Money Talk with Carl Stuart

Carl Stuart takes caller and text questions on the benefits of money market funds versus high-yield savings accounts for short-term emergency savings, including his analysis of the current Austin real estate market, noting a decline in median sales prices and home sales compared to the previous year.

The full transcript of this episode of Money Talk with Carl Stuart is available on the KUT & KUTX Studio website. The transcript is also available as subtitles or captions on some podcast apps.

KUT Announcer: Laurie Gallardo [00:00:01] This is Money Talk with Carl Stuart. Carl Stuart is an investment advisor representative of Stuart Investment Advisors. Call or text him with your questions at 512-921-5888. Now, here’s Carl.

Carl Stuart [00:00:20] Welcome to money talk i’m Carl Stuart and you’re listening to money. Talk on kut news 90.5 And on the kut app welcome Coming up on our 31st anniversary together on money talk This is a broadcast a world about the world of financial and investment planning Where you always determine our agenda by calling or texting 512 921 5888 It’s a great idea to call or text early in the broadcast, giving me, I hope, ample time to do my best to answer your question. I take today’s callers first, and then today’s texts, and then texts that I haven’t had the opportunity to answer, which came in the past. So before we get started, the number one more time to call or text is 512-921-5888. Every month I get. An update on the Austin metro area residential real estate market. And I suspect that for a lot of our listeners, this is interesting. And for some of them, particularly relevant if they’re thinking about selling or purchasing a home. So through December of 2025 in the Austin Metro area, the median sales price was $430,000. By the way, you hear that noise, that’s an incoming text, terrific. The median sales price was $430,000. It’s down 1.1% on a year-over-year basis. I think I’m gonna take that text. You’re listening to Money Talk on KUT News 90.5 and the KUT app 512-921-5888. Hello Carl, I’m a relatively new listener and love your show, thank you. My question is, would you recommend a high-yield savings account or a money market fund? Not a money market account, is I’ve heard you make the distinction for short-term emergency type savings. I would just probably go with a money-market fund. The money- market account is issued by a bank or perhaps a savings loan or perhaps credit union. And the benefit of that is you get the $250,000. Coverage, insurance coverage, FDIC for banks. But I’ve been doing this for 47 years and I’ve got to tell you my experience is the money market mutual funds pay more than money market accounts, even though it’s high yield because the banks have to obtain enough of deposits to make loans. They also have to keep track of their competition but they’re unlikely to do offer more than that. A money market fund doesn’t have a choice. Money market funds invest in high-grade securities of maturities of less than one year. So they’re always having bonds, if you will, coming due and reinvesting. So in a rising interest rate environment, as their existing bonds come due, they buy bonds at higher yields. And in a falling interest rate environmental, they then reinvest those at a lower rate. So there’s a lag on the return. But I like them because they’re daily liquid and I like their returns. And as long as you stay with the reputable name, if you’re a do-it-yourself investor like Schwab or Vanguard or Fidelity, if you work with an advisor, the advisor’s custodian, I’m only aware of one time where there was a problem with the Money Market Fund and it happened at the beginning, maybe during the global financial crisis in 2008 and 2009 because there was the standalone Money Market fund called the Reserve Fund that did not have a sponsor like Schwabb or like UBS. And some of their short-term debt was issued by Lehman Brothers, which filed for bankruptcy, and so the dollar per share, or so-called net asset value, was broken. I have no concerns whatsoever about using a money market fund. These custodians and broker dealers have millions of dollars of their clients’ money, and they simply are not going to let those fail. In fact, back when interest rates were very low, I remember reading, I think it was Schwab, but I suspect it was happening across the board. They were getting such a low return on the instruments inside the money market fund that they couldn’t pay their own operating expenses. So they subsidized the fund so that they could offer some return because they wanted to keep the money. So I suspect that a money market fun would be better. Now, What I would do if I were you is understand that there are three types of money market funds and these are all taxable because there are high yield money, I beg your pardon, municipal bond money market as well. So the three names are prime, government and treasury. The prime funds by high grade corporate debt and the government ones by US treasuries and also government agencies, primarily those bonds issued by Freddie Back and Fannie Mae. And the treasuries buy only treasurys. There’s a bit of a pick up and yield, what we call a spread between what treasureys are paying and what government sponsored enterprises like Fannie Mae and Freddie Mac are paying. And I like that middle one, the government money market fund. So do your homework or if you work with an advisor, ask her or him, but I would probably stick with the money market fun. Thanks for the question and thanks for being a new listener. You’re listening to Money Talk on KUT News 90.5 and on the KUT app. Call or text 512-921-5888. And by the way, you can catch past shows at kut.org slash Money Talk. So if you’re out and about somewhere on a Saturday and you’re not able to listen, or if you have friends or colleagues or relatives that you think would enjoy the broadcast, then go to kut dot org slash MoneyTalk. Five one two nine two one five eight eight eight. So I said the median sales price in the Austin metro area for a residential real estate is $430,000 as of the end of 2025, now 1.1% year over year. I kind of feel like that’s a little strengthening in the market because the numbers have been more like down two or 3%. The median sales price, this is probably more important, per square foot, at $209 was down 2.3%, and that would be consistent with where we’ve been. And the total home sold, and I think this is interesting, was down, was sold at 1,971. That’s down a significant amount, 13.6%, on a year-over-year basis. Median days on the market. 92 days so anticipate three months and that’s uh days on the market is up 5.7 percent from where it was a year ago the supply of inventory is up sharply supply of inventories 6.4 months that’s up 23.1 percent over year-over-year basis so depending on which side of the transaction you are a seller not particularly good news a buyer much better news and those sold above the list prize. Are 12%, that’s sharply higher, 18.8% year over year. But that’s kind of an iffy number because there just aren’t that many to be able to have a real broad understanding in my view. And new listings are sharply lower. This just probably goes along with the supply of inventory. New listings at 2,105 were down 35.6% from the last month. Now, doing it from month to month, obviously, also picks up some seasonality, so you have to figure that in as well. You’re listening to Money Talk on KUT News 90.5, KUT app, and we have all of our lines available. You can call or text 512-921-5888. Here is a previous text that I did not answer, or I may have answered it the last. 48 seconds of the broadcast. So let me go to this cause it’s a good question. Good evening. I have $20,000. Where can I invest the money and keep it there for five years? So I think the key here is five years. And the second is the word invest because the way I think about, there’s a distinction between saving and investing. Saving is where you have a specific need in the future or it’s emergency money. You’re saving money for a down payment, you’re saving to buy an automobile, you’re save money to take a nice trip, or you’re in a volatile labor market and you’re concerned about the quality, about the stability of your job, keeping money in a money market fund makes a lot of sense. But the data show that there are trillions of dollars in cash in America that, in my view, should be invested but they’re there for savings. And why is that? I think two reasons. Just inertia, it’s easier to leave it there than to think about making a decision. And the second is fear, fear of losing money. But when you have a 60 day window before you need it, or even a 12 or 24 or perhaps 36 month window, then you have to consider volatility or the potential falling in value. But when start talking five years and longer, based on history, you’re going to have a much better return when you think of it as an investment. And where I would go with this is this, over my career, there’s been this wonderful, what I would call democratization, where individual investors have the ability to do it themselves or with an advisor, but at much lower costs. So if I were starting with $20,000, the first question I would ask is, what is it I’m trying to accomplish? If I want the money to grow faster than inflation, then I’m gonna look to the stock market. If I have some reduced risk tolerance, then I am not gonna put it all in the stockmarket, but I’m going to put the substantial portion in. And depending on your age and tolerance, something around 55 to 65%, I would use global equities. So if you had 60%, that’s $12,000, I’d have more or less $8,000 in a total stock market exchange traded fund and $4,000 in a international exchange traded funds. And then I’d have the balance in a short-term bond fund, and I would have it in an intermediate term bond fund or something called a multi-sector bond fund. If the stock market falls and interest rates are stable, those bonds will hold value. If interest rates rise, your short-term bond fund. Will do better than the intermediate and probably the multi-sector. Thanks for the question. You’re listening to Money Talk on KUT News 90.5 and 90.50 and the KUT app. Call or text 512-921-5888. Carl, I want to give $10,000 each to my two minor children. I heard that there’s a way to set up Roth IRAs for my children as a gift. Is this true? My understanding is that they have to have taxable income. Back in the day when our children were young, when they got summer jobs, whatever they made, I was able to put in, back then before Roths, IRAs up to the amount of their full income. I don’t believe you can put money in a Roth for a minor if they have no income. Now, you can double check that and I’ll take a look this week, but that’s the way it’s always been. Now, because they’re a minor, you or some person, parent, has got to be the custodian until they reach age 21 and then your name disappears and the Roth IRA is theirs. I think it’s a terrific idea for everybody else if they’d been available when. When my kids were younger, I would have done Roth. And I will tell you what we did do, my wife and I did, is when Roth came out, we did a Roth conversion. They were in low tax brackets because they were young adults and in the university. And we just footed the bill for the taxes because the IRAs weren’t that big, moved them over to the Roth. And now that they’re adults, they really have a significant accumulation of capital and they have that wonderful ability to leave it in there as long as they want. Or take it out after the 59 and a half and pay no income tax on it whatsoever. So setting up her custodial Roth IRA seems to me like not only a generous thing to do, but I think it’s probably a terrific idea. Not, no, no I don’t. I think is a terrific I did. No, probably whatsoever. You’re listening to Money Talk on KUT News 90.5 and the KUT app. Call or text 512-921. 5888, I see that we have a call coming in, I think. Let me see if I have another text before we go to that. Here we go. Oh, there’s the text and there’s call. Here we, go. Stephanie, you are on the air. How may I help?

Stephanie [00:14:21] Hi this is Stephanie. Hi. And I’m calling, I meet with my financial advisor every January and the fees are what you typically expect where it’s like oh like 1% and then the more the bigger portfolio is the lower the percent. Right. And this year they said well you We have a $10,000 minimum, so like it’s still based on the percentage, but if you don’t have enough in their, you know, under their control.

Carl Stuart [00:15:02] Mm-hmm.

Stephanie [00:15:02] That you would have to pay the difference. And I just didn’t know if, like I’ve been going to them for over 20 years and I didn’t notice it’s like a new thing or is it like?

Carl Stuart [00:15:16] Well, I’ve been reading about this. Let me give you the, with whomever, is the advisor, is the adviser affiliated with a securities firm like Morgan Stanley or Merrill Lynch or Edward Jones or somebody like that? Or, you know.

Stephanie [00:15:34] There was Schwab.

Carl Stuart [00:15:35] Okay, so Schwab. So Schwab has, according to what I’ve read, put some pressure on their customers, the registered investment advisors. You’re the client of the registered investment advisor because of the cost of servicing accounts. In other words, whether a person has $50,000 with her advisor or $500,000, There are certain expenses that are exactly the same. And so they’re putting pressure on those advisors and saying, if you’re going to have smaller accounts, we Schwab are gonna charge you, the advisor. And the advisor says, well, then we need to look at Stephanie and raise the fees on Stephanie because our operating costs are going higher. I don’t, I have not read that across the board. I have read the Schwab because they have tens of thousands of advisors are doing some work on putting pricing pressure. On the advisors that have smaller amounts of assets with them. So I would tell you that I’m not surprised by this. I’m sorry for you that it’s occurred, but it is an industry trend, but it’s not the same everywhere. So if you are satisfied with the advisor, I would go ahead and pay the fee. If this is a tipping point for you where you wanna go shopping for another advisor, then I would do so, but I don’t see this changing. Frankly at all, Stephanie.

Stephanie [00:17:07] Okay, well that’s that’s basically what I needed to know I needed To hear more about the bigger picture because yeah, he didn’t go into that level of detail. But yeah Well, I that’s pretty much what I need to know

Carl Stuart [00:17:20] Thanks for calling. You’re listening to Money Talk on KUT News 90.5 and on the KUT app. Call or text 512-921-5888. You know, I think I’m going to take a break here before, so I don’t have to take your break in the middle of an answer. We are going to take a brake, a perfect time for you to call or text, 512 921-5888. Stick around. I’ll be back.

Jimmy Mass [00:17:59] Money Talk airs every Saturday at five o’clock on KUT News 90.5 FM on the KUT app and at KUT.org. This podcast is produced by KUT and KUTX Studios as part of KUT Public Media, home of Austin’s NPR station and the Austin Music Experience. We are a non-profit media organization. If you feel like this is something worth supporting, set an amount that’s right for you and make a donation at supportthispodcast.org

KUT Announcer: Laurie Gallardo [00:18:29] This is Money Talk with Carl Stuart. Call or text him with your questions at 512-921-5888. Now, here’s Carl.

Carl Stuart [00:18:43] Welcome back to Money Talk. I’m Carl Stuart, and you’re listening to KUT News 90.5 and the KUT app. We’re here this afternoon until five local time. It’s a great time to call or text. Five, I’d be here until six. Five, one, two, nine, two one, five, eight, eight eight. Okay, there was a follow-up question from, okay, here it is, the person who asked about the $10,000 to two minor children in a Roth IRA. What are some other ideas for gifting $10,000? And my children do not have taxable income. So I would, there’s a couple of ways. If you want to have them have the money at their age of majority, then a custodial account with you or some other responsible adult, their date of birth and social security will be there, but it will be. The custodian’s tax liability, which doesn’t necessarily mean a bad thing, on $10,000 properly invested in probably index funds, and then upon age 21, it’s theirs. Now, the challenge is, of course, that when you’re talking about youngsters, you don’t know how they’re gonna turn out in terms of how they gonna spend the money. Adolescence is a remarkable time, not always pleasant. And if you put 10,000 in and it grows nicely, and it’s 15,000 or $18,000 and they’re 21, they may decide to drop out of school and take a nice trip. So I think that’s the drawback for custodial accounts, the taxability to the custodian and the loss of control. The other thing you can do, which is something that I have used a lot, is you can open up a separate account in your name and you can call it children’s account or grandchildren’s account or whatever, you can fund it, it’s still your money, it grows over time, and then when you want them to have the money, you simply give the shares, they inherit your cost basis, and then they can keep it, sell it, whatever the case is, and go on down the road. Also, it gives you maximum flexibility. If you want to take it for whatever purpose, although that’s true of the custodial account, whether that’s a new car, I beg your pardon, not a new card, heaven forbid, a used car or a tutoring or an academic camp or a sports camp or whatever. So if you’re okay with the features of a custodian account, you open a custodeal account, just not a Roth or an IRA and make the same investments. You’re listening to Money Talk on KUT News 90.5 and the KUT app. Call or text 512-921-5888. Noe, you’re on the, I can’t tell your name, I’m sorry. You’re on The Error. How may I help? Is it Noe? Oh, good, good guess. Good for me. How may help, Noe.

Noe [00:22:03] I have, I’ve been working on paying off my wife’s student loan. We do Financial Peace University and we were nearly there and then I decided to go back to get my master’s. And I’m not employed, well I have a part-time job now until I finish my master in about six weeks. And I decided that I had a, I noticed there was a five percent checking account. Up to $15,000 at one of our local banks. So, would it be, if that’s at 5% and the online savings is at 4%, should I move that $15000 over to that 5% account? Well, it’s a great question. Sometimes I do things like this because I’m unemployed and I want to make more money for my family, you know?

Carl Stuart [00:22:54] Of course you do. The thing is, I’m not sure that it’s worth the hassle. When you think about 1% difference on $15,000, if 10% is $1,500 a year, so 1% is a $150 a year. So on a monthly basis, 150 divided by 12. If I’m doing this, it’s like 10 or 12 bucks a month difference. So you really have to ask yourself if the math is worthwhile. But from time to time, banks will do this, but I notice particularly smaller banks because they’re looking to get their deposits. And what they’ve learned is once they get the deposits, people stick around. They’re sticky even when rates go back to a more normal level. I’m not talking you out of it, but if it takes any amount of labor on your part and you’re picking up a few dollars a month, I’m frankly not, and I appreciate doing the right thing for your family, I’m sure knowing that it’s really worth it given that amount of money. Uh… Frankly

Noe [00:23:56] All right. Thank you so much for your help.

Carl Stuart [00:23:58] You bet. Thanks for calling. You’re listening to Money Talk on KUT News 90.5 and on the KUT app. Call or text 512-921-5888. All right. Let’s see. We got some more texts coming in here. Carl, first time on your show. You have a good grounded approach. Thank you. I just wanted to past this idea past you. I’m 67, I have a 401. B, it might be a 403B or a 401K. Not familiar with the 401B. Anyway, that’s not the point. That’s grown from 1,000 to 31,000 in 40 years. Of course it has, a magic of compounding. What do you think? I’m just taking a chance, rolling it over into an IRA, then into an ETF like NVIDIA. See what it does in five years. Well, first of all, If it’s your own money and it’s in a 401K, can you roll it into an IRA? The answer is yes. If you’re not a plan participant or the plan will allow you to take the money out, if you’re 67, you may have already retired. So you can go to a custodian, open an IRA, go to your employer because it’s an employer-sponsored plan and they will have you sign a document and the IRA custodial will have Signed a document requesting the money and then either you will get a check, but the good news is it’s not payable to you, so there’s no income taxes. It’s payable your IRA, and you take it to your custodian. Some plans will send the check directly to the custodium. It’s a very bad idea to buy an ETF that has Nvidia. First of all, I don’t know of any ETFs that only have one stock. I would not do that whatsoever, because the risk and the reward simply don’t fit together. You’ve earned through compounding $31,000. And let me tell you that every good thing comes to an end. And the best example of that is locally is Dell Computer. There was a moment, I used to do some TV work and I remember doing this on television, where Dell Computer was the best performing company in the stock market for one, three, five, and 10 years. Never happened before. And it made a lot of people in Austin wealthy, and of course made a lotta people around the world wealthy, but eventually it fell from $70 to $10.50, and Mr. Dell took it private. I just don’t think the risk is worth the reward. I think if you’re gonna use an exchange-traded fund, as regular listeners know, I would take either two-thirds of that or 75%. I’m starting to be a little more in the international persuasion, maybe two- thirds of it. A total stock market ETF, those are available through Vanguard Schwab Fidelity and the other in a total international stock market because you’re gonna own Nvidia in the total stock market because it’s done so well. It’s gonna have a much larger percentage of your total stock markets than it would have four or five years ago. I think that’s what I would do if I were in your shoes. You’re listening to Money Talk on KUT News 90.5 and on the KUTF. Call or text 512-921-5888. And you can listen to past shows at kud.kut.org slash money talk. All right, what’s the next one? Let’s see. I taught in Texas schools for seven years. I now work in education technology. Is there an advantage to leaving my funds in TRS or should I pull it out and put it in my 401k? So I have a close colleague and relative who spent about nine years in working and happened to be the AISD and had a good income. Uh, and when she left and went to the private sector like you are, the amount was very, very small, such that when she reached an age where they’d start paying her, it was a very modest amount. So while I really like pensions as a lifetime way to build retirement income for people who work as teachers or police officers or firefighters or city, county, or state employees, when you’ve been there a short period of time, the math is not very attractive. So I’m inclined in your situation to probably do a rollover and put it into the employer-sponsored plan where you are. Just be sure you do it right so that it’s not a taxable event to you. Thanks for the question. You’re listening to Money Talk on KUT News 90.5 and on the KUT app we have all of our lines available and you can also text 512-921-5888. Hi Carl, love the show, thank you. My wife and I are retired and in our late 60s. We have adequate income and cash reserves and a diversified investment portfolio that we don’t need to draw from on a regular basis. Terrific. We want to stay invested in the market for long-term growth, but like many people, are concerned about the run-up in the markets and high historical valuations. If you’re not worried, you’re are not paying attention. I’m not interested in trying to time the market. But have been considering rebalancing from the total market and S&P technology weighted indexes into smaller cap and value indexes. I don’t typically bet on sector plays, but I’ve seen several articles that talk about how value and small cap stocks have underperformed growth stocks for the past few years, making them more attractive and a smart option at the economy tanks or there is a significant crash in the technology heavy overall market. One article said the S&P 500, which I assume is a smaller caps, I beg your pardon. One article says the S& P 600, which I assumed is a small cap index, is trading at 15 times earnings compared to the S and P 500 trading at 22 times earnings, making it a better bet for growth in 2026. I’m just considering this as a small adjustment of five or 10% of our equity portfolio, not a complete shift in strategy. What are your thoughts on value in smaller cap stocks as a hedge against a drawback in the overall market? Thanks. Well, that is a terrific question and congratulations on your investing success. I share your view. The only thing I would tell you is I have kept a small piece in small cap value because my experience based on my reading and talking with a lot of people I respect, that’s been where nobody wants to go. Value stocks to your point and for the rest of, let me start over for the best of our listeners. Somebody somewhere decided to categorize company stocks by growth and value. Growth stocks tend to have rapid growing earnings and rapidly growing revenues or at least rapidly growing revenues and the prospect for rapidly growing earnings. Value stocks tend to be stable. They don’t grow as rapidly. So their earnings don’t go as rapidly, but they tend to be what we would call more defensive. And so one’s the hare and the There’s the turtle. I like both of them, and there are long periods of time, to your very point, where growth will outperform. But let me tell everybody a story. This is a classic case. So, we had five consecutive years. I’m pretty sure that hadn’t happened before, but it may have happened in the 20s, I doubt it. We had five consecutively years where the S&P 500 was up over 20% a year. That was from 1995 to the end of 1999. And it was the heyday of technology stocks, whether it was Dell or Cisco Systems or Microsoft or whatever the case was. And value stocks just stunk it up. I’ll never forget that I owned a growth stock fund in 1999 that was up 44% and I had a value fund that was at 4%. Now if you just looked at that and didn’t understand what you were doing, you’d say, sell the one that’s made for and buy the one earning 44. No, because they… Market peaked in March and April of 2000, and the index that really showed that was the NASDAQ, and it peaked then, and it took 15 years, that’s what I said, for the NASDAC to come back. And from that, from the bottom in September of 2002, until the global financial crisis in late 2007, early 2008, value just kicked the behind of growth, and coming out of the global financial crisis has been all about growth. So I really like your idea of rebalancing into value. I wouldn’t be hesitant to go value across the large and mid and small cap. I’m answering this because you are a sophisticated investor. I wouldn’t hesitate to lean into value across all three sectors. Then I would tell you, you can use an index like the one you have, or also Russell has the Russell 2000. You can do the broad index, you can do Russell growth, the Russell value. Obviously, I’m not making a recommendation. And I think it makes a lot of sense. This year, right off the bat, it’s really surprising. I don’t know whether or not this is a head fake or it’s gonna last, but I was looking through yesterday and the total stock market up 1.96 and the small cap value stock that, bigger pardon, fund that I own in my own portfolio, which has just been a stinker, up a remarkable 6.27. I don’t know if this is temporary or long term, but I really like the thesis of your question and I wouldn’t hesitate to do it. Now, having said that, the other thing is you can, because you are a sophisticated investor, I’m gonna use some jargon here. I like global market neutral, global equity market neutral funds, which tend to outperform and bear markets and they’re not tied into one market cap, growth or value. And I also like event-driven funds, which tend to deliver more bond-like returns, but the environment for mergers and acquisitions is really heating up with the change and the regulatory outlook. Last year, the one I watched was up 8%. It’s a little more conservative than the equity market neutral, but those are two that would be good defensive additions to your portfolio as well. Thanks for the great text. You’re listening to Money Talk on KUT News 90.5 and on the KUT app. We have no calls coming in. You can call or text 512-921-5888. Carl, I am broker owner for 40 plus years. They say own a house in September, own in February. Own a house September, owned in February, people take property off on holidays. This is an organization that does loans zero down prepaid. Okay, yeah, like I implied, because I don’t know anything about the real estate, that’s not fair. I don’t know a lot about the Real Estate market, but certainly cyclicalities absolutely the case. Five, one, two, nine, two one, five eight, eight eight. Hi Carl, I am Muslim and my religion restricts me either to earn or pay interest. So I was wondering how I can best invest $200,000 in cash that I have. What I would probably do is, because stocks don’t pay interest, they pay dividends. Right there is a really interesting opportunity for you. And bonds don’t pay a bigger part, bonds pay interest. It’s a little tricky there because bond mutual funds, they gather the interest, but when they pay it to you, it’s characterized as a dividend. So you might wanna talk to think about that or talk to a mom or whatever you might think about. But when you own a bond fund, and it shows up on your statement and it pays a monthly dividend. It doesn’t say interest. The dividend comes from interest. And if you own stock funds, let’s say you own the total stock market, it’s gonna own stocks and stocks don’t pay interest. A lot of stocks don’t pay anything, but the ones that do pay, pay dividends and that’s not interest. So depending on your interpretation of bond mutual funds or exchange traded funds, and your risk tolerance, you could build a portfolio of a combination of exchange traded stock funds or actively managed exchange traded or open end mutual funds and bond funds because the bonds are paying dividends. So take a look into that and I hope that’s helpful. It’s time for me to take a break, coming down to our last 20 minutes on the hour, a good time for you to call or text, Five, one, two. Nine two one five eight eight eight. I’ll be back.

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KUT Announcer: Laurie Gallardo [00:38:38] This is Money Talk with Carl Stuart. Call or text him with your questions at 512-921-5888. Now, here’s Carl.

Carl Stuart [00:38:52] Welcome back to Money Talk. I’m Carl Stuart and you’re listening to KUT News 90.5 and on the KUT app. When you have a financial or investment planning question, call or text 512-921-5888. Here’s the text. Hi, Carl. My husband and I are in our 70s and are retired. We have always been do-it-yourselfers when it came to our investments. Since listening to your show, I feel we need to talk to someone about our investments and whether we are on the right track. Can we hire a financial advisor by the hour and not let them manage the portfolio? My husband absolutely doesn’t want someone managing our money, but I feel that we need some outside advice. Thank you. This is a really difficult, it’s a great question, it’s really difficult answer. And the reason is, it is economics. Uh, the And this is just my observation over all these years. There will be people who will work on an hourly basis. They tend to be financial planners where they will do a financial plan for someone and charge a fee for that. But that’s not what you’re asking for. Someone who is an investment advisor or a financial advisor on the investment side and may also do financial plans. But you’re looking for the overlooked kind of a portfolio over, you know, looking at a portfolio and making suggestions. I don’t know how you do that and I’ll tell you why. It’s not profitable for the advisor. It’s that simple. What the advisor’s got is intellectual property and if she shares that with you for an hourly rate, the economics just don’t work. I’ve been doing this for 47 years. I have not personally found thoughtful, experienced, successful advisors who are willing to do what you’re asking. So it’s a perfectly reasonable question, but one of the things I want to say that you say that’s really important. People who have the personality to be a do-it-yourself investor should never hire an advisor because they’ll be miserable. They want to be in charge. They want to be in control and people who don’t want to do it. Or makes them anxious to do it, ought to have an advisor and pay the fees. Pretty straightforward. So I’m sorry, but my answer is, I think it’s gonna be extremely difficult to find someone who will give you overall kind of 30,000 foot portfolio advice, make some suggestions about areas in which you might make changes and do it on an hourly basis. Good luck. You’re listening to Money Talk on KUT News 90.5 and on the KUT app. Call or text 512-921-588- Gary, you’re on the air, how may I help?

Gary [00:41:55] Hi, Carl. I just want to make a comment regarding your texture who was interested in the Moslem safe investments. It’s been many, many years since I read this article. I think it was in Kiplinger’s, but there was a Moslem safe mutual fund. And it’s not that you’re receiving dividends that you cannot even own a company that charges somebody else interest. So You cannot have any bank stock in it. You cannot have seagroms because they produce alcohol and some other things like that. But there are some or were some years ago that follow certain mausoleum rules and so before safe.

Carl Stuart [00:42:38] Oh, great. Well, thank you. I really appreciate that. As always, thanks for listening and being the expert. Once again, Gary’s helped me and helped stump the chump and take care of it. I hope that our Muslim listener is still listening. I would do a I would probably you can go to morningstar.com that’s free and put in keywords and see what you get and also go to Google and see What you get as well. I was just responding to interest only, but Gary’s got a much more thoughtful response. And I hope those fund opportunities still exist. You’re listening to Money Talk on KUT News 90.5 and on the KUT app. By the way, you can catch past shows at KUT.org slash Money Talk. 512-921-58. Chris, you’re on the air, how may I help? Chris and we just lost Chris. Okay here. Let’s go back to the text then here we go Hi, Carl, my mortgage is 2.75%. Congratulations, you won the mortgage lottery. I owe 93,000. Should I keep funds in my money market savings? Well, I was hoping that you were gonna say, should I invest the money, Juan? I would tell you that I would keep the money in the money market savings. And the reason is, putting more money in your house concentrates your assets. Because a house is not an investment in that it’s illiquid. As I always say, long-term listeners can predict what I’m gonna say now. You can’t sell the bedroom if you want $50,000. And at some point, if you sell the house, you gotta go live someplace else. And you’re likely to need the proceeds to buy another place. And so reducing debt’s always a good thing. If you had credit card debt, that’s the first to get rid of. If you have 20% interest, if you have auto debt, that’s above 2.75, that’s a good place to go. And even though your money market savings is earning a modest amount, it does diversify your portfolio. Obviously, I don’t know enough about your situation. If you’re participating in an employer-sponsored plan, you ought to do that. If your employer offers one and you’re not doing that, obviously, you’re a good saver. If you have 90-thread, $3,000 in savings. Unless you think you’re gonna spend all that or you think that you’ve got an unstable job situation, I would look at employer- sponsored plan. I don’t know how old you are. You might consider an IRA or a Roth IRA, but I would not put more money down on your house for the reasons I said. Thanks for the text. You’re listening to Money Talk on KUT News 90.5 and on the KUT app. Call or text 512-921-5888. I recently had an elderly parent die, I’m sorry. I believe I’ve heard you say that a life insurance payout is not a taxable event, that is correct. If I receive a $25,000 IRA payout, a life-insurance payout from a parent who was in Connecticut while I’m in Texas, how do I react? I’m close to 69 with IRAs, annuities, et cetera. If you get money from an IRA, regardless of where you live, that’s taxable income. You’re the beneficiary of the IRA. Now, I’m guessing, because you are a Texas resident, that since we don’t have state income tax, you will pay U.S. Income tax. But this is a tricky question. I haven’t encountered this. And so you wanna check with a tax expert. Do some, ask our friend, ChatGBT, or go online, if I recognize Connecticut has income tax… And there is in some way something called income in respect of decedent. So you’re gonna have to look up the Texas, beg your pardon, the Connecticut statute, but the payout from the IRA will absolutely be taxable. The life insurance payout will not. You’re listening to Money Talk on KUT News 90.5 and the KUT app. Call or text 512-921-5888. Alejandro, I’m getting ready to buy a house. Where should I park my money that’s earmarked for the down payment? It’s currently in a high-yield savings account with a 4% annual percentage yield. Perfect, leave it there. That’s high, probably around what money market funds would pay, maybe even more. And you have daily, as long as you have daily liquidity, you can get your money when you’re ready to by the house. You don’t wanna put the money in the stock market and your money goes down 10 or 15%, go up the same, but you don’t know that. Probably a bond fund because of the, you say you’re getting ready to buy a house, so that’s a short-term period of time. There’s no reason to take principal risk. You are exactly in the right place. Don’t do anything else. You’re listening to Money Talk on KUT News 90.5. And on the KUT app. Call or text 512-921-5888. I’m 10 years old, would like to use some of my 1.6 million, oh, good, two years, what? Two years old. I don’t think so. Also, okay. I suspect there’s a typo. I would like use some of my $1.6-million IRA to retire early. How can I minimize taxes? Also, should I do a Roth conversion? So I don’t know how old you are, but the money is gonna come out of your IRA, and you can retire early as long as you’re over 59 1 1 2, but when you take that money out, you are gonna pay taxes. There’s absolutely unequivocally no way around it, because you haven’t paid tax on any growth in the IRA, and the odds are you got a tax deduction when you put the money in. In the rare circumstances where the money in your IRA went in on an after-tax basis, then a percentage of the money you take out will be attributable to your after-tax contribution, and you won’t pay tax on all of it. But for most people, you’re gonna pay tax on it, and if you do that before you’re 59 and a half, you will pay taxes, plus you will a penalty. You’re listening to Money Talk on KUT 90.5 and on the KUT app, 512-921-5888. I’m Carl Tom from Round Rock. Long time listener, thank you. I’m hearing more and more about the rise of private equity and private credit. Boy, so am I. The number of public companies has declined over time. Yes, it has. Are you watching the private equity space? I most certainly am. I suspect these offerings will become more flexible and attractive, especially for long-term investors. I do not. So private equity’s been around for a really long time. And it has been the bailiwick of large investors, wealthy people, institutions, foundations, endowments. I’m on the investment committee of the endowment fund of the Big Ten University, and we’ve been doing private equity investments for many years. Now the big players like Blackstone and KKR and Apollo are bringing private equity to the individual investor. As you know, if you’re a long time listener, I’ve been around this for a long and I will tell you my experience, it’s not about private equity. When a deal comes to the individuals investor, that is my daughter and colleague, Lindsey likes to say, squeeze is not worth the juice. The best deals never get it down to the individually investor. I learned this the hard way back when oil was going up. Securities firms were recommending oil and gas deals, and the best deals never saw the light of day to the individual investor. The other thing is we have massive amounts of money, billions of dollars flowing into these deals, but a lot of these private equity funds are holding companies that they invested in and haven’t been able to get out of. It’s been a very tough market to get into the initial public offering market, so what’s happening now is they’re raising money. To buy the deals that they couldn’t get out of before. So it’s really complicated. I don’t think the individual investor has a chance of fully understanding it and they’re illiquid. You can’t get it out when you want to. They tend to have eight to 10 year periods and so I would run away as fast as I can. You’re listening to Money Talk on KUT News 90.5 and the KUT app. Call or text 512-921. Five eight eight eight Barry you’re on the air. How may I help?

Barry [00:52:14] How are you doing?

Carl Stuart [00:52:15] Good, thank you. How may I help?

Barry [00:52:17] I’m thinking about buying some muni bonds, and I was wondering if the Fed cuts the rates, is it better to buy now or wait until he cuts the rate? What do you think?

Carl Stuart [00:52:31] So I think that’s a very interesting time because what we may have, and because you’re a thoughtful investor, I’m gonna answer it at that level. The Fed could possibly cut rates this year, but long rates could stay where they are. And if the global investor thinks that the White House is going to start to call the tune of monetary policy, I think rates will go up. And so it’s possible that we could have a steepening of the yield curve rather than a falling yield curve. And for everybody else on the line. Yeah, exactly. For everybody else the line, the 10-year treasury pretty much sets a lot of interest rates from credit cards and autos and mortgages. And it’s been in a pattern of between 4.4 and 4.1. It just got a little over that. And I think that’s because investors are skittish about what’s gonna happen to monetary policy this year. If I’m buying bonds, I’m gonna stay very short in my maturities, because I think it’s plausible that you could buy a 10-year investment grade Muni and actually see a decline in market value. It’s just too uncertain right now.

Barry [00:53:57] So if they’re at five or six Muni, the coupon, it actually may go up?

Carl Stuart [00:54:06] Well, I’m just talking now, I am talking about munis will respond if long rates go up, munis will go down. I mean, that’s mathematics, right? And so, you know, you want to, there’s two or three things since you’re a muni buying buyer. You want to look at what’s the difference between the same maturity and quality of a taxable bond and a muny. You ought to be getting paid for that. So you want know your marginal bracket, if that looks attractive. And if you’ve got a 6% Muni there’s some credit risk there and may be worth taking. I don’t know that. Or it’s selling at a premium so your yield of maturity is lower. And if I thought that rates might move up and I wanted to buy bonds, that the history is a premium bond will outperform a par bond and a premium will out perform a discount bond in a rising rate environment. It’d still go down, but it’ll go down a lot less. So if you’re gonna buy a lot, You can stick your toe in the water, but my personal view is I wouldn’t jump in.

Barry [00:55:08] Okay, so if he cuts the rates, it’s better to buy now, but it but if he doesn’t cut the rates

Carl Stuart [00:55:15] I just think, yeah, I think you could cut the rates and see longer bond yields not come down. That’s what I’m saying.

Barry [00:55:22] Okay, so I’ll just think about to do something else, maybe I’ll buy some gold.

Carl Stuart [00:55:29] There you go. Okay. Thanks for calling. You’re listening to Money Talk on KUT News 90.5 and the KUT app. I’m going to try to answer this, but we’ll see. Hey Carl, I’m a 62-year-old small potato with $20,000 in my retirement. I need full upper and lower teeth or risk health problems. Does it make sense to get teeth and live a healthy broke Retirement or risk a few more years and invest, risking health or fix my teeth and strive a few years to rebuild my finances. Now, I had my annual physical this week, and my physician, I talked about dental health, and there’s some evidence that it only affects your quality of life, but it needs one contributor to longevity, it’s a contributor possibly to dementia. Normally I would tell you to leave the money there because $20,000 is not a lot of money, but if I were in your shoes, I think, not only from a quality of life standpoint, but frankly, from a physical health standpoint, I would probably do the bad thing to do the right thing for yourself. You’re gonna pay income tax, so save enough money to do that. You’re over 62, so you’re not gonna pay a penalty. And don’t take the money out until the bill is due. Be clear about what that is. Make sure you’re going with a real first class professional to do, and good luck to you. Well, it’s been a lot of fun this afternoon. I want to thank Sehwag for doing a great job as my producer. I want thank you for listening and as always remind you the next Saturday at five o’clock, tune in to Money Talk.

KUT Announcer: Laurie Gallardo [00:57:04] You’ve been listening to Money Talk with Carl Stuart. Carl Stuart is an investment advisor representative of Stuart Investment Advisors. And this is KUT and KUT HD1 Austin.

This transcript was transcribed by AI, and lightly edited by a human. Accuracy may vary. This text may be revised in the future.