Speaker 1: You know the music. You know what that means. Time
Speaker 1: to take some questions and get your calls for our
Speaker 1: retirement playing professionals from Class Financial telephon numbers to get
Speaker 1: on the air this morning with CJ. Coloss and Malia
Speaker 1: Quavis of Coss Financial. All I get to do is
Speaker 1: dial the station six oh eight three two one thirteen ten.
Speaker 1: That's six soh eight three two one thirteen ten. Again
Speaker 1: we'll get you on the air with Malia and cjf
Speaker 1: Coss Financial. You can learn more about Class Financial on
Speaker 1: their website Coss financial dot com. That's k l aa
Speaker 1: S financial dot com. Great resource to learn more about
Speaker 1: the team at Coss Financial. They're separate services whether you're
Speaker 1: an individual or a business owner, different departments at Coss Financial.
Speaker 1: Also when you're at classfinancial dot com. Oh there's more.
Speaker 1: I slide on down towards the bottom where it says
Speaker 1: stay current. There's a little envelope there. You can sign
Speaker 1: up for the weekly market Paul's newsletter. It's a fantastic
Speaker 1: weekly email gives you a little snapshot of what's been
Speaker 1: going on in the markets. Also link to the most
Speaker 1: recent podcast that all available to you at Cossfinancial. Dot com.
Speaker 1: They're telephon number for the office right here in Addison
Speaker 1: six oh eight four four to two five six three seven.
Speaker 1: No charge for that initial get to know your appointment
Speaker 1: at Coss Financial. It will be complimentary to you again
Speaker 1: their number six oh eight four four to two five
Speaker 1: six three seven. And welcome maing in CJ Closs and
Speaker 1: Malia Quavis. CJ, how you doing this morning.
Speaker 2: I'm doing great. It's a beautiful day, Sean.
Speaker 1: It is a fantastic day. It looks like some nice
Speaker 1: days ahead. Malia, how have you been?
Speaker 3: Very good? Happy to be here.
Speaker 1: It's great to have you both along. And again we've
Speaker 1: got a full show this week. We're going to be
Speaker 1: talking about debt, which is never a good never a
Speaker 1: good thing, especially as you're planning for retirement and entering
Speaker 1: into retirement. We're gonna get some details from CJ and
Speaker 1: Malia on that and things you need to be aware of.
Speaker 1: Mention some of the cool features of the program. I
Speaker 1: mentioned the website and all the great stuff there on
Speaker 1: the show. Each and every week get a Closs Quiz
Speaker 1: quesch a week. This week is no exception. Your chance
Speaker 1: to win a fantastic prize from our friends at Coss
Speaker 1: Financial at twenty five dollars gift card to best Buy.
Speaker 1: I tell you, but a little bit later on in
Speaker 1: the program how you can win that little tip though,
Speaker 1: if you listen closely to the show. Oftentimes just about
Speaker 1: every time, both the question and answer to the class
Speaker 1: quiz questionly come up during the program, and before we
Speaker 1: get rolling on this week's conversation, let's actually take a
Speaker 1: look back at last week's program and get the question
Speaker 1: and answer as well to the class quiz question.
Speaker 3: Of the week. Yeah, we had a great conversation about
Speaker 3: estate planning, something everybody should take seriously and make sure
Speaker 3: they get that done. And as financial planners, we try
Speaker 3: to make sure our clients have their boxes checked in
Speaker 3: that category. Accordingly, our question was on average, what percentage
Speaker 3: of Americans have completed their estate plans? Is it twenty
Speaker 3: six percent or seventy five percent? So Xavier from Monona
Speaker 3: correctly answered that with the answer of twenty six percent.
Speaker 3: So this is one of those questions where you don't
Speaker 3: want to be part of the bigger number. You want
Speaker 3: to be part of the smaller number and help that
Speaker 3: smaller number grow, if that makes sense. We want more
Speaker 3: people to really have reviewed or complete their estate plans.
Speaker 3: So thanks for listening last week. Go back and listen
Speaker 3: to the show if you missed it as a.
Speaker 1: Really informative program. And as Malia mentions, you can listen
Speaker 1: back to the show. Just head on over to Clossfinancial
Speaker 1: dot com. That's k l Aasfinancial dot com. Our full
Speaker 1: minds are open as well if you'd like to join us.
Speaker 1: Love to have you six oh eight three two one
Speaker 1: thirteen ten. That's six oh eight three two one thirteen ten.
Speaker 1: We'll get you on there with Malia and CJ of
Speaker 1: Coss Financial. And I know that you guys help folks
Speaker 1: of course planning for retirement, and I know one of
Speaker 1: the issues that comes up is the amount of debt
Speaker 1: that folks carry the balance sheets in that true k CJ.
Speaker 2: Yeah, for many For many people, debt continues to be
Speaker 2: something that follows them into retirement and it can obviously
Speaker 2: put an undue burden on retirees that while they're trying
Speaker 2: to keep up with you know, regular living and medical expenses,
Speaker 2: and now suddenly they have all these debt service payments.
Speaker 2: So this is why choosing to be debt free in
Speaker 2: retirement is truly the best choice, and we'll provide more
Speaker 2: options as you begin the next season of your life.
Speaker 2: So there are a few steps that we want you
Speaker 2: to kind of focus on as it relates to attempting
Speaker 2: to be debt free. Now, I will say, as we
Speaker 2: move towards this, Molly and I try to do a
Speaker 2: good job of every once in a while telling you
Speaker 2: what is ideal and then what is realistic. Right, So,
Speaker 2: like some people go, well, that's great, you guys that
Speaker 2: it would be wonderful to be debt free. But life
Speaker 2: threw me some curveballs and I've got debt. Now what
Speaker 2: do I do? So just understand that often because we're
Speaker 2: not speaking to individuals on the air, right I'm not
Speaker 2: speaking to some Janis sitting in her living room right now,
Speaker 2: I'm speaking to a group of people. And therefore, because
Speaker 2: we're speaking to a group of people, we talk in
Speaker 2: more utopian terms. Right, Ideally you should do this or
Speaker 2: that and here's why. But if this doesn't fit you,
Speaker 2: that's okay. Just make sure you're working with somebody to
Speaker 2: move towards it. So a few steps to consider, you know,
Speaker 2: set up a plan would be would be you know,
Speaker 2: item number one here to reduce and then eventually eliminate
Speaker 2: your debt. And if you don't listen to us, then
Speaker 2: there is this guy called Dave Ramsey out there with
Speaker 2: Ramsey Solutions that is kind of the no debt guru,
Speaker 2: and he has a bunch of different resources as it
Speaker 2: relates to helping people get out of debt. But some
Speaker 2: things you might need to do would be first change
Speaker 2: your lifestyle and spending habits, which requires that you start
Speaker 2: by setting realistic goals. Today, likely you'll want to be
Speaker 2: aggressive and paying down your debt so that you can
Speaker 2: be skin saving on a regular basis when in doubt.
Speaker 2: Many behavioral finance experts, including US, suggest putting the two
Speaker 2: habits on autopilot. The two habits I'm referencing are paying
Speaker 2: down your debt aggressively and saving for the future. There
Speaker 2: is a reason why the people who are most successful
Speaker 2: financially create robotic behaviors to make that happen, or what
Speaker 2: many people would call disciplined patterns. Right, if you've actually
Speaker 2: watched what the most successful athletes in the world do
Speaker 2: is they never miss practice. Right, they practice practice practice,
Speaker 2: and so in a similar way, if the greatest athletes
Speaker 2: in the world are just constantly practicing and working on
Speaker 2: their craft. The most wealthy people in the world are
Speaker 2: constantly saving and paying down debt. Another thing you might
Speaker 2: want to do is pay down debt first. So obviously
Speaker 2: it depends on a bunch of different situations that you're in.
Speaker 2: We do like people trying to get their four one
Speaker 2: K matches, But generally speaking, you're going to want to
Speaker 2: get rid of all of your non mortgage debt as
Speaker 2: quickly as possible. Main reason for this is because often
Speaker 2: that non mortgage debt think student loans, credit cards, lines
Speaker 2: of credit, auto loans, those interest rates on those debts
Speaker 2: are typically as high or higher than the earnings you
Speaker 2: could receive on your savings. Let me repeat that, the
Speaker 2: interest on the debt of those non mortgage debts is
Speaker 2: typically as high or higher than what you could receive
Speaker 2: on your savings. And therefore, while we want you to
Speaker 2: save for the future, it becomes a bailistic if you
Speaker 2: are saving into an account paying you, say, three four
Speaker 2: percent all the meanwhile, you have a credit card at
Speaker 2: twenty five percent. So consider paying down debt first.
Speaker 1: Talking this morning with CJ. Closs and Malia Quavis, they
Speaker 1: are our retirement planning professionals from Class Financial Prime Opportunity
Speaker 1: right now, get you on the air if you've got
Speaker 1: a question, all I got to do is dial six
Speaker 1: oh eight three two one thirteen ten. That's six so
Speaker 1: eight three two one thirteen ten. Get you right on
Speaker 1: the air with CJN Malia. Don't forget about the website
Speaker 1: Class Financial dot com. That's Class k l aa S
Speaker 1: Financial dot com. And the telephone number six oh eight
Speaker 1: four four two five six three seven. No charge for
Speaker 1: that initial get to know. The appointment at Class Financial
Speaker 1: eight will be complementary to you. So what about I
Speaker 1: know there's a sometimes that big pile of cash just
Speaker 1: sitting there, a retirement thing. What about kind of dipping
Speaker 1: into that payoff some debts?
Speaker 2: CJ. Yeah, No, it's a good question. So often what happens.
Speaker 2: And by the way, again we speak in utopian terms,
Speaker 2: and often that's not very helpful, so I will speak
Speaker 2: in very practical terms here. I think Malia did this
Speaker 2: about a week ago, very practically speaking, when you are young,
Speaker 2: well it may not just be young, but let's just say,
Speaker 2: when you have less wealth built up, When you have
Speaker 2: less wealth, the primary places that you hold wealth, when
Speaker 2: you're younger or less developed, would be in your home
Speaker 2: and in a retirement account when your employer puts money
Speaker 2: in there for you. Again, in your home or in
Speaker 2: a retirement account, especially when an employer puts money in
Speaker 2: there for you so often when things go wrong or
Speaker 2: said maybe a better way, you are irresponsible and I'm
Speaker 2: raising my hand. That was me early on. When that happens,
Speaker 2: the two places people look to go. It's like, oh,
Speaker 2: I'll tap a line of credit on my home, or
Speaker 2: I will take a loan from my retirement account. So
Speaker 2: here's what we'd say, lines of credit right now, and
Speaker 2: even floating interest rate lines of credit are somewhere between
Speaker 2: seven and ten percent, depending upon your credit rating, and
Speaker 2: again that's probably higher than the interest rate we expect
Speaker 2: you to get on any sort of a saving account.
Speaker 2: So lines of credit can work fine for very short
Speaker 2: term emergency needs if you have a plan to pay
Speaker 2: it off quickly, but remember helocks as they're called home equity.
Speaker 2: Lines of credit are not great for longer term emergencies.
Speaker 2: Like I had a person say to me, oh, my
Speaker 2: roof went bad, and so I took out a line
Speaker 2: of credits, and you know it's thirty five thousand dollars
Speaker 2: and I go, how quickly you're going to be able
Speaker 2: to pay that back? And he goes over the next
Speaker 2: ten years. Not a great use of a line of credit.
Speaker 2: The second one that I really want to focus on
Speaker 2: is borrow from my retirement account. That sounds like a
Speaker 2: good idea. My employer's been putting money in there, and
Speaker 2: I've got one hundred grand in there now and I
Speaker 2: heard I can get a fifty thousand dollars loan. While
Speaker 2: this is true, we would just I mean, there should
Speaker 2: be like a huge caution button when you go to
Speaker 2: do this, and the huge caution would be listen, if
Speaker 2: you leave that employer and that loan is not paid off,
Speaker 2: it is deemed as a distribution, and if you are
Speaker 2: under fifty nine and a half, the distribution is not
Speaker 2: only taxable, but penalized under most circumstances. Or furthermore, if
Speaker 2: you get laid off from that employer, the same circumstances apply.
Speaker 2: So what we're trying to get at here is these
Speaker 2: four to one k loans, while while they can be
Speaker 2: a system of last resorts, they are not a great solution.
Speaker 2: And so what we would say is before you start
Speaker 2: doing these things where you're just grabbing at cash to
Speaker 2: pay for items you want or need, or emergencies that
Speaker 2: pop up. Talk to an advisor, talk to an accountant.
Speaker 2: They'll look at all of your options and then tell
Speaker 2: you what is the best path. And then, finally, kind
Speaker 2: of outside of you know, should you tap your four
Speaker 2: one K plan for an emergency. One other thing you
Speaker 2: could do, as it relates to getting out of debt
Speaker 2: before you retire, is planned to work longer. Now most
Speaker 2: people when they hear this, they go, no, no, you know,
Speaker 2: I want to be done, and we certainly appreciate that,
Speaker 2: but I will just tell you your retirement will only
Speaker 2: be as joyful as the cash flow allows it to be.
Speaker 2: That may not be purely true, because, of course, we
Speaker 2: all know how happiness does not come from money. But
Speaker 2: there is an immense amount of stress that comes from
Speaker 2: being retired, having a fixed income, and still living paycheck
Speaker 2: to paycheck in retirement, and that is often caused by
Speaker 2: debt service payments. So one thing you might want to
Speaker 2: consider doing if you are still, you know, entering retirement
Speaker 2: with debt is consider working a little bit longer to
Speaker 2: eliminate for sure all of your non mortgage debt and
Speaker 2: if possible, even your mortgage.
Speaker 1: Great advice and great great guidance this morning as we
Speaker 1: talk with CJ. Coss and Maleia Quavis. They are our
Speaker 1: retirement planning professionals from Coss Financial. Don't for you can
Speaker 1: learn more about Malia, CJ and the whole team at
Speaker 1: Coss Financial on their website. Great website, Cossfinancial dot com.
Speaker 1: That's Closs k l a A S Financial dot com.
Speaker 1: Telephone number for the office right here in Madison six
Speaker 1: oh eight four four two five six three seven. No
Speaker 1: charge for the initial get to know you appoinment dech
Speaker 1: Coss Financial. It will be complementary to you again. The
Speaker 1: number six oh eight four four two five six three
Speaker 1: seven number to get on the air this morning, six
Speaker 1: oh eight three two one thirteen ten. That's six oh
Speaker 1: eight three two one thirteen ten. Trey will get to
Speaker 1: your call in just a moment. We'll also talk about
Speaker 1: some of the general numbers when it comes to amount
Speaker 1: of debt that Americans are carrying. We will do all
Speaker 1: of that next as Money in Motion with Class Financial
Speaker 1: continues right here on thirteen ten, WIBA talking with our
Speaker 1: retirement planning professional CJ. Closs in Malia Equavis their website
Speaker 1: Class financial dot com delpha number six oh eight four
Speaker 1: four two five six three seven And to get on
Speaker 1: the air, all I gotta do is give us call
Speaker 1: six oh eight three two one thirteen ten. That's six
Speaker 1: soh eight three two one thirteen ten, and Trey from
Speaker 1: Madison joins us. Trey, welcome to the program. You're on
Speaker 1: the air with CJ. Closs and Malia Equavis of Class Financial.
Speaker 2: Hey, I was going, I was just wondering, what's the
Speaker 2: biggest financial mistake you've ever seen.
Speaker 1: Them with may Oh great question.
Speaker 2: Well thanks for the question, Trey. I'll answer and then
Speaker 2: Maleia can answer as well. You're kind of putting me
Speaker 2: on the spot because I've seen a bunch of big
Speaker 2: financial mistakes. But I would say, kind of broadly, the
Speaker 2: biggest financial mistakes we see people make is focusing on
Speaker 2: the next shiny object. And what I mean by that is,
Speaker 2: you know, kind of like what is the hot thing
Speaker 2: happening right now? So this could be you know, back
Speaker 2: in two thousand and eight, this was gold, Like, oh
Speaker 2: my gosh, everything's going down but gold. I'm going to
Speaker 2: put all my money in gold. This could be now
Speaker 2: in current day cryptocurrency. And this is not us saying
Speaker 2: that gold or cryptocurrencies are bad. It's just they're just
Speaker 2: a thing, right, They're not going to save you. Or
Speaker 2: game Stop. When game Stop was going crazy, we had
Speaker 2: some people calling us and saying should I have a
Speaker 2: portion of my portfolio and game Stop? And so biggest
Speaker 2: mistake is mistaking that wealth creation or solid financial planning
Speaker 2: comes from gambling instead of good behaviors, if that makes
Speaker 2: sense right, because we all just want to believe that
Speaker 2: we can just strike gold or that we can, like
Speaker 2: you know, win the lottery and there's a quick way
Speaker 2: to become wealthy and change our lives. But the truth
Speaker 2: is that like ninety nine point nine nine nine percent
Speaker 2: of people who are wealthy of make good decisions. And
Speaker 2: so that would be my feedback of the biggest mistake.
Speaker 2: But Malia, what do you think?
Speaker 3: So I think it's a great question, and I think again,
Speaker 3: it goes back to behavior. And oftentimes if we are
Speaker 3: spenders in our in our you know, earning years, we
Speaker 3: have this disconnect that when we retire, we're suddenly not
Speaker 3: going to be spenders vice versa. If we've been savers,
Speaker 3: some of the savers say, well, when I get into retirement,
Speaker 3: I'm going to start spending my money. And so the
Speaker 3: disconnect works fine for those savers, okay, because the savers
Speaker 3: remain savers. The spenders, however, cannot self correct. They think
Speaker 3: they can, but it's called a habit. And so really,
Speaker 3: when we're working with people in their fifties, you know,
Speaker 3: approaching their early sixties, if we haven't kind of you know,
Speaker 3: managed their spending and their mindset on spending, then we
Speaker 3: are going to end up in debt and we are
Speaker 3: going to end up with not the type of retirement
Speaker 3: income they're looking forward to. So it's all about the
Speaker 3: habits and making sure you've got good ones or you're
Speaker 3: getting better ones as you approach those magic years.
Speaker 1: It seems, Malia and correct me fight. It's easier to
Speaker 1: correct some of these things earlier than later.
Speaker 3: That's what we would prefer to do. Again, none of
Speaker 3: us have perfect lives, and life happens. But I think
Speaker 3: you know, a habit takes you know, a couple months
Speaker 3: to get into place, and as long as you keep
Speaker 3: on doing it. And I know, I mean, our clients
Speaker 3: say this all the time to us. They walk in
Speaker 3: the door and they go, yeah, we were out shopping
Speaker 3: this week and the wife says, Malia said, or CJ
Speaker 3: said we could buy this, or we shouldn't buy this
Speaker 3: or whatever. So, you know, it is good to have
Speaker 3: always that third party out there that can be kind
Speaker 3: of the sounding board, whether it be your accountant, your parents,
Speaker 3: you know, someone besides just your neighbor or your colleague,
Speaker 3: because you all have, you know, your own situation going on,
Speaker 3: and it's nice to have that objective third party.
Speaker 1: It's good. It's good to hear as we get some
Speaker 1: of you know, some of these great questions. Trey, thank
Speaker 1: you for the call. And I think some people are
Speaker 1: probably nodding their head to to to what both you
Speaker 1: and CJ had said. And as we kind of talk
Speaker 1: about some people, let's talk about all people. When it
Speaker 1: comes to debt in general. How much debt to Americans
Speaker 1: Malia have in retirement in general carry these days.
Speaker 3: Yeah, we're going to talk about the big number and
Speaker 3: then we'll drill it down to individuals, but we like
Speaker 3: to just start off with what comprises total household debts.
Speaker 3: So when we're talking about this, that would include your mortgages,
Speaker 3: student loans, car loans and of course credit cards. So
Speaker 3: according to the Federal Reserve Bank of New York, household
Speaker 3: debt balances in the US set a record high seventeen
Speaker 3: point six y nine trillion that's trillion with a T
Speaker 3: during the first quarter of twenty twenty four. So that
Speaker 3: was up by one hundred and eighty four billion. I mean,
Speaker 3: who can keep tracks of billions and trillions here, but
Speaker 3: billion up from the previous quarter, and mortgage balance is
Speaker 3: increased by another one hundred and ninety billion, so you
Speaker 3: know what. We look at various studies. One study we
Speaker 3: saw that's fairly accurate I believe is Credit Karma because
Speaker 3: they have a lot of members. They looked at their
Speaker 3: data of seventy eight point two million members as recently
Speaker 3: as April of twenty four, and we isolated what they
Speaker 3: said about the baby boomers because that's primarily the audience
Speaker 3: we work with quite a bit. So those would be
Speaker 3: people born between nineteen forty six and nineteen sixty four.
Speaker 3: These people who are typically retired or on their way
Speaker 3: to retirement in the next five to seven years. Those
Speaker 3: people carry an average auto loan debt of about twenty
Speaker 3: two thousand. Credit card debt of around seven thousand, mortgage
Speaker 3: debt of around one hundred and eighty eight thousand, and
Speaker 3: then surprisingly, and again I don't think most people would
Speaker 3: think of this. They do carry the most in student
Speaker 3: loan debt of forty three thousand plus. So you know,
Speaker 3: are they all in school paying back their own student loans.
Speaker 3: Probably not. We do have clients that feel an obligation
Speaker 3: to take over student loans for their kids or grandkids,
Speaker 3: and we would never you know, if a client wants
Speaker 3: to do that for their children or grandchildren, we understand,
Speaker 3: but we always want to make sure our clients are
Speaker 3: whole before they assume obligations like that. So some quick
Speaker 3: suggestions to help you stay or stray away from debt.
Speaker 3: First word is stop just stop stop adding to your
Speaker 3: debt balances. You need to remove those credit cards and
Speaker 3: Dave Ramsey would tell you the same thing from your wallet.
Speaker 3: Reduce that temptation. It's just like you know, if you
Speaker 3: put a cake in front of me all day long,
Speaker 3: I pass it in the office. Eventually I'm going to stop.
Speaker 3: I'm going to stop and have a piece right. Same
Speaker 3: thing with that credit card.
Speaker 2: If it's in that I know the problem.
Speaker 3: So you know, that's kind of what taunts us, So
Speaker 3: take it out. You don't need to have a whole
Speaker 3: bunch and just resist that temptation. Understand current interest rates
Speaker 3: and we're going to have CJ go over this, but
Speaker 3: current interest rates really can devastate you if you are
Speaker 3: accumulating debt. Prioritize pay enough high interest credit card debt first.
Speaker 3: But there's various methods. Use a debt reduction calculator, payoff
Speaker 3: calculator again, you can find that at credit Karma dot com,
Speaker 3: calculator dot net. Figure out how to use that snowball
Speaker 3: approach we've spoken about many times. And finally, pay your
Speaker 3: bills on time. So late payments will result in fees
Speaker 3: and that's going to increase your debt balances and ultimately
Speaker 3: it's going to hurt your credit score if you're trying
Speaker 3: to buy a house in the future or or whatever.
Speaker 3: So you know, again behavior just pay your bills regularly
Speaker 3: and don't accumulate more debt than you can pay off
Speaker 3: in a single month.
Speaker 1: Talking this morning with our retirement planning professionals from Class Financial, CJ.
Speaker 1: Coss to Malia Quavis the website Cossfinancial dot com. That's
Speaker 1: css K, l AA S Financial dot com and they're
Speaker 1: telephone number six, so eight four four two five six
Speaker 1: three seven. So about those current interest rates CJ. Of course,
Speaker 1: looking at different types of debt, we have what are
Speaker 1: we seeing then as far as those those interest rates
Speaker 1: for those those different debts.
Speaker 2: And so it varies by category, but we'll go through
Speaker 2: some of them here today. So you know, credit cards
Speaker 2: being one. According to lending Tree, the average credit card
Speaker 2: interest rate in America today is twenty four point eight
Speaker 2: four percent. This is the highest since lending Tree began
Speaker 2: tracking rates monthly in twenty nineteen. Now not the highest
Speaker 2: in history for those who know, back in the late
Speaker 2: seventies early eighties kind of Reagan administration era, we had
Speaker 2: higher inflation and higher interest rates than we have now
Speaker 2: by a wide margin, by the way. But since twenty nineteen,
Speaker 2: it's the highest number we've seen. And if you have
Speaker 2: less than an ideal credit score, than the average APR
Speaker 2: offered is twenty six point eight five percent or higher.
Speaker 2: And that's not a delinquency rate, that's just a standard
Speaker 2: credit card rate. If you have a lower credit score,
Speaker 2: so that's that's a big deal, you guys. We suggest
Speaker 2: paying off or at least paying down this type of
Speaker 2: debt first, for the obvious reason that you can't compete
Speaker 2: with that, meaning like if you have money in a
Speaker 2: bank account and say it's a really high yield money
Speaker 2: market account at six percent, and by the way, I
Speaker 2: don't even think that exists, but let's just say for
Speaker 2: conversation's sake, it does. Well, my goodness, your credit card
Speaker 2: is what five times that rate? So just remember credit
Speaker 2: card balances that carry from cycle are a poison pill
Speaker 2: to your financial circumstances. And actually Trey called in and said,
Speaker 2: you know what is one of the worst financial mistakes
Speaker 2: you've seen. Another financial mistake within this credit card category
Speaker 2: would be thinking that carrying balances on your credit cards
Speaker 2: helps your credit score. It doesn't. Carrying balances cycle to cycle,
Speaker 2: and paying interest on your credit card does not help
Speaker 2: your credit score. Now, utilizing a credit card could help
Speaker 2: your credit score, but for what it's worth, I mean,
Speaker 2: listen to Dave Ramsey on this topic. I don't think
Speaker 2: your goal in life should be to have a high
Speaker 2: credit score. Let me repeat that, I don't think your
Speaker 2: goal in life should be to have a high credit score,
Speaker 2: because I remember credit scores are defined by if you
Speaker 2: are using credit. The goal in life should be to
Speaker 2: have no credit score. Okay, sorry, now I'm starting to
Speaker 2: sound like Dave Ramsey. Okay. The next category would be
Speaker 2: home loans. So ideally, as we approach retirement, we would
Speaker 2: prefer that you have either no or very little of
Speaker 2: a mortgage left. And as of July of July twenty
Speaker 2: third of twenty twenty four, the national average thirty year
Speaker 2: fixed rate mortgage APR is six point nine to two percent,
Speaker 2: with the average fifteen year fixed rate mortgage at six
Speaker 2: point three three percent. This is according to bank Rate's
Speaker 2: the latest survey of the national or the nation's largest
Speaker 2: mortgage lenders. So there's no guarantee as to what mortgage
Speaker 2: rates will do in the future, so just do your
Speaker 2: research first. Even if your current mortgage has a decent rate,
Speaker 2: a debt is still a debt, and often it's a
Speaker 2: fixed amount that you've agreed to pay. And like we
Speaker 2: just mentioned to you, at an almost seven percent interest
Speaker 2: rate on a mortgage, there's no guarantee that what you
Speaker 2: do in the markets over time, or in bonds or
Speaker 2: in cash is going to beat that. So bottom line
Speaker 2: is we want you to carefully look at at all
Speaker 2: of your debts and just make sure that you are
Speaker 2: trying to get rid of those as quickly as possible.
Speaker 1: Great guy, it's from CJ. Clossom Aliaquavis. They are retirement
Speaker 1: planning professionals from Class Financial. We're to talk about auto
Speaker 1: loans and student loans, things to be watching out for.
Speaker 1: We will do that next of course. In the meantime,
Speaker 1: men haven't been to the website yet, checkout classfinancial dot com.
Speaker 1: That's class k l aas Financial dot com telph a
Speaker 1: number for the officer right here in Madison six oh
Speaker 1: eight four four two five six three seven. More of
Speaker 1: money in Motion with Class Financial is next right here
Speaker 1: on thirteen ten wib A, just moments away from the
Speaker 1: Class quiz question the week. Talking this week with our
Speaker 1: retirement planning professional CJ. Colossomlia Quaves from Klass Financial about
Speaker 1: debt of course, their website Class financial dot Com. Tell
Speaker 1: for a number six oh eight four four to two
Speaker 1: five six three seven. So, Malia, what should we watch
Speaker 1: out then? As we watch out for as we're kind
Speaker 1: of working our way through these different types of debts
Speaker 1: and loans and other things, specifically when it comes to
Speaker 1: auto loans and student loans. What do we need to
Speaker 1: be aware of.
Speaker 3: Yeah, we want everyone to be really careful with this,
Speaker 3: starting off with auto loans. And we hear this all
Speaker 3: the time. Our clients are getting ready to retire. They're like,
Speaker 3: I'm buying this car. It's going to be the last
Speaker 3: car I ever have, and quite honestly, they might have
Speaker 3: three more because we are living into our nineties oftentimes.
Speaker 3: So I love the thought, but the fact is you
Speaker 3: may need to replace. So we do have to look
Speaker 3: at auto loans, and you know, we like people to
Speaker 3: compare their credit unions to the banks if they're buying
Speaker 3: new buying news or whatever. But be familiar with the
Speaker 3: changing rates. As of mid July of twenty twenty four,
Speaker 3: aprs arranging anywhere from about five point six percent to
Speaker 3: over twenty one percent, and that's based on your credit
Speaker 3: score and again what kind of auto loan you're looking
Speaker 3: for now For individual consumers, though, you have to again
Speaker 3: understand that those rates, look at your credit score, the term,
Speaker 3: length of your loan, age of the car being financed,
Speaker 3: and understand that the length of the loan can range
Speaker 3: anywhere from you know, your normal sixty months up to
Speaker 3: eighty four months. And you know, when you enter onto
Speaker 3: a car lot, there's only one plan of action for
Speaker 3: that salesperson. It doesn't matter what amount you end up paying.
Speaker 3: They're going to tell you how you can afford the
Speaker 3: monthly payment, right, and the monthly payment can look maybe
Speaker 3: more attractive if they stretch out the loan. So that
Speaker 3: is the goal, just to sell you the car. And
Speaker 3: I know some of our clients go and they pay cash.
Speaker 3: That is not what the auto place wants to hear.
Speaker 3: They like to finance your loan. But you know, many
Speaker 3: of our clients pay cash. We think that's great, but
Speaker 3: just so you know, many times there's some bulking going
Speaker 3: on when you show up and say I don't want
Speaker 3: to finance. So there's some reality speaking there, so be careful.
Speaker 3: That's what we'd say. We would still advocate if you
Speaker 3: have to take a car loan out, try to keep
Speaker 3: it to the five years or less. We're we're fans
Speaker 3: of zero percent two point nine percent. If you're going
Speaker 3: to take out a loan, just make sure you shop
Speaker 3: that really well. And then student loans. You know, again
Speaker 3: we just spoke about how you know, many of our
Speaker 3: baby boomers do carry student loan debt, and that's a
Speaker 3: really important item, especially if you have grandkids perhaps that
Speaker 3: are taking out federal loans, to really understand how high
Speaker 3: those have risen. So, federal student loans for undergraduates currently
Speaker 3: have an interest rate for the twenty twenty four to
Speaker 3: twenty twenty five school year of six point five to
Speaker 3: three percent. But interestingly enough, graduate students they have interest
Speaker 3: rates of eight point oh five percent for those unsubsidized loans,
Speaker 3: and if they're not unsubsidized, they're up to nine point
Speaker 3: oh five percent. So these these student loan rates are
Speaker 3: are pretty high from the federal level. But then what
Speaker 3: people go and do is they go about go about
Speaker 3: finding out about refinancing them with companies you may have
Speaker 3: heard of called l FI or so FI, and those
Speaker 3: rates average anywhere from five and a quarter today up
Speaker 3: to ten percent. But you have to understand the difference
Speaker 3: between having a federal loan which will allow you to
Speaker 3: pay it over a very long period of time. If
Speaker 3: you have some type of crisis, you can generally defer
Speaker 3: them many times with federal, but as soon as you
Speaker 3: switch over to a better rate, which we're all about
Speaker 3: better rates, you have to understand now you are taking
Speaker 3: a loan that there really is no forgiveness. It's just
Speaker 3: alone and so you have to keep that in mind
Speaker 3: as you're thinking about refinancing for a lower cost. So
Speaker 3: just understand that. And finally, I just want to say
Speaker 3: the takeaway from all of this today is that you
Speaker 3: should make retiring as close to debt free as possible.
Speaker 3: And we understand the fight here is how can we
Speaker 3: do this while we're still saving enough for retirement. It
Speaker 3: is a little tricky, but we know we see people
Speaker 3: successfully do it every day. So just get a plan
Speaker 3: and stay to the plan.
Speaker 1: Talking this morning with CJ. Colss and Malia Quavis, they
Speaker 1: are our retirement plan professionals from Class Financial, the website
Speaker 1: COSS financial dot com that's coss k l Aasfinancial dot com.
Speaker 1: And the telephone number six oh eight four four two five,
Speaker 1: six three seven. Want to hold on to the telephone number.
Speaker 1: Now it's time for the COSS Quiz question the week.
Speaker 1: It works like this, just a moment, I'll ask you
Speaker 1: the Class Quiz question leak. You will then have thirty
Speaker 1: minutes from the end today's program to call the Class
Speaker 1: Financial office right here in Madison at six oh eight
Speaker 1: four four two, five, six three seven. If you are
Speaker 1: the first cost correct answer one this week's prize, which
Speaker 1: is a twenty five dollars gift card to best Buy.
Speaker 1: This week's COLSS quiz question the week is this true
Speaker 1: or false? According to the Federal Reserve Bank of New York,
Speaker 1: household debt balances in the United States set a record
Speaker 1: high of seventeen point six y nine trillion during the
Speaker 1: first quarter of twenty twenty four. First caller with the
Speaker 1: correct answer one that twenty five dollars gift card to
Speaker 1: best Buy the number six oh eight four four two, five,
Speaker 1: six three seven. CJ. Leah. It's always great chatting with
Speaker 1: you guys. You enjoy this beautiful day. Thanks Doctor Marty
Speaker 1: Greer comes your way next here on thirteen ten w
Speaker 1: U I B E