Smart Risk Investing Transcript Producer: [00:00:30] Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract guarantees are backed by the financial strength and claims paying ability of the issuer. Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer: [00:01:01] Welcome to the ActiveWealth.com show with your host Ford Stokes, Ford is a fiduciary and licensed financial adviser who places your needs first. He’ll help you protect and grow your wealth. The ActiveWealth.com has grown because activities like you want to activate their retirement planning with sound tax efficient investing and now your host Ford Stokes.

Ford Stokes: [00:01:24] Welcome Activators to the ActiveWealth.com Ford Stokes, your chief financial advisor. I’m joined by our esteemed executive radio producer Sam Davis, who also has got its not so new. It’s about three weeks and now he’s the ambassador to the weekend welcoming us to the weekend. So Sam, say a lot of folks,

Producer: [00:01:44] Welcome to the weekend activators. Look at this. It’s August. It’s back to school time. Football practice has started and the summer will soon be behind us. So enjoy the weekend.

Ford Stokes: [00:01:54] The congregation is about to be in the church for college football. The interesting thing is, as an OPSEC fan, for me, it it’s really interesting to see that, you know, Texas and Oklahoma saw to join the as you see. But your Kansas Jayhawks, the rumor is they’re about to join the Big Ten. Is that correct?

Producer: [00:02:18] We’re going to have to find a new nest, that’s for sure. I’m not sure where it’s going to be. I’ve seen some talks about a little big twelve pack, 12 merger. Who knows at this point. But football will be played.

Ford Stokes: [00:02:29] But it seems like the Kansas joined the Big Ten is actually imminent based on the reports that came out this week. Would you say

Producer: [00:02:37] It looks like that would be the most likely situation and probably the most ideal situation financially. So, yeah,

Ford Stokes: [00:02:44] It’s good stuff. All right. Well, I know a lot of us are college football fans here, whether Georgia fans or Auburn Tiger fans or the hated Alabama Crimson Tide fans or whatever. Just kidding. But there’s a lot of Georgia fans. A lot of our fans are not big fans of the Alabama Crimson Tide, but that was big happenings in the last few weeks. Incredible stuff. And that’s just part of the weekend and part of the religion that is college football here in. The Southeast, so, you know, you get all kinds of stuff here on the act of, well, shall we want to make sure that we were talking about your Kansas Rock Chalk Jayhawks there, Mr. Sam?

Producer: [00:03:26] Yeah, and I know that the football program usually doesn’t impress at Kansas, but I’m just glad that football will be played and fans will be back in the stadiums this year.

Ford Stokes: [00:03:37] Well, I know a lot of Georgia fans here in Atlanta are really excited about the coming football season. And they’re and also I think Georgia Tech fans are really excited about their quarterback, too. So I think I think we were well represented this year in the Atlanta area, which is great stuff. So let’s get straight into a market update. Your ActiveWealth.com market update. Jobless claims dip ahead of benefit expiration. Continuing claims fall to pandemic era lows. The number of Americans filing for unemployment benefits last week as the expiration of supplemental benefits drew nearer. The Labor Department said Thursday that three hundred and eighty five thousand Americans filed for initial jobless claims benefits in the week ending July 30, first below the prior week’s downwardly revised three hundred ninety nine thousand. Analysts surveyed by repetitive. We’re expecting three hundred and eighty four thousand filings. Initial jobless claims slipped below the mark of 400000 for the first time since the pandemic began around Memorial Day and have essentially hovered there since, said Mark Hamrick, senior economic analyst at Bankrate. Continuing claims, meanwhile, fell to two point nine three million filings, a pandemic era low in the week ending July twenty Fourth, down from the prior week’s upwardly revised three point two nine six million analysts had anticipated three point to six million filings. So that’s a real improvement there. Historically elevated twelve point nine million Americans are still receiving some form of jobless assistance.

Ford Stokes: [00:05:14] The three hundred dollars per week in supplemental unemployment benefits are set to expire in September. About half of US states ended or announced plans to end the benefits ahead of their expirations. Concerns over the health of the jobs market surfaced on Wednesday after the ADP report showed private sector payrolls slowed sharply in July. The private sector added three hundred thirty thousand jobs last month, down from the six hundred eighty thousand jobs gained in June. Analysts were expecting the addition of six hundred ninety five thousand jobs. Investors will get a deeper look into the health of the labor market when the July jobs report is released this upcoming Friday. Analysts are expecting the US economy added one hundred and forty five thousand jobs last month as the unemployment rate fell to five point seven percent. The economy gained eight hundred and fifty thousand jobs in June, while the unemployment rate ticked up to five point nine percent. With schools opening vaccinations still in the rise of the forthcoming expiration of the elevated unemployment benefits, the way should be cleared for more employment gains in the coming months. Hamrick said that’s barring the truly unforeseen. And obviously we’ve seen a lot of unforeseen, which is pretty interesting stuff. Also, stocks climbed with weekly jobless claims and earnings were in focus. Robin Hood Market said existing stockholders would sell up to ninety seven point nine million shares.

Ford Stokes: [00:06:45] US stock indexes rose Thursday as investors balance the latest jobs data and mixed corporate earnings. The Dow Jones Industrial Average gained ninety two points, or point to seven percent, while the S&P 500 index, the Nasdaq composite index rose points to seven percent and point one seven percent, respectively. The Labor Department said Thursday that initial jobless claims fell, like we said earlier, to three hundred eighty five thousand in a week, ending in July 31st, in line with analysts expectations. And again, I want to remind everybody, continuing claims, meanwhile, declined to a pandemic low of two point nine three million filings and stocks. Robin Hood markets was sharply lower and said in a filing that existing stockholders will sell it to ninety seven point nine million shares over time. Shares of the trading platform had surged eighty seven percent over the prior two sessions in earnings. Uber ANCs quarterly loss widened as the ride hailing giant boosted incentives to lure drivers back to work. The company said quarterly gross bookings hit an all time high and food delivery orders also increased by Darina reported earnings and revenue that exceeded Wall Street estimates and said its covid-19 vaccine was ninety three percent effective. Through the six months following the administration of a second dose, Electronic Arts led product launches and its live services fueled it stronger than a.

Ford Stokes: [00:08:14] Expected quarterly results, the videogame maker raised its full year outlook and said its new battlefield twenty forty two game will be released before the holidays. And in commodities, West Texas Intermediate crude oil ticked up 15 cents to sixty eight dollars and thirty cents a barrel and gold lost 40 cents to eighteen hundred and fourteen dollars and ten cents an ounce. And that’s your market update for this week. So last week we talked about smart, safe, smart risk and smart tax feeding into a smart financial plan. Mainly, we talked a lot about smart safe last week. We’re going to talk a lot more about smart risk this week. We’ll talk a little bit about smart safe. But after the break, we’re going to talk about a specific strategy that is a pretty awesome, smart risk strategy called a structured note or a flash note, and this one’s offered by Citibank. And we’ll talk through that right after the break. But I wanted to recap smart, safe, real quick. So smart, safe would be things like investing in a fixed indexed annuity and replacing the bonds in your portfolio. So what let me ask you a question. Why are you investing in bonds when you can invest in a fixed index annuity, eliminate your advisory fees, completely, delete your advisory fees, your portfolio fees, get into a fee efficient, fixed indexed annuity that is paying, you know, between five and nine point eighty four percent.

Ford Stokes: [00:09:43] Those are historical, not back tested. That’s historical. What’s actually happening now. And you’re paying no advisory fees and you’re getting market gains without market risk. Let me ask you, I mean, why wouldn’t you do that? So we’re also going to play a little bit about bond replacement here, we’re going to talk a little bit about bond replacement on today’s show, but it’s about risk. We come back from the break. We’re going to talk about how to invest in a structured note, how to get the greatest return from structured note, what the Bufford principle protection is on a structure note. And I think you’re really going to enjoy learning about a structure note or a flash note and what we offer through our R.A. Brookstone Capital Management here at ActiveWealth.com Management right after the break. And we’re going to talk more about smart risk strategies and also smart tax strategies here on the ActiveWealth.com show. If you think taxes are going to go up in the future, if you want to reduce the advisory fees, the portfolio fees you’re paying now, I would encourage you to come right back after the break. It was the ActiveWealth.com right here on AM 91. The answer. We’re so glad you’re with us.

Producer: [00:11:13] Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Ford Stokes: [00:11:41] And welcome back to the ActiveWealth.com show Activators and Ford Stokes, your chief financial adviser. And if you’re wondering who an activator is, an activator is someone who listens to this show. They want to build a successful retirement. They want a fee efficient, market efficient and tax efficient. Retirement or portfolio, and they’re also somebody who doesn’t spend more than four percent of their assets in a given year, there are someone who understands the rule of 70 to which is how fast their money is going to double. And there’s somebody that really is focused on their retirement and they’re inspecting what they expect to make sure that they have a great successful retirement. And if you’re wanting to inspect what you expect on your current financial plan and you’re unhappy with the returns you’re getting or unhappy with what happened to your portfolio in March of 2020 or what happened even in 2008, 2009 with the S&P 500 lost fifty point one percent of its value. And you’re also unhappy with the amount of money that’s being taken out. Of your IRA distributions that are being withheld and paid to the government and you’re getting a lesser amount of your IRA than you thought you were going to get. Then I would encourage you to give us a call at (770) 658-1777. Or you can visit ActiveWealth.com and click.

Ford Stokes: [00:13:12] That set an appointment, but in the upper right corner and you’ll get put directly into my calendar. We just look forward to working with you if you want to get a copy of my new book, Annuity Three Sixty. Absolutely for free, all you have to do is visit annuity three sixty dot net. That’s annuity three sixty. Now let’s get straight into these structured notes. So structured notes are financial instruments, which consists of two main parts combined to generate a specific risk return profile in their most basic form, structured notes. Or they’re basically investments that combine a low risk, low return component of bonds with a higher risk, higher return derivative of a selected assets, often equities or equity indexes. For us, we use equity indexes or a lot of a lot of the structure notes that we end up placing into our client portfolios as at their request is highly flexible. Basic model makes it possible for investors to benefit from practically any price move, any specific underlying asset. As a result, structured products are commonly used as a portfolio enhancement tool to augment returns while limiting the risk of loss of capital. Due to the highly customizable nature of structured products, the individual risk return profile of each note can be calibrated so that the individual requirements of each investor are met. Structured nodes are not about owning the underlying security or index, but rather about customizing an investor’s exposure to that underlying asset.

Ford Stokes: [00:14:53] Some of the situational uses of structured notes are listed here. Some of the situational uses of structured notes are an investor once exposed to an equity index but wants to reduce some of the volatility of owning that equity index. And investor wants the potential to earn a higher yield or coupon while limiting or eliminating interest rate risk. An investor wants to find investment strategies for different market expectations, whether bullish, bearish or sideways. An investor also wants to fine tune their portfolio in line with their risk profile, conservative, moderate or aggressive. A lot of folks are moderate these days. They’d like to be conservative, but they can’t get the right of return. So you’re looking for a moderate to moderate aggressive these days and they want to do bond replacements. And this is one strategy. You can replace your bonds with a structure. No matter what we do is we actually invest in five different notes, over five different consecutive months from five different banks that have five different coupon rates and have five different strike price points on the NASDAQ. One hundred, the S&P 500 and the Russell two thousand are really the big three indexes that all of these banks are using now as the underlying index that they’re working with. And I wanted to share with you the flash that we’re offering for the month of August, so and you probably would need to give us a call pretty quick for us to be able to trade this in and get this to you, but.

Ford Stokes: [00:16:30] Citibank is offering a minimum coupon rate is nine point to seven percent, and if you’re getting, you know, a paltry eight point six percent of one percent. On a Bankside offer by Ally Bank, or if you’re going to wear the bricks and mortar banks like Bank of America or Wells Fargo or truest, and they’re all offering zero point zero five percent interest, a nine point seven nine point two seven percent interest rate is better for you. The fixed coupon rate is paid monthly at point seven seven to five percent, which is higher than the bank CD rate on when your bank said that alive Thanksgiving just in a single month. It’s crazy your principal is protected as long as the S&P 500, the Russell 2000 and the Nasdaq 100 index don’t lose 30 percent of their value. Any of those three can lose 30 percent of their value. And your principal would then just ride the market. And this is what’s called an American style flashed up, and if you’re not familiar with flagstones or structured notes and they’re the same right, I would encourage you to consider the American style because the American style pays higher. Also, we’re able to offer a higher rate of return on these structured notes because I’m not taking commissions on the structure does themselves.

Ford Stokes: [00:17:55] They’re just getting input into your portfolio the way we would normally do it. We’re trying to help replace your bonds, get you a higher rate of return, but we’re really trying to protect and grow your wealth and sometimes in protecting your wealth is also getting you a higher coupon rate on income type product and income type products could be fixed index annuities that are not invested in the market and they are not at risk in the market. They don’t involve stock market risk. And their contracts with you in the annuity company and with the other would be flash notes that are offered by banks that are offered by Brookstone Capital Management are registered investment advisory firm and we are not taking any additional commission on those. We just offer those as a potential allocation within our portfolios that we’re structuring for our clients. And that would be a really good idea. I mean, nine point to seven percent on a fixed coupon would be great with you as long as the S&P 500, the Russell two thousand and Nasdaq one hundred don’t lose 30 percent of their value. That that’s very attractive for many investors out there. And if you’ve got questions about structured notes, you can get our free report understanding structured notes just by send me an email at Ford@ActiveWealth.com. That’s Ford@ActiveWealth.com. And I’ll just send you.

Ford Stokes: [00:19:21] The understanding structure, Dennett’s report that we have absolutely to you for free, and so I think you’ll enjoy that. You can also give our office a call at (770) 658-1777. Or visit ActiveWealth.com and click the set an appointment button in the upper right corner. This this structured note is paying nine point to seven percent. It’s offered by Citibank and a rated bank. It also has FDIC protection on their own, but this this investment does not. This investment is a structure that has a. 30 percent buffer, as long as, you know, when you purchase the structured note, as long as the S&P 500, the Russell two thousand and the Nasdaq one hundred do not lose 30 percent of their value from the point you purchased the structured note. So as those indices don’t lose 30 percent, your principal is protected throughout the 12 months. Also, this note cannot be called until the first day of month seven. Also share that most of these notes are called in month seven. The banks have made their money. You’ve made your money and then we roll it into a new structure. Note for you or we put it into one of our managed portfolios or whatever you decide to do with the money. But basically it works like this. You’re getting paid point seven, seven to five percent of the principal you put in, which is pretty great stuff each month for six months.

Ford Stokes: [00:20:52] And they call it and they give you your principal back. So that’s how it works. As an example, if you invest one hundred thousand dollars in many of our clients, do invest in a five month structured don’t ladder at one hundred thousand a piece for five hundred thousand over it. But you if you let’s say you did one hundred thousand dollars in a Citibank structure that was offered in August, that’s paying nine point to seven percent, you would get seven hundred and seventy two dollars and fifty cents a month times 12 months, which would be nine thousand two hundred seventy dollars. And if the notes called in six months you get seven seventy to fifty times six and you get your principal back all in like the first day of the seventh month after you invested it. So it’s a really good idea to consider replacing your bonds because bonds are paying, what, three, four percent tops right now. And you’ve got a chance to earn twice as much as that, at least, if not three times. And you take, you know, a smart risk play with a portion of your game, with a portion of your portfolio, not all of your portfolio. So consider a structure now. I mean, listen it way. A lot of work says, let’s say of one hundred thousand to invest, we would just invest twenty thousand dollars in in five different structured notes in five different consecutive months with five different banks at five different coupon rates.

Ford Stokes: [00:22:20] That’s what we would do. And so all you have to do is give our office a call. If you’re interested in the structured note strategy, just give us a call at (770) 658-1777. And that is a smart risk play to consider investing in structured notes or class notes. And this one for August is paying nine point twenty seven percent with a thirty percent buffer. As long as the S&P 500, the Russell two thousand and Nasdaq one hundred index, any of those three do not lose thirty percent of their value from the point you invested in that structure. Note congratulations. Your principal is protected throughout that time period. We come back from the break. We’re going to talk about more bond replacement strategies. This one’s a little bit more of a smart, safe play, but we’re trying to talk about a smart financial plan that includes smart, safe, smart risk and smart tax strategies. The active wealth show right here on AM920. OK, welcome back, Activators, the ActiveWealth.com show, and we’re talking about building a smart financial plan, we’ve talked about smart safe with replacing bonds and fixed index annuities last week and a little bit this week.

Ford Stokes: [00:23:48] We’ve also talked about smart risk strategies. One of them is replacing your bonds with a smart risk play that your money is at risk in the market with a structured note, but it can pay nine point to seven percent. And you’ve got a principal protection buffer as long as the Nasdaq one hundred, the Russell 2000 and the S&P 500 don’t lose 30 percent of their values. Any one of them, your principal is still protected. So and most of those notes get called in at the beginning of month seven, but they cannot be called before six months. So that’s good news. And then we want to talk about another smart strategy that, again, this is more back to the smart safe. But we’re all talking about trying to trade out our bonds, replace our bonds, eliminate the advisory fees we’re paying and with bonds, and get a higher rate of return with market like gains without market risk by doing a bond replacement into a fixed indexed annuity. And I, I would strongly recommend you consider this bond replacement strategy. And Sam, go ahead and play chapters 15 and 16 for my new book, Annuity 360, and you can get my free book at Annuity 360. Gotten that. That’s Annuity 360 dot net. We look forward to getting that book out you and you can really study up on this bond replacement strategy.

Ford Stokes: [00:25:07] Chapter 15, bond replacement with fixed indexed annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed index annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial adviser talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. At my firm ActiveWealth.com Management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities. First, here’s some information on the history of bonds in the United States. Historical bond volatility. The 1900 saw to secular bear and bull markets in U.S. fixed income inflation peak at the end of World War One and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The U.S. government kept bond yields artificially low until fifty one. The long term bond yields were at one point nine percent. In nineteen fifty one, they climbed to nearly 15 percent in nineteen eighty one. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation, protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created early. Investors in these new asset classes were compensated for taking on the challenge.

Ford Stokes: [00:26:43] The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of fifteen percent to seven percent by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold see chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history alone, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds, bonds and interest rates have an inverse relationship. When interest rates fall, bond prices rise. Due to the covid-19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows as of May 24th. 2020, the ten year Treasury note was yielding point six four percent and the 30 year Treasury bond was at one point to seven percent. Reinvestment risk of bonds. This is the likelihood that investments cash flows will earn less and a new security.

Ford Stokes: [00:28:07] For example, an investor buys a ten year one hundred thousand dollar Treasury note with an interest rate of six percent. They expect it to earn six thousand dollars a year. At the end of the term, interest rates are four percent. If the investor buys another 10 year note, they will earn four thousand instead of six thousand annually. Consider the possibility that interest rates change over time when deciding to invest in bonds systematic market risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid diversification, cannot fix this issue. But the correct asset allocation strategy can make a big difference. Unsystematic market risk. This type of risk is unique to a specific company or industry similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk business risk. There are two types of risk internal and external. Internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells financial risk. This relates to the capital structure of a company.

Ford Stokes: [00:29:38] A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you were actually paying. Standard and Poor’s estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point two one percent for municipal bonds. However, markups can be as high as five percent, up to fifty dollars per bond. Bonds have finite duration. Bonds only provide income for a finite amount of time. Unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive. Chapter sixteen reduced risk in your portfolio with annuities. Big idea. An annuity can protect against several risks that can affect retirees and pre retirees and offer a better financial safety net than other investment types. One of the biggest benefits of investing in annuities is reducing risk in your portfolio. With current market volatility, pre retirees and retirees are more concerned than ever about their retirement funds and protecting their hard earned well.

Ford Stokes: [00:31:16] We believe that annuities can be the answer to risks in your portfolio. Longevity risk. Retirees and pre retirees are concerned about outliving their wealth. We have offered some strategies in this book that will stretch your retirement funds, such as following the four percent rule. But annuities can offer even more protection against this fear. We are living longer, so it is important to plan for at least three decades of retirement. An annuity can help create an income you can never outlive. Your money will last for your entire retirement by utilizing monthly, quarterly or yearly distributions from your annuity account. After your money grows during the accumulation phase, market risk fixed indexed annuities can protect you from market risk. These annuities are not actually invested in the market. They’re only tied to a specific market index. This means that you enjoy all the benefits of your market index when it performs well, but you are not exposed to any of the market risks. Should your index perform poorly, you will either make money or remain flat. You will never lose any money. Zero is your hero. Inflation risk annuities can offer riders that can help you adjust for inflation, even though a rider might reduce your payout. Protecting yourself from inflation will ensure that your money lasts and is not exposed to any unnecessary risk. It is important to have an annuity with a payout linked to the Consumer Price Index, or CPI, instead of one that increases at a fixed rate each year to ensure you are protected against inflation risk an annuity.

Ford Stokes: [00:32:49] The increases at a flat rate each year does not offer sufficient protection against inflation sequence of return risk. An annuity with a lifetime withdrawal benefit can counteract the effects of a down market at the start of your retirement. Research conducted by Retire one has shown that you can flip fifteen years of returns from retiring during a recession to retiring during a market that is up and completely change your retirement outlook. The positive returns would offset your withdrawals and grow your assets before your account felt the effects of a negative return. Consider a smart, safe plan with a smart, safe plan. Your money is invested not in the market. The characteristics of investing, not in the market, include growth with safety. Market upside limited to no downside principal and gains protection, low cost, zero to one percent annual fee time horizon of seven to 14 years can earn five to seven percent annually. Options are available for guaranteed income. Here are some examples of not in the market investing banks CDs. The annual percentage yield API is about one to two percent. Your time horizon is typically one to three years and you cannot access the funds until the contract is up. Treasuries, the API is about three percent. Your time horizon is 10 years and you cannot access the funds until the 10 years is up.

Ford Stokes: [00:34:15] Fixed annuities, the annual percentage yield is between three and four percent. Your time horizon is typically four to seven years. You are able to access the funds during the contract period, multi-year guaranteed annuities or MYGAs. You get between two and four percent growth on your principal depending on the duration of your policy. This is less growth than a fixed indexed annuity, but it is guaranteed the annuity company is required to pay you the rate they promised for the duration of your policy. Fixed indexed annuities you receive between five and seven percent growth on your principal. The time horizon is seven to 14 years and you do have access to the funds in your account if you need them. A smart, safe plan does not invest your money directly in the market. Your investment is tied to an index without being invested directly in it. This means that you get a portion of the market gains without the market risk. You may want to consider investing in a fixed indexed annuity over other not in the market options. If you invest in treasuries or CDs, you will lose ground in your investment due to inflation. Investing in a fixed index annuity will likely cut down on your inflation risk. We prefer accumulation annuities because they minimize your risk in several areas and they lock in your gains through the use of point to point protection periods, meaning you won’t lose money.

Ford Stokes: [00:35:37] We’re going to come back from the break. We’re going to talk about smart risk, smart, safe and smart tax strategies. Use the ActiveWealth.com right here on Am I to the answer.

Producer: [00:35:55] Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Ford Stokes: [00:36:22] Welcome back, Activators. The ActiveWealth.com show, we’re talking about how to build a smart financial plan with smart, say, smart risk, smart tax strategies, all combined equaling a smart financial plan. And we want you to be smart. We want to be successful. We want you to have a great retirement where you’re not constantly worrying because we want you to have a great long retirement. Won’t you live a long time? Enjoy time with your family. What you see are your grandkids, you know, go to college, get married, have kids so you can have great grandkids and all that kind of stuff and enjoy those parts of your life. And, you know, in our family, we spell love, Timmy, and we want you to make sure that you get the chance to literally spend a great amount of time with your loved ones. And Sam, let’s go ahead and hit him with our inflation demonstration. It’s a shocker today.

Producer: [00:37:16] It’s time for an ActiveWealth.com inflation demonstration now.

Ford Stokes: [00:37:23] Ok, so current US inflation rates, the inflation rate for the United States right now is five point four percent for the 12 months ended June 2021, according to US inflation calculator dotcom after rising five percent previously, according the US Labor Department data published July 13. The next inflation update is scheduled for release on August 11th at eight thirty a.m. and will go ahead and make sure that we can display that so. I wanted to be clear here, we’re looking at a inflation rate of the last 12 months, a five point four percent, if you look at from twenty sixteen through July of 2021, you’re looking at thirteen point two percent growth rate on inflation and the consumer price index increasing as well. Sam, you’ve got even some data on just what the meat costs are, right?

Producer: [00:38:20] Yeah, for just this year, meat costs, poultry costs especially. They’re up more than 20 percent of the year. So if you’re doing the grocery shopping at all, that reflected on your grocery bill and when you’re going out to eat, you’re going to see that reflected on the bill that you’re way to bring to you at the end of your meal, because the margins in restaurant as it is, they have to raise prices to keep up.

Ford Stokes: [00:38:40] Amen. And so what we’ve got to do is be smart about our investments. And one of those is we’ve got to eliminate underperforming assets. And we’ve also got to invest in smart tax strategies, like with a raw gladder conversion or life insurance or both. Visit ActiveWealth.com and reach out to a book, an appointment you can click that set an appointment button in the upper right corner. We’re happy to help you with a free financial plan. That’s a fifteen hundred dollar value at no cost to you. And you’ve been listening to us for months. I would encourage you to say, you know what? Today I’m going to go ahead and call for it. As Deborah and our team are standing by at (770) 658-1777. And we’re happy to get you on my calendar. You’re going to talk directly to me. You won’t talk to any of our other advisors. You’ll talk directly with me. We’re happy to help you. So we’ve talked about a lot today. We talked about smart risk. We talked about smart, safe. We’re also talking about smart tax with Rothblatt or conversion. And again, Rothblatt conversion is when you’re moving money from your IRA to your Roth IRA. Dollar for dollar is the best way to do it. Or you can take money from a taxable account or a savings account, pay the 15 20 percent taxes, which is whatever your top marginal effective tax rate is, and go ahead and apply that and pay the taxes on it.

Ford Stokes: [00:40:08] So therefore, you’re moving money from your tax deferred account in your IRA to your tax free account. In your Roth IRA and you’re using taxable money to pay the taxes on it, that’s the ideal way of doing it. Hope you’ve learned a lot today on how to build a smart financial plan that includes smart, safe, would like a bond replacement with fixed index annuities or smart risk with an actively managed, tactically managed portfolio that also includes a structured note ladder of five months in a row to diversify risk and get you a higher rate of return than you’re getting on your bonds. Now, that would be a really smart risk way to go. That’s something to consider. And then also you want to make sure that you’re reaching out to us to get that free $1,500 value of a free financial plan that includes a portfolio analysis financial plan to your ninety fifth birthday and then also one with your current plan and also one with our recommended portfolios and our recommended plan. And you get all that for free. And it’s a $1,500 value at no cost to you because we want to help you make an informed financial decision about your retirement future. Now for the final countdown. It’s the third.

Producer: [00:41:28] So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:41:37] Our final countdown, we talked about smart risk, smart say we gave you a great market update, we also did an inflation demonstration that talked about five point four percent inflation rate over the last 12 months, thirteen point two cents, twenty sixteen. And we want to make sure that your lifestyle is not eroding and your buying power is not eroding. We want to keep pace with inflation and outpace it. And we’ll talk about outpacing inflation and more information on how to build a really smart financial plan on the ActiveWealth.com next week. Remember your retirement. If you’re going to be a bear, be a grizzly, be aggressive, inspect what you expect about your retirement future. We’re so glad you’ve been with us. And we’ll be right back. Next week, I’m Ford Stokes, the chief financial advisor of Everybody Has a great week.

Producer: [00:42:28] Thanks for listening to the ActiveWealth.com. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your chief financial advisor Ford Stokes at (770) 658-1777 or visit ActiveWealth.com Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor, become an active wealth management, are independent of each other. Insurance products and services do not offer the BCA, but are offered and sold through individually licensed appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed past performance going to be used as an indicator to determine future results.

Producer: [00:43:10] A purchaser should evaluate and understand all of the risks and costs of an investment in structured notes essence prior to making any investment decision, a purchase of an asset entails other risks not associated with an investment in conventional bank deposits. A purchaser may not have a right to withdraw his or her investment prior to maturity or could incur substantial penalties for an early withdrawal if permitted. A purchaser should carefully read the disclosure statement and any other disclosure documents for before investing in. Investment, in essence, is not FDIC insured and is subject to credit risk. The actual or perceived credit worthiness of the issuer may affect the market value of assets as will not be listed on any securities exchange. Even if there is a secondary market, it may not provide enough liquidity to allow purchasers to trade or sell assets. As a holder of assets, purchasers will not have voting rights or rights to receive cash dividends or other distributions or other rights in the underlying assets or components of the underlying assets. Certain built in costs are likely to adversely affect the value of assets prior to maturity. The price, if any, at which the notes can be purchased in secondary market transactions, if at all, will likely be lower than the original issue. Price and any sale prior to the maturity date could result in a substantial loss. Sins are not designed to be short term trading investments. Purchasers should be willing to hold any notes to maturity. The tax consequences of assets may be uncertain. Purchasers should consult their tax advisor regarding the US federal income tax consequences of an investment in assets if it is callable at the option of the issuer. And then it’s called the holder will receive only the applicable redemption amounts will not receive any coupon payments that would have been payable for the remainder of the term of the essence are not FDIC insured, may lose principal value and are not bank guaranteed.

Producer: [00:44:46] This material is provided for informational purposes only. It should not be construed as investment advice or an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary the value of investments and the income derived from investments can go down as well as the future. Returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively. And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involved varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Historical performance results for market indices generally do not reflect the reduction of transaction and or custodial charges or the deduction of an investment management fee, the occurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions and investment strategies will affect the performance of any portfolio, and there are no assurances that it will match or outperform any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the strategy, not FDIC insured may lose principal value. No bank guarantee.