Kendall Neukomm (00:00)
Hello everyone. Welcome to Whitley Penn talks where we give you valuable insights to help you make confident, informed decisions and move your business forward. My name is Kendall Neukomm and today we’re back with some of our WP wealth professionals to give an update to our previous episode covering tariffs and market updates.

If you did not tune into that episode back in April, I encourage you to do so. It should be linked in the description below.

I’m super excited today to get started. We’ve got two special guests from the WP Wealth team. We have Brandon Russ today and Tyler Ayers. Welcome both of you.

Brandon Russ (00:38)
Thank you Kendall, thanks for having us.

Kendall Neukomm (00:41)
Yeah, yeah, of course. I’m excited to dive in a little bit more on kind of what’s happened with the markets and tariffs and rates and all of that good stuff here in just a bit. To start, we’ll have each of you give a little bit of background on your story, how you got to WP Wealth and what you’re doing today. So Brandon, will you kick us off there? Thanks.

Brandon Russ (00:59)
Yeah, of course. Thanks for having me. So my name is Brandon Russ. I’m a manager on the WP Wealth team out of our Dallas office. I majored in financial planning in school and started with Whitley Penn right after graduation. I did the first three years in the Fort Worth office, but then I’ve gotten the chance to start to build out that wealth practice here in Dallas. So that’s what I’ve done the last three, three and a half years now.

Kendall Neukomm (01:28)
Awesome, awesome. And when you’re not working hard for clients, you actually founded an internal program called NextGen, which is also an awesome thing to be able to say you had a hand in. So love that. Yeah, NextGen counsel. Tyler, how about you? Give us a little bit of background on your experience and how you got to WP Wealth.

Tyler (01:49)
Yeah, my name is Tyler Ayers, also a manager here at the wealth team, certified financial planner, been doing this for about nine years. I started out in the broker dealer space and made the switch over to Whitley Penn about three years ago. I just kind of saw that the space was moving more to consulting, tax advisory, and just that’s what clients were wanting. And the conversation was stopping with go see a tax advisor.

And now we’ve got hundreds of them I can lean on. So that’s been great. Married, have a little boy. He’s one month. I’m fairly confident that he’s gonna be the next tight end for the Dallas Cowboys. We’re working on it.

Kendall Neukomm (02:29)
Every day, ⁓ 30 days in and every day closer to his, his debut in the NFL. That’s good. That’s definitely preferred for a one month old. I love it. Well, thank you both for being here today and for sharing a little bit of your background and your story. I know our listeners are really excited to hear a bit more on our conversation today. So thanks for taking the time.

Before we do dive in to our conversation today, I did want to take a moment to encourage everyone out there listening who isn’t yet familiar with WP Wealth, check them out. Visit WPWealth.com to learn a bit more. You can find their website and their LinkedIn, both linked in the description below. On WPWealth.com forward slash insights hyphen news, you’ll discover timely recommendations and insights designed to help you make the most of today’s financial landscape and to move your financial strategy forward. So definitely check that out for those tuning in today. Now, to get into what we actually will be discussing with Brandon and Tyler, we’ve got a couple topics on the table and some questions for both of them to just learn a bit more about where we are today compared to when we recorded with Shane and Bill back in April. So we’ll talk a little bit on the tariff conversation and where we are today compared to April.

The Federal Reserve rate cuts are back on the table, so we’ll discuss that as well. And then consumer spending in general, we’re tending to see it slowing down, so we’ll dive in there on more on what that means for consumers and clients alike. So to start off with kind of that conversation and the topics at hand.

Brandon, kind of what expanded tariffs are now in play and how are you advising clients to balance speed with strategy during this time?

Brandon Russ (04:19)
Yeah, so as far as what tariffs are at play, it kind of depends on the day. You see one day there are tariffs on a certain sector of the market or a certain country and then the next day maybe a trade deals in place. So that is up in the air. But as far as, you know, how do we advise our clients to deal with it? You know, we work with a lot of small business owners and so small businesses don’t really have the luxury that maybe, you know, an Apple or a Microsoft or those large businesses have to wait things out or, you know, be flexible. And so, you know, I think a good thing for businesses to do is just be honest. Most times with a small business, you know your clients on a first name basis. So you have the luxury of communicating with them.

Look, we’re dealing with these pricing pressures. ⁓ There’s not a lot we can do. And so we have to raise our prices. A lot of customers will probably appreciate your transparency. And that’s just going to help you build trust and continue to develop that relationship. So I would say, be honest with your customers. ⁓ Try and talk with your suppliers. See if there’s anything you can negotiate in the short term, if there’s any flexibility that they have. Yeah, small businesses are definitely in a lot different world than some of these larger multinational organizations that are maybe a little better equipped to handle a constantly changing supply chain.

Kendall Neukomm (06:03)
Definitely different levels of agility kind of in each scenario there and ability to pivot quickly in some cases can be a challenge for sure.

So when we kind of think a little bit more about these trade tensions and increased conversations of tariffs and just advising clients on being proactive and trying to be communicative as they can be in those situations, how are these trade tensions affecting everyday consumers? And are we already seeing price changes or product shortages from what you guys have heard?

Tyler (06:35)
I remember I had a cousin ask me the other day, they were talking about tariffs on some agricultural products, specifically avocados, because we get a lot of them from Mexico. And there was some headline, it was like the price increase was 60, 70, 80 % on $1.50, $1.75. So the actual increase wasn’t that significant. I mean, you go and you buy and you just people have gotten more numb to increases in prices ever since 2020. It’s just we kind of expect it almost at this point. So I think consumers one, they’re more used to seeing this increase in cost. And what it’s showing is, well, people are starting to either have more in savings, money markets just hit another all time high. It seems like they’ve been doing that for the last five years. People are cutting their spending. And that’s something that, in the US, we love to spend, so cutting that down, we might already be at a high level, we’re just reducing that sum. So instead of buying five different versions of a toy, you might buy three versions for your kid.

So we’re seeing some price cuts there, and McKinsey actually just did a great study, and they said about 63 % of US consumers have a plan or already have changed spending habits due to tariffs, but only 29 % of them were actually concerned about tariffs. So yeah, they know it’s there, but when it actually comes down to your day to day, like we’re gonna go buy groceries, we’re gonna go do these different things, the tariffs really haven’t made a significant impact, I don’t think, at least I haven’t noticed personally, and I’m not really seeing it across our clients. The big concerns really I hear are my auto insurance is going up through the roof and that there’s been a lot of natural disasters.

That’s more of a concern for me than what I’m seeing from consumers on the tariff side. I guess ultimately the tariffs, I think the fear of the tariff is more scary than the tariff itself.

Kendall Neukomm (08:31)
Great answers, and great story to share there for our listeners, for sure. So kind of on that topic as well, leaning in just a little bit more to business owners and what folks can watch for? Think about pricing, think about strategy. I mean, for some of these small businesses, pivoting quickly can be a challenge. So like Brandon said, we need to be transparent with our customers and our clients. But what’s an indicator that you would say, Tyler, on, hey, it’s time to change my business process? Or I need to think about that chain of supply a little bit differently, or that strategy? I mean, what do you think is a sign there or an indicator that we should rethink?

Tyler (09:09)
We deal with a lot of different business owners in different spaces. So one, it’s hard to blanket answer, you know, should you accelerate buying your inventory in case there might be more tariffs, in case something might happen to your margins? And one, I think just generally speaking, the business owner is going to know their business better than anyone else.

So we can help consult and advise and weigh the pros and cons across all the different aspects of their plan. But at the end of the day, the business owner needs to do what they need to do. And I think anticipating that a rate cut might come in the future and that’s when you start expanding, shouldn’t dictate when you start your expansion. I mean, let the business be the business and the outside factors will happen. And then we’re just going to have to navigate those things.

And when you make those decisions, don’t delay or rush them, but know that, okay, if rates do get cut or if rates do increase or these tariffs happen, what’s option B? What’s option C? You’ve got to look at all the options here and have a plan that can get through all those scenarios. I had a client, he asked about buying some machinery and he said, well, should I do it in December or should I do it in January? And, we told them, it’s like, well, when do you need it? I mean, for the operations of the business, that’s more important. Don’t let these other external factors dictate where the business is heading. Now there might be some depreciations, things like that, but that’s where our tax team, they said, you buy it when you need it, we’ll figure it out on the tax side.

Kendall Neukomm (10:47)
Yeah, for sure.

Brandon Russ (10:48)
Kendall, I think something to add to that, especially for, you know, the sudden shifts in tariffs, a lot of it is inventory. You know, we saw a lot of people really stack up inventory with the anticipation of these tariffs coming, but then, you know, on the flip side, as Tyler said, the business owner is going to know best. Maybe that doesn’t work for your business.

So maybe keeping a leaner inventory works better for you as tariffs continue to fluctuate. So that’s the first part of it. You know, the other part is, you know, just continue to do the things that you would do if you were a smart business owner. You keep that cash cushion. Keep an eye on your debt schedule. If you have high interest rates loans and you’re heading into a rate cutting cycle, probably a good time for you to get ready to start refinancing your debt.

As Tyler said, timing your purchases wisely. If you can wait, you know, it may be in your best interest to wait. And so things like that, that you would do normally are just re-emphasized here as you get into a more volatile pricing time.

Kendall Neukomm (11:42)
Right. Yeah. And for those listening, Brandon, tell us a little bit more about the current conversation around the Fed cutting rates. What’s the what’s today’s news there?

Brandon Russ (12:11)
Yeah, so, you know, we actually within the last about week or two, we got our first rate cut of this cycle. And so previously we were kind of sitting in a wait and see period, but now it’s gotten to the point where, you know, the Federal Reserve felt comfortable to do it, to finally cut rates. And so we got a 25 basis point rate cut in September of 25.

Now going forward, think that there’s still some, I guess it might be up in the air whether we get more. Certainly there’s a lot of pressure on the Federal Reserve from the White House to continue to cut rates. But I’m not sure that the Federal Reserve is 100% convinced that we need to continue cutting rates at this time. Usually when you cut rates, it’s because you want to jolt the economy.

But what’s interesting is right now, home prices are at all time highs or near it. The stock market is at all time highs. So it’s not necessarily the environment that we typically see when we head into rate cuts. So ⁓ another variable I guess that goes into that is in 2026, we’re gonna have a new head of the Fed. Jerome Powell is stepping down and so it’s on Donald Trump to replace Powell. so you, would guess that he’s going to put someone in that position who sees really the same, I guess, playbook as Donald Trump sees it. So with that said, you know, I think we’re under the, I guess, we’re expecting rates to continue to come down with whomever is that next Fed share. So all that to say is it’s a weird time, but I think we’re headed to more rate cuts.

Tyler (13:57)
You know, the reason I think that rate cuts are so needed right now is because the US is refinancing % of their overall debt. And if we’re going from a 1-2 % interest rate, now we’re refinancing at 5-6-7%, that’s going to have a huge effect on cash flows really, I mean it’s a government it’s a business and Servicing our debt now, I think it’s like the fourth or fifth largest expense for US government. I mean there’s Social Security, Medicare, there’s probably one or two more. Bt servicing the debt is one of them and it’s creeped up month after month since 2020, and these rates have just crept up so Trump’s pushing for these cuts because we need them. To have those cuts is gonna be one helpful for the economy as people are slowing down some

Kendall Neukomm (14:50)
Yeah, definitely. And you’re talking a little bit about refinancing the debt from the just full country’s perspective, but what about individuals managing their own debt during this time? I mean, what does that look like and how can people begin to plan major purchases? Is now the time? Do they hold off? Kind of what’s that been looking like from your perspective?

Brandon Russ (15:12)
You know, I would say in general, we probably advise our clients to be very mindful of variable rate loans. This would be the exception. You know, like I said, we are fully expecting continued rate cuts. And so if that is the case, and you know, there is an opportunity for you to take out debt at a variable rate.

Now is probably the best time to utilize one of those variable rate loans. A lot of times that’s tied to the federal funds rate and when that gets cut, your loan, the interest rate on that loan will get cut with it. So one of the better times to take advantage of those financing strategies. If you are exploring, you know, a big purchase. Let’s say you’re in the market to buy a house. I had a conversation with a young couple today who’s doing that. ⁓ You know, I don’t think that where rates sit today should prevent you from doing that. You know, buying a house, especially your first house is a rite of passage in the U.S. And so don’t let that prevent you from doing it. A lot of banks or mortgage lenders, you know, they will happily work with you to refinance that debt later. And so that I don’t think, if you found the home of your dreams, definitely do not wait. Go after it, go get that home that you want. You can refinance later.

Kendall Neukomm (16:37)
So Brandon talked a little bit about his clients that he had just today talking about buying a house and what would your perspective there be just the same? Like kind of go for it if you have the perfect deal in front of you or what do you think Tyler?

Tyler (16:51)
Yeah, so I mean, it’s kind like with a business owner, it’s like, don’t let the external factors decide your path. I mean, let it influence it, but don’t let it be the deciding factor. Like when you were buying a house in 2020, like it might have seemed rough and I remember at one point people were telling me when we bought our home, you know, prices are way too high. You shouldn’t buy, but rates were amazing and we got a fantastic rate. And now we look back and it’s like the best thing we’ve ever done. And now prices are higher. Like there’s never the perfect time to buy. There’s either going to be higher, low interest rates. Prices will be too high quote unquote. So I think really it’s just a matter of like having a plan, knowing, you know, like I said earlier, what are all the different options? What could happen?

And just try not to stretch your budget, buy a house too big and become house poor because once you’re in it, you’re pretty much in it because refinancing, you’re going to pay 2 % of the value of the home for closing costs at least. So you’re going to have to do an analysis and that’s where we can help people is figure out like does this make sense or not and when is the break even.

Brandon Russ (17:56)
Yeah, yeah, honestly for refinancing, mean, people get excited when there’s a rate cut, but I mean, rates need to move like 1 % for it to even make sense to refinance. And so if your rates move, you know, 0.25 % or 0.5%, it’s probably still not even economical for you to do that refi yet.

Kendall Neukomm (18:09)
Mm-hmm. Yeah, definitely. It’s one of those like, it’s a nice tool to have in your back pocket, but not something that you want to do often and not something that makes sense in every single case. So that’s a good point to make. A nice tool though to keep in your back pocket for sure.

Well, kind of next thing that was on our plan to discuss through today was the weakening of the US dollar. So that was a big conversation in April. And as the tariff, I want to say threats almost came into the headlines of the news and lots of conversations were occurring around those, people were starting to look at the dollar and the strength of it at that time. For someone kind of early in their career, how should they think about the dollar strength when planning long-term investments today and is there an impact?

Brandon Russ (19:07)
Yeah, I mean, kind of like you said, Kendall, I think, you know, six months to a year ago, we were concerned that the dollar was too strong. So, you know, it’s kind of like, which way are you concerned about? But, ⁓ you know, the best thing to do for a weakening dollar is diversification. You know, we are extremely lucky to be living in the time period that we have where you can invest in pretty much any asset class at the tip of your fingers. Like can get on my iPhone right now and buy a stock that is traded in Germany or whatever. ⁓ And so you have that ability to really diversify your asset base. And that’s a good way to really fight back from a weakening dollar.

Another thing would be inflation hedges. So think gold or I guess if you’re younger, Bitcoin or even real estate, those are all great hedges for inflation. So, or excuse me, not inflation, but a weakening dollar. ⁓ So, just making sure you have a wide variety of different assets, either domestically or abroad, but just don’t only hold US securities.

Kendall Neukomm (20:10)
Yeah. Right. And is there any, aside from calling both of you, is there anything that people can read and keep up with that would point them in the right direction on where internationally to start to look?

Brandon Russ (20:34)
That’s a good question. I would say the same places that you would get news for domestic investments. The Wall Street Journal or Motley Fool or anything like that, definitely with a registered investment advisor or CFP or someone like Tyler and I.

Kendall Neukomm (20:54)
Brandon, thanks for elaborating a bit there on the dollar and kind of what that means in conversations around where to invest and how to further diversify. Definitely helpful for our listeners. Tyler, when we’re kind of thinking about how individuals can protect their overall financial health and spending habits during periods of economic downturn or general uncertainty. What are your tips there for individuals and people listening today?

Tyler Ayres (21:20)
It’s the hardest part is knowing what you’re spending your money on because we all think we spend less than we do until you actually track it or go back and look at a credit card statement. But if you can, I mean, you don’t have to detail a budget and say, I’m going to spend only 500 bucks a month on golf or 300, 800 going out to eat, but just have a number in mind like I’m gonna spend X amount and it doesn’t really matter what it’s on and I’m gonna save 20, 30, 40 % of my income and as long as you’re doing that, you can spend every other penny you have left.

You know, of the theme of this conversation has been you can control what you can control and there’s things that are out of your control and you can tighten a budget. You can know how much you’re spending. You can improve yourself by studying, working harder, providing new ideas to the company, whatever it might be. And that’s going to improve your career path, your income. But all those external factors, I mean, it’s gonna happen, there’s always gonna be something. So you just gotta control your household, your corner, in order to make that progress you wanna see.

Brandon Russ (22:26)
Also don’t be emotional with financial decisions. We say it all the time in investing, but spending and savings, the same thing. Don’t freak out, don’t panic. There’s always someone that can help you or that you can talk to. So, again, can’t stress it enough, consult an advisor.

Kendall Neukomm (22:43)
Definitely, and that that brings us right to our kind of wrap up there. So as people are preparing for year-end planning just as you said Brandon and starting to think about what some of these Market factors mean for them or what controlling what’s right in front of them looks like How is it how what’s the best way for people to get in touch with either of you?

Brandon Russ (23:03)
Yeah, reach out to us on LinkedIn, shoot us an email. I think you can find us through our website. You can show up at the Dallas office. I’ll be here. ⁓ Tyler, how can people find you? At the golf course?

Tyler Ayres (23:18)
In the sand bunker, in the trees, yeah. Yeah, we’re over here in Fort Worth and we’ll be in San Antonio, Houston, Austin, but yeah, an email, a phone call, lunch, whatever it might be.

Kendall Neukomm (23:21)
Awesome. Well, thank you both for your time today and for those listening, if you enjoyed today’s episode, be sure to subscribe on YouTube, Spotify, Apple, or listen right on our website at whitleypenn.com slash podcasts or on wpwealth.com just the same. If you’re interested in receiving our episodes straight to your inbox, along with other market updates, check the link in the description to sign up for our email list. Thank you again to both of you, Tyler and Brandon for your time, and I hope everyone has a wonderful rest of their day. Thanks guys.