Big Brother Ford Is Listening | Stewardship Concepts Financial Advisors

The days are getting shorter! My morning pickleball group has to start playing at 6:20 a.m. instead of 6:00 a.m. Enjoy your weekend, and check out the Spokane Fair (the last day is the 15th). My wife Jenny and I went yesterday! Thank you for joining me today for two minutes on the economy, an interesting story, and a financial planning secret.

Economy – Inflation Falls

Inflation data came out this week. Inflation continued to ease, coming in at 2.5%. It's on its path toward the Fed's goal of 2% next year. Economists expect a 0.25% cut at the three remaining meetings this year (starting next week) and continue into 2025.

One problem is that the Fed's focus is on rate cuts, but the actual problem may lie in the money supply, which should be discussed more. If the money supply growth picks up quickly, we risk a return to higher inflation, like in the 1970s. On the other hand, if growth in money supply remains lifeless despite rate cuts, we may have a more severe recession.

Interesting Story – Big Brother Ford

Looking at what patents are filed can be a great way to see what type of technology or strategies companies have coming down the line because it's public knowledge. A recent patent has been making headlines this week. Ford filed a patent allowing advertising to a driver inside a vehicle. It goes on to describe how this technology will listen to a conversation and be able to present a very targeted ad, like suggesting a nearby restaurant if someone mentions they are hungry. The company must walk the line between frustrating its customer base and providing helpful ads. They plan to help navigate this by utilizing a dynamic advertising system that will give fewer Ads if the user seems frustrated. This wasn't the use of AI that I was hoping for.

Financial Planning Secret – My Best Tax Strategy

This tax-saving strategy is one that I've seen clients save over $500,000 in taxes over their lifetime. As a financial advisor in Spokane, we get a lot of clients who are transitioning or entering retirement. A common scenario is typically a 401k or IRA that holds most of their investments, which leads to income tax problems. The benefit is that the saver got tax savings while contributing to the account. The downside is that they now owe income tax when the money is distributed. A rule called RMDs requires owners to take a growing percentage every year as they get older, starting at age 73. This typically will force them to take out more than they need, potentially pushing them into a higher tax bracket. There are two main solutions that we look at to reduce this tax impact. One is doing Roth conversions after they retire and before they start Social Security income. Two, QCDs can be utilized to avoid taxes entirely. If you have any other questions, check out my article on how to avoid RMD taxes.

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