As investors’ appetite for risk continues to be tested by the stock market and crypto currency, we shine the spotlight on old school Certificates of Deposit. Beth Pinsker shares how to buy them, which ones to buy and why CD's are having a moment for the first time in decades. 

Money Tips

1. Think about your whole financial picture

2. Your timeframe matters most

3. Money you need in the short-term is best kept low-risk investments.

4. Ask for help when you need it

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Links to things mentioned in the episode!

• https://www.bobbirebell.com/podcast/jeremy-keil

Follow Beth!

• Twitter - @bethpinsker

• LinkedIn - @bpinsker

• Website - https://www.marketwatch.com/author/beth-pinsker

Follow Bobbi!

• Instagram - @bobbirebell1

• Twitter- @bobbirebell

• LinkedIn- Bobbi Rebell

• TikTok - @bobbirebell

• Website- http://www.bobbirebell.com

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Full Transcript:

Bobbi Rebell:

Hey, grown up friends. There is something I don't talk about publicly that I have decided to start sharing. Even though it can be a bit embarrassing, I get digital overload and it stresses me out for good reason because when you have so much junk on your computer because you're not as organized as you should be because you get caught up in all the things that you have to do, if you don't deal with it, all that stuff on your computer starts to really slow things down and can become a total drag on your productivity. For me, there is nothing worse than finally motivating to get stuff done, only to be derailed by a sluggish computer that is just not cooperating. A little while ago I decided I was going to stop just hoping that things would get better and I was going to deal with it.

I downloaded something called CleanMyMac. It's from a company called MacPaw. I was skeptical but I took a deep breath and I tried it. Long story short, it totally worked. I loved how I could see it work through my files with clear and easy to understand graphics. I could see what was messing things up. And CleanMyMac would ask me for my okay before deleting files so that something I did need to keep didn't go bye-bye. That was one of my biggest fears. I recently reached out to the company and they are offering 10% off to my Financial Grownup listeners who want to also get CleanMyMac. To get that 10% of CleanMyMac, you do need to go to my link. It is bobbirebell.com/cleanmymac, B-O-B-B-I R-E-B-E-L-L dot C-O-M forward slash CleanMyMac, and that is all one word. I promise you, you'll be so happy. I want you guys to be in touch with me. Let me know how it goes. You deserve to lower the stress of data overload. Trust me. So worth it.

Beth Pinsker:

It is definitely a shopping opportunity. You definitely want to treat it like you would a high yield savings account and just go out there and seek the best rate.

Bobbi Rebell:

You're listening to Money Tips for Financial Grownups with me, Certified Financial Planner, Bobbi Rebell, author of Launching Financial Grownups, because you know what? Grown up life is really hard, but together we got this.

Are you wearing any retro fashion? Maybe you're reaching to the back of your closet, pulling out something that you forgot was even an option but now looks interesting enough to try on. That's what's happening with CDs, which is short for certificates of deposit. I personally have absolutely ignored them for as long as I can remember and my only real awareness in my daily life of CDs came from those signs that you see when you walk by physical bank branches and they would advertise rates that were frankly not all that appealing. Well, the laughing has stopped because the rates have gone up right along with inflation, but in a good way. And unlike I bonds that we discussed a few weeks ago, there is not one rate for all and not one term for all. There are a lot of choices for all of us to make if this is something that we may be interested in adding to our investment portfolios.

So I have enlisted the help of my former work colleague, Beth Pinsker, to give us the low down. Now, Beth and I worked together at Reuters where she wrote a personal finance column and she was also the editor of many of my columns. Like me, she also became a certified financial planner. Beth is now at MarketWatch where she writes about investing. I saw her recently and being the nerds that we are, the conversation naturally turned to how exciting CDs were as one does. Beth translates all when it comes to CDs. You guys are in for a treat. Here is Beth Pinsker.

Beth Pinsker, you are a financial grownup. Welcome to the podcast.

Beth Pinsker:

Hello.

Bobbi Rebell:

I'm happy to have you here. We ran into each other recently and reconnected. We are former colleagues and you have continued to soar in the world of journalism. You are now the investing columnist at MarketWatch. Tell us a little bit about that job and your expertise, because you're also a CFP. We both took the CFP exam and we both mutually cheered each other on and thank goodness we passed because that exam is one we don't want to take again.

Beth Pinsker:

No, never. I'm done with tests I think. So I'm looking in my column and investing holistically as an element of financial planning. So it looks at everything that you need to do from what kind of accounts you have open to what you put in them to how you take it out of them, that whole life cycle of your money.

Bobbi Rebell:

I love that because we previously used to just think, okay, investing means throw money into the stock market, pick an ETF and you're done, set it and forget it. But it's becoming a little more complicated now because the market's had such an extreme pullback. We're talking in the fall of 2022 and people are starting to think about things like I bonds, which we covered in a recent podcast episode, and things that we used to roll our eyes at and dismiss as being not all that, things like CDs, and that's what I asked you to come on and talk about. Tell us, first of all, just explain to people because this may be a foreign concept to some people listening to the podcast because it has not been something even really for many people worth looking at. What's a CD? How do they work? What do we need to know? The basics.

Beth Pinsker:

Yeah. Advisors tell me that anybody under 50 has no idea what a CD is and has never touched one and doesn't have any idea what they are. A CD is a certificate of deposit, it's a banking product. So it's fully insured under the FDIC and you are basically buying a certificate that is loaning money to the bank and they pay you interest for that and that interest is higher as an incentive than a regular bank account. You lock in for a certain period of time, three months, six months, nine months, 12 months, five years. You can even get CDs that are longer than that and the longer the length, the higher the rate usually.

What happens with that kind of structure is that a lot of people will put longer term money in there in order to get the higher interest rate or they will create what are called ladders where they have different maturities that come due and then they create a rung structure. So you have a three month, a six month, and nine month, and when the three month comes due, you roll it into a six month and when the six month comes due, you roll it into another six months or a three month. There are different scenarios for what you need to get out of your money, but basically it's a loan that you are giving to the bank and so they give you money in return.

Bobbi Rebell:

Is this something that people would buy in a normal brokerage account like if they use certain apps or if they use certain discount trading platforms? Is it as simple as picking it out just like you would a stock or a mutual fund or an ETF?

Beth Pinsker:

It's actually easier, which is why I think that when you talk about I bonds, which you have to go to a separate account to buy, and treasuries, which you have to go to either treasurydirect.gov or you can get them through your brokerage account. There are all sorts of maturities and different distribution dates and all sorts of numbers after the title of the treasury bond, they're hard for the regular person. A CD is like a click in your bank account and you have a CD. It's like the regular person's version one step beyond a high yield savings account. I think that the hierarchy is you have your checking account, you have your savings account. If you're really interested in making more money, you have a high yield savings account, which might be at a separate bank like an online savings bank.

If you want more money than that, then you go to a CD and then if you're willing to go beyond those steps, then you think about I bonds in a separate account or treasuries in a separate account. There is something called a brokered CD, which would be available through your brokerage account and those are typically at a higher rate than even the CDs that are offered directly by a bank. Basically, they're like bulk rate brokerage discounts so that Fidelity or Vanguard or whatever your brokerage account is, they would make a deal with the bank that's offering the CD and you would get a slightly better rate to buy it through as the brokerage account as an incentive to do it there and then it would live in your brokerage account.

Bobbi Rebell:

So let me ask you this, for example, you compared it to treasuries. With the treasury, which is borrowing from the government, the rate is set. So with I bonds, every six months it's resetting. We know it's been 9.62, we know it's going to reset to a lower number, but it is what it is. With CDs, different banks could offer different rates. I mean we walk by, if you walk by a bank, you see them often advertising the CD rates. So is this something where you may bank at one place but you may want to shop around and buy a CD at a different place? And if so, how do you shop around?

Beth Pinsker:

So you can find the latest rates if you Google and search around a little bit, it is definitely a shopping opportunity. You definitely want to treat it like you would a high yield savings account and just go out there and seek the best rate. You may get preferential rates from a bank you already have a relationship with, so that's one place to start, but then you can start looking around. And because they're all FDIC insured, you don't have to worry about the safety of a brand name that you might not have heard about or a bank that's only online or a bank that's really far from your home that you can't go visit in person. As long as it says FDIC insured on there, you should be pretty good. And because it's a competitive environment, you might find a really good rate somewhere that's seeking out new customers and you can get a good deal.

Bobbi Rebell:

You sent me four tips for our financial grownups, so I just want to go through them as well. The first tip when buying CDs is to think about your whole financial picture.

Beth Pinsker:

Yes. So you don't want to put money in a CD that you're going to need right away. If you have an emergency fund, people are starting to think about their emergency fund in tiers. You need the money that you need right away to have access to say for instance, a check doesn't come in that when you're expecting it or you blow a tire and you need a little bit of extra cash, you need money you can touch today and you want that in a savings account. You want that earning interest but somewhere where you can get at it, but you might have a lot saved in your emergency fund as you should like six months worth and you wouldn't need that money for six months.

So you can look a little bit further out for the kind of opportunities to earn more on it. And so you can get a six month CD but you lock it up for those six months. There are some CDs you can get where you can get no surrender charges, where they're going to charge you if you turn it in early, but those are going to cost you a little bit on the rate. So they'll take a little bit off for that convenience fee. So that's why you have to look at how much do I need right now? How much do I need in a little while? How much do I need in a longer term timeframe? And for that longer term money, you have other options right now. CDs are one of them.

Bobbi Rebell:

Your second tip for financial grownups is exactly what you just said. Your timeframe matters most. So follow up on that, you've talked about the timeframe, but what are the other options? You said there's other options with different timeframes. What else should people be considering?

Beth Pinsker:

When I was first a grown up, I thought you needed a certain amount of money to invest. That used to be true. There used to be minimums and trading fees and it really didn't pay to invest money because you were going to pay so much in fees in order to buy the stock or mutual fund that you wanted to buy and you needed $5,000 or $10,000 to get anybody's attention to do it for you. And now with all these trading platforms, there's no transaction fee, there's no minimums and you can get started right away. So your money is really all about what you need it for and what's the best way to store it and grow it while you're waiting to spend it. You have investing options, you have bond options, you have banking product options, you have a lot of options these days.

Bobbi Rebell:

Right. Because your third tip was money you need in the short term is best kept in low risk investments, CDs are one. And I think a key thing that has come up a few times in this interview is FDIC insured. And that's something that I think has become more of a conversation topic in the wake of so many troubles in the crypto space because that's something I don't know people were necessarily aware of that there is no FDIC insurance when it comes to crypto products and other new kinds of investments that maybe people are thinking about and talking about. It's not that simple. I mean FDIC insured, can you just explain what protection that offers?

Beth Pinsker:

Sure. FDIC is an insurance product offered by the government to banks on $250,000 worth of deposits in a single account type. So if I have $250,000 and I have it in the bank and the bank goes kaput, the government will make sure I have my $250,000. I can't lose that money. It won't necessarily protect me from losses in the stock market, for instance, like there's a separate insurance for the failure of brokerage houses, but that also only covers the amount of money you have saved there. It doesn't cover investment losses. And I think what a lot of people are learning this year too is that the stock market can indeed go down and I think a lot of people who might have gotten started investing in the last five years or so might not have really fully realized that that things do go down and that if you put a thousand dollars in the stock market and today it's 800, nobody's going to make up that difference for you. But if you put your money in a bank account and you have a thousand dollars, you're going to have a thousand dollars.

Bobbi Rebell:

Very well said. And the fourth one is probably the most important for financial grownups and that is to ask for help when you need it.

Beth Pinsker:

Yeah, a lot of people have trouble with that. A lot of people don't want to tell their exact numbers to anybody, and it's hard, even a teenager talking to their parents or a young adult talking to their parents doesn't want to talk in exact numbers. And it's hard to give advice for finances without exact numbers because the advice you give to somebody who has $10,000 to invest is a lot different than somebody who has a hundred thousand dollars to invest.

Bobbi Rebell:

I think that you've made a great point throughout this that not only is everyone's needs goals and resources different, but your timelines are different. And that really is so much of this discussion that the nice thing about CDs is you can choose different timelines with the CDs and you'll get different returns, but at least you can customize it to your needs and strategize with it.

Beth Pinsker:

Yes. Another important thing to take note of that is that the Federal Reserve's next meeting is November 2nd, and then after that, I think it's December 14th, and they might raise rates again. And so you might want to be cautious about what you lock into right this second. We're very close to November 2nd. If rates go up again with the Federal Reserve, they're tied to the rates that banks offer. And so CD rates and high yield savings account rates and treasury bill rates might all shift upwards with that. And if you're locked into a two year CD right now, you might not necessarily capture what's going to happen in a month. But then again, given all the forecast about the economy, rates might eventually come down. So we're in an in between phase where nobody knows exactly what's going to happen with rates. And so you just want to take a look at what your needs are and what the amount of money you're dealing with and the timeframe you're dealing with and see what the best course of action is for you.

Bobbi Rebell:

Very well said. Beth, tell us where people can make sure to get all of your pieces for MarketWatch and be in touch with you if they want to learn more about you.

Beth Pinsker:

Well, there's marketwatch.com and then there's bethpinsker.com, so either one.

Bobbi Rebell:

Okay, great. And your socials?

Beth Pinsker:

I'm @bethpinsker on Twitter. And I'm Beth Pinsker on LinkedIn, and my dog has an Instagram account.

Bobbi Rebell:

Oh, well what's your dog's Instagram account?

Beth Pinsker:

It's [inaudible 00:16:28].

Bobbi Rebell:

We'll follow that too. Thanks, Beth.

Beth Pinsker:

Thank you.

Bobbi Rebell:

Hey, grown up friends. A big thank you to so many of you that have already bought my new book, Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Become Everyday Money Smart. This book was not easy to rate because I had to get honest with myself about what was working with my teen and young adult kids and what was not working, and I also had to be prepared to share it with all of you.

So first of all, thank you for your support and your wonderful responses to it. There's definitely some things in there that you may not have been expecting to hear. By the way, I got a lot of help from my money expert friends and also financial therapists and parenting experts. I am really happy with how launching Financial Grownups came out, even though it really was hard to be, like I said, that honest and it was a lot of work, but I really love doing it and I'm really happy with how it came out. On that note, if you have not already, please pick up a copy of Launching Financial Grownups today. After you do, please share it on social media. Please leave a review on Amazon. Those reviews are super important because the algorithm picks up on them and that can make the book a lot more visible to more people. So I truly appreciate it and I really also appreciate all of your support.

So many choices. I highly encourage everyone to use the free resources available to you as a listener of The Money Tips for Financial Grownups podcast, including the full transcript that we provide so you guys don't even have to take notes. Just go to my website, bobbirebell.com, and look under the podcast tab and then click on the episode and it is all there for you. So be in touch with what topics you want to hear about. Just DM me on Instagram @bobbirebell1, that's the number one. Or email me at hello@financialgrownup.com. I love sharing this information with all of you for free. I know your time is precious and I appreciate your support. If you do have the time, please leave a review of this podcast wherever you listen to it and help me get the word out by taking a screenshot on your phone and sharing it on social media.

Tag me so I can thank you and let you know how much it means to me. And of course, you could just tell a friend about it too, right? Let's stay in touch. I share relevant articles and resources in my newsletter. It only comes out every other week, so I promise I won't barrage you with mail, but I really appreciate you being part of the community. You can sign up on my website, bobbirebell.com. Super easy. Biggest thanks to MarketWatch investing columnist and certified financial planner, Beth Pinsker, for helping all of us be financial grownups.

Money Tips for Financial Grownups is a production of BRK Media LLC, editing and production by Steve Stewart, guest coordination, content creation, social media support, and show notes by Ashley Wall. You can find the podcast show notes, which include links to resources mentioned in the show, as well as show transcripts by going to my website, bobbirebell.com. You can also find an incredible library of hundreds of previous episodes to help you on your journey as a financial grownup. The podcast and tons of complimentary resources associated with the podcast is brought to you for free, but I need to have your support in return. Here's how you can do that. First, connect with me on social media @bobbirebell1 on Instagram and @bobbirebell on both Twitter and on Clubhouse, where you can join my Money Tips for Grownups club. Second, share this podcast on social media and tag me so I can thank you.

You can also leave a review on Apple Podcast. Reading each one means the world to me. You know what? It really motivates others to subscribe. You can also support our merch shop grownupgear.com by picking up fun gifts for your grownup friends and treating yourself as well. And most of all, help your friends on their journey to being financial grownups by encouraging them to subscribe to the podcast. Together we got this. Thank you for your time and for the kind words so many of you send my way. See you next time and thank you for supporting Money Tips for Financial Grownups.

I Bonds currently pay 9.62 percent but that is ending very soon. Certified Financial Planner Jeremy Keil joins us to explain what I Bonds are, why the interest rate is expiring and how to decide whether they are right for you. 

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Follow Jeremy!

• Facebook - @KeilFinancialPartners

• LinkedIn - @jeremykeilfp

• Website - https://keilfp.com/

• Retirement Revealed Podcast

Links in the episode!

• Ibond Form - Form 8888

Follow Bobbi!

• Instagram - @bobbirebell1

• Twitter- @bobbirebell

• LinkedIn- Bobbi Rebell

• TikTok - @bobbirebell

• Website- http://www.bobbirebell.com

Did you enjoy the show? We would love your support!

Leave a review on Apple Podcasts or wherever you listen to podcasts. We love reading what our listeners think of the show!

1. Subscribe to the podcast, so you never miss an episode.

2. Share the podcast with your family, friends, and co-workers.

3. Tag me on Instagram @bobbirebell1 and you’ll automatically be entered to win books by our favorite guests and merch from our Grownup Gear shop.

Full Transcript:

Bobbi Rebell:
Hey, grown up friends. A big thank you to so many of you that have already bought my new book, Launching Financial Grownups: Live Your Richest Life by helping Your Almost Adult Kids Become Everyday Money Smart. This book was not easy to write because I had to get honest with myself about what was working with my teen and young adult kids and what was not working, and I also had to be prepared to share it with all of you. So first of all, thank you for your support and your wonderful responses to it. There's definitely some things in there that you may not have been expecting to hear.

Bobbi Rebell:
By the way, I got a lot of help from my money expert friends and also financial therapists and parenting experts. I am really happy with how Launching Financial Grownups came out even though it really was hard to be, like I said, that honest. And it was a lot of work, but I really love doing it and I'm really happy with how it came out. On that note, if you have not already, please pick up a copy of Launching Financial Grownups today. After you do, please share it on social media. Please leave a review on Amazon. Those reviews are super important because the algorithm picks up on them and that can make the book a lot more visible to more people. So I truly appreciate it and I really also appreciate all of your support.

Jeremy Keil:
9.62. A great interest rate. You cannot find that anywhere. You can't find that in 12-month CDs. You can't find that in savings accounts. And, of course, there's a few different quirks, again, with the I bonds we'll get into. But the reason why rates are so high is because it's just based on inflation. And inflation, unfortunately, has been high, but thankfully you can get some good value out of what's going on.

Bobbi Rebell:
You're listening to Money Tips for Financial Grownups with me, Certified Financial Planner Bobbi Rebell, author of Launching Financial Grownups, because you know what? Grown up life is really hard, but together we got this.

Bobbi Rebell:
Let's talk about savings bonds. Savings bonds used to sound really boring. In fact, they were really boring. The returns were kind of blah, especially compared to other opportunities that were out there. But things are changing. Between the bear market and the rise of inflation, something pretty interesting is happening with what are called I bonds. I as in inflation. Let me say though from the get go that this episode is, as is always the case frankly, for information and hopefully entertainment only. I'm not advising anyone to make any specific investments.

Bobbi Rebell:
That's going to depend on your personal situation and your goals, but you should at least know about different investments, in this case, I bonds, in order to make that decision. So my guest this week is Jeremy Keil. He is a Wisconsin-based financial planner and also the host of the Retirement Revealed Podcast. In our interview, Jeremy and I discuss what I bonds are, how they work, how you can actually buy I bonds. It's not where you think or where you usually get most of your investments. We also talk about how much you can buy. There are limitations and then there's little loopholes. And, most of all, why they are currently paying so much more than other investments. Stay tuned to the end because we also get into some quirks that you really need to know if you are considering putting some money into I bonds. And also a very important deadline. Here is Jeremy Keil.

Bobbi Rebell:
Jeremy Keil, you're a financial grownup. Welcome to the podcast.

Jeremy Keil:
Thanks for having me on, Bobbi.

Bobbi Rebell:
You are a Certified Financial Planner. You have your own practice out in Wisconsin and you are also the host of the podcast Retirement Revealed. I asked you to come on because you focused, recently especially, on something that I am incredibly curious about and I think our listeners really need to know about, and that is something called I bonds. So it's a letter I and then the word bonds. Explain what exactly are I bonds and why do we care, especially at this moment in time?

Jeremy Keil:
You got it. Well, you right might remember back in the day growing up, your grandparents probably gave you paper savings bonds for a gift. Christmas, birthdays, things like that. I bonds are savings bonds. They're U.S. government bonds. They're no longer on paper. And the I part means it's tied to inflation. And so no one really cared or knew about these until about the middle of 2021 when all of a sudden the rates started getting pretty good.

Jeremy Keil:
Middle of 2021, they were 3.5% and your average bank account was 0.01. And so that was a pretty good deal. Then they went to 7% and now, through the end of October, they're at 9.62%. So if you buy an I bond on October 30 or before that, then the rate will be 9.62%. And I threw in a little funky date there, October 30, because when you buy an I bond, you can only do it through treasurydirect.gov. You got to go direct to the U.S. government. They make it effective the next day. And so if you're on Halloween listening to this, have some fun, but don't bother buying an I bond because October 30 is the last day for the 9.62%.

Bobbi Rebell:
Okay, we want to talk about why these rates are so much higher than other investment options, the risk involved in them, and then also what's going on on October 30. Let's start with, first of all, why are the rates so much higher? What's going on? Is there some kind of disconnect? Because, as we record this, which is October 6 of 2022, we're recording this, the stock market has been kind of a disaster the last few months. People have been losing quite a bit of money depending on where you're invested. And these seem very safe and kind of a no-brainer. How do they work? Why is the interest rate so much higher and why has it jumped so much recently?

Jeremy Keil:
Yeah, so I'll call it a quirk, not a disconnect. One reason why the stock market's down is because usually the stock market drops when there's a sudden quick inflation. And that's what happened. All of a sudden, inflation just kicked up. It was somewhat a surprise to most everybody. And yet the I bonds, I stands for inflation, they are tied directly to the inflation rate. And so when you see inflation high, that initially usually historically kicks down the stock market, but it's also tied a hundred percent. It kicks up the rates in these I bonds. And so it's also interesting too because usually in the newspapers and the news media, you'll see the 12-month inflation rate. And most of the time in the last year you've seen inflation's at around 8%, which is a pretty high rate. But the way I bonds are figured out is they take the last six months of inflation and they double it.

Jeremy Keil:
You normally see a 12-month rate, but they've looked at the last six months and doubled it. And so back in April of 2022, they had the March numbers and it came out that inflation was 8, 8.5%, whatever it was. But it was kind of a ramping up. The last six months of that 12-months number was really high and that happened to have been the number they use for inflation bonds, the I bonds on there. So 9.62% is the rate for anyone that bought in May of 2022 all the way through the end of October 2022. And that's interesting. 9.62, a great interest rate. You cannot find that anywhere. You can't find that in 12-month CDs, you can't find that in saving accounts. And, of course, there's a few different quirks again with the I bonds we'll get into. But the reason why rates are so high is because it's just based on inflation. And inflation, unfortunately, has been high, but thankfully you can get some good value out of what's going on by looking into I bonds.

Bobbi Rebell:
So when you're buying an I bond, what kind of account should you put it in? Is it a taxable asset where you should maybe put it in something that's a retirement fund or is it something where you're going to pay tax on? Where is the best place to put these I bonds if you buy them?

Jeremy Keil:
You got it. So you used a term taxable. I like to use the term non-IRA. It's just not special. It's just like your bank money. You cannot buy an I Bond inside of a Roth IRA. You cannot buy the I bond inside of your traditional 401k, anything like that. It's basically a replacement for your bank money. If you thought, "I don't need this bank money for the next 12 months or so", then you can put that money into an I bond and think of that 12-month number or 12-month time because you absolutely cannot, no way, get your money out of I bonds for the first 12 months. That's a rule. No matter how hard you try, you're not getting the money out. So the only money you should put into I bonds is money that you expect to not use for at least 12 months because you can't get it out.

Jeremy Keil:
And if you take it out in the first five years, you lose the prior three months interest as a penalty, which sounds big, sounds bad, but when you run the numbers, even after losing that last three months of interest, it still comes out to a pretty good rate. And then that gives us kind of a first tip with I bonds is looking at more a 15-month purchase at the minimum. Because if you really like the interest for the first year and you don't like the interest a year later, well, you want to wait about three months, then cash out your I bond because then you're cashing out and losing the bad interest and holding on to the good interest that you got the first 12 months.

Bobbi Rebell:
But you can't buy unlimited amounts of this. There are some caps to how much you can actually buy and then there's sort of a loophole with respect to taxes, to your tax refund.

Jeremy Keil:
A bit of that. So the maximum purchase is $10,000 per person per year. So a lot of people say, "Oh, that's not terribly too much." Most Americans don't have $10,000 in the bank. And so most Americans can benefit by purchasing I bonds and not actually running up against that $10,000 limit. Folks that have more than that and want to buy more than that, well, you might be married. That's 10,000 for you, that's 10,000 for your spouse. You might want to put some in the name of your kids. You might have a revocable living trust because you've done some estate planning and your trust can buy the $10,000 worth of I bonds.

Jeremy Keil:
And you might have an LLC. Perhaps you have a business and that business can buy the $10,000 worth of I bonds. So there's a lot of, I wouldn't say ways around it, but just knowing the rules that it's per person, per entity, I'd say most couples might be able to get 20,000, maybe even 30,000. Perhaps they could get more depending on what their kid situation is or their business situation is. And, hey, if you max out in one year, wait until January. It's per calendar year. You can get another. It just resets. You get another $10,000 per person or entity once you hit January.

Bobbi Rebell:
Now you talked about October 30 and that's because it's the end of the month and you need 24 hours. You need to buy it one day before the end of the month. What exactly is going to happen in November? I mean, how do we know it's not going to go up and get even better because it feels like inflation is still pretty bad right now.

Jeremy Keil:
Yeah, you get it. Inflation is bad on a 12-month basis. That's what you normally see. But the I bond rate is based on the prior six months. So the November rate will be based on what happened between March and September. And so far we're about a week away from that number release. So October 13, if you're listening October 13 or later, I'll have that posted right on our podcast website, which is retirement-revealed.com. We're doing the math every month on what the projection will be.

Jeremy Keil:
And, finally, October 13, we'll have the full six months that's on there. So we'll know for sure. But right now it's trending the last two months of inflation have actually gone down. And so you see the numbers that say inflation's 8% above. It's actually reporting 10 months of really bad inflation and the last two months, inflation has actually gone down. We'll see if it happens again for a third month straight. It's just kind of a quirk of how people report inflation with 12-month numbers. I bonds are based on six month numbers and if you really dig into it month by month, which I like to do, you'll notice that the last two months, inflation's actually gone down

Bobbi Rebell:
When you're actually going to buy an I bond, whether it's for money or also you can do it right with a tax refund money as well, right? That's an extra thing?

Jeremy Keil:
Yes. So that's an extra thing. So you could get, on top of the 10,000 per year of online I bonds, you could have your tax refund refunded to you, not direct to your bank, but through I bonds. Those are actually paper. You'll get them in the mail. And so some people are sending in a $5,000 extra payment. It's called a quarterly estimated payment. They're sending in that extra payment early in December or so because they want to file and get an extra refund coming back and they're choosing those paper savings bonds, those I bonds. That's a way to get more I bonds.

Bobbi Rebell:
So you could file your taxes. Let's say you got an extension on your taxes and you're filing them in October. You could send in an overpayment and ask for it to come back in the form of an I bond. And that's a way to actually put more money into I bonds if you wanted.

Jeremy Keil:
That's absolutely it.

Bobbi Rebell:
Okay, great. So that happens automatically. That's something you do on the tax form. You can obviously speak to your tax preparer about that or I'm sure there's ways to figure it out through the IRS that it's on the forms, right?

Jeremy Keil:
Yeah. That's a form. We'll see if I get you the exact form before we're done talking, but it's a form, I believe. I'll figure it out. I'll figure it out for you.

Bobbi Rebell:
We'll figure it out and we're going to put it in the show notes for you, the form that you need, which is going to be on my website, which is just my name, bobbirebell.com, but I'm sure you can also find it on Jeremy's website. So if you're not buying it through a tax refund, do you have to have it through a brokerage account or a savings account or whatever or can you literally just go to treasurydirect.gov and buy it that way? Or do you need it to be in an account?

Jeremy Keil:
Yeah, that's the only way to buy it is treasurydirect.gov. Yeah, you can not buy I bonds through a brokerage account or a bank. Some people are used to buying them through a bank or a payroll deduction. Those are all old school ways to do it. Treasurydirect.gov. Or, and I found it here, it's form 8888. Easy to remember.

Bobbi Rebell:
Okay.

Jeremy Keil:
Form 8888, so tell your tax prepare if you want to get those I bonds, "Here's how I want my refund to come out to me" and you can put right in there up to $5,000 of your refund can come out as a I bond.

Bobbi Rebell:
Oh wow. Okay. So the limit though for the refund is $5,000. So that kind brings you up to 15,000 per person. Well, I guess it's 5,000 per tax return, right?

Jeremy Keil:
That's exactly it. So a married couple, 10,000 each plus 5,000 for the tax return gets you 25,000 for the year as your maximum.

Bobbi Rebell:
All right. What else do we need to know before we wrap up?

Jeremy Keil:
When you're thinking of short term money, you deserve more interest. And your bank is out there getting more interest through things like treasury bills or they're loaning out your money to make a better interest rate. I'd encourage you to go get the best interest you can find and it's definitely not your local bank. It's going to be a place like a high yield savings account. It's going to be a place like treasury bills, six month treasury bills especially, are a higher rate right now. But these I bonds have been kind of hot since middle of 2021. They look like they'll continue that way at least through the end of October of a purchase you can get for 12 months and get more interest than you can get anywhere else for 12 months guaranteed. So just look into those things.

Bobbi Rebell:
Thank you so much. Tell us where people can find more about you and your podcast.

Jeremy Keil:
Yeah, we've got the Retirement Revealed podcast, so just look up Retirement Revealed wherever you listen to podcasts. And then if you'd like to learn more about what we do on the retirement planning front, just go to fivestepretirementplan.com and you'll see some videos about here's how we take people through the retirement planning process.

Bobbi Rebell:
And those are great videos. Thank you so much, Jeremy.

Jeremy Keil:
Yeah, thanks, Bobbi. It's been fun.

Bobbi Rebell:
There is something I don't talk about publicly that I have decided to start sharing even though it can be a bit embarrassing. I get digital overload and it stresses me out for good reason. Because when you have so much junk on your computer because you're not as organized as you should be because you get caught up in all the things that you have to do, if you don't deal with it, all that stuff on your computer starts to really slow things down and can become a total drag on your productivity.

Bobbi Rebell:
For me, there is nothing worse than finally motivating to get stuff done only to be derailed by a sluggish computer that is just not cooperating. A little while ago, I decided I was going to stop just kind of hoping that things would get better and I was going to deal with it. I downloaded something called Clean My Mac. It's from a company called MacPaw.

Bobbi Rebell:
I was skeptical, but I took a deep breath and I tried it. Long story short, it totally worked. I loved how I could see it work through my files with clear and easy to understand graphics. I could see what was messing things up and Clean My Mac would ask me for my okay before deleting files so that something I did need to keep didn't go bye bye. That was one of my biggest fears. I recently reached out to the company and they are offering 10% off to my Financial Grownup listeners who want to also get Clean My Mac. To get that 10% off Clean My Mac, you do need to go to my link. It is bobbirebell.com/cleanmymac. B-O-B-B-I-R-E-B-E-L-L.C-O-M/Cleanmymac. And that is all one word. I promise you you'll be so happy.

Bobbi Rebell:
I want you guys to be in touch with me, let me know how it goes. You deserve to lower the stress of data overload. Trust me. So worth it. As you could probably tell, this is not an investment that I have made in the past because the fact is saving bonds have just not been competitive with the stock market. And while I do want to repeat that this is not an endorsement of I bonds, because everyone's financial situation is different, it's important to at least know what's going on so you can make those decisions.

Bobbi Rebell:
On that note, how are you guys feeling about your investments and are there new kinds of investments or investments that haven't been front and center in recent years, like I bonds, that you want to know more about? DM me on Instagram at BobbiRebell1 or on Twitter at BobbiRebell and please go to my website, bobbirebell.com, and sign up for my free newsletter where you will get more useful investment tips and ideas.

Bobbi Rebell:
You can also get the show notes with links to the things that we talk about on this podcast, like that IRS form, which is important. I think that was really interesting. And you can also get full transcripts of every podcast that we do for free. Just go to the podcast dropdown menu right on the top of the page. I also want to thank those of you who have left reviews for the podcast and ask that if you have not to please consider taking a couple minutes to leave one.

Bobbi Rebell:
I know everyone's so busy, but the support is really appreciated and means a lot to me. If it's easier, take a screenshot while you're listening and just post it on social media and tag me so that I can share it as well. And also thank you because it means a lot. It's really important to me to grow the community and get the word out and help more people. So thank you. I also want to thank Retirement Revealed podcast host and financial advisor Jeremy Keil for helping all of us be financial grownups.

Bobbi Rebell:
Money Tips for Financial Grownups is a production of BRK Media LLC. Editing and production by Steve Stewart. Guest coordination, content creation, social media support, and show notes by Ashley Wall. You can find the podcast show notes, which include links to resources mentioned in the show as well as show transcripts, by going to my website, bobbirebell.com. You can also find an incredible library of hundreds of previous episodes to help you on your journey as a financial grownup.

Bobbi Rebell:
The podcast and tons of complimentary resources associated with the podcast is brought to you for free, but I need to have your support in return. Here's how you can do that. First, connect with me on social media at BobbiRebell1 on Instagram and BobbiRebell on both Twitter and on Clubhouse, where you can join my Money Tips for Grownups Club. Second, share this podcast on social media and tag me so I can thank you. You can also leave a review on Apple Podcasts.

Bobbi Rebell:
Reading each one means the world to me. And you know what? It really motivates others to subscribe. You can also support our merch shop, grownupgear.com, by picking up fun gifts for your grownup friends and treating yourself as well. And most of all, help your friends on their journey to being financial grownups by encouraging them to subscribe to the podcast. Together, we got this. Thank you for your time and for the kind words so many of you send my way. See you next time and thank you for supporting Money Tips for Financial Grownups.

Bobbi and Mario discuss the pro’s and cons of Exchange Traded Funds and Mutual Funds, including the dangerous and potentially very expensive red flags grownups need to know about before they invest. 

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Full Transcript:

Bobbi Rebell:
Hey, grownup friends. A big thank you to so many of you that have already bought my new book, Launching Financial Grownups: Live Your Richest Life by Helping Your Almost Adults Kids Become Everyday Money Smart. This book was not easy to write, because I had to get honest with myself about what was working with my teen and young adult kids and what was not working, and I also had to be prepared to share it with all of you. First of all, thank you for your support and your wonderful responses to it. There's definitely some things in there that you may not have been expecting to hear. By the way, I got a lot of help from my money expert friends and also financial therapists and parenting experts. I am really happy with how Launching Financial Grownups came out, even though it really was hard to be, like I said, that honest. It was a lot of work, but I really loved doing it and I'm really happy with how it came out.

Bobbi Rebell:
On that note, if you have not already, please pick up a copy of Launching Financial Grownups today. After you do, please share it on social media. Please leave a review on Amazon, those reviews are super important because the algorithm picks up on them and that can make the book a lot more visible to more people. I truly appreciate it and I really also appreciate all of your support.

Mario Payne:
That probably means that it got lucky one year, but over three or five years, not so much. It's like a basketball player, a basketball player might have one good year, but over five years, if they're not good, not so much.

Bobbi Rebell:
You're listening to Money Tips for Financial Grownups, with me, certified financial planner, Bobby Rebell, author of Launching Financial Grownups, because you know what? Grown up life is really hard, but together we got this.

Bobbi Rebell:
Welcome, grownups. This episode is one I have been wanting to do for quite some time for all of you. We're going to answer the questions so many of you have been asking about investing in ETFs versus mutual funds, now, an ETF stands for exchange traded fund, whether maybe in some cases it makes sense to have both in your portfolio, for example, to serve different needs, at different times in your life, for different purposes, different goals.

Bobbi Rebell:
My guest is Mario Payne. Mario not only runs his own company, TOAMS Financial, he also has launched his own ETF. The symbol is LETB, L-E-T-B. I also want to point out, and this is important, that Mario is a fiduciary, he is a certified financial planner. That means he is someone who puts the needs of his clients first, something we grownups know to always ask for.

Bobbi Rebell:
In our interview, Mario and I cover the differences in investments that go into ETFs and mutual funds, basically how they work, how decisions are made, what the flexibility is of each one, what the downsides are, the pros and the cons also, regarding how expenses work, and what to look for when you're making a decision. We also talk about taxes and how the different vehicles fit into your investing and retirement goals. Most importantly, you need to stay to the end for this, we talk about some very scary and potentially expensive red flags that we all need to watch out for, especially some that, frankly, I had never really thought about.

Bobbi Rebell:
Here is Mario Payne of TOAMS Financial and the LETB ETF.

Bobbi Rebell:
Hey, Mario Payne, you're a financial grownup. Welcome to the podcast.

Mario Payne:
I am a grownup. Thank you for having me, I really appreciate the opportunity.

Bobbi Rebell:
Well, I invited you on this podcast because you are an expert in ETFs and you're going to be giving us some tips on ETFs and how we can all better invest with our eyes open and really understand the difference between ETFs and mutual funds, as well as other kinds of investments. A lot of people don't really know a lot about that.

Bobbi Rebell:
First of all, you were very much in the ETF business this past February. Your company launched an ETF, tell us more about that. It's on the New York Stock Exchange, by the way, the symbol, I like this too, L-E-T-B, LETB. Tell us about that decision and what's involved in setting up an ETF, because a lot of companies would really just go with a mutual fund. You chose an ETF.

Mario Payne:
We launched our fund February of this year. We've been doing the same strategy in my practice since 2019, as the market continues to go up. Before 2022, of course, we had some great returns for our clients. As we launched, it was great, because as the market was going down our clients inside our ETF have not been affected as much a negative way. Yes, there's still losses. Nobody knows, but God, the future, so we don't know from a day-to-day basis how your money's going to grow, but if we're able to have your money grow consistently and not have the dips of the market, then you should be in good shape. We hope that our ETF continues to do that.

Bobbi Rebell:
Just to time stamp this, we are recording this in August of 2022. If you listen to this further into the future, you can at least put it in context. Hopefully, the market will be up from here. But tell us about ETFs. A lot of our listeners are confused sometimes about why or what is the difference between an ETF and a mutual fund, can you explain it, and then we'll get into some of the different nuances that people should also be aware of when they're making investment decisions.

Mario Payne:
An ETF is called an exchange traded fund. E, exchange, T, traded, F, fund. It's sold actually on the New York Stock Exchange or on the stock market, so it's liquid. If I sell an ETF, it's like selling a stock. I'm able to get my money back right then and there, it's liquid, it doesn't take as many days to settle. A mutual fund is not sold directly on the New York Stock Exchange. It's sold through the company it's with, the fund company. You have what you call NAV, net asset value, which is different than shares on the market. It's not as of liquid. If you sell a mutual fund, it can take up to three business days to settle, which means it may take you longer to take the money out of your account after you sold that investment. That's really one of the differences.

Mario Payne:
Another difference is, from an investment standpoint, the expense ratio. Typically when it comes to an ETF they historically, not all, but historically they have a lower expense ratio. An expense ratio is the hidden fee that you pay for that ETF provider to manage and hold that fund. With mutual funds, historically, those expense ratios are a little bit higher. If I have a higher expense ratio, my performance may not be as good. If I have the same let's say $10,000 to make the math easy and I have one ETF that has the expense ratio of let's just say 1% and I have a mutual fund, same investments, same performance, but that expense rates ratio is 2%, well, that 1%, which would be a hundred dollars, is less than $200 with the mutual fund. All things being equal, my ETF will perform better with the same investments than my mutual fund, because the expenses are not as much. Those are really the two big differences between an ETF and a mutual fund.

Bobbi Rebell:
I was on the debate team in high school. I was actually president, very proud of it still. I'm going to throw a debate question your way. What you've said so far basically makes the case saying ETFs are a slam dunk, so much better, they're cheaper, you can access your money better, but Mario, a lot of people still buy mutual funds. Make the case for mutual funds, there must be some advantages.

Mario Payne:
Yeah, in its advantage, you're definitely diversified. A mutual fund is a pool of invest. Think about a swimming pool. If we have a hundred swimmers, we might have 90 swimmers that are doing great, they're free styling, they're doing the backstroke, breaststrokes, they're doing all types of swimming moves that the average person cannot do, and then you might have five swimmers that are not doing good at all. A mutual fund manager will act as a lifeguard. He or she will take those bad swimmers or bad stocks out of that pool. The thought process is if we continue to take out the bad stocks or bad swimmers at that pool, then my mutual fund is going to grow. Since it's diversified, if I have enough good and not as many bad, then even with the market going down, hopefully your mutual fund does not go down as much as the market. That is the case for a mutual fund.

Mario Payne:
Also with the mutual fund, from a retirement planning standpoint, if you have a 401k, a 403B, a deferred comp retirement plan, those mutual funds offer target date funds. If I am 40 years old, per se, and I want to retire when I'm 60, I might get me a target date fund that's in the year 2040 or 2045. That mutual fund, on a quarterly and annual basis, changes the way that investment in that mutual fund is invested to be where your age is. As I get older, it's going to be more conservative. If I'm younger, it's going to be more aggressive. That allows you not to have to check your balance on a day-to-day basis, not look at the market, not make changes in your 401k, your 457, because that target date does it for you. Those are some advantages of a mutual fund.

Bobbi Rebell:
It sounds like there's legitimate reason why the costs are higher and it's just a question of what your priorities and your needs are, which kind of investment vehicle you're going to use. Within a mutual fund, you've just explained how the manager can make adjustments based on their judgment on how different stocks are going to perform. Is an ETF managed at all? Can someone come in and make adjustments or is it set in stone, sort of what's in it is what's in it is what's it?

Mario Payne:
That's a great question. You have two types of ETFs. You have passive ETFs and you have active ETFs. The passive ETFs are things that are like an S&P 500 ETF or NASDAQ or a Dow Jones ETF, where it just mirrors what the index is. The S&P 500, top 500 companies in America, there are different ETFs that just pick those five stocks and they just let it be. Since this passive is not being managed, no one is picking up one bad stock, putting in another good stock. If the index is down, you're down. If the index is up, you're up. It's not being managed.

Mario Payne:
But then you have active ETFs, and our fund, LETB, that is an active ETF, where it is actively being managed just like a mutual fund. If it's good stocks, great. The bad stocks that are inside that ETF, then that ETF manager, he or she is pulling those out. With our ETF, LETB, it's automated. We have proprietary systems that automatically pick and choose what investments from a stock standpoint are going good. We put those in there, what investments are about to go down, and we hope to take those bad investments out that ETF before it happens so we can maximize your gains and minimize your losses. So depending on what type of ETF that you have.

Mario Payne:
Now, typically, a passive ETF, since it's less management, it's going to be less. The expense ratios on a passive ETF are very, very low compared to an active ETF. An active ETF, those expense ratios that you don't see, but they're there, they're going to be a little bit more.

Bobbi Rebell:
If you do not sell any shares of a mutual fund or an ETF, do you sometimes pay taxes if the manager is selling the assets inside, if they're switching out the different stocks that they have, the different holdings, and there are capital gains within there? How does that impact your taxes year to year and your cost basis, if at all?

Mario Payne:
Yeah, great question, two part. From a dividend standpoint, if that ETF or mutual fund is paying you a dividend, then yes, you will receive a 1099 if it's in a non-retirement account. If it's inside a retirement account, like a Roth IRA, traditional IRA, 401k, then no, you're not going to receive a 1099. But if it's not a dividend, the only way that ... Well, let me take that back. If it is a dividend, then you will pay taxes. If it's not a dividend, then no.

Mario Payne:
What happens is that if the mutual fund manager or the ETF manager in an active ETF are making changes, that's built into that expense ratio and they charge taxes inside the fund. You will not receive a 1099 or a tax form. In January, if it's a $100 stock that's bought, and in December it's sold for $50, that $50 gain, you're not going to get a 1099 for because it's inside of that fund. Now, it's going to be a charge, it's going to be a charge and that's going to be tied into your expense ratio, again, that hidden fee that you're paying that you don't see, but as far as getting a separate 1099 because he or she is actively managing your ETF or your mutual fund, no, you will not receive a 1099 for that.

Bobbi Rebell:
Finally, I want to ask you, can you discuss the red flags investors should look for if they're interested in investing in ETFs, and then separately red flags for mutual funds?

Mario Payne:
Number one, expense ratio. Yes, expense ratio means a lot of management, but that does not mean it's good management. If the expense ratio is high, we might want to pump the brakes. That's number one, from a mutual fund standpoint and a ETF standpoint.

Bobbi Rebell:
What would be high? Ballpark, what would be a red flag number?

Mario Payne:
Huh, That's tough. It's some mutual funds out there that have expense ratios that could be 1.5, 2, 2.5%.

Bobbi Rebell:
That's high, those numbers are high.

Mario Payne:
Yeah.

Bobbi Rebell:
Okay.

Mario Payne:
There's also different share classes you want to look into as well. When it comes to mutual funds, they have A shares, they have C shares, they have F1 shares. Those different shares depends on the price and the cost. Some, like C shares for instance, they may be a little bit higher, but then an A share, most people don't do upfront commissions anymore, but they do have A share investors, we pay an upfront commission, but then that hidden expense ratio that you don't see is very, very low. You want to look at the expense ratio.

Bobbi Rebell:
If you're buying a mutual fund through somebody, you should ask, "Are you getting a commission?" It's fine if they are, you should just be aware of it okay with it. Correct?

Mario Payne:
Correct. The certified financial planner in me, because I am a fiduciary, historically, fee-based is typically the best way to go from a just investment standpoint. Yes, it is a fee on an annual basis, but then a person can move from one investment to another, not have to worry about, "I charge you a commission, let me wait for two years because I don't want to overcharge you." You really should not be anything commission based anyways, to be honest. A lot of brokerage firms, not all of them, actually waived fees and commissions on ETF sales a couple years ago when the whole Robinhood explosion came and everybody was going to Robinhood in 2020 and 2019 because of the no commission. There really shouldn't be any commissions out there anyways, just to be honest with you.

Mario Payne:
That's my fiduciary hat, let me take that off and let me go back to the mutual fund and ETF expert. Another red flag, you do not want to, in my humble opinion, invest in something unless it has a nice track record. A one year track record in a five or 10 year bad track record does not mean it's a good fund, because every mutual fund and every ETF has what you call a prospectus. It's the legal document that tells you the historical information about the fund, how it's been invested, the managers, what it invested in. You can also Google fact sheet, so you can also go to Google and Google the fact sheet, which gives you that information. But it tells you the one year, the three year, the five year average.

Mario Payne:
It might be having a one year average that's very, very good, but then the three to five year average is not good at all. That probably means that it got lucky one year, but over three to five years, not so much. It's like a basketball player. A basketball player might have one good year, but over five years, if they're not good, not so much. You want to have a consistent good return.Those are some red flags to look at.

Mario Payne:
Also, funds that invest in "hot stock", the new funds that pop up, that they invest in hot stocks, you want to watch out for that. Last thing as well, performance wise, you have a lot of ETFs that are called leveraged ETFs, very important. A leveraged ETF is when the stock market goes up, it goes up double or triple. If you have a double leveraged ETF, if the stock market makes 1% for the day, that ETF is going to make 2%. That feels great, I've doubled the stock market. If the stock market goes up by 2% for the day, it makes 4%, that doubles the stock market.

Bobbi Rebell:
Sounds great.

Mario Payne:
Yeah, I know, right? But the bad part about that is when the stock market goes down, you lose double. The stock market goes down by 1%, you lose 2%, the stock market goes down by 2%, you lose 4%. If your risk tolerance is not aggressive to be okay with the roller coaster down and definitely okay with the roller coaster up, you might want to stay away from leveraged ETFs. Those leveraged ETFs usually have better performance than all ETFs because, again, they either double or sometimes triple the stock market.

Mario Payne:
Now, if you're an aggressive investor, you have that appetite for a diversification standpoint, you might want to look at that for some of your money from a ETF standpoint, but definitely just be careful because a leveraged ETF, the performance is great, but this year, right from January 1st to June, before the market bottom on June 13th, those leveraged ETFs did very, very, very bad compared to the market. You just want to watch out from a performance standpoint, if that's your end all be all, how to make the most money. Leveraged ETFs will look good from a performance standpoint, but I hope you have the stomach during the ups and the downs.

Bobbi Rebell:
I think people think they have the stomach until they don't. On that note, where can people get in touch with you and learn more about you and your ETF?

Mario Payne:
Yeah, yeah. Google, you can Google LETB ETF, our social media, our website, www.toamsfinancial. Our social media is TOAMS Financial. Again, our ETF, you just literally just Google LETB ETF. It's on all platforms, robinhood, Fidelity, TD Ameritrade. LETB gives you all the information we have, our fact sheets. The great thing about ETS and funds, they're transparent, so you can see our performance for the year as we did not go down as much as the market, how we invested, how we've been in cash for most of the year, so as the market's been going down, we've been in cash so you can't lose money when your money's in cash unless the word inflation comes up.

Bobbi Rebell:
I was about to say, we've got a little bit of inflation going on, Mario, but I'll let investors make that decision themselves.

Mario Payne:
Yeah, but literally just TOAMS Financial on all social media platforms and then LETB, L-E-T-B, B as a boy.

Bobbi Rebell:
Okay, my grownup friends, I told you those red flags were going to be eyeopening. What have your experiences been when it comes to investing in mutual funds or ETFs? Did you get any surprises, good experiences, not so good experiences? I'd love to hear from you. Get in touch, you can DM me on Instagram @BobbiRebell1, or on Twitter @BobbiRebell. Also, I want to help you learn more about personal finance and investing, so get on my newsletter list so I can send you more valuable information. You can sign up right on my website, at bobbirebell.com. Big thanks to Mario Payne of TOAMS Financial for helping us all be financial grownups.

Bobbi Rebell:
Money Tips for Financial Grownups is a production of BRK Media LLC. Editing and production by Steve Stewart, guest coordination, content creation, social media support and show notes by Ashley Wall. You can find the podcast show notes, which include links to resources mentioned in the show, as well as show transcripts, by going to my website, bobbirebell.com. You can also find an incredible library of hundreds of previous episodes to help you on your journey as a financial grownup.

Bobbi Rebell:
The podcast and tons of complimentary resources associated with the podcast is brought to you for free, but I need to have your support in return. Here's how you can do that. First, connect with me on social media @BobbiRebell1 on Instagram and Bobbi Rebell on both Twitter and on Clubhouse, where you can join my Money Tips for Grownups Club. Second, share this podcast on social media and tag me so I can thank you. You can also leave a review on Apple Podcasts, reading each one means the world to me, and you know what? It really motivates others to subscribe. You can also support our merch shop, grownupgear.com, by picking up fun gifts for your grown up friends and treating yourself as well. Most of all, help your friends on their journey to being financial grownups by encouraging them to subscribe to the podcast. Together we got this.

Bobbi Rebell:
Thank you for your time and for the kind words so many of you send my way. See you next time, and thank you for supporting Money Tips for Financial Grownups.

Taxes are never fun but millions of Americans may pay less for 2018. David Rae CFP® joins Bobbi for a breakdown of what changes matter and specific things Financial Grownups can do to make sure they are on track for when it is time to turn in their returns this spring. 

Here are 5 tips for year end tax planning

• Max out your retirement accounts

• Set up the Right Retirement Plan for your business

• Strategically Bunch your Tax Deductions

• Consider Doner-Advised Funds

• Tax-Loss Harvesting