Ep. 112: Gifting and Inheritance Strategies for Families
The X's and O's
In this episode, the hosts dive deep into the importance of gifting and inheritance strategies. They explore how families can effectively transfer wealth, minimize tax burdens, and create meaningful impact through well-timed gifts. They also discuss the psychological and emotional aspects of giving and how to approach conversations around wealth transfer with loved ones.
Key Topics Covered:
World Series Discussion
The hosts kick off the show with a light discussion about the Dodgers’ return to the World Series and how baseball brings joy and nostalgia.
Negativity and Financial Media
Brent, Matthew, and Josh discuss the pervasive negativity in both the media and in personal financial perspectives, particularly how clients often assume the worst, even when their portfolios are doing well.
Gifting and Generational Wealth Transfer
The conversation shifts to the main topic: gifting. The hosts discuss the emotional reluctance many older clients feel when it comes to gifting money to their children, and how families often struggle with the idea of wealth transfer.
Strategies for Effective Gifting
The hosts explain strategies to minimize taxes when gifting, including gifting shares with low-cost bases to children in lower tax brackets. They also highlight the benefits of front-loading 529 plans for education savings.
Encouraging Gifting as a Positive Legacy
Brent emphasizes the importance of not only gifting financially but also creating shared experiences. He encourages older generations to consider family vacations or experiences while they’re still able to enjoy them together.
How to Start Conversations Around Gifting
Joshua raises the point that families often don’t communicate enough about finances, which can lead to missed opportunities. The hosts offer advice on how to initiate these important discussions with parents or grandparents.
Practical Gifting Examples and Financial Planning Insights
Real-life examples of clients who have successfully used gifting strategies are discussed. The team also explains how to integrate gifting into an overall financial plan without disrupting the retirement lifestyle of the giver.
Wrap Up and Recommends
The hosts wrap up the show with a positive message about the benefits of well-planned gifting, both financially and emotionally. They also share their personal recommendations, including holiday lights and technology tips.
Connect With Evermont Wealth:
(909) 296-7977
Transcript
Welcome to the Retirement Plan Playbook hosted by Brent Pasqua, Matthew Theal, and Joshua Winterswyk of Evermont Wealth. This podcast dives deep into investment strategies, retirement planning, and current events, equipping you with the insights needed to craft a robust retirement playbook adaptable to any political or economic climate.
Join Brent, Matthew, and Joshua as they guide you through the complexities of retirement planning. Offering expert advice. to tackle challenges and the later stages of your journey. It's time to build your optimal retirement playbook. Now let's dive into today's episode.
Matthew: Dodgers world series Brent found out last night. They won. Are you excited?
Brent: I'm very excited. I mean, I've been waiting for this for a long time. I think part of it too, for me is that the world series that they won during COVID, like a lot of people discounted and rightfully so they didn't really like validate that world series.
Brent: And so that the fact that they're back is, it feels a lot more meaningful now.
Matthew: Josh, are you a baseball guy? Oh yeah. Huge. Are you? I didn't think you were Brent. Can you tell us? Cause to me, it feels like the Dodgers are in the world series every year, but. I don't really follow the Dodgers as closely as you do.
Matthew: When were they last in the world series? And then like they won in 2020, you said?
Brent: Yeah. So they won the COVID year, which I think was actually, yeah, it must've been 2020. That's
Joshua: the one that didn't count. So it was like the Lakers. Yeah, like the but they call the Lakers championship the bubble. Yeah. Okay. So the Dodgers weren't one without that was a joke I don't know if you sense my sarcasm.
Joshua: I did I liked baseball a lot when I was young man Kind of wore off as I got older was born.
Brent: Yes, so they won that in 2020 Okay, they won against Tampa Bay. Okay, and then the last time they won before that was 1988 against the A's
Matthew: Have they been in the World Series since 2020 because I feel like they're always good
Brent: 1988.
Matthew: Wait a minute. So they've only been in the world series in 2020. And that was
Joshua: it. That used to be my joke that the Dodgers hadn't been in, like, hadn't won a world series. Like the whole time I've been alive.. Until the COVID they've been good for a long time now. Yeah, they're good. They get playoffs every year. Yeah, they are. They go pretty
Matthew: deep every year. You know what's crazy, too, is the Yankees first World Series since, , 0 9. That's wild. Yeah, I feel like they're always good, too.
Joshua: I will say, I've been, I've been kind of watching the postseason here and there for baseball.
Joshua: I will be watching the World Series, L. A. versus New York. That's cool. That is exciting. Yeah. They got the best one. Like, so I'll be tuning into all of these games. That's for sure. Me too. I'm looking forward to it. Are you going to buy tickets? No, I think the minimum ticket for is game one in LA. I don't know.
Joshua: I think it was a thousand dollars. Wow. Wow. Are you going? No.
Matthew: Are you interested in going? Yeah. If my kids were older, I'd probably buy tickets because I feel like the world series doesn't come around that much.
Joshua: Yeah.
Matthew: And then it's Dodgers Yankees. Like
Joshua: that's cool to give some context. So if you can get in for a thousand bucks, I think the messy.
Joshua: Game where he played in LA versus LA FC. The minimum ticket was like 1500 bucks Yeah, and that wasn't even a playoff game, right?
Brent: So the last time the Dodgers were in the World Series was in 2020 Wow And then they were in the World Series in 2018 in
Matthew: 2017. So they have been in they just took a while to win it
Brent: Yes, but before that they hadn't been in the World Series since 1988 So they were on a long drought for a very, very long time until they really started picking it up in 2017, 2018.
Matthew: So Josh and I are going to be sitting this world series out. Are you going to the world series
Brent: from what the price tag of the tickets are, are being talked about right now? I haven't looked them up yet, but I would be out at 1, 500, , kind of like that starting price of what I've been hearing. I'm, I'm not going to the Dodger game without my kids.
Brent: And so four tickets is a lot of money. I'm not going to spend six, 7, 000 to go world series game because watching it on TV is too good. Now,
Matthew: you know, I'm going to have, you know, I have a comeback for you. Right. You need to take your son.
Brent: Yes. I mean, it would be a very, very cool experience, but again,
Matthew: I, whatever you have to do to get everything signed off on.
Matthew: You need to take your son.
Brent: We'll see what price we'll see what the T the price of the tickets come out at as more information starts to come out.
Joshua: I know you were looking that up, but I was saying the tickets were the same prices when Messi was playing LA FC in LA.
Brent: And what was that?
Joshua: About 1500 bucks. So, and that wasn't even a playoff game.
Joshua: So what I'm saying is also, yes, that price tag is huge. But it's not overly outrageous to other big events in L. A.
Brent: Watching the playoffs on TV, there was seats that looked like available in the upper decks along the third foul line and the first base foul line. So it seems like they weren't completely all sold out for these playoff games.
Matthew: Your son likes baseball? Yes. And you like baseball?
Brent: Yeah. No, it'd be a great experience. I used to
Matthew: love baseball as a kid, and the Angels made the World Series. Right. I don't know. What year is that? Like 2002? A long time ago. A long time ago. I'm an Angel fan. And they haven't sniffed the World Series since.
Matthew: I think they haven't made the playoffs in like 20 years or something like that. Dude, you don't know what like the next 20 years for the Dodgers are going to look like. It would be like probably one of the best moments you could have with your son.
Brent: Yeah. Pretty. It's, it's a. Great event to potentially look into as your financial.
Matthew: It could be a once in a lifetime of it as your financial planners. We approve this expense
Joshua: also because you don't know. Also know if your son is going to continue to love baseball. Like right now you guys have that bond, right? So if we're in the talking about why you should go camp, that would be my recommendation.
Joshua: You should go.
Brent: Would you spend 1, 500 on a ticket?
Joshua: For baseball?
Brent: No. Would you, would you spend 3, 000 to go to a game?
Joshua: Would I spend 3, 000 to go to a game? I think. For the right game, I would definitely think about it. Yes. And the reason why is again, with kids too, and knowing it might be like that one lifetime memory, core memory, I would consider it.
Brent: Would you spend 3, 000 to go to a world cup final game? Even if USA wasn't into it,
Joshua: if USA was into it. Yes, absolutely. I would. Yeah, I would go work. I would do whatever I had to do. If the U S is in the final to try to get a ticket to that game, you would take a 401k loan. Yeah, absolutely. Yep. Yeah. I mean, cause then I can work that off.
Brent: It's pretty neat. They have the roster to get to the World Series. They've done a really good job, but that Yankees roster looks pretty massive as well.
Joshua: That was gonna be my next question. Do you think they, they got a shot to win it?
Brent: Pitching is obviously a concern. They've got, you know, a billion dollar roster and they have no starting pitchers.
Brent: So we'll see how that works out against the The big studs in from New York.
Matthew: Do you think Otani is going to pitch?
Brent: I don't think he can. I don't think his arms ready. I've know he's through some bullpens getting is getting prepared for next year, but I don't think that he's in any capacity to throw this.
Matthew: What do you got spooky season? It's spooky season. Do you want to talk about Halloween? Yeah, it's spooky season. It's spooky season. You
Joshua: guys ready? Yeah. Yeah. Josh, your kid's dressing up.
Joshua: Oh yeah. Yeah. I wasn't never a big Halloween guy, but having kids has made me like really like it now seeing them light up or my son, my daughter's still too little, but my son like loves everything Halloween right now. So he already has his costume. He's going to be Jack from nightmare before Christmas.
Joshua: And my daughter's going to be Sally. It's
Matthew: popular. We were talking with our neighbors the other night and their kids are being that too. Oh, really? Yeah. It must be a popular, are you
Joshua: going to dress up? I think my wife has something along like a theme of the movie for us to wear. Okay. Yeah. So I'm not, I'm, we're going to be completely, you know, engulfed in all of the Halloween stuff.
Matthew: My girl's going to be a mermaid and my son's going to be a shark. That's cool. My wife and I were going to be scuba divers. Oh, perfect. Scuba Steve.
Brent: I feel like you guys always dress up, don't you? Yeah, you have to. Now, do you go buy your costumes or do you rent them from somewhere?
Matthew: Usually she creates them.
Brent: Oh,
Matthew: piecing together things online and ordering things. Sewing she enjoys it.
Brent: I didn't know she was like a seamstress.
Matthew: Yeah, she was. So one year she made us a sushi costume. It's pretty cool. We went to Brent's. Brent had
Joshua: a Halloween party. That's right.
Brent: What happened to your Halloween
Joshua: party?
Brent: My Halloween party got taken over by my kids wanting to go trick or treating with their cousins, and so we're with them every year now.
Matthew: Are your kids dressing up?
Brent: They are. My son's going to be Deadpool, which I'm not really familiar with what that character is, but I feel like My son always picks characters that he likes the little gadgets that come with the costume. He doesn't always just pick the character. He picks the gadgets. So
Joshua: cause Deadpool has two swords, he has two swords.
Joshua: That's cool.
Brent: And then my daughter's some other cartoon or some kind of character. I have no idea what it is. That's not my department. I mean, I don't pick out costumes and I'm not, I don't either. I don't
Matthew: do any of that really. Are you going to dress up this year?
Brent: I think I will. I usually
Matthew: do. What are you going to go as?
Matthew: I
Brent: have no idea.
Matthew: I have a good one for you.
Brent: I usually piece mine together the day. Could I have
Matthew: a good one for you? I think you could, I think you just, you just need to buy a wig and maybe a hat. What's that? Okay. I think you should go as Donald Trump. And your wife, she goes, Harris, dude, would it, that'd be great.
Brent: It would probably stir a little bit of of some laughter at the party.
Matthew: Yeah. I mean, that's like the best joke costume this year.
Brent: Yeah, it is. I agree.
Joshua: That would be
Brent: hilarious. My wife's favorite costume I ever dressed up on was I dressed as a. Construction worker. Oh, she liked that.
Brent: I put boots on because
Joshua: it's so different than your normal attire every day. The suit,
Brent: put some boots on and a helmet. Did you like put dirt on your face? Put some paint on my hands. Put a drill.
Matthew: And did you wear a tool belt?
Brent: Yeah, I wear a tool belt. I had like the vest on, like the orange vest. I think you
Matthew: should just do that again, then.
Matthew: Who did you borrow the tool belt from? Your dad? My
Brent: dad. He brought me home all of this construction stuff.
Matthew: Hey, hey dad, I'm gonna be a construction worker this year. Can you just bring me over what you wear to work ? It is one of those day of costumes. Yeah. That's cool. That's cool. So have you guys noticed that everyone's really, really negative today
Brent: in our office or just in the
Matthew: world?
Matthew: in? In the office. In the office and the world. Why is that? I don't know. Well, I have some theories. Josh, what do you think? No,
Joshua: it is. I'll just start with like you turn on the news. It's just all negative, right? That's been the case for a long time. That doesn't help but I feel like yes, the world is very negative now
Brent: do you think because a lot of this negativity on the news besides Like all the the news that they talk about which is like this person got shot and killed this person got murdered They talk about all these things, right?
Brent: But did did the news make politicians negative or did the politicians make the media negative?
Matthew: I think what ended up happening is there's a, we have so much data now, engagement, views, all this different analytical stuff, and what these media companies figured out was if they were negative, people watched more and listen longer and, you know, tuned in more frequently.
Joshua: It's the same with the internet.
Matthew: Yeah, well, because the internet's really negative too.
Brent: Do you notice that humans are actually wired to notice negative experiences more?
Brent: Then positive experience.
Matthew: I didn't know that
Brent: because negative experiences have more of an impact on you than a positive one.
Joshua: And you learn more from them.
Brent: Correct. And so those negative experiences will actually resonate with you much longer and have a much bigger impact. And I always noticed this about kids versus.
Brent: Somebody that's in like their their late 80s a child who's just beginning their life like cartoons are in beautiful colors They're very bubbly. They're very happy a child a lot of times at a very young age They're very positive and very happy but an older person let's call them in their 80s is not that same way They don't view things in bubbly characters in in cartoons.
Brent: They see cartoons that even
Joshua: have the same appeal
Brent: correct They see what they're watching on Fox news or CNN, where it brings all this negativity. I mean, those are very different extremes
Matthew: because I feel like they're like even most people you meet these days or you come across like we're in a client facing business.
Matthew: So we talk with a lot of people. It's like they're just waiting for something negative to happen. Like they're like preconditioning themselves. Oh, something bad is going to happen. With, you know, things are actually quite positive out there.
Brent: Yes. People are bracing for impact. And why? Because people have been affected by trauma.
Brent: In all different forms of trauma, everybody's been impacted by some kind of trauma. We can all go back into our life and say that we've experienced different types of trauma that had an impact on us.
Matthew: So, so the 08 market crash from the stocks and the houses, right? I feel like everyone brings it up.
Matthew: Stocks are gonna crash like 08. Or houses are going to crash like Oh seven Oh eight. It's just because it was such a negative impact event. They think it's going to happen again. Is that what you're saying?
Brent: Yes. Or COVID. Right.
Matthew: Right. And the correction
Joshua: from COVID scary, even though it recovered very quickly, I mean, what, over 30 percent drop.
Matthew: Yeah. I was locked in my apartment with a mask on by myself watching the market go down. Scary.
Brent: But news media, news outlets and social media thrive on engagement, which in order to get engagement. It's focusing on the things that people have the most impact on. And that's negativity,
Matthew: right?
Brent: So in order for these platforms to succeed, they're thriving off of this negative.
Matthew: Yeah, I agree. So I think social media has made it a lot worse.
Brent: And in social media now, everybody's comparing each other to somebody else. You see some, something somebody else is doing. You're like, why can't I do that? Why haven't I done that? Why are we not doing that? You know, everybody's constantly in comparison of like.
Brent: You know, this personal identification of whether or not they're, they're doing enough in their own life.
Matthew: That's why I don't post a lot of personal stuff to social media anymore.
Joshua: I feel like social media though has evolved because like the algorithm, Willie, when I log in and I follow who I follow, it's actually feeding me a lot of more positive content.
Joshua: Like it's like the things that I like, right? It's golf. It's cute puppies. It's like things that I've engaged in. And so it isn't actually as negative when I would actually think about it. As it used to be you engage in cute puppy videos. I'm just giving an example, but yes, I do like puppies Yeah, I mean who doesn't
Brent: but that could be how now you're able to separate it At this stage of your life But I feel like somebody who's 20 years old or 22 or 25 Or even in their teens or adolescence and they're using these platforms They're not able to just see the positive of things like you could look at golf You And say, wow, that's awesome.
Brent: I could learn something from it where somebody in their twenties could be looking at that same golfer and say, why can't I golf like that? And then they feel inferior.
Matthew: I could see that, especially at a young age. I guess if when I was growing up, if I had social media and all this stuff and. You know, when we were in our twenties I probably would have felt like a loser if I looked at people who were doing better than me in my twenties.
Brent: Cause I see people that I didn't have a lot of friends that go on RV trips, right? They have their RVs and they go camping. And to me, that stuff seems, you know, like it's. Fairly fun, but like that, that isn't for me. Like I don't want to go RVing around. Like I, first of all, I don't want to drive an RV or a trailer.
Brent: Neither do I. I don't want to set up. I don't want to be in dirt. Like I don't want to go do all the things that it takes to have that type of experience. But I also look at them and see the enjoyment they're having. And so there's times where I compare myself, like, should I be out there trying to buy an RV so I can have those same experiences for my kids?
Matthew: As your financial planner, Brent, you could buy a lot of world series tickets for one RV, right? But what it tells me
Joshua: is like, Are kids engaging with social media too soon?
Brent: Absolutely, they have to be.
Joshua: Because it's a combination of that and then like, coping as well, right? So I, I just, that's what it tells me is like, what is the right age then?
Joshua: To start really engulfing yourself and if we're talking about the world of negativity. Where you can't decipher what's negative or what's positive.
Matthew: Is it a free time issue? Maybe because I think of the time, like, you know, as you get older, you probably have more and more free time. Like the three of us, we don't have a lot of free time.
Brent: No. What's free time.
Matthew: Yeah, exactly. Right. Cause we're, we're raising our kids and they're at a demanding age. But when you're in your twenties, your teens, you have all the free time in the world and then once your kids are older, you actually get a lot more free time too. Right.
Brent: Yeah, it's but it's also the way that they're spending the free time,
Matthew: right?
Matthew: So they're on social right?
Brent: Yeah, cuz we weren't like that. We were playing basketball in the street or every sport football Like you don't see kids in the street playing sports the way that we used to
Joshua: no You know because you they're being stimulated at their fingertips whenever they want right?
Joshua: There's that engagement. It's right here at their fingertips So there's no like craving to say Let's go out and do this, right? Go play basketball with my friends, or let's go to the mall, you know, ride our bikes to the seven 11, whatever it may be.
Brent: The other thing that I think contributes to the negativity that we're constantly seeing and hearing, and that does go back to politics.
Brent: I think whenever you have people at the highest positions of power talking so mean. To everybody to other people and they're engaging with the rhetoric of being disrespectful and it's okay to talk threatening to somebody to degrading to somebody and I'm not talking about any political party. I'm just talking about all of politicians in general,
Joshua: the culture of politics, culture of
Brent: politics is so rough that it's telling society that it's okay to talk to others.
Brent: This way. It's not setting a
Joshua: good example, right? It's not. They're not role models
Matthew: anymore.
Brent: Nope.
Matthew: Politics is kind of like the WWE. It's all for show.
Joshua: But I think that why we're talking about it is because we see this with finance as well, right? Right. We were talking about the economy, even though it might not be that bad.
Joshua: I feel like the sediments, like it's negative, the economy is doing poor, the stock market's doing poorly, and that might not even be the case. Right. But the theme is we're
Brent: just always negative. And how many times in the last year and a half. Or the last 12 months did we have clients come in the office?
Brent: And they were surprised that their portfolio was up when their portfolio wasn't just up. It was a double digit Yeah, yeah, especially in the whole year
Joshua: like that beginning of the year that january to like april Got a lot of that from our clients. Like how bad am I doing? Right? And it wasn't, it was the complete opposite.
Brent: What were they being fed to get to that conclusion before they came in here?
Joshua: And I think a lot of it is relation to the economy, right? The economy's not doing good. The recession's looming in, you know, inflation's high rates are high and they associated those factors into a bad market, which that wasn't the case.
Brent: So how should people stop becoming so negative and become positive?
Joshua: That's a good question.
Matthew: Yeah.
Joshua: I don't know.
Matthew: I don't know what has to change. Yeah. I'm not the expert on it.
Brent: I mean, I think it starts with, you know, turning off the things that contribute to people's negativity. Right. Yeah. It's, it's mindful, whether it's meditation or breathing or positive focus, positive thinking.
Brent: I mean,
Joshua: my tip is always like focus on the things you can control. Don't spend as much time on the things you can't. That's how I try to live my life.
Matthew: That's what that's well said Let's pivot to something. That's a pretty amazing and optimistic
Brent: positive
Matthew: But also something that people like I feel like this is still controversial, you know to this day people trying to make it controversial but Did you guys see a, how amazing Elon Musk is or, or was like, let's, you see the week that guy had.
Brent: Yeah. So I saw some of what's on our list of things that he released. I saw some of them. I did not see the heavy booster.
Joshua: Oh, that was cool. So
Brent: you, you have to fill me in. I've seen zero videos on the heavy booster.
Joshua: So it, it, they had a launch and it launched the rocket into space, but the booster, right? Like the actual engines that boosted it. Like I think they have levels, it breaks off and then it came back. But it, why, why was such a big deal? Cause it's the biggest. Rocket that they've ever done and it came back to earth and it was caught in like this Contraption to preserve it to use it again.
Joshua: So which ultimately is just you know technology wise it's amazing But then also gonna make future space travels, you know The whole colonizing Mars, all of this is like slowly becoming more and more of a reality. Cause they're also reducing the cost to do it because they're able to reuse these rockets.
Brent: So is he, is he the one engineering all of these things or is he have the engineering ideas, like some of the infrastructure, brainpower, and then he has all, all these other people putting it together, the pieces together.
Joshua: I don't know. I think he's, he's just a really. thinker and leader. I mean, cause he's spread out pretty broadly now, right.
Joshua: With all of the businesses he has and all the ideas he has, but really, you know, just a brilliant mind to be that even just from a leader standpoint. And it's very impressive that he's leading these new innovations, not only in
Joshua: Okay.
Matthew: So then with Tesla, like, I feel like this is a few hours later or a few days later after the SpaceX thing, he rolled out the cyber cab, which is a fully autonomous cab think Uber, but without an actual person in the car something called a robo van, which is kind of like this mini van looking thing that could autonomously transport large groups of people and do deliveries.
Matthew: And then to me, what the, what the coolest thing was with the optimist robot. So it's supposed to be like an at home robot where you purchase it and it, you know, helps you out around the house. Does your chores, does your cooking and does your cleaning? I'm sure it could walk your dog one day like that kind of stuff.
Brent: Yeah. We're going from like an Alexa, right. Being in your house to potentially now a robot being in your house.
Joshua: Yeah, that's cool. Have you seen iRobot? The movie with Will Smith, I think that's the right name. Yeah, yeah, he's, it's Will Smith. Okay, so they have robots, it's a futuristic movie. And like, they start to put them into people's houses.
Joshua: So they use that image of like the iRobot for all the memes. Now, I don't know if you've seen all of them, you know, so like one of them was, it had the iRobot image, but it says like, you know, I'm a, this is a new robot. And it has the robot looking at you like kind of confused and says, you are going to sit here and wiggle my mouse for eight hours, suggesting like I'm working from home to keep my screen active.
Joshua: It was pretty funny. So there's like a bunch of memes now that I've been laughing at with all of the iRobot stuff and his robot.
Matthew: Yeah. So, I mean, I'm probably going to buy one of these robots. I
Brent: think it's really cool. Do you think future generations are going to be like you guys cleaned your own dishes?
Brent: Yes, absolutely. Because all the housework and chore works can potentially in the future be done by a robot.
Matthew: I mean, just like when we look back at like how our parents used to watch sports or like even how we watch football in the nineties, it's like, there was only one game on TV. Like. That was it.
Brent: Could have two robots around your house. Basically. It sounds like doing whatever that you want
Joshua: Yeah, you could but how much is that going to cost you can everyone afford a robot?
Brent: Maybe not right now, but in the future, I would have guessed.
Matthew: So they're pricing them like entry level cars. I think he said his estimate is they're going to be about 35, 000, but I'm sure they're going to attack on a subscription and all this other stuff, tax credit your robot to be more efficient. I feel like you're going to get tax credits to not buy robots,
Brent: but here you tell your robot to go mow the lawn and do all your house chores and your house is going to be spotless.
Matthew: Yeah.
Brent: Would you get in a cyber cab?
Matthew: Sure. Why not? I've actually seen there's the way most, I don't know if you guys are familiar with the way most I've seen those around town, especially, I don't know if you've seen one at LAFC, but I feel like they're always down by where the LAFC stadium is
Joshua: in downtown.
Joshua: Yeah. Where
Matthew: they, they do the delivery. I don't think they, no, I've seen people. I'm like, Oh, yeah, yeah, like a cab. Yeah. I haven't seen this.
Brent: So do you use your car as autonomous driving?
Matthew: No, I'm too scared.
Brent: Why? But you mean an autopilot or the full self driving full self driving?
Matthew: No, I haven't used it. I'm too scared,
Brent: but your hands are on the wheel and your foot's right there.
Joshua: Yeah, I know that I drive my kids though, but you say, you said that you get in a cab that you're not driving, correct? That's autonomous. You have no power
Brent: of driving.
Joshua: Yeah, but correct. But I also have a lot less liability for that, but you don't always drive your car with your kids in it. I haven't tried it.
Brent: So you wouldn't really get in a cyber cab. No, he would not at this point. I'll
Joshua: answer the question for him. I mean, I would. Yeah, you would I would
Brent: okay by myself see I wouldn't but I've also used my full self driving service and I hate it I don't like it and I turn it off every time I last maybe like two or three minutes And the reason why is because it drives like a robot,
Joshua: but I don't
Brent: want to drive
Joshua: like, but also like, okay.
Joshua: So is it going to save me money first off? Why would I be using it over
Brent: Uber? Well, you'd be using it because you don't want to get into somebody's smelly car. Sure. Which going into Uber, there's a lot of downsides to Uber. Sure. You never know what you're going to get. You never know what the type of person you never know.
Brent: The smells are going to be the heart. I'm sensitive to smells. I don't like getting in smelly Ubers. Like I've, when my car's in the shop, I've had to do enough Ubering around. Like it's not fun.
Joshua: The Uber is not cool anymore, but do you trust a human over technology to drive you most of the
Brent: time at this point?
Brent: Yes. But I know I'm assuming the cyber cab is going to be at very advanced. I think just like washing dishes. Our future is going to be our, our next generation saying those people actually drove themselves around. They're just not going to have the concept that people used to actually physically drive cars.
Matthew: Yeah. It's like when we had to look up and do our school papers using the encyclopedia. Did your guys parents buy the encyclopedias from the door to door encyclopedia sales guy in the 90s? No,
Joshua: no, my grandma had a had a complete set though. Oh,
Matthew: yeah, my parents bought from the door to store Encyclopedia sales guy she had in her closet.
Matthew: I remember it was red. Yeah, we had him.
Matthew: . So I saw this pretty cool chart online and this is contrary to what we hear on TV. But it's this wealth graph chart showing like the bottom percentile of wealth up to the top percentile wealth and the growth since 2019.
Matthew: So this is like a five year growth. I would have thought, you know, based on what I heard on TV, that the group that was growing the fastest was the richest Americans, right? The top 1 percent you're Elon Musk, you're Jeff Bezos, you're Mark Zuckerberg. So those people, right? Like the super rich, however, it's the bottom 50%.
Matthew: Has seen their wealth grow the most since 2019. So it's actually the people at the very bottom who have had their wealth grow the fastest.
Brent: Could that just be from inflation?
Matthew: No.
Brent: Could it be from interest rates?
Matthew: It's most likely from 401k participation and how good the stock market's done since then.
Joshua: And indirectly inflation because wage growth has kept up, right?
Joshua: Well, there you go, right? And so you've probably experienced your biggest, especially for that bottom. 50 percent the biggest wage increases you've ever have because of inflation.
Matthew: And what's interesting is the 90 to 99th percent. That's actually been the worst at only 30 percent growth. People are still rich.
Matthew: Yeah. They're still rich.
Brent: But is it people are 401ks. And investing has become mainstream. It's not just for the elite anymore, a separate group. It is mainstream for companies to have 401ks and employee sponsored plans. Companies a lot of times still are matching or making it enticing for people to contribute.
Brent: And regardless of their investment elections, people are able to at least pick some elections that. You don't have to have an investment background to pick a good investment option. And so people are growing based on market growth.
Matthew: Yeah, it could be in and also the house housing markets done well. Yep. So if they lucky enough to own a home in that percentile, they've seen your equity in your house grow.
Matthew: It
Joshua: doesn't even matter the size of the home, right. Or the price of the home. Right. There's been appreciation.
Matthew: So essentially though, what that graph is showing is that we're the richest we've all ever been. So I thought that was pretty cool.
Joshua: It's a little contrary to what, again, like the environment everyone feels that are in right now is
Brent: it's a negativity, right?
Brent: Like negativity, all the expenses, everything's super expensive. But people actually have more money than they've ever had before.
Joshua: But there are two different things, right? Net worth is different than what you feel from a monthly cashflow basis. Yes. Right. So you might feel your budget might feel tighter, but you also have to look at how is your net worth doing overall.
Joshua: And this is suggesting it's better than it was five years ago.
Matthew: So moving on to that, I think we should talk about gifting and inheritance a little bit. I think it's going to be an interesting topic.
Brent: Are you, do you want some of your listeners to gift to you or what?
Matthew: That'd be great. Please give to me. Well, would they need to give to you to get those Dodger tickets?
Matthew: Yeah,
Brent: that's true. And if anyone wants to throw me down some Dodger tickets, that'd be amazing.
Matthew: So there's this post that was on the internet on Reddit that was written by a millennial. And I thought the post was kind of interesting and a really good topic for a financial planning podcast. Do you guys want me to read this and bore?
Matthew: I
Brent: think you can paraphrase it, but at least give us the context of it and kind of maybe read some of it.
Matthew: Alright, so he starts off by saying, My wife and I have spent two decades leveling up jobs and careers and are now in our late thirties. Hey, that's just like us guys. They have two small children and they live in a high tax state.
Matthew: Sounds pretty familiar. They, they scraped enough to buy a small ranch house and they have two large cars for their family. Yeah. And he said their credit suffered, and they're personally in credit card debt. And they're slowly paying it off, and they're getting bled out to death by their kid's child care costs.
Matthew: Yep, all about that. He said this is typical millennial stuff. And then he said, last week I came across my father in law's account summary. And he has ten million dollars.
Matthew: He said, he mentioned that to his own father and he said, well, he's doing a little bit better than I am. And then the poster goes all caps and says literally what the F I would give my last dollar to my son to make sure he was more comfortable. And make sure he didn't suffer debt or bad credit as long as he was working he said our parents are sitting on piles of gold and watching us.
Matthew: Navigate this world you guys have thoughts. I
Brent: mean, I have a lot of thoughts. I mean, this is not uncommon,
Matthew: right? It's not
Brent: We see a lot of people of either similar or less net worth Struggle with the idea of gifting to their kids Even though they're in a position to have enough money for the rest of their life And A lot of times when I bring up the conversations of gifting, it is A lot of a foreign concept to a lot of people, they are not really generally open to the idea and it takes a long time for people to come around to the idea that gifting can be very helpful for their kids and there's.
Brent: A lot that their kids can benefit from, from gifting, but maybe it was their parents didn't gift them. And so they're at the point where they're like, I'm not going to gift my kids and my parents didn't give me anything, but I don't know that that's the right attitude.
Matthew: Yeah. I don't know. I mean, when you look at like the wealth chart, we just looked at where, you know, this generation is so much more rich than the previous generation.
Matthew: You would think that gifting would make some sense, but I know you work with a lot of the clients at the firm and you know, your average client size is probably, you know, north of 1. 5, 2 million. What are your conversations like with your clients?
Brent: So when we talk about gifting with my clients I bring up to them how they gift, what the estate tax rules are, what the tax implications will be when their kids inherit it.
Brent: How the distribution is going to be when the kids inherit it, how it will impact their life, the rules they have to follow when they inherit it what the step up and basis are. And then I show them if they start distributing some gifting out now, how little to no impact that's going to have on them or their future and why it's important to potentially consider gifting.
Brent: Sometimes I go into the conversation with them about just gifting shares with low cost basis on them because sometimes that will get them entice them a little bit more to gift because, Hey, you know, we bought Apple 10 years ago. You're never going to sell this in your lifetime. Probably. Yeah. We could wait for a step in basis for somebody to die.
Brent: But why don't your kids in a lower tax bracket much lower? Why don't we just have them so or they're sometimes now having a capital gains tax per tax bracket?
Matthew: Yeah, so what you're saying is If you have like a low basis stock that you made a lot of money on you could gift it to your kids And then if they so choose they could sell the stock and hopefully they're in a lower tax tax bracket than you Correct, and sometimes it's zero percent based on income.
Matthew: Correct. Have you seen that utilize a lot Josh?
Joshua: Yeah, I've seen this utilized. I have a question though, for both of you guys really. How many of your clients actually know how to do these types of things or are familiar with how to gift money to grandchildren or children and the taxes involved in that?
Joshua: Is part of this just the education around successfully doing this transfer? Do they even know they can do that?
Matthew: I'd say, I'd say yes and no. I feel like when it comes to grandchildren, they always want a gift, right? But when it comes to their own children, they don't want to. For instance, the amount of times we open up UPMAs at this firm for, you know, grandchildren, and they're like, oh, I want to put some money away for the, for the grandkid.
Matthew: As a minor account, right? As a minor account, exactly. Absolutely. You know, cause they were just born or they had their fifth birthday, whatever, and we want them to be financially successful. But then on the other hand, their kids are, you know, out there struggling like this
Joshua: poster, see, but again, you know, kind of the education, they understand that there's a type of an account, right?
Joshua: I can open up a minor account or I can have a five 29 account, but if you're just gifting, you know, 17, 000 to your child, do they know how to do that? And where, where is that money coming from? And where's that money going? Yeah, I don't think most do
Brent: and I think the part that they get hung up on is they don't understand the tax Implications or they think is there a tax benefit for me to do it or my kids gonna get taxed on this money so they have very Simple questions that you know that they can get answered But they're not looking at that and saying now that I got these answers about how the tax gifting works I'm gonna go ahead and go just go gift my kids A lot of people are going to sit on their wealth because I think they're afraid to run out and they're afraid of what potentially could happen if they were to run out of money and they don't end up gifting, but gifting, if you have a good gifting distribution plan, like, you know, making your kids not receive any of their inheritance till 60s is probably far less beneficial than Then them getting a little piece of that inheritance, you know, in their forties or thirties,
Joshua: I feel the same way.
Matthew: And as a grandparent or parent, don't you want to see your kids enjoy what you've worked for?
Brent: I would think so, but I don't think they think of it that way. And I hear a lot of clients say things like, Oh, well, my kids have more money than I did at that age. And so they think that everybody else is living a better life.
Brent: It's an interesting take. Yeah. So I, I don't know exactly why the mindset is not so much giving and thoughtfulness and, you know, I'm here to help out my kids. But we're all in a stage right now where our kids are 10 or under. And so we view our kids as these little, you know, little blessings, like they are the love of our life, but I don't know, maybe people's feelings changed towards their kids when they get in their twenties.
Brent: You know, they've made a few stupid decisions or they've made some mistakes and you know, maybe they don't have that same type of relationship with their kids as we do now.
Matthew: Yeah, I get it. But like this off the going off of what this post says, it sounds like, you know, it sounds like I could be golfing with this guy.
Matthew: On, on, you know, a Saturday sounds like him and his wife both, both have decent jobs, have kids, you know, they're trying to get by and you know, their, his father in law is sitting there on a pile of money.
Joshua: And I just don't know. Also, like, is there not like enough conversation around. The family's finances.
Joshua: How much is that son sharing? How much are the parents sharing to actually know each other's situation to even make this type of wealth transfer possible?
Matthew: I don't think there's a lot of conversation about money at all going on. And maybe there should be, right? I think
Joshua: that's the thing I take from like just this post and with working with my clients too, because I do feel like when we do talk about the strategy, it opens their mind up a little bit more to have these types of conversations with their kids.
Brent: But finances is very private to a lot of people. I remember when I started in the industry 20 plus years ago, like it was very difficult to ask people how much money they have in their savings account or their bank account. You know, that that's something that like most people don't always feel comfortable sharing, not only with somebody who's a professional, but let alone with their kids or their in laws or.
Brent: You know, with other people around potentially,
Joshua: I think that that's something we can do better because it's also that privacy has equated to the younger generation, not understanding finance. Like if we're not sharing our own personal stories and we're not teaching our kids about money, how are they ever going to have like a.
Joshua: Craving to go like learn more or ask more questions, right? I do believe, I mean, I agree with you. It's, it's become private and maybe it shouldn't be,
Brent: you know, and I think where people can also at this level of when people have net worth like this and they're potentially not gifting, what I think is that they should at least bare minimum do.
Brent: Should probably be taking those families on trips and vacations and utilizing their hard work and their hard earned money. For experiences because those the younger family is going to experience those trips when you pass away and that money goes to them
Joshua: Yeah, but why
Brent: not do that with them? So you get those experiences in your life But a lot of people will make them split that cost of that trip or they'll make them split part of it Like that's not right
Joshua: Accelerate the enjoyment Correct.
Joshua: To now. Yeah. Instead of it waiting
Matthew: till later,
Joshua: or you're not being here.
Matthew: Well, when my grandparents passed away a few years later is when my family took us to Europe for the first time, right? But grandma and grandpa weren't there because we were using the money they left us. And would they have enjoyed going to
Brent: Europe with you guys?
Matthew: Yeah, they went every year. They would probably would have loved to show us Europe.
Brent: Yeah, I mean, I think I hope I hope this isn't always the problem that society has that when you have a level of wealth, hopefully, you know, that you have enough to last you the rest of your life that you share those blessings with your kids.
Matthew: Well, at 10 million bucks, I could tell you one thing you're doing. Okay. Because here much that portfolio should be generating at least half a million dollars in interest.
Brent: But see, I don't think that the 10 million thing is the right thing to do. The number that really sets the standard.
Matthew: What number do you think it is?
Brent: I think it's a couple million bucks easy or less that someone could have. I think even at a million or a half million dollars, depending on situation. We were talking about before the show that we see people that's even has less money than, than all of this. Like we're talking a few hundred thousand dollars or can't afford to do it.
Brent: We see them giving to their kids more than we see giving to the, with the wealthy. A
Matthew: hundred percent. I see more gifting from people with under two 50 than I see with people over 2. 5 million.
Joshua: And a lot of that though, like it's a different word for me. It's like helping. Cause the situation normally to me when I see people with under, you know, 250 giving money, it's to help them.
Joshua: It's not even gifting. It's not to go take a trip. It's because they're struggling. They're just more likely to go help. So I feel like they've struggled too.
Matthew: Right. Well, one thing I'll say if you're older, Retired boomer listening to the show and you know, you have kids around our age, thirties, forties, and you know, they have their own kids.
Matthew: You have your grandkids chances are they could use some kind of financial help or you know, support in one way or the other just to take some stress off their plate.
Brent: Yeah, and I, I do think that's the case for a lot of people. I think that things have become very expensive. I think that, yes, kids is 401ks have grown, but their day to day, month to month cash management hasn't been able to flourish over long periods of time.
Brent: And I do think a lot of kids are challenged and strapped financially, more so than they're probably telling the parents.
Matthew: Right.
Brent: But I, on the other side of this, I will say though, I think that parents are also afraid, That if they do give their money, give money to their kids, that the kids are number one going to expect it.
Brent: And number two, depend on it. And I think that's what the they're trying to constantly avoid is saying, just because I gave you money this time, doesn't mean I can afford to do it next time, because they might not always be in the same financial position.
Joshua: Okay. When do I turn off the well, right? When do I stop doing this?
Joshua: When does it become a problem? And then, so like all of those questions probably just pause them from making any sort of decision,
Brent: right? Cause they could say, well, I, I'm going to gift my kid. Let's just call it 5, 000. Okay. Now my kid's gonna change the way they think of me because they think I have all of this money.
Matthew: But it doesn't just have to be 5, 000. It could be, well I'm gonna pay for private school. So that's off, off my kid's plate. Or I'm gonna help pick up the daycare bill. Something like that.
Brent: Which we see a lot of that. Right. You see more of that than we do parents actually physically writing their kids gifting checks.
Brent: Or I'm
Joshua: gonna front row 529 plan so you don't have to save for college.
Matthew: I went with a prospect the other day. He had the largest 529s I've ever seen for his kids. And he said that his I think he said his father in law front load, the five 29s. I'm like, fine. It's a good strategy. Somebody did that strategy.
Matthew: To let the listeners know you could front load a five 29 plan with a large deposit. And these five 29s, this this person had, they had over a hundred grand in them. Yep. It's going to pay for college for the kids.
Brent: Yeah. They're on their way.
Matthew: Yep.
Joshua: It's one less thing to save for, for that young family.
Joshua: Exactly.
Brent: So did we in this segment talk about things that were negative or positive? Are we going to leave the listeners with a negative thought or a positive thought? Cause we talked about negativity.
Matthew: Well, yeah, it was a negative, it was very negative, but I think it's positive. Like if you have enough wealth where you feel comfortable, I mean, you should be gifting it.
Matthew: And what I usually tell my clients, like if I have clients who are above, like, you know, the two and a half threshold in retirement, as long as they're not heavy spenders, like We're not really concerned about you running out of money at that point. We're more now transitioning to a tax minimization and gifting conversation, or you need to start spending a lot more.
Joshua: The conversation is about enjoyment. Yes. Right. Right. Like that's where the conversation is gone. I think that's positive. And I think if you're creating a plan, that's positive, right? Like if you have this type of net worth, you have this money and we're going to try to be as efficient with it as we can to not only bring enjoyment, but potentially help your family.
Joshua: Creating that plan is a positive thing, not a negative.
Brent: You know, I think all three of us would agree that. A financial plan is like a puzzle and you have all of these pieces and everybody's pieces are different, but when you put all those pieces together, it makes that person's picture. I think gifting is definitely one of those pieces to the puzzle.
Brent: I think it just needs to be focused on and explained and discussed more so that it becomes part of their picture more. It's not just this little piece on the side, but it's actually a part of their picture.
Matthew: Yeah.
Brent: Well said. You have a recommends.
Matthew: Yeah. I have a, a good recommends today for you guys.
Matthew: We got a couple weeks left until we hit daylight losing time, which is my least that such a hot
Joshua: topic with you every year.
Matthew: My least favorite time of the year is when we switch the clocks. Back an hour and wait, is it back or forward?
Joshua: Spring forward. Fall back,
Matthew: yeah. Where we fall back. Oh, we lose this time, huh?
Matthew: Oh, we lose daylight. It literally drives me crazy. Like, and the sun is, I wake up at 5 AM and the sun's up. I'm like, well, what's the point of this? But when I get home from work at four 30, the sun's down.
Joshua: It's for the farmers, dude.
Matthew: Yeah. I don't know. So daylight, losing time, a couple more weeks, you know, enjoy those 6 PM sunsets get outside when you get home from work, enjoy the sun while it's here, because it's about to disappear.
Matthew: That's
Joshua: going to be grumpy. I hate this time. I love prime hate. In the next couple weeks
Brent: you have a recommend.
Joshua: I have a follow up actually to a recommends. Ooh, I got my iPhone. Nice. Just a couple weeks ago. I think I got a couple weeks after you got yours. What?
Brent: What iPhone number were you on before? 13? 13.
Brent: And now you got the 16. And how do you fill any upgrades from three years?
Joshua: You know what, actually, you know what I really like about it? The camera button. So the new AI features obviously aren't updated on and all that stuff. We'll talk about that later. But the. Just the fact that it's like holding a great charge.
Joshua: It's I feel like it's brighter My other one felt like it was like screen was dimming for some reason and the camera button on the side is really cool Yeah, that is neat. That is an efficient
Brent: like new feet and
Joshua: it's just working and it's fast. It's nice now It's not a worry. It's not like man. I really need a new phone.
Joshua: I really need a new phone now It's just functioning the way it should and I like it. It's nice I was actually able to order a case because they weren't making cases for my phone anymore You so I'm all hooked up. It's nice.
Brent: I agree. I, I like mine. I think it's worth, you know, getting those upgrades on those phones.
Joshua: And I love the Apple Wallet case.
Brent: Yes, me too.
Joshua: I don't have to carry a wallet. Like, it's just, it's nice. So I'm following up, sorry Matt, you don't have the camera button on yours. Yeah, I was gonna say, I can show you at lunch. I guess I'm
Matthew: gonna stick with what I said two shows ago. You know, the most exciting thing you could say about your new phone is there's a new button, which
Joshua: I said a lot of things.
Joshua: That's just what you took, I guess.
Matthew: Yeah.
Joshua: No, I took away. There's a new feature. You're going to, you're going to buy a robot and you're going to walk in here with your Ray Ban metaglasses.
Matthew: Yeah. If it's not AI. Or robots. Like I'm just not excited at the, you're
Brent: going to get in an autonomous cab, but not let your autonomous car that you have drive you around where you're at the foot of the wheel.
Matthew: Oh,
Brent: but do you have anything to recommend enough about? I do. I do. I do. We got our man Charlie out here Friday. And I think that that's probably the, as timing wise goes, the best recommend I can come up with our guy, Charlie is going to put Christmas lights on our office, the trees, the front and the back.
Brent: And he's also doing my house. I'm not at a stage in my life where I'm getting up on a ladder and putting up Christmas lights. Like, first of all, I don't even know how to use a nail gun. Second of all, probably fall off the ladder and die. Third of all, I will not go high on any ladder, like above like four or five feet.
Brent: Like I'm cool on that. So Charlie's hooking up the office. He's going to go and put our lights up. I think like it's worth the money. These businesses are fantastic. These lights guys are efficient. I've done it at my house for the last several years. But I want Christmas lights and I don't want to do the work and I'm willing to spend the money on things that scare me and putting up Christmas lights as one of them.
Matthew: Yeah. I'll piggyback yours. My lights are going up November 1st. I use hang tan holiday lighting out in Pasadena. So if you're in the Pasadena region that's who, who we use. They're the best. So I can't wait. Is Charlie have a company?
Brent: Yeah. I just don't know the name of his company, but you could, if you message us at the office 909 296 7977.
Brent: I'll give you the contact number. He does the IE and he's doing the, in the Claremont area. I'm thankful for that because he's doing both my house and my office. I
Joshua: got a comment and a recommends one. My comment is I'll be up on a ladder this year. Wasting up my lights. I'm not spending money on someone to put lights up on my house.
Joshua: And number two, if you guys got up on a ladder, both of you guys could be going to the Dodger game save some money on the Christmas lights and go spend that on an experience. That's my recommend for both of you guys.
Brent: Can you get up on a ladder? Yeah.
Matthew: So funny story. My father in law, when I, when we got the house brought over a ladder, he bought me a ladder that was like one of his housewarming gifts to me.
Matthew: That's a good gift. Great gift. The only time it's been used has been when he's been over at my house and he needed to use a ladder to do something.
Brent: I have the same experiences in life, man.
Matthew: We're
Brent: carbon
Matthew: copies.
Brent: All right. Well, as advisors, we love helping people. You know, obviously went through some tough topics today. But if you ever have questions on financial planning or you need help with retirement planning we also have our ebook on our website. You can get our show notes at retirement plan, playbook.
Brent: com. You can visit us on ever. Well, you can visit us at evermontwealth. com and book a consultation with us on, on that platform as always. Thank you for listening.
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