Excel in Retirement : Recent Episodes
David C. Treece
Where financial planning becomes understandable. David brings interesting stories each week to listeners of his Excel in Retirement show along with actionable ideas that may help listeners avoid pitfalls that many people face in their retirement. David C. Treece began his career in the financial services industry in 2011. He is an independent financial adviser. He has passed the Series 65 securities exam, and he is health and life insurance licensed in several states. David’s financial advisory firm focuses on retirement income planning.David worked for two other financial advisors before founding his firm in 2018. David launched Clients Excel because he has a desire for his clients to have a second to none experience when it comes to their financial planning for retirement. David relentlessly strives to be the best at helping people prepare for retirement.The bedrock of David’s ethos is treating others as he would want to be treated.David works tirelessly to continually bring pertinent content to our clients and friends through our weekly newsletter and podcast. Through these, David brings informative content that may aid you in preparing for retirement. Through his financial planning work, David’s hope is that his clients are empowered to have a confident financial future.David and his wife, Mallory, have a daughter named Amelia and rescue dog named Oscar. They also have a backyard flock of chickens that Amelia loves to tend. David and his family are active in their church in Spartanburg. He is also a volunteer mentor with JumpStart, which is a ministry for people who have been recently released from prison.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
I’m reading a book titled Think Ahead by Craig Groeschel, and one of the premises of the book is to pre-decide how we will react in given circumstances. My first thought was this would be a great book for teenagers to read. Planning beforehand for the outcome we know to be right is better than waiting until we’re under stress to think through what we should do. Under stress we may make bad decisions.
One of the reasons Groeschel said we sometimes make poor decisions is we are fatigued by all the decisions we have to make. He writes, “Experts estimate that we make 35,000 decisions a day.”
Think about how many basic decisions you made before you even left your house this morning. You had to think about getting up, brushing your teeth, what to eat, what to wear, taking the dog outside, and the list could go on.
The issue is by the time we get hit with a big decision we may not make our best decision because we have not predetermined our belief system about the topic.
In my previous volunteer work with a local ministry called Jumpstart, I learned that one of the ways prisons control the detained is by limiting the decisions they can make in a given day. Instead of 35,000 decisions they may have 6,000 decisions they can make a day. It stands to reason that the way we can control our outcomes is to limit the amount of mental energy we need to expend on making decisions.
As evidenced by major stock market trading platforms going down on Monday due to large quantities of people placing trades in their equity portfolios, a lot of investors may not have pre-decided what they should do in a market downturn. When we don’t have a plan, we subjugate ourselves to making decisions based on feelings and not on hard facts. The stock market likes predictability and we’ve seen historically unpredictable events transpire recently.
The cool thing about our financial planning process is we have pre-determined how we should react in a down market so we don’t have to frantically attempt to make wise decisions in the chaos of the moment. In our 3 Roles of Money process we have our “red money” in the market, but we’ve segregated out our “blue money” to use over the next ten years.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and th
People come to us for financial planning at different stages of life. Most of our clients are closing in on retirement or they’re in retirement, but that can be a 10- to 15-year window of when people generally become a client of our firm. I’ve gotten a bird’s-eye view into what works well and what doesn’t.
We normally recommend that people begin working on their financial plans for retirement when they are five years out from retirement. It makes sense to begin making the transition from an accumulation stage to an income and distribution stage five years out. Once we are closer to potentially using our funds, it makes sense to dial down our risk on some of our funds in order to figure out a way to increase our probability of being able to successfully take income out of our accounts. For that reason we are downside focused first because most of our clients are transitioning into retirement.
We also want to begin figuring out how much income you may be able to sustainably draw from your retirement accounts and make them last as long as possible. This may include tax planning strategies like converting tax-deferred 401k accounts to tax-free accounts and the implications around this. Healthcare planning and taking a crash course on Medicare is often helpful, as is figuring out your best Social Security claiming strategy.
We can do all this quickly, but when there is a window of time to work through these things, it allows for you to not feel like you have an exhausting summer of activities and you have time to rest in between mental exercises. It’s not easy planning the next 25 to 40 years of your life, and it’s best done methodically. If you’re like most of our clients, it took you 30 to 40 years to accumulate the funds you have. It definitely merits taking a few hours off work to figure how to make them last for the next 30 years.
Whenever you have questions about your financial plan, please reach out at 864.641.7955. Get David's book How To Excel in Retirement.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
David starts out with a story about his recent vacation to Hilton Head Island with his family. Then he gets into some practical steps that can help you make good decisions.
Today, I have a few practical things that sometime inhibit us from making the best decisions. When it comes to personal finances this is super applicable because we need to get our financial planning right!
I just finished reading a book called The Richest Man Who Ever Lived. It’s about King Solomon, who the Bible says is the wisest person to live and he was incredibility wealthy. The author, Steven K. Scott, has a section titled “The Cost of Being Naïve.” I’ve been accused of being naïve before (probably true) so I was particularly interested in the content. I have a predisposition to think the best about people but as we have probably all experienced, we probably shouldn’t extend that courtesy to everyone.
Whatever the case, we all want to make great decisions that result in our intended outcome, so what do we need to be aware of that prevents this from happening? Scott states several reasons why we sometimes don’t make good decisions. He writes, “We all have a natural inclination toward simplicity. We want things to be simple. We want to be able to figure things out instantly, without having to read an instruction book or doing homework. We want to believe everybody, and we want to accept what we’ve been told at face value.
Solomon warned us about assuming tomorrow will present the same opportunities as today in Proverbs 27:1. The author states, “The fact is, however, we do not live in a static world. Everything changes moment by moment, and presuming that we will have the same opportunities or conditions to respond to tomorrow that we have today is foolish and naïve.” My takeaway is to seize the day and squeeze as much out of our present as possible. What would we do today if we knew we could not do it tomorrow?
The next reason we may be naïve is we misplaced our trust. Perhaps, we trust someone or an institution that doesn’t merit our faith. Sadly, the author writes, “More often than not, people are less capable, less experienced, less competent and less honest than they seem to be.” Solomon recommended looking well into a matter and doing due diligence, and Scott analogized that due diligence is shining a floodlight on a situation. It illuminates what’s there or what may be missing.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Another unique position we have as a company is to be able to offer solutions larger corporatized offices often do not have the ability to do. We all know the bigger things tend to get, the slower they are to innovate. Maybe it’s the bureaucracy or protocols or hierarchies, but whatever it is, when we have to deal with it it’s normally painful.
As an independent financial advisory firm, we don’t have layers and layers of corporate executives dictating the advice we can offer our clients. I believe this allows our clients to have solutions that are more tailored to their particular needs. Who likes one size fits all?
A quick example of this is our use of buffered exchange traded funds (ETFs). They’ve been around for a handful of years now and they are becoming more mainstream. The Wall Street Journal causes them “Boomer Candy.”
In 2022, every time the government raised interest rates to try to bring down inflation, the stock market stock went down. I had been on a training call a couple years prior to 2022 and had learned about buffered ETFs and began investing my own money in them on a monthly basis.
There are various different types, but one of our main go-to ETFs works like this. It credits interest based on the performance of the S&P 500 over a one-year period, and it has a defined outcome. We are buffered against the first 15% of losses in the S&P 500 over the year. In exchange for the protection, we are capped at making between 13% and 14%. The caps can vary from month to month. Of course, in any fund there is an internal expense ratio and then you may have management fees also. All in all it’s a generous upside with less downside potential than the overall stock market.
We’ve been using these since 2022 and corporate America is catching up two years later. I don’t know about you, but I like having access to the best possible solutions available to me, and I believe our business model allows for that.
We’d always be delighted to answer your questions if you have them. You may reach David at 864.641.7955.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Connect with David at hello@clientsexcel.com or call 864.641.7955.
Marty and Jess Ansen loved going on cruises so much they opted to cruise indefinitely. I came across an article that said, A retired couple have been living on back-to-back cruises for two years, and claim it's 'cheaper' than if they stayed in a nursing home in their retirement years. Hopefully you’re not feeling our inflation problem quite that much.
I don’t know about you, but that would be too long a boat for me. Although, I’ve never gone a cruise. Do you think you could live on a cruise ship? I guess it would depend on how smooth or choppy the water was.
From the Wall Street Journal, “Markets are unusually calm—and that’s making Wall Street nervous. Stocks have been on a steady climb, with the S&P 500 up 14% nearly halfway through 2024 and closing at 29 records along the way.” The S&P 500 continues to climb up, and as of this past Monday it’s up 15.22% for the year.
Read more about our financial planning approach here.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Last week the Federal Reserve board who determines if rates will rise or fall or remain met and determined that they were going to leave rates unchanged for the time being. The board is always vague about what comes next for rates, so it’s to be determined if rates decrease later this year.
To many conservative investors this rate environment feels like they’ve walked into a perfect situation, because our rates we earn on cash is elevated. I’d ask you to consider whether the rate we earning on our cash is keeping us ahead of inflation. Of course, the government states inflation is one thing but most people I talk to tell me it’s higher. If we are earning less that real inflation we may be losing our purchasing power.
The financial product space is always innovating and right now there are ETFs that have 100% downside protection that allow you to earn what the S&P 500 earns up to a cap. Some of them may earn well over what a C D earns. That beats the socks off what most CDs are earning, and the ETFs can be withdrawn anytime.
It’s always worthwhile making sure you’re getting the most value out of our money. If you’d like to discuss this further, please reach out at 864.641.7955.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
David tells a funny story about having mice. Here is the link to the newsletter he mentioned.
Excerpt from the show: The hurdle that some people have is taking the next step. They reached out for help, issues have been identified, a plan of action to better the circumstances has been presented, but we sometimes worry about what comes next.
I’ll tell you, it took hours to get the garage in order and the better part of a day. But the results are worthwhile. Moving on from an old advisor who isn’t helping you get to the next stage of life is in my mind a lot easier than cleaning out a garage!
Here’s the other thing; just because someone helped you get to one spot, that doesn’t necessarily mean they’re the right person to get you to the next spot. Investing and financial planning when we’re within five years of retirement is a lot different than when we have ten or twenty years before we are going to retire.
Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
It's easy when we face something we’re not familiar with to shy away from it or move on to a topic we’re more comfortable with. Recently I saw on social media a way to understand our national debt better. This was written on May 20th:
· “A million seconds ago was May 8th.
· A billion seconds ago was 1993.
· A trillion seconds ago was 30,000 B.C.
· The US national debt is now rising by $1 Trillion every 100 days.”
The Guardian recently published a Harris poll. According to the government we’re not in a recession and yet 56% of people polled believe we are currently in a recession, and 72% believe inflation is going. What I think this indicates is the growing disparity between those doing okay and those economically suffering. After all, nearly 40% of Americans don’t participate in the growth of the stock market by owning equities.
According to government stats inflation is going down and we’re not in a recession. At the start of this week the S&P 500 is 11.85% this year. It’s easy even if we are doing okay financially to not feel good about the economy. We’re reaping the consequences of over 20 years of government ineptitude such as not having a balanced budget since 2001.
The author of the post linked to a 60 Minutes interview with Federal Reserve Chairman Jerome Powell. He’s the guy who leads the board that sets interest rates amongst other duties. In the interview Powell said, “The U.S. is on an unsustainable fiscal path. The U.S. federal government is on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy. We’re effectively borrowing from our future generations. It’s time for us to get back to putting a priority on fiscal sustainability. And sooner is better than later.”
Here is a disclosure that needs to be on the last screen of the video Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
You’ve probably heard by now that Silicon Valley Bank failed last Friday.
It appears the bank rapidly took deposits over the last few years, and they needed somewhere to place their funds. And here begins the problem. The bank put money in Treasury bonds and mortgage-backed securities. When interest rates go up, bonds lose value.
A few depositors figured this out and began withdrawing their large deposits in the bank. Eventually the bank was unable to meet the demand of withdrawals. Which is a bank’s worst nightmare!
If you’ve been following this saga, you may be reading about fears of “contagion,” which is a fancy way of saying when one bank fails there is risk that other banks may fail due to fear of similar circumstances.
Just last week, head of the Fed Jerome Powell indicated that interest rates will continue to rise in his comments to Congress. The government had appeared to think inflation was coming down, and interest rate increases might slow down. But after the economy added more jobs than expected this year, Powell began indicating that the rates are likely to continue rising. It will be interesting to see if the government pauses raising rates when they meet later this month or if the Fed will continue its plan to raise rates.
What should you do? If you have a well-thought-out plan of action, you should probably do nothing.
Nick Murray, an advisor and prolific author on the market, wrote, “Wealth is not determined by investment performance, but by investor behavior.”
The goal with financial planning is doing the planning so that you don’t have to be reactionary when difficult times happen in the market. People with no plan have to play defense all the time, but we know the only way to win is by playing offense.
You can be positioned to play offense by staying invested in difficult periods if you have a plan. Time and time again I have people tell me that if only they had not sold and had stayed invested, they’d be so much better off. Selling in difficult markets is what we do when we don’t have a plan. If you don't have a financial plan now is the time to develop it.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Like a lot of people, I’ve always had a job where I work with people, and it’s always fascinated me to try to figure out why people think the way they do. People are unique, but their themes are similar.
In my role as a financial planner, I primarily assist Baby Boomers who are navigating how to retire. Or that’s often when we were first acquainted. In our initial meeting I always ask, “How are you feeling about the stock market?” You’d be surprised at the responses, but one theme repeats.
I ask this question when the stock market is doing well, and when it’s struggling like it has been recently. Naturally, the answers vary, but in our current prolonged downturn I’ve been getting an interesting response.
People have frequently said something along the lines of, “The market is down, but I believe in the market. It’ll come back, and we’ll (America) get it figured out.” I don’t disagree but think with me about the importance of our order of returns.
Steve and Bill are brothers. Bill has a few years on Steve. Bill retired in 2000, and Steve retired in 2010. They both entered retirement with $500,000 saved. They both began withdrawing $30,000 to supplement their incomes.
From 2010 to 2019 the worst market return came in 2018, but it wasn’t even a 6.5% decline. Most will recall that 2000 to 2009 was a wildly different situation. The market had four negative years with the worst of which being a drop of 38%.
Who do you think came out better? Clearly, Steve had more favorable circumstances. Steve, retiring in 2010 had over $874,000 in 2019 while taking the $30,000 away each year. Bill on the other hand was left with less than $97,000.
Managing risk in retirement is as important as managing our portfolio for returns. We call it going from an accumulation phase to an income and distribution phase.
When we’re younger and have a longer time horizon we should work to accumulate, but when we’re five years out from retirement or in retirement we should be in an income and distribution phase. The later goal being figuring out how to make our funds last as long as possible.
So, this begs the question. What is your strategy for managing your risk in retirement? If you don’t have one, we’d be happy to talk with you to share how we help our clients manage their downside exposure.
Do you have a question? Would you like to learn more? Email
Connect@ClientsExcel.com or call 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
With inflation at 40-year highs some seniors feel this year’s big cost of living increase in Social Security is falling short. Yahoo Finance had an article last week that said, “According to a new survey by the Senior Citizens League, 54% of older Americans think the 8.7% increase in the Social Security cost-of-living adjustment (COLA) this year won't keep up with inflation.”
What’s troubling is that the government’s rapid interest rate increases over the last year have done little to slow inflation. Thelatest government reportsreveal inflation is remaining elevated at 6.4%. The government has stated they are resolved to bring inflation levels down to the 2% range, which means we have a long way to go at our current rate.
It’s a juggling act. The economy has continued to grow despite the rate increases which is a problem for the government. The Federal Reserve is attempting to not break the economy, and get inflation lowered.
Interestingly, for the first time in recent memory the government is on the other side of the table from investors like you and me. Generally, the government is trying to keep the economy going and the stock market growing. AARP reports, “Nearly half (48 percent) of households headed by someone 55 and older lack some form of retirement savings, according to the latest estimates by the U.S. Government Accountability Office.”
So, the government is now on the side of the table of folks with little to no savings. What I mean by this is the government is trying to lower the cost of things for those most impacted by price increases: those with little savings. We’ve got a front row seat to see how this plays out.
What should you do? Listen in to find out...
Do you have a question? Would you like to learn more? Email
Connect@ClientsExcel.com or call 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
When we age into the time we can claim Social Security the temptation is strong to get the money as soon as we can. In fact, most people claim as soon as they can at 62. I get it. I love having extra money in my pocket, but it’s important to understand that we may be giving up quite a bit of money.
The Wall Street Journal had an article last Sunday about this topic. It said, “A recent study, funded by the Federal Reserve Bank of Atlanta, finds that retirees often give up tens of thousands or even hundreds of thousands of dollars by taking Social Security benefits too early.” The article states that researchers found that 90% of people would benefit from waiting to claim until 70, and this would increase discretionary income spending by 10% or $182,370. Did you ever think that claiming early could be that costly?
If you’ve already claimed, you’re not alone. Only 10% of people will wait until age 70. I’ve found that most people get little to no help with making Social Security decisions. The rules surrounding how to claim are daunting too. It’s been estimated that there are 81 age combinations and 567 sets of calculations to determine how and when to claim your Social Security. It’s not exactly easy to figure out. In our office we use software to analyze the best claiming strategies. The computer program will show you how you can get the most out of your benefits over your lifetime.
Unfortunately, you won’t get this help at the Social Security office. Sadly, the government is not equipped to give you advice on how to claim a benefit that you’ve paid into since you began working. Also, what I find is that most people who come into our office to talk about their Social Security have a financial advisor, and yet that advisor has never given them an objective plan for how to claim their benefits. You have to scratch your head and wonder why. After all, the difference in how we can claim Social Security can be the difference of over a hundred thousand dollars. Making the wrong decision may cost you.
If you’d like to get a Social Security report that illustrates how to get the most out of Social Security, please let us know. We can schedule a 15-minute call to get a few details to run the report. We’d be happy to provide this complimentary resource. You can reach us at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Did you ever read Sherlock Holmes? In the 1894 story entitled “The Adventure of Silver Blaze” Holmes noticed something odd when he was attempting to solve the mystery.
Holmes said, “the curious incident of the dog in the night-time” and the detail that the dog did not bark or make a commotion during the commission of the crime. Holmes concluded that the suspect must be someone the dog knew because the dog didn’t stir. If someone is breaking into a house and a dog resides there, you’d expect the dog to bark and growl.
The decline in the market this year has been analogized in some ways. Often, when the market experiences a downturn, there are lots of sudden uproar about the hit people are feeling. Just think back to the year 2020 when the pandemic started in the spring. On several trading days the market triggers paused trading because the market was selling off so quickly.
This year is different in the sense that we are familiar with who’s causing the market decline. You may have already figured out where I’m going. The government is leading us into a recession, but we’re not seeing the uproar that often coincides with market downturn. And I think it may be because we’re familiar with the culprit.
While the economy has slowed as evidenced by us technically being in a recession, it has not slowed enough to cool inflation. This means the pressure is on the Federal Reserve to do more, but they are limited in their ability to have an impact.
What this means for people in the market: First, we should not have money in the market we will need in the next ten years. However, we need our money productively allocated to maintain our lifestyle in retirement. You have options for your income money in retirement.
Second, if our market volatility is causing you turmoil consider using a hedge called a buffered ETF. This has resonated with some of our clients this year. You can be buffered against the first 15% of losses in the S&P 500. In exchange for the buffer, we are capped at earning around 15% of what the S&P 500 produces over the next twelve months.
This allows you to not have to attempt to time the market (nobody can), but allows some peace of mind that if the market drops further, you have a buffer in place. If you’d like to learn more about this strategy or others, please call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
The media and the government have gotten creative with answering whether we are in a recession or not in order to make our economic situation better than reality. The traditional definition of a recession is being redefined. Historically, the definition of a recession has been two negative quarters of growth in the gross domestic production. In the first quarter of this year the GDP declined -1.16% and at the end of June the second quarter reading was -0.90%. We are by definition in a recession.
According to Tom Siomades , the chief investment officer of AE Wealth Management, the average recession has lasted on average six to twelve months since World War II. He states in recent commentary that we should be mindful of the possibility of another six months of negative economic growth.
Remember, we want three types of funds: Liquid, protected, and growth. Check out last week’s newsletter for a description of the three types of money.
We have become increasingly spoiled by the market popping back up after recent downturns like it did in 2020. This pop effect is due in large part to the government intervening in the markets to stabilize them. Now the government is on the other side of the table from investors.
Simodaes stated, “We are not seeming impetus for the market to come back up.” Why? Because if the government lowers interest rates or uses quantitative easing to create more new money, inflation runs away.
If you’ve lost money in the first half the year, brace yourself for the possibility of more losses. This may not be a bad thing if you’re properly allocated and have a plan in place. If you’re winging it right now though, you have reason to be concerned.
The government’s hands are tied with how much they can help the economy bounce back this time. This is a problem for folks who have gotten used to the market bouncing back and taking off for more growth. This may not happen this go around. It may take longer for the economy to right itself.
Adding lighter fluid to the issue is the Federal Reserve has not stated what it’ll do at its September meeting. They could give forward guidance as to where rates may go but they are not, which is driving market sentiment down.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Wall Street has done a great job of marketing us. So much so that they have convinced us that we should sell our Amazon stock to pay our cable bill. Warren Buffett once said, “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.” We take his advice to heart. We can’t be invested in the market for ten years if we are using that same bucket of money to create income. So, what do we do?
This brings us to our last point which is our “income bucket.” The worst year for the stock market in the last hundred years was a loss of over 43%. That’s an impactful loss for the portfolio. We can’t control what the markets are doing so we separate out our income bucket from our growth bucket.
The liquid bucket and income bucket are designed to meet our lifestyle needs in retirement. We use the income bucket to cover all of our income needs for ten years. We want this money to be some place that’s protected. No, we don’t want it buried in the backyard losing purchasing power.
We want it to have some growth. Historically, we could use several asset classes to find something that provides interest or dividends. We’re looking for something that will earn four to six percent on average. This enables us to leave our growth bucket alone for ten years like Buffett suggests and capture the returns of the market.
Does this philosophy resonate with you?
Our approach enables us to tell our clients, like I tell Amelia about school, that we don’t have to be nervous about market volatility. When the difficult times come in the market hopefully you’ll remember the team at Clients Excel set your portfolio up with ten years of income. This gives the market time to recover from any potential losses it may face. We do this because our goal is for it to enable you to be worry free in retirement.
Don’t fall into the trap of being completely in equities or pulled out of the market completely. If we’re all in equities, we are suffering this year. And if we are trying to time the market by selling and buying back in at the right time we’ll likely be disappointed.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
We sometimes become quite loyal to the companies we are invested in. It may be a company we worked for or it may be an investment we inherited from our parents. Oftentimes, people in this scenario have a high concentration of their portfolio in one stock or one industry sector.
The problem with this type of investing is that sometimes companies or sectors falter and this could leave us overexposed and feeling distraught. Just as if Thriller or Boogie Woogy were to break, Amelia would be disappointed. We don’t want to be overly allocated in one sector in the event that the investment underperforms.
If we’re invested in stocks, it makes sense to have numerous companies, but often a lower cost way that requires less rebalancing is to use index funds.
An example of an index is the S&P 500. The index was created in 1957 and it was designed to represent 500 large US companies. Today there are many different types of indexes to allocate to.
We can use index funds to allocate to bonds, commodities, real estate, technology, emerging markets, international markets and the list goes on. With index funds we are diversified amongst the companies inside of the index and this prevents us from being over exposed to one company. Also what this does is it allows us to be diversified, thereby not being disappointed if a company underperforms.
When the market turns down as it has this year, it's a great time to evaluate how your portfolio has performed under stress and assess whether you need to rebalance to get your holdings in line with your priorities. Perhaps an index fund may be appropriate for you. If you need assistance with rebalancing and accessing whether your allocations are in line with your goals and objectives please call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In my twenties I loved riding and racing bicycles! Most of my races were on a closed circuit that was less than a mile long. The race would go around the closed loop for anywhere from 45 minutes or an hour.
This kind of racing gets fast! My strategy was to stay in the front third of the group of racers and then in the last lap sprint to the finish.
During that hour leading up to the finish it’s a fight to survive and not crash. Every race was an adrenaline rush, but a few of them stand out as extra memorable. The races I won are enjoyable to reminisce about, but that’s only half of the picture. Unfortunately, the ones I crashed in tend to be stamped in my mind due to the physical pain they induced.
Many of these races were in downtown settings as they naturally had turns and were easy to create a circuit. My friend Phillip and I had driven to downtown Roanoke, Virginia, for a race one summer. I was hanging in the top third of the racers. Everything seemed to be going my way until I made a turn to the right and my pedal scraped the ground. This sent me to the ground with a big thud.
Normally, if you can get to the wheel change area, you can get back in the race when something like this happens. Fortunately, I wasn’t injured and was able to get back in the race. I ended up placing eighth in the sprint finish.
Some people in the market have had it going their way until this year, but the market has made a turn. Some savers have been beaten up a little, but they may be okay if they have enough time to recover their losses. At this point they may feel like they can stay in it and live to see another day. But if they’re taking income off their positions they may be really hurting in this down market.
Later in the year Phillip and I traveled to downtown Salisbury, North Carolina, for a race. It was close to where I grew up so my parents came out to watch. They were standing just beyond the finish line. This race course was like a figure eight where on both ends of the course we navigated a small city block and then there was a wide-open stretch in between each square to race back and forth to. This allowed the race to generate a swift pace because it was essentially a sprint to each corner.
I had just upgraded to a more advanced level of competition and this race was fast! I found myself not meeting my goal of staying in the top third of the riders. A few laps into the race I was on the outside of the road to the right. We were turning left.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
It was recently revealed that the stock market had its worst first half of the year since 1970 and several analysts are indicating the market still has further to drop. The article linked here states equities “Face a triple whammy of sticky inflation, recession risks, and the threat to corporate profits sinking consumer confidence.”
We don’t have to believe the adage that nobody could have seen this problem coming.
Congressman Thomas Massise astutely warned in March of 2020 that “The popular bill to spend $2 trillion dollars and shut down our economy was ‘the biggest mistake in history.’ That bill and subsequent bills that spent another $4 trillion are the reasons we now have shortages and inflation.”
This should be common sense for the Federal Reserve, but Janet Yellen, a former Fed chair, stated she was wrong and didn’t see this coming.
When the government pulls back its money printing and raises rates it becomes easy to anticipate what will happen. The most recent example to point to is in 2018 the government raised rates, and the market went down over six percent.
In our July 2021 podcast, I warned of the coming inflationary problem we are experiencing and fortunately were able to help many prepare for what is transpiring this year.
The worst thing we can do when faced with uncertainty is to do nothing. We don’t want to be the deer caught in the oncoming car’s headlights. Like the deer, we need to move and we need to do it quickly.
When we hear people stating they did not see what is happening coming, I recommend being done with their advice like Amelia was done with Burglar Bill!
Are you positioned the best you can be if things get more dicey in the economy? Let’s find out. Call our office at 864.641.7955 to schedule an appointment.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Our idea of successful retirement planning is creating a proverbial space suit for our clients that insulates them from twitches in the financial markets that we can’t control.
We create a buffer that allows our clients to know that they have a stable bucket of money available to them for income and expenses. This bucket of money is productively growing and can be drawn down over ten years.
After we have our income and expenses bucket of money taken care of, we use another bucket of money to participate in the stock market.
If the market has a correction like this year, our client’s have the benefit of having ten years to recover. The market has always come back, but that does not prevent short-term pain. With our first bucket we lessen the pain of market losses.
When the hard times in the market happen we begin hearing pundits preach about how it’s a unique period or this has never happened before. I normally don’t give that train of thought consideration but I recently read a compelling rationale for this actually being a unique correction.
Peter Mallouk is an author and CEO for a financial services firm that manages north of $210 billion. He said in a recent interview, “I think it’s a more complicated time than normal,” noting key differences between this year’s market downturn and the past four bear markets. “‘These were four very scary bear markets but they all had one thing in common: They all had a single cause,’ Mallouk said, citing the tech bubble, 9/11, the 2008-09 financial crisis and the 2020 coronavirus pandemic.”
“In the past four bear markets, the Federal Reserve ‘was on the investor’s side’ and pumping money into the system, Mallouk said. Now, given high inflation and low unemployment, ‘this is the first bear market in a long time when the Fed is on the opposite side and wants the market to cool down,’ he added.”
Our goal as a company is to insulate our client as much as possible so that they can be less affected when things are haywire.
If we are only using one or two financial tools for retirement planning we may be disappointed when the hard times in the market come. We strive to be holistic and comprehensive in our approach to allow our clients to have the greatest opportunity at success.
Whenever you’re ready to learn more about our process, please give us a call at 864.641.7955. We’d be happy to share with you our unique Excel in Retirement process.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
When I was in college I loved riding road bicycles. One of the first full years riding, I rode about 3,500 miles. The next year I started racing. Some people didn’t have a base of previous mileage on their legs before they raced.
From the muscle memory perspective, I felt advantaged that I had done the training the prior year. I raced for two years and was able to win two races. It’s addictive. When we start physical activities, oftentimes we feel sluggish and it’s hard. But once we achieve a level of fitness our physical exertion takes less effort and becomes more enjoyable.
After I quit racing and started spending more time on career aspirations, I quickly fell out of racing shape. When I got on the bike I felt sluggish and riding took more effort. I was still in relatively good physical fitness shape, but I was riding less. Naturally, it felt more burdensome.
Without having the time to ride 6 or even 7 days a week I wasn’t able to be in “race shape” fitness. I found it hard to ride my bike when I wasn’t in race shape. I robbed myself of the ability to enjoy something I previously had enjoyed because I did not make a mental transition to the next stage in my life.
When helping people plan for retirement, I’ve observed that some folks have issues transitioning to a retirement planning mindset. Some of our readers have been great savers and have accumulated enough money to fund their retirement but you may still be playing the game. You have not transitioned to the next life stage.
Think about this: The Carolina Panthers are on the 5-yard line and up by 6 points with 30 seconds left in the game. Does Cam Newton throw a 5-yard touchdown? NO! He would kneel. The Panthers have won the game. Why would they keep playing?
When we continue playing the retirement accumulation game it may cause us to take unnecessary risks. The gains of the market over the last 12 years have become addictive like my aspirations for race shape fitness was.
The goal with planning for retirement is to figure out how to take income and distribution off of our accounts and how to make it sustainable. Figuring this out may allow you to have more peace of mind when deciding if now is an appropriate time to retire.
If something here has resonated with you, please forward this to a friend who may benefit. As always we would be happy to discuss your particular goals and objectives with you in a private comfortable settings. Call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
If you’re watching the news this week you may have seen the wild swings in the market. If one thing is certain it’s that we need to know that when we’re in the market, we may lose money. The market has been generous for over a decade due to easy money policies like ultralow interest rates and government bond buying.
The market tends to be forward looking and price events before they have happened, but the government has done a lousy job forecasting the impact of inflation. Government officials thought inflation would be “transitory” last year, but late in the game they realized it was a problem. Even knowing this, the government was still buying bonds in March which increased the money supply, increasing inflation along with it.
Stanley Druckenmiller, a seasoned money manager and billionaire, states that the economy has never had a soft landing when inflation has gotten above 4.5%. “It’s a historical fact,” according to him. What Druckenmiller is saying is we are heading for a recession.
But, what’s stopping this recession from happening now? Well, Americans are sitting on their savings which has allowed spending to continue. Once savings are depleted however, the recession will begin in haste. This may take 3 months, 6 months, or it may begin next year.
On Monday, we saw the market take a big hit, because of the higher than expected inflation numbers from the previous Friday. Advisor David Nicholas states, “The market thought inflation peaked. The Fed thought inflation peaked.” They were wrong and the market sold off. It’s further evidence that the government is gasping for answers for how to fix the inflation problem.
For these reasons, when we as advisors comprehensively help folks with planning, we suggest not having 10 years-worth of income in the market. Because remember we build all-weather proof financial plans. We help our clients figure out how to generate their retirement income from a stable bucket that cannot lose value. One that can only go up in value. This allows us to stay in the market and ride out storms like we are having this year. In the long-term, this allows our clients market positions to appreciate over time because the allocations have not affected my emotional sentiment.
If you are concerned about how your account is allocated and how the market may impact you, please call our office at 864.641.7955 or reply here to schedule a complimentary 15-minute call.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
On The Podcast This Week
Doug, our new support staff member, joins David on the podcast this week. Doug and David talk about the ideal time to retire.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Our business is growing! We’ve grown each year of our existence and we are on track to continue that pattern this year. We are growth minded, client focused, and desire to continue to serve new clients. Like most businesses, we were required to innovate during the COVID pandemic and fortunately, we came out of that situation stronger than we were.
We are growth minded, client focused, and desire to continue to serve new clients. Like most businesses, we were required to innovate during the COVID pandemic and fortunately, we came out of that situation stronger than we were.
Taxes are on sale right now. We may have talked with you previously about how it may be a good idea to convert your tax-deferred accounts to tax-free Roth accounts. If you believe taxes will be higher in the future than they are today, then this may be a good idea. We are thirty trillion dollars in debt as a country and our unfunded obligations are fatiguing to consider. The writing seems to be on the wall that taxes will have to be much higher than they are today to continue funding our government.
We’ve been able to skirt this issue in the last decade because America has been able to print more money to buy bonds and equities. But we can’t even do that now, or at least not right now. We printed too much money during the pandemic and it’s what’s causing our inflation issue. In order to tame inflation, the government is now increasing interest rates. Meaning, the government won’t be able to print more money to keep the wheels of industry turning or to make up its gap in funding. This means taxes are at an even higher likelihood of increasing than they otherwise were.
Now you may be scratching your head thinking “but why are taxes on sale?” As of last Friday, the S&P 500 was down 18.14% for the year. If you have $500,000 in your 401k and it’s down 18.14% you now have $409,300. When the market is down there is less to pay taxes on to convert to tax-free. At times, we may be able to create a situation for select clients where they will receive a bonus to enable them to make up some of their losses.
If you’d like to discover more about this, click here to schedule a 15-minute call with me.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
While it looks all but certain that we are heading into an economic recession, it’s important to consider what positive outcomes may be possible during this time. It’s also important to understand that if we do experience a setback due to market losses, we may be able to recover more quickly if we have good investing habits in place. Part of this habit is developed at the outset with clearly defined expectations on how to or how not to react when the market declines.
I recently watched a video from Craft Ventures about its raising of assets for private investors to place their money in. It mentioned that a couple iconic companies such as Google, Amazon, Airbnb, and Paypal were founded during the early 2000s Dot Com market correction. Many of us are very familiar with the success of these companies, regardless of what major obstacles have come their way. These companies are prime examples of how having the right financial habits set in place can set you up for long term success.
Ultimately, what the government is intending to do with increasing interest rates is to bring down the cost for our everyday goods. This hopefully means we’ll soon be paying less for basic necessities like food and gas. The economy tends to slow down during these times which often allows us to gain new perspectives about what’s most important to us in our lives.
For some, this could be physical assets. Others, like myself, hold family as the most important thing in our lives. Regardless of what this is for you, one thing is clear, we need to make sure that what we do have is cared for, protected, and secure.
With a well thought out, all weather proof financial plan in place, the necessity to fret about a downturn in the economy is lessened. Planning allows us to not have to dream about what we want. It allows us to work toward our aspirations, and that’s exactly what we help our clients do each and every day. Whenever you’re ready to talk more about this, please call us at 864.641.7955. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Often people attempt to guess at what will cause the next market correction, and sometimes we are taken off guard. Things like September 11th happen or the Coronavirus. Nobody saw those events coming, and they caused a major downturn in the market. These are commonly referred to as “black swan” events.
This year is different. We’ve seen this recession coming. The government announced last year that the Fed would begin increasing interest rates and decreasing its balance sheet. The government bought bonds and equities and lowered rates during the pandemic to stabilize the economy. In hindsight, the government did too much of these things and it has caused inflation to reach 40-year highs. Something had to be done to decrease prices, so rate increases were prescribed by Fed policy makers.
We recently saw the biggest rate increase we’ve had in 20 years and some people are left wondering, will the Fed go too far in pushing rates up? It feels like this is a controlled burn and the government is facilitating a potential recession, which is unlike anything we’ve seen in the recent past. The issue is the government doesn’t have many choices about how to deal with surging inflation.
So, how do we create retirement income plans when we know things will happen along the way that we can’t control? We preface any conversation with the fact that we know we will have down years in the market, but historically, the market has always gone up over time.
Next, we know in order to not be a speculator in the market, we have to have time in the market to allow for our values to increase and to be earned in the long-term. We set up two buckets.
One bucket is in the market and our goal is to advise our clients to not touch this bucket and allow it to appreciate. We seek a modest return, because if we are batting for the fences, we unnecessarily increase our risk.
Then we have a bucket of money that can only go up. It can’t decrease. We illustrate to grow less than it typically will and we draw income from this bucket that can’t lose value.
Once this bucket is depleted, we can replenish it with our other bucket that has grown. With our approach we are diversified, we have decreased risks, and our clients don’t have to wonder if they’ll have income money.
When is the right to take action on creating a retirement income plan? It’s like most things in life. When we have new knowledge and we can act it’s often appropriate to execute as soon as possible. This year it’s even more true because waiting may increase your risk of continual losses.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Shortly after the turn of the century a doctor named Gordon Lithgow in the UK coined a new term. Seeking to distinguish between the years we are healthy and functional and our actual lifespan he began using the word “healthspan.”
Dr. Peter Attia defines longevity using two things. He says lifespan is how long we live and healthspan is how well we live. Within healthspan he states there are three dimensions. There is the cognitive dimension, the physical dimension or your ability to carry out activities of daily living, and the third is our emotional dimension, which he admits is harder to quantify.
The thought process surrounding our healthspan is important to contemplate because we obviously want our healthspan to correspond with our lifespan. If you’d like to learn more about this concept, check out Dr. Attia’s website. He has a practice focused on longevity. I’ve found his insights helpful. Click here to go to his website.
The S&P 500 is down nearly 13% this year while the technology heavy NASDAQ is down over 20% this year. Years like these typically attract investors to bonds, but with interest rates going up, bond values are down also. The S&P US Aggregate Bond Index is down 8.42% this year.
I happened to be on call awhile back with a financial advisor named David Moore. He created an index that adheres to rules that the S&P 500 index was designed to follow.
The S&P 500 was created in 1957. It was supposed to only have US stocks in the index and the companies were supposed to have positive earnings for the past four quarters. These things aren’t happening any longer. To further cause issues, larger companies have a larger weighting. So, if one of the large companies has a bad earnings report it may cause the whole market to experience volatility.
Moore’s index is comprised of only US companies, and twice per year companies are removed from the index that have not maintained positive earnings. The companies are also equally weighed.
With Moore’s index, each of the stocks are weighted equally. The result when it comes to stocks is less volatility because one company does not have an outsized influence. Year-to-date Moore’s index is up 1.13%. If you’d like to learn more about this, please let us know. You can reach me by calling 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
So, you’re considering retiring, and maybe you’re wondering how to go about ensuring you have your ducks in a row. I’ll share some actionable tips for how you can make informed decisions about how to begin the retirement planning process. I’ll share with you part one of the steps we walk through with our clients and next week I’ll share the second half of our process.
Senator Portman stated a few years ago that 10k Baby Boomers retire every day in a Wall Street Journal article. The goal with any financial planning in retirement should start with attempting to help you avoid common pitfalls that you may encounter along the way. With our clients we start with the question, “How much money does it take to pay your bills each month?” If you don’t know this number, this is step one. The next area we help our clients with is determining how to get the most out of their Social Security Benefits. This decision can result in a difference of literally hundreds of thousands of dollars.
We then consider our client’s healthcare needs. Then we consider long-term care. The government states that 70% of us will need long-term care but what we find is most long-term care products are not palatable because they are “use or lose it” type scenarios.
The other topics we discuss with our clients include what we can do to lessen the risk of a sequence of returns issue. If you experience a significant loss right before you retire or right after you retire it may be a problem.
Economist Tom Hegna states that longevity is a risk multiplier. If we pass away four or five years into retirement it does not matter when we take Social Security or how much of our investment portfolio we are withdrawing because we only had a few years to plan for.
We then look for ways to ultimately lessen their taxes in retirement. Most people today have used tax-deferred savings vehicles like 401Ks or 403Bs to save for retirement. Finally, we believe in the power of diversity. If we are only using equities, bonds or insurance products, we may be disappointed when the economy experiences a hardship. We don’t use one financial product at the exclusion of others. We seek to be holistic and comprehensive in our approach. If you’ve found this guide helpful, please let me know.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
I enjoy a well thought out plan of execution, and I’m lucky because Mallory, my wife, does as well. The pain with this mentality is that we tend to analyze things and come up with a game plan, then re-examine all the possible scenarios. At any rate, we tend to go into things wide-eyed.
I haven’t always been this meticulous. In my teens and twenties, I enjoyed saying “yes” to new opportunities. It was easy to be spontaneous when you had limited bills and felt invisible. Why not jump off that cliff into the lake or ride that motorcycle, right?
In my twenties, I lived in Colorado for a couple of years, and my buddy, Chris, was out for the summer visiting. We had done a lot of hiking and camping together in Virginia, where I went to college, and naturally did a fair amount of hiking that summer in Colorado. One of the crown jewels of outdoor activities in Colorado is hiking to the top of 14,000 foot mountains. There are 54 mountain peaks in Colorado that are 14,000 feet or taller. I think I conquered five or six of them. More continued in show...
One area that I see where people could use a little extra planning is estate planning, so that they are not caught on the proverbial mountain with no water. Nobody wants to plan their demise, but having proper legal documents in place in the event that you are incapacitated or you pass away is important. I am not an attorney, but we have strategic partners that we refer our clients to assist with estate planning.
A will that goes over how your assets should be distributed is a key to ensuring that your wishes happen after you pass away. Having a healthcare and financial power of attorney is helpful if you are in the unfortunate situation of being incapacitated while you are still alive. I have sat in the hospital with a family member that did not have a healthcare power of attorney when a social worker came to visit. At that point, the pressure was put on me and other family members to decide how that person may want their end-of-life decisions made. I do not, personally, want anyone else to have to make those decisions for me. That is why we have elected to have estate planning documents drafted. We do not want to neglect this important detail.
I know this subject may be a little morbid but it is one topic that I have often seen placed on the back burner. If you have questions about estate planning or would like to be connected with an attorney outside of our office to discuss your particular situation, please give us a call at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
A couple weeks ago rates went up by a quarter point, and Jerome Powell, the chairman of the Federal Reserve, recently said nothing will stop the government from increasing rates by a half a point in May. The expectation is that if the economy tolerates it, rates may go up six times this year.
First Trust, a portfolio manager, stated in their March 18th commentary that home sales had declined in February by 7.2% and were down 2.4% compared to last year. Real estate is one of the first places that see the impact of rising interest rates because the cost to borrow often increases.
The commentary stated, “Despite affordability issues there is still significant pent-up demand, with buyer urgency so strong in February that 84% of existing homes sold were on the market for less than a month. The combination of strong demand and sparse supply has pushed median prices up 15.0% in the past year, but the good news is that price gains have decelerated since hitting a year-to-year gain of 23.6% in May. Put it all together and we do not foresee any sort of collapse in home sales even with higher mortgage rates.”
So, did the interest rates medicine work so far? It seems to have when it comes to real estate. Obviously, there are other considerations to take into account, and this is only one example. My takeaway is we are in a “wait and see” pattern when it comes to the next rate increase in May. Expect unease in the market this year because the market does not like uncertainty, so we may continue to see a market that can’t find its footing as has been the case this year.
If you’re wondering if your accounts are properly allocated for what’s happening with current events, we will run a complimentary report for you outlining the statistical probability of how your accounts may perform over the next six months. If we do nothing else for you, we’d be happy to run this report for you. Just call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
If you’ve been following the news, you may have started hearing the term “stagflation” being tossed around, so I thought I’d share what it is and tease this concept out. We haven’t had to consider this term since the 1970s, and back then the average Baby Boomer was just getting out of school and entering the workforce.
The lexicon definition is, “persistent high inflation combined with high unemployment and stagnant demand in a country’s economy.” The good news is we don’t have it yet, but market analysts are beginning to warn of the possibility of stagflation happening.
Here is a practical example of how it may become a problem. Denmark has warned that their economy may be impacted by stagflation if Russian oil imports were to end. This would theoretically cause oil prices to be inflated, productivity would slow, and jobs may go away. “The crisis will not pull the rug from underneath the Danish economy, but Russia’s brutal invasion of Ukraine will take a toll on growth,” the Danish Finance Minister Nicolai Wammen said according to Bloomberg News.
The challenge is to tame inflation and in America, the government needs to raise interest rates. We saw a small 0.25% increase last week, but at least one Federal Reserve governor is saying that wasn’t enough. Jerome Powell, the head of the Fed has said the government may raise rates six times this year, but James Bullard, who is on the board of the Federal Reserve, says it’s not enough. Bullard says the government should be looking at raising rates twelve times this year.
But here’s the problem. If interest rates move too quickly, it will slow economic output. Raising rates may be one of the few things the government can do, so how does this apply to you? Market Watch had a recent article that opened with, “Rising stagflation risks in the U.S. and Europe are raising the possibility of a ‘lost decade’ for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.”
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Many of us are left hoping for the best this year when it comes to the market. The Nasdaq is down nearly 18% this year and the S&P 500 is down close to 12%. When I’m talking with people, I normally ask how they are feeling about the market. The overall sentiment I get is, “we’re hoping for the best.”
If when I went to the foul line when I was playing basketball and I had known I was going to make the basket, I would have loved it. That known outcome would have been a relief, and I could have had greater confidence in my ability to win at basketball.
Many of us are left hoping for the best this year when it comes to the market. The Nasdaq is down nearly 18% this year and the S&P 500 is down close to 12%. When I’m talking with people, I normally ask how they are feeling about the market. The overall sentiment I get is, “we’re hoping for the best.” If when I went to the foul line when I was playing basketball and I had known I was going to make the basket, I would have loved it. That known outcome would have been a relief, and I could have had greater confidence in my ability to win at basketball When it comes to investing, we normally don’t have known outcomes, but there are some types of insurance vehicles that do have these known elements. People tend to gravitate to safety in times like these when the economy is volatile.
We want balance in our approach and to not use one type of product at the exclusion of others. With that said, when we are within five years of using a segment of our money, we believe the bucket of money we are using for income should remain somewhat consistent. We would be better off taking income from a bucket of money that we know will be in place for us. Right now, there are three places we can put money to do this. We can use the bank, but our money isn’t productive. We can use bonds, but we don’t want to do that when interest rates are going up like they are this year. When interest rates go up bond values go down. So, where’s the best place? We use fixed annuities for our income bucket. With a fixed annuity your money is going to be there no matter what which may bring peace of mind in markets like we are having this year. I’d be happy to answer any questions you may have on what I’ve covered here. You can reach us at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
The Wall Street Journal ran a headline on Monday this week that read, U.S. Retirement Funds, Heavy on Stocks, Brace for Losses. It said, “A sustained downturn could squeeze state and local government budgets.” Article here While pensions have been slowly phased out from most workplaces, many governments are still using them. But most pensions today are a far cry from how they were originally used. The first issue came about when employers began putting the burden of retirement readiness on employees in the last 1970s.
Congress passed a law in 1978 that allowed for a tax-deferred 401k. Employers thought it was a great thing because they were no longer responsible for paying an indefinite amount of lifetime income to their employees in retirement, and the employees could buy the company’s own stock in some cases. This was a double win for employers.
A pension manager used to look at a hundred-year swath of time and he or she could plot out boom and bust cycles. This is not as easy to do anymore because the government does things like keep interest rates artificially low for years on end.
Pensions are interest rate sensitive and must have normalized rates to work properly. For the better part of the last twenty years interest rates have been ultralow, so it has made generating a sure income for retirees with pensions a challenging proposition. This is the second major challenge pension systems have today.
What have governments done to compensate? They started using risk assets like equities. When equities are used, the value of the underlying portfolio fluctuates with the market. Then, how well funded the pension system is depends on ho
As a society we have experienced one challenge after another the last few years. I highlight the issues with pensions because I know that this impacts many of our clients and readers and my goal as an advisor is to help you avoid pitfalls that stand between you and a successful retirement. And we can’t do that if we are not informed of challenges. We want to be cognizant of these things because this may inform how our other accounts are allocated.
If you have a question about anything covered here, please reach out to me by calling our office at 864.641.7955. I would be happy to share with you how we help mitigate against risks in retirement.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Given the level of economic uncertainty we are experiencing this year you may be wondering if there is a better way to handle your retirement. Below, I’ll share with you how we are helping our clients.
When it comes to making sure our retirement plans are in order there seems to be a lot of people asking, “Is there a better way?” The volatility level in the markets ratcheted up this past week as Russia began its assault on Ukraine.
The timing of Vladimir Putin’s attacks seems to eerily coincide with our government’s stated timeline of increasing interest rates and ending the economic stimulus plans that began when COVID began in 2020. The new war further complicates our government’s ability to rein in inflationary pressure.
Our reduction on monetary easing is one of the leading reasons for the correction territory markets are in now. We were expecting market gyrations to continue in March before the conflict arose.
The question now becomes how will the Federal Reserve move with the Russian / Ukrainian uncertainty? The head of the Fed will have eyes directed on him as he testifies before Congress twice this week.
When it comes to timing the market or making predictions about what may happen, we should exercise caution in listening or following advice like this. But what our clients can rest on in their retirement plan is that we have different buckets performing different functions.
In retirement we advise using your money in the market as a long-term seldom touched resource that is eventually used to replenish your income bucket. Time in the market is the leading indicator of success when it comes to being in the market.
What we are trying to avoid is tapping into positions that are depressed due to market losses. If your plan has you using your money that is down, you run the risk of this bucket running out sooner than it otherwise would.
We design an income bucket to help our clients establish a method of creating retirement income. This bucket productively grows their money, and they also have the ability to know it will be there and ready for them to draw it down over time. With our process our goal is for our clients to be insulated when news of war starting or a bombing or black swan event occurs.
It’s fulfilling helping people ensure their retirement planning house is in good order. If you have a question about something I’ve covered here or would like to discuss your situation, please call us at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
The rout in the markets continues. According to the Monday edition of the Morning Brew newsletter, the Nasdaq is down over thirteen percent, the S&P is down nearly nine percent, and the Dow is down six percent this year.
Ongoing expectation that the government will increase interest rates soon and end the bond purchasing program it started during 2020 is part of the reason for the pullback.
The government recently released the inflation numbers and stated that inflation was seven percent last year. Suddenly, the hundred-dollar bill you have in the bank is worth ninety-three dollars.
Then the incessant talk about Russia invading Ukraine isn’t good for the markets. The market grows in times of predictability and we have a lot of uncertainty this year.
With these three major issues persisting, this is a great time to ensure that your portfolio is optimized for times like these. The value of a second opinion can’t be understated. And as we saw last week in the newsletter, if the strategy is “Hold on, hold on, it’ll come back,” that’s insufficient to create steady retirement income.
I’d be happy to speak with you about your specific situation and help you gain an understanding of how your money is working if that’s needed or answer questions you may have. Our desire for each of our clients is to have as much peace of mind as possible. When you’re ready, call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Over the weekend I read an article from advisor David Nicholas, and in the article, he described the power of hedging. The idea behind this concept is that as your portfolio gains interest, you begin taking some of the gains off the table. You then invest those gains in things that are hedged from losses.
Here’s an example of how this works. Forbes states that the S&P 500 gained 26.9% in 2021. Clearly, a great year for the market. If you had a portfolio of one million dollars, that’s a gain of $269,000. You now have $1,269,000.
In our hypothetical example, if the market corrected, 40% this year, your $1,269,000 would turn into $761,400. In Nicolas’ article, he writes, “'Don’t worry, the market always comes back.' If you haven’t heard this comment yet -- from a well-meaning friend or co-worker, or maybe a concerned financial professional -- you almost surely will. We’re all hoping for the best but bracing for the worst as the market continues to react to political and economic uncertainty. Your friends and colleagues aren’t wrong. Historically, the stock market always has come back, and investing in stocks has been a good way to grow retirement savings over the long term.
Of course, historical data doesn’t offer much comfort when the loss is personal, especially for investors who are in or approaching retirement and don’t have a lot of time to recover from this latest bear market. Waiting for the market to come back may not sound like much of a solution if you are retired or you’re planning to retire in the next few years and are depending on those assets for income.”
Back to your $761,400 you were left with. If the market went up 26.9% next year like it did in 2021, you’d have $966,216. If we have 25 or 30 years until we need our money to create retirement paychecks this may not be problematic. If we’re in retirement or within ten years of retirement market corrections may become more meaningful.
A possible solution may be to use hedges or remove some of your gains and place them in financial vehicles that can predictably create retirement income. If our only tool we are using in our portfolio is equities, we can’t build a financial house that’s going to shield us from economic storms. Imagine only using a hammer to build a house. If you'd like to discuss this more or have a question, call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Many of us are seeing these shocking inflationary prices in our everyday life, and the government is cognizant of it. Interest rates have been very low for a very long time, and the Federal Reserve has not had much success increasing them in recent years. It normally causes volatility, which is what investors don’t like.
The market prices in events before they happen. That’s why the government has been talking about raising rates since last year. Now we’re closing in on the projected date to begin rate increases and investors are nervous.
But here’s the catch. The government seems to feel they have to raise interest rates to lower inflationary pressure. It’s a Catch-22, and according to the head of the Federal Reserve, the plans are set to move forward with rate hikes in March.
Now, you may have heard Facebook stock prices fell off a cliff recently. MSN put it this way, “The meltdown in highflying technology stocks like Facebook is just the start of the financial changes that will probably result from the Federal Reserve’s decision to end a prolonged era of free money and make borrowing more expensive.”
Technology stocks are inherently sensitive to interest rates, so when rates go up they tend to go down. One explanation for this is tech companies use debt to finance growth and when debt gets more expensive profitably reduces.
https://www.msn.com/en-us/money/markets/facebook-s-faceplant-on-wall-street-could-be-just-the-beginning-for-some-tech-stocks/ar-AATvqC2
So, interest rates increasing may impair the growth of publicly traded companies because they can’t borrow as cheaply.
Before the revelations about what the Federal Reserve would do with interest rates or before the volatility in the market started this year our clients had a plan in place to weather the good times and the bad.
When we have years ahead of us before we need our savings to supplement our retirement income, what’s happening in the markets may not be as big of a deal. But when we’re five years out from retirement, or in retirement, the approach should change to an all-weather plan.
I hope your plan has been stress tested and is ready for the road ahead. If you’re not sure, call our office at 864.641.7955 to figure out if your plan is ready.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Volatile markets like we are having this year remind me why I became an advisor. When things go south and get difficult is where value is seen. It’s a great feeling when we are able to communicate to our clients that they will be okay. With our process, we help our clients develop a plan to weather rocky times like these.
The Washington Post put it this way. Click the link to read.
We have the perfect storm brewing with a possible Russian conflict and the expectation of rising interest rates. Last week, the Federal Reserve Chair stated that the government’s plans have not changed, but he stated the Fed would be “humble and nimble” moving forward. I interpreted that to mean that he wasn’t sure what to expect. Uncertainty is the thing the market does not like, and it’s getting it from multiple angles.
This is why I became an advisor: To help people navigate their retirement with as much ease as possible and eliminate as much uncertainty as we are able. We never lose sight of what matters and what we can control.
It’s our belief that we do not have to chase overall market returns to have a successful outcome in retirement. Productive returns and limiting volatility are our goal. It doesn’t have to be complicated, and in fact, the best things are normally those we can explain in our sleep. Learning the recipe is the challenge, but once that is accomplished, our hope is for our clients to see volatile times and not be as worried as they would be if they had no plan for the challenging time.
I’d encourage you to not delay evaluating the risk you are taking on in your accounts. Here’s an example of what we look at to help people understand where they are currently. Do you know the probability of what you’d lose with your current allocations if the S&P went down 30%? If you need assistance figuring that out, call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
The markets have been wild so far this year. On Monday, the market was trading down most of the day and at some points it was down a thousand points. But then at the end of trading the market bounced back. Expect more volatility.
In 2021, the economy experienced record growth. According to the LA Times, the stock market saw 68 record highs. But the burner may have turned on a little too hot and now our proverbial dinner is getting burned by inflation. When our money buys less product, everybody feels it.
When overheating happens, it indicates that the economy is growing too quickly and it normally can’t continue. The Federal Reserve is tasked with a huge decision:
Increase interest rates to tame inflation or keep them as they are. If the Fed doesn’t increase rates, it may prolong the inflationary problem. If they do increase rates, it may create a recession. The Fed is expected to give indication today if they will raise rates in March.
If the Fed decides to hold rates where they are at near zero, the markets will probably bounce even higher and ballooning prices will stay. I read a great analogy that Tarek Mansour gave on Twitter to describe this situation.
It’s always a good idea to assess your allocations to determine how much risk you are taking on. Your risk changes as markets change if you are in equities, you may need to rebalance.
Determine how long you expect to go before you’ll need access to your money. If it’s more than 10 years, you may not need to do anything. However, if you’re within 10 years of needing your money, I suggest removing some risk.
The traditional way to remove risk has been by buying bonds or holding cash. Neither of those is generally a winning proposition in today’s climate. Remember, when interest rates go up, bond values will go down.
At the end of the day most people will come to find that their income in retirement determined their outcome.
Most people save for years and work hard to hopefully eventually be able to retire and enjoy life. It doesn’t really matter what amount you were earning for 30 years, if at the end your money is reduced and you can’t afford your retirement. This is what the fixed indexed annuity guards against and that’s why we believe it’s an essential element to a well thought out financial plan. Call us at 864 641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Did you also know that the age of those requiring long-term care is actually decreasing? The stats shared in this newsletter are taken from Genworth.
In 2010, 81% of care recipients were 65 or older. In 2018, 57% of care recipients were 65 or older. So, younger people are needing long-term care.
Remember, that Medicare will only pay 100% of the cost at a skilled nursing facility for 20 days. Also noteworthy, 21% of people require long-term care after an accident.
The need for knowledge about this subject is only going to increase. By 2030, one billion people worldwide will be over 65. And until 2030, ten thousand Baby Boomers will turn 65 each day. 70% of individuals will need long-term care in their life-time. On average, people that need long-term care will need it for three years.
What do we do with this knowledge? Let’s start with what has historically been done.
Someone may learn the above information and say, "I want a long-term care policy." Here’s how they generally work: the person may think to themselves, “Well, if I need help and I need the most help, I guess that would be about $8,821 per month. So, I’d like a policy that will pay that amount.”
Then they may choose to have a 30-day elimination period. What this means is 30 days after you needed care, the policy will begin paying you. Sometimes they may add an inflation provision. It's common for people to experience sticker shock when they figure out how much their coverage will cost.
If the person can could afford the coverage, I’ve generally found that they probably started it in their 40s or 50s. So, the insurance company knew they would be paying for it for many years before they actually used it.
Each year the price may change for the policy, and if the insurance company that issued the policy found a lot of people in a certain state were needing the policy to payout, they may seek to increase the rates. I’ve talked with numerous people who saw their rates sore.
If the person in the above example could not afford it or was unwilling to pay for the above scenario, they may lower the monthly amount the policy will pay and increase the elimination period to 60, 90, or even 180 days.
But here’s the kicker. It's like your home or auto insurance. If you never use it, you normally lose it and all the money you put into it is gone. Sometimes you can pay extra for a return of a premium provision that will return your money if you don't use the benefit. This may increase the cost and may make it less palatable.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
One of the speakers at the conference referenced a famous quote by author John Maxwell. Maxwell once said, "When you find your why, you’ll find your way.”
Think about it. When I know why I’m doing something, I can do more of it. For example, when I register to run a three-mile race, it’s easier to put in the training miles, because I know why I’m making myself endure the difficulty of getting in shape. Before we do anything, it’s important to ask why we are doing what we’re doing.
The book illustrates the power of small changes by using a plane that’s traveling from
Los Angeles to New York City. “If the nose of the plane is pointed only 1 percent off course—almost an invisible adjustment when the plane’s sitting on the tarmac in Los Angeles—it will ultimately end up about 150 miles off course, arriving either upstate in Albany or in Dover, Delaware.”
Mike Tyson, the boxer, once said, "Everybody has a plan until they get punched in the mouth." It’s easy when the market is favorable and a major bull run is happening to take on more and more risk and it may even be encouraged depending on where your recommendations are coming from.
But bear market happens, and we get punched in the mouth. After this painful experience, we sometimes figure out we need a better plan, or at least a different plan. But this is normally not the best time to be figuring out our new plan.
A single, seemingly small, positive or negative decision may have a dramatic result.
The author is using this example to illustrate the power of bad habits, but this can also illustrate the power of good or bad financial planning. One seeming small decision to allocate a certain way may result in a wildly different result than you were expecting.
Darren Hardy, the author of the Compound Effect, said, “Unsuccessful people carry their goals around in their head like marbles rattling around in a can, and we say a goal that is not in writing is merely a fantasy.”
Obviously, I want you to be successful and glide through retirement with as much ease as possible. In order to do that, we need to have a well thought out comprehensive plan that looks at all the possible solutions available to you. Together, we can achieve that.
If you would like to receive a one-page written outline of our financial planning process, please email us at Connect@ClientsExcel.com and we’ll forward it to you. Or you may call our office at 864.641.7955. This outline explains the steps we go through with our folks and allows you a snapshot of our process.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Something I’ve learned is to set achievable goals. It's deflating to make a huge goal, then figure out weeks or months later that the goal is unrealistic.
I’ve started making yearly goals that are going to be a stretch, but I believe I can accomplish them.
This creates motivation for the next year, because when you have had success it creates positive momentum for the next year. And it allows me to have occasion to celebrate my accomplishments.
Toward the end of 2020, the Wall Street Journal had an article that I wrote about last year. Click the orange font above for a list of possible goals for retirees.
I just reread the Journal article and something new stuck out. It discusses the idea that we should strive to always be a beginner, so we should always be trying to learn new things. The title of the article is For New Year’s Resolutions, Never Think You’re Too Old to Become a Beginner.Most of us want to at least be as good mentally and physically as we are today. In order to do this, we should find new things to try to strengthen our minds and bodies. This is particularly important for me because cognitive decline has touched me closely.
In 2018, at the age of 63, my mom was diagnosed with dementia. Today she is nothing like her former self. We may not be able to stop the dreaded Alzheimer’s or dementia diseases, but we can be proactive about trying to prevent diseases.
Of course, the only medical training I have is doing CPR on a dummy, but we know that a "merry heart does good like a medicine." Creating and finding happiness in our lives is essential to our wellbeing.
The other half of that Bible verse says, "a broken spirit dries the bones." We were not created to just exist. I believe we were created for a purpose and to strive to find it. By doing this, I believe we'll find happiness.
If you’d like to learn how we help some people create a long-term care benefit that’s generally tax-free reply to this email or call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Jim Stack said, “The parallels we have today are historically very, very concerning. The current froth is the icing on the cake, and when you look through it, you see a lot of other underlying issues.”
The article began by saying, “Despite a steep 30% market correction last year, the longest bull market on record has helped the S&P 500 surge nearly 300% over the past ten years—roughly in line with the growth in the ten years preceding the dot—com crash in 2000, after which stocks plunged 40% over two years.”
A risk factor is how the government will unwind its bond purchasing program down. The government began buying bonds and equities and lowered interest rates to help the economy combat COVID-19, and there has been much debate as to what the Federal Reserve will do. They have penciled in three interest rate increases for 2022.
Hindsight is twenty-twenty and many people hold the view that the government began stimulating the economy too much in 2020 and it has accelerated inflation. We are feeling the effects now on things like food, gas, and basic services. Figuring out how to lessen the inflationary impact will be on the government’s priority list.
It’s possible that since the market tends to pre-price changes ahead of time that the interest rate hikes won’t have much of an impact. At least that’s what the government is hoping. It’s possible that the market continues up and we don’t see major problems in 2022. Keep in mind, if this is the case, I believe inflationary pressure will persist. That’s why it’s imperative to not sit on cash.
There are two main reasons to not sit on excessive cash. We define excessive cash as more than one year of bill paying money.
If we hold large amounts of cash, we are losing purchasing power. When inflation is two percent, this is not felt as easily. When it’s six to ten percent it is going to be felt.
The second reason is nobody knows what will happen. Remember, after the 2008 correction, the government used similar measures as they are using now. The methods were slightly different, but some market commentators from 2010 to 2019 were calling for a market crash that did not materialize. If we held cash through this period, we significantly hurt ourselves. There are ways to be invested and only experience gains if there is a concern.
There is a difference between gambling and taking investment risk. With a well thought approach, the risk can be lessened in your portfolio. I would be happy to discuss how we help our clients mitigate risk. Call our office at 864.641.7955 to learn more.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believe
Bloomberg ran an article this week that stated, “One of the interesting aspects of the brief selloff in stocks in late November was that breadth deteriorated markedly. The broad indexes were only down a few percentage points, but there were more than a thousand stocks making 52-week lows on a daily basis.”
So, large indexes were only down a little, but over thousand stocks were the lowest they’ve been in a year. Big companies like Apple and Facebook and Microsoft help lessen the impact of the smaller companies losing.
The article continues to explain that nearly every investor owns those large companies, because they are used as hedge. As the market decreases, they tend to rise. In the early 2000s, the hedge stock was Cisco Systems, but when the volume of trading continually declined, it was the start of the Dot-com bubble.
But many people are unwilling to get out of the big stocks because their cost basis is so low. “Psychology dictates that people don’t experience as much pain with the loss of big unrealized gains as they do with outright losses, and are willing to withstand corrections of some magnitude. If you have a 500% gain on a stock instead of a 1,000% gain, it’s still a 500% gain."
The author also explained that another advantage for the market has been people’s willingness to continue holding because it seemingly only goes up. The author concluded by saying, “I have also come across more and more investors who characterize themselves as optimists. Sure, optimism works most of the time. But there are long stretches when it doesn’t. Most people forget how painful the dot-com bust was at the time. It was a full three years before stocks finally returned higher. And don’t forget the sad period of 1929-1945. If the time you have to wait for new highs isn't for years or decades, it’s not easy to be an optimist. Remember, as recently as 13 years ago, pessimism worked as a strategy. They made a movie about it, if you recall: The Big Short.”
What To Look Out For
If you’re within ten years of retirement, what the market is doing is important to consider. How you’re allocated matters more as you get closer to using your investments for income. Consider whether what you’re doing is appropriate for your situation and verify whether it is with a trusted advisor.
David can be reached at 864.641.7955 or by emailing connect@ClientsExcel.com
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
...One of the thoughts I had as I cleaned the leaves up was that there is power is in doing small things in small sessions. Often, the hardest thing to do is the first thing, but when I practice doing a little every day, it results in accomplishments.
James Clear, a popular author, adapted the famous quote about how Rome was built when he said, “Rome wasn’t built in a day, but they were laying bricks every hour. You don’t have to build everything you want today, just lay a brick.” What bricks are you laying today?
Retirement comes with a set of adjustments, and how we set goals may need to be adjusted. I just read an interesting article about the challenges of beginning retirement, and while the article was largely geared toward men retiring, there is practicality for women as well. From the article:
“Here’s one of the main factors that lead to a good adjustment: Both of you must recognize that your husband will still have a deep need for significance and contribution—including beyond the family. This doesn’t mean that he won’t enjoy some time off. But sooner or later, many men have told me that they feel ‘rudderless.’ I should note that this is not just a “guy thing”, but it appears to be more acutely felt for men in retirement than for women in retirement. We all have a purpose for our lives, after all—deep callings and ways that we are built to contribute in a meaningful way.” For more practical tips check the article out here.
Turing a corner in life can be a rewarding time where you’re able to refocus on important things, and invest time in people and organizations that matter to you. I’ve quoted this Zig Ziglar quote before but it’s truth never fades. “Every time the opportunity (alarm clock) goes is another opportunity to get up and go.” What opportunities do you have to make an impact?
I guarantee you there are non-profit organizations close to your home that would highly value your input and assistance. You could make a major impact serving in a volunteer capacity. Or better yet, how can you serve those closest to you like your family?
Consider what you’ll aspire to achieve in 2022. Start thinking about it now, so you have time edit it or fully think it through. Then, write those goals down, so next year around this time you can see what you’ve achieved. It’s important to commit our goals to pen and paper because we can’t improve what we don’t track.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Charlie Munger is a 97-year-old billionaire and the vice-chairman of Berkshire Hathaway. You may recall Munger and Warren Buffett are primary controllers of Berkshire, and they’ve obviously both been around for a long time.
Munger was recently interviewed and stated that the stock market today is “crazier than the dotcom boom.”
From the article, “He said many companies were now trading on the US share market at prices that represented 35 times earnings – making it much harder for ordinary investors to make money on the market. It is hard to get results which could be called normal results in investing.”
This may be why CEOs and insiders have sold a record $69 billion of their stock according to a recent CNBC article. The key takeaways from the article are:
- Looming tax hikes and lofty share prices encourage many to take profits.
- As of Monday, sales by insiders are up 30% from 2020 to $69 billion, and up 79% versus a 10-year average, according to InsiderScore/Verity.
- The selling is likely to increase even more as December is often an active month for sales due to tax planning.
The Result
The government continues to use extraordinary measures to stimulate the economy. The Federal Reserve has not given a clear indication of when interest rates will be increased or when the $105 billion of money printing per month will end. The government uses the newly created money to buy bonds and presumably equities.
These drastic measures seem misplaced given the seemingly robust economy we have. But these measures may be creating an illusion of economic vitality. The challenge becomes, how do we invest in this economy?
A Possible Solution
Our philosophy is to have a diversified approach that includes:
- Investments that cannot lose principal.
- A bucket of money that is in the market and has active portfolio management.
- And a smaller portion that is more aggressively invested to combat inflation.
Obviously, the suitability of this approach will vary from person-to-person, but having your portfolio performing different tasks is prudent. This approaches allows us to attempt to earn a consistent return in different types of markets.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Sometimes half the battle is deciding beforehand how we’re going to react. We live in a sensationalized world where as soon as we look at our smart phone or TV, someone is trying to outrage, anger, or frustrate us.
The “outrage economy” has flourished in the last decade. It works though, right? Negativity sells and keeps eyeballs coming back.
A couple of weeks, I told you about going fly-fishing for the first time. Click here to read about it.
We went with a guide who had all the equipment, so we just had to show up. After that I knew I wanted to get into it, but like most hobbies, getting started comes with a cost. I finally bit the bullet and bought my gear to become a full-fledged fly fisherman last week.
I was itching to try my new rod and reel out, so the next morning I was out there trying to catch a fish. On the hour ride to the river, I told myself I was not going to get frustrated or disappointed if I did not catch a fish.
I could just imagine what the fish thought when they saw my attempts to catch them. I’m sure if they could laugh, they were having a good laugh.
It turns out that YouTube confirmed later that night that I was doing several things wrong. Naturally, I didn’t catch any fish. BUT I had a great time! I enjoyed being outside, unengaged by technology, and having time to think.
If we’re not careful, it becomes easy to allow others to dictate our emotions and control how we feel. And when we fall into this trap, the next step by those telling us to be outraged is to sectionalize us into teams. Then they tell us why the other side is wrong and why we should oppose them.
But the thing to remember is that we are in control of our emotions and of how we spend our time. It’s a challenge to be disciplined in what we spend our time on, but figuring out a balance may be necessary for finding peace.
Like many things, setting up rules beforehand for how things will go tends to create peace of mind. This is important when it comes to retirement planning as well. If we’re reacting to what the market does or any given urge, we tend to make irrational decisions. When we can outline our goals and follow a plan, we stand the best shot at long-term success in most any endeavor.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Have You Ever Considered An Allocation That Isn’t Completely Market Tied
Have you heard how real estate has been doing? If you’re like some people you may be tempted to buy property or a rental. That comes with a set of obligations that may be lengthy.
Did you know there is another way to have exposure to real estate in your portfolio without owning real estate outright?
Traditionally, this has been done by owning a Real Estate Investment Trust (REIT). Hold on though, because REITs come with details you must know. Sometimes if REITs are not traded they may have liquidity limitations. Which means you can only get money out at a certain time or after a certain period or if metrics are achieved.
If the REIT is concentrated in only one sector, obviously that’s the only exposure you have. Sometimes the fees can be hard to ascertain in REITs too. These reasons alone are enough to say “forget it!”
But like everything, companies have developed a more palatable route. You can now use a REIT that is held in an Exchange Traded Fund (ETF). Remember that ETFs are baskets or pools of various investments held jointly.
The thought process is that if one part of the fund is doing poorly, then the other parts that are doing well will pick it up. It’s a diversification tool, and the fund we use has exposure to commercial, residential, and international real estate. This creates a broad range exposure so that if one part of the industry is impacted, perhaps the other areas can balance it out.
ETFs were first introduced in the early 1990s, and they are completely liquid. So, anytime the stock market is open you may buy and sell ETFs. You can now have real estate exposure through a REIT with an ETF wrapper.
I believe this may be important, because real estate is only about 45% correlated to the overall market. That means if the market dips, REITs do not mirror those losses normally.
ou may participate in the upside of real estate industry without directly owning real estate outright. The REIT ETF we use for our clients has earned 9.28% gross since inception, which is strong!
Obviously, if there was another housing crisis like we saw in 2008 and 2009 this type of fund may be impacted. However, it may be appropriate to allocate a portion of your portfolio to real estate to lessen the impact of an equity market correction.
If you’d like to discuss if a REIT ETF is applicable for you, call us at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Do You Have An IRA or 401k?
We always get questions about Required Minimum Distributions (RMDs) especially as we get close to the end of the year. So, let’s take a look at what you need to know.
Please remember, before making any tax decisions, it may be appropriate to speak with a qualified tax preparer about your situation.
So, what is an RMD?
We make a deal with the government when we begin saving money in tax-deferred accounts like an IRA, 401k or 403b.
We agree that we won’t take our money out until we are at least 59.5 years old, and as a result, the IRS allows us to defer paying the taxes we owe on this money.
This helps us by lowering our taxes while we are working, but the IRS eventually wants their money. There is no legal way to avoid RMDs.
If you’re already taking money out of your tax-deferred accounts, you may already be satisfying your distribution requirement. However, it’s strongly advised to ask your tax advisor if you’ve met your requirement.
The IRS is serious about taking out the right amounts! If you fail to take the required amount, the IRS will penalize you by taking 50% of what you should have taken.
How do RMDs work?
After you reach the age of 70.5, for some people 72, you must begin taking money out of qualified retirement accounts. A law changed in early 2020 to make it 72 for everyone going forward. However, if you turned 70.5 in 2019 or before you fall under the old rule, and you should be taking RMDs each year.
The amount that you take out begins around 3.5% to 4% and it increases each year you live. Simply put, the IRS wants the opportunity to tax your money that has never been taxed.
If you have more than one qualified retirement account, you can satisfy the RMD from one account or you can split it up. You may take the required distribution from each qualified account.
Listen to learn more.
How to withdraw money from qualified accounts before 59.5
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
It feels like we're sliding into the end of the year on two wheels, so if you're uncertain where the economy is hopefully the content below will provide you with clarity.
The third quarter saw records in the markets, but we’ve had pervasive growth concerns. Some pundits predicted double digit growth, but GDP in the third quarter was 6.4%. Not bad, but it wasn’t what most analysts were expecting. So, where are we now that we are about halfway through the fourth quarter?
Democrats in Congress finally got a $1.75 trillion infrastructure spending bill passed to give President Biden a policy win, but our high levels of spending have already created inflationary pressure on the economy. What will additional spending do?
When the COVID shutdowns happened last year, President Trump, with the Federal Reserve immediately turned on easy money measures, and it appears the spigot was turned on a little too strong. What does that mean?
In order to keep the economy from descending into a deep recession last year, the government began creating $120 billion per month and buying its bonds and buying equities. Also, the Federal Reserve lowered interest rates, which led to greater price increases in things like homes. This liquidity from the $120 billion per month expenditure drove the market back up last year, and is partly responsible for the markets continually hitting all-time highs this year.
This led to the inflationary pressure, which has caused the Federal Reserve to vacillate on when to begin reducing the $120 billion monthly purchases and when to raise interest rates. Remember, it took four years for the tapering process to end after the Great Recession that dipped to its slowest point in 2009.
From Yahoo Finance, “BlackRock Inc.’s Rick Rieder and Allianz SE’s Mohamed El-Erian are among those warning that systemic risks will only multiply, unless monetary officials take more decisive measures to pare extraordinary pandemic stimulus. While policy makers are acutely aware of the dangers in the easy-money era, their accommodative stances are encouraging ever-increasing flows to the riskiest markets.”
Last week the Fed announced the tapering would start this month, and they would reduce the monthly purchases by $15 billion per month. Now we’ll wait to see if this causes volatility in the market.
Another challenge we face is a complete Biden reversal from last year when he said nobody would be forced to get a vaccination to it now being mandated...
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Certain people tend to play large roles in shaping our beliefs and who we become. Jerry Falwell, Sr. was one of those people for me. He's passed away now, but I want to share a few of his insights, how he thought, and his vision.
His philosophy created a legacy that is still impacting people 14 years after his death because he focused on excellence. Here’s a link to his autobiography.
Our philosophy is, “if it’s Clients Excel, then it ought to be better.” The natural question becomes, "then how do we do that?" I’ll share a few ways.
We take a listening approach. We listen to what our client’s objectives, aspirations, and goals are. We can't fully help our folks if we do all the talking.
Then we educate our clients about topics that may impact them, like taxes or estate planning or long-term care planning. After a person becomes a client, we invite them to future educational events like the ones they often originally attended with us.
We value your retirement savings like it was our own. There is nothing we recommend for you to do that we don’t do or would not do with our money. In our business many advisors are incentivized to grow your money in order to get paid more. If done improperly, this may increase a person’s risks. Growth in the absence of safety may turn out to be like a Halloween candy sugar high.
Then we communicate and we communicate frequently. Most problems can be derived from communication issues, so we remedy this by staying in touch with our clients. I don't know of too many advisors who send out weekly correspondence like you're reading.
This process has proven to be a winning combination as we have grown each year of our existence. The best part is as we continue to grow these things will only become better for clients. We are growth minded and our desire is to help our clients excel with financial confidence, protection and growth.
As a company we understand that you can do business many places, but our goal is to make going elsewhere a chore compared to our firm.
When you’re ready to explore whether we’re a fit for your financial planning needs, please reach out at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
But over the last year, something new has started to develop, and I want to share with you how it may be costing some people thousands.
We are told financial sentiment is driven by two main factors: greed or fear. It’s our basic instincts.
People tend to lean toward fear or greed, but an appropriate tone is a combination of knowing when to take risks and when to be more cautious and then developing rules for how you are invested. If you don’t have rules established beforehand, you’re just going by feelings, which is not how we want to run our finances.
If we don’t know what to do or we don’t have enough information to make a decision we sometimes default to doing nothing. In our illustration above that’s what the high school boy did. He did nothing and when he did do something the opportunity was gone.
Opportunity cost is the expense we pay when we delay making a decision, so let’s talk about why some people are hesitant.
The last 20 months have been filled with uncertainty. COVID-19 emerged and it has caused destruction, despair, and isolation. Then the government started stimulating the economy by lowering interest rates, printing money, and buying bonds and equities.
Then we had a divisive and contested presidential election that resulted in a new presidential administration. Even now things seem to be uncertain with how these things will play out in the long-term.
And many people have been reluctant to invest their retirement savings. This seems reasonable, right? Well, the bad news keeps coming.
Let’s say you have $500,000 sitting in cash (not invested) in your IRA. If you were able to make a modest 5% return, you end the year with $525,000.
There are about 231 days where the stock market is open every year. If you divide $25,000 by 231 you would get $108.23 per day. For any day you’re not invested and earning 5% in this hypothetical example you are not making $108.23. Obviously, the numbers are simplified for illustration.
That would equate lost opportunity of $2,146.50 per month when you’ve been uninvested. So, your opportunity cost is $2,146.50 per month. What can you do with $2,146.50. Does that pay your mortgage or half of your expenses? Not only are you losing money to inflation but your lost opportunity cost is significant.
If we are going to use a cash equivalent accounts, we need to establish beforehand what the parameters are for when we use it. This is why developing investing rules is important. As always, I’m happy to dive deeper on this topic if you’d like. You may call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
When referring to the stock market, many people equate the S&P 500 as the market. The S&P 500 is an index of 500 large companies, but did you know the largest companies make up a larger percentage of the index?
Apple, Amazon, Facebook, Google, and Microsoft account for 22% of the entire index. What do they all have in common? They are technology companies. The bottom 250 or smallest companies comprise just 10% of the index. The point being is the technology companies are critical to how the index performs.
The S&P 500 has more than doubled in the last five years, and it hasn’t been hard to make money in the stock market with the accommodative stance the government has taken. The government has kept interest rates artificially low since the turn of the century.
Fundamentally, we know that low interest rates are accommodative to technology companies, especially those in a start up phase. It allows them to get going with less debt. This is one of the reasons we experienced the technology crash in the early 2000s. Companies were fearful ultra low lending rates were going away. When the government begins raising interest rates, technology tends to be most quickly impacted which may lead to the overall S&P 500 being impacted. It may create a wave of disruption.
In retirement, it’s important to have a proverbial bucket of money that productively grows but can never go down. This may be a remedy for unruly markets. We need part of our money to be in the stock market for several reasons, but it’s important to use all the tools of financial planning and be well diversified. If you’d like to talk about this topic or others or you have questions, feel free to call our office at 864.641.7955.
Each year, I write a handful of things I want to accomplish down on a small card and typically fold it up and put in my wallet. I found my card from 2012 recently and I made it a goal to learn to fly fish, but it never happened that year.
I hold the philosophy that it’s better to shoot for something and miss than to never shoot. With that said, I have learned to manage my expectations for my goals. In other words, I’m realistic.
Carl, my father-in-law, had been wanting to try fly-fishing also, so we did research on how to go about learning the skill. We found an instructor named Aaron who would teach us the basics, and all we had to do was show up.
Last week, we went to Saluda River in the northern part of Greenville County to meet our instructor. I grew up fishing, but never for pretty fish. I have never been one to have the...
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Recently, I was approached by the mission’s pastor at our church about a vision for a mural in downtown Spartanburg. Jason sent over a picture of what it would look like, and he explained that the purpose was to give the community a visually appealing piece of art that would could remind people of the hope we have in Jesus.
Jason envisioned it to be a place where people could come to pray and be reminded that no matter how bad it gets; we have an eternal hope if we have trusted Jesus as our Savior. Our company was offered the opportunity to be a corporate sponsor of this project to which we accepted. I had no idea it was going to be as big as it is. If you’re ever downtown, go down Dunbar Street and check it out. You can visit HopeInTheBurg.com to see more.
On the site, there are videos of people being interviewed about the mural. Our sheriff is interviewed, and he mentioned that the people the Sheriff’s department interacts with don’t care about how much you know. They want to know how much you care about them. It was a good reminder that people will remember more how you made them feel than what you told them. I can wax and wane about financial topics in our newsletters, but helping people feel good about their financial well-being is most important.
The Benhams teach in their group to view our profession as our ministry. In order to do this, you have to ask yourself, “How can I minister to the people I interact with?” That’s a paradigm shifting concept because it changes the outlook I have for most every interaction. When you go in to a situation looking for ways to meet someone’s known or unknown need, your work becomes your ministry. That’s how society changes for the better.
As things seemingly drift further and further out of control in our society, I believe people are searching for answers. We can have hope and peace with Jesus, despite the turbulence of our society. Let’s hope, as Billy Graham envisioned, that God will move through the business community and elsewhere to bring a Great Awakening. Proverbs 29:12 states, “When the righteous increase, the people rejoice, but when the wicked rule, the people groan.” Christian and non-Christian alike all benefit when Biblical values are used.
I’m always happy to speak with you about anything I’ve covered here or answer any questions you may have. You may call us at 864.641.7955
Article Discussed: Click here
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Here’s a quick guide on how to determine if you can retire. Some of our clients come to us when they are approaching retirement, and they're trying to figure out things like:
- How should I elect to take Social Security?
- Do I have enough money to retire?
- How should I draw my money down or use it?
- What will my health insurance cost be in retirement?
- What options do I have for long-term care?
I’ll briefly break down each of those concerns and tell you how we go about answering these important questions.
The first step is determining what it takes to pay your bills each month and how much money you need for lifestyle expenses. If you don’t know this number, this is a step one.
Next, we help our folks figure out the best way to claim their Social Security benefits. This decision can literally result in a difference of hundreds of thousands of dollars. If your financial advisor has not talked about your Social Security benefits, ask yourself if you think it’s an important conversation.
There are hundreds of different claiming strategies and nuances to this decision. We will run a comprehensive Social Security Timing Report that analyzes your choices based on when you claim, what you will earn at your full retirement age, and what life expectancy you’d like to plan for.
No retirement income plan would be complete if it didn’t factor in a reduction of Social Security benefits, because the government has been warning us of this probable eventuality for more than a decade. So, we’ll factor in what a 76% reduction in benefits in 2033 will do to your portfolio. A twenty to thirty percent reduction is what most reports indicate may happen in the 2030s.
When we have the two Social Security numbers, which are what you will earn and what your benefit may be reduced to, we can figure out the most advantageous way to claim benefits. Then, we can move on to the next part of the equation.
Social Security typically only funds 40% of a person’s income in retirement. There are ways to generate income to shore up that funding gap. There are productive ways to allocate your money to equity positions to generate a somewhat reliable source of income, and this is typically achieved by active portfolio management.
Did you see Facebook went offline on Monday for hours? During the course of trading the company’s stock fell more than 5%. Commonly, people will bring their accounts that demonstrate how their money is currently invested, and many of those account statements we look at have money invested in Facebook stock.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Michael Wilson (pictured below) is a strategist for Morgan Stanley. His firm is calling for a twenty percent drop in the near term for the market. “He sees earnings revisions from American corporations ‘and higher frequency macro data pointing to a decelerating economy, amid demand pull forward, supply chain issues and margin pressure; which he forecasts could lead to a 20% drop, a near-term outcome, in a research note dated Sept. 20th.”
Speculation may conclude that the bear market could turn out to be worse. We never hope for this, because most all investors are negatively impacted by a down market in one way or another. The point to note is that we are not helpless. We can take steps to create a safety net around our portfolio.
Bloomberg ran a recent article that said, “When the story of this era in financial markets is written, it will be said that many investors were overtaken with fanciful notions of money growing to the moon, leading them to make costly mistakes that could have been avoided with simple steps to safeguard and grow their savings. But this era is not over yet, and it’s not too late to get on the smart side of history.”
When there hasn’t been a major problem in the stock market in a decade, people tend to forget what may happen. The article continued, “Expectations about what a diversified portfolio can achieve have also become silly. In its latest survey of individual investors, French lender Natixis SA reported that U.S. investors expect their portfolios to generate a long-term return of 17.5% a year after inflation, a big jump from the already unrealistic 10.9% they expected in Natixis’s 2019 survey.” The old adage, “pigs get feed and hogs get slaughtered” seems appropriate.
There are a few ways to create safety nets around your retirement portfolio. We always want to keep six months of bill paying money in our savings account. After that safety net, there are allocations you can make with your money that carry less risk or no investment risk at all. The suitability of these strategies will vary from person to person.
It’s important to know what all your options are, because if you don’t, how can you make educated decisions? I’d be happy to schedule a 15-minute call with you to talk through all of your options. You may call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
While September is great for apples, it is turning out to be a rough month for the stock market, and the culprit is multi-faceted. It’s easier on the mind when we can point to one thing that’s causing a disruption, but this time we’re not that fortunate.
Over in China, a large property development company called Evergrande is on the verge of default, and from my research, their overuse of leverage is a major contributor. The company agreed to the use of highly speculative development projects and in recent years ventured into business sectors outside of their expertise. Because world economies are interconnected and dependent on one another, this appears to have caused uncertainty in world financial markets.
A research company, Emerging Portfolio Fund Research, Inc., stated last week that “Almost $62 billion was pulled from cash accounts in the week of September 15th. Of that $51.2 billion went into equities, $16.1 billion into bonds and $37 million into gold.” Much of this appears to be motivated by the expectation that the Federal Reserve will continue its easy money policies, but that’s not what the Fed is signally.
The head of the Fed has said they may begin tampering or reducing the amount of bonds the government is purchasing. The bond buying program is one of the leading factors causing higher inflation. The government has no money. What do they do? They print money or borrow money for any venture the government undertakes. Taxes are not enough to cover government spending. So, the government creates money to buy its bonds. Thus, driving down the purchasing power of our money. When there’s more of anything, it’s worth less. In stands to reason, when there is more money in circulation, it devalues current dollars. This is government induced inflation.
This has worked out to a degree for equity investors because the market has gone straight up for more than a decade. A stock market crash would be devasting for people overly exposed to equities because it will be a double hit due to inflation. If portfolios are depressed and inflation is rampant, it could majorly impact purchasing power.
I’m always happy to discuss the topics I’ve discussed here further, answer any other questions, or share how we serve our clients. You may reach me at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In news that’ll make you do a double take, the Wall Street Journal reported last week that Robert Kaplan, a guy who sits on the board of the Federal Reserve, made multiple million-dollar-plus stock trades in 2020.
The Federal Reserve is a group of non-elected regulators who help determine what our interest rates will be, and whether the government should create currency to buy government bonds to stimulate the economy.
The officials like Kaplan are required to file public disclosures, and his fillings indicate that his trading represented at least $27 million. This is nothing out of the ordinary, though. Past board members have operated similarly. It just makes me scratch my head and think: should people who stand to directly benefit from the Fed’s decisions get to have a say in the Fed’s decisions?
Last year, the government was buying bonds issued by Apple. Kaplan’s disclosure indicates that he was trading Apple stock. Do you see what’s going on here? If there was ever an ethically gray area, this is it.
If you ever turn on CNBC, you may have seen a bald guy wearing a tie commenting on the stock market. His name is Jim Cramer. He’s normally bullish on the stock market, but last week he began blowing the alarm whistle. The reasons go on outlined in show.
Bloomberg News wasn’t far behind CNBC in reporting that “top banks came out with a nervous message about the stock market.” Deutsche, Goldman Sachs, Morgan Stanley, Citi Group, and Bank of America all weighed in that the stock market is vulnerable to a pullback.
Are you getting sucked in to the market at what may be its top? Or have you allocated your savings in such a way to minimize the downside risks?
Do you know how much risk you have in your accounts? If we do nothing else for you, we’d be happy to show you so you can be informed. If you’d like to take us up on a risk report, call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
On Labor Day I ran the Reedy River 10k with my buddy Greg. I’m glad I committed to run it because I was dreading it! It’s hard to back out when you’ve told somebody you’ll be there. When we registered, the form asked what we anticipated our completion time to be, and I must have been thinking I could fly.
We were placed in the first heat to take off, and after about a thousand yards, I was thinking there was no way I would be able to maintain this pace. So, for the next 6.2 miles, I could almost hear a vacuum sucking me to the back of the pack.
It’s easy to see people passing me and become dissatisfied. I’ve found that when I begin comparing myself to other runners who may have a “runner’s body” or have other perceived advantages, it’s easy to get sulky. But what good does that do? After all, I heard it once said that the death of contentment is comparison.
Sometimes when people meet with me after we’ve talked about their accounts, they ask how their money compares to other people. I’m always careful to answer this question.
I think they are asking a deeper question than they sometimes may even realize. I’ve found normally what they are concerned about is do I have enough to retire. It’s easy when you don’t feel like you have enough money to become discontent, but it’s self-defeating. The better perspective may be to ask, “How can I make my money last as long as possible?”
The absolute wrong perspective is to feel like you should aggressively invest because you don’t have enough time or want to increase your money quickly. We hear that from folks with differing amounts of money. Remember, just because we perceive something doesn’t necessarily mean it’s completely accurate.
The flip side of this is called “overconfidence bias.” From a website called Toptal, “Outside of finance, in a 1980 study, 70-80% of drivers reported themselves to be in the safer half of the distribution. Multiple studies – of doctors, lawyers, students, CEOs – have also found these individuals to have unrealistically positive self-evaluations and overestimations of contributions to past positive outcomes. While confidence can be a valuable trait, it can also lead to biased investing decisions.” Obviously, there is a fine balance between feeling like you don’t have enough money and feeling like you are set no matter what comes your way.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
At our church, we sing a song called The Father’s House. It’s a moving song about failure. It starts, “Sometimes on this journey, I get lost in my mistakes. What looks to me like weakness is a canvas for your strength. And my story isn’t over, my story’s just begun. Failure won’t define me ‘cause that’s what my Father does. Yeah, failure won’t define me ‘cause that’s what my Father does.” Cory Asbury, the song writer is pictured below.
Sometimes we get stuck in the past. But as Zig Ziglar used to say, “Remember that failure is an event, not a person.” He also said any time the “opportunity clock” goes off in the morning is another chance to get up and go.
When you talk to people about their finances, you inherently learn about what has worked well for them and what has been a challenge. I talk with people who have overcome major obstacles, and went on to be successful. It’s inspiring, but what is even better is when we get to help them move from a bad situation to a better situation.
In fact, when we experience setbacks, it often helps up hone our skills or create a better situation. In my life, things are normally not easy starting out. Don’t you envy the people who pick anything up and easily become proficient?
When I was in middle school, my parents wanted to home school me. I remember thinking that was fine with me. I could spend hours outside by myself. I’ve never minded some quality alone time. My parents had a challenging time teaching me the content as I got older, so they figured they should put me in school for high school.
Wouldn’t you know they picked probably the most academically challenging school to enroll me in? I was quickly overwhelmed with the more rigorous course work and my grades reflected it. I saw quite a few one legged “As” that year.
It taught me some important lessons. When the going gets tough, we have to keep going. Failure is an event. It was never me. I ended up getting a wonderful education at that school, and I’m grateful that my parents did not choose the easy route. If it had been up to me, I would have been tempted to switch schools to try to find an easier route for my kid, but my parents never offered that solution.
I think more than anything, when we face these obstacles in life, what’s really happening is Jesus is extending his hand to help. The songs goes on to say, “When the Father’s in the room. Miracles take place. The cynical find faith. And love is breaking through. When the Father’s in the room. The Jericho walls are quakin’. Strongholds now are shakin’. Love is breaking through. When the Father’s...
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
This concept relates to our finances, in that risk isn’t inherently bad. Taking that risk in a breakaway isn’t inherently bad, but it wasn’t for me. Assuming too much risk may not allow us to stay in the fight to see another day. Incorporating a plan that has the capacity for adjustments is essential.
Morgan Housel writes in The Psychology of Money, “… Room for error is underappreciated and misunderstood. It’s often viewed as a conservative hedge, used by those who don’t want to take much risk or aren’t confident in their views. But when used appropriately, it’s quite the opposite. Room for error lets you endure a range of potential outcomes, and endurance lets you stick around long enough to lets the odds of benefiting from low-probability outcome fall in your favor."
A way to incorporate room for error in your planning is to create safety nets or guardrails around a portion of your money. One way to do that is having cash on hand like we mentioned above, but after six months of bill paying it becomes unproductive to have more cash. So, what do you do?
Rolling Stone magazine recently had an article addressing the top concerns of the Baby Boomer generation. The article states, “Make sure your investments outpace typical inflation rates. There are many things that have guaranteed rates or at least no risk for loss and higher potential upside. Consider multi-year guaranteed annuities, fixed indexed annuities, and of course, make sure you’re diversified into regular indexed mutual funds. Fixed indexed annuities and multi-year guaranteed annuities are both safe options to consider because they have minimum guaranteed interest rates. Fixed indexed annuities often have lower guaranteed rates; however, they have a high potential yield of return.”
A fixed annuity not only helps you beat the typical inflation rates, it guarantees you won’t lose money in a market downturn. This type of vehicle should be used as a bond replacement, because most bonds have become unproductive with interest rates being near zero. Plus, it’s actually safer than a bond since it doesn’t carry the interest rate risks that bonds do.
If you’d like for me to do a webinar on how annuities work, please email us at connect @ clientsexcel.com and let me know. I’ve been considering this, and I value your feedback.
The video mentioned early in podcast is linked here.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Last week, the stock market continued its wild streak and continued setting records. While Investing.com had a headline that Consumer Sentiment in U.S. Plunges to Lowest Since 2011. The data was based on a Bloomberg survey.
From the article, “Consumers have correctly reasoned that the economy’s performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end,” Richard Curtin, director of the survey, said in the report.”
The government, in an attempt to keep interest rates low, is buying $120 billion worth of bonds per month. This increases the money supply and money trickles back into the stock market. When the government does this, the market goes up, but for what? While portfolio values go up, the purchasing power of those funds goes down.
For our folks who are entering retirement or are in retirement, the strategy shouldn’t be keeping up with the stock market. It’s about earning productive returns that can be repeated. When the government ends its bond buying program or an unexpected event happens and drives the market down, you may lose ground.
From the book The Psychology of Money, “But good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that can’t be repeated. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time."
When we’re able to earn consist returns we’re better off than swinging for the fence to hit a home run. In retirement, many times your income will be your outcome. If your portfolio is down your income may be diminished.
The author of the book also said, “Compounding doesn’t rely on earning big returns. Merely good returns sustained uninterrupted for the longest period of time – especially in times of chaos and havoc – will always win.”
Boy, do we have the potential for chaos and havoc? The Delta variant of COVID-19, vaccine debates, a new Middle East debacle in Afghanistan, and many others. Any one of these things can throw your apple cart off if you don’t have a well thought out financial plan to deal with it.
We have the tools to be able to help you avoid common pitfalls people face in retirement. You don’t have to get caught flat footed in the next stock market correction. We want to help you be successful! You can reach our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Sometimes I feel like I’m a researcher more than anything else. People come to me with big problems and I want to be the best possible resource I can be. I’m always listening to podcasts or buying another book to learn. And over the last few years, I’ve begun buying courses about specific topics
In a recent course, they made a distinction between “riches and wealth.” We tend to think about them as synonymous, or at least I did until I heard the difference
Riches can be income that’s only generated once, or isn’t sustainable. Think quick returns on our money that is fleeting or is not always going to be replicable. It serves us now, but we normally show back up at square one sooner or later.
Wealth, on the other hand, increases with discipline, and wealth continues to flow in because we have a replicable process for generating money. This allows us to increase our quality of life both mentally and physically. Mentally, because we are not distressed by trying to come up with solutions to the next issue that may arise.
Using our money with a wealth building mindset instead of riches mentally will inform our decision making as markets change and gyrate.
At our firm if we were interested in producing riches for our client’s we could order our client’s portfolio for that. It’s not hard, and it’s what most people do. But part of building wealth is building all weather portfolios that are capable of weathering a financial storm and even producing a return when markets become difficult.
So many times, we see people who would rather spend their time pulling their lures off the bottom the lake than using professional advisors who are trained in risk mitigation and how to help clients achieve their financial goals. As long as you’re willing to be patient like I was when I was fishing for the bottom and willing to not have access to a professional that’s fine. It takes all kinds of people to make the world go round as that saying goes.
Our desire of each of our clients is to help them build long lasting wealth in retirement so that they can focus on the important things in life. Things like the people in their lives and embracing the passing opportunities they have now. If we’re chasing riches, it’s hard to free ourselves up to enjoy the important things. Call us at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Following along can be a trap and cause us heartache if we’re not wise about who we’re taking our cues from. The Bible states that Solomon is the most wealthy person to have ever lived.
In today’s dollars some estimate Solomon would have a net worth of $1.2 trillion. For comparison, Jeff Bezos, who was the wealthiest person in the world up until last week when Amazon’s share price fell, is worth $192 billion. Solomon had over six times as much money has Bezos.
God appears to King Solomon and tells him to ask for anything. Solomon thanks God for his favor that he had shown him and his father David, and Solomon proceeds to ask for wisdom and knowledge so that he can properly lead the people of Israel.
2 Chronicles 1 states, “God said to Solomon, ‘Since this is your heart’s desire and you have not asked for wealth, possessions or honor, nor for the death of your enemies, and since you have not asked for a long life but for wisdom and knowledge to govern my people over whom I have made you king, therefore wisdom and knowledge will be given you. And I will also give you wealth, possessions and honor, such as no king who was before you ever had and none after you will have.’”
Are we asking the right questions? Solomon didn't put the cart before the horse. He knew if he had wisdom, then the other material things would flow to him. Maybe he was already wise enough to know how to ask for the right thing.
Before asking our questions we should figure out how to become more wise so that when we hear the answers, we'll know how to apply them. What good is knowledge without application?
In reflecting on these things, it seems it’s more important to pursue wisdom and knowledge so that when we have decisions to make, we can make prudent choices.
The natural question then becomes “How do I make prudent financial choices?” Years ago, I was taught in a class that everyone has a worldview. A worldview was defined as the lens through which we see the world.
It’s important to take advice from people who have a similar worldview. A worldview isn’t an opinion about whether the stock market will crash this year or not. A worldview is a moral compass that guides you.
The second thing to look for is someone who has your best interest at heart. I think the easiest way to figure this out is to observe what a person is greedy about. A person who is looking out for you is concerned about your outcome. They understand that if you have a favorable outcome, then they will have a favorable outcome.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
A Market Watch article describing the chart said, “If you have a 401(k) and you’re of a nervous disposition, you probably don’t want to look at the chart.
Even by the standards of GMO, the super-cautious money management firm in Boston best known for its famous co-founder Jeremy Grantham, say 'it’s terrifying.'”
You’d never know such dire forecast exists if you only check your portfolio balance. For perspective; around last year this time the Dow was trading around 26,000 points. Ten years ago, the Dow was trading around 14,000 points. That’s about a 60% growth in the Dow over the last decade.
It’s almost like the index has been on a sprint. What happens when the sprinter runs out of air? A pullback happens. When the market corrects, if you haven’t done your due diligence by preparing, you may be impacted.
If you’ve worked with a financial advisor, you may have had a meeting once a year where the planner said “we need to rebalance your portfolio.” Does that sound familiar?
The advisor may make changes to your account. You may be weighted too heavily in bonds or stocks, and the advisor wants you to have the appropriate split. We typically don’t talk in those terms at our firm.
We speak on asymmetrical versus symmetrical terms. The balanced portfolio above is symmetrical. It’s a nice clean circle so to speak. Fifty percent bonds, and fifty percent equities.
We use an asymmetrical approach. The first thing we do is we use a bond replacement that does not have the interest rate risks that bonds have. Also, it produces returns bonds produce when interest rates are normalized. Our bond replacement strategy is our client's safety net where they may draw income from in down markets.
Secondly, we use portfolio managers that focus on algometric investing techniques. This isn’t a “buy and hold” strategy like most symmetrical financial advisors would use. We remove the human emotion of trading in the market and rely on computer algorithms to dictate when we should buy, hold, or sell.
Remember the above situation where people just want to hold on for a little more growth in the Dow? They are using human emotion to make their decision, but this isn’t to be diminished. We’re human after all. We are emotional creatures, but our money isn’t emotional and the stock market doesn’t care what we think may happen.
We’ve found asymmetrical modeling allows our clients’ money to be all weather proof. If you’d like to discuss this further or have questions, you call us at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Inflation simply defined is when our money buys less than it used to buy. Conventional wisdom says we need equity exposure to keep up with inflation, and I don’t disagree in principle. But where it gets tricky is when we have an over exposure to stock market investments and a correction happens. A down stock market portfolio plus biting inflation is like a one-two punch to knock you out. Some people will have a hard time getting back in the fight after that.
This is why we recommend having a safety net of investments that cannot lose value. These are our fallback positions when times get tough in the economy, because taking distributions off our stock market portfolio in a down market may cause us to run out of money even quicker.
I don’t mean to harp on stock market corrections or preparing for the worst, but in retirement major losses to your portfolio matter a lot in whether you’ll financially make it or not. What’s worse is that the government has figured out how to lessen the impact of stock market corrections buy using quantitative easing. The problem is that this ultimately devalues the dollar and causes inflation.
Quantitative easing (QE) is when the government buys securities and increases the money supply to incentivize lending and investing. It increases the government’s balance sheet and the government is essentially creating money to facilitate this. This causes inflation.
It’s a double edged sword. Should the government allow the markets to naturally correct and create an unknown amount of financial pain for people or do they use QE to stabilize markets today but create a potential inflation problem later?
These issues necessitate a new approach of active portfolio management. Last week, I explained our methodology for using algorithmic models to mortgage risk in our equity positions. What that means is that we are not riding the Dow to its low, but rather through computer programs going in and out of investments to mitigate against major losses.
We have a unique approached to portfolio management that you’ll be hard pressed to find elsewhere. When you’re ready to experience active portfolio management with less fees and a comprehensive approach to your whole paradigm, please let us know. As always you can reach us by calling 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In the 1950s, economist Harry Markowitz developed a "Modern Portfolio Theory." His theory aims to maximize returns for a given level of risks. Out of this theory was birthed the idea of buying equities or stocks and holding them. Markowitz won a Nobel Peace Prize for his research.
Warren Buffett came along and popularized this style of investing, but then a hedge fund manager named Ray Dalio thought we could track data and do better than buying and holding investments. Many people are stuck investing the way people did seventy years ago, but things have changed. Dalio, pictured below. helped change that.
Dalio used computer algorithms to track data that allowed for certain triggers to be activated when trades should be executed. Obviously, a team of asset managers are responsible for managing these programs and the purpose of this investing technique is to mitigate against losses.
This investing method is called algorithmic investing. We use models that have internal algorithms that allows a client’s account to go in and out of positions depending on what’s happening in the overall market, economy, and world. We have developed strategic relationships with well renowned asset managers that manage billions of dollars using these methods.
routinely talk to people who never recovered from the 2000 to 2010 stock market performance. That decade, commonly referred to as the ”lost decade,” because since the S&P 500 index was created that was the worst decade for the index. You may have had a negative return if you had been invested in an index that mirrored the S&P 500 during that decade.
If you used the buy and hold method you saw years of negative returns, and if you were taking income off of your investments you saw your principal dissipate. Algorithmic investing is a better way to avoid this common pitfall.
Why? Because the goal of investing this way is to lessen the chance that we will have to wait years for our money to break even. If you are using your money to live on or if you like the idea of keeping your principal intact more than you like taking big gambles this may be appropriate for you. The days of riding the stock market to the bottom are over. We don't have to ride the volatility roller coaster due to our algorithmic investing methods.
David Treece would be happy to schedule a 15-minute call with you to discuss this concept more. You may call our office at 864.641.7955 to schedule a call.
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Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In this show David goes over how to adjust our goals and aspiration halfway through the year. He tells an engaging story about kayaking down the James River. Then he discusses a recent interview with economist Gary Shilling.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
It’s so predictable. It’s so hard to start again. Everything inside me doesn’t want to start the process again. I told you a while back I got busy and quit running. I needed to start back. I feel better, my mood is better, and my clothes fit better!
After a few days of running, something magical happens. It happens with most forms of exercising. The pain and agony shift to enjoyment and with running it typically means I start running faster and my body feels more comfortable.
If you are ever in need inspiration for running read the book Come Run With Me written in 1979 by Pete Strudwick. Pete was born with no feet and takes up running. In the book he tells his story of how he trains. If he can run, I can run.
Slowing down and sitting around really isn’t a combination for success in any equation during our lives. We have been blessed with time here on earth and in order to make the most of it we have to be doing or becoming the kind of person we should be
An analogy to financial planning can be easily drawn. We all know that if we start saving for retirement in our twenties, we are equipping ourselves for success down the road. But we put off and put off and avoid the discomfort and do what we we’ve always done. We may learn the behavior of those around us and replicate it for better or worse. As we approach retirement, having a written retirement plan in place becomes very applicable so that we can make logical decisions.
When we have a written plan, we have a guide for how and why our money is allocated, the ways that it is. I would be happy to work with you on creating your written financial plan. We will look for ways to optimize what you are doing and look for pitfalls people often face on their path to retirement. There’s no cost to this and there’s no obligation to hire us to help you invest your money. We’ll help you develop your plan completely for free. Call our office at 864.641.7955
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Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Even when the weatherman tells us a bad storm is coming there always seems to be an element of surprise when the storm arrives. It’s almost like we didn’t believe the meteorologist would get it right this time.
Sometimes we poke fun of people who weren’t prepared and got drenched in a downpour or sometimes we truly emphasize with people when a tornado uproots a hundred-year-old tree in their front yard like we’ve seen recently in Spartanburg.
The last thing you want to happen is for you to get a caught in a financial storm with no safety net. It’s easy in markets like these to exude confidence and grasp to squeeze out the last little bit of interest, but chasing growth with no guardrails on your financial plan leads to getting drenched when the financial storm arrives. We normally doubt it will come like we doubt the weatherman.
When you’re ready to begin building your all-weather financial plan that equips you to be prepared for an array of financial circumstances call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
I’ve interacted with countless people who are always looking over their back, waiting for something bad to happen to their 401k. They fear a stock market downturn, Congress increasing taxes, or future healthcare expenses. What people are searching to know is, “Am I going to be, okay?”
Unfortunately, some people live with these nagging thoughts, but they don’t have to. There are strategies to mitigate the risk of market downturns, our rising tax rate environment, and even long-term care expenses. We address each of these with our clients. Our goals is not to provide a financial product to you, but to solve problems and to be a voice of reason for you.
We do ourselves a disservice when we plug into products without developing our goals beforehand. When we figure out our problem we want to solve, then we can find appropriate financial solutions to fit those needs.
It’s like a teacher assigning you a math problem to do, then giving you a calculator. You may have what you need to figure out the problem, but you don’t know how to go about solving the problem on the calculator. If we can learn what the goal is we are closer to being on our way to solving the problem.
If you are worried about how your investments are allocated and wonder if you’re in good shape it may be worth investigating. I’d be happy to share more of our process of helping folks in a 15-minute call. If you click on the link HERE it will pull up my calendar and you can select a time to speak about this. I want to help you eliminate worry and fear! You can always reach us by calling 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
A logical way to determine if we can afford to retire, or if now is the right time, is to figure what your expenses are per month.
Conventional wisdom is you want to be able to replace 70% to 80% of your current income in retirement or as close to 70% as possible.
So, how do we go about projecting how much income we can draw from our savings? With stock market investments, we can look at reports that indicate what has happened in the past.
However, what the future holds may not be similar to what has happened in the past. We’ve never had $28 trillion in national debt or so many unfunded obligations as a country. We also have a budget that hasn’t been balanced in twenty years. Using past performance of the stock market to indicate what we can expect to earn in the future may be problematic.
Remember, when we are working, we are in an income and accumulation phase. What this means is that we are planning to be invested for a long period and can wait for our money to come back from stock market corrections.
When we are getting ready to retire, or we are retired, we are in an income and distribution phase. The goal becomes figuring out how I can take consistent income off my accounts and make it last for as long as possible an ideally for the rest of my life?
For our stock market positions I believe it’s essential to have active management. How we do this is we have strategic partners actively managing portfolios with varying objectives. For many retirees the goal is to lessen the impact of major market gyrations. We look to match our portfolio managers up based on your goals and objectives.
It’s not a secret in our business that we use annuities as the bond alternative when we construct financial plans. By and large, bonds aren’t effective in today’s interest climate at providing fixed income. The correct annuity can provide bond like returns and have guaranteed principal protection. What that means is that the annuities we use are safer than bonds.
When you are able to use an annuity to provide for basic lifestyle expenses and know that that block money is insured against market losses, you are able to use the equity portion of your portfolio to grow your money. Thereby, allowing yourself a greater opportunity to keep up with our rising inflation environment.
We’re not a fit for everyone, but we care about protection from both the sun and loss of principle. For many people we’ve been able to be the logical voice in their retirement planning decision. When you’re ready to learn more about how we may able to help you call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Many people have experienced amazing stock market returns over the last decade. It becomes addictive. A lot like always becoming more competitive on the bicycle, but life changes. Our circumstances change and we need to change our mentality. Ten years ago, you were younger and may have still been working. You could afford to have more risky allocations, but when you are retired, you’re typically no longer categorized as a long-term investor. You may need your money sooner rather than later. It makes sense to begin taking some risk out of your equation if you can’t wait for your money to come in a stock market correction.
I’ve had my eye on a single speed basic bike. It has one gear and is made for cruising around, nothing too serious. I found a shop in Shelby, NC, that had one and last Saturday we drove up there to buy it.
When Mallory and I went on our first date, we met in Shelby. It was about halfway between where we were both living. So, we had lunch at the pizza restaurant where we met the first time. Enough with the sap! Back to the bike analogy.
With a single speed bike there is little that can go wrong with it. Even an inept mechanic like myself can work on it. As we age, it makes sense to begin simplifying our financial plan and having a quarterback that can help you oversee what you have going on. It’s no secret that if we live long enough, we won’t always be as mentally sharp as we are today.
In today’s world, it’s not uncommon to have several jobs in our careers. At each of those employers people will commonly begin a new retirement plan. It’s important to have your accounts working in harmony to create your masterpiece financial plan.
When you’re ready to learn more about how we work with folks, just reply to this email or call our office at 864.641.7955
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
The government has also been providing liquidity to the economy by buying billions of dollars of government bonds per month. I believe this is adding to the inflationary pressure. The Federal Reserve is faced with a challenging dilemma.
Does the Federal Reserve attempt to raise interest rates? Or does it continue to allow inflationary pressure to mount? If rates go up that may cause major gyrations in the stock market, and lending may decrease. If people aren’t buying homes or cars or boats as much that’s means manufactures may lay people off. And one of the Federal Reserve stated objectives is to have maximum employment. This lessens the chances that the Federal Reserve will increase rates.
The next thing the government could do is slow down on its bond buying program, and that may cause stock market gyrations as well. It appears that the Federal Reserve is between a rock and a hard place, because the outcome probably isn’t going to be favorable either way.
This is why it’s important to have a safety net around your portfolio. If you have a portion of your money that you are guaranteed to not lose in market downturns that may allow you to take greater risk with the other portion of your finances.
We know that being invested in the stock market is the way to keep up with inflationary pressure. As inflation rises, the stock market tends to increase. That’s why it’s important to be invested in the market with a portion of your money.
But we want to be diversified so that inflation risks, legislative risks, and market risks are mitigated against. Creating a balanced approach where a portion of your money is prudently invested in the market with specific goals around why it’s invested the way it is the first step. Secondly, having a portion of your assets that cannot go down in value is critical as we approach retirement.
When the market is down, we want to avoid taking income out of our stock market investments. Taking distributions in a down market cuts into our principal and may cause us to run out of money quicker than we otherwise would have.
When the market is down, we would be better off taking distributions out of our guaranteed never to lose portion of our portfolio. This may allow us to stretch our money further.
No matter what amount of money you have, most people want to have as much of it as possible for as long as possible, and this is one of the strategies I’ve found that helps facilitate that objective.
If you would like to discuss this further or have questions, call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
The Washington Post recently ran an article titled 95-year-old might have found the key to longevity: A purposeful life.
The article described how Olga Murray, who is 96, has flourished despite the COVID lockdowns and how she has found meaning in her life. She lives a life of gratitude for the vitality she has. The article states she will commonly tell people “I feel so fortunate. You can’t imagine.” It’s amazing that thankfulness attracts blessings in our lives.
While her mother lived to be 98, Olga has done her part by eating healthy and working out three times a week. The article states, “Scientists increasingly are finding that some variation of that third factor – call it living with purpose, finding meaning in life or just engaging with something larger than yourself- can be a particularly healthy pursuit.”
A study conducted in 2019 of 7,000 older people revealed that “living with a sense of purpose can improve the quality of those final years and even prolong them.” She stated, “I have always loved children, and have endless patience with them — not as much with adults.”
At age 59 she went on a trek in Nepal and she was intrigued with how happy the children were despite what many would deem miserable circumstances. The kids were malnourished and had no toys but they had joy that was unfamiliar in industrialized countries.
She interacted with a family there and the kids were of a fortunate few that had the opportunity to go to school, but they had to walk two hours to get there. Can you imagine?
During her trip she had an epiphany that she wanted to spend the rest her life helping Nepalese children. She went back the following year and with the help of others began organizing college scholarships for a few of the children.
A few years later they launched a non-profit where hundreds of children were able to obtain scholarships and they helped house homeless children.
It’s easy to develop an identify in the work that we spend 30, 40, or 50 years doing, and once we retire it may be easy to lose purpose. There are many worthy causes that you can find purpose in by helping them by volunteering your time and expertise. Our value to society doesn’t cease when we retire, and I’ve found some of my most fulfilled clients have been those who had a reason to get up each morning. If you’d like to read the article, click here
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In 2018, Innovator Capital Management, a financial product creator, developed an investing strategy called “defined outcome” exchange-traded funds (ETFs). Today there are several billion dollars invested in their strategies.
Historically, when we’ve put money in market, we’ve not been able to determine what our outcome will be, but often commentators or advisors will discuss past performance of investments.
What defined outcome ETFs do is allow the investor a level of certainty that’s not normally found in stock market investments. The investor has exposure to broad market indexes like the S&P, Russell, or emerging markets, and in exchange for a performance cap, the investor will have a known built in buffer from losses. Innovator has three buffered ETF options.
With the first option the investor is buffered from the first 9% of losses in the S&P 500. After the first 9% of losses the investor could then lose money. The ETF holder participates in the gains of the S&P 500 one-to-one up to 9% of the gains. So, if the S&P 500 goes up over 9% the investor would hit a performance cap in exchange for the buffer from the first 9% of losses.
The second option is similar to the first option but with a 15% buffer, so the investor participates one-to-one going up to 15% and conversely down 15%.
Innovator has a third option that is an “ultra-buffer.” With this option the investor agrees to take the first 5% of losses, but would then be buffered for the next 30% down. So, if the S&P 500 fell 37%, the holder of the ultra-buffer ETF investor would experience a loss of 7%.
With bond yields being at record lows and equity valuations at record highs, it’s created a dilemma of where do you put money? This may be a viable solution for your portfolio.
I encourage you to find a competent financial advisor to help you determine if a buffered ETFs are appropriate for your portfolio. This won't be a suitable approach for all investors. There is no guarantee that the funds described here will achieve their investment objective.
If you’d like to learn more about this strategy, just reply to this email and I’ll send you a more exhaustive video explanation of buffered ETFs. Also, I'd be happy to explain the finer details of this investing strategy. You can reach me by calling 864.641.7955
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Sometimes saving money doesn’t matter...
Most of us for a period of time dutifully arose out of our comfortable beds each morning to go to work to earn money. While work should be meaningful and purposeful, we realize that if we weren’t getting paid, we’d have issues.
We are engineered from a young age to understand that money is essential. In fact, I’m trying to teach my three year-old daughter this lesson now.
We’ve raised chickens for the last four years. Since she was able to walk, she’s enjoyed helping me by carrying the chicken feed out to their coop.
She enjoyed our morning ritual until a few months ago. One afternoon I let the chickens out of their coop to walk around the yard, and I took my eyes off Amelia for a couple of moments. When I did, our rooster came rushing at her. Roosters are notoriously aggressive. Of course, this frightened her, and she didn't want to feed the chickens anymore.
We have so many eggs that we started selling them. Previously, I had told Amelia since she was helping with the chickens, she could keep the egg money for when she wanted to buy new things. On Monday I had a conversation with her that if she didn’t want to feed the chickens, then she wasn’t going to get to keep the egg money. The next morning she put her boots on and fed the chickens with me. Something about being able to buy more Play-Doh motivated her.
We are conditioned as young children to understand that money is important, but sometimes money can’t buy you what you want…
She enjoyed our morning ritual until a few months ago. One afternoon I let the chickens out of their coop to walk around the yard, and I took my eyes off Amelia for a couple of moments. When I did, our rooster came rushing at her. Roosters are notoriously aggressive. Of course, this frightened her, and she didn't want to feed the chickens anymore.
We have so many eggs that we started selling them. Previously, I had told Amelia since she was helping with the chickens, she could keep the egg money for when she wanted to buy new things. On Monday I had a conversation with her that if she didn’t want to feed the chickens, then she wasn’t going to get to keep the egg money. The next morning she put her boots on and fed the chickens with me. Something about being able to buy more Play-Doh motivated her. When my mom was 63, she was diagnosed with dementia. She now can’t go to Italy or Hawaii. If she were in one those cool places, she’d never know it. Life is too short to not fully live each day.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Warren Buffett, the famous stock market investor and billionaire, developed a stock market indicator that came to be known as the “Buffett Indicator.”
From Carmen Ang a writer at the website Visual Capitalist said, “This ratio, now commonly known as the Buffett Indicator, compares the size of the stock market to that of the economy. A high ratio indicates an overvalued market—and as of February 11, 2021, the ratio has reached all-time highs, indicating that the U.S. stock market is currently strongly overvalued.”
How this ratio is calculated is by dividing the value of the stock market by gross domestic product (GDP). The article states that the ratio is sitting at 228% which is 88% higher than historical averages.
The article went on to state that the low interest environment is one culprit of the ratio being so high. If you enjoy charts, you may enjoy reading the article linked here.
With alarming news like this, it’s important to understand the why in how you are invested. Then you can know if your allocations are correct for your purposes.
If you haven’t evaluated how your portfolio is allocated lately, I’d be happy to review it with you and evaluate whether you’re likely to meet your goals or not. If you’d like to talk through this, please call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Bitcoin is up 107.27% this year according the Morning Brew newsletter on Monday. I’m frequently asked about cryptocurrency and what I think about it. I’ll briefly share what it is and what I think about in this show.
If you’ve thought about bitcoin or considered buying it was probably because somebody you knew bought bitcoin. Cryptocurrency holders tend to be raving evangelist for it. It inspires enthusiasm.
Recently, I read a Kiplinger article titled What to Make of Bitcoin. The article states that major companies have been announcing that they are buying bitcoin. Examples of this are Tesla, PayPal, and Mastercard. This is creating demand for it, and it’s up over 450% in the last 12 months. This has caused many people to wonder if it’s a bubble.
Little is known about who actually created bitcoin. I tend to be the type of person who doesn’t like secret societies or clubs that exclude people. Bitcoin’s lack of transparency in this regard makes me raise an eyebrow. Bitcoin was created in 2009 and has experienced significant volatility during its existence. Matt Andrulot, the head of research at a financial advisory firm Verdence Capital Advisors states, “It’s volatile and speculative.”
In January, bitcoin lost 25% of its value in just two weeks, and during the coronavirus market correction bitcoin lost 49% of its value. From December 2017 to December 2018, it lost 83% of its value. Talk about a roller coaster!
From the Kiplinger article, “Because bitcoin doesn’t generate any cash flow or earnings -- and never will -- its price is driven purely by demand so it’s speculative. That said, bitcoin could still have a small place in an investor’s portfolio. But given the sky-high volatility it should take up no more than 1% to 3% of your assets.” Basically, don’t put more in bitcoin than you can afford to completely lose.
If cryptocurrencies are of interest to you, look at it like an alternative investment asset. Things like gold and silver have traditionally filled this role, but keep in mind that bitcoin is three to four times as volatile as gold.
Kiplinger article mentioned
Who created bitcoin
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
This show begins with a confession. You may have heard before that “Confession is good for the soul.” Well, I have a confession. Historically, I’ve been a curmudgeon when it comes to holidays. It started sometime in adolescence. I continue this story before jumping into a recent study.
Dalbar is a large financial services market research firm and creates reports on investor behavior. For the last 27 years they have released a yearly study titled “Quantitative Analysis of Investor Behavior (QAIB).”
From the report, “QAIB has measured the effects of investor decisions to buy, sell, and switch into and out of mutual funds over short and long-term time frames. These effects are measured from the perspective of the investor and do not represent the performance of the investments themselves. The results consistently show that the average investor earns less in many cases, much less–than mutual fund performance reports would suggest.”
Much of the report was spent discussing the stock market correction that happened as a result of the Coronavirus. In the first quarter of 2020, the average investor lost -21.93%.
“In response to the to the market crash in March:
- 30% of investors reallocated assets
- 28% of investors invested more while prices were low
- 26% of investors did nothing
- 15% of investors cashed out”
One last point from the report, “The average investor fails to realize the long-term benefits of asset ownership because they seldom stay invested in any given fund for a long enough period of time.”
Congress in junction with the Federal Reserve responded quickly by buying bonds, equities, and dropping interest rates to the floor. Without interest rates being around zero percent, our economy would be in dire straits.
It’s unlikely that interest rates will be normalized any time soon. Also, the government is massively spending. We are coming close to $30 trillion of debt. The task for how to allocate your retirement savings has never been more challenging for the average retiree.
The challenge with investing in retirement is how to allocate your assets. We know from Dalbar and other research that for stock market investments to work properly it requires a long time-frame and patience. However, in retirement many people use their savings to supplement their income.
Working with a financial advisor to develop a custom allocation strategy for your needs may be beneficial. If you’d like to discuss this further call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
I make it a point to read every day. Someone once said, “You will be the same person in five years as you are today except for the people you meet and the books you read.” Reading is important for a myriad of reasons.
Sometimes something really cool happens: I run across a book and it teaches me ideas that are life changing. I want to share a book like that with you and offer to send you complimentary copy.
A friend and I were having coffee in January and he recommended that I read a recently published book called Get Your Life Back by John Eldredge. I had read one of the author’s prior books and enjoyed it. I figured this would be a good read too.
We are inundated with information. Our smart phones keep us connected to the entire world, and research is starting to show that our technological attachment is reshaping how are brains work in ways that we don’t yet fully understand. One result of prevalent technology use is our growing inability to focus.
Eldredge states in the introduction, “There’s a madness to our moment, and we need to name it for the lunacy it is. Because it’s taking our lives hostage.” Later he writes, “We’ve been sucked into a pace of life nobody is enjoying.” We can’t even fully learn about one current event before the next ones is splashing across news headlines.
The book discusses the concept of “benevolent detachment.” We have all kinds of mind-bending events notifying us in real time on our phones or newsfeeds. All of these things require us to have some level of vested interest to understand them or even consume the content.
Benevolent detachment in practice is choosing to care about these things, but not using all of your emotional energy to invest in problems that we have little to no control in helping. It’s detaching, so that our minds have room to focus on our souls. Distraction can be an enemy.
It also discusses, how we often don’t have proper transitions from one thing to the next. We go from one task to the other without a mental break. This creates a bleed over into other areas of our lives.
Eldredge is a Christian and the point of him illuminating these issues is to make the point that when our lives are cluttered with social media or the 24/7 news cycle, or whatever it may be for you, it leaves little time to know Jesus and listen to his leading. Jesus doesn’t come to you with flashing red notifications like Facebook to tell you something, but he comes gently and softly. Our spiritual develop may be hindered by constantly hopping from one thing to the next.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
A challenge I’ve seen people face is figuring out how to begin transitioning their finances for retirement. This may be especially difficult for some people because of the stock market’s upward momentum. It’s hard to know when enough is enough or how to scale back your portfolio risk level when times are good in the market.
As bonds have increasingly paid less and less, this becomes even more problematic because we’re seeing portfolios completely constructed with equities. What that means is when a market correction happens, you may be impacted. What will that mean for your retirement aspirations?
The ten years before you are retiring and really the five years before you are planning to retire are important. I frequently talk to people who explain to me that they never fully recovered from the 2002 or 2008 crash due to when they retired or when they got out of the market. The decade before and after retirement are important
There are ways to be invested in the stock market without being overexposed to gyrations or corrections that may devastating in a retiree’s portfolio.
Also, there are substitutes for the bond portion of your portfolio. The 60% equities and 40% bonds rule from the 1990s is broken. There are innovative techniques to remedy being overexposed in the market.
If you’d like to learn more about what tool we use for the bond portion of portfolios email us at Connect@ClientsExcel.com or call our office at 864.641.7955 and we'll send you a complimentary bond alternative report.
If retirement is on your horizon in the next 5 to 10 years, I highly recommend you meet with a financial planner. Here’s a list of questions I’d ask the financial planner.
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How much of my current income will I be able to replace with my pension, Social Security, and retirement savings?
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When should I start Social Security?
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How do I figure out where I should pull money from first?
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What is a sustainable withdraw rate?
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Are there any assurances that I won’t run out of money?
This quick list should allow you to understand a financial planner’s investing philosophy and help you better understand if it resonates with what you are looking for in a planner. As always, thank you for reading and feel free to reach out by email or phone with questions or comments.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
One the asset managers we use recently released his market commentary. His name is Geremy van Arkel, and he’s a Chartered Financial Analyst with Frontier Asset Management. He states in his writing, “There are so many similarities between what is happening now and what took place in 1999 that is uncanny.”
Geremy continued, “First off, 1999 occurred following a long and extended bull market. Ten years into that bull market, the obvious leaders of the day were known, and investors couldn’t get enough of them. This created a very narrow investment market environment – much like that of today with FAANGM (Facebook, Apple, Amazon, Netflix, Google, and Microsoft).”
He goes on to explain that those six stocks comprise an overweighting in the NASDAQ and S&P. He states, in theory, one would only need to invest in those six stocks to continue making return, but that’s not rational or prudent. He analogizes that the same thing was happening in 1999 with technology stocks.
Later in Geremy’s commentary he gives 10 reasons why today’s current stock market is eerily similar to 1999. If you’d like to read his commentary send us an email at connect@clientsexcel.com, and we’ll forward it to you.
He concludes by staying, “How does this all end, and what, if anything, should we do about it? Are these the signs of a stable and efficient market environment? I will let you decide. What I personally learned in 1999 is that there is no way to win in a bubble. I find it best to simply not participate. That way, I can sit back, watch, and just enjoy the show. The second thing that I learned is that there is a difference between an investment and a speculation. Here is the rule to live by, so ears up. An investment is an asset that you can hold forever. If investors only chose investments in light of the idea that they could never sell them, they would make much better decisions. A speculation, on the other hand, is when investments are chosen with the idea and intent that they will be sold at a higher price.”
We use asset managers whose philosophy resonates with ours. At Geremy’s firm they are forward looking. Many people will talk about past performance in relation to the market, but what that fails to communicate is that the future will be vastly different than the past.
It’s important when position your portfolio to have someone who’s anticipating the future rather than someone who is looking to the past for what may happen in the future. Change happens fast. Is your portfolio geared for rapid changes?
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In this show, David begins by telling a story about his daughter's first dentist appointment. He demonstrates what working with our financial planning firm is like. And he finishes the show by talking about a recent article that discuss the current financial bubble economy.
From our weekly newsletter, "Do you remember the first time you went to the dentist? My three-year-old daughter, Amelia, had her first dentist appointment last week.
Mallory and I tried to coach her on what to expect, because when I’m going into a new situation my anxiety tends to spike. I get even more antsy when I can’t visualize what the new experience will be like. I figure, I’m probably not alone in my uneasiness in new environments.
We told Amelia that the dentist and the hygienist were going to look at her teeth and count them and clean them, and that she would need to sit really still for them to look in her mouth.
Our dentist referred Amelia to a children’s dentist. Who knew a dentist specializing in children’s care was a thing? I had no clue!
When I was a kid, everybody went to the same dentist. In many ways it seems like just yesterday that I was a kid sitting under that blinding bright light having my teeth cleaned in a big beige chair.
Since Amelia’s new dentist office is geared for children, the entire office is kid themed. It has visually appealing decorations like murals on the walls, an aquarium, and vibrant carpet.
Amelia even got a prize at the end. What a dream for a kid! After our experience last week, we’ll be equipped to remind Amelia what it will be like when she goes back for her next visit in the fall.
I’ve found that people may be reluctant to meet with a financial advisor or take the first step in creating a financial plan because they don’t know what to expect. This may even cause anxiety. It probably would for me.
When someone meets with me by phone, Zoom, or in person, the first interaction is a learning session for me. I attempt to learn as much as possible about the person I’m talking to. I make notes while we’re talking, so that I can remember the details.
My intention with this interaction is to gain an understanding of where the person is in their planning journey. I’m trying to gauge if I can add value to your financial situation, or if we can optimize what you may already be doing. ”
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Now is the time to have a plan in place. The market is hitting highs for no explainable reason, Congress is promising $1,400 stimulus checks, and we have ultra-low interest rates. Market commentators are growing increasingly leery of how this may turn out.
Tom Siomades heads the investment division of AE Wealth Management. In a recent letter he wrote, “Now we have a $1.9 trillion stimulus moving through Congress that is meant to address and redress many of the problems those policy mistakes and shifting priorities created. It will also take years to pay out and increase the size of the government. Why does that matter? More debt means more interest payments, which equals less capacity to borrow in the future and fewer funds available to reinvest in our economy and society. “How is all this borrowing and spending possible? Fed Chairman Powell’s testimony before Congress this past week reaffirming the Fed will keep rates artificially low is one major reason. In response, it is likely that prices will go up and we’ll have inflation. The Fed will have to act because it cannot ignore inflation forever; and history has shown that rates will go up and the equity markets will decline. Inflation and the Fed’s ultimate response are not the only things we should worry about; the markets themselves will have a say in where we head from here.”
We align with portfolio managers that are forward looking. We believe mitigating against market downturns is essential to a sound investment plan. When you’re ready to begin looking a comprehensive plan that factors in all the sides to financial planning, please call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Did you see the movie the Perfect Storm? I remember watching it in the movie theater. A crew on a ship are stuck out in the ocean when two major storms come together to form a “perfect storm.” The look of horror on George Clooney's and Mark Wahlberg’s faces told it all.
At one point in the movie huge waves are collapsing on the vessel from both sides. Seeing it on a big screen makes a scene come to life. It was like I was right there as the two storms collided. Did you realize that two areas of investor sentiment are colliding now. You may need to be aware of what's going with savers.
Last year, when the coronavirus created pervasive uncertainty, the stock market got volatile. So volatile that trading was halted a few times. It’s not uncommon for some people to get nervous and sell their investments during market corrections and go to cash. I’ve heard people comment that they were nervous about what President Trump would do, and they did not know how COVID-19 would impact markets. I understand their reticence. Now that Joe Biden is president, some people who were confident President Trump would guide us out of the Covid downturn are nervous that Biden’s policies will stifle economic growth and hurt industry.
In my ten years in this business, I’ve never seen circumstances similar to the way they are now. There seems to be uncertainty around every aspect of life. Devastating storms and blistering cold have consumed much of the country recently. You may be asking yourself, "what’s next?" I’m fortunate that I get to help people by lessening the impact of uncertainty around their finances. Being able to help people bring a level of certainty to their lives through financial planning is gratifying.
I meet with people weekly who are distressed about their finances and whether they will be okay. Our ability to help our clients create a greater sense of peace through positioning their assets in predicable financial vehicles can be reassuring to our clients.
The ten years before you’re retired and the ten years after you retire are critical. If you sustain major losses in your portfolio during these periods it may have lasting effects. Having a plan in place that helps to mitigate against major losses is key
If you’d like to create a more predicable financial future for yourself, I’d love to speak with you. You can reply to this email or call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In financial services there’s confusion around what a “fiduciary” is.
I’ll explain what a fiduciary is here without all the jargon. The definition was first placed into law a few years after the Great Depression. The government codified laws to guard against another financial crisis.
The SEC highlights the duty of care and the duty of loyalty. The loyalty part means that the adviser should not put his interest ahead of yours, and to disclose any conflicts of interest.
The SEC doesn’t say that there cannot be conflicts of interest but that they should be disclosed so the consumer can make the decision of whether to follow the advice even though there may be a conflict of interest.
It sounds intimidating the way the government puts it, but here’s an example from another profession. If you had a wart growing on your foot, you may make an appointment with your primary care doctor.
The doctor may be able to effectively treat the wart, but she may tell you to go see the foot doctor (podiatrist) who specializes in treating your issue. Similarly, there are things that I don’t do as advisor or things that you would benefit from having the help of another professional. When those things come up I’ll refer clients to other professionals.
The duty of care part means you always serve the best interest of the client based on the client’s objectives. “The application of the duty of care, however, may vary based on the scope of the client relationship.”
In all reality, the topic of what a fiduciary is hinges around how an advisor is paid. When you understand how an advisor is paid, it may aid you in understanding the type of investing philosophy, advice the advisor offers and what type of investors the advisor is accustomed to working with. This will vary from advisor to advisor. It’s important to be paired with an advisor that matches your investing and planning preferences.
To me it comes down to the Golden Rule, “Treat others how you would want to treated.” I believe everyone deserves to work with an advisor who looks out of their best interest. Our pledge to our clients: To always treat them as we would want to be treated.
If you’d like to speak about this topic or ask a question just reply to this email or call our office at 864.641.7955. I’d love speak with you!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
David begins this show by sharing a story about a young lady who was involved in an auto accident. Fortunately, a good Samaritan came by and freed her from her car before it burst in to flames. The two are later connected. David shares the details of how it unfolded.
David then discuss an article CNBC published an article last year titled, The Fed is buying some of the biggest companies’ bonds, raising questions over why. The points the article covered are:
- The Federal Reserve is continuing to buy corporate bonds, following up on a pledge it made in March.
- Corporate America titans such as Microsoft, Apple, Visa, and Home Depot have been among the beneficiaries.
- Questions have been raised over “moral hazard” as the Fed buys debt from companies that don’t seem to need the central bank’s help.
- Indirectly through exchange trade funds the government holds investments in companies like Apple and Goldman Sachs also.
- The government has even purchased bonds of speculative-grade.
So, what’s the government doing? The Federal Reserve seeks to stabilizes financial markets during periods of major economic volatility. This is commonly referred to as quantitative easing (QE), which is the technical name. America is currently in itself fourth installment of quantitative easing.
The government bought trillions of dollars of bonds after the Great Recession began from 2008 to 2014. During that time the Fed accumulated $4.5 trillion in assets. In September 2019, the Federal Reserve began conducting quantitative easing. This was six months before Covid 19 came to the forefront of most of our minds.
March 2020 the government announced it would begin purchasing $700 billion in assets. And quantitative easing continues today. Some commentators are saying it will be permanent. Nobody knows if QE is sustainable or how long it will last. No one is privy to knowing the future. But what I do know is that our philosophy in how we manage money is incredibly beneficial in times like these.
Active management of stock market investments combined with buckets of money that are safe from losses may be beneficial for a retiree. If you’re interested in learning more about how we build financial plans, please Click Here to schedule a call with David or call our office at 864.641.7955.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
The stock market was front and center in the news and on our social media feeds over the last week. Maybe you were confused by what was going on with GameStop, like some people who called me to ask for an explanation. I’ll break it down in simple terms.
A hedge fund noticed that GameStop has been in decline for years and saw an opportunity to buy an option. The hedge fund was betting that GameStop would continue to struggle and they bought options accordingly.
Well, a website where people gather in an online community to discuss various topics has a forum where individuals share stock picking tips. They noticed what the hedge fund was doing and did not like it.
The forum participants decided to buy GameStop stock. This was incredibly risky for these individual buyers. Buying individual stocks can be risky under normal circumstances, but what happened with GameStop came with even greater risk. The GameStop buyers wanted to drive the price up and cause the hedge fund to lose out. Somewhat miraculously these individual stock buyers were successful.
A hedge fund lost so much money they asked another hedge funding. Then many people were angered when several trading platforms began limiting trading of GameStop stock or not allowing it all. Congress began issuing statements on the issue. The political elite called for more regulations and even more taxes to remedy the situation.
Warren Buffett once said, “For investors as a whole, returns decrease as motion increases.” And that’s what we saw. The market experienced some minor gyrations that made some market participants nervous.
It may be appropriate for you to look for ways to lower your taxes in retirement. Many retirees have used tax-deferred accounts to save for retirement. There are strategies that you may be able to be implement to lessen the impact of taxation on your tax-deferred accounts.
If you have questions or would like to explore if tax reduction strategies are viable for your retirement accounts, please Click Here to schedule a quick call with me. Or if you have questions about anything I’ve covered here feel free to reach by calling 864.641.7955.
- David C. Treece
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
What will happen with the economy? Will President Biden and Democrats raise taxes? How will this impact my retirement savings? These are questions I’m hearing when I’m talking with people about their life savings, and they’re all merited.
I think it’s fair to say that many of us have never experienced this much uncertainty. I’m as worried as the next person about what will ultimately happen to America, but when people ask me the questions above, I have good news for them.
Some of our long-term readers and clients will recall that I learned the retirement planning business from my dad. Dad taught me many lessons, but one was particularly valuable. He taught me that we either want our clients to love us or at least like us a lot! Ideally, we’ll do a tremendous job for you and you will love us. But at minimum, we want you to like us a lot.
The way that we get our clients to like us is we build financial plans that are weather proof.
We were building financial plans the way we are now when Obama was president, when Trump was president, and we’ll continue while Biden is president. And we’ll maintain our philosophy for one reason. We build each of our plans to flourish in any type of political environment. There are always things that are absolutely out of our control, but there are many things when it comes to our financial planning that we can control.
So, that’s the good news: Our clients are in a position to flourish. We’ve found this may allow our clients to have peace of mind and to eliminate a level of worry. By using our philosophy, many of our clients come to like us a lot.
On our podcast this week, I continue this thought process by sharing how our planning varies from client to client. Click here to listen.
Until next week,
David C. Treece,
Financial Advisor
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
It’s no exaggeration that before we bought our house, we looked at least thirty houses. Yes, the housing market was competitive, but we looked at all kinds of houses then we finally began narrowing our needs and desires down. Finally, after months of deliberation and prayer, we bought our house.
We spent copious amounts of time on our house buying decision and we should have. It’s one of the largest financial decisions most of us make.
But then many of us work 25 to 40 years saving for retirement. We faithfully put away money. Often times we make sacrifices so that we can live more comfortably in retirement. Some of us accumulate $250,000, some of us $500,000, and some of us are fortunate enough to accumulate over a million dollars or more.
After working all those years for some of us our savings surpasses the value of our homes. Positioning our money properly and allowing a financial plan to dictate how our money is invested is as important of a decision as which house we are going to live in.
Whoever you decide to entrust to help you with your planning, we recommend you have a professional develop a financial roadmap that dictates which investments you use and how your money is allocated. This will help you avoid pitfalls and investing in things that don’t ultimately get you to your end goal.
Most people’s end goal is that they don’t want to run out of money, they want to grow their money, and maybe leave some to their kids if they have them. These things are all achievable with a well thought out financial plan that is customized to your specific needs.
When you’re ready to get started building your plan, schedule a 15-minute call with me by clicking here. On this call I’ll answer any questions you may have and discuss a starting game plan.
David C. Treece,
Financial Advisor
864.641.7955
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Some of our long-time readers may recall that we frequently hosted in person seminars. We had an ambitious calendar of events planned for 2020, but that all came to a halt early last year.
One of the seminars I had hoped to conduct was one with an elder law attorney to go over the ins and outs of estate planning. Obviously, we couldn't do that, but I wanted to find a solution...
Instead of asking you to attend an in-person seminar or watch a webinar online, I interviewed attorney Robert Merting on our podcast. You can listen to this information from the comfort of your home or vehicle.
It is no exaggeration that some attorneys charge a several hundred dollar fee to share the information Robert shares on our podcast.
This is applicable information that will be valuable to you no matter where you are in life, but it will be especially pertinent as you approach retirement.
I asked the attorney:
How would you define estate planning?
Who is a candidate for estate planning?
Why should someone consider not writing their estate planning documents themself?
What are powers of attorney and why are they needed?
What is probate?
What is a trust?
How is a will different from a trust?
What are a person’s action steps to get started on their estate plan? Click here to listen.
Planning how we want our assets to flow after we pass and getting power of attorney in place is extremely important!
Estate planning is so important that we include it on the retirement planning wheel. We attempt to address this concern with all of our clients.
Pre-planning may take the burden off of whoever is going to settle your estate. I also talk with Robert about how it can be a cost savings in the long run. Click here to listen now.
Until next week,
David C. Treece,
Financial Advisor
Click here to schedule a 15 minute call with David.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
Over the weekend the Wall Street Journal ran article entitled, For New Year’s Resolutions, Never Think You’re Too Old to Become a Beginner.
New Year’s resolutions tend to get a bad reputation. I like to think of them as goals rather than resolutions. The word resolution carries more of a symbolic meaning, and the word goal carries more of striving context. Goals are more practical and applicable.
Sure, we can write 2020 off, but let’s face it: sometimes our goals don’t even come to fruition when everything goes perfectly in the world. Some of us get discouraged and avoid setting goals for the next year. That’s unfortunate, because we lose the fulfillment of being able to celebrate our successful goal completion.
We were designed to strive. It’s important to obtain new goals throughout our lifetime. Necessity created striving in the hunter gather days because your survival depended on it. You might have to hunt, fish, grow food, or raise animals among other things.
The idea is to always have the spirt of a beginner. The article explained the progression babies go through from crawling to walking. They spend a third of their day practicing and it still takes them months to master walking. But when they learn how to walk and not crawl it opens new opportunities for them. They no longer face down all the time and they can use their hands. In other words, learning new things opens new opportunity for us.
Listen to the show to hear David Treece's list of 5 goals for retirees to have in 2021.
Is one of your goals for 2021 to be better prepared for retirement? As always, you can use the link to schedule a 15-minute call with David to discuss anything you have questions on.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Bloomberg recently ran an article that read, Rich Americans Who Fear Higher Taxes Hurry to Move Money Now.
From the Social Security Administration’s website, “Currently, the Social Security Board of Trustees projects program costs to rise by 2035 so that taxes will be enough to pay for only 75% of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman.”
From NPR article in July of this year, “Most of those who watch Medicare finances agree that the larger problem right now is how much money is being collected for the trust fund. That money largely comes from the 1.45% payroll tax paid by employees and employers. With so many people out of work because of pandemic-related shutdowns, cash flowing in has dropped dramatically.”
I could write a book on why taxes are going to go up, but I think you’re probably convinced if you’re still reading. I never like to share a problem with you without sharing a solution also.
Staging a transition from tax-deferred savings vehicles like 401Ks and IRAs to tax-free savings vehicles like Roth IRAs and other strategies may be essential to you being able to maintain your quality of life in retirement.
Who does this make sense for? Let’s find out. We have software that we can run an analysis on to see if it makes sense for you from a financial standpoint. You don’t have to depend on “hope so” or “maybe so.” Let’s control what we can control and take charge of our destiny.
Click here to schedule a 15-minute call with me to get started on your complimentary tax analysis on your accounts.
- David C. Treece,
Financial Advisor
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
What I’ve found is when most people come to me, they are looking for assurance that they’ll be okay. Most people don’t state it quite like that, but that’s the underlying concern that they have. It’s merited. We all want to know what to expect or how to prepare. And if we’re not asking these questions, we may have issues down the road of life.
The next question clients have for me is, “How can you help me have greater financial peace of mind?” Again, they don’t say it quite like that, but I’ve found that is what they are asking. I’ve found that putting together financial plans that are all weather proof generate the most peace of mind for my clients.
The first thing we do is we use financial tools that do well in bull markets and they can still do well in recessions.
Second, we don’t want to depend on just one tool to build our financial plan. If you hired a contractor to a build a house and he showed up to the job site with only a hammer and he said, “I’m prepared to build your house” it may or may not work out.
I can tell you though that my wife, being an interior designer, would not approve of the aesthetics of the house.
Third, we create plans that are nimble and capable of change. If one thing is certain, it’s that nothing stays the same. As we meet at least yearly we want to have a plan that we can make adjustments to and have room for change.
Research shows that most spend more early in retirement and their spending goes down as they age. Except for healthcare. Our spending on healthcare tends to increase with age.
It's great if you have money to self-insure and pay for your long-term care out of pocket. The problem becomes when your spouse doesn’t have any assets left to provide for their needs after your illness. I implore to you find what you can do to help yourself in this capacity. It's not possible for everybody to have long-term care due to various limitations, but it’s important to have a plan in place for your long-term care needs if possible. This issue can be addressed in a number of different ways. I’d be happy to review those with you in a 15-minute call. Click here to schedule a 15-minute call with me.
If you're ready to get started building your all weather financial plan, use the link above to schedule a call. We’ll discuss what the first steps are and there won’t be any cost or obligation.
- David C. Treece, Financial Advisor
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
It’s fascinating to me that in our day of high speed innovation, how we invest is slow to innovate. Modern Portfolio Theory was developed years ago and it’s broken. Harry Markowitz developed MPT in 1952 and won a Nobel Peace Prize for it.
Investopedia.com states, “Modern portfolio theory (MPT) is a theory on how risk-averse investors can construct portfolios to maximize expected return based on a given level of market risk.
Leland B. Hevner in an article states, MPT dictates that portfolios be designed to match the risk tolerance of each investor using asset allocation techniques. Then they are to be held for the long-term. Because these portfolios have no sensitivity to market, they are dangerously vulnerable to market crashes.
Hevnver goes on to state that we saw portfolios that were constructed using MPT experience 30% to 50% losses in 2008 during the Great Recession and states we saw these portfolios strained again this year with the coronavirus pandemic.
The average portfolio construction for those within a 10-year window of retirement is normally problematic. Why? Because many portfolios are setup using MPT and they are on a set it and forget trajectory.
A better way is to use professional money managers who dynamically position your investments. By doing this, when economic storms happen, we can potentially mitigate losses and develop a more consistent return.
Often, at our firm we use mutual funds and exchange traded funds that are either evaluated on a daily or monthly basis in an attempt to ensure your investments are not sustaining massive losses.
But why is set it and forget it method not okay for a retiree? Well, number one volatility is here to stay. We’ve seen thousand-point drops in the market somewhat routinely the last few years.
Right now, the market is running up on the hope that a Covid vaccination will get things back to normal. The market likes when the rules stay the same. When the rules shift, the market gets nervous. So, when more regulations come or higher taxes, volatility may increase.
Our goal is to avoid violent downturns in the market. Our goal is to create an all-weather financial plan where you are able to make a return, but attempt to limit your downside losses.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
There’s a lot of chatter about what will happen politically right now. One side of the political spectrum says the election is settled. The other side says Trump’s pleas of election fraud are warranted.
No matter where you stand on the question, the most important thing you can do when it comes to your retirement planning is plan for the worst and hope for the best.
The biggest question for many people is “Do you think tax rates will be lower or higher for you in the future?
If you’re like most of the people we interact with (both Republican and Democrat) you probably think taxes are going up in the future.
And for good reason. At last check, America is $27.3 trillion in debt. And Joe Biden is talking about more stimulus payments.
I just read in the Spartanburg Herald about another restaurant going out of business. As a business owner I can empathize.
I understand the blood, sweat, and tears that go into building a business. So, I get the desire to help people now. But when we help ourselves now, we pay for it with future obligations.
If you’re like many of our clients you have used tax-deferred accounts like 401Ks, 403Bs, and IRAs to save for retirement. I’m afraid the taxes on those accounts will come due for many people when tax rates are higher.
But I’m not here to beat up on 401Ks. You may have greatly benefited from them. You may have gotten a company match on your contributions and you lowered your taxes while you were working.
But now things are changing and you may be able to save taxes in the future if you put a plan in place now to mitigate your tax exposure.
I elaborately explain this on the podcast this week. Please take a listen by clicking here.
David C. Treece,
Financial Adviser
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
David further expands on our Empowering Women in Retirement topic. He discusses the 3 legged stool of retirement planning and expands on practical approaches we can all take in our financial planning. He also shares what to look for in a financial advisor. He expands and explains each of these points.
5 Criteria for a Financial Advisor
• Listen
• Open and honest
• Respond in a timely manner
• Speak clearly
• Create a written retirement plan and review regularly
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
Did you know that 90% of all women will eventually be solely in charge of household finances? Unfortunately, that can also be very scary for some. To me this was very exciting.
I try very hard to empower women around me when it comes to financial planning. One of the reasons I wanted to do the podcast this week is because, based on a recent survey, it was found that only 20% of women feel very well prepared to make wise financial decisions.
If 90% of women are going to be solely in charge of finances, would you agree that you need to be 100% prepared to make financial decisions?
It isn’t uncommon for us to encounter a couple where the man has been the sole person in charge of the finances; this can lead to unforeseen problems if and when the husband makes decisions not planning for what will likely be his death prior to his wife’s.
Think of this: What happens if he was the primary or even sole bread winner? What becomes the financial reality if his wife is left behind and hasn’t been involved in the finances or the financial decisions?
We have seen scenarios where the woman is left without the financial resources that she needs to maintain her lifestyle.
We are not saying women have to control all household finances. What I am saying is you have to be involved. You have to make sure your voice is being heard. It is completely alright if you are married to have a different investment philosophy than your spouse.
Women sometimes more conservative investors than men. What you need to make sure of is the advisor you work with hears both of your voices.
They have to listen to concerns from both of you, because an average women live five years longer than men. Make sure both of your lifetimes are being planned for.
David expands on this further in our podcast this week. Please take a listen.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
On this show David cover three segments. First, he goes over some current events, then he covers a behavioral finances study then we conclude by going over what the exceptions are to withdrawing money from your IRA early are. Remember, if you’re younger than 59.5 years old if you take money out of your tax-deferred plan like your 401k you’ll be penalized in most cases. We’ll go over what the exceptions to that rule are.
Next week, our show will be geared towards women and what they face in retirement. It’s no secret that women often live longer that us guys. We’ll give some actionable steps for retirement and what to look out for. We think it’ll be a really cool show!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
What will happen to the national debt under a Trump or Biden presidential administration? David outlines possible outcomes and what that could mean for your retirement assets. Also, he discusses what happened last week in the markets.
Everything sold off including bonds and gold. He tells listeners what they may be able to do to hedge against this issue. Also, he discuss what Nobel Prize winning economist Robert Shiller has recently found.
Shiller's Crash Confidence Index is measured based on asking investors “What do you think is the probability of a catastrophic stock market crash in the U.S., like that of Oct. 28, 1929, or Oct. 19, 1987, in the next six months, including the case that a crash occurred in the other countries and spreads to the U. S.?” Their answers have been fairly bearish and the lowest readings of confidence he’s ever seen.
David finishes by telling listeners what they can do protect their life savings from the whims of the market.
Thanks for listening!
Show 15 Principle Protection Plan Discussed
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
Are you still using the outdated antiquated 60% equities / 40% bonds portfolio allocation?
That rule originated in the mid 1990s when bonds were paying 6% to 7%. That’s not the case anymore.
With interest rates hovering near zero, the 60/40 rule is broken. Many bonds are not even keeping up with inflation, so using bonds may be problematic.
Couple this with the new reality that corporate bankruptcies are piling up due to Covid-19. From the Financial Post: “Bankruptcy filings are surging due to the economic fallout of COVID-19, and many lenders are coming to the realization that their claims are almost completely worthless. Instead of recouping, say, 40 cents for every dollar owed, as has been the norm for years, unsecured creditors now face the unenviable prospect of walking away with just pennies — if that.”
Corporate bonds have always carried default risk but it appears this is becoming more of a concern.
The challenge all investors face is volatility! And many people are wondering when the next drop in the market could come. The stock market is a growth engine, but the stock market is NOT an income engine.
Once retirement is on the horizon, we need to begin shifting our focus towards income and distribution. How will you effectively produce income once your work paychecks stop?
You may already know why the stock market is not an income engine. The market is unpredictable. It’s common to hear commentators say the market just always goes up. While that may be true overall, if you were in the market from 2000 to 2010 you may have experienced a negative average return like many investors did.
What happens when you need to take income off of your accounts when the market is down? You eat away at your principle investment very quickly.
We all need to remember that retirement is different. What I mean by that is retirement brings a new set of goals — a new set of objectives, if you will. How many of you can remember the name of the pediatrician you went to when you were kids?
Why don’t you still see that pediatrician for medical care? Because you outgrew that physician’s area of expertise.
Retirement is much the same way. And it makes perfect sense that the strategies we use to get to retirement may be different from the strategies we use to get through retirement.
I continue on this train of thought in the podcast this week. Click here to listen.
David continues on this train of thought in the podcast this week. Listen in for more practical tips.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
In this show David Treece, a financial adviser, shares with you his election analysis and explains how COVID-19 has impacted this election. He explains how this election may affect you and your retirement. Davidalso shares how we build all weather financial plans at Clients Excel that are built to withstand market volatility. Also, he shares with listeners reasons why you may want to consider a Roth IRA conversion and why some people probably don't need to consider a Roth conversion. David ends the show by discussing what everyone's financial plan must have. He covers a lot of useful content in this show!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
David Treece shares some potential consequences to this year’s presidential election. And he shares with you a new investment idea that our clients have been enjoying!
"You know, I believe the economy is better off with competition. We don’t have to look hard to see enterprises, companies or government entities that have a monopoly. In fact, sometimes the government will intervene and break companies up when they become too big. But what tends to happen when one organization has the corner on the market? Customer services becomes secondary, the company isn’t as competitive as it used to be, and maybe there are less options… Why do you need options for what you can buy? If that company is the only choice, they can dictate what products come to market. It would be like if one farmer grew all the vegetables. If he didn’t want to grow corn that year, oh well... We don’t get corn. But if there are multiple farmers if one farmer chooses to not grow corn no problem the consumer can buy corn from the other farmers who did grow it.
I put a lot of thought into voting. I always have. I’m 36 and the first election I followed closely was in 1996. Senator Bob Dole was running against Bill Clinton. I actually have a Bob / Jack Kemp sign in my garage now. I was 12 years old then. I quickly registered to vote when I turned 18 and if I’ve missed an opportunity to vote since turning 18, I am not aware of it. I’ve always felt that elections were really important and people sacrificed for our ability to vote. It should be taken seriously.
So, I’ve been thinking a lot about this year’s presidential election. I think one of the best things President Trump has done for America is cut regulations. As a business owner, I live by the Golden Rule. "Do unto others what I would want done to me." And all of our clients are over 60 years old. And one common phrase I tell most everybody that meets with me is there isn’t one thing I’m recommending for you that I would not recommend that my 65-year old mother do with her finances. The point is we need laws.
David continues on this topic on this podcast and ties into the possible outcomes of the election.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
David is joined by Sarry Ibrahim to discuss how to eliminate using banks for loans. The bank on yourself concept uses Nelson Nash's Infinite Banking strategy to create your on personal bank. This idea utilizes permanent life insurance to create your personal bank. Permanent life insurance has couple living benefits, and when properly structured this strategy can allow you to simultaneously use your dollars for more than one thing. If you've ever wanted to leverage your assets this episode is for you!
Book mentioned at minute 3:52
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
Do you know the two types of Fixed Indexed Annuities? There are income annuities and accumulation annuities. David breaks them down into these two categories, but of course there may be some overlap with them. But generally speaking, these are the types.
Accumulation focused fixed indexed annuities do not guarantee a rate of return. You’re participating the growth of an index but you’re not invested directly in the stock market. So, you cannot lose money if the market goes down. If the market goes up you may earn a return. This same concept applies to Income focused fixed indexed annuities, but they come with riders to allow the income portion to grow at a specified rate for a specified number of years.
David explains how both of these annuities work and connects the dots on when to use one versus the other. We'd love to hear from you. You can reach David by calling 864.618.4800
WSJ: The Secret to a Happier Retirement: Friends, Neighbors and a Fixed Annuity
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
Have you ever wondered if your financial plan could use a second opinion? On this show David goes over reasons why it may good idea. He gives a list of reasons that you can immediately apply to determine if you should get a second opinion.
David begins by telling a story about how he got a second opinion one time and the impact it had in his life. Also, he mentioned some blue blocking glasses he's using and a Harvard study about them. Check out the links to those below. Then he finishes the show off by going over some current events and explaining how they may impact us financially.
Harvard study
Blue blocking glasses
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. A Roth Conversion is a taxable event and may have several tax related consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.
If you have a 401k, then you probably own mutual funds. Maybe you own ETFs too. But do you know what they really are? David's found most people who own them but don't really understand how they work. If you'd like to have a better understanding of both of these investments then this show is for you. David takes you on a short journey that starts with when these funds were created and explains how they evolved. At the end of the show, David gives a strong warning about tax-deferred accounts that you'll want to hear.
Mutual Funds vs ETFs article
Hidden Cost Inside Mutual Funds article
Government Spent $6 Trillion This Year article
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. A Roth Conversion is a taxable event and may have several tax related consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.
This week David expands on last week's show where he talked about using a fixed indexed annuity for the bond portion of your allocation. This week he talks about how we have helped some of our clients allocate the equity portion their money. We believe it’s important in retirement to be downside focused first. And it’s important to be nimble in your equity approach, because the dynamics may quickly change. Those who are positioned to adapt to rapid change often come out on top. David explains how we achieve this for our clients.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
You've probably heard about the 60/40 rule in financial planning. Sixty percent of your portfolio is allocated to equities and 40% to bonds. But it's no secret that bonds are not paying too well. In this show David shares how using a Fixed Indexed Annuity instead of bonds may pay off. Also, he explains what an Independent Financial Adviser is and how they operate. This is a super informative show that we believe you'll get a lot of good content out of. Let us know what you think!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. A Roth Conversion is a taxable event and may have several tax related consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.
David talks about financial indicators and what they are telling us. As a financial adviser he is a student of the markets and he studies and observes what’s going on. He does this so our clients don’t have to. We build portfolios that are all weather financial plans.
Last year we were warning our clients about a possible recession. Even if you are evergreen optimist, you had to see that markets can’t continue up in perpetuity. David shares some signs we warned our clients about last year.
It’s important to have an understanding of what’s going on in the financial markets. Now is the time to take action with preparing your all-weather financial plan.
Sources:
Campbell Harvey, a finance professor at Duke
Yield Curve Inversion
Overnight Lending Rates
2019 Quantitative Easing
Fed Buys Stocks
Fed Buys Corporate Bonds
FANG Driving Index
Robinhood Adds 3 Million New Users
Corporate Debt Issue
Holding Foreclosures Off Market
Labor Force Participation Rate
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
We wrapped up our three-part serious on how to de-risk your financial plan. We end this week by discussing how much deducting $155,000 can cost in taxes. It’s important to have tax diversification in your accounts.
If all of your retirement savings is in a 401k or IRA you may be vulnerable in a rising tax rate environment. Simply put, we want to help you keep as much of your money in your pocket as possible. When you have a solid financial plan in place it tends to generate peace of mind.
Picture a day when you no longer have to worry about getting a plan together, but it’s already done.Picture a day when your grandkids run up to you and say, “Grandpa and Grandma, I am so glad you could visit!”
Picture a day when you have the freedom to travel if you want to travel, relax when you want to relax, and give when you want to give. Together, we can get to that day.
In all of our lives there are things that we’ve put off, thinking “we can always do them later.” That’s not always true.
Now is the time to take the first step. You deserve a great retirement, and a great retirement starts with a plan. You deserve a great retirement that isn’t filled with worry about money. You deserve a great retirement…filled with choices and freedom and joy.
So, give us a call or at 864.618.4800 or shoot me an email at david@clientsexcel.com and let’s get you on your way…to a great retirement! See you next week!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. A Roth Conversion is a taxable event and may have several tax related consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.
The "Retirement Danger Zone!" David goes over what this is and how it's important to begin altering the way you invest as your approach retirement.
This is Part 2 of our How to De-Risk Your Retirement Plan
If there is one word we are hearing a lot in the news lately, it is “volatile.” We live in some pretty volatile times. Whether we’re talking about world affairs, domestic politics, the election this year, COVID 19, or people’s reactions to social media posts, we’re in the middle of some of the most turbulent times many of us can remember.
So what does that really mean? Well financially, it simply means that with so many things happening so fast, the stock market can go up and down … a lot – much like a roller coaster.
What does that mean for you?
Well, one question that many of our clients have is, “Will a drop in the market change our reality or our day-to-day existence in retirement?” That’s a great question! David expands on this in this show!
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
David Treece starts a three-part series on how to De-Risk Your Retirement Plan. In this episode he goes over the danger of not having enough income in retirement and possible solutions to mitigate this risk. Once we retire, the paychecks often stop, but our bills don’t stop. Having a Written Retirement Income Plan in place is critical to successfully navigating your retirement. David shares how to get started on your income plan in this episode.
4% Rule Article
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
This week David goes over current events and explains how to shield your finances from economic disruptions in the stock market like Covid-19. There are tons of pitfalls in retirement planning. You need a trained eye to help you avoid the pitfalls. David, who has worked in the financial services space for nearly a decade, shares some key tips that could help you successfully navigate retirement.
Also, he shares the basics of Medicare and how it works. David simplifies this important spoke on the retirement wheel. Having an appropriate health insurance plan in retirement may be a key to keeping more of your money in your pocket. Discover the basics of Medicare on this show.
First article quoted
Second article mentioned
Third article mentioned
History of Fed Funds Rate
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. A Roth Conversion is a taxable event and may have several tax related consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.
David Treece introduces you to a new voice. His name is Martin Ruby, and he wrote the book the The No-Compromise Retirement Plan.
Ruby is an actuary so his perspective is different than what we normally hear.
Ruby states, “Your IRA is full of risks. In fact, saving for the future is one of the most significant financial risks most of us take in our lifetime.”
You may understand why listening to what an actuary has to say about retirement planning may be really beneficial.
David outlines 3 Conflicts In Our IRAs that he covers early in the book.
The conflicts are:
1 Growth vs. Protection
2 Income vs. Legacy
3 You vs. the IRS
Each of these conflicts present challenges for our retirement planning. And many people think you have to accommodate these challenges, but you don't!
Also, David will tell you how to get this book for free.
Mark Cuban article mentioned
Nervous about the market article mentioned
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. A Roth Conversion is a taxable event and may have several tax related consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. 675011-07/20
It’s possible for your Social Security to be tax free! We all want to keep as much money as possible in our pockets, especially when it comes to retirement planning.
One way we can keep our money in our pockets is to know what provisional income is and how it causes your Social Security to be taxed.
On our podcast this week, David outlines how to eliminate taxes on your Social Security. It's not possible for everyone, but it may be for you. Also, he review how to reduce your taxes in retirement by using Roth IRA conversions
Provisional income break down mentioned in the show
Normalcy bias article
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. A Roth Conversion is a taxable event and may have several tax related consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. 669110 - 7/20
You’ve fully funded your Roth IRAs. What’s next? Is there another way to generate tax-free income in retirement? Yes, there is!
On the podcast this week, I explain another financial vehicle that will allow tax-free income.
The Covid 19 pandemic is causing America to spend like never before to save the economy. You can take steps to protect yourself from the rising tax rate environment we are entering.
How will the government pay for its HUGE bills? Higher taxes! Plus, America is over $26 trillions in debt, so taxes may be going up soon. In fact, we know that taxes are set to go up in 2026.
You have a window of opportunity to position your tax-deferred money in tax-free vehicles over the next 6 years.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan.
I'm excited about the podcast this week! I discuss converting your 401k or IRA to a Roth IRA.
To begin the show, I share a quick story about racing bicycles. In one race I crashed. I had to be transported to the hospital on a backboard. Listen in to hear how it happened. I relate the crash to things to look out for in retirement planning.
Think about financial planning like a wheel on a bicycle. You have spokes on your retirement planning wheel. The spokes are healthcare, estate planning, investments, insurance, income, and taxes. We want all these spokes to be true and working properly so that your financial plan is complete.
Also, we want to be aware of what is going on with each of our spokes so we can anticipate potential problems or to ensure things are right.
In this show I'll explain a report we offer that illustrates how much you are projected to pay in taxes on your qualified money like your 401k or IRAs. You may be able to save money by converting to a Roth IRA.
The report shows if it will be beneficial or not to do a Roth Conversion. I'll tell you how you can get this free report. It's better to be proactive than reactive. I'll explain how Roth IRA conversions may be a proactive move for you.
Article mentioned linked here
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. 660184-07/20
On the podcast this week, David begin by sharing a story about how his family adopted their dog, Oscar. It's a fun story! .
The show topic is Sequence of Returns Risk and the impact it can have on your retirement.
He shares strategy we use at our firm to help combat sequence of returns risk. The strategy involved is called a Fixed Indexed Annuity, and he share how it works.
He compares it to investing in the stock market and go back in time to show a fixed indexed annuity it would have performed during the "Dot Com" stock market crash and in the Great Recession compared to the stock market.
CNBC article mentioned in the show: https://www.cnbc.com/2020/06/19/the-stock-market-is-running-out-of-steam-with-reopening-trades-fading-and-economic-data-uneven.html
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation.Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice to meet the particular needs of an individual’s situation. Please note, it is not possible to invest directly into the S&P 500® Index; this measure is provided solely as a benchmark of overall market performance. Past performance of the S&P 500® is not an indication of future performance and is not guaranteed. 655430 - 7/20
In this week’s show David poses the question, “Can you have a well thought financial plan withOUT consideration for America’s Economic Situation being factored into your plan?
It may not come as news to you, but the landscape of retirement planning is changing. We all know the only thing certain is that nothing stays the same. For this reason, we have decided at our firm that we should inform our clients of about issues that could potentially impact them in regard to their retirement planning.
We just crossed over $26 trillion of national debt. We added $2 trillion in just 63 days, folks. These numbers quickly become overwhelming. Yahoo Finance ran a headline recently that said, “Coronavirus pandemic could wipe out Social Security 4 years earlier than predicted.” This was based on the Penn Wharton Model at the University of PA.
Fewer people working means less taxes. Which strains Social Security. The model predicts the trust fund will run out of money by 2032, which is two years earlier than previously predicted. Remember, being proactive is normally better than being reactive. In this week's show David shares some ideas to think about when drawing Social Security.
I’ve specialized since 2011 in helping retirees safely protect their money from stock market losses and have guaranteed income. But I have become aware that that is not enough! We have to help them further insulate themselves from a rising tax rate environment due to the government's budget shortfalls. David explains how to maximize the efficiency of your retirement savings. As always, you can reach David by calling 864.618.4800 or emailing me at david@clientsexcel.com
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier.
This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation.
Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. Roth IRAs offer tax free income if distributions are taken after age 59-1/2 and the account has been open for at least 5 years. When converting funds to a Roth IRA, ordinary income taxes are due on the amount converted in the same year, and ideally should be paid with funds outside of the retirement plan. 650814
https://finance.yahoo.com/news/coronavirus-pandemic-to-wipe-out-social-security-4-years-sooner-wharton-model-191101417.html#:~:text=The%20coronavirus%20pandemic%20could%20deplete,the%20Penn%20Wharton%20Budget%20Model.&text=In%20an%20April%202020%20report,would%20be%20depleted%20by%202035.
Thanks for tuning in! In this show David goes over what he's reading. Next he goes over a new law called the SECURE Act. Most tax-deferred accounts have changed with the passage of this recent law. The biggest take away is the “stretch IRA” is no longer an option in most circumstances. This was a popular planning strategy & David explains what it is. Also he discusses estate planning. He explains what negative interest rates are and shares how this was mentioned in the financial news recently. He discusses what goes into a Retirement Income Plan and things to consider when retirement is on the horizon. Also he shares how to optimize your portfolio to combat inflation.
https://www.amazon.com/Majesty-Calmness-Individual-Problems-Possibilities/dp/1489553355
https://www.cnbc.com/2020/06/02/negative-interest-rates-could-be-needed-for-a-v-recovery-fed-economist-says.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard&fbclid=IwAR3_WCex_mW2O4AxGVq475qCupzJ6HaA-iMAYNruj_RQW3f8pY_875-wVRI
https://www.investopedia.com/terms/t/taxdeferred.asp
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds
https://www.thinkadvisor.com/2019/12/17/5-ways-the-secure-act-would-affect-retirement-529-plans/?kw=5%20Ways%20the%20Secure%20Act%20Would%20Affect%20Retirement,%20529%20Plans&utm_source=email&utm_medium=enl&utm_campaign=insidewealthmngmnt&utm_content=20191218&utm_term=tadv&slreturn=20200007130131
https://www.investopedia.com/ask/answers/102714/how-are-ira-withdrawals-taxed.asp
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier.This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation.Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.
If you’re like many of our clients, you contributed to a 401k or some type of tax-deferred account when the highest marginal tax rate was higher than it is today. Few people actually pay the highest marginal tax rate of 37%, but we talk about it because it’s a bell-weather for what happens with the lower tax-brackets. When the highest rate goes up the lowest rate typically increases as well. Which means our effective tax rate will go up.
So, you contributed to a tax-deferred account and got a tax break in the year you contributed, which was great for you then! Now you have a window of opportunity to potentially save more in taxes later down the road, because we believe tax rates are likely to be higher. But you have to get moving on your plan soon. The tax breaks Congress passed in 2017 sunset in 2026, and it takes several years to properly transition your retirement savings to tax-free.
The longer you wait to begin, the more you risk you assume of not being able to transition all of your money to tax-free. We do not recommend paying all the tax in your tax-deferred account in one year and moving it to a tax-free vehicle. We don’t want to double your taxes now to avoid your taxes potentially doubling the future.
But this is all useless info if you are not convinced tax rates will go up in the near future. Do you believe taxes are likely to go up in the near future? Our goal is to help you transition your assets where you will have 4 to 6 streams of tax-free income. But the cost of admission is paying some tax today.
Traditionally how the LTC coverage is obtained is buying a LTC insurance policy that may have a monthly benefit. For example, a person may say, “I’d like to have a $5,000 per month benefit.” Should you need LTC, the insurance company would send you a check for $5,000 per month, typically for a certain period.
The problem is, if you die peacefully in your sleep typically all your money you put into the policy is gone. There’s got to be another way, right? We all want to believe we won’t need LTC, but what if we do? I had to find a way to help my clients have LTC coverage without the potential to lose the premium they put into their policy. So, here’s a possible solution. Some permanent life insurance policies provide several living benefits. One of which is LTC coverage through the addition of a rider benefit.
Listen to discover more...
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. 643225
https://www.fool.com/retirement/2018/09/02/5-long-term-care-stats-that-will-blow-you-away.aspx
Welcome to the first episode of the Excel in Retirement podcast show. I’m David Treece and I’ll be your host. Thank you for taking a few minutes to listen in.
In today’s show we look at the ramifications of drawing Social Security early.
Social Security is complex and everybody is a little different. I’ve actually heard that the Social Security rules or laws are more expansive than the IRS tax code if you can believe that…
When 62 rolls around many people begin wondering if they should pull the trigger on SS.
It’s really a longevity question and how long you think you’ll live. If you start taking SS at 62 and die at 65, clearly it was a good thing…
But I want to challenge you think about it in a way that you may not have before.
So, your 62nd birthday is coming up. Maybe you’re wondering should I start collecting Social Security?
If you’re still working full-time, or if you file taxes with your spouse and they are still working, it may not make a lot of sense.
Why? Because when taking benefits EARLY $1 of benefits is deducted from your Social Security benefit for every $2 of earnings over $16,920 (a). So, you’re going to end up paying a lot of your benefit back in taxes.
BUT there is a more important factor. People are increasingly living longer, so when making financial decisions it is important to consider what happens if you live to be 95 or 100 years old.
According to the government (b) the number of people over 90 tripled between 1980 and 2010. With the upcoming census, these figures are sure to increase.
If you turn 62 in 2020 and you begin Social Security, your benefit will be reduced by 28.33% according to the government. Once you start it, that is the way it is (a).
If you were going to collect $1,000 at full retirement age and began taking at 62, you would receive $716.70. That is a loss of $283.30 per month (a).
But let’s say you were able to wait until full retirement age and collect the full payment.
According to my calculations, if you invested the difference of $283.30 and earned a compounding 4% return for 30 years, that $283.30 per month would grow to $199,211.86.
When making decisions about whether to draw your benefit early, think about it as a potential $199,211.86 decision.
Everyone’s financial situation is different, but delaying Social Security for as long as possible can often seem like a good idea. When making decisions about drawing Social Security it's a good idea to speak with a qualified tax advisor.
If you would like to speak with me about any of these ideas or any financial planning questions you have I can be reached at 864.618.4800 or you can check us out at clientsexcel.com
Now for the disclaimer
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Our firm is not affiliated with the U.S. Government or any governmental agency. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.
I hope you’ll join me for our next show! Have a great day!
https://www.ssa.gov/planners/retire/agereduction.html
https://www.thoughtco.com/living-past-90-in-america-3321510