Going for the Gold in Financial Safety

Our 2 Cents – Episode #183

Going for the Gold in Financial Safety

Welcome to an informative episode of Our 2 Cents! On today’s episode, Steve and Gabriel share the economic impact of hosting the Olympics and a lesson on how to avoid those pesky financial scammers. Then, they answer some common “How Do You Know?” financial questions. Listen in now using a link below!

1. The Cost of the Olympics:
   • Explore the advantages and disadvantages for countries hosting the Olympics and how this influences the infrastructure and lives of city residents.
2. The Red Flags of Financial Scammers:
   • Discover how one man’s encounter with scammers devastated his retirement.
   • Learn the red flags to watch for to avoid falling victim to financial scams.
3. How Do You Know?:
   • How do you know how much income you’ll need when you retire?
   • How do you know if the fees in your portfolio are too high?
   • How do you know if you can trust your advisor?
   • How do you know how much money you should have in your savings account?

Request Your Free Consultation Today
847.499.3330

Podcast Transcript

Announcer: You are listening to Our 2 Cents with the team from SGL Financial, building wealth for life. Steve Lewit is the President of SGL Financial, and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news, trends, strategies, and more.

Gabriel Lewit: Welcome to Our 2 Cents today. You’ve got Gabriel Lewit and Steven Lewit here for a great show with you, our valued listeners. We love having you here. Thanks for joining us today.

Steve Lewit: I’m too busy laughing.

Gabriel Lewit: Steve is, I don’t know what’s wrong with him. He took some pills before the show or something. I’m kidding.

Steve Lewit: Gabriel just told me the funniest story ever. You’ve got to tell this story. Tell it.

Gabriel Lewit: Well, we verified it’s true. I was at Vitamin Shoppe. Obviously, we’ll get to finance topics and money topics in a second here. I was at Vitamin Shoppe yesterday looking for some whey protein because I was all out of protein powder. And I’m very familiar. Over the years, I’ve bought a variety of different types. I usually get a whey protein isolate. I’m walking down the aisles, and there’s some new companies there, and one says, “Whey protein itholate.”

Steve Lewit: It should be isolate.

Gabriel Lewit: Well, I was like, “I wonder if this is some new kind of protein.”

Steve Lewit: Yeah, isolate.

Gabriel Lewit: Itholate.

Steve Lewit: Itholate.

Gabriel Lewit: So, I go ask the guy, and I’m like, “Is this some new kind of protein?” He’s like, “No, it’s named after this wrestler,” or some guy, I don’t know what he is, that has a lisp.

Steve Lewit: A lisp.

Gabriel Lewit: And I was like, “No, this isn’t true.” So we just googled it before the show, and there’s a video of him on TikTok saying that it’s a play on his lisp.

Steve Lewit: On his lisp. Itholate.

Gabriel Lewit: And it really is true.

Steve Lewit: So, I didn’t believe him, folks. I said, “Nah, you’ve been taken. This is not a true story.” And it’s a true story.

Gabriel Lewit: So, whey protein itholate. And also there was another. They had some recovery shake or something called Savage, and now it’s called Thavage.

Steve Lewit: Thavage.

Gabriel Lewit: Thavage.

Steve Lewit: But, it’s amazing how people couldn’t take something that other people would consider a weakness and translate it into a great-

Gabriel Lewit: When the guy told me, I’m like, “That’s awesome.”

Steve Lewit: … that is awesome.

Gabriel Lewit: I was like, “This is so cool.”

Steve Lewit: That is very cool. I want to buy it now just because I have to. I shouldn’t make fun of people with lisps.

Gabriel Lewit: Well, what I was saying to you beforehand though, I didn’t buy it because I actually chose a different new brand because this one had sucralose and sulfonate potassium and a bunch of the artificial sweeteners. I like the all-natural artificial sweeteners. The Stevia and the monk fruit are my go-tos. They’re not real sugar, but they’re not artificial either. They’re like the healthier fake sugars.

Steve Lewit: Yes, yes. I’m not going to get into this. Let’s talk about money now. How much did that cost you for protein?

Gabriel Lewit: You just said you didn’t want to talk about it.

Steve Lewit: Well, it’s about money though.

Gabriel Lewit: Oh, yes. It was $39 per bottle or package.

Steve Lewit: And how long will that? Is that for your muscle? That’s so you can build muscle.

Gabriel Lewit: Well, if I do a workout, I can take a scoop, and it’s good for building muscle.

Steve Lewit: Cool. Very cool.

Gabriel Lewit: Some whey protein itholate.

Steve Lewit: Itholate.

Gabriel Lewit: Just for us.

Steve Lewit: I think that’s terrific.

Gabriel Lewit: Okay. Well anyways, that aside, yes, what I was also going to say, just a little snippet, it is going to be the first week of August here tomorrow. When you are listening to this show, it’ll likely be in the first week of August.

Steve Lewit: Aren’t we in the first week of August now?

Gabriel Lewit: Well, I guess technically this is the first week of August, even though it’s technically July today, July 31st. But the first week of August is officially National Simplify Your Life Week. I don’t know who the they are that come up with these, but I’m always curious who decides that it’s National Simplify Your Life Week. But anyways, I digress. But I like the concept.

Steve Lewit: I love it.

Gabriel Lewit: Is there ways that you can simplify your life? Examples would be things like putting bills on autopay, putting your savings on autopilot. That’s a really important one, by the way,

Steve Lewit: Starting from very young.

Gabriel Lewit: Yeah. The more you can put your savings on autopilot, the more it’s proven, folks, proven you will save more money if you just automate that.

Steve Lewit: And if you’re in retirement putting your income on autopilot.

Gabriel Lewit: I would also, yes, put your income on autopilot in retirement. Put your financial planning on autopilot by choosing the right financial advisors. That can simplify things tremendously for you because we can take, as I often say, all the heavy lifting, all the stress, all the worry, all the going it aloneness that would happen if you have to do it yourself, and we can take care of all of that carte blanche for you.

Steve Lewit: Well, it’s like building a house, Gabriel, if you look at the financial. You were showing me some plans that you might do in your house.

Gabriel Lewit: Some renderings, if you will.

Steve Lewit: Renderings, yes.

Gabriel Lewit: It’s a future project.

Steve Lewit: Yes. But they’re so complicated. They’re so detailed. There’s a lot going on. There’s a lot going on in them. You’ve got numbers. It’s very complicated. But you don’t do that. You simplify your life. You give that to an architect, they build a house, you walk into your house. And that’s same with the financial plan.

Gabriel Lewit: I’ll even simplify that. I don’t mow my lawn. And in fact, what’s funny about it is, I actually enjoy mowing my lawn, but I just don’t like doing it every single weekend on clockwork, week in, week out; obligation, no matter what. It’s a little simpler to have somebody else do it, and gives more flexibility, even though I could very clearly handle that task myself.

Steve Lewit: So, simplify doesn’t mean things aren’t complicated. It means how you handle them makes it simple.

Gabriel Lewit: Yep. So ultimately, I just wanted to mention that. It’s not going to be our main topic here for today. But yeah, if you think of ways of simplifying your life financially, non-financially, do them because that’s going to give you better quality of life.

Steve Lewit: Have a simple diet.

Gabriel Lewit: The goal is a nice, stress-free, relaxed lifetime hopefully.

Steve Lewit: Have simple dinners.

Gabriel Lewit: Sure. You could just Uber Eats it, I guess, if you wanted to. That’s not good on the financial wallet though.

Steve Lewit: No, no, no.

Gabriel Lewit: Okay. Now moving on, another just interesting topic I think is, well, Steve, are you watching the Olympics?

Steve Lewit: I am.

Gabriel Lewit: You are?

Steve Lewit: I think they’re amazing.

Gabriel Lewit: What have you watched?

Steve Lewit: I have watched. I’m swum out.

Gabriel Lewit: I watched swimming. It was recorded, but I watched swimming for an hour last night with the kids.

Steve Lewit: Oh yeah. It’s amazing. They’re amazing.

Gabriel Lewit: The backstroke one just impresses me that they go so fast.

Steve Lewit: It’s incredible. And you can’t tell on the crawl, you can’t tell how fast they’re going. But if you really watch the camera zipping by, they’re moving at amazing speed.

Gabriel Lewit: And I will say, they go so far on that crawl, 800 meters back and forth-

Steve Lewit: Back and forth.

Gabriel Lewit: … eight times. I’m like, “Wow.”

Steve Lewit: I didn’t realize it was 800 meters, and I’m saying, “They’re going again? They’re going again, and they’re going again.”

Gabriel Lewit: It seemed like the US had quite a few medal placers from what I was seeing in the swimming though.

Steve Lewit: What’s extraordinary though, those medals are less than tenths of a second difference. You win the gold by two tenths of a second after 800 meters of swimming. It’s extraordinary.

Gabriel Lewit: It is. It is. Well, what’s also extraordinary is the price of hosting the Olympics.

Steve Lewit: I can’t imagine.

Gabriel Lewit: There’s an interesting article here. It’s, again, just something I just thought it was interesting to talk about. But it’s becoming more and more financially unbearable to host the Summer Olympics, or any Olympics, or the World Cup. These big national, worldwide events are just becoming astronomically expensive.

Steve Lewit: Well, you use it once, and then what do you do?

Gabriel Lewit: Right, yeah. Here’s some examples here, and this is just from some data here. But going all the way back to 1976 as an example, Montreal Summer Olympics projected the cost of $124 million and it ended up being over $1.5 billion of debt that they took out that took them nearly three decades to pay off.

Steve Lewit: I think that Olympics, they ran into huge labor shortages and structural shortages. They ran into all kinds of problems.

Gabriel Lewit: And obviously that’s in 1984. Let’s look at some recent years. In 2014, Winter Games in Sochi cost spiraled to over $50 billion, $20 billion for the 2016 Summer Games in Rio, and $39 billion for the 2022 Winter Games in Beijing, even though China supposedly said it costs just $4 billion.

Steve Lewit: Yeah, no way.

Gabriel Lewit: And there are countries now that are withdrawing their bids to host upcoming Games given how expensive these are.

Steve Lewit: I was just going to say, LA is getting, which Olympics are they getting?

Gabriel Lewit: That’s a good question. I know Utah, Salt Lake City, just got-

Steve Lewit: They’re getting the Winter Olympics.

Gabriel Lewit: … the Winter Olympics, I think 2034.

Steve Lewit: I think LA got the Summer Olympics. And it’s like, there’s huge costs. What’s the payoff? The payoff now is really in TV sharing, revenue sharing that they didn’t have before. So I don’t know what the economics look like today, but the cost is mind-boggling.

Gabriel Lewit: It’s just interesting because I’m very much enjoying the Games, but at some point-

Steve Lewit: They’re incredible. They’re incredible.

Gabriel Lewit: … lots of national pride here. I watch the gymnasts. Also because my daughter is both a swimmer and a gymnast, so we were watching gymnastics and swimming. And it’s just interesting. I mean, what do you think is the future of hosting these Games? How long do you see this going on for?

Steve Lewit: Forever.

Gabriel Lewit: You think?

Steve Lewit: I think there’ll always be a country that steps up.

Gabriel Lewit: Well, yes. Yeah. I assume there’ll always be Olympics, but how do you think they’re going to solve the ever-increasing price issue? How does that get paid for is another question.

Steve Lewit: We pay for it. I don’t think they’re going to solve it. I don’t know how you solve it. It’s not a profit making organization. Countries want the prestige of having it. It brings business in. It might take 30 years to pay off the debt. I don’t see the solution of a problem this. It’s like the person that every four years goes out and spends a bundle of money that they don’t have. There’s no solution to it.

Gabriel Lewit: Here it says, “Almost all of the facilities built for the 2004 Athens Olympics, which the cost contributed to the Greek debt crisis, are now derelict.”

Steve Lewit: Wow, that’s sad. That’s sad. I know you and I were in Park City, and they are using-

Gabriel Lewit: They are.

Steve Lewit: … a lot of the things that were constructed.

Gabriel Lewit: I think that’s part of why they won in 2034, is they do already have much of the infrastructure for some of the bigger, less common things that you would do in the Winter Olympics; ice luges, bobsled tracks, big ski jumps.

Steve Lewit: They’re all up there. They’re up there now.

Gabriel Lewit: So anyways, just thought that was an interesting topic. I mean, obviously there’s tourism benefits for the country, but that can only go so far. So just interesting. We’ll have to see how that plays out.

Steve Lewit: I hadn’t thought of that. It is interesting. I love the Olympics. I love the pomp and circumstance of it. I think these athletes are living in another world. All of them, they’re just so dedicated and keen to what they do.

Gabriel Lewit: This reminds me of something my son said last night. We were watching the swimming and there’s eight lanes. One of them’s obviously in the lead, and one of them’s obviously last of the eight. And he looks at me, he’s like, “How come that last guy is going so slow?” I was like, “Nathan, just so you’re aware,” this is the first Olympics he’s ever seen.

Steve Lewit: Yeah, but in comparison.

Gabriel Lewit: Yeah. I’m like, “You know how fast this guy is?”

Steve Lewit: And that’s how good the better guy is. It’s incredible.

Gabriel Lewit: He said that because there was one swimming race where I think the USA got second or third, and there was some record holder for it that clearly won first, and he was just so much faster than everybody else. He’s like, “How come the USA guys are so slow?” He got a silver metal. He’s like the second-fastest guy in the whole world-

Steve Lewit: At swimming slow.

Gabriel Lewit: … but just to him, it looked like he was going slow. So I thought that was a lot of fun.

Well, we definitely have a number of money topics for us today. One that I want to start with, which really struck to me when I was reading it, is about financial scams. Now, we do talk about these regularly on the show, and the reason for that is, one, I think it’s really important in today’s world more and more and more and more that we protect ourselves from these things. And I think the best way to protect ourselves or yourselves are through examples and awareness.

Steve Lewit: And the thing is, Gabriel, is these happen more often than are recorded.

Gabriel Lewit: They’re getting more sophisticated.

Steve Lewit: Absolutely.

Gabriel Lewit: They can be hard to spot, and you’re going to see that with the example I’m going to give you here. And they can ruin people’s financial lives.

Steve Lewit: Yeah. Very rarely do you see the old scam, have a prince in somewhere, in Dubai.

Gabriel Lewit: Or the Nigerian prince wants to send you a basket of gold, and he just needs to have you cover the shipping costs.

Steve Lewit: Or buy the basket for him. That’s so old hat now.

Gabriel Lewit: Even now you can, I mean, we talked about this I think at one point. AI can deepfake your voice, so it can sound like your kid asking you to send them money.

Steve Lewit: Exactly.

Gabriel Lewit: I mean, it is just getting, it’s quite a world. This one jumped out at me and stuck with me here. So there is a gentleman, and his name is, it’s in the news. I found the article. Barry Heitin; he was a 76-year-old retired lawyer who thought he was part of a government investigation and was actually assisting criminals and stealing hundreds of thousands of dollars of his own money.

Steve Lewit: Now just stop for a minute and think about that. Here’s an attorney who’s a pretty smart guy. He thinks he’s part of a federal investigation, and doesn’t realize that he’s stealing money. I mean, just think of how that can happen.

Gabriel Lewit: Now, what did this cost him?

Steve Lewit: How good these guys are.

Gabriel Lewit: Almost all of his retirement savings, about $740,000.

Steve Lewit: Almost a million bucks.

Gabriel Lewit: So how did this happen? The article does a good job of breaking it down, and I’m going to try to break it down even more. I thought it’d be fun to kind of quiz you along the way. I’m going to stop at each point and say, “Mr. Lewit, what do you see as the flags here?”

Steve Lewit: The red flag.

Gabriel Lewit: Because I think we’ll learn from it this way. And also what’s interesting is there was a movie that I recently saw. It’s called The Beekeeper with Jason Statham, I believe. I love all of his action. It’s an action, beat him up.

Steve Lewit: One of my favorites beat the other guy up people.

Gabriel Lewit: But I really like it because he’s playing the good guy in this one, he’s part of this hidden society of people called beekeepers, which are insanely tough guys that do good for the world or something. I don’t know. Anywho, he has a neighbor that he likes. He’s retired. The neighbor gets scammed out of all of her money, and he gets really ticked off about it and goes on a revenge tour, and it’s great. It makes you feel good because the guy scammed this lady out of all of her money. It’s terrible, so he goes and gets revenge.

Steve Lewit: I bet he kills everybody.

Gabriel Lewit: Yeah, basically everybody. But good movie. But it also made me think about this, and it’s also a good example actually. If you’re out there, watch the movie, because you’re going to see even in the movie how they scam this lady out of her money. And this kind of reminded me of this. So number one, what happened, it began in September last year when he was unable to log into his 401(k) retirement account. He said he tried a couple days later, got in, but the screen quickly changed and instructed him to call his 401(k) provider’s fraud department. And then he called the number on the screen, which had the firm’s logo on it.

Okay, let’s stop there. What are the red flags right there, first and foremost, that we could identify?

Steve Lewit: It turned up on a screen. I had the same thing. I just had that happen two weeks ago. My computer gets taken over, and on the screen it says, was it American Express or something? “You must call now. Your card is being incorrectly used.” I don’t know if it was American Express, but it was exactly like that. And it looks real.

Gabriel Lewit: Well, yeah.

Steve Lewit: And it says on there, “Don’t turn off.” Oh, it says, “Your computer is full of virus. Do not turn off your computer because it will get worse.”

Gabriel Lewit: Correct. One of the things will be scare tactics. But here’s the number one thing. If you ever get anything that pops up on your screen, emails claiming to be from the company, you want to just disregard all of that. Go on your phone or an otherwise unaffected quote unquote device, and Google the number of the company and call the prominently displayed number that’s going to show up on Google. That’s going to be one of your safest bets. Because what happens is, these fraudsters are pretending to be the company and giving you a fake number to call in. And then they act like they’re going to be the company.

Steve Lewit: They sound like exactly. You wouldn’t know that you’re not talking to the company.

Gabriel Lewit: Now, how did this pop up on his computer? He could have been phished. He could have clicked something on an email. But that’s one of the most important things is don’t call numbers that pop up on your screen or show up in emails. Go to the source directly, call, and then ask a real human at that department, “Do you see anything on my account?” to double verify. Because obviously they should tell you.

So he connected with a man, number two here, called himself Charles Hunt and said he was a fraud investigation officer with the company. So right away, the guy is positioning himself as, “Oh, we already identified fraud and we’re trying to help you,” and he’s positioning himself as a trusting authority to help with that, and told him that someone was trying to gain access to his account. And then he also happened to be listing off of names of banks. And of course, it makes it sound like he knew about it. But Hey, Steve, do you have money at either Schwab or Wells Fargo? If you list those enough times, someone’s going to say, “Yeah.”

Steve Lewit: Yeah, I do.

Gabriel Lewit: Well see, they’re trying to get into your money there too. So he made him worry that they were also trying to hack into other accounts that he of course had money at. And the guy, because he said he worked for the bank, said he had identified two $10,000 transactions from a site in China and started asking him questions. “Do you know anybody in China?” Acting like an investigator probably would.

Steve Lewit: Right. And he’s probably saying, “No, I don’t. No, I don’t know anybody.”

Gabriel Lewit: And then last but not least, he said, “These financial institutions, they work with the federal government. And would Mr. Heitin be willing to talk with the federal government about this case to help them solve it?”

Steve Lewit: Brilliant. This is brilliant.

Gabriel Lewit: It’s terrifying.

Steve Lewit: It’s terrifying, but it’s brilliant in a bad way.

Gabriel Lewit: Because people have an innate, what’s the word? You’re going to defer to authoritative figures like police, fraud investigators, FBI.

Steve Lewit: Well, you think you’re being taken care of when you’re really not.

Gabriel Lewit: And then a third person, so he connected with him, a guy named Finn Wittrock said he was with the IRS and provided a badge number, all fake, all fake, saying that his other accounts were at risk, but the government could safeguard his money by transferring it to a federal locker.

Steve Lewit: Oh my God. That’s good. That’s terrible. Wow.

Gabriel Lewit: So, here’s where I think the next really big red flag, of course, comes in, which is-

Steve Lewit: Transfer.

Gabriel Lewit: … they want you to transfer your money. We’re going to help you protect it by transferring your money. All right? Big banks won’t say that. Big firms won’t say that. The IRS won’t say that. There is no federal locker to transfer your money to. But of course, this was all set up from the outset and then just continued to go down the rabbit hole.

Now, I won’t go through everything step by step, but he then said he would do that and gave them access to his computer. Then they instructed him to start moving his money from his bank account to ATM, wire transfers, and Bitcoin. That’s the next huge red flags. Even if it was a federal locker, why would it be using wire transfers, Bitcoin, ATMs. But the problem is, I think as humans, once you get sucked into this, you start to believe that it’s real.

Steve Lewit: You don’t even know you’re doing it.

Gabriel Lewit: You don’t know you’re doing it, right.

Steve Lewit: You just don’t know you’re doing it.

Gabriel Lewit: The next red flag, which is another one, is for whatever reason, he didn’t question this. Was instructed not to disclose this to anything, to anyone, including his three adult children. Red flag, red flag.

It’s a really interesting article. If you have any interest in it, please let us know, (847) 499-3330. Email us, info@sglfinancial.com. We will send it to you. It’s a great way to learn in reverse.

Steve Lewit: We’ll learn from other people’s mistakes.

Gabriel Lewit: Unfortunately, other people’s mistakes.

Steve Lewit: I hope he wasn’t a fraud attorney.

Gabriel Lewit: I don’t think so. I’ll say one last thing. This guy, they went as far as telling him to… The guy had $830,000 in an IRA and an advisor of 20 years that they managed to turn him against by basically saying, “Look, your company is not going to want to transfer this,” which they didn’t. They were actually telling him, “We’re concerned you are getting scammed.” But it was all set up so that he would trust the “authorities,” not even his financial advisor that was trying to warn him that he was probably getting scammed. And it’s just very crazy. Very crazy stuff.

Steve Lewit: When did he find out? Does it say how he found out? At one point?

Gabriel Lewit: I’m sure he looks back at this and says, “How did I not notice?”

Steve Lewit: Of course.

Gabriel Lewit: At one point, they literally had him take money from his IRA, buy gold bars, and drop off the gold bars and coins to an unnamed person in a car, who they then found traces of it, and he got a call from an actual investigator saying, “We think you got scammed.” And then of course, the bottom dropped out on him.

Steve Lewit: What fear will do to us. I feel for this guy. But you said the point is, Gabriel, is folks, if anything feels different in your normal transactions, if something pops out of the blue, or somebody calls with a fear that they’re trying to scare you, just hang up the phone or make a phone call. Like Gabriel said, go on to Google, get the real number, and say, “Hey, did someone just call me?” And then you’ll find out the truth.

Gabriel Lewit: You got to be careful. Be aware. Be vigilant. If anyone tells you, “Don’t talk to your kids,” so many red flags. So many red flags.

Steve Lewit: Amazing. Amazing.

Gabriel Lewit: Be on the lookout for that. And if you’d like the article, just let us know. I think it’s very enlightening in a scary way.

Steve Lewit: Yes.

Gabriel Lewit: Last but not least for today, I don’t know if there’s a new segment, if you will. We’re going to call this, “How do you know?”

Steve Lewit: Well, the reason is, folks, is that when we do a financial plan, or we put an assumed interest rate in, or when we say, “This is how much money you’re going to need for retirement,” all of those things are what’s going to happen with the market. Some people come in and say, “Well, the market’s going up.” The question that always comes up is, “How do you know?” You know what the market’s going to do? How do you know?

Gabriel Lewit: Well, it’s kind of like when your kids are, “How does that work? How does this work?”

Steve Lewit: Why is this guy blue?

Gabriel Lewit: Why?

Steve Lewit: Why? Why? Why?

Gabriel Lewit: Yeah. We’re going to break this up into probably a little bit of this show and a little bit of the next one, because we’ve got a bunch of these to go through and we’ll talk about them. I think we’ve got a good mix for investors and listeners of all ages here. But let’s start with one of the first ones that’ll apply really to anybody prior to or entering into retirement, which is, how do you know how much income you’re going to need when you retire?

Steve Lewit: Yeah. It’s like, how do you know that?

Gabriel Lewit: How do you know that? I’m asking you.

Steve Lewit: I’m reversing the question.

Gabriel Lewit: Well, I sent it right on back to you.

Steve Lewit: Here’s how you know that. It’s very simple. You add up your expenses, and that’s how much income you need in retirement.

Gabriel Lewit: Well, let’s say you add it up for one year. So you need $100,000 for this year. And let’s say you have 30 years of retirement. Would you say that all you need is $3 million?

Steve Lewit: Nope. Got to add inflation into that. So how do you know? You know the steps to take that include all of the different scenarios that are predictable. Inflation is predictable. How much you spend is predictable.

Gabriel Lewit: Medicare costs.

Steve Lewit: Medicare costs, insurance is all predictable. So the first thing is, you get your predictable in place. And then people will say, “Well, what about illness? Or what about emergencies?” Well, those aren’t predictable. So the question then becomes, “How do I know how much I’ll need for those?” The answer is, “We don’t know. But in your plan, we have built in funds for the unknown.”

Gabriel Lewit: Yep, yep, yep. So just to summarize, we call it a cashflow, but you model that out for your retirement, even if you’re younger. I have 22-year-olds that I’ve modeled the next 70 years, believe it or not, of their plan.

Steve Lewit: It’s what we do.

Gabriel Lewit: And it’s helpful.

Steve Lewit: And they love it.

Gabriel Lewit: They do. They do. I mean, I’m 40, but I’ve got a plan for myself for the next 50 years.

Steve Lewit: Just a little sniper.

Gabriel Lewit: Little sniffer. I’ve been doing this 20 years, you little snipper.

Steve Lewit: Your little snipper’s been with me 20 years.

Gabriel Lewit: Yeah. Wow. Gone by fast. Gone by fast. All right, next, how do you know? Mr. Lewit, is, how do you know if the fees in your portfolio are too high?

Steve Lewit: Well, goodness, that’s an interesting question. Well, what’s too high? So you can shop around for sure.

Gabriel Lewit: Well, I would add, can I even jump in?

Steve Lewit: Sure.

Gabriel Lewit: How do you know just what the fees are in your portfolio?

Steve Lewit: Yeah, it’s a great question. First you got to know all the fees in your portfolio.

Gabriel Lewit: Well, yeah. So how do you do that step, step number one?

Steve Lewit: So, what I would do is not talk to your advisor, but call customer service in the company that you’re dealing with and say, “Take me through the fees.” Because they’ll give you all the fees.

Gabriel Lewit: So why did you say not talk to the advisor?

Steve Lewit: Because the advisor, how do I say this in a nice way? You might trust the advisor, but, what is it? Trust, but check?

Gabriel Lewit: Trust, but verify?

Steve Lewit: Trust but verify. So the advisor gives you the fees, that’s great. I would verify the fees with somebody independent that’s not making money from me. So I would call customer service and I’d say, “Hey, I’ve got this portfolio. Please review the fees.” And if they send you back to the advisor, say, “No, I want to review them with somebody else.”

Gabriel Lewit: Yeah, it’s interesting. Obviously, hopefully you have a trusting relationship with your advisor.

Steve Lewit: Well, but that’s the question that I’ve been thinking about is, how do you know you can trust your advisor? Which eventually all money-

Gabriel Lewit: All on the list?

Steve Lewit: … I don’t know. But eventually, all financial transactions-

Gabriel Lewit: I don’t think that was on the list.

Steve Lewit: … I don’t think so.

Gabriel Lewit: But you added a new one to it.

Steve Lewit: To me, it’s the question in our business is, when a client comes in here, I’m always saying to myself, “How do they know they can trust me?” Well, the fact is, they don’t. So you have earn it.

Gabriel Lewit: Well, not initially.

Steve Lewit: So, the same with how do you know your fees, is you go digging to see what the fees are. And it takes a little bit of effort. You could ask your advisor and say, “Is that all the fees?” Most advisors are pretty honest and they’ll tell you, but I would still verify it.

Gabriel Lewit: Well, yeah. I mean, there’s a lot of different types of fees, just to stick to that one first. And maybe we’ll talk about the trust thing here in just a second. But the most common is going to be if you own funds, mutual funds or ETFs, they have a fund expense ratio. So you can Google the ticker or go online or call in or ask about the fund expense ratio. That will be a fee that will impact your returns.

You’ve got fees at front end or backend loads. I found a new client a couple of weeks ago that had a bunch of A shares, and they didn’t fully understand-

Steve Lewit: What that meant.

Gabriel Lewit: … what that meant. Some funds have commissions according to when they’re sold or redeemed. You’ve got potentially 12b-1 fees. These are even more hidden. But companies can get paid these 12b-1 fees to essentially recommend a certain fund or investment as an added compensation to the firm. Now we don’t do anything with funds that have commissions or 12b-1s or anything like that.

Steve Lewit: But other people do.

Gabriel Lewit: Yep. And then you’ve got other fees. Let’s say you’ve got a variable annuity. It depends on the type of account you’ve got. There could be income rider fees, administrative fees, death benefit fees, mortality and expense fees, contract fees.

Steve Lewit: So, we always call. Folks, if people come in and they own a variable annuity, I always call. You do too. We call the insurance carrier and we say, “We know the fees.” But we call the insurance carrier and say, “Could you review the fees with me and my client?” And they’ll say, “Well, the fee is 1%.” Most people leave it at that, and that’s what these people were told, the advisor’s fee is 1%. But then you have to ask, “Are there any other fees?”

Gabriel Lewit: Oh yes, there’s others.

Steve Lewit: Oh, yeah. “Could you list them out for us?” Then there’s four. Then that 1% turns into 3.5%.

Gabriel Lewit: Yeah. So number one, just to answer the question, you’ve got to do a little bit of research. But to lead into your other question and maybe just move on, how do you know that you can trust your advisor? Well, obviously that starts from, I think, the collection of experiences you have with that advisor from day one. Have they given you any reason to doubt what they say? Have you verified what they say and it is indeed accurate and truthful? Are there tons of negative reviews on that person? Do they have complaints? So it is important to do those due diligence.

Steve Lewit: Do you feel like they’re pushing you? Do you feel like they’ve got your interest as best heart?

Gabriel Lewit: And I think that’s where ultimately people are looking for an advisor that they truly feel they can trust, and they can hear what recommendations they make, and know that this person actually is doing this because they do have our best interests in mind, and we believe what they say and we trust their advice. That’s such an important thing to develop is a trusting and lifelong advisory relationship.

Steve Lewit: It is. I often ask at my seminars, I say, “Folks, if you had an advisor that charged you a fair fee, it was comparable to all the other fees and you got what you bargained for, and you trusted this person and they were fiduciaries, had your best interests at heart, and they were holistic, not locked into bias towards any product or anything like that, and they’ve showed you different ways they can improve your wealth, would you hire that person?” And you know what? Everybody would hire that person. But the problem is, they can’t find that person or get past the trust barrier. And that’s really, really difficult.

Gabriel Lewit: Can be, yeah. All right, we probably have time for one last quick question here. I’m going to pick a quicker one. How do you know how much money you should have in your savings account?

Steve Lewit: Well, how do you know that? Well, that’s like, how do you know what kind of ice cream you want to eat?

Gabriel Lewit: I always know what kind of ice cream I want. I like coffee.

Steve Lewit: And people know-

Gabriel Lewit: Coffee with chocolate chips, chocolate chunks.

Steve Lewit: … look, you have people and I have people that are happy to have $30 grand in their checking account or in savings, and other people won’t go less than $300.

Gabriel Lewit: I did have a client recently with over a million dollars in their savings account.

Steve Lewit: And you asked, “Why?”

Gabriel Lewit: And I said, “I think this might be a little too much.”

Steve Lewit: And they had probably had to think about that.

Gabriel Lewit: So, everyone’s number there can be a little bit different. Obviously that’s a great position to be in, no doubt about that.

Steve Lewit: Of course.

Gabriel Lewit: But yeah, I mean I’m a fan of less is more in your savings account. But the way you figure that out is, do you have any short-term needs that you’re saving that cash for? Short term being roughly less than three years. Three to five might be midterm. Then the second question, what amount gives you peace of mind? Some people have a higher threshold for that than others.

Steve Lewit: What I hear a lot, Gabriel, is folks will say, “Well, I want to be able to get my hands on the money when I need it.” And then I explain, “We can get you money in three days. Can you wait three days?”

Gabriel Lewit: Right. I mean, if it’s just in a brokerage account, you can get your money in three days also. Two days.

Steve Lewit: Exactly. Two days. So a lot of people feel they can’t get the money quick enough. But it is a very personal thing, and there’s no rules on this. But how you know is, “I feel good about the money that I have in there. I’ve talked to people, and that’s a decision I’m making.” Then you stick with your decision, and that’s how you know.

Gabriel Lewit: That’s how you know.

Steve Lewit: That’s how you know.

Gabriel Lewit: Well, that we have time for the-

Steve Lewit: That’s all we know.

Gabriel Lewit: … how do you know segment here for today. We will cover more of these on our next show, so hopefully you’ve found those a little bit fun and interesting. But yeah, we’ve got a wide range of additional how do you know questions we’re going to cover next time.

Steve Lewit: We do.

Gabriel Lewit: If you do have any thoughts or need our help or guidance in the interim, you can reach us anytime, (847) 499-3330. Or go to sglfinancial.com, click Contact Us. Or email us info@sglfinancial.com. And again, if you want a copy of that article that I referenced earlier about the unfortunate fraud scam situation, let us know there and we’ll get a copy of that in your hands as well.

Steve Lewit: Absolutely. Absolutely. So, enjoy the Olympics folks.

Gabriel Lewit: Indeed, enjoy. Root for your home country. But in my case, go USA.

Steve Lewit: Go USA.

Gabriel Lewit: And we will see you on the next show.

Steve Lewit: All right, stay well everybody.

Gabriel Lewit: Bye now.

Announcer: Thanks for listening to Our 2 Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at (847) 499-3330, or visit us on the web at sglfinancial.com. Be sure to subscribe to join us on next week’s episode.

Prerecorded Voice: Investment Advisory Services are offered through SGL Financial, LLC, an SEC Registered Investment Advisor. Insurance and other financial products are offered separately through individually licensed and appointed agents.