On this week’s show, Erick talks about balancing risk in your retirement savings and explains two Smart Tax strategies that are essential to building a Smart Retirement Plan. Also, Author and Financial Educator Ford Stokes joins the show to discuss his book – Annuity 360.

Call Erick today at 352-616-0511

Book a free consultation here.

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TPOR Full Show_R 8.17.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

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

Producer:
Welcome to take point on retirement with your host, Eric Arnett. Eric is a fiduciary and licensed financial advisor who always places your needs first. The experienced team at Tape Point Wealth Management takes pride in knowing they've helped so many pursue the financial future of their dreams. And they can help you, too. And now let's start the show. Here's Eric Arnett.

Sam Davis:
And welcome into take point on retirement visit take point on retirement dot com I'm Sam Davis joined by Eric Arnett. Eric, how are you doing today?

Erick Arnett:
Hey, Sam, how you doing, man? Great to be here today. And thank you so much for everybody out there listening to the show. I just wanted to say thank you and welcome all our listeners, our retirement warriors out there. We really appreciate our audience. And and you guys have made this show one of the number one shows in Tampa Bay and the Nature Coast. And and I just wanted to say thank you, but thanks for. Thanks for being here today, Sam. When we got going on today.

Sam Davis:
Yeah, absolutely. We've got more of the smart retirement plan for the retirement warriors out there today. We've got a little bit of talking about smart, safe and bond replacement. We're going to talk about smart risk and the importance of growing your wealth, even during your retirement. And then we'll talk a little bit about smart tax here in this first segment as well. And and taking advantage of some tax free investments and taking advantage of putting your money into different tax buckets. We know that you like to talk about that, Eric, so we'll get to all that. But before we get started today, I just want to remind everybody that take point on retirement is available online. You can visit Eric and his team online just go to take point on retirement dot com. And if you miss part of the show today or if you miss any of our shows take point on retirement is available wherever you listen to podcast. So that's just sort of the on demand version of take point on retirement. So you don't always have to catch this live either in Tampa or all up and down the nature coast down there in Punta Gorda. Take point is all up and down kind of the Gulf Coast of Florida now. And you're right, Eric, we've we've had a fantastic response from our audience. And we and we continue to grow. So we encourage people to visit us online, take point on retirement dot com or they can give us a call at 3526160511. That's 3526160511. And Eric, we actually have a guest on the show today as well. Joining us in segment two at the bottom of the hour will be Forde Stokes, the author of Annuity 360. So give the folks a little bit of a preview of that conversation.

Erick Arnett:
Eric Yeah, just I'm excited for today's show. I mean, it's going to be a great show. If you're out there listening, please sit back and listen to the entire show, especially segment two or so. Blessed to have Mr. Ford Stokes on the show, the author of Annuity 360. You if you've listened to the show before, you've probably heard us talking about this book and you may have even ordered one yourself. And we just we love the book and we love Ford just because of the way he broke things down and just made it so easy and simple for our our clients and our listeners to understand and and, you know, investing and retirement planning and Wall Street. And it's super complicated, folks. I get it. And that's what we the purpose of this show is to try to break through all that and bring you information and educate you and hopefully in a way in which it makes sense to you. And and so thank you so much for listening to the show. It's going to be a great one. You know, if you don't get the information that you need from the show, reach out to us. And that's because that's why we're here. We're standing by the phone right now and we're at 3526160511. We're standing right there by the phone right now so we can chat with you and answer your questions. You know, you may not get everything out of this show, so reach out to us and we're happy to talk about your specific problem or concern and just super excited for today's show and to have Ford on later on.

Sam Davis:
Yeah. And as always, Eric, take point. Wealth management provides comprehensive consultations at no cost to the listeners of the show. So just for listening today, you can get in touch with Eric and the team at Take Point Wealth Management. They will help you analyze your specific financial situation because we recognize that everyone's situation is different. They will closely analyze any annuities you may currently have, see how those are performing for you, see if they can do anything better. They're also going to find out. Exactly. How much you're paying in fees, because it seems like everybody's paying more in fees for everything these days. So they'll take a look at how much you're paying for fees inside your portfolio, help you cut unnecessary costs within your IRA, your 401. K or any other retirement savings accounts. They can also help with Social Security planning and Medicare and comparing your current situation to a custom plan. If you decide to work with Take Point Wealth Management and if you're interested, just give them a call. 3526160511. That's 3526160511 or visit them online at Take Point on retirement. So Eric, let's get into our Smart Retirement Plan series. Last week we talked a little bit about the first few steps and we're going to get things started with Smart Safe. So just kind of your initial thoughts on the need to protect your wealth. We're going to talk about growing your wealth in the Smart Risk section, but let's talk about smart, safe and kind of your philosophy with protecting people's money.

Erick Arnett:
Yeah, we're going to dive into that quite a bit with Ford and our second segment. So please don't don't turn off the dial just yet. Stay tuned. But you know, we've talked about our smart plan and our smart retirement plan. And there's there's three phases to it. It's we believe we have to have the smart safe portion, the smart risk portion and the smart tax portion. And so we're always focusing 100% on taxes, risk and fees, taxes, risk and fees. And so, you know, if you haven't heard from your advisor lately or if you're a current advisor or broker or a mutual fund firm, wherever your assets are, if you haven't heard from them recently and they haven't done this in depth analysis for you and you have questions about it, then then we can answer those questions for you. We have all the tools, the software to do a deep, deep x ray into your current situation and pull all that data out. But super and super important. You know, we're going to be talking about a lot about this with Ford in the second segment, but replacing bonds, your fixed income with indexed annuities. Now, there's a ton of annuities out there. You know, don't get don't get too excited when I say the word annuity. You owe it to yourself to really educate you on all the different ones out there. But right now, we're offering solutions. You know, your current advisor may not be, but we're currently offering solutions and alternatives to just that conventional portfolio where you're holding on to bonds and those bonds are going down in value and you're also paying fees for them, just not the right environment, not the right time for bonds in your portfolio.

Erick Arnett:
It's not going to get you to your goals. It's not going to provide the income that you need. A lot of volatility there, a lot of fees and negative returns. I mean, the bond market was down 13.1% this year at one point. So, you know, it's not offering that conventional hedge. Typically, we used I've been doing this 25 years and when I first came into the industry, you know, bonds were paying good rates and bonds were interest rates were higher. And so bonds were a great value in portfolios and they offered a great hedge. But we're talking we're talking strategies that were put together in the fifties. I mean, it's a little outdated. So 95% of you out there listening, if you go and pull your portfolio right now and download it offline and look at it and we'll have a little chart and it'll say how much you have in fixed income. But if you have anything in fixed income right now, ten, 15, 20, 30, 40%, then you owe it to yourself to give us a call and you also owe it to yourself to stay tuned and listen to this show. And and we're going to give you some some really good reasons why we feel more than ever you have to replace bonds in your current portfolio, just super low returns. Liquidity is even a concern there when it comes to bonds.

Erick Arnett:
And so, you know, just not a good just not a good bedrock or anchor for your portfolio at this point. If anything, it is an anchor and it's dragging you under. And so we've got great alternatives to that. And one of them is the indexed annuities. So you owe it to yourself to truly understand the ins and outs and the mechanics of the index annuities. I mean, the Federal Reserve is going to keep on raising rates here. Same. And they're also slowing the purchase of their bonds. So that climate right there is negative for long term bonds and they're just going to continue to be very unfavorable into the future. So historically, low rates, which means long term bonds fall in price. So we could be looking at a low yield investment for years to come. Remember, bonds work inversely to interest rates, bond pricing. So if interest rates are rising, your bond values are going down. And so in vise versa, if interest rates are going down, bond values are going up. So you've got to ask yourself, under the current environment that we're in with the Federal Reserve aggressively raising rates and inflation being such a concern, when are they going to be lowering rates? And so probably not a positive environment for bonds for quite some time. And we've been talking on this show for a couple of years now. About getting bonds out of your portfolio. So hopefully folks out there been listening. Hopefully folks have taken charge and and educate themselves and taken charge of their own money and making those changes.

Erick Arnett:
So just really, really feel adamant about that. And one way that you're going to be able to educate yourself is don't just take our word for it. We are a fiduciary. I've been doing this for 25 years. I've been working in all aspects of the industry, and we're always going to put your interests and your and your concerns first and foremost, but you still owe it to yourself to truly educate yourself on where your money is at and what it's doing and why it's doing what it's doing. So I had a gentleman called in off the show about a year ago and still working with him, and he just had this massive fixed income portfolio, millions of dollars, and never had it with multiple advisors and never really heard from his advisors. And all of a sudden, like I'm looking at his portfolio like, do you really you realize you have $300,000 in losses here? And he had no idea. He thought it was the volatility of the stock market that was hurting his portfolio and it wasn't. It was the bonds. And so you probably may not even know why your portfolio is reacting the way it is. So that's why you owe it to yourself to reach out to us. It's 35261605113526160511. Call me right now and I'll get started for you and I'll pull that portfolio of yours apart and I'll show you how you're allocated, what you're paying in fees, what your risk is. And let's get you on track into to a totally optimized, safe, smart portfolio.

Sam Davis:
Yeah. And to learn a little bit more about bond replacement, we're going to play an audio book chapter from Annuity 360. You're going to hear from Ford Stokes later in the show, but you'll hear from him as the narrator of his own book, Annuity 360. Let's go ahead and play that chapter about bond replacement right now. Chapter 15 Bond Replacement With Fixed Indexed Annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. At my firm Active Wealth Management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We'll talk about some reasons why you should consider replacing your bonds with annuities first. Here's some information on the history of bonds in the United States. Historical bond volatility. The 1900s saw two secular bear and bull markets in US fixed income. Inflation peaked at the end of World War One and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The US government kept bond yields artificially low until 1951.

Sam Davis:
The long term bond yields were at 1.9% in 1951. They climbed to nearly 15% in 1981. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created. Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of 15% to 7% by the end of the century. The bull market in bonds showed continued strength in the early 21st century, but there is no guarantee with our current market volatility that this will hold. See Chart 15.1 to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history of loan, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds. Bonds and interest rates have an inverse relationship. When interest rates fall, bond prices rise. Due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option.

Sam Davis:
However, this has caused bond yields to fall to all time lows as of May 24, 2020, the ten year Treasury note was yielding 0.64%, and the 30 year Treasury bond was at 1.27%. Reinvestment Risk of Bonds. This is the likelihood that an investment's cash flows will earn less in a new security. For example, an investor buys a ten year $100,000 Treasury note with an interest rate of 6%. They expect it to earn $6,000 a year. At the end of the term, interest rates are 4%. If the investor buys another ten year note, they will earn 4000 instead of 6000 annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic Market Risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue, but the correct asset allocation strategy can make a big difference. Unsystematic Market Risk. This type of risk is unique to a specific company or industry. Similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market.

Sam Davis:
There are two factors that contribute to company specific risk. Business risk. There are two types of risk internal and external. Internal refers to operational efficiency. An external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading. Reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds. They sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of. How much commission you were actually paying. Standard and Poor's estimates of bond markups is 0.85% of the value for corporate bonds and 1.21% for municipal bonds. However, markups can be as high as 5%, up to $50 per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time, unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive.

Erick Arnett:
I'm glad we played that chapter and it's a great lead into we're going to have Ford here on the show real soon. And please, if you're listening, stay tuned for that. It's just it's super great that we got Ford coming on the show here. He's going to offer some great insight and some great perspective. But index annuities, just a great alternative right now to fixed income. It's a long term investment, but you can still take make you can make a lump sum deposit transfer funds from your retirement plans or make multiple payments. Over time, your money will grow tax deferred. And so you may have too much money in that tax deferred bucket or you may have too much money in that taxable bucket. But you can actually, instead of taking that lump sum pension, you can transfer these funds and your retirement plan over into an index annuity as well and receive payments over your lifetime. And you're also your money is going to grow. So investment and performance is tied to the market but not directly invested in the market. So you can get upside potentially get market like returns without having to take the risk. Your principal is 100% protected and you can track the performance of the S&P 500, the Nasdaq composite, the Russell 2000. So you can have access to those upside returns and the potential of those markets without having to take the risk. Your principal is 100% protected. So protect your investments, protect your retirement against the loss of principal this year.

Erick Arnett:
Obviously, it's been a tough year and you're probably looking at your portfolio. You might be down ten, 15, 20%. The markets have rebounded here pretty nicely since June. But what I'm seeing is if you have that now, imagine, imagine the market has rebounded, but your portfolio hasn't. It's because you still have that dead weight, that anchor of fixed income that's pulling you under. And it's not going to allow you to grow and move forward until we release that and get rid of it. So please, please call me. Let's put an action plan in place to move towards that goal. And you're going to understand we're going to be able to provide that income that you need, as well as the protection from the market loss and, you know, and establish a solid, reliable source of retirement income. Imagine if you have that conventional portfolio or you have a fixed income portfolio and you're trying to draw income off of it, and at the same time you're paying fees on it and at the same time you're actually losing value because the portfolio is down 13.1% this year. The broad. Averages. The broad bond averages are down 13% this year. So and they're still overvalued, believe it or not, bonds are still overvalued. So just I can't we can't harp on it enough. Please give us a call. Reach out to us. You can even go to take point wealth just on your phone.

Erick Arnett:
If you want to Google take point wealth and our website will come right up in an upper right hand corner. There you'll see click, click to set an appointment that's just a chat session with me, set up appointment to talk with me 15 to 20 minutes over the phone. Let's get to know each other and let's talk about your specific needs. Let's talk about your specific portfolio. And then just I'm I'm going to give out this free gift to everybody who calls or reaches out to me. They're going to get the Annuity 360 book completely free. I've covered the cost for that. But what I would really love for people to do is pull those statements right now today. Go to your computer, pull those statements off, and then circle how much you have in fixed income, and then shoot me an email or call me just and let me know. I'd like to know how much our listeners have in fixed income. If you would do that for me, that would be that would be awesome because I, I actually lay awake at night knowing how many of my retirement warriors are out there and they've still got a large portion of their portfolio sitting in bonds. And somebody probably told them, Well, just hold on, it'll come back, you know, don't worry about it. And that's not the case. We've got to duck and move. We've got to be tactical. We've got to make changes now.

Sam Davis:
Yeah. And another thing that retirees are concerned about, Eric, is taxes and potentially rising taxes into the future. So another part of a smart financial plan is smart tax. And I know you like to explain it by describing the different tax buckets that people need to be diversified. And so could you talk a little bit about smart tax planning with the portfolios that you manage?

Erick Arnett:
Man, thanks for bringing that up. And guess what I mean, it looks like the hands are finally coming home to roost. We've been talking about this and warning folks for years about the tax increases that are coming. And sure enough, the folks up in Washington are going to be bringing that live to you. And by the way, it's not just taxes on the wealthy, it's taxes on all of you. It's taxes on the middle class. It's taxes on the wealthy. It's taxes on the poor. It's we've the poor. Everybody's already paying way too much in inflation. So tax, tax, tax. It's the silent killer. It's the deadly killer. And so many advisors and so many brokerage firms, if you have your money at one of the big ones, I'm not going to mention them. So and so dot com. And you've got you've got your money in mutual funds there with them. And you talk to some guy on the phone every once in a while. Are they asking you about your taxes? Have they looked at your tax returns? You know, are they doing that total comprehensive tax planning for you? Probably not. And so this is first and foremost, one of the most important things that we focus on is building a tax efficient portfolio for you and potentially, hopefully some folks, we can even get them in a totally tax free retirement situation with some work.

Erick Arnett:
But there's so many great strategies out there. You've got to divest the IRS from being your current partner in your retirement accounts. You know, the IRS, you know, you've worked so hard for this money. You've saved this money over the years. And but the IRS is licking their chops because a good portion of this money is theirs. We've got to get you out of that situation. One of the ways we do is we utilize we utilize the uses of life insurance, indexed, universal life or the Roth IRA. So you owe it to yourself to reach out to us. Do you do you qualify for a Roth? Can you do a Roth conversion? All those questions need to be answered because we've got to try to get money over into that tax free bucket as fast as we can, because higher taxes are coming and they're coming very soon. So, you know, we've got to focus on this tax situation for folks. And, you know, different investment accounts are taxed very differently. So understanding how those different accounts are taxed are very important, you know, and when we do, we talk about the taxable bucket, the tax deferred bucket and the tax free bucket. And unfortunately, 95% of America has it in that tax deferred bucket, that IRA that for one K or you may have decided to take that pension that's taxable every year.

Erick Arnett:
So you're putting your Social Security at risk. And so there's a lot to talk about. And so we've got to focus. I mean, really. You know, 40, 50, 60% of your time, your advisors should be focusing on taxes. And then now you've got these buckets. When do you take from them? When do you not take from them? Which ones are more tax efficient? So all these questions need to be answered. Super, super important, because a lot of folks out there, Sam, are just kind of willy nilly taking money from their investments and they're creating higher taxes on their Social Security. They're they're creating higher Medicare premiums, higher taxes on their pensions. And so, you know, popping up into a higher tax bracket. And more than likely, those tax brackets are going to change very soon. So if you if you if you listen to anything that's going on on there in Washington right now, they're working hard to raise our taxes. So we've been talking about it in seminars and on the radio for years and trying to warn our retirees and our pre-retirees that you've got to build a tax efficient portfolio going into retirement. And it's here. The time is now.

Sam Davis:
All right. So we're going to send it to a break. When we come back, we'll have Ford Stoke's, author of Annuity 360 on to talk about smart, safe investing strategies. Take point on retirement. We'll be right back.

Producer:
Miss, part of today's show Take point on retirement is available wherever you listen to podcasts and online at take point on retirement dot com.

Producer:
Big changes could be coming and they may affect your retirement. I'm Matt McClure with the Retirement Radio Network powered by Emera Life. Increases in costs, market volatility and fears of a possible recession. All have people who are close to retirement worried about the future. Some people who were considering early retirement are staying in the workforce, while others who had already called it quits are going back to work. Marketwatch recently published a list of eight big things retirees and pre-retirees should keep an eye on. Some of them are pretty obvious, like number one inflation, as the prices of goods and services continue to go up at rates not seen in four decades, just paying for everyday things could eat through your retirement savings more quickly than you thought. Another concern, Social Security. The trust fund is set to be exhausted by the year 2034. Potential changes to save the program could have a big impact on your retirement years. Two items on the list have to do with savings how much money to set aside for retirement and how to address a growing gap in that amount versus what most of us have actually saved. Yahoo! Finance contributor Vera Gibbons recently reported that the savings gap has been exacerbated by the pandemic, with a lot of folks dipping into their retirement accounts just to get by.

Vera Gibbons:
We are in an inflationary environment here, and some of the experts I spoke to said given the fact that costs are going up for just about everything, they expect more people to actually tap into their retirement accounts or contribute less this year. Also, keep in mind that people are still quitting their jobs at a record rate and that group may also be tapping into their retirement accounts to to cover their costs.

Producer:
Health care spending and drug prices are two more things on the MarketWatch list of retiree concerns and they could be impacted by the last two items on the list diabetes which continues to affect more Americans each year and uses up a good portion of the nation's health care resources and exercise, which could actually bring costs down by helping you stay healthier longer. So which of these items is your biggest cause for concern heading into retirement? That's a key question to consider as economic uncertainty continues to cause headaches for us all. With the Retirement Radio Network Powered by a Life. I'm Matt McClure.

Producer:
At Take Point Wealth Management. We know you've worked hard to earn your money and you've worked even harder to save it. When it comes to wealth management and planning for retirement trust, Eric Arnett and his team of experts who have been helping individuals, families and business owners find financial freedom for more than 20 years. Let us help you protect and grow what you've worked so hard for. Schedule your free no obligation consultation now at tape point wealth dot com.

Producer:
Social Security will get a big cost of living adjustment next year, but there could be some consequences you might not have considered. I'm Matt McClure with the Retirement Radio Network, powered by a merrill Life. A new report by the Senior Citizens League says Social Security beneficiaries could see a cost of living adjustment or COLA as high as 10.1% next year. The reason, inflation running at a 40 year high.

Vera Gibbons:
This is a very, very unusual and unprecedented pattern of inflation that we're experiencing.

Producer:
Mary Johnson with the nonprofit group, told WBTV that surveys show inflation has caused about half of Americans to spend their emergency savings, and people are carrying more debt on their credit cards. So the highest jump in Social Security payments since 1981 would be a good thing, right? Well, Johnson says it's better than no increase, but there are some things to be aware of.

Vera Gibbons:
In fact, you can get penalized if you think your tax liability is going to be 10% more next year than you're paying now. You can be penalized if you don't send in estimated payments or have more money withheld.

Producer:
She told the TV station. The increase would not be enough to cover a jump in Medicare Part B premiums, which are taken directly out of Social Security checks. And she says higher incomes mean some seniors could no longer be eligible for some other government benefits.

Vera Gibbons:
And then a whole 15% were made ineligible because they were their incomes increased over the income limit for food stamps or rental subsidies or the programs in their area.

Producer:
So what should you do? Johnson says Prepare now. Talk to a financial adviser to help you get ready ahead of time and contact local nonprofits if you need help paying bills. So are you prepared for the unintended consequences of a larger Social Security check? That's a key question to consider as inflation impacts all our lives. With a retirement radio network powered by a micro life. I'm Matt McClure.

Producer:
Welcome back to take point on retirement schedule your free financial consultation now at take point on retirement.

Erick Arnett:
So welcome back retirement warriors to take point on retirement radio. As I promised in the first segment, we're opening up the second second segment with our guest. Mr. Ford Stokes is with us today, author of the new 8360. By the way, if you haven't reached out to us before to get your copy of Annuity 360 and you're your retirement warrior out there listening today, reach out to me. You can reach out to me several ways. One, you can just give me a shout right now on the phone. 3526160511. That's 3526160511. You can go to take point wealth dot com and upper right hand corner. You can request a copy of the book. We've given out tons of copies and one of the reasons that we feel so strongly about this book, Ford is, is for thanks for being here, by the way.

Sam Davis:
Oh, it's my pleasure, Eric. You're one of my closest adviser friends in this entire industry. We should have done this a long time ago. I'm so glad that we did it. I'm so glad we thought to do this. And it's always great to talk to the retirement warriors out there. You know, I've got a radio show, too. We call them Activators. But I think I think the retirement warrior sounds like a cooler name.

Erick Arnett:
Yeah. So, you know, like I was saying, I mean, for you and I were just chatting on the phone one day for, gosh, it seemed like almost an hour. And I'm like, man, all this is great stuff. We need to share this with our listeners, so we need to definitely do this more often. But we've been talking about smart, safe, smart risk and building that smart plan. And obviously we talked quite a bit and we've talked in past shows, as I'm sure you have, because we feel you and I pretty much on the same page with this and we feel pretty strongly about bond replacement. And, you know, it's still not an old thing to talk about. I mean, we've been talking about it probably, gosh, I don't know, maybe close to two years now, maybe more. But it's still something that is super, super important to us and a super, super important message for us to get out there to our listeners. And so but people have a lot of apprehension. I mean, obviously, just the word annuity carries some bad headlines out there. And so people tend to be fearful of those things. And sometimes our emotions get the best of us and those just kind of shut things off and they won't take the time to truly just educate themselves. Right.

Sam Davis:
So.

Erick Arnett:
You know, we hear so many different things in life and then we kind of forms our opinions. But if we truly dive in ourselves and educate ourselves and make our own decisions, we might find that a totally different side of things.

Sam Davis:
Yeah.

Erick Arnett:
It works.

Sam Davis:
Okay, I totally agree. What I would encourage your listeners to do is to pick up the phone and give you a call at. I'll read the number here. 3526160511 or just, you know, make sure they reach out to you over at your website just to get the book, because that way they can learn. I mean, we don't really you know, you're not making money on the book. You're giving the money the book away for free. It's just good education because what we tell our listeners, our radio listeners in Atlanta is listening. If you're if you're going to seek knowledge, you need to be aggressive about it. If you're going to be a bear or be a grizzly, you need to be aggressive about it. And you should go to take point on retirement and you should go get the book because you're going to learn about what an accumulation annuity is. You're going to learn about the concept of bond replacement. You know, with bonds losing up to over 13.1% this year in market value and with more potential, if you listen to the Fed and you listen to Jerome Powell and you take his word for it, guess what? It looks like we're going to go up another 75 basis points the next time the Fed meets. That's scary. It just keeps going up and up and up.

Sam Davis:
And it's getting it's getting to be a little bit like the Carter years, where no matter what the Fed does, inflation continues to ramp up. I mean, last month, Eric, inflation was up 8.5% year over year from July of this year to July 2021. And I mean, that's a remarkable jump in inflation. And it looks like this is going to be the highest cost of living adjustment in the last 40 years, all the way going all the way back to 1981 for Social Security. And all that means is it's more than what we're getting in in Social Security income. It's more than what folks are getting from their 4% withdrawals. And they need to have an income plan. And you're so adept at helping people figure out a retirement income plan. And. But that bond replacement strategy feeds into it because. There's no reason to lose money in the market on your fixed income bucket within your portfolio. That portion of your portfolio that you're going to get generate your income from, and there's just no reason to do it also. You can your your listeners can delete the advisory and portfolio fees out of that portion of their retirement portfolio as well. If they just invest in a fixed indexed annuity with you because the insurance company, the annuity company is going to pay you as the advisor and you're not double dipping because you're a fiduciary and you put your clients first.

Sam Davis:
And so I would just encourage people to really to listen to you about it. It is really neat. I've been able to talk to a couple of the retirement warriors who've read the book, who have called me and just had a couple of questions. And then you and I were able to even conference call with one gentleman. It's just really neat to to hear the people that read your book. I wrote the book during COVID because I was tired, Eric, of going back to the refrigerator every 20 minutes to eat. So and it's and and we keep it updated year over year so it's the latest in information. But I would encourage people if they want to get tax efficient, fee efficient and market efficient with their portfolio, they should contact you and visit take on take point on retirement and and get started just at least read the book and understand what you could do with a bond replacement. And there's some entertaining chapters in there, like all the famous people who've invested in annuities in the past that may not know. And, and there's a lot of really good info in there.

Erick Arnett:
And one thing comes to mind, too, can't you get can you get the audio version of the book, too?

Sam Davis:
Yeah. I appreciate you mentioning that. Yeah, you can get it at Amazon and also on Audible where it was nice. Your your radio producer, Sam Davis, he actually produced my audio book and made me sound a lot better than I normally do.

Erick Arnett:
Yeah, that's awesome, because I know if people are driving around in their cars, people are just busy these days and an hour long shows and hour long show. I mean, the book is super easy to read. I mean, you can get through it quickly. It's so well put together. And that's why I love partnering with you on this. And and quite frankly, you saved me a lot of work because during COVID, I was going to the fridge and just laying around and would being and I was being lazy. I should have wrote a book myself because it's it's frustrating. And you mentioned earlier and I think we I'd love to really bring this point to light. I worked for a gentleman years and years ago, and the first thing he said to people when he sat down with them is like, look, this is your money, this is your money. You have to be like you said, you have to be aggressive, vigilant, educate yourself and know what your money is going into and and how it's working and stay up to date on performance fees, everything. Unfortunately for and I think people sometimes just rely a little bit too much on the advisor or the brokerage firm or wherever their money is out of the mutual fund company.

Erick Arnett:
And they just say, hey, I guess I'm hoping that these people got it. And with that conventional portfolio that's just kind of been on autopilot, which, you know, 95% of America I'm not beating anybody up is probably in that conventional portfolio. And if you're close to retirement or even in retirement and we've talked about that rule 100 before, you may have 50, 60, maybe 40%. Heck, I don't care if it's only 20% of your portfolio is in fixed income bonds right now, you owe it to yourself to educate yourself on how that works and how it is working and how it will continue to work going forward. Because we could be in an environment where, like you said, bonds are under pressure for a long, long time. And if you just have this kind of dead anchor just sitting there in your portfolio, it's not growing and you're paying fees and it's not providing any income for you because we're at historically low interest rates. Why do you have it in your portfolio so you owe it to yourself. Please reach out to us and get this book 100% free. We'll mail it out to you.

Sam Davis:
Yeah, it's super nice of you guys to to offer the book for free at your expense. I just think that's a really nice thing to do and people should visit take point on retirement dot com to do that I would just say this to people are really have no idea what's going on with bonds I would just ask your I would just ask your listeners why are you paying advisory and portfolio fees to an advisor when they're giving on a portion of the assets that you're giving fixed income? Right. Also, how trust or how much do you trust US corporate bonds right now? I mean, you and I have done the analysis. We've also worked with Mark Diorio, the chief investment officer with with Brookstone Capital Management, and he says that he did the analysis and they were you know, the US stocks are trading between 21 and 22 times earnings in a go forward price to earnings ratio, whereas US corporate bonds are trading in a go forward price to earnings ratio of over 135 times earnings. So that means the company is going to have to get 135 times earnings or buy or sell new bonds and issue new bonds, which makes there in this increasing interest rate environment makes the cost of their capital higher. It it it just makes it more difficult for them to pay your principal back and if you're concerned about default risk at all. You know, somebody that's got 135 times earnings to pay your money back. In my opinion, that's a risk. It's riskier by more than five times five, six times what it is on 20 on a on a go forward price earnings ratio with US equities at 22. Listen. You mentioned also the percentage of portfolios and people are in typical 60 to 40 portfolios, 60% securities and 40% bonds.

Sam Davis:
But what's interesting about that is Harry Markowitz was given credit for being the founder of Modern Portfolio Theory. Eric, as you and I talked about all the time in 1952, that is a 70 year old strategy, 60% stocks, 40% bonds. Eric, you and I talk all the time about a new 6040 portfolio, 60% stocks attached to the asset, tactically manage portfolios with tactical asset allocation so you don't ride the lowest the lows in the valleys. And then also we talk about a 40% bond replacement with fixed indexed annuities, which are safer and there are 100% financial reserve products. You're so experienced at that and I'm so thrilled to partner with you and also have this book so you can help people understand that. But if you if you want a different way of looking at things and you want to build a successful retirement with your hard earned and hard saved money, I mean, we we believe both Eric and I, you know, we believe that it's harder to save the money, even if it is to earn it. So and a lot of folks in Florida, you guys are you know, it's the retirement state. You're looking to retire or you are retired and you've got to do more and make your money work as hard as you did. And one of the ways to do that is to not take this 13.1% loss that's happened this year with bonds and turn that frown upside down by eliminating the advisory fees and eliminating the interest rate risk and the reinvestment risk that's associated with bonds. And I would encourage people to pick up the phone and give you a call. I really would.

Erick Arnett:
So well said and so eloquently, eloquently said. And and that's why I have to thank Sam for putting this together. So great to have you on the show, but schedule your appointment now if you're out there listening. Retirement warriors up and down the Nature Coast or in Tampa Bay, just take 5 minutes, pick up the phone, call me at 35261605113526160511. I'm actively sitting by the phone waiting for your call, ready to talk to you. And, you know, don't take my word for it. Don't even take Ford's word for it. But get this book annuity 360, you owe it to yourself will zip it right out to you. Take your time, read the book, highlight it. You mentioned the gentleman that we spoke about earlier, and I just I love telling this story. And this gentleman, he he reached out, got the book from listening to the show. He was a total naysayer on annuities just because of maybe what he heard from his friends or or folks out there. And it just had this negative connotation. Read this book several times, highlighted it even went as far as to seek you out and call you up there in Atlanta and asked you some questions. And that's and that's actually just gave me goose bumps because that's why we're here.

Erick Arnett:
I mean, that's why we're passionate. And and, you know, it's about educating folks. And if we have educated retirement warriors and we have educated clients out there, it's just going to make everything so much better for you and your retirement, as well as even us, the advisors. We we love our clients to be educated and we love for you to actively get involved in the management of your money. And it's so, so important. But if we don't educate ourselves and take that time, then we're just relying on somebody else to make decisions. And then you have to have this insane amount of trust, right? And so but if you have trust and knowledge, imagine the power behind that. And imagine sitting back in and enjoying your retirement and enjoying the fact that, you know, that you have a team behind you that's going to get you there in two and three retirement. So take point on retirement dot com. You can you can reach us there as well and and click the link in the upper right hand corner and we'll get you a copy right away. But, you.

Sam Davis:
Know, let me just jump in there, too. Also, you really should be working with the fiduciary. Shouldn't be just working with some salesmen. You know, you need to work. And a lot of times when people are selling financial products or they're selling mutual funds or variable annuities or fixed indexed annuities even, or in life insurance or just different financial products that people use for retirement. Let's say the client brings them a problem, like I need income or I need I need tax efficient growth, or I need I need to protect my principal or I need to get this certain rate of return. I need to have this certain withdrawal rate to to be able to fund my retirement. A lot of times those salesmen will pull off whatever they've got on the shelf to sell you and fit that in as a solution to your problem.

Erick Arnett:
And the fact that you nailed it when you wrote this book and just made it so easy to read. You know, sometimes people I got to be honest with you. I've written a couple of books and I get deep in the weeds. I'm too analytical. That's just the way my brain is. And and I get really kind of lost deep in the weeds. But the way that you put this book together and made it easy to understand for folks out there, it's just a great, great tool. And and, you know, it's it's so important for folks to reach out to us today and so excited to be able to give this book out for free. And and thank you so much today for being on the show for it. I greatly appreciate it.

Sam Davis:
You bet.

Erick Arnett:
But, you know, in closing, I just wanted to kind of ask you one question and kind of getting into the minds of the listeners as they're sitting out there listening. And, you know what? Is there anything that folks need to fear about the index annuity? I mean, what are you run into as far as objections? I just want to try to overcome that for folks.

Sam Davis:
Annuities aren't for everybody, but they're for most people, in my opinion. They're really well suited for people that are age 50 to 75, even 80 plus years old. They're good ways to protect and grow your wealth. What else is nice is Eric. You're so good at making sure that you're not putting people in annuities that have only 32 or 38% participation rate. You're doing the right thing by the client. Those are it's always the concern is fees and liquidity. Fees and liquidity. And don't you want to get a reasonable rate of return and eliminate the market risk, at least the stock market risk version of it? I would. And at least for a portion of your money, I'm not saying all of it. It's not suitable for you to put all of your money into fixed indexed annuities and fixed indexed annuity. And Eric's not going to do that for you, but it is suitable for you to take up to at least 40 to 50% of your assets when you're 70 years old and you don't want to go back to work and say, hey, welcome to Wal Mart when you want to actually do the right thing and and protect your money so you don't become burdens on your kids. Yes, an annuity is going to pay you income as well. And that's something an income you can never outlive. That's a pretty good idea, too. But those are the big objections as liquidity and and fees. And what's nice is you take care of both of those issues for the client.

Erick Arnett:
Thanks for that. For Sam's giving me the cue. We've got to wrap up the show. Unfortunately, I'd love to sit here and I'm sure our listeners would enjoy listening to you much longer. I'd love to have you on the show again sometime real soon. I greatly appreciate your time today. Thanks for being with us. And and anything we can do for you up there in Atlanta, just let us know.

Sam Davis:
That we'll do that. And you guys enjoy sunny Tampa and and everybody down there on the nature coast. You all enjoy that weather coming up because it's about to be amazing down there in Florida. We'll come down and visit during the fall.

Erick Arnett:
Winter sounds good. Annuity 360 folks. You owe it to yourself to reach out to us, get you your free copy. Take point on retirement com you can go right there and get it click on the upper right hand corner or just give me a shout out. 35261605113526160511. Thanks so much for listening to the show. Tune in next week, guys.

Producer:
Thanks for listening to Take Point on Retirement. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets, to schedule your free no obligation consultation visit, take point on retirement, or pick up the phone and call 3526160511. That's 3526160511. Investment Advisory Services offered through Brookstone Capital Management LLC, BCM, a registered investment adviser and take point wealth management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.