Nate Reineke (00:24.854)
Hello physician moms and dads. I'm Nate Renneke, Certified Penatial Planner and Primary Advisor.
Chelsea Jones (00:31.311)
And I'm Chelsea Jones, also a certified financial planner and primary advisor.
Nate Reineke (00:36.662)
Chelsea, you're back! had clients and listeners asking for you and Kyle and we're trying to do more of that this year. We're a little late in the year I guess, but hopefully you guys will be back on more. I think sometimes listeners forget that we like have jobs. And you and Kyle are busy. So am I, but... Okay, well...
Chelsea Jones (00:38.721)
I'm back.
Chelsea Jones (00:47.116)
Yeah.
Chelsea Jones (00:51.544)
For sure.
Chelsea Jones (00:57.225)
Yeah.
Nate Reineke (01:06.066)
I was lucky to have you on today because you're on a big move, The physician family is spreading their wings and you're moving to the sunny state of Florida and I'm super jealous. You're like moving right now, right?
Chelsea Jones (01:14.902)
That's right. Yeah.
We're packing everything up right now. Next week is whenever we start heading that way. It happened really fast.
Nate Reineke (01:27.05)
This, yeah, something always happens when people move. This is like your second move across the country, because from Kentucky, moved to Oregon, now you're moving to Florida. I feel like when someone on the team moves far away, which hasn't happened all that often, but I'm like thinking about all the people we talk to every day that they move across the country and it's kind of this big deal and maybe there's some freak out moments.
Chelsea Jones (01:38.798)
That's right.
Chelsea Jones (01:47.674)
Mm-hmm.
Nate Reineke (01:56.938)
thinking maybe you could tell us about your journey so far.
Chelsea Jones (02:01.896)
Yeah, yeah, I've learned a lot. A lot of the stuff that I've learned about it has to do with housing. But the main thing that I learned was that when it comes to figuring things out, if you have kids, you got to look for the daycare first and then the house.
Nate Reineke (02:09.174)
Mm-hmm.
Nate Reineke (02:19.19)
Right. I've never moved across the country, so I don't know. But it's always funny when it seems to be that there's always kids in the mix nowadays for physicians because they're making this kind of big move. Maybe they just got their first first job after residency or something. And sometimes there's a kid involved and you're you're sort of thinking about moving based on yourself and you realize that you have this other human.
Chelsea Jones (02:23.021)
Yeah.
Chelsea Jones (02:31.79)
Mm-hmm.
Nate Reineke (02:47.028)
And so you don't want to buy a house because it's cheap or because it's in a neighborhood that you like when there's no childcare.
Chelsea Jones (02:47.032)
Mm-hmm.
Chelsea Jones (02:52.598)
Yeah. Yeah. And there's it, it's not preferable. It would be kind of a time suck and just not very fun to live 30 minutes away from the daycare and have to make that commute every morning and afternoon, whenever you pick them up. So yeah, what we did is we knew where, cause the reason for the move is my husband's job. He just finished his graduate studies. and so he's got a job in Orlando and that's what's bringing us over that way.
But yeah, what we did was I tried to find a daycare first, because even kind of ignoring location for a bit, there's always weightless. Like you never know where you could actually get into. So I searched and searched for a good daycare. And then once I found a daycare, I reached out to him and the stars aligned and they had one spot opening up like a week before we were going to be there. So I was like,
Nate Reineke (03:31.04)
Mm-hmm.
Nate Reineke (03:50.027)
Yeah.
Chelsea Jones (03:51.34)
we'll take it. And then once I knew where the daycare was going to be, I started looking for houses close to that. So that way we didn't have to drive 30 minutes every morning to go. Yeah.
Nate Reineke (03:52.787)
Nice.
Nate Reineke (04:02.774)
I've done that once. I've done the drive to daycare one time and it was the worst and it was only 15 minutes. And it's just right in the center of traffic and everything that's happening in the world. So, but you decided, so something we talked about this, you decided to rent and I'm sure that's like, it's always painful. I just want to get a house and plant roots and everything, but physicians do this all the time.
Chelsea Jones (04:09.069)
Yeah.
Chelsea Jones (04:14.648)
Yeah.
Chelsea Jones (04:22.456)
Mm-hmm.
Nate Reineke (04:31.222)
or they're moving somewhere, it's a new job, they have no idea, they'll even like the job or hate their boss or love their boss. And so was it a pretty easy decision for you when you hear position stories or like what made you rent?
Chelsea Jones (04:31.427)
Mm-hmm.
Chelsea Jones (04:43.182)
It was a pretty easy decision for us because we know we're not going to stay in Orlando forever. It's not likely. Because my husband's job, he had a postdoc position there and those are not permanent. They last usually two to three years. And so we know that's probably not where we were going to set, know, like plant our roots or anything and settle down. And so we just decided to rent because
Nate Reineke (05:07.83)
Mm-hmm.
Chelsea Jones (05:14.635)
It just made sense for us.
Nate Reineke (05:16.158)
Yeah, it's funny that it just makes sense to you, but I hear people all day long, they're like, well, just buy for a couple of years. And usually that makes no sense because realtor fees are expensive. And, you know, it's interesting. We, I think maybe if you're in your thirties, you've probably never experienced, poor housing market. She never know when that's going to happen. And so, yeah, think that's cool though.
Chelsea Jones (05:27.298)
Mm-hmm.
Nate Reineke (05:44.454)
I am going to be taking a Florida vacation, I hope, before the two to three years is up.
Chelsea Jones (05:49.481)
Yeah, for sure.
Nate Reineke (05:52.086)
Okay, we have more questions for our listeners and we have Chelsea here to help us. Chelsea and I both write retirement and college plans for physicians. So we got two planners on the phone. So forgive us if we get very, very, very practical in planning. First question is from an internal medicine doctor in Oregon. They said, my work offered me a new 457B plan. Should I use it?
Chelsea Jones (06:16.718)
Yeah, and I get it all the time. Yeah, and the key with 457 plans, there's two types. There's a governmental plan and there's a non-governmental plan. And the short answer is governmental good, non-governmental bad.
Nate Reineke (06:22.186)
This is actually your question. You got this one.
Nate Reineke (06:27.67)
These pesky 457 plans.
Nate Reineke (06:43.499)
Mm-hmm.
Chelsea Jones (06:44.648)
But the reason that non-governmental plans are, when I say bad, they're, we don't recommend that you contribute to those because the taxes usually don't work out. And the whole reason you would want to contribute to an account like this is so that way you could defer taxes and save taxes. But how the, the governmental plans essentially act like another 403B. So,
Nate Reineke (06:55.68)
Mm-hmm.
Nate Reineke (07:10.25)
Mm-hmm.
Chelsea Jones (07:10.668)
When you leave the job, can transfer it to your new plan or when you retire, you can transfer it to an IRA. But that's not the case with a non-governmental plan. So if you're deferring the maximum into the non-governmental plan each year and you switch jobs, which physicians do quite often, even when they're not planning on it, life gets in the way and
Nate Reineke (07:32.341)
Mm-hmm.
Chelsea Jones (07:39.552)
It's not uncommon for physicians to go through a few jobs before their career is over. But with these non-governmental plans, usually if you separate from employment with the employer that's offering the plan, the money gets distributed to you a lump sum. And when it comes out of the account, it's taxable to you. And if it is just a job switch and you're still earning a high income,
Nate Reineke (07:56.256)
Mm-hmm.
Chelsea Jones (08:05.714)
then all of that money that's coming out is going to be in addition to what you're already making. So that means it'll be taxed at the marginal rate, which is the highest rate. Yeah.
Nate Reineke (08:13.332)
Yeah, that's right. Right. Yeah. And you know what I've noticed is that most people who have these 457 plans are the physicians that change jobs. So sometimes, you know, we'll get a family that comes in and the doc and the family has been at their job for 20 years or something. It's like a private practice. Maybe they have, maybe they're a partner. And I'm like, well, they don't have 457 plans. It's the people who offer these jobs are working for big organizations and
Chelsea Jones (08:23.649)
Mm-hmm.
Chelsea Jones (08:35.79)
Mm-hmm.
All
Nate Reineke (08:43.562)
You know, oftentimes things, leadership changes or something, or you move and you just go get a similar job at a big organization, but you kind of get the bad news when you owe a ton in taxes on this. So the other reason that you and I, think we have learned over time that most people, despite our advice, don't accept the idea that 457 plans or the bad ones are subject to
Chelsea Jones (08:57.686)
Mm-hmm. Mm-hmm.
Nate Reineke (09:13.578)
your employer's creditors. So if hospital goes bankrupt, they lose the money. No one believes their company is going to go bankrupt. But the reality is that they do. But even if they didn't, it's just that they don't normally work out. So it would be better if you took that after-tax money and just invested it in a taxable account. So it's always bad news when people hear this, but...
Chelsea Jones (09:21.929)
Yeah.
Nate Reineke (09:40.404)
I promise if this was a good idea, we would be all over it, right? Us planners would love for you to save as much in taxes as possible.
Chelsea Jones (09:48.62)
Yeah, we've just seen it not work out so many times that we can't in good conscience. Yeah, recommend it.
Nate Reineke (09:53.566)
It's hard to keep recommending it. Exactly. Okay, next question. This is from a double doctor family in Pennsylvania. They asked me this question. Said, we're moving soon. Should I sell my own house to avoid realtor fees? This is actually one of the first times, maybe in the last like seven or eight years, I've gotten this question two, three times, but it's not very often.
Chelsea Jones (10:05.629)
Good.
Nate Reineke (10:23.7)
And you know, I bought and sold a couple of houses at this point in my life. And I feel like, you know, the way I think, the way my brain works, I would be the person if anybody could, other than realtors that could sell their own house. And, you know, it's interesting is Ben has sold his own house before. And so I I'm not, it's hard for me to say absolutely yes or absolutely no, but
Chelsea Jones (10:36.639)
Okay.
Nate Reineke (10:53.008)
My take on this is, it's all experience based. So I have had great realtors. And so they have always in my eyes, earned their money. And I don't just mean, saved me time and energy. I mean, like we get to the point where we're negotiating something, we're negotiating a roof, we're negotiating a broken pipe in my yard. We're negotiating something.
Chelsea Jones (11:18.754)
Mm-hmm.
Nate Reineke (11:20.154)
And the only reason we got to that negotiation is and got money back to me is because they told me to get something inspected. So, for example, I bought my first house and they said, hey, do you want to run a camera through the pipes, like out into the street? Because, you know, it's an extra hundred bucks. And I was broke. And so I called my real estate agent and said, should I pay the hundred dollars? I mean, this was
years ago and get this camera ran through the pipes and she said yes. And then we run it through, the pipe was destroyed. They had to dig up the whole yard and fix all the piping out into the street. And it's funny because we lived in the house for a few years and some of the neighbors we knew they're like, hey, hey, it looks like it's been going pretty well. The yard's not overflowing anymore. Like they used to just get, the yard would get flooded because that pipe was broken.
Chelsea Jones (11:56.748)
Yeah. Wow.
Nate Reineke (12:19.51)
And I bought it from an estate sale. So the owner couldn't say that, you know, there's a lot of times you have to disclose that certain things are wrong with the house and they couldn't disclose anything because they were dead. You know, so it's like, if they wouldn't have done that, I would have had a $10,000 bill, you know, and for the price of the house at that time, I don't even know if the realtor made $10,000. Right. And so in my experience,
Chelsea Jones (12:29.029)
Yeah. Right.
Chelsea Jones (12:44.694)
Mm-hmm.
Nate Reineke (12:48.394)
there's a lot of emotions that come when you're buying and selling houses and you really don't know exactly what you're doing. You could probably figure it out. But if you want to look at this from, cost benefit analysis, you'd have to see like, what am I paying this agent? And do I think I can make that big of a mistake? And in this situation, you know, they were even calculating that part wrong. Cause I know there's new rules with real estate agents where
The buyer needs to pay their own agent But from all the agents I've spoken to they the real estate agents have essentially worked that out to where the seller Still pays the buyer's agent if they want to And usually the buyer just won't come look at the house if they have to pay their own agent So it's kind of business as usual, which means the seller is going to have to pay the buyer
Chelsea Jones (13:31.302)
Okay.
Nate Reineke (13:43.99)
buyer agent and their own agent. And it was like 50 grand to sell their house. And so, you know, it's hard for me to say, absolutely do not sell your own house when it's $50,000 because you could probably replace the roof and the pipes for $50,000. So it's a tough question, but there's a one thing I know for sure is that this family, a double doctor family who happens to have four children is moving across the country.
Chelsea Jones (13:50.566)
Well.
Nate Reineke (14:11.956)
does not have the time, energy or expertise to sell their own house. And they have already sold one of their own houses. They asked me this because they've already done it once. So they're about to sign up for, you know, selling their own house, hiring an attorney to do the paperwork and doing all these negotiations, holding open houses while they're both physicians. And to me, mixed in with the time that that would take and the potential pitfalls of losing money.
Chelsea Jones (14:16.269)
Yeah. right.
Nate Reineke (14:40.906)
Because you're not a great negotiator or you don't know when to push and when to pull and you're risking potentially losing a sale because you don't know how to negotiate and on top of that that you know that a lot of people will celebrate Because when they sell a house, it's sold. They get sold in a week sold in a day and My brain red flags are going off if it's sold in a day. It was too cheap
Chelsea Jones (14:49.31)
Mm-hmm.
Chelsea Jones (15:08.002)
Yeah, yeah. Right.
Nate Reineke (15:10.218)
Right? And so if it's too cheap, like who would know the answer to that question? A real estate agent. So you can do this, especially in a market where houses sell really fast. Whether or not you should, you kind of hear my opinion about this, probably not as a physician, but yeah, you better get some professionals to help you draw up this paperwork.
and you better be prepared to negotiate with someone who does this professionally, which is the buyer's agent.
Chelsea Jones (15:41.026)
Yeah. Yeah. And it's, there's a lot of housing questions that have come up. guess everybody's moving myself included. then my experience to looking at rentals, made me feel a lot better talking to a real estate agent because I knew that it was a real property. Like I'm in Oregon. I, everything happened so quick. I couldn't fly to Florida to go look at rental properties. So working with a real estate agent, like
Nate Reineke (15:48.896)
Yeah, I know.
Nate Reineke (15:59.019)
Mm-hmm.
Chelsea Jones (16:10.066)
made it more, I was able to verify everything, make sure that it was real. Cause apparently another thing I learned, there's a lot of fraud in the real estate market and like Zillow and those websites. So my bank even like delayed my payment because they saw me sending money to Florida and they were like, this is fraud. We're going to stop it. And I had to go through all the channels to open it back up. But
Nate Reineke (16:14.548)
Yeah, right.
Nate Reineke (16:23.072)
Mm-hmm.
Nate Reineke (16:31.679)
Yeah.
Yeah.
Nate Reineke (16:37.429)
Wow.
Chelsea Jones (16:40.628)
yeah, this makes me think of another question that I got recently, about housing. I have a, a client up in New York who they're wanting to sell their house and buy a new one, with just one floor. They don't want stairs in their home because it's going to be their, their home that they retire in. And they were really kind of set on making an all cash offer.
Nate Reineke (16:54.934)
Hmm.
Nate Reineke (17:00.47)
Mm-hmm.
Chelsea Jones (17:06.028)
And they were willing to move things around to make sure it was possible for them to do an all cash offer. And they were basically asking like, we want to be competitive. We want to make an all cash offer. Should we do like, should we move things around to make that happen?
Nate Reineke (17:06.472)
yeah.
Nate Reineke (17:20.584)
Yeah, yeah, I get this question actually all the time. And I'm kind of the housing person. You get so many questions, like you'll be the second housing person before we know it. But yeah, so this all cash offer thing, this is to me, you know, from what I can tell, this is a new phenomenon. Like, this is a COVID thing, where it was so ultra competitive that
Chelsea Jones (17:32.674)
Yeah.
Nate Reineke (17:50.58)
you have everyone thought they had to have an all cash offer, which is insane because like only a few handful of people can have all cash offers. And we heard it a lot in Oregon because people were coming with a ton of equity from California to Oregon and paying cash because they had their houses are so much more expensive. They would just take their equity and move here. And so, okay, so there's a couple of things to know about this. First of all, if you have an all, if you're coming in with an all cash offer,
Chelsea Jones (17:54.812)
Mm-hmm.
Chelsea Jones (18:05.55)
Right.
Nate Reineke (18:21.838)
or I'm sorry, if you're coming in with paying with a mortgage, so you, the bank is paying and versus an all cash offer, there, there is some reason that the seller would sell to you. But to me, it's, it's not a, an extremely strong reason because the reality is that you get the same amount of money as the seller of a home.
Chelsea Jones (18:44.862)
Mm hmm.
Nate Reineke (18:48.086)
So someone comes in, they want to buy a house for 800 grand, they have cash, one comes in with $200,000 down and the rest is a mortgage. You're gonna get all the money. So what happens when you're actually selling your house is your agent comes in and presents you with the three best offers. You say, they're all 800,000, one's a conventional loan, one's a VA loan, and one's cash. Of course you're gonna take the cash. Because...
Chelsea Jones (19:12.251)
Mm-hmm. Mm-hmm.
Nate Reineke (19:16.15)
there's no chance that the loan doesn't get approved. Right? But let's say one came through and it says, you know, they're paying 805 or 810. Well, it depends. I mean, obviously someone might want to take the cash and lose $10,000, but I can tell you, I wouldn't. If someone was a really strong buyer and, you
Chelsea Jones (19:40.642)
Yeah.
Nate Reineke (19:44.326)
My agent spoke to their agent, said like they have a good amount of money down. They're both, they both got jobs. And in our case, these people that are asking this question are like physicians with money. I'd want the extra 10 grand. so think about, think about that, in order to have an all cash hopper, you have to sell your house and go rent somewhere so that you can buy a house or you have to sell your house. And within
Chelsea Jones (20:11.055)
Okay.
Nate Reineke (20:13.684)
the time you get that money to the time you buy, there can't be any gap in between. Extremely stressful and sometimes costly, like go get a hotel sometimes. And so when you take a step back and you see what it's actually gonna cost you to make an all-cast offer versus get it with a loan, it's not that big of a difference if you have to rent, okay? Even just for a few months. Now,
Chelsea Jones (20:19.746)
Right. Yeah.
Nate Reineke (20:43.126)
Take another step back and I you know, I just would like for people when they're when they're buying houses is really hard But let's just all calm down a little bit. Okay, there's gonna be a new house on the market every weekend and So what's a more reasonable approach to doing this? I think I more reasonable approach to doing this is to make your best offer to the house that you love and if you don't get it you move on because I can tell you every
Chelsea Jones (20:52.716)
Yeah.
Nate Reineke (21:12.246)
single time in the last two years I've gotten a question about housing. Everyone who wants to buy a house says, this is the house, this is the one, this is perfect. And then I say, okay, but just, I hear that every day. Are all houses perfect? No, no, no, no, no, Nate, you don't understand, this is perfect. And then they lose the house, they're sad for about a week, and then they call me again, this next one is perfect.
Chelsea Jones (21:21.76)
Right. Yeah.
Nate Reineke (21:41.054)
I'm like, I'm pretty sure there's a lot of perfect houses because everyone wants a four bedroom, three bath house with an office, which means they make a lot of them. So just.
Chelsea Jones (21:46.738)
Mm-hmm.
Yeah, or when they don't get the house, they're like, actually, now that I think about it, there was this one thing that I wasn't super crazy about.
Nate Reineke (21:54.568)
Yeah. Yeah, right. Exactly. Exactly. So there's a there's a human element here that if we can all take a step back and relax, called Nate or Chelsea so they can help you relax, it will be okay. You will find a house. It will be fine. But just to entertain this for a moment, better than an all cash offer or better than going out and renting what this person should probably do is have their
Chelsea Jones (22:08.183)
Mm-hmm.
Nate Reineke (22:23.622)
agent negotiate what's called rent back. So when you're selling your house, you have the power, a lot of times to negotiate. And something you might want to negotiate is you tell the buyer, say, Hey, I will sell you this house, but you need to rent my my old house back to me because we're going to stay here for 6090 days until I buy a new house. And so you're just going to pay them market rent rather than moving twice.
Chelsea Jones (22:26.917)
Mm
Chelsea Jones (22:48.559)
Mm-hmm.
Chelsea Jones (22:53.055)
Right.
Nate Reineke (22:54.012)
And you know, it's all hard. Moving is hard because when you have all that cash in your hand, you're losing money renting. When you wait, then you have to buy the perfect house within 60 days. So I get it. It's really stressful. hard. It's hard to find the perfect fit. don't believe that you have to have all cash to make a competitive offer.
Chelsea Jones (23:07.022)
All right.
Nate Reineke (23:19.594)
Just pay them a little bit of extra money and save the time and energy on rent and moving twice. So come in with your best offer and accept the results.
Nate Reineke (23:31.41)
Okay, I promised not to talk too much about housing, but I think I didn't keep that promise. Family medicine doctor in Washington. They said, keep hearing about ETFs, but they sound the same as mutual funds to me. What am I missing?
Chelsea Jones (23:49.966)
Yeah, so I'll take this one. The ETFs and mutual funds, they are similar in a lot of ways. So if you crack them open and look what's inside them, before like comparable funds, you may find the exact same holdings. What's different is basically how they're sold and how they interact with the market.
Nate Reineke (24:04.822)
Mm-hmm.
Nate Reineke (24:19.158)
Mm-hmm.
Chelsea Jones (24:19.608)
So ETFs trade like a regular stock. So they trade in whole shares. The value goes up and down throughout the day. As opposed to mutual funds where it's an open-ended fund, the trades go through at the end of the day at market close and that's when the price is determined. There's one price per day, it doesn't really fluctuate.
Nate Reineke (24:46.24)
Right.
Chelsea Jones (24:49.646)
throughout the day. And ETFs tend to be more tax efficient because of how they're traded. So mutual funds are open-ended funds. When you're buying and selling your... So say you sell your mutual fund, you're actually selling it back to the mutual fund. Whereas the ETFs are sold on the secondary market. So when you sell an ETF,
Nate Reineke (25:12.277)
Mm.
Chelsea Jones (25:18.85)
you're really exchanging or transferring it to another investor. So there's no actual liquidation of the original investment happening. And how that affects the taxes is that because the ETFs are traded on the secondary market and whenever investors are buying and selling, they're buying and selling with other investors and transferring the shares.
Nate Reineke (25:31.968)
Hmm.
Chelsea Jones (25:46.306)
Whereas mutual funds are selling it back to the fund, ETFs typically distribute fewer capital gains, which means that you owe, you would typically owe fewer, like ongoing taxes in your taxable account because of that.
Nate Reineke (25:57.322)
Okay.
Nate Reineke (26:07.432)
Okay, that makes sense. So basically, easier to buy and sell, or more straightforward to buy and sell, more liquid, because you can sell them immediately, and more tax efficient.
Chelsea Jones (26:13.08)
Mm-hmm.
Chelsea Jones (26:21.55)
That's right.
Nate Reineke (26:23.218)
Okay, here you go. All right, last question of the day. Internal Medicine Doc in Virginia said, have been investing in a taxable account for a while with hopes that I will get a bigger return for some expenses I know are coming up in a year or two. Is that a good idea?
The short answer is probably not. Really, the short answer is no. you know, when you buy, so this, basically what this person is asking is, should I invest in stocks with short-term money? And so, you know, I'm sure our listeners have heard me say this a million times, from the peak of a market to a trough to the next peak, that's a full market cycle that averages like five years.
Chelsea Jones (26:48.165)
Right.
Chelsea Jones (26:59.614)
Mm-hmm.
Chelsea Jones (27:13.43)
Right.
Nate Reineke (27:14.942)
So the really shorthand way to think about this is if you need the money in the next five years, you shouldn't have that money in stocks. So how do you outperform CDs? How do you outperform high yield savings accounts? How do you outperform ultra short term bonds? You buy stocks. But can you withstand a market cycle with that money is the real question. And if you can't, then what you're doing is you're saying, I'm going to take this hundred grand
Chelsea Jones (27:20.942)
Right.
Nate Reineke (27:43.99)
that I know I'm going to need for a house. And I'm going to put it in the market. I'm going to put it in stocks. I'm going to hope that let's say I get an 8 % return or a 10 % return versus a high yield savings account paying 4 % right now. So I want to outperform that high yield savings account by 5%. Okay. And so that I get an extra five grand in the next year.
Chelsea Jones (27:46.555)
Mm-hmm. Mm-hmm.
Nate Reineke (28:14.804)
I know I'm going to move. want an extra five grand, so I'm going to take the risk. But the risk is that you lose half the money and your family still needs to move. Now you only have 50 grand.
Chelsea Jones (28:27.451)
Right. Yeah.
Nate Reineke (28:28.65)
So of course, stocks are a better long-term investment than a high-yield savings account or CD. But you can't take it. You literally can't stand the risk if you still want to accomplish this goal.
Chelsea Jones (28:40.502)
Yeah, because with higher return always comes higher risk. so it sounds like is the was this client's goal or was the short term goal for a house?
Nate Reineke (28:56.126)
It was a mixture of things. It was a house, which it wasn't a primary residence, but long story, but basically it was a house, a family thing. was, had something strange going on with their student loans and they wanted to clear them in the next few years. And then there was another one. I mean, there was just a mixture of things, which kind of like when there's a lot of goals, I think people make some interesting decisions.
Chelsea Jones (29:05.09)
Mm-hmm.
Chelsea Jones (29:17.208)
Mm-hmm.
Nate Reineke (29:26.258)
Maybe they didn't have enough money to go around for all these goals, so they're trying to outperform things. the risk is that you don't get to do any of them.
Chelsea Jones (29:31.954)
Yes.
Yeah. Yeah. You're kind of putting those, those goals, like you said, at risk. Cause it sounds like they have good goals. Like they've specified exactly what they want to use it for. They know when they need to use it. but they just don't really know how, like what to do with the money in the meantime. And.
Nate Reineke (29:44.778)
Yeah.
Nate Reineke (29:49.632)
Mm-hmm.
Nate Reineke (29:55.754)
That's right. Yeah. Applying an investment strategy to those goals is always uncomfortable because if the investment strategy doesn't get you there, then guess what? You have to get you there. And sometimes we don't always get all the things at the same time. But basically what they're asking is how can I maximize returns on a short-term goal? And this may not be the most exciting answer, but on a short-term goal, one to two years,
Chelsea Jones (30:09.155)
Yeah.
Nate Reineke (30:24.916)
The best you should be doing, the best you really can do with an appropriate investment strategy is a high yield savings account, is a CD, maybe, maybe is ultra short term bonds, if you're careful, but that's just the best you can do with the amount of risk that you should be taking. And you made a really important note that I think a lot of people miss. The goal isn't to just get the maximal returns, it's to get the optimal returns given how much risk you can take.
Chelsea Jones (30:31.362)
Mm-hmm.
Chelsea Jones (30:41.057)
Yeah.
Chelsea Jones (30:52.03)
Yeah.
Nate Reineke (30:54.752)
Because people say, this thing outperformed this thing. I'm like, this thing's 10 times riskier. So like, yes, in this moment it did, but there's a chance that you lose a lot of money right before you need it.
Chelsea Jones (31:00.642)
Yeah. Mm-hmm. Yeah. And not being able to buy a house is kind of a big deal. That's not something that you can put off till the market rebounds if you had invested the money.
Nate Reineke (31:15.368)
Yeah, no kidding. Sorry honey. Sorry honey, we have to stay in the apartment because the stocks went down. Okay, well that was the last question for today, so I'm gonna take this out, okay? All right, so if you're a physician trying to get back on track or get on track for college or retirement, if you want a team,
Chelsea Jones (31:24.942)
You
Yeah.
Chelsea Jones (31:32.856)
Okay.
Nate Reineke (31:43.638)
that cares about your investments and your family. You're listening to them right now. Chelsea and I can help. You can go to physicianfamily.com, click get started button. can interview us. Ben does all the interviews, so you get to speak with him. And then, you know, if you decide we're a match, Chelsea or I can help you get on track with those written plans in a matter of just a few weeks. And then after that, if you decide you need help with your investments, you can move forward and we can help you with that as well.
And I think Chelsea, the great thing about this is you and I are really honest. If people don't need help with investments, there's no slick sales pitch here. They can just stop. Right. So if you need a plan, we'll tell you. If you don't, we'll tell you. If you need investment help, we'll do our best to suss that out and tell you. If you don't, we'll tell you that too. And then if you need someone to work through this, these investments work through
Chelsea Jones (32:20.62)
No. That's right.
Chelsea Jones (32:32.963)
Yeah.
Nate Reineke (32:38.57)
guide you through this all the way to the finish line, that's to retirement and beyond, then we can do that too. So thanks for listening to Position Family Financial Advisors podcast. Until next time, remember, you're not just making a living, you're making a life.
