Personal Finance

Secrets investors need to know

Published

6 months ago

October 6, 2024

Business Finance News

Josh Brown

Photo: Duncan Hill

Josh Brown once had this idea that in order to be a financial advisor, you needed to be buttoned up and fit a particular mold.

Brown, a CNBC contributor who often takes a casual and accessible tack with investors for his commentary, has since learned that there’s more than meets the eye to a lot of things in the world of money.

Throughout his new book, “You Weren’t Supposed To See That: Secrets Every Investor Should Know,” Brown encourages investors to look beyond the surface level of financial advice you see in traditional and social media. Take the American Dream, for example:

“We all grow up being taught about the American Dream and why it can work for everyone,” said Brown, who is the CEO of Ritholtz Wealth Management, a New York City-based investment advisory firm. “I still believe that’s true, but what we learned in the pandemic is it can’t work for everyone all at once. That’s the thing that you weren’t supposed to see.

“The hidden truth about American-style capitalism is that if everybody is good all at once, the whole thing breaks down. We need people to be successful, but we also need people who are still striving to get there, who are willing to take jobs and do things that others won’t do.”

What we learned in the pandemic is it can’t work for everyone all at once.

Joshua Brown

CEO of Ritholtz Wealth Management, a New York City-based advisory firm

CNBC spoke with Brown in early October about his experience in the field as a financial advisor and some of his top takeaways for investors across generations.

This interview has been edited and condensed for clarity.

‘One of the biggest lies on Wall Street’

Ana Teresa Solá: What led you to write this book?

Joshua Brown: I had been writing a blog [The Reformed Broker] for about 15 years, and I was writing seven days a week at one point. Then the momentum started to slow down as my career took over.

At the end of last year, I decided to put an end to it and just say, “This is as far as I could take this.” But I didn’t want to not give it the proper send off, because it was a huge part of my life.

When you put your heart and soul into that much writing over that length of time, you kind of want to say, “All right … these are the most important insights, and these are the things that I think were important at the time. And let me do something that recognizes that.”

I wanted to collect all those insights in a book, revisit some of the greatest hits, and then bring them up to the present so that there is a value to the reader today.

ATS: You echo this idea throughout the book, that you can’t reap the rewards of the stock market without some impact.

JB: One of the biggest lies on Wall Street is that investors can avoid risk and still have the upside of whatever asset class, the markets, etc. It will always be the biggest lie because it’s the easiest thing on earth to sell.

Everybody wants it, and even very intellectually secure people who understand logic will still fall for that.

When you’re a salesperson, one of the things you learn is to figure out who you’re talking to and what their buttons are, and then you push those buttons.

Josh Brown on the CNBC set at the New York Stock Exchange.

Photo: James Moock

The thing that we have done very well in our content as a firm, is we have pointed out the ways in which people are convinced to do one thing or the other, and how much human nature plays into that and why it’s really important to fight those instincts, whether it’s fear or greed, as the markets are unfolding.

You really don’t want to veer too far into one of those buckets. You want to be right down the middle. Take enough risk that you can make money, but not take so much risk that you’re about to get the knockout punch.

Josh Brown is out with a new book, 'You weren't supposed to see that'

Financial advice industry ‘has come a long way’

ATS: In the book, there’s a story about how you walked into this financial advisor’s office and her technique was not what you expected.

JB: That’s about more than 10 years ago, and it was a really eye-opening moment for me. Prior to that, I was very intimidated to make the transition from being a retail stockbroker to an investment advisor.

I had this idea in my head that all the people who were serving as investment advisors were like these serious, buttoned up professionals who knew exactly what to do — and it really turned out not to be that. It turned out to be a lot of people pretending.

The industry has come a long way since then. The average advisor is significantly better equipped to deal with clients and more professionalized than what I had seen in that era.

That’s kind of a relic of another time that no longer exists. I don’t think that you can fake it to the degree that you used to be able to. [Many advisors are] operating on a fiduciary standard, I don’t think you could fool people anymore.

Gen Z doesn’t need financial planning advice. They need asset allocation advice.

Joshua Brown

CEO of Ritholtz Wealth Management, a New York City-based advisory firm

ATS: You say young advisors are equipped with the expertise, but they lack something prior generations of advisors have. What is it?

JB: You have this new generation of incredibly qualified financial planning talent. They’re coming out of college knowing more at 23 than many advisors at 43 have ever learned about the planning process.

This is my opinion — I’m sure people [will] get mad when they hear this — but what they’re missing is the ability to convert an audience of prospective clients into real relationships.

They don’t yet have the life experience. Generationally, they’ve been able to get away with doing a lot less face-to-face. They haven’t dealt with as much rejection as Gen X, certainly the boomers.

Let’s put them in some rooms with important meetings going on. Let’s give them opportunities to have these face-to-face interactions, because they really know what they’re doing.

Where they’re lacking is what my generation and older has — which is the ability to sell, to persuade, to make people feel comfortable and the ability to deal with awkward social circumstances.

‘Gen Z doesn’t need financial planning advice’

ATS: What are you observing with Gen Z and how they’re seeking financial advice?

JB: Gen Z, they don’t need financial planning advice. They need asset allocation advice. They don’t have the assets accumulated. There are no estate issues. There aren’t really tax things worth discussing.

Whatever they’re encountering on TikTok is whatever the algorithm is serving them, and the algorithm is going to serve them the most outrageous content, it’s going to serve them shortcuts, facts, tricks, stories about people making wild, Bonanza size trades.

It’s not advice … Most of it is being delivered by completely unqualified people who are not registered, who are not beholden to any sort of standard, and could just say whatever they want.

But I think what ends up happening with that generation, just like every generation prior, is things in their life become more complex. The level of responsibility goes up, the amount of money that they’re dealing with goes up, and they will, in turn, start looking for help.

And they’ll start their search online.

Personal Finance

Your last chance to claim an IRS stimulus check is approaching

Published

18 minutes ago

April 4, 2025

Business Finance News

Douglas Sacha | Moment | Getty Images

If you still haven’t filed your 2021 tax return and never received a pandemic-era IRS stimulus check, the deadline is April 15 because there’s a three-year window to claim refunds, according to the agency.

Filers who never got the 2021 stimulus payment of up to $1,400 could claim the recovery rebate credit on that year’s return.

“If you didn’t get the stimulus, you’re running out of time,” said Syracuse University law professor Robert Nassau, director of the school’s low-income tax clinic.

The IRS in December announced plans to automatically send “special payments” of up to $1,400 to 1 million taxpayers who didn’t claim the 2021 recovery rebate credit on tax returns for that year.

The agency said most payments were expected to arrive via direct deposit or paper check by late January 2025, based on the taxpayer’s 2023 tax return information.

In order to see if the IRS issued a stimulus payment, you can create an online account and view “tax records” under the “records and status” toolbar.

“That’s the best place to look,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

Your IRS online account also shows if you filed a 2021 return, Lucas said.

If you don’t submit your 2021 filing by April 15, you could also miss other tax breaks, such as the earned income tax credit, which can trigger a refund even without taxes owed, according to the IRS.

Currently, there are more than $1 billion in unclaimed refunds for tax year 2021, the IRS estimated in early March. That represents more than 1.1 million taxpayers and a median unpaid refund of $781. These figures don’t include applicable credits, including the recovery rebate credit.

Tax season is a prime time for scams: Here’s how to protect yourself

You need ‘proof’ of filing by the deadline

While there are several free options for tax returns this season, some may not offer electronic filing for 2021 returns, Nassau warned.

If you’re forced to mail your 2021 return, you should send the filing via certified mail for “proof” you sent it by the April 15 deadline, he said.

“I’ve had situations where the IRS gets something after the filing [due] date, and they just reflexively say it’s too late,” Nassau said. “Spend the $5 and send it certified.”

Personal Finance

Disability advocates sue Social Security and DOGE to stop service cuts

Published

19 hours ago

April 3, 2025

Business Finance News

A Social Security Administration (SSA) office in Washington, DC, March 26, 2025.

Saul Loeb | Afp | Getty Images

A group of disability advocates filed a federal lawsuit against the Social Security Administration and the so-called Department of Government Efficiency on Wednesday aimed at stopping cuts to the agency’s services.

Recent changes at the Social Security Administration under DOGE — including staff reductions, the elimination of certain offices and new requirements to seek in-person services — have made it more difficult for individuals with disabilities and older adults to access benefits, the lawsuit argues.

The complaint was filed in the U.S. District Court for the District of Columbia.

The plaintiffs include the National Federation of the Blind, the American Association of People with Disabilities, Deaf Equality, the National Committee to Preserve Social Security and Medicare, the Massachusetts Senior Action Council and individual beneficiaries.

“The defendants’ actions are an unprecedented and unconstitutional assault on Social Security benefits, concealed beneath the hollow pretense of bureaucratic ‘reform,'” the complaint states.

In nine weeks, the new administration has “upended” the agency with “sweeping and destabilizing policy changes,” the plaintiffs claim, that have shifted agency functions to local offices while slashing telephone services.

“The result is a systematic dismantling of SSA’s core functions, leaving millions of beneficiaries without the essential benefits they are legally entitled to,” the lawsuit complaint states.

The “mass restructuring” of the agency is unlawful and violates the Rehabilitation Act and the Administrative Procedure Act, the lawsuit argues. The changes also violate multiple constitutional provisions, including the First Amendment right to petition the government for redress of grievances, according to the plaintiffs.

With 1.1 million disability claims pending, the recent actions could also be life threatening to individuals who are dying or going bankrupt while waiting for decisions, they allege.

The Social Security Administration did not respond to CNBC’s request for comment.

“President Trump has made it clear he is committed to making the federal government more efficient,” White House spokesperson Liz Huston said in an email statement. “He has the authority to manage agency restructuring and workforce reductions, and the administration’s actions are fully compliant with the law.”

Lawsuit alleges reform is ‘administrative vandalism’

People hold signs during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025.

Nathan Layne | Reuters

The Social Security Administration sends monthly checks to around 73 million Social Security and Supplemental Security Income beneficiaries.

DOGE, which is not an official government entity, has been tasked with cutting “waste, fraud and abuse” within the federal government. President Donald Trump issued an executive order creating DOGE on Jan. 20, the same day he was inaugurated.

Since then, the Social Security Administration has cut 7,000 employee positions and closed the Office of Civil Rights and Equal Opportunity and the Office of Transformation. The Office of Civil Rights and Equal Opportunity handled the agency’s equal employment opportunity and civil rights programs. The Office of Transformation was responsible for coordinating customer service-related initiatives like adding the ability to use digital signatures and electronic documents.

The Social Security Administration has also changed its identity proofing policies for claiming benefits and changing direct deposit information that is expected to require more individuals to visit the agency’s offices in person.

The agency has updated its policy, allowing individuals applying for Social Security Disability Insurance, Medicare, or Supplemental Security Income who cannot use a personal my Social Security account to complete their claim entirely over the telephone, starting April 14.

The reforms amount to the dismantling of “core functions of SSA, abandoning millions of Americans to poverty and indignity,” according to the plaintiffs’ complaint.

“What the defendants frame as ‘reform’ is, in truth, administrative vandalism,” the lawsuit states.

Beneficiaries face long waits, overpayment issues

The plaintiffs include seven individuals whose experiences, including long customer service waits and, in some cases, demands to repay large sums to the Social Security Administration, are detailed in the complaint.

One plaintiff, Treva Olivero, who has been legally blind since birth, was informed in March 2024 that she had been overpaid Social Security disability insurance benefits for five or six years, prompting the agency to demand she repay more than $100,000, according to the complaint.

Olivero’s Medicaid coverage was also terminated soon after, which left her without income and health coverage. She has since been in an “ongoing struggle” to have her disability benefits reinstated, while also facing almost $80,000 in medical debt, according to the complaint.

Fiserv CEO on the nomination to Social Security Commisioner role

Another plaintiff, Merry Schoch, who received Social Security disability insurance for many years, returned to work to help pay for large medical bills after she was hit by a waste management truck in 2022. She reported her income to the Social Security Administration, and the agency made no changes to her benefit payments, according to the complaint.

Two years later, Schoch stopped working and reported her unemployment to the Social Security Administration. In August 2024, the agency then terminated her benefits and informed Schoch that she owed $30,000 for the disability benefit payments she received while working full time, according to the complaint.

Last September, Schoch was informed she could reapply for benefits. However, she has since struggled to get in touch with the agency over the phone, online and in person.

Both Olivero and Schoch are members of the National Federation of the Blind, which is also a plaintiff.

The plaintiffs want the court to reverse the Social Security Administration’s recent reforms, including staff reductions, closures of certain offices and policies requiring in-person appointments.

Personal Finance

Amid trade turmoil, ‘you do not want to time the market’

Published

22 hours ago

April 3, 2025

Business Finance News

Pres. Trump unveils sweeping tariffs: Here's what to know

As President Donald Trump rolls out sweeping new tariffs on goods imported into the United States, Americans are growing increasingly pessimistic about their financial fate.

Consumers worry that the duties will cause inflation to flare up again, while investors fear that higher prices will mean lower profits and more pain for the battered stock market.

As of Thursday morning, futures tied to the Dow Jones Industrial Average were down 1,200 points, or 2.8%. S&P 500 futures sank 3.4%, and Nasdaq-100 futures lost 4%.

But sharp drops — or sudden spikes — in the market are to be expected, according to Jean Chatzky, CEO of HerMoney.com and host of the podcast HerMoney with Jean Chatzky.

“With these volatile markets, you do not want to time the market,” she said of the old adage. “Timing the market doesn’t work — it’s time in the market.”

Trade tensions, inflation and concerns about a possible recession have undermined consumer confidence across the board, several studies show.

Still, it’s normal for most Americans to feel unnerved during heightened volatility, Chatzky said.

“There’s very little doubt that consumers are feeling nervous, maybe more nervous than we’ve felt in quite some time,” she said.

Committing to setting money aside in a high-yield savings account, whether by scaling back on dining out or rideshare expenses, will help regain some financial control, Chatzky said.

Top-yielding online savings accounts currently pay 4.4%, on average, well beyond the savings account rates at some of the largest retail banks, which average just 0.41%.

“Taking action is the best way to feel more resilient,” she said.

It’s understandable why some may be hesitant to continue investing, however, when you are investing for the long term, a down market is an opportunity for dollar-cost averaging, which helps smooth out price fluctuations in the market, Chatzky said.

This is also a good time to check your investments to make sure you are still allocated properly and rebalance as needed, so you are not taking on more risk that you are comfortable with, she added.

Timing the market is a losing bet

Talk yourself down from making any sudden financial moves, Chatzky advised.

Trying to time the market is almost always a bad idea, other financial experts also say. That’s because it’s impossible to know when good and bad days will happen.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.