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Announcer: It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only, and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representatives securities offered through Cambridge Investment Research Incorporated, a broker dealer. Member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Gary Determan: Here it is, Financial Focus first Wednesday of the month and Dave Nelson joining me in studio. As always gotta talk a little basketball.
David Nelson: Absolutely, Gary.
Gary Determan: And we gotta talk up your nephew, former River King standout Brian Peterson. Another National Championship under his belt as head coach.
David Nelson: Isn’t it amazing? Such a short tenure as far as out there. And I don’t have the exact timeline, but I’ll be close. It’s the fourth or fifth year, and two National Championships, as far as pretty spectacular.
We were just discussing before we went live here, that I spoke to him about a month or so ago and it had to do with a player in town that he’s looking to potentially spend a little time with and see about possibly recruiting him. But yeah, he said I’m in the midst of things, I don’t have a lot of time now, but I just wanted to touch base and what have you.
You couldn’t be more pleased, he’s a humble kid, he’s a hard worker to say the least. Obviously what he’s saying, it’s working. As he admits to he said, for recruiting at a place like this, you’re not getting the top tier players, you’re going to get second level, third level, fourth level, and often times you’re getting them late. And in addition to that, you’re basically, best case scenario, you have them for two years. And so teaching really complex things and drilling down on a whole bunch of stuff, he says we can’t do here. We have to put in pretty simple stuff and then we have to have the right mix of players as far as to try to pull it off and in a very short period of time, figuring out, as far as what it takes to win at that level, we’re talking about National Championship. I don’t know how many teams that applies to, but it’s a lot. They got down there and had a good run and he said he really enjoyed this year from the standpoint of the kids. This year he had a nice mix of personalities and good group he said. So I was really pleased for him and pleased for my sister and brother-in-law. They’re junkies like we are. Junkies about hoops. We love basketball, they followed them the whole way and it just had to be spectacular.
Gary Determan: You know it’s interesting, of course I know you know Bob Walker who is a very successful…
David Nelson: Absolutely.
Gary Determan: … Junior college coach here in Clinton. And bob was always telling me, the good thing about being a junior college coach is that you’re only going to have the players for one or two years.
David Nelson: Right.
Gary Determan: The bad thing cause you’re only going to have them for one or two years.
David Nelson: Yes, exactly. Makes it, it’s a guessing game. From year to year, many of the players just don’t cut it. They’ll come in there, and they depart, its harder than they thought, the environment, the expectations are different than they thought. So he’ll have a decent amount per year, that just up early in the year and disappear, so you’re right. Some of those can be a year and transfer somewhere else. So it’s a great challenge and Bob did such a nice job as you said as far as in town here, still, which we had the program in town obviously it’s a numbers game and trying to make the numbers work financially wasn’t doable these days. But Brian, he got a couple requests as far as to chat, as far as after the last championship, and they were small D1 schools, and as an assistant, he likes that area out there. I gotta wonder now, as far as, after this, as far as if there might be some other people, as far as schools looking, as far as to maybe have him come in as far as for an interview and who knows, maybe something big for him.
We’re certainly hoping for it because as I said, it’s just like, me coaching as far as my players, I want to, we’re not just coaching basketball, we’re coaching human beings and you’re trying to prepare them for tomorrow. I really believe that Brian cares about the kids as individuals. Not just as a piece of meat as far as to try to build his resume, and that’s I think again, most coaches fall into that category. Lot of times people that aren’t around sports, have a tendency to generalize and think it’s only about wins and losses, and these people aren’t being treated fairly, et cetera. But at the end of the day, the great coaches, they understand as far as they’re trying to build these people to be good citizens and some of them come from pretty tough upbringings, and they don’t understand. So you need to work with them, and I’m thrilled that he’s not only getting the W’s as far as on the court, but I think he’s getting a lot of W’s behind the scene as well.
Gary Determan: And you know, you take a look at Brian, four sport athlete at Clinton High School.
David Nelson: Absolutely.
Gary Determan: He was our best basketball player, led the team in hitting in baseball, outstanding in track and field. He golfed, also.
David Nelson: Exactly.
Gary Determan: And he goes onto Kirkwood Community College, and that is a stepping stone to Iowa State.
David Nelson: Right.
Gary Determan: Where he started for two years.
David Nelson: Exactly. So two years at Kirkwood, had a great run there. Now what’s it going to bring. I get an opportunity to go out to a big school and a really nice program as far as that point in time. McDermott was out there at Iowa State, anyway he gets on, I think there was an injury as far as one of the people kinda fighting for his position, he finds himself in the starting lineup and he never gave it back. And for two years he was a starter at Iowa State.
I mentioned earlier, and I think this is a true statement. If it is and it’s really, really close to a true statement. I think he has to record out there as far as for assists versus turnovers. He just didn’t turn the ball over, and he had a couple really nice players that he played with, and so he got them the ball and they did some damage. Anyway, it’s terrific, and again, great human being and he’s making a difference. So I’m absolutely thrilled for him.
Gary Determan: It’s so exciting to see him do well, and of course, Jay Herkelman.
David Nelson: Yes, exactly.
Gary Determan: What a job he has done in Kansas in a junior college there.
David Nelson: Exactly, exactly. Terrific, again, it’s local guys that had success as far as at the lower level and now as far as at the upper level, college type coaches. Again, he may be perfectly content there, as far as at junior college for the next thirty years, as far as I know. We really haven’t discussed that at length. I do know he had conversations after the last W, but who knows? Like Herkelman, he’s been there a number of years, I think, from what I know, really enjoying himself and certainly making a difference as far as some of these programs.
Gary Determan: Before we take the break for the weather, let’s switch this to business. He’s going to get an opportunity to step forward in his career.
David Nelson: Sure.
Gary Determan: Or do you stay where you’re comfortable. You kinda did the same thing, you were at Eagles, you had a comfortable position.
David Nelson: Exactly.
Gary Determan: And then you took that step.
David Nelson: Yeah, and for two years I thought, boy this is one of the dumbest things I’ve ever done. So put things in perspective. Now we’re going back to 1981, and I’m at Eagles, it was union store, all Eagles were. I left the position, I don’t even know at the time, I’m give or take twenty, twenty-one, twenty-two years old.
Gary Determan: Young family.
David Nelson: Young family, I had a daughter as far as that point in time, so the decision of jumping ship and going to the unknown was scary, but I did it. And I can tell people, two years later, so I was making nine ninety an hour. I had six weeks paid vacation, sickness, et cetera, et cetera. Nine ninety an hour in 1981, 1982.
Gary Determan: Not bad.
David Nelson: Not bad, it was a good wage, and life benefits, health insurance, the whole nine yards, to go to nothing. And so two years later, my income was about six grand, so to kinda put things in perspective there. So wow, I’m waking up at night, thinking I’m dreaming and I’m late for work at Eagles just all this stuff, and saying, what did I do here? But, took a few more risks and over time things paid off so, very blessed to say the least, and it was scary. So Brian could be looking something in the eye too. Who knows?
Gary Determan: You never know cause it is amazing what Division One coaches make a year.
David Nelson: Exactly, exactly.
Gary Determan: And the potential there.
David Nelson: Even the assistants, even the assistants, are making a nice income. You’re exactly right. He has the demeanor, I think, and he certainly loves the game, he loves sports period, but he loves the game of basketball.
Gary Determan: The demeanor part, you look at him, you think mild mannered.
David Nelson: Right.
Gary Determan: But he can get riled up.
David Nelson: He can, exactly. He put out a DVD recently, I’ll just blabber this real quick, anyway I gave him a little static about that. I bought his DVD and so, he’s walking through as far as how he coaches et cetera. What it is it’s an event that took place, it was in Indiana, and he was one of the speakers there and so they video taped. You can just tell in how he coaches, and walking through some of his offensive sets, et cetera, et cetera. So I bought it and I’ll probably be running a play or two of his. So it’s pretty cool.
Gary Determan: I would hope so.
David Nelson: Exactly.
Gary Determan: Let’s take a break for the weather, brought to you by Awesome Carwash.
Andrew Studski: A little more of a dreary day expected after some morning sunshine. We’ll see increase in clouds, that will eventually lead to some light rain overspreading the area. Still a warm day expected, with a high of 58, south winds at 15 miles per hour. The rain continues tonight. Overall, amount, close to a half an inch for most of us. We’ll see a low temperature of 44 degrees, an east wind at 15 miles per hour. Couple of leftover showers for Thursday, those skies clearing out later in the day and a little cooler too, with a high of 52. A nice warm up though, for the end of the work week, a mix of sun and clouds for Friday, and high of 63. With your storm track eight forecast, I’m meteorologist Andrew Studski.
Andrew Studski: Some scattered clouds, current temperature now thirty nine degrees. Our update brought to you by Awesome Carwash.
Announcer: The Awesome Carwash Complex wants to extend a big thank you for voting them, number one carwash, for voting Bronx Auto Sales as best preowned small lot, and for voting Laundry Max as best laundry mat. And don’t forget, auto detail and the awesome pet wash, are also available. Attendants are on duty if you need assistance. All this and more, at the Awesome Carwash Complex, on Manufacturing Drive, in Clinton.
Announcer: It’s awesome, baby!
Gary Determan: Welcome back to Financial Focus, still talking basketball…
David Nelson: Still talking hoops.
Gary Determan: … during the break, but we’re going to talk business.
David Nelson: All right, let’s talk some shop.
Gary Determan: Got a big date coming up, April 15th.
David Nelson: Yeah it’s a big one. Most folks out there, I believe, I mean the statistics are, there’s roughly twenty-five percent of the American public that filed their return, the last two weeks, leading up to April 15th. So there’s still a fair amount of people as far as that haven’t filed, but I would suspect, many individuals out there that are listening now, probably have done their taxes.
So the date is this, its kinda interesting as far as some of the national publications have put some of this together and saying that many individuals have been really disappointed as far as that their tax returns were less this year than they have been in the past, expecting to have a larger return, tax return. So as we’ve explained as far as whether it be on TV, whether it’s individuals that we talk to, what have you. Essentially, it’s centered around that the tax law kicked in in the first quarter this past year, so many individuals saw a pop in their income there, so the income went up a little bit, as the tax is being withheld were less. So net, you’ve got the refund through the year. So for most individuals out there, the numbers seem to be, and I think this is what we’re told a year ago and it’s still what we’re hearing, is that the average person out there is probably seeing a two to three percent reduction as far as the actual tax that they pay. So the key is, how much tax was withheld from my check, not the refund, just looking at that in isolation. It’s how much tax did I pay last year, well last year being in seventeen, how much tax did I pay in eighteen. And I think if you compare the two. It will put a smile on most peoples face.
The one category Gary, that’s kinda interesting that if we were to summarize and look as far as what area didn’t as a whole see a reduction, and that is single taxpayers that have a pretty substantial income. And I think the substantial falls into the six figure category, so a hundred grand and up. Those individuals as a whole did not see a tax reduction, they saw a slight increase. We’ve already talked about, as far as on prior programs, that corporations as a whole C Corporations, so these are usually the medium to bigger companies out there, they got a substantial tax reduction. Hopefully it went back into hiring new people, hopefully it went back into buying new toys and whatever as far as for the business to make more money as far as going forward. That was the case as far as a lot of press, as far as some of the real gorillas out there, the huge companies, they put it back into stock buybacks and that didn’t make a lot of politicians happy. But it is what it is, it’s out there corporations as a whole tax reduction. Most individuals, slight tax reduction. Single taxpayers making a pretty good income, didn’t see a reduction, and they’re pretty much the only group.
Gary Determan: Now personally, I didn’t see a whole big difference between what I pay in and what I pay out and different things like that. I know Deb and Andy are down there in your office now, what are some of the things they’ve been telling you.
David Nelson: Yeah so, what we’re seeing as far as a typical individual is a little bit of kinda the national type of viewpoint, and that is that last year I got a bigger refund than I am this year, what happened? And so the immediate impulse is that the new tax change actually caused me to pay more. Again that net for most individuals that’s a reduction. Now, the discussions they’re having with people it centers around the same discussions we’re having with people. There’s still some things people can do, up to April 15th. You still have a few opportunities that exist, they are probably the obvious ones to most people, but maybe they’re not to some. And that would be IRA’s. If you’re eligible for an IRA, you can put in a buck or two as far as in the IRA and have that reduce your current taxes. Hell, savings accounts, for those individuals that have plans, health insurance plans with high deductibles, and through your employer, or if you’re self employed, you have a high deductible plan, you’re eligible for a savings account and the money that goes in there, for those that don’t know, big picture it’s a bucket of money, you put a dollar in today, it’s deductible today, it goes into this bucket to be used sometime in the future as far as to pay for your healthcare expenses, that aren’t covered as far as by insurance.
The nice thing is, it’s deductible on the front end and it’s tax free on the back end. No other investment out there, no other vehicle out there, allows that so, hell savings accounts should be looked at for many individuals. But the tax savings you’re going to get from IRA’s, outstanding.
I would say, again folks should start focusing on 19th. And not last minute stuff, but really focusing on 19 as far as what can I do to impact as far as this year. We’re having lots of conversations with people, they’re having conversations with people about upping their 401k contributions, upping their simple contributions. So simple is similar to 401k, just typically for small businesses. So really nice opportunities there. Put money in you hell savings account ahead of time. Charitable deductions, we get the question from people, are the deductible? Aren’t they? I heard some people say they are, some people are not. And so what’s the answer? They’re looking for a definitive answer and my response unfortunately, is pretty much what they’ve heard. Well it depends. And so if you have enough deductions, as far as to get you over what’s called the standard deduction, bottom line it’s deductible then.
But again, that’s kinda complicated, and what we tell people as a whole, if we were to summarize this as a whole, most people out there won’t be able to deduct their charitable contributions because their standard deduction went up. So indirectly, you kinda are. It’s just blasted confusing, the tax code. I mean, I don’t know who writes this stuff, but the bottom line, it’s typically special interest that are sticking their nose into it and putting their little slant on things. But at the end of the day for the typical person, if you work with somebody competent in the tax area, what you’re going to find is that again, there are still many opportunities out there, most people are leaving money on the table that they’re entitled to some tax benefits, and we encourage people to work with somebody competent. They can pay for themselves, they can give you the advice to make their fee essentially free, because they gave you advice as far as to help you.
Gary Determan: Visiting with Dave Nelson of NelsonCorp Wealth Management, about five minutes left in the program, Dave, markets fluctuating what are we looking at here?
David Nelson: Yeah, it continues to be a battle that exists. Brexit, everyday you wake up you hear more and more as far as about Brexit, it’s getting close to deadlines here. I mean the negotiating that’s taken place over in the UK, it’s intense to say the least. So that’s impacting things. What’s interesting, again for the folks that are out there, it tells you how exciting my life is, if this is interesting, okay. So I’ll preface it with that, but anyway, the currency for the UK has been rallying pretty hard. And it essentially says, that it’s probably going to be a good outcome. Again, that’s a pretty big wager right now because this is a fifty, fifty deal here. This is not sixty, forty. This is clearly fifty, fifty. So it’s going to be interesting as far as where that pans out.
The other things that’s interesting is, where negotiations are going as far as over in China. You’re hearing some good news, as far as that some of the stuff is, we’re getting to understandings on some tough issues, theft, being probably front and center, As far as a lot of our technology. So that we seem to have some agreement, the key is enforcement of that. But the area that is really, really tough as far as that we’re pushing at them on and they’re not giving, is the ownership of companies as far as there, that are on key areas of the economy, and producing something that have state ownership that we’re pushing them, as far as to get the state ownership out of there. In other words, it’s like the US funding certain companies, as far as with money, to make them more competitive on a global basis. We don’t do that here, I think we could say a hundred percent, but the bottom line is over there, there are many of those key companies that are funded to some degree as far as by the government. And they’re pushing back saying, we’re not changing, and we’re basically saying, you’re going to need to change in order to get some of these tariffs removed and or other new tariffs as far as, put in place.
So it’s going to be interesting, I think for the average person out there, again, what does all this mean? It means uncertainty, and as we had a good friend client for quite some time, he lives up in the Thompson area, that was in recently. Has a very nice net worth, and as he put it he said, the last two, three, four years could all be wiped out in a very very short period of time. That’s the hard part, and I said you need to come to work for us, because most individuals don’t understand that. They don’t realize if one of these things goes terribly wrong, that the market could backpedal, twenty, thirty, forty percent, in a week, in a month. I mean a very short period of time. And here, all of your gains over the last several years, just disappeared. And so what we talk about is again, having a strategy, to play defense at certain points. And to be proactively, trying to not just sit there and hope that things work out, but proactively making changes. And I don’t many of our listeners out there probably fall in that category.
They’re putting it in, they’ve been told that over time you’ll be okay. Well many of these individuals are at retirement, in retirement, and to have a hard punch in the gut and then hope that things come back, so that they can live the quality of life that they want to in retirement, is a real dangerous game. And we don’t think that that dangerous game is appropriate for most folks. So again, what’s the alternative? The alternative is to have a sell discipline in place, that when certain events take place, you proactively act, and that act would be to sell some riskier stuff, and to take that money and put it into more conservative stuff, to try to protect your capital. Everybody out there knows roughly what their account balance is, and their 401k, and their various investments that they have, they want to keep it in that neighborhood. And unfortunately it can happen quickly, and we advocate and promote as far as that people have a sell discipline, and most advisors don’t, and almost every client without exception, wouldn’t. And so they need one, and again, we’re not predicting Armageddon as far as tomorrow, but as we all know, what took place in 07, 08, 09, wasn’t pleasant, and nobody rang a bell that this was going to happen tomorrow. And so you need to be prepared for stuff like this at all times.
Gary Determan: As always interesting, David thanks so much for coming in.
David Nelson: Thank you Gary, appreciate it.
Announcer: Financial Focus is a production of NelsonCorp Wealth Management and Clinton and Davenport. The opinions voiced in this show are for general information only, and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representatives securities offered through Cambridge Investment Research Incorporated. A broker dealer member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website, at www.nelsoncorp.com.
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