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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: It is the first Wednesday of the month, so we’re going to go live to the bottom of the hour. Nate Kreinbrink in the studio with us today. Good to see you, Nate.
Nate Kreinbrink: Thanks, Gary, for having me. A little pinch hitting this morning. I know David usually does the first Wednesday show, the live show, here to the bottom of the hour, but feeling a little under the weather. I know there’s a lot of that going around. I think he caught it and finally caught up with him a little bit.
Gary Determan: Of course people hear you the other Wednesdays. John, James, sometimes Andy comes in as well.
Nate Kreinbrink: Right. We do the Financial Focus, then, the rest of the days… the abbreviated version where we tackle various topics, from tax planning to Social Security planning, to college planning. Just overall type of things. We usually sit down the day before and discuss what direction we want to go with that next morning program and usually talk if there’s something relevant in the news that’s continuing to be a headline. We try to address that a little bit. Otherwise, if there’s a topic that we see in our meetings with clients that seems to repeat itself over and over again, usually if that’s the question, there’s a lot of other people that have that same question. So, we try to keep the topics relevant, change it up, and just try to get it out there. Cram a lot of information into 10 minutes. I know you start going on some of these topics and it’s hard to touch all the points you want to do in 10 minutes, but we try to give a broad base and then, if people have questions, to follow up with that.
Gary Determan: Of course, they also hear you in our mid-day report, with the Mid-day Market Update. Now, how long ago did you get started with NelsonCorp?
Nate Kreinbrink: I got started roughly six years ago, I think is when it was. The early 2013, I think, is when I finally passed the final exam that I had to get to actually be licensed to be able to sit and meet with people and continue that process along. It’s amazing how fast that time goes. Just the knowledge that you have to have to continue to progress and learning something new every day. You think, six years. You think you’re going to have this pretty good base, but again, this industry is constantly changing. Staying up to date on new tax laws, new contribution limits, everything that goes with it. So again, it’s constantly evolving, but like I said, it’s hard to believe that it’s been six years. Time flies, I guess, when you’re having fun.
Gary Determan: I guess. I can recall when you first joined and we were visiting with you. I don’t know if it was a men’s day or this program. You were talking about taking the test, what you all had to go through to take the test, and I would imagine that continues yet today.
Nate Kreinbrink: It does. That, I think, was just the eye-opening experience the first time you went in to take the test was just how, I guess, I don’t want to say scrutinized, but just how observed you are. You’re watched over like it’s Fort Knox or something when you’re going into this thing. I mean, emptying pockets, emptying everything out of it… coat pockets, everything, taking watches off. You have a camera that’s right on top of you that’s focused down on you. Then, you have, basically, like an air traffic control person that’s sitting there with 20 monitors watching everybody so they’re not doing anything they’re not supposed to. So, it was a little overwhelming to sit there and be watched. I never really struggled taking tests, but that definitely pushed you a little bit to feel like, like I said, someone’s looking over your shoulder all the time, let along trying to remember just everything that you learned from a seven, 800 page book that you’re just trying to cram and know the 100 questions that they’re going to ask you.
Gary Determan: That is amazing.
Nate Kreinbrink: It definitely was a little overwhelming, but like you said, you have to have that to do it and it kind of weeds people out, as far as taking that test and passing it. To then continuing on, you kind of know what to expect a little more going into it. All in all, great experiences.
Gary Determan: Again, visiting with Nate Kreinbrink here on Financial Focus. Something that the listeners might be interested in… how often do you have to continue, if you get a license, to keep that license still renewed?
Nate Kreinbrink: Every license that you get and designations that you get… letters after your name, licenses, whatever they may be… they all have continuing education credits that you have to have. Usually, depending on which one it is, it’s usually 20 to 30 continuing education credits, usually in the two to three year span. So, you’ve got to have to many that you can take online. You have to have so many that you have to have in person, in a classroom, to actually do that. Then, there’s different topics within those continuing education credits that you have to have, whether it be ethics, or taxes, or whatever it is. There’s certain, basically, sectors that you have to have to be able to continue on with that.
Gary Determan: I would imagine there’s a cost involved with some of this.
Nate Kreinbrink: Obviously, that’s how they get you. Whenever you get it, you have to pay. Just like people going back to, again, for schooling, for more hours, for whatever classes it is for school, the continuing education credits are no different. You go to a class and you pay to go there. But again, in order to have that and to keep it up to date, it’s part of the business and what you have to do to continue it and to keep it up to date then.
Gary Determan: I know NelsonCorp, a couple of times, has had an event down at Saint Ambrose, giving these people an opportunity for that continuing education.
Nate Kreinbrink: Right. That’s something that, again, David’s in here all the time and he preaches it every day at the office. He places a big emphasis on education and just having people be educated on the different topics that fall into it. That even that we had down at Saint Ambrose is right up that alley where, as you said, we had in the morning… we brought in a bigger speaker, had breakout sessions from some of the vendors that we work with over the course of the year, and giving different topics. But inviting advisors from all over this area. We had people in from Iowa City, Peoria, some up all the way to Dubuque. Then, anywhere in between coming in and basically just having a session of learning.
Again, you have the CE credits. The classroom credits are usually the tougher ones to get because you can go online to a lot of different places and sit for a webinar or whatever, but it’s the classroom ones that are usually a little more difficult to get, and especially the insurance ones a lot of people are looking for is those classroom insurance credits. So, being able to offer them… again, help promote some of the things that we have going on… Cambridge, our broker dealer, partners with us a little bit to put that on. It’s a great thing, selfishly, for us to be able to learn something, to sit in some of these sessions, and have great speakers come out and do this. Again, we look to continue doing that in some fashion.
Gary Determan: I know, I was involved with the first time that you did this. Then, you also opened it up to the public in the evening. Did you do that again this year?
Nate Kreinbrink: We did that this year again, as well. We had the same keynote speaker that came in and basically put on a session in the evening, covering IRA planning, taxes, Social Security… just a lot of the main topics that people have so many questions on. You look at Social Security, there’s so many misconceptions that are out there that people, they read an article and they take it and they twist the words to apply to themselves. But they don’t really truly understand the different options that they have, how it fits into their situation that is different than their co-workers or their neighbors or whatever. So again, anytime that we can do this, anytime that we can get people in… And again, not forcing any specific strategy down their path, or whatever, but just giving them the information so they can make an educated decision as to what is best for their situation.
Gary Determan: All right. We’ll talk more with Nate, but first let’s break for the weather, brought to you by Awesome Car Wash.
James Nelson: Plenty of sunshine. We’ll just notch that temperature up just a few more degrees from today. The high, about 31 degrees. West winds at 8 to 15. 13 degrees below that night, then more clouds rolling on Thursday will lead to some light snow by the afternoon. I’ll keep it under an inch in the listening area with maybe an inch or two. The farther south of the listening area, as you go.
I’m chief meteorologist James Zahara with your WQAD Storm Track Eight Forecast.
Gary Determan: Sunshine. We’re up to 15 degrees now, as winds continue out of the southwest. Our update brought to you by Awesome Car Wash.
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Gary Determan: First Wednesday of the month, so we continue to the bottom of the hour. Nate Kreinbrink in for Dave Nelson here on Financial Focus. A new year, people concerned about taxes.
Nate Kreinbrink: Yeah. I think this year was going to be just kind of a wait and see type of year when people went in to file their taxes. If you remember back to 2018, it was the first year that the Tax Cut and Jobs Act was enacted. Last year, January, February-ish people got a little bit more in their take home pay because the tax brackets were reduced. They were cut to 15%. Went down to 12%. The 25 down to 22 and so on. So, they had a little bit more in their pockets to take home every paycheck. But it was a new system and it was going to be interesting to see how that factored into when people went and actually filed their taxes this year. The withholdings that they had… was it going to be enough to cover everything?
Again, I think a lot of people are coming in this year a little cautious, knowing that they either paid a little bit in the last couple of years, or they got a little return the last couple of years. Is that going to be the same with this new laws being enacted? Standard deduction… I know David has covered this a number of times, as far as how that standard deduction for 2018 was raised. A lot less people are going to itemize their deductions on their tax return. How’s that going to, overall, impact a lot of this?
Again, a lot of questions coming in. I think, for the most part, I know Deb and Andy, with our tax part of our office over there, hasn’t really been anything too drastic when people have came out of there. A lot of times, they may have to pay just a little bit more, but it was offset by the extra money that they got throughout the course of the year. So, nothing major so far to report, but again, I think as people continue to go, they’ll understand how these lower tax rates will benefit them and how they can maybe do a little extra planning with contributions to this bucket of money, rather than this bucket of money. Or, how that can impact them a little more favorably when they file taxes again 12 months from now.
Gary Determan: How are they doing? I drive by after I get done doing a ball game sometimes and I’ll see a couple of cars in the lot yet.
Nate Kreinbrink: I think they have cots down in the basement, I think, a lot of times because they’re usually the first ones to open up the office this time of year and they’re the last ones to lock it up when they go home. They go through such an enormous amount of taxes that they do every single year. Again, this is their busy season and that’s what they signed up for. Again, having the go through… and I think the way that they approach taxes, as far as being able just to sit down with people… I think is a different approach that a lot of people may not have gotten if they’ve gotten their taxes down at other places.
Sitting down with them, face to face, saying, “Okay. This is what these numbers mean. This is how these numbers impact either your return or what you owe to it. And this is, potentially, what you can do to benefit you a little bit more favorably next year.” A lot of times people, when they think taxes, they get all that stuff in the mail. They put it on a big pile on their kitchen counter until they think they got everything. They put a paperclip on it. They bring it to their tax person, drop it off, and they say, “Well, two weeks we should be good.” They stop in. They pay for it. They either know if they get a return. They don’t really quite understand what the numbers inside of that big envelope means and how they can, maybe, improve them or what they can do differently.
I think that approach people really like. Not that they want to know everything there is to about taxes, but have a basic understanding of what their situation is, I think, definitely helps.
Gary Determan: We had our taxes done for the first time through them and I want to point out they’re also reasonably price.
Nate Kreinbrink: Right. Again, it’s something that you have to be competitive with what you do, but again, it’s something that everyone has to have their taxes done. You can charge up to here. Again, it’s something that, again, you want to be compensated for, but at the end of the day, a lot of these forms… especially with the itemized deductions going away, a lot of people are just that standard deduction any ways. So, as far as the time and some of the complexities that, again, the normal person that don’t have a bunch of other stuff, they’re not going to take as long quite to do.
Gary Determan: Again, visiting with Nate Kreinbrink from NelsonCorp Wealth Management. If I’m not mistaken, your specialty is kind of like Social Security, retirement planning. Is that right?
Nate Kreinbrink: That is my specialty and I really enjoy it. It’s literally when we have people that come in and say, “Hey, we’re looking to retire five years from now, 10 years from now. Are we going to be ready?” Because they think they have a lot of their stuff in line, but again, knowing what’s going to happen 10 years, 20 years, 30 years whatever down the road, it’s a lot of uncertainty. So, they want to make that decision to retire, but in the back of their mind, they’re not really confident.
Being able to take all that stuff… To me, it’s like every situation, when people bring in their information, is like putting together a new puzzle because there’s no situation that’s exactly the same, as far as what they have with Social Security, any pensions, debt, what they’re going to need to live off of… that type of thing. Again, looking at what they’re going to need because that’s what everyone always comes in. Well, how much do I need to save to retire? Well, it’s kind of a two way question that’s difficult to answer because, again, someone saves a million dollars isn’t the same as somebody else. If one person spends a lot, a million dollars isn’t going to last as long as someone who is very frugal, they’ve been very good with their money, they paid off their debt. They’re not going to need a whole lot in retirement and a million dollars could last this generation and next generation.
Again, it’s not necessarily what you save, but it’s coordinating how much you have saved versus how much you’re going to need. Then, we can get closer to coming up with a number of how much you’re going to look at. Taking everything into account when it comes into it, Gary and I, when you were talking here before we went on air this morning as far as those magical ages when you start getting stuff in the mail. The age 65. The months leading up to age 65, your mailbox is going to be bombarded with Medicare stuff and trying to understand what it all means and how it all applies to you… Social Security… 62 is the earliest that people can take 62 on their own record. Again, do I take it at 62? Am I still working?
Being able to… Again, there’s so much complicated stuff that is going into this retirement anymore. Obviously people probably only want to retire one time. So, how are you supposed to do everything right when you only do it one time? Again, working with somebody, I think, that has done it, that has seen a lot of different scenarios… David always says, “Learn from other people’s mistakes.” That’s what we try to take forward and we continue to do that with everyone we meet with and say, “Okay. We’ve seen this situation here. Yeah. You may be thinking this way, but let’s look at it this way and here are the reasons why. Don’t just take our word. Here’s the reasoning behind it.”
I think when people actually see some of those situations that we lay out, understand the benefits of how it may not benefit them this year, but how it’s going to benefit them maybe 10 years, 20 years down the road, as far as lowering their taxes at that point, keeping their Medicare part B premiums lower, down the road rather than right now. I think they kind of get the whole concept that, again, this isn’t a sprint. It’s a marathon. If we can extend this out and have better benefits through our whole retirement, rather than the first couple years, you’re going to have more money in your pocket, probably, over the long run.
Gary Determan: I’m going to throw this out at you. Baseball brought you to our community.
Nate Kreinbrink: Yes.
Gary Determan: What advice would you have for Bryce Harper? He has now 330 million dollars. The contract that he signed was interesting. I heard Dan Patrick talking about this. It does not have an opt-out clause. He is in there for the long run.
Nate Kreinbrink: Yes. I think that was one of the key points that he was looking for when he was negotiating is because I think he’s looking at when he was going to make a decision on which team to go to, he wanted to go to a place where he could attract other people to commit to come there with him later on. Again, similar to what the NBA is doing with these star players, looking at where they’re going. I think he wants to create some kind of stability with that next team that he went to. By not having that opt-out clause, he can attract these big name free agents. I know he’s not very subtle about it, but I know Mike Trout is from the Philadelphia area and his contract comes up at the end of 2020. The way that Bryce Harper’s contract is structured, they would be able to afford another big contract, known as Mike Trout, coming at that time.
I think the way that he structured that, to be able to have the long term commitment in place, to say, “You know what? I’m not going to come here for three years, test the waters, and if you don’t do it, I’m out.” He didn’t want to do that. I think that’s very respectful, as far as for him to say, “Hey, we’re going to do this. You’re going to pay me a lot of money, yes, but I’m going to be here. Let’s build this thing and build a strong foundation. It’s not going to be a quick one year fix or two year fix. It may take us a couple times to get to where we need to get to.” But again, you look at the money that he’s paying. I mean, 25 million dollars a year. It is astronomical.
Gary Determan: How do you spend that?
Nate Kreinbrink: You don’t. You hopefully get someone that gives you sound advice to, obviously, put money away because that’s money, again, that obviously in someone’s lifetime… to be able to spend that amount of money is almost impossible. So, you look to see, again, we always say that money doesn’t change people, it just brings out more of who they already are. If they were a good person before they got money, they’re going to be a good person just with money later on. If they were a bad person before they got money, they’re going to be still a bad person with a lot of money.
Again, you hope that these individuals… and a lot of them do… as far as giving back to charities that were impactful to them. This is generational changing money that these families are getting so you hope that they can take some of that, impact some of the charities, some of the foundations, and things like that and take some of that and spread it out and do a lot of good for a lot of people.
Gary Determan: If you knew back then, when you were working with the Clinton Baseball Club, and I would imagine there were some probably players that came in with good bonus money… what advice would you give them now?
Nate Kreinbrink: Probably the same advice that I’m trying to teach to my three young boys at home. Put money away. The whole needs and wants, I think, theory goes into play a lot. You think about, again, the players that come down and play here in Clinton. They’re 18, 19 20, 21 years-old. They’re fairly young, right out of high school. Again, you think back. If you’re thrown with a bunch of money in your lap at that age, it’s tough sometimes to be responsible for it.
Gary Determan: You see the cars.
Nate Kreinbrink: But you start looking at it. You see, okay, if I would take… Again, take a little bit, have fun with it, but let’s take the bulk of it. This money, over the course of 10 years, 20 years, 30 years what that can do for you and what it can turn into and see this big picture, I think, is very important for a lot of people to do.
Like I said, I’m trying to teach that to my young boys right now, as far as how to budget a little bit. Yes, you want to buy this, but do you really need it? Is that something that is really going to benefit you, really, in the long run? If we take that and, what, $5 a week over the course of how many times adds up to be. I think they start seeing how that grows a little bit. I think that’s some of the lessons that I think really need to be pushed a little bit more throughout school. I know I teach JA a little bit to my middle son’s class, or whatever. It’s neat to see some of those topics at least starting to be introduced, as far as saving, as far as compounding of interest and how a dollar today isn’t going to be worth a dollar tomorrow, how taxes work… a lot of that type of stuff.
Again, I don’t think kids can learn enough of it these days, especially when you look at how our retirement planning has shifted. When you go back to our grandfathers, our great-grandfathers, they walked off the job, they had a nice pension sitting there with them. There’s not pensions left anymore. Very rarely do you see that where someone’s going to be able to retire and have a nice pension. So, the responsibility to retire falls on the individual’s shoulders. I think the new age of kids coming into the workforce are going to be a little bit more prepared because 401(k)s isn’t an uncommon word anymore. People understand what that means and what the importance of doing that. Again, it’s just getting people into the right mindset of having to save, and paying yourself a little bit, and understanding what it means.
Gary Determan: I know that it used to be that three-legged stool was the pension, Social Security, and your own savings.
Nate Kreinbrink: Yeah. Well, it’s a two-legged stool anymore and you’re not very sturdy if you’re not doing it.
Gary Determan: Hard to balance on that, that is for sure.
Hey, the time just flew by.
Nate Kreinbrink: It did.
Gary Determan: Appreciate it. Thanks so much.
Nate Kreinbrink: Appreciate it, Gary. Thanks for having me.
Announcer: Financial Focus is a production of NelsonCorp Wealth Management in 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 advisory 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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