No One’s Built Wealth in a Savings Account – In The Trenches (We’re The Brits In America S1:E29)

With inflation easing to 2.9% for the first time in two years, we’re now entering a particularly critical phase in the economic recovery. Richard and James are back in the trenches to guide you through it. As always, it’s about sticking to your investment plan during these volatile times.

What’s been the impact of interest rates on spending? Richard and James speculate that higher interest rates have, somewhat paradoxically, both curtailed economic activity and increased spending among wealthier consumers, due to higher returns on cash and fixed-income investments.

Plus, watch out for financial scams! They’re getting increasingly sophisticated, targeting older people with large retirement savings. There’s a prominent scam called ‘pig butchering,” where scammers isolate and manipulate victims, often by posing as legitimate entities like banks or government officials. Be vigilant, use safeguards such as two-factor authentication, different passwords, and be cautious with electronic payment platforms like Zelle. James highlights the importance of financial institutions and advisors playing their part, and being proactive in recognizing red flags to protect clients from falling victim to these scams.

We’re the Brits in America is affiliated with Plan First Wealth LLC, an SEC-registered investment advisor. The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Plan First Wealth.

Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that listeners seek their own advice in these areas.

About Richard

Richard Taylor is a British expat, dual citizen (UK & US). Originally from Bolton, he now lives in Greenwich, CT, where Plan First Wealth has its head office.

As the firm’s leader, Richard launched Taylor & Taylor, now Plan First Wealth, and continues to fuel the firm’s growth. Richard is a Chartered Financial Planner (UK – CII) in addition to holding the IMC (CFA UK) and Series 65 (US – FINRA).

Connect with Richard on LinkedIn

About James

James Boyle is the lead financial planner at Plan First Wealth. He is going on ten years in the industry on the American financial planning side, including having certification as a financial planner in the States. James is also CFP level four UK cross-border certified, making him exceptionally qualified in the niche in which he works.

Connect with James on LinkedIn

Transcript:

Richard Taylor:
[00:01:00 – 00:01:49]
Hey, James, welcome back.

James Boyle:
[00:01:49 – 00:01:54]
Hey, Richard. We’re not going to have anything to talk about because it’s been a quieten house couple of weeks in the market.

Richard Taylor:
[00:01:54 – 00:01:57]
Nothing’s happened. Just nice and steady as always, right?

James Boyle:
[00:01:57 – 00:02:00]
Everything’s fine. Yeah, steady. Climb up.

Richard Taylor:
[00:02:00 – 00:02:01]
What’s going on with you?

James Boyle:
[00:02:01 – 00:02:05]
Same old here. We’re chugging along. End of summer. I can’t believe how quick the summer goes.

Richard Taylor:
[00:02:06 – 00:02:06]
Yep.

James Boyle:
[00:02:06 – 00:02:10]
Gearing up for portfolio review season for our clients, which is always exciting.

Richard Taylor:
[00:02:11 – 00:02:12]
Is it for them or for us?

James Boyle:
[00:02:13 – 00:02:16]
It couldn’t come at a better time. Speaking of the movements.

Richard Taylor:
[00:02:17 – 00:02:19]
Yeah. Well, listen, do you know what I’m doing after this?

James Boyle:
[00:02:19 – 00:02:19]
What’s that?

Richard Taylor:
[00:02:19 – 00:02:22]
Practicing driving in a car park like I’m 17 again.

James Boyle:
[00:02:22 – 00:02:25]
Wow, you’re gonna do donuts and.

Richard Taylor:
[00:02:25 – 00:02:48]
Well, no, I’m not quite there yet. I’m eight weeks post surgery. Boot comes off next week, although, you know, it’s on, off, on off. Kind of for a while, but it’s my driving foot. I can drive now, I think. Certainly I’m at the point where I’m further enough away from the operation. I have enough flexibility and strength, but it’s about building up that confidence. So I’m gonna head to a car park and practice like I’m 17 again. And hopefully next week I’ll be unleashed back out on the roads.

James Boyle:
[00:02:48 – 00:02:50]
Is your wife volunteering for this?

Richard Taylor:
[00:02:50 – 00:02:54]
Yeah. Yeah. I’m not going. She’s coming with me. She’s gonna chaperone me.

James Boyle:
[00:02:54 – 00:03:03]
I’m no doctor, if anyone didn’t know that yet, but I would imagine the Achilles is pretty instrumental for that motion, like pressing down with force on the pedal.

Richard Taylor:
[00:03:04 – 00:03:38]
Yeah, I never thought about this until now, but my foot’s been static for weeks. And when you’re driving, obviously, you’re pivoting quickly, right. From accelerated to brake. Accelerated to brake. And, like, I have got no confidence in that movement right now. I can do it, but I can do it slowly. So I just need to get out there and just. You’ll be amazed by how quickly a range of motion comes back as well, because you haven’t done something for eight weeks. Your brain forgot you can do it. You do it once, and your brain’s like, oh, I can do this. So you. I just need to go out there and just practice it. Basically, I’ve lost confidence in putting the pressure down, stamping on the brake, you know, that could push your foot back. I don’t want to do that. I just need to get out there and practice. But I’ll be. I’ll be on the roads next week.

James Boyle:
[00:03:39 – 00:03:44]
It’s like riding a bike. Once you’re. Yeah, once you’re back on it, you won’t miss the boot. Right. Do you miss driving?

Richard Taylor:
[00:03:44 – 00:04:01]
Yeah. I’ve got cabin fever. I’ve barely left the house in eight weeks. I’ve not been to the office. I can’t go anywhere. There’s nothing within walking distance of my house. But not that I can walk very far anyway. I’ve really got cabin fever, and I’ve used this time productively, but it’s been kind of hard mentally, honestly.

James Boyle:
[00:04:01 – 00:04:02]
Yeah.

Richard Taylor:
[00:04:02 – 00:04:06]
Much harder than I thought it would be. I’ve not had this much time alone myself for a long time.

James Boyle:
[00:04:07 – 00:04:13]
And after, I think we talked about in the last episode, you had a summer of activities planned, which always makes it harder, too.

Richard Taylor:
[00:04:13 – 00:04:13]
Yeah.

James Boyle:
[00:04:13 – 00:04:16]
When that gets set aside, my kids.

Richard Taylor:
[00:04:16 – 00:04:31]
Are five and two, and we’re dropping diapers and naps are getting shorter. And we had all my five year olds started to play golf or go to driving range. We joined a lifetime. They got this outside pool, so we had all sorts of stuff going on. It was gonna be great, and it’s not happening like that, but it’s still been good in its own way.

James Boyle:
[00:04:31 – 00:04:34]
Kind of light at the end of the tunnel.

Richard Taylor:
[00:04:36 – 00:04:50]
Right. Let’s get into this. So we just got to talk about what happened last week, or when people listened to this the week before, which was on Monday, Monday the fifth. We woke up and markets were tanking.

James Boyle:
[00:04:50 – 00:04:51]
Very upset. Yes.

Richard Taylor:
[00:04:51 – 00:04:58]
The Vix, which is a measure of volatility, spiked crazily. So I think it hit 70.

James Boyle:
[00:04:58 – 00:05:11]
I think it did. I mean, really, you don’t see a spike like that outside of an actual crisis. You know, thinking 2009 2001. And it was a tantrum. The market had a tantrum.

Richard Taylor:
[00:05:11 – 00:05:15]
Yeah, there was panic. Is it here? Is the final high in.

James Boyle:
[00:05:15 – 00:05:17]
This is the big one is the.

Richard Taylor:
[00:05:17 – 00:05:41]
Recession we’ve been talking about for years now. Is it here? Markets were in freefall. Volatility spiked. There was panic. There was absolutely panic. We sent out an email on Tuesday saying, don’t do anything. The best day is come after the worst days. As a long term investor, you don’t need to react to this act on your plan. And it was already out of date when we sent it. The market was already coming back at that point.

James Boyle:
[00:05:41 – 00:06:15]
I was going to say we couldn’t have timed it better if we scripted it that way right now. We didn’t know this was going to happen that rapidly. But your newsletter, and if you’re not on it, folks, jump on it. But it talked about how your best days typically come in clusters around the very worst day. So Monday, the S and P drops 3%. There will be investors out there, many of them. Not our clients, thankfully, who acted on what is a natural but ultimately harmful instinct to sell when the market’s down. And look at what’s happened since. In the two weeks since.

Richard Taylor:
[00:06:15 – 00:06:51]
I actually heard Callie Cox on the compound this week, the Compound podcast, which is just a great podcast. Those guys are all so good, right? They’re all so good. And she had this great start. I think it was, if someone sells after a 2% down day, just a 2% down. So that’s a shock. 2% down, that hurts. I mean, the grand scheme of things, it’s nothing. But in a very short period of time, that’s panic inducing. So if someone sells after a 2% down day, and then they wait two weeks, just two weeks to get back into the market, over the long term, they give up something like 30% of their return. Yeah, I think she said 30%.

James Boyle:
[00:06:51 – 00:07:04]
It was a third of the gains, total gains. And that’s a two week waiting it out, quote unquote, or what whoever’s doing that is thinking in the moment that they’re making the right decision. We know, obviously, in retrospect, that they’re not, certainly weren’t in this case.

Richard Taylor:
[00:07:04 – 00:07:25]
So wait, James, just to bring this back to what’s happened right now, that’s Monday afternoon selling, waiting for this to pass. Right. Market’s down over 2% at that, .3% whatever it was. That’s selling on Monday afternoon and waiting to get back in, like now or Monday. Right. That’s two weeks. That does not feel like a long time no. And if you do that, you’re giving up a third of your long term gains.

James Boyle:
[00:07:25 – 00:07:27]
That is a third of your gains.

Richard Taylor:
[00:07:27 – 00:07:28]
That’s remarkable.

James Boyle:
[00:07:28 – 00:07:43]
And, you know, Monday afternoon, the investors that sell, they have every reason to feel like it’s the right to feel. That’s the key word. Like it’s the right move. Right. When selling feels the best, that’s usually when it’s most dangerous.

Richard Taylor:
[00:07:43 – 00:07:49]
Yeah. All right, so what happened? Why did the proverbial shit hit the fan on Monday?

James Boyle:
[00:07:49 – 00:08:19]
There’s a lot that goes into it. We have the benefit of Monday morning quarterbacking, I should say, too, for 3%. It’s a scary day. Right. For investors, that’s the worst market route since the pandemic, the first month of the pandemic. So people who are invested in March of 2020 remembers we lost something like 40% over three weeks. This is the worst it was since then. You hear about carry trades. Everyone’s an expert in bank of Japan carry trades now, right, Richard? I’ll let you explain it.

Richard Taylor:
[00:08:19 – 00:08:25]
Well, look, so I actually think, before you get to that, I think the carry trade that we’ll talk about, that was kind of like the spark.

James Boyle:
[00:08:25 – 00:08:25]
Right.

Richard Taylor:
[00:08:25 – 00:08:37]
That really lit the fire. But the context that that happened within economic data is softening. I still think it’s pretty positive. But unemployment is rising. I think fewer jobs being created.

James Boyle:
[00:08:37 – 00:08:38]
Yeah.

Richard Taylor:
[00:08:38 – 00:09:28]
And the narrative is just like, interest rates have been high for a long time, and this was always going to happen. Like, the interest rates are high in order to cause an economic softening in order to bring inflation down. So this is all part of the script, but we’re just getting to that point where it’s actually happening. And that’s a dangerous time. Yeah, I think from what I can tell, and it looks to me like we’re navigating it well at the moment, but it’s still a dangerous time. There is still. The needle needs to be threaded at this time, and it could go wrong. So everyone’s kind of, like, on high alert. Oh, you know, are they left at too late to bring down rates? Are we going to blow up? Is recession coming? So that’s. That’s the general. That seems to be the feeling. Then you get buffett unwinding billions out of his apple position, and that starts to freak everyone out. Like, oh, he’s panic selling off. I don’t know what they’re thinking, but he still holds a load.

James Boyle:
[00:09:28 – 00:09:30]
And that generates the headlines. Right?

Richard Taylor:
[00:09:30 – 00:09:30]
Yeah.

James Boyle:
[00:09:31 – 00:09:46]
Buffett’s face on CNBC, when you open it up and scary headline, I think it was maybe the Friday before that, the week job numbers came out, manufacturing looked bad, unemployment went up. Obviously you’ll hear about the Som rule was triggered.

Richard Taylor:
[00:09:46 – 00:09:52]
I’ve never heard about it before. Every crisis there’s a new rule. I’ll never hear of it again.

James Boyle:
[00:09:53 – 00:10:02]
And even she, the economist who came up with it, said, look, this is brand new. This was a pandemic, sort of. It doesn’t mean that anything is about to happen. Don’t take this as gospel.

Richard Taylor:
[00:10:02 – 00:10:07]
Journalists, they always find something in that moment that points to the prevailing narrative.

James Boyle:
[00:10:09 – 00:10:15]
It’s an evocative sort of the psalm rule too. It just sounds dangerous. So it gets attention.

Richard Taylor:
[00:10:15 – 00:10:47]
It does. The buffet unwinding is apple trade almost confirms, you know, that we’re done for. And then, so the japanese carry trade, we’re not traders. So I don’t live in this world and nor are our clients or anyone who’s hopefully listening to this podcast. This is not something we should have to worry about. But as I understand it, the popular trade was, or is, traders were borrowing in yen, which had low interest rates, and then investing that yen. And then the bank of Japan put interest rates up quarter of a percent or something, surprisingly from a negative base.

James Boyle:
[00:10:47 – 00:10:49]
Right? I think. Oh, really?

Richard Taylor:
[00:10:49 – 00:11:06]
So that meant the borrowing costs for yen got more expensive, so everyone had to dump their yen and maybe sell their positions. So there was just mass selling going on, which is not something long term investors should worry about at all.

James Boyle:
[00:11:06 – 00:11:38]
Speaking of headlines, right? It’s one of those things that, it’s a form of leverage trading, right? Something that 95% of people are never even going to touch with a ten foot pole. Certainly, like you said, our clients are a long term investor buy and hold position, never going to have to worry about leveraged trading. But that bank of America, or, excuse me, bank of Japan, carry trade commanded and demanded so much attention in the financial media in the days following that route. And like I said, all of a sudden everyone’s an expert on carry trades.

Richard Taylor:
[00:11:39 – 00:11:49]
I can’t blame them because it was news, but it’s just conflating, it’s just as long to investors, you have to like kind of separate on, okay, this, this is important. This is, this is relevant for me or this is, this is interesting but irrelevant for me.

James Boyle:
[00:11:50 – 00:11:50]
Right.

Richard Taylor:
[00:11:52 – 00:12:28]
It was still kind of, you know, it was Monday was ugly. It was ugly. Yeah. We feel it. Like, I think people think that with, we’re like these robots who are just programmed to feel these things differently, but that’s not the case. Like we’re investors. We’re humans. We ride the emotional roller coaster like everyone else. It’s just we have each one. We live in this day in, day out, you know, and we’re talking about it all the time. So these philosophies, these beliefs that the knowledge of what’s happened in the history is deeply embedded within us, and then we have each other. We’re always talking about this stuff with each other and our clients.

James Boyle:
[00:12:29 – 00:13:52]
We don’t want to come across as glib. Right. We say that a lot because the way we talk about market movements and things like that, we don’t want to sound dismissive. We know that there is a very real emotional component to it. As you say. We feel it. Our clients feel it. We talk to our clients through it. We also don’t want to bury our heads in the sand and pretend that these things don’t happen. Right. I think you have to be prepared and know that there are going to be days when headlines are screaming and Buffett’s not ordering his coke and cheeseburger in the morning, whatever he does, and clients are panicking. It’s having a plan in place and always having that to fall back on, to know that, okay, market’s down 3%. What is my investment policy state? What does my plan say I should be doing? Does it say I should be running for the hills and selling, not our clients? Of course not. It’s saying I should stay the course, keep the faith, and ride out the inevitable downturns. Now, that was a downturn that lasted about two days. So that’s an easy one to ride out. But we went through a bear market two years ago that was a lot longer and just as painful, I would argue, in the long term because equities were down and fixed income were down. But we know that the market has soared since then. We cannot predict what’s going to happen in the next three 6918 months. But we do know that having a plan in place will help you prevent you making a bad decision and derailing yourself.

Richard Taylor:
[00:13:54 – 00:14:14]
Preach, my man, preach. Can I just the Ritholt’s love here. Quote you, Ben Carlson. Over the past 15 years, the US economy has been in recession for just two months, which is during COVID That’s less than 1% of the time. How many recession predictions have you seen in that time?

James Boyle:
[00:14:14 – 00:14:15]
Wow.

Richard Taylor:
[00:14:15 – 00:14:55]
That’s Ben Carlson asking the big questions. And it’s just the. What is it? Bulls. Bear sounds smart. Bulls will make you money. There’s just no shortage. We’re just humans. We respond to the bad news, the bad noise. But if you look at the data, you look at the history, it’s one of unrelenting optimism, really, or positivity, I should say. Yes, there’s punctuated with significant dark periods, but they are massively in the minority.

James Boyle:
[00:14:55 – 00:15:03]
Yep. By Murphy’s law, this episode will come out and we’ll dive directly into a recession.

Richard Taylor:
[00:15:03 – 00:15:03]
Right.

James Boyle:
[00:15:04 – 00:15:57]
But everyone listening, you have to remember that this is a narrative, this particular, this recession that has been predicted. October 2022. I remember, speaking of review season, we were heading into portfolio review season with our clients. The market had hit the bottom. We didn’t know that, of course. At the time, every headline on Wall street, every pundit, every analyst was calling for this severe recession. I’m talking October 2022. So we’re looking at the first quarter of 2023 that never happened. Certainly if they keep predicting the recession, eventually they’ll be right. It’s a perfectly normal, natural part of what is a cyclical economy. It’s about having a plan in place, staying invested. If you had panicked in October 2022, same way we’re talking about you panicked last week, you would have missed out on an incredible bull run.

Richard Taylor:
[00:15:57 – 00:16:36]
Even a broken clock is right twice a day. And you know what happens in every downturn. Someone makes their bones. You know, there’s a new, there’s a new analyst who called it. And then the problem is, and then they, and then in that moment, they become like, you know, they’re on, they’re all the tv shows, they’re, they’ve got the third eye. They can see into the future. They’ve got the crystal ball that none of us have. And then what happens is, I found, and to spring to mind is that they’ve kind of made the name on that and that’s, that’s now who they are. And then they just spend the rest of their career making these doomsday predictions and they get found out.

James Boyle:
[00:16:37 – 00:16:39]
It becomes branding, in a way.

Richard Taylor:
[00:16:40 – 00:17:03]
Yeah, yeah. I’m not actually, I’m not gonna name names, but there’s a couple, there’s a couple who immediately spring to mind. But yeah, in the next one, someone will predict it and then they’ll be exalted and they’ll still be predicting them in ten years time. In the meantime, everyone else has made a load of money just by staying invested and not doing anything. Inflation.

James Boyle:
[00:17:04 – 00:17:06]
So we had good news this week.

Richard Taylor:
[00:17:06 – 00:17:13]
Yeah. Inflation was a two number, 2.9. Was it? For the first 2.9 years, which is.

James Boyle:
[00:17:13 – 00:17:26]
Technically everyone, you know, everything hinges on that. 2% target as the Fed stated goal. But technically within the parameters, they give themselves a margin of error of 1% either way. So one to 3% really is within target.

Richard Taylor:
[00:17:26 – 00:17:46]
What a journey we’ve been on with inflation. Yeah, I just feel like last, it’s dominated our lives, like as financial advisors, it’s dominated the news that we consume, it’s dominated monetary policy and, oh, gosh, I tell you, I’m sure you feel it as well. Like everything is just savagely expensive.

James Boyle:
[00:17:46 – 00:17:47]
Oh, absolutely.

Richard Taylor:
[00:17:47 – 00:17:53]
The cost of everything is just. I feel it every day in business and personal life. I really feel it.

James Boyle:
[00:17:54 – 00:18:23]
And households feel it. Right. Inflation is. We talk about so many different economic indicators and surveys and things like that. Inflation is something that people see when they’re buying milk and eggs at the grocery store. So people really feel that pain. And I think this whole journey since the inflation really spiked up has proven that that is one of, if not the most painful economic realities that people have to face. And it’s been a tough journey.

Richard Taylor:
[00:18:23 – 00:19:12]
It’s really been a tough journey. And the problem is, as you know, prices aren’t falling, they’re going up slower. So the rate of it was painful and it was the speed at which it was changing, which has been painful now, at least we should start to plateau a bit and maybe we can start to catch up. But it’s not going to breath. Yeah, we’re not. At least it’s going to stop running away. At least prices are going to stop running away from us because they really were running away from us. And I think it’s impacted most normal people. But I’ve got to tell you, to get down from whatever 9% to 2.9 with the limited economic fallout we’ve had, it’s been pretty. I don’t want to. I do not want to jinx it, so touch wood. But it has been remarkable so far.

James Boyle:
[00:19:12 – 00:19:45]
It seems to be working. Now, of course, we have pal speaking at Jackson Hole coming up. We’ll see how he’s positioning his words next Fed meeting in September. I think a 25 bit cut is pretty much broadly priced in at this point. But, yeah, it’s been. It has not been an easy journey, certainly for households and economists and people in headlines, you’ll see. Cheering and it’s down, which is good news. Right, ultimately. But we understand that the journey to get there has not been easy, certainly.

Richard Taylor:
[00:19:47 – 00:20:37]
Well, it goes back to what I said at the beginning. We’re now it’s crunch time again. They left it too late to begin with, then they put them up quickly. And everyone thought that was going to break the economy. That was going to, myself included, recession was imminent. Somehow, somehow that didn’t happen. And here we are and it’s now another crunch time. The next landing, think about taking off and landing are the two hardest parts of a flight. We’re now trying to land this baby. And, you know, I got to tell you, everything’s looking pretty positive. Yes, there’s some weakening. Yes, there’s some difficult parts. Yes, this is a tough, tough, really tough thing to navigate. But I like that. I like, I like the chances. Right now. I feel as good as I think I possibly could feel going into this.

James Boyle:
[00:20:37 – 00:21:31]
One of the things, one of the stats that came through this week, I think it was Wednesday, is consumer spending. So consumer spending makes up the majority of the us economy, essentially, if you’re working, if you have a job, you’re spending as a consumer. Weekly jobless claims fell this week, which is a good sign and helps to allay some of those fears from the unemployment report. Last week, retail sales increased 1% in July, which is way higher than the estimate. The estimate, I think was 0.3%. So at the moment, households are spending, people are spending. They haven’t felt the pinch yet. Now, obviously the unemployment rate is going to dictate what that looks like over the coming three, six months. But I think this week’s good news on the expenditure side helped to allay some of those fears. Like you said, is it happening now? Is it the big one, which is good? And you have to take it week by week.

Richard Taylor:
[00:21:33 – 00:22:23]
A lot of that spending, ironically, is because interest rates were put up? I think so you think we’ve had however many years of 0% interest rates and suddenly people are getting 5% on cash. You know, they’ve got cash or fixed income investments that are throwing out money that they previously were not throwing out. I think some of that spending is at the higher end. The rich, wealthier consumers is probably ironically linked to higher interest rates, which are meant to quell. And maybe that’s why, or one of the many. There’ll be a myriad of reasons. Maybe that’s one of the reasons why we managed to avert disaster. They put up interest rates, which quelled economic activity. But at the same time, that created more excess cash. For some people, though, they could continue spending and it balanced each other out. I don’t know. That’s probably massively oversimplifying it, but directionally.

James Boyle:
[00:22:23 – 00:22:55]
Correct, I would say. And to your point about cash, I think we talked about this in the last episode, too, that it’s a, people talk about investing surplus and having cash reserves and things. And it’s attractive when you have a money market paying five and a quarter. Right. If we get into this rate cutting cycle, which seems to be the case here, I’ll be interested to see how eagerly investors move that cash, cash reserves, money markets, cds, bank accounts into the market and what kind of economic environment they’re doing that in.

Richard Taylor:
[00:22:55 – 00:22:57]
Too slowly.

James Boyle:
[00:22:57 – 00:22:59]
That’s a guarantee.

Richard Taylor:
[00:22:59 – 00:23:15]
100% too slowly. They’ll, they’ll miss the boat. They’ll miss the boat. And because cash right now, this very second, yes, cash is delivering more than inflation, but long term, that’s just, it’s just not the case.

James Boyle:
[00:23:15 – 00:23:16]
Yeah.

Richard Taylor:
[00:23:16 – 00:23:28]
This economy couldn’t run on that, on that basis. And money will move, but it, but it will move probably too late because it’s just the way, it’s just, it’s just the nature of the beast.

James Boyle:
[00:23:28 – 00:23:38]
No one’s built wealth in a savings account. Right. You cannot have long term returns above and beyond inflation by investing in cash. There’s no risk premium. You just can’t do it.

Richard Taylor:
[00:23:39 – 00:23:46]
No. Exact amendo. Anything else on that before we move on?

James Boyle:
[00:23:46 – 00:23:48]
No, I think we’ve ranted enough.

Richard Taylor:
[00:23:49 – 00:24:10]
Yeah. So I saw an article recently, I think it’s worth bringing to people’s attention, because I think this is a problem and a growing problem, and it’s going to get worse. And it was in the New York Times, and it’s how one man lost $740,000 to scammers targeting his retirement savings.

James Boyle:
[00:24:11 – 00:24:11]
Wow.

Richard Taylor:
[00:24:12 – 00:25:46]
Criminals on the Internet are increasingly going after Americans over the age of 60 because they are viewed as having the largest piles of savings. And they do. And this is only going to get worse of AI and all these other tools. But essentially, this guy, it was a really sophisticated scam. This is a retired lawyer. This is a successful, intelligent, sophisticated person. This somehow created like an overlay over his. Yeah, I think it was Wells Fargo or something. Maybe not. Well, whoever had his retirement benefits, they created some sort of overlay screen. When he tried to log in, it failed. He had to call in. Little didn’t know he was calling the criminals number. Yeah, this game and then this really, they managed to, like, this was a team approach. They managed to convince him that they were, he was part of an FBI sting into money laundering. And there was different, he was passed from different agents, and there were some warning signs of hindsight, but I all, it was sophisticated and ended up draining his retirement savings. And what’s ironic here, is he actually had a bank advisor, and they went into the bank, and he was trying to take the money out, and the bank said, no, we think something’s fishy here, and they refuse to do it. And then the scammers helped him basically roll it over somewhere else where no questions were asked. Yeah. So there was. There was a professional, and the professional and the bank did their job to a point. I don’t know if they could have done more. Maybe.

James Boyle:
[00:25:46 – 00:26:36]
You know what’s tragic about these cases? I think they’re called. It’s a horrible name. Pig butchering. You can google that term and you’ll see the basic sort of structure of what it is. And they target people who are vulnerable or alone or it tends to be older people. Um, it’s a numbers game. These people are doing this professionally day in and day out, and ultimately, they know they’re gonna, you know, sheer numbers. One or two people on that day or that week are gonna be victims of these frauds, and they learn what they need to do to get by every single obstacle and barrier along the way. Like this idea of rolling it over. I actually. I hadn’t heard that piece of it.

Richard Taylor:
[00:26:36 – 00:26:57]
I wonder. So I think about we have with all our clients, we have their details, then we’ll have, like, a trusted contact. Mm hmm. Right. And I wonder had. Because one of the part of the coaching was it was he was coached to keep it quiet from his kids. Didn’t want that, you know, as part of the sting.

James Boyle:
[00:26:58 – 00:26:59]
Yeah.

Richard Taylor:
[00:26:59 – 00:27:11]
And I wonder. I wonder if that happened to one of our clients. Would we. I like to think we would have. We were. We would have been so suspicious because there really were alarm. You know, as a professional, you’re like this. Something’s not kosher here.

James Boyle:
[00:27:11 – 00:27:12]
Yeah.

Richard Taylor:
[00:27:12 – 00:27:29]
Quite obviously not kosher. And I think, would we have then used that to contact one of the trusted contacts and brought the kids into it? I like to think so, yeah. I’m not. If you read the article, the bank did a good job that just maybe didn’t. There was one final hurdle that could have helped him with.

James Boyle:
[00:27:29 – 00:27:43]
And what’s sad is, in these cases, it’s in retrospect that I’m sure this gentleman looks back. Number one, the money’s gone. This is my understanding. Usually it’s overseas, and there’s very little they can do about it.

Richard Taylor:
[00:27:43 – 00:27:52]
Wait, it’s worse. It’s worse because not only is the money gone, 740, but it’s came out of an IRA. So now the IR’s wants their tax.

James Boyle:
[00:27:52 – 00:27:54]
It’ll be deemed a taxable distribution.

Richard Taylor:
[00:27:54 – 00:28:06]
And they use. And apparently they used to be some sort of relief for this, but in, I think it was the tax jobs act, whatever, the one that Trump, I think it was removed, so there’s no relief for it. So it’s double whammy.

James Boyle:
[00:28:06 – 00:28:34]
Horrible, horrible. And it’s only in retrospect that I’m sure this is. This is a gentleman, like you said, you know, well meaning, just happened to be the victim of this. And in retrospect, those red flags that when you’re in the heat of the moment and you’re speaking with these. These people who have the training to do this, in retrospect, you think, how did I fall for it? But. But the reality is people do and it’s tragic. It’s a shame.

Richard Taylor:
[00:28:34 – 00:29:12]
James, ten years ago, more 2014, my wife got scammed on Airbnb. You know, she got encouraged to go off platform and send money to a UK bank and she. I think she ran it past me and I wasn’t really paying attention. I was like, yeah, sounds fine, relatively. It wasn’t a big sum of money, you know, a couple of thousand, but we didn’t get any of it back, obviously. But it was so obvious with hindsight, it was so obvious. But just. We were busy just wanting to get this sorted, wanting property, and I wouldn’t fall for that now, you know, to stay on platform.

James Boyle:
[00:29:12 – 00:29:48]
But, yeah, and they’re sophisticated. I think that’s the biggest takeaway, right, is there are bad actors, and this is not an amateur sort of, you know, knocking on your door and asking for funds or something. These are. These are sophisticated approaches. They know what works and what doesn’t, and it’s. It’s sad to say that you have to be on guard. Certainly we have the safeguards we do for our clients, for digital platforms. Everyone for their bank and everything should be using two factor, multi factor authentication, wherever you can, different passwords, a password manager, if you can. But I. But ultimately, you do have to be.

Richard Taylor:
[00:29:48 – 00:29:57]
Aware, and I learned recently. So, Zelle or Zelie, I’m never sure how to say it, you know, the bank, the way you transfer funds around banks don’t insure that.

James Boyle:
[00:29:57 – 00:29:58]
Wow, that’s good to know.

Richard Taylor:
[00:29:58 – 00:30:08]
If it’s a bank error. Yeah, for sure. But if you send it to a scammer or if you accidentally put the wrong amount in, you forget about it, you’re not getting that back.

James Boyle:
[00:30:08 – 00:30:28]
Very common scam on those apps that I’ve seen or read about. Haven’t, thankfully, haven’t seen you get a random. For people who don’t know, there’s these sort of electronic payment platforms in the US, we don’t really have a unifying one between the banks. Zelle, I think, is the closest to that. It’s sort of this conglomerate of banks that you can send money to and from people electronically.

Richard Taylor:
[00:30:28 – 00:30:33]
You’ll get a random, because it is the conglomerate of banks. Big banks, I just assumed.

James Boyle:
[00:30:33 – 00:30:34]
Right? It’s insured.

Richard Taylor:
[00:30:35 – 00:30:40]
Yeah, it was insured. And someone scams you, the bank will make it right and then go after them. That’s what I thought.

James Boyle:
[00:30:40 – 00:31:17]
What I’ve heard is a common scam. Maybe they’ve changed this or fixed this, because people, you can just send money to someone. So what happens is you get, you get a $50 deposit, whatever it is, thousand dollar deposit, from a, from a random number via zelle. You get a message in the app that says, hey, I’m so sorry, I meant to send this to a friend of mine. Terrible mistake. It’s a rent payment. Would you mind sending it back now? The money’s showing is in your account. Okay, no problem. I’ll send it back to you. You send it back. Bad bank account, the money bounces. You are now on the hook for whatever that those funds were.

Richard Taylor:
[00:31:18 – 00:31:19]
Oh, really?

James Boyle:
[00:31:19 – 00:31:26]
Yep. That’s a very common scam on these, on these payment platforms. It’s sort of the version of.

Richard Taylor:
[00:31:26 – 00:31:31]
Wait, wait, I don’t. So the money they sent you isn’t real, right?

James Boyle:
[00:31:31 – 00:32:20]
It was never real to begin with. It’s almost the modern day version of Jerry here, the check. Check bouncing scams, where a lot of times what they’ll do is have a job listing and you have this sham interview. This is common now nowadays, too. You have this sham interview. They say, you’re hired. We’re going to send you a computer, a laptop, Mac, you’ll be reimbursed. You just need to. We’ll send you a $1000 check, cash it, pay for the, pay for the funds, whatever it is, and then you’ll be reimbursed. The check was no good. Most banks nowadays will honor a check. It’s sort of a pending before it clears. Right. You’re spending money you think is in your account. It’s not that check bounces, you don’t get reimbursed. It comes out of your funds. Same exact idea on the Zelle platform.

Richard Taylor:
[00:32:21 – 00:32:25]
Yikes. Yeah. So everyone just. This is only gonna get worse.

James Boyle:
[00:32:25 – 00:32:28]
Be aware. Yeah. The only thing you can do is be aware.

Richard Taylor:
[00:32:28 – 00:32:54]
Yeah, we’re unundated and they’re getting better and better. These phishing emails. Phishing letters. I’m seeing fake letters from HMRC. I saw one from HMRC this morning online. They’re getting better and better. Yeah, you just need to build in checks and balances and it’s super annoying, you know, having two factor authentication and having to call up and. Yeah. Not to do so for the click. And we’re more and more conditioned to be able to do so for the click. But these, these things are there for. For all of our protection.

James Boyle:
[00:32:54 – 00:32:55]
Mm hmm.

Richard Taylor:
[00:32:55 – 00:32:57]
Okay, so anything else to add before we wrap up?

James Boyle:
[00:32:58 – 00:33:03]
We need an uplifting ending after scans. Well, we have to do our pick and mix.

Richard Taylor:
[00:33:03 – 00:33:06]
Okay, pick and mix. What are you, what have you got for us?

James Boyle:
[00:33:06 – 00:33:43]
I read a book recently. Now this. This list comes out. You might be, I don’t know, it might be actually be a UK institution. The Booker Prize. Have you heard of this? Big time, sort of. You know, I think it might all be novels, novel awards. Listen, happened to see the Guardian had posted this list of. I want to say they’re finalists. I don’t think they’ve actually awarded them yet. Book called Orbital. The author, Samantha Harvey. Very quick read if you have any interest. I’m going to sound like such a nerd here in space travel, space exploration.

Richard Taylor:
[00:33:43 – 00:33:47]
Sci-Fi or like actual. For real.

James Boyle:
[00:33:48 – 00:34:26]
Real, yeah, real. It’s set. The idea of the story, the conceit is it’s one day on the ISS, on the International Space Station, and it’s sort of. Each chapter goes through a point of view of one of the astronauts on the ISS. I think it’s less than 200 pages. One of my favorite books I’ve read this year. It’s really an interesting portrait of not only what they go through and what their life is like, but also not to sound too corny and overwrought, but also this idea of humanity and striving and things like that. It was really, really good. I would recommend it.

Richard Taylor:
[00:34:26 – 00:34:35]
Okay, so I’ve actually got a book for us as well, and it’s called a place of greater safety by Hilary Mantel. So you know who Hilary Mantel is?

James Boyle:
[00:34:35 – 00:34:37]
She wrote Wolf hall.

Richard Taylor:
[00:34:38 – 00:34:38]
She did, yeah.

James Boyle:
[00:34:39 – 00:34:40]
Historical fiction.

Richard Taylor:
[00:34:40 – 00:34:42]
That was big here in America.

James Boyle:
[00:34:43 – 00:34:47]
I know of it because I read a lot and I’m a nerd, but I haven’t read it.

Richard Taylor:
[00:34:47 – 00:35:12]
The Wolf hall. It’s a trilogy where people know it for Henry VIII, but it’s really. The protagonist is Thomas Cromwell, which was like his henchmen during that tumultuous period, who met his own sticky end. And actually, there’s an incredible something. That something reignited my interest in this. In this time was I was living in New York, and there’s the frick collection. Are you familiar with a frick collection?

James Boyle:
[00:35:12 – 00:35:13]
Oh, yes, yes.

Richard Taylor:
[00:35:14 – 00:36:42]
Right. So we actually live near the frick collection for a time, and we went in there one day. It’s just this, you know, this incredible house with this incredible art. You know, it’s amazing. But you walk into the drawing room or whatever. Anyways, a big fireplace. Above the fireplace is a very angry looking man painting, very famous painting. I don’t remember what it was, but on either side of the fireplace are two paintings, and they’re looking at each other malevolently in my head, and I’m like, I know these. Wait, that’s. That’s Thomas Cromwell. And he’s staring at his arch nemesis. His name escapes me now, but he’s staring at his arch nemesis. And they both ended up getting, basically, Cromwell got him beheaded, and he ended up getting beheaded, and they’re staring each other. The painter was a guy called Hans Holbein. He painted it all like the iconic Henry VIII, the famous portraiture. He painted these two guys as well, and they’re in this house, and they’re looking at each other. Sir Thomas more. It’s. It’s. It’s Thomas Cromwell staring at sir. And these were. They were arch enemies. And they both came to a sticky end, as everyone did under. Under Henry VIII. And these. These, these are 500 year old paintings, and they’re staring each other across his fireplace. And I wasn’t expecting it. It’s just. It just really reignited my interest in this period. So I went and read all the Hilary Mantell, the trilogy that she put out. Unfortunately, she died recently, but a place of greater safety. It deals with the french revolution.

James Boyle:
[00:36:42 – 00:36:45]
Okay, so this isn’t part of the, like, the Wolf hall trilogy.

Richard Taylor:
[00:36:45 – 00:38:00]
No, it’s one of her earlier books. And the french revolution is. It’s just a period I wanted to know, and I’ve been. I’ll read biographies and stuff, but I find. I sometimes find starting with historical fiction is a really great way to get into the period and the characters, and it brings the characters to life in ways that may not be completely accurate but humanizes them in a way that a biography simply can’t because it’s dealing with. It doesn’t have that kind of. That latitude. So I’m familiar with what happened during the French Revolution, particularly the reign of terror, but the famous figures of, like, Danton and Robespierre. Robespierre especially. I’ve never really been able to get a handle on them, in a way. I have other figures, so I love her work. So I went back to a place of greater safety, and I’ve not finished it yet. I’m not quite at the reign of terror, although we’re gearing up for it right now. And it’s just remind me how much I love good historical fiction. I don’t read too much historical fiction because reading novels keeps me up at night. I can literally read till three in the morning. So I read. I’ll read bio, I’ll read biographies and other history books because I enjoy them, but I still fall asleep. But I’m really enjoying it and I’m really enjoying her work.

James Boyle:
[00:38:00 – 00:38:13]
She’s apparently an incredible writer. Like, her prose alone is really amazing. I have to check her out. She. She pops up a lot on those historical. What was the one pillars of the earth, obviously, is a big one. I’m sure you’ve read.

Richard Taylor:
[00:38:14 – 00:38:25]
I’ll check that out. I’ll check that out once I’m through with a place of greater safety. But it’s good. I recommend it if you’ve got any interest in this period. And I have it. It’s a good read. All right, my man, we’re done. Till next time.

James Boyle:
[00:38:25 – 00:38:27]
Till next time. Thank you all for listening.

Richard Taylor:
[00:38:27 – 00:38:28]
All right, cheers. See you soon.

James Boyle:
[00:38:28 – 00:38:29]
Take care.

Richard Taylor:
[00:38:32 – 00:39:36]
All right, folks, that’s another episode of we’re the Brits in America under our belts. Thank you for listening. I appreciate it and I appreciate you. If you’re enjoying the show and would like to support the mission, which is to help brits thrive in America, I’d ask you to subscribe to the podcast wherever you listen and also consider leaving a rating and a review. This stuff really does matter. Please help us get this information to the people who need it. That is your fellow Brits living in America. Just a quick reminder that this show is brought to you by planned first wealth. We are a us based US UK cross border financial planning and wealth management firm, and we help successful british expatriates living across the US to make the most of their opportunity and ultimately to retire happier. So if you’re a british expat living in America and you’d like to know more about what we do for people like you, you can find us at our website, planfirstwealth.com. or you can look me up on LinkedIn. Do get in touch. We’d love to hear from you. As always. Thank you to the podcast guys for their help producing this episode and the entire show. See you next time.