriel Lewit: Everybody’s trying to prevent that.
Steve Lewit: Yeah. We all don’t want to do that. But eventually, we pass on and that estate has to pass on to our heirs. And it’s like, how does that happen? Does it happen efficiently? Are there a lot of taxes involved? Do my kids get the money when they’re in the middle of a divorce? All of that is estate planning. And while living too is estate planning, because you have your powers of attorney, your financial power of attorney, your healthcare power of attorney, let’s say your partner is in a coma, who makes that decision, who makes financial decisions, that’s all part of how to manage your estate.
Gabriel Lewit: Yeah. And legacy is similar, but legacy could be what are you remembered by or how or how do people remember you? What’s important? What are your values, specific memorable items you want to leave, not necessarily monetary things, right? So, what kind of legacy are you leaving? So collectively, yes, estate and legacy planning is one of our core pillars and a little bit of what we’re going to focus here today for your August financial planning tasks or tips are based on this estate and legacy planning goal. All right. Now, a couple things here. As you said, everybody has an estate.
Well, that estate might evolve as your life evolves. So, what you need to do in your 20s, 30s might be different than your 40s, 50s will likely be very different than your 60s, 70s, and certainly into your 80s. And people oftentimes have this notion that you just do your estate planning one time and you have completed it, right? Task complete.
Steve Lewit: Well, it’s complete for the moment. It’s not complete-complete because life changes as you say, we evolve. We go through different events in life. People get into accidents, they die young, they marry, grandkids grow up.
Gabriel Lewit: Or just age.
Steve Lewit: Or just age. Yeah.
Gabriel Lewit: And all of a sudden, you look back and say, “Wow, I last did this 20 years ago.”
Steve Lewit: Yeah, exactly. And interestingly enough, estate planning somehow, somehow always gets pushed to the bottom of the to-do list.
Gabriel Lewit: It is definitively always last. It’s like that term paper that, “Oh, I got a month to do it, I got plenty of time. I got three weeks to do it, plenty of time. I got two weeks.”
Steve Lewit: I got 10 years to do it.
Gabriel Lewit: Oh shoot, it’s due tomorrow.
Steve Lewit: Exactly.
Gabriel Lewit: Better get started.
Steve Lewit: And it doesn’t matter if you’re low wealth, high wealth, medium wealth, extremely wealthy. We have folks, we meet extremely wealthy people have done no estate planning.
Gabriel Lewit: None.
Steve Lewit: None at all.
Gabriel Lewit: Absolutely none.
Steve Lewit: Yeah.
Gabriel Lewit: Yeah. So, one of those things where I know what you’re thinking right now, we don’t have to do this. Right now, as we’re talking about this, you’re saying in your head, “We probably don’t need to do this yet. We can punt on this.”
Steve Lewit: We can punt, sure.
Gabriel Lewit: But yeah, you should probably avoid punting on this. That’s the point of making this hopefully bite size. So, here’s the first question for your homework here on this topic here this month. Has anything changed in your life recently? Marriage, divorce, births, deaths, retirement, new business, changes in wealth, any of the above or more.
Steve Lewit: Fallout with a child.
Gabriel Lewit: All these things, if you have an estate plan, you might need to review it or change or update it if any of those things have occurred. Now, the other question is also very simple. Do you have any documents today?
Steve Lewit: Yes.
Gabriel Lewit: If the answer is no, you’ve got a little work to do now.
Steve Lewit: Yeah. So, most people say, “Well, I have a will.”
Gabriel Lewit: Yeah.
Steve Lewit: Okay.
Gabriel Lewit: Well, again, a lot of people don’t even have that. So, your homework assignment right now is simple, just inventory what you have. And if you have documents, when were they last updated? That is going to be your first homework assignment here for your state and legacy planning goals here for the month of August. What do you have? How old is it? Do you have anything at all? And have any life changes occurred? And then you want to get this either reviewed if you have stuff that’s old or if you have nothing at all, you want to call us and talk to us and we can give you some guidance on next steps on what to do.
Steve Lewit: Yeah, folks. So, if you have a trust from 2020, the languaging changes over time. The laws change, the different things you can do in a trust need to be addressed differently. So, because you have an old trust is great, but that trust probably needs to be updated.
Gabriel Lewit: Yeah, exactamundo. Now, the next homework piece for you here on estate and legacy planning is also fairly simple. So, we want to give you not too much that feels overwhelming here, but it’s reviewing the beneficiaries on your accounts.
Steve Lewit: Big deal.
Gabriel Lewit: Because beneficiaries are very, very important. Beneficiaries named on an account can overrule or override anything that’s in your will or your trust, it takes precedent. So, let’s say you updated your trust, but you forgot that on your 401(k) you had listed an ex-spouse as your primary beneficiary and then you pass away and whoops-
Steve Lewit: Whoops.
Gabriel Lewit: … they get all your money.
Steve Lewit: Ex gets all the money.
Gabriel Lewit: That’s one example, right? But there’s a lot of examples like this. And so, inventorying your beneficiaries per each of your accounts is a very good idea. Now, I’ve had one client that we wanted to do this and they just happened to be one of the individuals out there that had 30 accounts. And what that proceeded to is why don’t we consolidate some of these? Why do we have 30 accounts?
Steve Lewit: Yeah, why are there 30 accounts? Yeah.
Gabriel Lewit: So, this could be an opportunity if you do a little housekeeping, a little cleaning up. If you have 17 old bank accounts with $100 in each of them for some weird reason and you have to go through and update the beneficiaries on all of them, maybe you use that as an opportunity to clean those up along the way and simplify as well as make sure you get your beneficiaries updated.
Steve Lewit: Yes. And I would add onto that, Gabriel. It’s not only listing the accounts, but if you’re a couple, who owns what account? Because when it comes to Illinois state tax purposes, we need to know if husband owns $4 million and wife owns $1 million and husband passes, what happens? So, we can get an Illinois estate tax exemption.
Gabriel Lewit: Yes. If you’re at that level, it’s a part of estate and legacy planning too, but generally a little more advanced if you’ve got assets greater than $4 or $8 million, depending on if you’re married or single.
Steve Lewit: Yes.
Gabriel Lewit: All right. So again, estate and legacy planning, lots that we could talk about here. We could spend probably hours talking about this and all the nuances here, but that’s your homework assignment for this month. Keeping it simple for you here, there’s more we could get into about your digital estate, right? Making sure people can locate these things because if you have all this great stuff, but people can’t find it.
Steve Lewit: Or they can find it, but they don’t have the passwords for it.
Gabriel Lewit: That too, right? You got some potential problems. Let’s start off simple here. Again, do you have any estate planning documents? If no, let’s help you get those started. Do you have them but they’re old? If yes, let’s update them. If any life changes have occurred, you should get those reviewed and then let’s review your beneficiaries on your various accounts.
Steve Lewit: Exactly.
Gabriel Lewit: Those right there are going to take you a long way, folks, a very long way.
Steve Lewit: And you can bring all those documents here; we’ll review them for you.
Gabriel Lewit: Yes, exactly.
Steve Lewit: You’re supposed to give the phone number.
Gabriel Lewit: Well, oh yes. Did you want to do that today?
Steve Lewit: No, no.
Gabriel Lewit: You haven’t done that in a while.
Steve Lewit: I love the way you do it.
Gabriel Lewit: Well, of course, folks, you can call us anytime here at 847-499-3330 or go to sglfinancial.com, click contact us, or you can email us info@sglfinancial.com and we can help you set up a time with us to talk through your financial planning, estate planning, review estate planning documents. Whatever we can do to help, we’re here for you.
Steve Lewit: I love the way you do that. You have that certain inflection in your voice that you’ve got down. It would take me a number of times to duplicate that.
Gabriel Lewit: It’s just a little bit of practice.
Steve Lewit: Yeah. Yeah. But do call.
Gabriel Lewit: Yes. Yes, please. Okay, so dad, Steve, this next topic, we talk about analogies here a lot and we compare financial planning to various things. Steve picked this one out here today, folks. So, I am going to let him introduce this one because it’s near and dear to his heart and soul.
Steve Lewit: Yes, it is. Right now, I don’t think it started. The US Open Tennis Tournament in Flushing Meadows, New York is on its way.
Gabriel Lewit: Flushing Meadows.
Steve Lewit: Flushing Meadows.
Gabriel Lewit: What a name.
Steve Lewit: Which hosted the 1964 World, what do you call it? The world thing when everybody shows, World Fair, the World Fair. And you can still see some of the monuments that are still there. Did you know Chicago hosted a World Fair? I forgot the date, but that’s pretty interesting too. Anyway-
Gabriel Lewit: Was this in the 1700s?
Steve Lewit: In 1622, the Saxons from England came over and they had a World Fair here. So, look at the US Tennis Center’s magnificent tennis facility in Flushing Meadows, Forest Hills, New York, and I was a professional tennis player, so this is near and dear to my heart. No, I do not play pickleball. All you pickleball people, I wish you well, but I refuse to get on a pickleball court.
Gabriel Lewit: You got to get with the times.
Steve Lewit: I’m a truist. I’m a supporter of the real deal. So, we found some analogies, as we always do, to tennis in the world of finances.
Gabriel Lewit: We sure did.
Steve Lewit: And Gabriel’s going to walk us through.
Gabriel Lewit: Yeah. What would financial planning have to do with tennis? Well, we will tell you.
Steve Lewit: We will.
Gabriel Lewit: Okay. Well, the first thing is, you’re going to see this one here, is lesson number one, that the court is different in singles and doubles. The game is different, the court is different, the strategies are different for singles and doubles. Well, can you guess what the parallels there are with financial planning? Sir, Steve, tennis professional, Steve.
Steve Lewit: Simple, very simple. If you are married, you have different options than if you’re single. Just as on a tennis court, if you’re single, you’ve got a smaller size court to deal with. If you’re playing doubles, you have a bigger size court to deal with, different strategies.
Gabriel Lewit: Are they actually wider in doubles?
Steve Lewit: Oh, sure. Yeah.
Gabriel Lewit: Because you go to the local park and you got one size court, whether you play singles and doubles. I didn’t actually know that.
Steve Lewit: Well, if you look at a tennis court, there’s an inner rectangle and then there’s an outer rectangle. So, if you’re playing doubles, you’re using the outer rectangle. So, it accommodates a wider field because you got two people instead of one people.
Gabriel Lewit: Yeah. Well, that makes sense.
Steve Lewit: Yeah. I was not very good at doubles, by the way. I hated doubles because I always had to worry about somebody else. But like in financial planning, if you’re married-
Gabriel Lewit: You got to worry about the other person.
Steve Lewit: You got to worry about-
Gabriel Lewit: Sorry, honey. Get out of my way. All tech stocks for us.
Steve Lewit: You can’t hit the ball by yourself all the time. There are just different rules in doubles.
Gabriel Lewit: Yeah, just tackle your wife over and make all the financial planning decisions. I don’t know if that’ll go over so well.
Steve Lewit: You can try.
Gabriel Lewit: You could try.
Steve Lewit: It won’t work out well in the long run.
Gabriel Lewit: You got to coordinate when you’re doubles. You got to be on the same page. You got to have a jointly agreed upon strategy.
Steve Lewit: Well, the doubles players actually signal each other at the beginning of each serve so that everybody knows where they are on the court, depending on the serve. And likewise, with financial planning, your spouse should be aware of, even if they’re not interested, they should be aware of where you are on the court and what is happening.
Gabriel Lewit: I like that-
Steve Lewit: Yeah.
Gabriel Lewit: … that’s good. You know a lot about this tennis stuff, huh?
Steve Lewit: Yeah, a little bit.
Gabriel Lewit: Just a little bit, sorry.
Steve Lewit: Just a little bit.
Gabriel Lewit: Yes. Okay. So, the next one here is that certain players perform better on certain surfaces.
Steve Lewit: You bet.
Gabriel Lewit: Okay. So, there are some names here, Federer Sampras, Pete Sampras, right? I remember watching him.
Steve Lewit: Yeah, amazing.
Gabriel Lewit: Graf, I don’t know who Graf is.
Steve Lewit: Steffi Graf.
Gabriel Lewit: Steffi Graf-
Steve Lewit: Woman champion.
Gabriel Lewit: Nadal. Different people play better on grass, some play better on clay. Some play better on hard courts.
Steve Lewit: That’s correct.
Gabriel Lewit: Okay. So, what kind of parallels can we pull for financial planning here? Well, I was going to say there’s different phases of life. These are different, you take different approaches or you have different strategies perhaps for grass or clay or what’s the regular one? Grass, clay, and what’s the other one?
Steve Lewit: Hard court.
Gabriel Lewit: Hard court, yes.
Steve Lewit: It’s actually not hard, it’s a soft rubberized surface.
Gabriel Lewit: I think if you fall and skin your knee on it though it hurts a little bit.
Steve Lewit: Yeah. Well, I grew up on cement courts, which is why I have no knees left.
Gabriel Lewit: There you go.
Steve Lewit: They were cement.
Gabriel Lewit: Yeah, that’s definitely a different story. But yeah, and there’s also advisors that specialize in different courts, different styles and things. We’re retirement planning specialists, so maybe we like the clay court, whatever it is.
Steve Lewit: Yeah. Well, it’s like Nadal was a clay court champion. Not that he wasn’t a champion in other areas, but that was his surface. When I was growing up, you had Borg and Laver and all those names that kind of like-
Gabriel Lewit: Serena Williams, the Venus?
Steve Lewit: Yeah, Venus and Serena.
Gabriel Lewit: Serena, yeah, the twin sisters.
Steve Lewit: They just lost in double.
Gabriel Lewit: Did they?
Steve Lewit: They tried to come back, I don’t think they did very well. Yeah, but grass is a lot faster, it’s quicker, there’s less rallies. You’re running to the net more often because when the ball bounces on grass, it’s not an accurate bounce. So, everybody develops a specialty. I like faster surfaces when I played. I didn’t like long rallies because I didn’t have the stamina for them.
Gabriel Lewit: Well, yeah. My thought when I was thinking about this parallel, it’s interesting you went to advisors with different specialties. I was thinking more just different strategies as you were just explaining on different courts and different phases of life all have their different strategies, right?
Steve Lewit: Absolutely.
Gabriel Lewit: Nearing retirement’s different than after retirement. And you’ve got to understand your playing surface. If you were going to go play a tennis match, you got to know what court you’re on that might impact what you do. So, you’ve got to be aware in financial planning where you are in your life, what game court you’re playing on so you can develop the most appropriate strategies for those periods of time in your life.
Steve Lewit: And the idea, Gabriel, is to have a strategy because a lot of people get on a tennis court, they just hit the ball.
Gabriel Lewit: Well, if you do the same exact thing you would do, if you play on grass courts and then all of a sudden you do the same exact thing on the other one-
Steve Lewit: You lose.
Gabriel Lewit: … you may not be as prepared properly. So, if you’re doing the same thing in retirement as you were doing when you were 20 years old or 30 years old, you might not get the results you’re looking for.
Steve Lewit: Yeah. So, there has to be a harmony, if you will, between the advisor you’re working with or how you perceive your own investments if you’re doing it yourself, which is the court you’re playing on and where you are in life. You might be playing a grass court game very fast, very volatile, but you’re on clay courts.
Gabriel Lewit: Yeah. Now let’s move to the third parallel here. Holding serve matters.
Steve Lewit: Holding serve matters, right.
Gabriel Lewit: Well, I’m saying that, but I know a little bit about this.
Steve Lewit: Well, holding serve means winning your serve.
Gabriel Lewit: Yeah. So, in tennis, one person has to serve the ball and the other has to return the serve. And the advantage is normally to whom in this scenario?
Steve Lewit: The advantage is normally almost always to the server.
Gabriel Lewit: Correct. They know where they’re planning to hit the ball. The person is receiving the serve has to be reactive. But the parallel here is in financial planning, know what you can control. You prefer to be the person in control, right? There’s certain things you can control. As the person receiving the serve, you can’t control where the server’s going with the ball. In financial planning, you have to sometimes be prepared for the unexpected, just like the person receiving the serve. But also, you can control what you can control almost as if you’re both players at the same time.
You’re the person serving and also the person receiving the serve. In tennis, you got to be both, you switch in between games, what do they call them? Game set match, right?
Steve Lewit: Yeah.
Gabriel Lewit: In tennis.
Steve Lewit: So, the idea is in any point in tennis, you want to control the point.
Gabriel Lewit: Yeah.
Steve Lewit: All right. So, if you have the serve and I can hit it out wide, I can slice it in, I can hit it right into their body. I have different serves that allow me to upset the rhythm of the other person. Now, I control the point after the serve. They hit a weak return, I can go in and hit a winner. They miss the serve altogether, hit it into the net. So, holding your serve, controlling the point is paramount in tennis and its paramount in financial planning. We don’t want to get on a financial planning court and have the other person dictate or the market dictate or a headline dictate what is happening to us.
Gabriel Lewit: Yeah. You can pick your risk profile. You can pick your amount of income you spend. You can pick how long you work. There’s all these variables that are in your control and you want to focus on those first and foremost versus worrying too much about the things you can’t control, like what the market’s going to do.
Steve Lewit: Exactly. Exactly.
Gabriel Lewit: Okay. Our last point here, game set match, right?
Steve Lewit: Oh man.
Gabriel Lewit: Is-
Steve Lewit: The quickest match I ever played.
Gabriel Lewit: … avoiding unforced errors. Okay. There’s nothing worse than losing a match because you shot yourself in the foot, so to speak.
Steve Lewit: Which is why most matches are lost by unforced errors. Folks, in unforced errors, the ball comes up to you and this is a shot that you’ve hit a thousand times and you just lay into it, bend your knees and lay into it and you hit it wide.
Gabriel Lewit: Well, I’m a soccer player, so for me, it’s when you got a wide-open net, it’s you one-on-one with the goalie and you just shank it over the top of the net. Just not even on target. And you’re just like, “What in the heck?”
Steve Lewit: Yeah. And that’s called an unforced error.
Gabriel Lewit: Yeah. And these things are, they’re challenging in sport, they’re problematic in sports, they’re also problematic in financial planning and investing. If you panic sell because the market dipped a few points, if you make an emotional decision to stay in cash because you’re concerned, all these things are potentially unforced errors. If you just take a withdrawal out of your plan without assessing the tax analysis and that triggers a Medicare surcharge, unforced error. These things can really drag down your portfolio and the success that you have. And so, we want to avoid those. And that’s done through preparation, good planning, practice, and a good coach.
Steve Lewit: A good coach because I had two coaches actually, and paying attention or being attentive. What happens in a tennis match, Gabriel, is you kind of fall asleep back there. You get into the mechanics and for a moment you just lose your attention and in that-
Gabriel Lewit: That’s all it takes.
Steve Lewit: And that’s all it takes. And now you’re kicking the ball into the goal and you’re so confident that you’re already celebrating the goal before you actually kick the ball and your attention is somewhere else and you miss the ball.
Gabriel Lewit: That happens.
Steve Lewit: And in financial planning folks, we have to pay attention to what is going on and control what we can control and hit the right angles and pick the right strategies. And that’s how you win, and I like winning.
Gabriel Lewit: And as I’m sure do the players in the tournament that’s coming up here. What’s it called? The US Open?
Steve Lewit: US Open.
Gabriel Lewit: Yeah. So, nobody likes to lose so let us here at SGL Financial help you win. That’s what we’re here for. So, if we can help you with your financial planning, any questions-
Steve Lewit: Let me hear it, Gabriel.
Gabriel Lewit: … that you have.
Steve Lewit: Let me hear it.
Gabriel Lewit: Give us a call anytime for a complimentary consultation here.
Steve Lewit: That’s so beautiful.
Gabriel Lewit: Thank you. 847-499-3330 or go to sglfinancial.com. Click contact us or email us info@sglfinancial.com anytime. Well, we’re excited to have you listening to the show. Thanks so much for tuning in with us here today. Have yourself a wonderful rest of your week or weekend, and we will talk to you on the next one.
Steve Lewit: Stay well, everybody.
Gabriel Lewit: Bye now.
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.
