Keep Fear Out of Your Portfolio TAKE POINT 11-20-21 FINAL: Audio automatically transcribed by Sonix

Keep Fear Out of Your Portfolio TAKE POINT 11-20-21 FINAL: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
The following paid program is prerecorded and sponsored by Take Point Wealth Management on the Nature Coast of Florida, Take Point on Retirement, a well-rounded show from a well-rounded team of experts leading you into retirement. Listen Saturday mornings for an hour of simple retirement advice from your friends at Take Point Wealth Management Saturday Mornings seven thirty eight point Wealth Management is an Investment Advisor Representative of Retirement Wealth Advisors Inc., an SEC registered advisor. Ok, and as the music plays, I want you to listen in because we've got some important information for you once again, as always at this time. Our friends from Take Point Wealth management in the studio because they want to share the information with you too and day. Take point Wealth Management, the sponsor of Take Point on Retirement. The name of the show for the next hour, we've got Erick Arnett, Lead Advisor, Retirement Planner in the studio with us, along with Randy Woodruff, CPA, a well-rounded group of individuals. These are just two that make up that group. Take point wealth management with services that they can offer to you so much, I know. Without further ado, I'm going to turn it over to Erick Arnett, who's going to take over from here.

Erick Arnett:
Hey, morning, J.W.. It's actually good to be back in the studio. It's just great to be back. A lot of good stuff going on. A lot. Lots to talk about. I think we've got a great show today. We are continually excited to just get information out there to help folks. And I wanted to thank a lot of the listeners because we've been getting just some tremendous feedback. Yes. Great to see the fruits of your, I guess, efforts or time that we spend here in the studio actually making an impact. So we've had some really great responses and I want to make sure I'm listening to the folks and they're telling me, Look, we love your show because you actually give us some real ideas. You actually hit some topics and really kind of in a clear, easy way, communicate. And instead of some shows, they just talk in generalizations. And so I want to make sure we stay on track. Randy with like keeping just real good pointed advice and giving people solutions out there. So I'm excited about that. Yeah, you

Producer:
Give us the meat, not just the potatoes. Exactly.

Randy Woodruff:
I love it. One of the compliments I've heard a couple of different times is that we have other people on our show that round out the team, if you will. They say most of the shows they listen to, people are just talking about the markets or just financial products or anything. We've had attorneys, a Medicare specialist, insurance specialist, health insurance, reverse mortgages, real estate loans, mortgages. So a whole different variety of professionals that hold them for a variety of services that complement what we do here at take point. And really, people need to be to know about that we can actually offer to them.

Erick Arnett:
So that's actually a great point. We're working hard with guests in the process of making sure that every single one of our radio shows will be on our site. www.TakePointonRetirement.com, which is our radio show website. Maybe if you have time and you've missed a show or you want to go back and peruse that and listen to some former shows, just like Randy said, we have all those tremendous topics on there and we'll continue to always invite specialists from every discipline on our show because we just want to continue to try to have impact on the community that way. So absolutely.

Randy Woodruff:
Also, if you listen to one of our shows online and you find it interesting, feel free to share it with a friend or family member that may have been going through an issue that they may need that kind of advice that we're talking about that day. Love to have that kind of sharing and opportunity to work with your friends and family also.

Erick Arnett:
So, yeah, so it's take point. Wealth has a link to the show at the bottom. And then also we have a website entirely just for the show Take Point on Retirement. So it's pretty easy to get to. You can type it right in your your browser bar or hit Google. And boom, you're right there with all the information that you need. We've got blogs on there. We've got articles. We've become dedicated to putting more videos on there, and I know Randy's got an awesome site to Suncoast CPA Group. Yes, and he's got he's been cutting videos on all different types of tax topics and all kinds of tremendous information. Now that's right at your fingertips. Peruse those sites, folks. Go through those videos. If there's something there that you want to talk more about, then by all means just pick up the phone and call us and set an appointment or and we're doing a lot of Zoom meetings. You know, you can stay right in the comfort of your own home and boom. I send you a link and on your email, you pop it open and there we are. We're in the same room together virtually. You can ask as many questions as you want, so I really encourage folks to pick up that phone or shoot us an email or fill out the form and request a consultation 15 20 minutes just to chat and find out how it is that we may specifically help you with some of those topics that might be pertinent to you creating that stress free retirement.

Producer:
I've got a local phone number here. It's 3-5-2, which is the Hernando County area, but you have offices throughout the Nature Coast. Three five two six one six zero five one one Perfect.

Erick Arnett:
So what are we talking about today?

Randy Woodruff:
Erickk won't you give us an update on where we're at with the markets today?

Erick Arnett:
You and I were talking about this earlier. Unfortunately, we've had folks that we were talking to was even after the initial COVID hit in the market started recovering. We're still paralyzed by fear. They're paralyzed by that change in administration. They're paralyzed by what are the markets going to do? What is COVID going to do? How's the economy? And unfortunately, I got to tell you, sitting at home and kind of being in this kind of lockdown scared phase, people are watching more and more TV, right? So they're sitting here watching.

Randy Woodruff:
It's never good. No, never.

Erick Arnett:
No. You're sitting there watching Fox News 24 hours a day, CNN 24 hours a day. You're getting just pumped with this bias information all day long, and it starts to really, I mean, think about it, I'm not a psychologist, but I know that if you continually have something pumped into your head, you're going to start believing it. And regardless of whether who's right, who's wrong, it's creating a lot of fear and it has created a lot of fear. I see it in people when I talk to them every day. I was talking to a lady the other day, vibrant woman. 68 years old, Healthy had a tremendous lifestyle and and she's she won't come out of her house. This is just crazy to me. You know, it's nuts and and we've had a lot of folks like, I'm not going to do anything with my money right now. I'm going to wait totally. And so but what we find is and what we've told people is that doesn't matter, right? It doesn't matter if you have a good, solid plan in place to that will weather all storms. The time marches on, markets march on, people march on. We find new ways. We're most innovative people in the world. We continue to innovate. People are going back to work. We found the economy is adapted to it. More of a digital economy where people are working from home. Real estate's going through the roof. I mean, you could talk a little bit about that. You can't even put a home up on the market for more than a day and it's gobbled up, right? Oh, absolutely. And and people are paying more than they would for you for the asking price.

Randy Woodruff:
So getting multiple offers back up offers basically taking contracts higher than the original asking price. So, you know, the real estate market is due to lack of inventory is really on fire right now.

Erick Arnett:
So think about this one of the worst pandemics on record this crazy political climate. The markets keep moving higher, right? You know, companies keep generating earnings. So folks, nothing's really changed. Don't let fear grip you to the point where you're not going to make any decision. What was that? We said a decision decision not to act or if you're not acting because you're paralyzed by fear is a decision to do nothing and have your money. Just sit there making nothing. So you're you're really impacting yourself financially by just kind of being frozen and a guy. I talked to a guy the other day two and a half million dollars, and he has done nothing with it for the last two or three years because he said to me, Erickk is, I'm paralyzed. That was that was his exact words to me. I'm paralyzed. I don't know what to do because of the political climate and because of COVID and all that. And and think about it, the amount of money that he is lost by not having his money actively managed and actively working in the markets or in an index annuity or whatever it may be, he's cost himself hundreds of thousands of dollars, and that's fear fear has taken out.

Randy Woodruff:
Now you mentioned earlier about making a decision. Yeah, you're not making a decision. Make a decision. Be, I'll say, be courageous, but don't let fear grip. If you don't make a decision, you're going to let the environment around. You make your decisions for you,

Erick Arnett:
Very well said.

Randy Woodruff:
So we definitely want encourage everybody to hear again. Stop listening. So much to the news radio. Let's start show, of course.

Erick Arnett:
Well, just our show.

Randy Woodruff:
Just just just our show and come in and talk to us, talk to professionals that are in the market that that are do this every day for a living and not people on on TV or radio that really don't have a grasp on finances and really can't give you the right financial advice that you need and are probably politically biased in the way they're spinning, what they're what they're talking about on TV or radio as well.

Erick Arnett:
We are the most adaptive. Culture or society I believe in in the world. America, Americans are more innovative. Harder, harder working than anybody out there. We had a saying in the military and it was simply this. Adapt and overcome. Adapt and overcome, I like it, and because when you're in the military and you're in different situations, you could plan, you could have the best plan in place and that plan can just totally blow up in front of you. So you got to be able to adapt and overcome and move. And that's what we do as Americans. And that's what we do at take point. While absolutely we're constantly adapting, overcoming our clients are happy. They're making money. Everything's going, going great. And because we had a solid plan in place prior to any of this occurring, you can't continue to let fear rule your decisions, you know, and that's my biggest concern. So it kind of getting back to the markets. I mean, the markets are continuing to reach new highs, driven mostly by technology. Of course, because of the changes with the digital technology, more and more people are using technology today because of the change. With with COVID, however, what we are seeing, which I alluded to earlier and some other shows, we're starting to see a shift. We're starting to see a change. The broad market itself was still pretty beat up, and so we had financials and energy stocks and all other sectors of the S&P 500 were still kind of beat up. We're starting to see that rotation out of technology and we're starting to see money pumped into those other beaten up areas in the market. So still poised for great great returns and good strong recovery index annuities or investment management, or whatever it may be. It's still a great time to get going and get active.

Producer:
If you haven't prepared, it's again not too late. You still have time. Although we can't see the future, we can plan for it and now is the time to do that. That's why we recommend Take Joint Wealth Management. I myself enjoy the camaraderie that I have had with Erickk Arnett, Lead Advisor, Retirement Planner Randy Woodruff, CPA and well-rounded team there at Take Point Wealth Management. You too can enjoy that as well, regardless by phone, by Zoom Internet. Whatever the case may be, the time is now to plan for your future. Or maybe you're looking into other options. There are other options out there. Let folks that take place in wealth management give them to you.

Erick Arnett:
All kinds of great news coming out. Let's look, let's focus on the positive stuff the vaccines, treatments. So and that's another reason why the markets continue to reach new highs because the market folks listen. The market's always looking ahead. It's not looking behind. It's not looking a couple of days ahead. The market's trying to predict stuff and look at six months a year down the road. So if you're if you're sitting at home and you don't think we're going to be in a better position a year from now, then rethink it and really think about that when the vaccines are out and people are getting better and all the new therapies, I mean, all these great companies are coming out with good therapeutics and whatnot and the vaccines, and I think we're going to be in great shape.

Producer:
So there you go. Positivity the word for today. So folks, keep it here for the next positive segment coming up on Take Point on Retirement brought to you by Tech Point Wealth Management. Once again, that phone number three five two six one six zero five one one If you like what you've heard so far, give them a call. Pick up that phone three five two six one six zero five one one or Google Take Point Wealth Management and it will bring you right there to Lead Advisor Retirement Planner Erickk Arnett and of course, Randy Woodruff. Along with that take point crew. We'll be right back, folks after this. Take point, wealth management is on a mission to honor, protect and utilize the values, ethics and principles learned through military service to our country to our communities, the investment tax advisers take the advice of someone with your best interest at heart. Take the hand of a leader guiding you every step of the way. Take joint wealth. Dot com. Take point. Wealth management will take point on your retirement today. Erickk Garnett is an investment adviser, representative of Retirement and Wealth Advisors, Inc., an SEC registered advisor. Take on wealth management.

Producer:
This station and RWA are not affiliated. Exposure to ideals and financial vehicles discussed should not be considered investment advice or recommendation to buy or sell any financial vehicle. This information should not be considered tax or legal advice, and individuals should consult with professionals specialized in fields of tax, legal, accounting or investments regarding the applicability of this information for their situation. Past performance is not a guarantee of future results. Investments will fluctuate and, when redeemed, may be worth more or less than when originally invested. Well, there you go. Just a little disclaimer, part of the Take Point Wealth management program, its Take Point on Retirement, a show brought to you every single Saturday at this time. So thanks for joining us once again as we continue with lead advisor retirement planner Erickk Arnett and of course, CPA Randy Woodruff, part of the Take Point Wealth management team here to serve you and all of us. Thank you, gentlemen. Once again. Thank you. Thank you, sir. We entered off the last segment with some great positive information news about the markets, and that's going to continue. So I think Randy is going to start us off.

Randy Woodruff:
Yes, I want to talk about I have Erickk go through the process that when we're a new client comes in or our existing client comes into the office, Erickk and I talk about a smart plan or a smart risk plan. So Erick, let's walk through that process once you start off just kind of talking about generally what we do and then we get into more details as we get into the show.

Erick Arnett:
Yeah, we'll probably just scratch the surface but appreciate the question. And I think it's a good one. And once again, alluding to the fact that we're 100 percent transparent here, I'm going to give you the secret sauce and exactly what we do and what we believe in no smoke and mirrors or clouds of smoke. It's this boom. Here we go. I'm going. And so get your pen and paper out. Record this whatever you may do, or go back to our website and listen to it again. But I'm going to give you a second to start taking notes because this is exactly what we do, how we do it and what we believe in most and is the foundation of our practice. So we believe in what we call a smart plan and overall plan and the one strategy we call a smart rest. So taking a portion of your assets and coming into a smart risk bucket and investing in smart financial plan that includes smart, safe and smart risk elements. So a great rule of thumb is right now, we firmly believe, is to replace your bonds you currently hold to generate income with fixed indexed annuities. Hmm. Why would you own bonds right now with the extremely low rates that they're providing? One. If you're buying new bonds, right, you're you're buying bonds at super low rates.

Erick Arnett:
So when rates do go up in the future, which they will, no one's going to want your bonds. Your bonds are going to be less less. They're going to be less valuable because of the current bonds that they'll be issuing at that time. So we just think it's a horrible time for bonds. And if you're actually holding bonds right now and you've had bonds for several years, you probably have some really good profit in those bonds because let's say you bought bonds five, 10, 15 years ago and you're getting five percent. Well, people think, Oh, I better hold on to those because they're not issuing anything at those rates today. Well, that's kind of the exact opposite of how I look at it. I look at it as you've made some good profit there, you're going to lose that profit if you continue to hold on to them. So go ahead and take action and take some profit off the table those bonds and look at alternative investments. Like we said, the smart plan is is active management. It's not just passive just right now, especially more than ever. We don't believe just that. Buy and hold passive strategy of your current portfolio is the right is the right thing to do.

Randy Woodruff:
Let's just call me on that buy and hold strategy because it touched on something that I've experienced over the years of my CPA practice, where I've had clients come in and we've been talking about investments and what they have and their retirement and everything and what they're doing and buy and hold strategy has kind of been driven into especially some of our our older listeners probably is part of being driven into their psyche over the years. I never forget a conversation I had with a client is now passed away, but came in they were talking about. We're talking about trading advances by 15 years ago, talking about the trading environment back in 2005 six seven. So we become more hyper as fast now with computer trading. But they were talking about Randy. I wouldn't buy Kraft. I went by Procter & Gamble, I would buy IBM and we would hold it for years and years decades and watch that company grow and be a part of that growth. And now with computerized trading and modeling, and the trading is happening at rapid rapid speed. So to your point, a buy and hold strategy, I don't say it doesn't work anymore, but it really works anymore because things are changing so rapidly. If you don't, you aren't actively managing your portfolio. Have someone doing that for you? You can find yourself upside down or in positions that are no longer favorable for what your long term goals are.

Erick Arnett:
Yeah, absolutely. We find that folks that currently in this environment will last five to 10 years that are doing that buy and hold strategy. They're underperforming the S&P 500 by more than 50 percent, really that much. So anybody trying to kind of like manage their own portfolio and purchasing securities, it's not about picking the right stock, it's about having the right over. Red plan, right? And having all those different pieces in your plan working together harmoniously, but yeah, it's not the same stock market that Grandpa used to invest in. Unfortunately, conventional wisdom has been pounded into our heads. If we're told something for a long enough period of time, we believe it, right? And so old. Conventional wisdom is grandpa used to go to the newspaper on Saturday morning or The Wall Street Journal, and he'd read up on some stocks and he'd kind of look at the prices of the stocks and the college broker and say, OK, you know what? I think for the long haul, I'm going to buy Kraft or I'm going to buy Procter and Gamble or Exxon. And at that time, guess where the market was? It was extremely low in those stock prices were extremely low, so they bought those. They held them for 10 20 years and we see people coming, well, grandpa, you know, he bought this stock 10, 20 years ago and look at what he's done. Well, there wasn't computer model trading algorithm model trading systematic risk like there is today. Ninety five percent. It might even be higher. It might be 98 percent of every trade now on the markets is done by a computer or it's electronic so systematic you could pick the best stock in the world. But if all of a sudden these computer models say sell that sector or sell that industry or sell that ETF or that mutual fund that has that stock in there, it doesn't matter. It's going down. Yeah, it's being sold.

Randy Woodruff:
Everybody's selling this in it, everybody.

Erick Arnett:
So you've got to think about ETFs like exchange traded funds. These are electronic funds now that are run by computers. There's no human being managing them. And what it does is, let's say, for instance, as an example now there's hundreds of ETFs out there, folks, but I'm just going to use this as an example the S&P 500. So this electronic ETF will go out and buy every stock in the S&P 500 for you, and you own the S&P 500. So if all of a sudden the markets decide to sell off the S&P 500, it doesn't matter whether you have the best stock in the world, your stocks going down with it. There's not as much individual position holding in mutual funds, same way the way they manage mutual funds. I mean those, they'll blindly sell a whole block of stock. So you have no control over that. So when you're in mutual funds, you don't particularly have any control over your assets at all. So we more than ever right now believe in a smart what we call smart risk, or our smart plan is just another name for a tactical asset allocation, which means your portfolio is rebalanced on a consistent and regular basis, oftentimes monthly, right? So we're constantly adjusting the portfolio where so we're we're kind of moving along the curve like, for instance, the one of the main reasons we encourage folks to folks to look at actively managing your portfolios as opposed to the passive kind of buy and hold strategies.

Erick Arnett:
You won't be riding the negative slopes of the growth curve like we saw in March, March of this year at the beginning of COVID, right? So we have portfolio managers that are chartered. Financial analysts work for Brookstone Capital Management, Retirement Wealth Advisors, and they're constantly managing your portfolio on a daily basis. So we like to have a portion there and an actively managed portfolio, and we like to have a portion and indexed annuities as as a substitute for bonds right now. And boom, there it is, folks. I mean, we're right out with it. That's that's what we firmly believe in right now, and we're going to be able to drastically reduce your expenses with this type of strategy. Think about it, index annuities have no fees. So right now, if you're own, if you have a five hundred thousand dollar portfolio and half of it's in bonds or bond mutual funds, you're paying a fee on that. Ok, indexed annuities carry no fee,

Randy Woodruff:
Any kind, a better rate of return and

Erick Arnett:
A better rate of return and less risk and taking out interest rate risk taking out all the risk of bonds. Because guess what, folks, bonds do have risk. There's no fees on that portion of your portfolio. So therefore on the entire portfolio, you're paying half of what you normally would paying. So what are we talk about all the time? The silent killer of a of a retirement is hidden fees kind of eating away at your money taxes, eating away at your money and then risk your volatility. Volatility is the silent killer. So if your portfolio went down 20 percent right in March or April of this year because of COVID, you had to get 40 percent or forty five percent returns to get back to even where you started. Mm hmm. How do you do that? That's pretty tough to do. So active money management and having a diversified portfolio with your principal protected and indexed annuities is going to alleviate that downturn. You're going to alleviate that riding that curve down into the depths of the of the of the whole of the market. So just something that we firmly believe in. We really are not big fans of mutual funds. I'll just tell you straight up. Try to avoid investing in mutual funds and instead invest in ETFs right to reduce the expense ratio within your portfolio.

Erick Arnett:
Mutual funds If you have a portfolio right now and as an advisor managing it for you or you're at a big firm or whatever, there's internal cost in those mutual funds that are pretty high, and that advisor is probably charging you a fee on top of the mutual fund. So that's maybe one and a half, two and a half three, three percent of your portfolio right there and expenses. Ok, so not a big fan of mutual funds because of those expense ratios and then what they don't have to report. Right, are administrative, management, advertising and all other expenses like trading costs. So the expense ratios are actually even higher than what they have to report, which is kind of an interesting way that the mutual fund industry has been able to get around that transparency, right? I had a guy I was talking to the other day. He's like, Yeah, he goes, You know, that makes sense to me. He said, I had this fund, the Putnam Fund, Putnam Growth Fund, in 2008, when the stock market went down 38 percent. So I lost money in my fund, but they still sent me a bill for capital gains tax because the portfolio management side of the mutual fund were selling the stocks, creating capital gains.

Erick Arnett:
Right. And so you still have to pay the capital gains tax on it, even though you lost money in the fund that year. So how's that work for you? You have no control. And anybody with any wealth or significant wealth, or even if you don't have a ton of wealth, I don't. I don't. I don't think you should be investing in mutual funds. You really shouldn't. You deserve better. So ETFs extremely low cost like less than less than I mean, some of them are one basis point two basis points. Wow. For whatever. And so if you don't understand what that means, folks, that's less than half a percent. Ok, so 50 basis points is a half a percent. 100 basis points is one percent. So you might be paying one, maybe two basis points or below what the standard is. So like mutual funds could have some internal costs in there that you don't even know about. So only about 20 percent of mutual fund managers actually outperform the S&P 500. Think about that statistically. Wow, only 20 percent. I'm going to say it again. Only 20 percent of mutual fund managers outperform the S&P 500. So what are you paying for, folks?

Randy Woodruff:
What are they managing? What are

Erick Arnett:
They managing? What are you paying for? So we have people come in well, you know, that advisory fee you charge is kind of high. Well, I look at what they're currently doing and it's like, Well, you're in a passive portfolio. You are paying fees and expenses and you're getting no active control. You have no control over what those people do inside of that mutual fund and no advice and no advice. So unfortunately, I think there's a lot of people stuck in that conventional wisdom. This is the way grandpa invested. And yeah, I'm going to buy this mutual fund and hold it forever. That's just not just not going to work for you, especially in retirement, folks.

Randy Woodruff:
Exactly.

Producer:
Yeah. The old way is not the new way. The new way is not the old way, but the future is a way that we're headed towards. And you know, you can't see the future, but you can plan for it. That's why we got the folks in the studio from take point well to management. Take it from me. I go to take joint wealth management and I work with Erick Arnett personally. J.w. here with you. This is a prerecorded program, by the way. As always, every Saturday at this time, Erick Arnett and of course, Randy Woodruff, just a couple part of the team that want to take point on your retirement. Once again, that phone number three five two six one six zero five one one take that stress free financial analysis now and let them get the work for you. We'll be right back, folks, and after this. Take point on retirement, a well-rounded show from a well-rounded team leading you into retirement bliss and Saturday mornings for an hour of simple retirement advice from your friends at Take Point Wealth Management Saturday mornings 7:30. You're with us. 7:30 to 8:30. It is a prerecorded program brought to you by your friends at Tech Point Wealth Management. It is called Take Point on Retirement. Erick Barnett, Lead Advisor, Retirement Planner in the Studio CPA Randy Woodruff. Part of that team that want to take point on your retirement personally. Give them a chance. Give them a try. Of course, safe is secure investments. That's what we're talking about this morning. They have that financial analysis, evaluation consultation. It's all true. Take point wealth management. Their phone number once again three five two six one six zero five one one And yes, they are still giving out that free book stress free retirement. You got to ask for it, though, and the studio with us once again, Erick Arnett and Randy Woodruff.

Randy Woodruff:
Thank you, J.W. We're going to talk more about the Smart Plan, the smart risk side of the plan. Erick, talk to us about the smart safe side of the plan.

Erick Arnett:
Yeah. So a smart plan overall, we feel as though some portion needs to be in that smart risk, which is a tactically actively managed portfolio. And then the other side of the equation is utilizing what we call the smart safe side of the plan, and that's really utilizing index annuities. It may be more than one indexed annuity. I mean, it could be a laddered portfolio of annuities. So it just depends on each individual that comes in and how we tailor that for them.

Randy Woodruff:
But let's pause there for a minute, because you mentioned it depends on each individual. And I want to stress at that point out that, you know, when you come in and meet with Erick and I, we don't just have a cookie cutter plan. One plan fits all people. We sit down with you. We spend hours going over the over your, your financials, your investment statements, your tax returns. We put together a custom plan that's going to meet your needs in retirement. I mean, no,

Erick Arnett:
No, no, that's a great point. I mean, you got to you got to point that out because a lot of investment management firms or mutual fund companies or wherever you have your money place, they just have one blanket approach for everybody. They don't know you from Adam. It might be a 20 year old person or 80 year old person in there in between, and they don't know your situation, so it's just a blanket approach. So, yeah, we take sometimes a couple of months with the client developing these customized plans. So there's a lot of time and effort goes into it, and it's perfectly matched for that person's situation or that family. So I mean, I'm glad you, I'm glad you actually pointed that out.

Randy Woodruff:
So in the plan can actually change over time as the clients, as a client goes through life and as their needs change, the plan is altered to fit their needs at that time.

Erick Arnett:
Absolutely. So the smart, safe side of the equation is really utilizing safe investments like index annuities, fixed annuities, you know, trying, trying to create that guaranteed pension in the future so we can create a personal pension for you on that side of the equation. And I think it's important to have that as a good backup and also acts as a great anchor of your overall portfolio. So yes, it does. You can generate your own pension income that is guaranteed by the claim paying a bill of of a highly rated annuity company or life insurance company. So we always screen for the top rated. We always screened for the ones that are paying the best rates. There's all kinds of technicalities here to get into, but there's cap rates, there's participation rates. You've got to be careful. I was talking to a guy the other day and I'm not going to mention any names of the companies. But he was working with a big brokerage firm, and they only recommended one annuity to him while annuity. Because guess what? That company was embedded with that annuity company. That was the only product that they wanted to push, and that's the product that they were getting the highest compensation on, right? Amazing. How amazing how that works. He's like, Wait a second. You know, you just showed me an illustration where this index annuity that you're recommending even has some guarantees on the income roll up and the one they put me in and they told me that was like the best one. A lot of that going on. So that gets into being an independent advisor, being an independent fiduciary. We don't work for anybody. We work for you. Exactly.

Producer:
So you're telling me we should shop around. We shouldn't take just one person's advice.

Erick Arnett:
Absolutely. 100 percent, J.W. Yeah. In fact, we had a guy come in the other day. He's shopping around and he said, Look, I'm just, you know, I love what you guys are saying, but I'm also going to go interview a couple other folks and I said, Absolutely do it. I encourage you to do it. That's what you should do.

Producer:
You're listening to ninety nine point nine FM, JB Homosassa just

Erick Arnett:
Sitting there kind of being apathetic and stuck in what you're currently doing, you know, just trying to encourage it to to move forward and and get some new fresh ideas in there. So we always evaluate the insurance carriers. There's third party evaluation. So we're looking for the best financial solvency ratio of the annuity companies. You have to be careful of that. They've got to be good. Strong companies, highly rated carriers are considered Triple B or above many A or a minus ratings out there. And so those are really good, strong companies. More important than the rating is the financial solvency ratio.

Randy Woodruff:
You know, I'm glad we're going to touch on this. I think it's like you're going to touch on this because it's something that people don't really understand when they. Think about annuities, and they don't really understand how safe their money is when they invest into annuities compared to the bank. So, yeah. Walk us through that, please.

Erick Arnett:
Yeah. So we are constantly educating folks, and once again, conventional wisdom is the barrier that we have to break through. Folks have been always sold this

Randy Woodruff:
For years, for years and years before. I mean, we had good annuity products out there. The the banks with the FDIC guarantee was a great guarantee. But now, with the way insurance companies have evolved, annuities have evolved. They think there's a much better products out there when it comes to annuities. And so I think that IRA, how they recommend that people don't focus on the FDIC guarantee, right, and focus more on, you know, the other, like you say, the financial solvency of the company that they're investing in. Well, yeah, I

Erick Arnett:
Don't know if if folks know this or not, but if you invest in a bank CD or a money market, the FDIC reserve requirement is only three to 10 percent.

Randy Woodruff:
So what's a reserve requirement mean?

Erick Arnett:
So basically, when banks have your deposits, they have to have a certain percent of those deposits in reserve to back that up. But think about it, three to 10 percent of the banks deposits. Not much, much, right? And guess what, FDIC insurance? There's not enough FDIC insurance out there to insure everybody's deposit at the bank. So the banks have us kind of fooled or duped, and there's been a veil over our eyes for years that, oh, if you just put your money in the banks, it's safe. And guess what? Guess what? Why they're telling you this because they're taking your money and they're lending it out on the street at six eight percent. So they're making a massive spread on your money, folks, because they're preying on your fear. Bottom line, they're preying on your fear.

Randy Woodruff:
Oh sure, a real life example. I had a conversation with a client the other day about this exact topic. I said Apple, where we all know about Apple, and they probably got seventy five or 100 billion or more sitting in the bank or in cash reserves. So Apple is not worried about the FDIC guarantee. You know, so, and most of these large companies can't worry about the they got too much cash to manage and to have on hand to run their businesses. So here again, I'm not saying we shouldn't look for safe investments. I'm not saying the FDIC and FDIC guarantee is a bad thing, but don't put a lot of confidence in that and don't just use that as your sole decision when you're making a safe investment.

Erick Arnett:
The big difference right now with investing your money in insurance companies in these different products we're talking about is that these insurance companies are actively working with your money to improve your life and improve your lifestyle and add money to your bottom line. They're working for you. They want to make money to put dump into your interests bucket, because that's how they're going to retain you on as a client. But they also want to make money too, right? And the insurance companies are much safer than the banks. So a an insurance company by law has to have one hundred percent, one hundred percent of their annuity deposits on reserve. Ok, four percent. They also, by law, have to invest your money in U.S. treasuries, which is the benchmark for the safest investment in the world, right? So the they they put your money into U.S. treasuries, they it spits off interest and then they use that interest to buy options on the different indexes that are out there, stock indexes. So your money? Guess what? Your money's put your money with these insurance companies. It's never invested in the markets. It's never put at risk, OK? And it's also backed one hundred percent with a 100 percent solvency ratio. And then they take that money and they're trying to work it and make money for you. And so when what they do is when they make the money on the markets, they give you a portion and they retain a portion, and it's usually a fair split for their efforts. But the bank isn't doing that for, you know, the banks not working your money other than making money on you. So it sounds

Producer:
Like they want to charge interest on your money. Why would you pay interest on your own money?

Randy Woodruff:
Yeah, the banks want to pay you half percent of percent and lend it out at four or five percent right now. So they're not giving you.

Producer:
If you're paying to use your own money or to get access to your own money, why would you want to do that? I want to have control over my money. Yeah, I want to have control over my own money.

Randy Woodruff:
That question again, why would you do that? Anybody do that?

Erick Arnett:
So the great thing is is think about this inside those index annuities, which we love, right? Mm hmm. Your money's never at risk. The principles 100 percent protected. And if the markets go up, guess what you win? Mm hmm. But if the markets go down, you don't lose a dime. Exactly. And so how is that not better than a bond, you know? Or how is that not even better than taking the risk in the stock market? And that's why, in my book, I talk about what is your financial speed? Guess what, folks? If you don't need to earn eight, 10, 12, 14, 15 percent to reach your goals, then why the heck are you taking that risk? But at the same token, why are you have your money sitting in the bank making nothing? So the happy medium is these type of strategies where you can make five six seven eight percent on average and not have to take any risk. And if that helps you achieve your goals and you can sleep it. And don't have to worry about it all this fear that maybe might be out there and you don't want the banks making money on your money. And when's the last time the bank did you any favors? Call us, educate yourself. We're happy to spend as much time as it takes. I'll do 20 Zoom meetings with you. I don't care. I just want you to be educated. I want you to understand it. And I don't want to empower you to be the leader of your own finances and lead your family to and through retirement. You know, get control, folks, as opposed to all these other people controlling your money. The banks are controlling much of the mutual fund companies are controlling your money. You have no control. Let's teach you how to control it and you make the decisions and learn and you become the expert in the leader. How's that sound? Hmm.

Randy Woodruff:
I said in one of our earlier shows that it's amazing how much time people will spend the course of a year planning their vacations where they take two or three or four weeks a year in vacations, when it comes to retirement, which I'll spend years and maybe decades in. They spend little or no time planning for retirement. And so I think it's time we change our way of thinking and need to plan and spend time. To your point, Erick. You know, the way you take control of your finances as you educate yourself, you learn you sit down with professionals that will take the time to teach you and take the time to educate you. So even though you're working with somebody, you'll be a part of the process and this will be your decision that you're going to help help. We're all going to make together, but ultimately be your decision. And here again, you're taking control of your finances.

Erick Arnett:
Yeah, well, we're in a Zoom meeting or you actually come in the office and say, Well, I'm going to sit there right in front of you. I'm on a run in illustration with these different companies and these different products, and I'm going to show you exactly how it works and how it looks. And no one's going to hold a gun to your head and try to sell you anything. You just relax. Great atmosphere. Learn. Educate. I mean, that's what we love to do. That's why we do the webinars. That's why we do the seminars. That's why we do this radio show. I feel like if people can truly be educated and truly understand really what it is that's going on out there to empower these folks to to understand and make their own decisions. That's the beauty of it, you know, because guess what? The banks don't want you to know. Wall Street doesn't want you to be educated. They want you to continue to fall into that conventional wisdom trap so they can utilize your money to make money for themselves. Guess what? The banks are getting richer. Wall Street's getting richer. Ask yourself, Are you getting richer?

Randy Woodruff:
Is Main Street getting richer? Absolutely.

Erick Arnett:
Come on. Good question. Anyways, yeah, I mean, we're just passionate about it. And for years, I mean, I've written articles, I've written books about it. Just call me and I'll help you guys out or do your own research just like anything. Don't believe what you're told. Don't believe what someone pumped into you. Check it out for yourself. Check it out for yourself. Yeah, absolutely. So on the next segment, we're going to talk about the rule one hundred, the four percent rule. These are things that folks always kind of bring up to us and kind of understand a little bit better. So I think that'll be that'll be some great stuff to get into as well.

Producer:
Ok, let's take a quick break and we'll be right back with your friends and mine. Take joint wealth management. Erick Arnett, Randy Woodruff. We got another 15 minutes ago here, folks. Hang on. Stay with us. We'll be right back after this. I'm not at the age of retirement, but I know it's never too soon to start planning. And as I get older, I know that days coming where I'm going to have to rely on something other than a paycheck from work. That's why Take Point Wealth management for a stress free future by contacting Take Point Wealth Management, take your free financial analysis, investment tax trust, estate planning, insurance services business advice from someone with your best interest at heart. Truly. Contact Erick Barnett. Take Point Wealth Management three five two six one six zero five one one Take Point Wealth Big Point Wealth Management is an Investment Advisor Representative of Retirement and Wealth Advisors Inc., an SEC registered advisor. Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments. It may be subject to restrictions, fees and surrender charges, as described in the annuity contract. Guarantees are backed by the financial strength and claims of papain ability of the issuer. Erick Arnett, Randy Woodruff and the entire team is, Erick says. No one's going to force you into anything. They just want to educate you. And that's what they've done well and we do appreciate all the information they bring to the table. I've heard words this morning already like tactical, active, safe, secure, smart, perfect guarantee, even an anchor and that was thrown out there as well. So anchor yourself to your future to make sure that it's safe, secure and once again, we're going to turn it over to Erick Arnett, Lead Advisor, Retirement Planner, along with Randy Woodruff, to finish this show.

Randy Woodruff:
J.w. Thank you. At the end of the last segment, Erick brought up two great topics we're going to talk about in the last segment here. The first one is rule of one hundred. So, Erick, walk us through that, please.

Erick Arnett:
Yeah. So we often hear this and folks come in and it's sometimes what's the proper mix of investments for me at the point that I'm in and I've heard this Rule 100, so quite simply, Rule 100. It's a term and a strategy that's been put together by financial experts over the years, but simply states that individuals should hold a percentage of stocks that is equal to one hundred minus their age, right? For example, if you're 60 years old and you subtract 60 from one hundred and a half forty, so we're kind of recommending you stay around that 40 percent in stocks and then 60 percent in fixed income assets like index annuities or bonds. Because quite frankly, if you're 60 and we have a significant correction in the markets or even some short term volatility, it's going to impact you a lot more than it is, let's say a 40 year old. So, for instance, a 40 year old, you subtract from 100, you have 60. So they're saying, hey, 60, 60 percent in stocks. Well, if a 40 year old experiences a two thousand eight like we did, he's got plenty of time to make up, right? But I saw in 2008 when I was managing money in 2009, people right around that age of 60 had so much risk they had way too much risk in their portfolio, caused them a lot of stress, sleepless nights. And in fact, they're so fearful that eventually would just capitulate, sell everything and go hide in the woods somewhere and put the money in mattress. And guess what? That means that you've permanently lost that investment and you you've dramatically affected your retirement.

Erick Arnett:
Because I'll show you when you come in or we do our Zoom meeting, I'll show, I'll show you some charts and some calculations, like if you lose that kind of money, plus you're taking money out as maybe a withdrawal to live on in the first five years of your retirement. If you experience any negative downturn like that, it has a dramatic effect on the back end of your retirement. You could potentially see yourself running out of money. It's so important to get it right in the first five years and to have a good, solid plan that can weather all storms. And so that's just kind of a basic example, and it doesn't necessarily apply to everybody. It's kind of like we were talking about this one individual that we won't name that just kind of applies blanket terminology that every person out there when he's giving investment advice. True, we don't feel that that's the way you treat people. We customize everything. So it may be where we have an 80 year old man come in and says, Listen, I've got plenty of money, I've got plenty of pensions. This money set aside for my firm, for my grandkids put me in 100 percent stock here. Ok, that's different, right? We're talking about most retirees where they have the majority of their nest egg is something that they're going to rely on to get them to and through retirement and even potentially have to live on or draw on at some point. So. Pretty good rule of thumb, I love to balance the money between good, strong indexed annuities and good strong tactical asset management where you kind of have the best of both worlds and and your and then on the tactical side, very well diversified and even on the on the index annuity side, diversify what? And strategies and companies, because every index annuity out there has a different crediting strategy or a different index in them, so we're really creative with it.

Erick Arnett:
I love creating it, love taking when someone comes to me and it has like a hodgepodge of accounts and mutual funds, and they don't really know what's going on and what. And taking that and kind of creating a nice sound plan that they can understand and and you getting them on track. And now they're like, OK, I get it. I see it. Ok, this is going to work and predictability. We need more predictability, right? So we take the plan and then we stress test it. We throw a thousand scenarios and it throws out predictability and so predictability percentage. So we can tell you like look, based on a thousand different scenarios that we throw at this, you have a 95 percent chance of that. We're going to reach the goal that you're and have success or people come in. They might only be 50 percent chance of success so we can tweak things and change a few things and drastically improve that because number one, volatility risk, which is the measure of risk, taxes and fees, those three things are going to slowly eat away at your retirement. They're the silent killers. They don't just jump up and say, Here I am. Look, I'm doing this to your portfolio. It's a slow kind of death. And so you've got to be really careful that, like

Randy Woodruff:
The frog in the the analogy of you turn the heat up slowly and the frog cooks then don't even know it yet. Same same kind of analogy that, yeah, we don't just eat at you in taxes, eat it. You just really snippets. You don't even realize it. But over time, they become a more and more eating into your retirement.

Erick Arnett:
I use I mean, I fall back on personal experience and one of the one of my whys and the reason that I'm in this business and love what I do is it hits right home like my grandmother. You know, she when she retired my my grandfather passed away and my grandfather, you know, this is like back in the 70s, folks bought these bonds called Tennessee Valley Authority bonds, right? And probably somebody out there has heard of them and they were paying high interest rates and. And so six, seven, eight percent. So my grandfather had all his money in those bonds because he, you know, wanted safety and a good yield. Well, my grandmother was like 70 years old, and she never made a change in her portfolio, ever and was drawing money out of it. And by the time she was 82 83, she was out of money and had to come home and live with my grandfather. I mean, I live with my parents and my parents had to support her, and she was devastated by that because she lost her autonomy in her freedom and independence. Like in my dad and my mom and dad were like, You don't want my grandmother living with them. Even though they loved her so much, it was difficult, had to take care of her so she wasn't able to take care of herself anymore because of improper planning and just holding one investment for the long haul. And those bonds all of a sudden weren't the best bonds in the world, and they lost value and they just paid out and she ran out of money. So she was too conservative, didn't have other things in working in her portfolio, didn't have equities, didn't have indexed annuities like just that kind of hit home with me and kind of reason why I thought to myself to be a great business for me to get in so I can help folks alleviate that.

Randy Woodruff:
I had a similar situation not come to a family member, but with a client gets back. Over 20 years ago, new client comes in and and older gentleman and he had almost his entire wealth, well over a million dollars tied up in GE stock.

Erick Arnett:
Wow.

Randy Woodruff:
Yeah, yeah, almost the entire end GE back in the 90s and for the better part of the first, I say first decade of 2000 was a great stock performing very well, most of the time paying out dividends, stock values going up, and I was encouraging him. Now you need to begin to rebalance your portfolio, take some profits off, pay some taxes. Don't like paying taxes, of course, but you need to get some balance here because everything is concentrated in one position. And over time, there are some management changes or decisions that GE and the stock price began to shrink. Dividend payout got cut, the 911 hit and basically they quit paying dividends for the longest time. And I haven't really stopped all the stock price specifically, but I know for several years there there had a major impact on his financial freedom because he was so concentrated in that one position. So, yeah, we talked earlier in the show about buying and holding Erick. You just brought up a personal experience. I've got a situation with a client that happened 20 plus years ago. These strategies that we may have been discussing decades ago with mom and dad and grandpa and whoever else don't always apply to today.

Erick Arnett:
So it's a different world or these

Randy Woodruff:
New rules they were talking about should definitely be. At least I would say it here too, but they should be given some, some thought.

Erick Arnett:
Well, and that's what we were talking about earlier in the show, right? Think about it. This is innovation like the the marketplace of investment companies and annuity companies. They're they're constantly, you know, innovating new tools every day. I mean, those guys are constantly thinking of ways that we can get better and constant ways that we can track attract folks dollars to give them a better turn to beat the other company because it's very competitive. All right, there's a hundreds and hundreds of companies out there trying to get your money, so they've got to be competitive, right? So they're always innovating, they're always changing. New tools will come to the table. And that's why you and I are like real students of the game and we're constantly educating ourselves, going to events where we're learning more about products and we have a constant every week. We have an educational meeting where we're getting pumped with new products and ideas. And so you've got to stay in the game, you have to be innovative. So. And that's what Americans do. Getting back to our time, we're innovative people. We can find ways to reach your goals in retirement, no matter what. The environment is very true.

Producer:
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, including the risk of loss or principal, and there can be no assurance that the future performance of any specific investment, investment strategy or product made reference to directly or indirectly in this presentation will be profitable, equal any corresponding indicated history or historical performance levels, or be suitable for your portfolio. Investment Advisory Services offered through Take Joint Wealth Management and Registered Investment Advisor. Take Joint Wealth Independent insurance products and other services are not offered through Take Boeing wells, but are offered and sold through individually licensed and appointed agents. Any comments regarding safe and secure investments and in guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to claims paying ability of the issuing company and are not offered by Take Point Wealth management. Indexed or fixed annuities are not designed to for short term investments and may be subject to caps, restrictions, fees and surrender charges, as described in the annuity contract.

Randy Woodruff:
Let's touch briefly on this four percent rule that I see you have sitting here next to you as well

Erick Arnett:
Or run out of time, so only whipped through this one. The four percent rule, you know somebody. A lot of you have probably heard about it, but it's kind of a rule that economists and financial planners have come up with. It's what what amount should I withdraw off my retirement so I can safely maintain that principle and be able to never run out of money? And so it's kind of a good rule of thumb, you know, I like the four percent rule. In other words, if you're the value of your portfolio is a million dollars, you know, taken four percent or 40 grand a year, you should be fine because even if we are invested to earn around six to eight percent, you got to remember, folks, there's inflation out there, right? And inflation is two three percent a year. So we have to have a little buffer in there to grow with inflation because you're going to need more money 10 years from now from your portfolio than you do now because of the rising costs and inflation. So I love the four percent rule. Sometimes maybe we'll stretch it out to five percent if we have to, but that's really a good, safe number to withdraw off your portfolio to where it'll last throughout your retirement years and be able to live comfortably and also to fight inflation as well. So yeah, I think that's not a bad rule to follow. I see some folks they may need eight, 10 percent and that's just what it is. It is what it is. And but and we show them, OK, that's what you need to live on. But here's how it's going to look 10 years from now, potentially, and we'll do our best or try to keep up with that. But maybe we find other ways to reduce expenses, reduce fees. Ok, if we can reduce fees, expenses and taxes, maybe we can get you closer to that goal or what you need is so yeah, but in general, that four percent rule is a pretty good one to live by, I believe.

Randy Woodruff:
You mentioned reducing fees and taxes and other expenses and the folks we have on our team that take point not just you and I, but other folks have come on the show with us. Can I also help you reduce your expenses and talk about reverse mortgages talking about Medicare? We had a couple of Medicare experts are talking about, you know, potential ways to save Medicare premiums in retirement. So about retirement planning, about estate planning. You know, there's people think that unless you've got a huge estate 10, 15, 20 million dollar estate, there's no need to do estate planning, but they're actually still is. Absolutely. There's a lot of money you can save. Your heirs can save. You can make your estate very easy to transition to your heirs. The proper estate planning and proper trust planning. Yeah.

Erick Arnett:
Boom. Think about being able to transfer some of that wealth in a tax advantageous way.

Randy Woodruff:
Exactly. Talking about the real estate market right now about mortgages, so please come see us here. Take point wealth management. We have a well-rounded team of people, not just Erick and I, but other professionals across multiple disciplines that can really help you structure your financial legal portfolio, your assets to help you achieve that stress free retirement.

Erick Arnett:
Yeah, it's kind of a one stop shop. It is.

Producer:
So there we go. Yeah, it's like the big box store all under one roof. You can get it right there with take in wealth management. So once again, we appreciate the guests in our studio each and every Saturday, of course. Erick Arnett, Lead Advisor, Retirement Planner, and Randy Woodruff, CPA Part of that team that's there to help you and take point on your retirement, folks once again give them a call now. Three five two six one six zero five one one if you have a question even. Out in info info at Take Point on Retirement and of course, Google take point. Get in touch with Take Point Wealth Management. They're here for you and we'll be here next Saturday for you as well. We Take Point on Retirement. Thanks you all. Erick Barnett is an investment adviser, representative of Retirement and Wealth Advisors, Inc., an SEC registered advisor. Take on wealth management. This station and RWA are not affiliated. Exposure to ideals and financial vehicles discussed should not be considered investment advice or recommendation to buy or sell any financial vehicle. This information should not be considered tax or legal advice, and individuals should consult with professionals specialized in fields of tax, legal, accounting or investments regarding the applicability of this information for their situation. Past performance is not a guarantee of future results. Investments will fluctuate and, when redeemed, may be worth more or less than when originally invested, Lead Advisor Retirement Planner Erick Arnett.

Erick Arnett:
Ninety five percent of our job is not to beat up the public out there listening, but when we sit down with people is to correct mistakes, to try to avoid mistakes and hopefully to educate people so they can learn more than ever. I have so many concerns for our retirees out there and our listeners. There's so many different things that you may or may not be aware of that are ready to hit in the next few years. And if you're in the beginning stages of retirement or you're close to retirement, you really can't afford to make a mistake if you suffer any type of negative downturns in your portfolio values in the first five years of retirement. It's extremely detrimental, and I believe that the pressures are building to where we're going to see some potential corrections here come in the near future kind of had some good returns in the markets due to all of the stimulus that the government artificially pumped into the economy. People get excited and say, Oh, the economy is going to boom. That may be correct, but there's also a lot of things out there that are looming like inflation potential increases in interest rates, overvaluation of stocks, the bonds.

Erick Arnett:
We've had basically 12 years since 2008, where things have just kind of gone straight up peaked here and the market's just popping and it's volatile. We're seeing more than ever a rotation out of certain sectors certain stocks, certain asset classes. When a rising tide floats all ships, it's kind of easy. Any fund in your portfolio, any mutual fund, say a growth fund or any stock like a technology stock like Apple or something like that. When everything's going up, it's easy. But we're in a pattern now where we're seeing a lot of sector rotation. We're seeing a lot of asset class rotation. We show people this rainbow chart that shows all the different asset classes out there and how they perform differently in any given economic cycle. What we're seeing already, which Randy and I predicted a year ago, was that we're seeing a rollover in growth, so those very high growth stocks are starting to roll over with values outperforming international stocks, large cap growth, domestic stocks, real estate gold, you know. So how is your portfolio positioned now?

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