Episode 59: The Good News and Bad News In Financial Situations

Today’s Prep:

Do you want the good news or the bad news first? When it comes to financial situations, you hope to not have any bad news. In these four statements, David explains why the good news to follow isn’t really enough to soften the bad news.

(Click the featured times below to jump forward in the episode)

Equipping Points:

Have you ever had someone say, “I have good news and bad news”? Sometimes the good news to follow is not enough to offset the bad news. Let’s look at a few situations where the good news isn’t quite good enough.

The bad news is: you have a lot of debt. When it comes to debt, is any of it good? Mortgage debt is okay, whereas consumer debt eats away at your financial independence. Getting a tax deduction on the interest is sometimes considered the good news, but remember that consumer debt has no tax deduction.

If your mutual funds aren’t doing well (bad news) but the fees are low (good news), are you really ending up ahead? Make sure with any of your investments that you look at the net value, not just the gross.

Long-term care is very expensive and maybe you don’t have enough money to cover it…is Medicaid the good news you need? It’s actually not very good news. Medicaid only steps in when you’re out of money, which leaves your spouse in a tough financial spot.

If you are near retirement and lose a major percent of your portfolio, the good news of “it will come back eventually” is a tough pill to swallow. Depending on close you are to retirement, “eventually” can’t come soon enough.

In all of these bad news/good news situations, it helps to have an advisor to come alongside you to help decipher between the bad and the good. Then you can set yourself up for better financial news in the future.

Listen to the entire episode or click on the timestamps below to hear some good news and bad news.

[0:44] – The bad news is you have a lot of debt, but the good news is some of the interest you’re paying is tax deductible.

[1:56] – The bad news is, the mutual fund hasn’t performed well but the fees are low.

[2:58] – The bad news is you don’t have enough money to pay for nursing home care, but the good news is that Medicaid will step in.

[3:42] – The bad news is your portfolio lost 40 percent, but the good news is that it will come back eventually.

[6:46] – Mailbag: When forced into an early retirement at 57, should I find another job since my pension is not enough to live on?


More From David:

The host: David Dickens

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