Jump Into Savings

Brian Akers and Paul Franco discuss the importance of starting to save early for retirement. They emphasize the need to maximize workplace benefits, such as 401(k) matches and health savings accounts, and to avoid debt. Brian highlights the significance of financial planning, including understanding one's job benefits and creating a budget. They stress the importance of saving first and living off the rest, and the impact of compound interest. Paul advises cutting up credit cards once they are paid off to prevent future overspending. They conclude by urging listeners to take action and plan for their financial future.

Transcript

Unknown: 0:00

The following is a pre recorded show, welcome to winning in retirement with your host, BRIAN AKERS, Certified Financial Planner, professional and founder of AKERS Financial Group now helping you win in your retirement. Here's BRIAN AKERS,

BRIAN AKERS: 0:16

welcome to winning in retirement. I'm BRIAN AKERS, president and founder of AKERS Financial Group, which we sponsor the show, winning in retirement. It's our radio podcast. Here with me today is Paul Franco from AKERS Financial Group. Good morning. Paul, good morning. Brian, how are you? I'm doing very well. Today's a great day to be able to have a talk. I thought you and I should have this, this talk today. And I I want to stretch out and make people understand that we want to make you jump, yes, and we want to make them jump high, as high as they possibly can, and jump often, often, yes. Should you pre exercise before they start to jump? Well, what I would

Paul Franco: 0:53

say is I generally need to, I need to stretch. If I take it too hard of a jump, something's getting pulled. Some muscles getting pulled. So we do want to do some stretch beforehand? All

BRIAN AKERS: 1:01

right, so no matter what age we're going to talk about, jump into savings. Yes, we're going to jump into savings. The thing is this, no matter where you are, age wise, based on your financial goals and concepts of retirement, you must jump into savings and get going. You need to jump high jump often and get into saving anywhere and everywhere that you can to benefit your future self.

Paul Franco: 1:27

Yeah, and it's to jump into savings immediately. No matter where you're at, whether it's your first job or if you've switched jobs multiple times throughout your career, you need to jump into savings now and do it immediately.

BRIAN AKERS: 1:39

Today becomes a launching pad. I'm saying about frogs, it's more of a lily pad, but a launching pad is where you have a moment, and that moment is now where you listen to a radio show, and you're thinking about yourself and where you are financially and where you want to be, and you're thinking, How do I get there? The answer is, jump into savings. What do you think? Paul, yeah.

Paul Franco: 2:00

I mean, the reality is that there's two big wealth builders for for Americans, and one of them is real estate. But you know what number two is Brian. He's your 401, K, your 401, K. That's the one of the biggest wealth builders that you can have, that you start earlier. You start when you can. You start putting money towards your retirement, jumping into that savings. You really do build wealth over time.

BRIAN AKERS: 2:23

You're right. So there's many things to talk about. I always like talking about cash cows and building wealth. The hard part is you got to know and you need to meet your first cash cow, that's right. And that's usually your first job, that's right. So the financial you might call your first job your first financial plan, and that you're creating money through working. And that creation of money you make decisions on, are you going to save it for later, spend it now? Are you paying for yesterday? Because you're deep in debt, right?

Paul Franco: 2:52

And that vast majority of people, when they get, when they get that job, and they they start to see the dollar amount hit their account, they think they should spend all of it. And that's when we have, I mean, as a country, we have over a trillion dollars of consumer debt. People are spending, people spend money. And so that that's a big that's, I mean, the reality is the spending money isn't necessarily the issue, but if, if, if you're not saving, then it certainly has become one. Yeah,

BRIAN AKERS: 3:17

so financially fit jumping, or the jump into savings, you don't have to be fit. You just have to to work on becoming financially fit. So today's show, we are going to talk about worth workplace choices to help you with your financial life, understanding what you are offered through your work so that you can take advantage of it to benefit you now and the future, and cover the importance of this and then the pitfalls that prevent us from doing these things. That's what the show is all about today. So the first topic comes down to becoming financially fit. Begins with a job and benefits provided. So Paul, give me a story, sure. So

Paul Franco: 3:54

imagine you get your first job, or, let's just say the scenario where you're switching jobs and you're considering switching jobs and you're reviewing a package. They give you a salary, they give you benefits, they might give you a 401 K, and might give you a match. They might give you a disability. There's all these different benefits. What we have to work through in becoming financially fit is making sure that you're maximizing each of those benefits. The 401 K might be one piece of that, but the reality is that there's other benefits. There's other benefits that they're giving you that you need to make sure that you're maximizing. And so in reality, we have to look at the package. We sit down, evaluate it, see what makes sense, and make sure we maximize everything your company gives you.

BRIAN AKERS: 4:40

Yeah, yeah. I What normally happens? They throw paperwork at you, yep. And then what happens? Ah, don't worry about that. And then, unless there's someone in that office that says to you, yes, sign that out, get put money away. Now you need to do this. Someone has to be coaching them. Usually it's someone at the work that become. That that first mentor, that first influencer to help somebody learn, to save Yeah, now on winning in retirement radio, a lot of our listeners, listeners are older, but what happens is that we make these big decisions every time we change jobs, every time we transition from one job to a next, a career to the next, every time we change, we get a new set of paperwork, a new opportunity to begin changing our financial future. Yeah, that's

Paul Franco: 5:26

exactly right. And so that what we try to do is we work through that with you as a planner. And so you're exactly right, Brian, they get this packet, and they're like, What? What on earth do I do? Well, I should sign up for my 401, K, I guess I should. Well, there, your company's given you disability insurance. They're get. Well, why aren't we signing up for that? These are the options. These are what we want to work through in helping you build out this plan.

BRIAN AKERS: 5:48

Absolutely. So for me, college went to Virginia Tech, Virginia Tech bookstore. That was the first time I got a credit card. Hey, you want to win a credit card? Sure, I don't have a I did have a job. I was going to jokes. I didn't have a job, I didn't have a job. I didn't have my full time job. Yep, I had a job during college and everything. But the thing was, they want to give you a credit card, and credit card was magical. You could buy whatever you wanted, yep, and then that you didn't have to pay the whole thing. And so you can easily get into into debt very quickly. I got the Federal Reserve numbers for debt for US consumers. Yeah, you said 1 trillion. Guess what the number is? What is it now? 1.1 8 trillion? Oh, wow, that's pretty good. That's just credit card auto balances are actually up to 1.6 trillion on auto loans. People have balances on student loans. And right the last one was 1.6 million on trillion of 1.6 trillion on student loans, and then about 15, I think that's the number. Sorry, my brain is has to go with my eyes, 12 point 8 trillion was mortgages, and another looks like 402 billion of HELOC mortgages. So the idea of debt, I think the total debt number of the country was 18,$18 trillion on the Federal Reserve website. Wow, for us, yeah, that debt comes at you fast. So the first thing is this, are you going to jump into savings for you and your future, whatever your goals may be, are you going to jump into debt? And one of the things, when you think about marketing and everything that's out there in front of us is all these things we got to have. It's not the things we need to have, it's the things you got to have. Want to have. You got to keep up. You got to it's like, usually you want a new car. Once you see someone else get a new car. There's these things that occur in our mindset that drive financial decisions. The mindset we want you to have is this, when you are starting a job and you have that paperwork, look at look at it as a reset. Can you save money through them? Now, sometimes you got to wait a year, and so it might be bad, because you have to wait a year, and you can't defer right away. So that means you need to save at home while you're checking save on your own. Yeah, I think you got to save 10 to 15% to start and then live off the rest. I found, no matter how much money people make, if they save first, I'm saved for the future first, they can live off the rest. They just adjust their lifestyle to it. Yep, very, very important. Yeah, very,

Paul Franco: 8:19

very important. And it's the same thing in the sense of retirement planning, is when you can live off of that income, and you've been saving it, saving it, saving it over your whole career. Now, in retirement planning, we know the number we can work off of. We know that net number we can work off of, but it's unbelievable. Brian, some of our wealthiest clients, the reality is that even after they retire, they're looking for more ways to save. And that says a lot. That says a lot

BRIAN AKERS: 8:42

because their core is a saver, but American core is a debtor. Exactly. Majority of Americans are in debt and are staying in there, and then they want to retire. And my speech on retirement is a cash flow thing. It's about cash flow. Where's your money going? Is it going out to debt and interest? And it's all called for before you have any discretionary money left over to have fun, you need to change that by getting rid of the debts. I have one situation where they have to sell things to unravel all the purchase decisions they made over the last decade. And we're talking someone who says when they first walked in, they want to retire in one year. And I'm like, No, you can't, unless you can get rid of and I listed three things they had to get rid of, and they're like, how are we going to do all this? I said we're going to do one piece at a time, and you got to work through it. The cash flow is money coming in, money going out. If there's only so much money that's going to come in, we don't want you to have a negative cash flow in your retirement. Exactly.

Paul Franco: 9:38

Yeah, I have, and I have a situation, Brian, it's funny, you bring that up where it's almost like where we're trying to save towards these other goals, like they want to buy another house, so they want to buy another property, sure, but they want to reduce their contributions to their retirement to then save that extra to fund that fund that house. And I showed them the numbers. I showed them the interest numbers, the compound interest of here's here's that. Net effect, even if we just bring down your 401, K contribution down to the match, and we, we basically take that extra income and save it to the house. Here's the net effect, 2530, years from now, yeah, to your retirement. And that's a real that's a real number. In that situation, it was about$600,000 difference just by bringing the 10% down to five to max the match.

BRIAN AKERS: 10:21

Oh, but you ran the house at a low escalation of value.

Paul Franco: 10:25

Yeah, there's then. There's that part as well. So that's the other piece of it. But I mean, the reality is that, what are your goals? What are your goals? Is your goal that you want to be able to retire one day, or do we want to be in debt for, for for a longer period of time? So these are sometimes,

BRIAN AKERS: 10:39

they wants are higher, and then what we need to do, I believe in fundamental financial planning, that means, get your house in order. What you need to retire on, get that in order. And when there's extra money, let's do extra with the extra money. That's a tough way to get to but that's what savers do. Those are people that never worry about their finances. They don't get a job because they have to make more money. They get a job that they want to have because they want to do that as a career, and they make money almost like a byproduct of it, yeah. And that kind of relaxation and lack of stress will actually allow them to make more money because they're they love what they do. Well said, Yeah. And that, I believe, when you're thinking about that, if you want to start to jump into savings, then one of the best first ways to do that is through your job, understanding what's available, understanding about what the choices are. Financial Advisors like ourselves can sit down talk with you about your choices, no matter where you work, if they offer something or if, even if they don't, we can find places to save money. So AKERS Financial Group, what we do is we do financial planning. We believe the plan dictates the answers, but the plan is driven on you and your decisions and your goals and what you want to accomplish, and that's why we bring it all together to create your plan. So AKERS Financial Group, we're local or independent. We don't report to a big company on Wall Street, we report to you. We do have offices in Forest Hill and Lutherville and places to meet around Maryland and all meet with clients all around the country and even a few around the world. It's so easy to begin winning in retirement. Just give us a call and schedule your free meeting with one of our team of advisors. You give us a call at 833 win retire. That's 830, 3w, I n, r, e, t, I R, E, we'll give you a call on Monday to schedule your free meeting in person. Go ahead to AKERS financial group.com or call us at 833-946-7384, to start planning for your retirement. Now, how much is your job worth to you. We'll explain why this is so important when we return,

Unknown: 12:45

you're listening to a pre recorded show, welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's BRIAN AKERS, welcome

BRIAN AKERS: 13:00

back to winning in retirement. I'm BRIAN AKERS, President, founder of AKERS Financial Group, and we do welcome you back to the show here in the second quarter. Here with me is Paul Franco. Paul Franco has his MBA. He's been a financial advisor here at AKERS Financial Group for a number of years. And we enjoy what we do. We love our jobs, right? Paul.

Paul Franco: 13:17

We love them. We love it. We love taking care of our clients. It means everything does.

BRIAN AKERS: 13:21

You know, I love getting people started as early as possible in the right direction, and then watching it work. The coolest thing about being in the financial advisory business, 3438 years total, it's neat to see things I did 30 years ago and where they are now, and watching that it worked. Now I don't say that it worked as a surprise, not officially, but I do it as a wow. The habits, the basic fundamental teaching that we try to do, works. And it works because people become savers and are not debtors when we're following the crowd and trying to keep up with the crowd, you're going to end up financially not in the shape that you want to be in. You're going to need to do some things different. You're going to say no more often than Yes. You're going to have to say later instead of now. But later on, you're going to be saying, all right, I'm fine. I can do all those things when everybody else is saying, I can't do anything. Yeah, it's a crazy thing. When you think about retirees, there's the ones that are that go and ones that can't go, and it's all dictated on what they made, on their decisions in their 20s, 30s and 40s, that decide that right?

Paul Franco: 14:35

And it's it's repeatable. Brian, the process is repeatable. So you did that. You've taken care of these clients for over 30 years, and you've seen it work. It's repeatable now. And so the reality, the reality is that our goal, winning in retirement, our goal, and with helping our clients, is to allow them to win in retirement, become financially free, become financially independent. How do we do that? Is. We don't wait. We don't wait to start saving until it's too late, or else you're working longer. You're working longer than you want to. We want you to have the choice to retire when you want to retire, and so to do that, we need to make the decisions as early as possible to give you that choice to have financial freedom.

BRIAN AKERS: 15:17

Yeah. So today we have a show. The show is called jump into savings. And one of the things you got to realize is that your work becomes this great source of benefits for you, depending on the company you work for. If they offer benefits, you need to know what they offer and have you taken advantage of it? Are you taking advantage of it? No matter what level you are, all the way up to C suite C suite. I've met with a number of executives that don't even talk to their HR and their specialized, specially assigned HR person to take advantage of all the choices that are there. The key ingredient to planning is what's available to you at work. Now this is one thing that bothers me as an owner of a company, a small company. I used to be small. The hardest part is that people, when they have a job, do they really know what their job is worth? Most people dictate their job based on their net bring home pay, not the combined value that's added to them. And

Paul Franco: 16:18

some people even just look at the gross number, and that's all they they're all that's all they're concerned about. And they don't take a look deeper in. Sorry, I jumped in there. Sorry. But the gross part, right, right, right. Like looking at the gross salary, and that's it. Like, imagine somebody who is getting a higher gross salary with no benefits, we have to try to figure out what the real value is. Is it worth it?

BRIAN AKERS: 16:39

Yeah. So jobs, if you're comparing jobs, there's jobs that offer health care for you, health care for your family, savings for retirement. Offer life insurance, disability, maybe lawyer benefits, maybe vacation, pay certain number of weeks, and depending on the person, they'll have different priorities based on what's going on in their life. The younger we are, we don't even look at it. It's true. We start having kids. We think about health care, then also worry about the savings for dependent care if we need child care. Then, all sudden, we start thinking about retirement, probably, or 4045, 50. You know, people don't really think about too early. I run a financial planning company, right? I believe heavily in making sure my employees can retire, because I want the opposite of the whole story about the cobbler, the shoot, the person who fixes the shoes and their kids don't have good shoes. I want people that work for a financial planner to have a well done financial plan, and so we offer a really nice match after someone's been there a year. And I really I check up to see if everybody's maximizing their match. Some people don't, once in a while, and then I'll have talks with them about why, because the match is one of those big things that companies offer that you must take advantage of. Because if you don't take advantage of and postpone putting money into your retirement plan, you're postponing, like, a doubling of your money. And people complain about their job, right? Oh, I never got a raise, but they gave me a match I didn't take advantage of. And so I try to explain after, after they're there a year, you get an automatic raise of the match, and that and that money is your money, but you got to put money in there, then we match it dollar for dollar. That's

Paul Franco: 18:22

exactly right. And so those are the real conversations we have with our clients. It's like, we take a look at the paycheck they come in. We ask for a lot of information. You know, Brian, we ask for paychecks. We look at your last pay stubs. We're looking at the benefits. We want to take a look at that with you. And one thing we can look at is, okay, we're looking at how much at the paycheck. We're looking at how much you're putting into your 401 K, here's what your match is. Well, it doesn't look like we're maximizing. It looks like we're 2% short. Well, is there a reason for that? You know, I get a lot. Brian is, oh, I just, I don't know what the match is. I guess I

BRIAN AKERS: 18:53

just told them, 50 bucks, yeah. Or they filled the format wrong, or they haven't logged into their website since they started, or they don't have a login at all. We've heard them all right, right, right. Then there's some people are just on it. And I love these are on it. We bring up that site on in the meeting, and we talk, we look at it. What are your investment choices? How can we make this better? Exactly. So when you're listening, jump into savings. Jump into savings by maximizing the match. Max the match. That's a key ingredient here, jump into savings and make your savings double immediately by maximizing the match. Now certain designs of companies, normally of nonprofits, they're not going to have a match. They're going to have a pension. Now they've been sliding out of pensions and giving you 401, K matches. You just got to make sure you put in enough to get whatever their match is. It could be a hard dollar match, like at some universities, 3000 4000 bucks could be a percentage. Really depends on where you're working. We don't know every employer's options, but we want to help you understand them, bring them all into what you need to do, and match your match and then move from there.

Paul Franco: 19:57

Yeah, exactly. And not only maximizing the match. And then we take a look at all the other options that they have inside there.

BRIAN AKERS: 20:03

Oh, yeah, the group benefit package. Do you know something called a health savings account might be the best accounts you ever open? That's right, you can deduct your health savings money going in and take it out tax free. Yeah. So nothing else does both

Paul Franco: 20:17

like that, right? It's one tool that it's truly tax free. You never pay tax on it.

BRIAN AKERS: 20:21

It's like above the line. It's a great way to put money in, especially if you're going to spend it on health care. I tell you, in life, you're going to eat glasses, dental you're going to you're going to be sick. Someday, you're gonna be sick. Maybe in the future, you can actually invest your HSA and grow that for your future, can become a retirement part of your retirement plan. That's right. All not a bad thing, not a bad thing at all. Yeah.

Paul Franco: 20:40

The reality is that Brian the HSA, and this is, this is just general advice for anybody listening. Is the small purchases that you make, the small purchases to buy, Advil over the counter, all that don't even use your HSA for it, let it, let it grow for you. Tax free. That money that grows over time you will have, the reality is, there will be some health issue maybe down the road. And so if, no matter what, we have some sort of tax free health account for you that growth, that tax free growth, is a huge benefit, absolutely.

BRIAN AKERS: 21:13

And so the key thing is, this is understanding your benefits when you sign up, check the box for short term disability and long term disability when you think about younger ages, anybody less than 60, you're more likely to be disabled than you are to die. Yeah, we check the life insurance box. We check two times, five times whatever the number is. But the reality is that short and long term disability are things that will pay when you need it most. Your your company only offers vacation and sick pay, like a week or whatever hours you earn, paying off your government or not. But generally, check the box and short term disability. Everyone should check that. Pay the money, the four or five bucks, it's worth it, and go from there. Buy the long term care, the long term disability through the through work, absolutely check that the life insurance. What happens about joining a new group. What's amazing is, when you the week you sign up, in that period of the first 30 days, it's guaranteed coverage. So if you're unhealthy and you change jobs, you can get insurance through your group plan, maybe double, double your salary or more, by checking a box without any insurability, right? Right?

Paul Franco: 22:21

That's a huge benefit, and that's not a bad thing, right? It's not a bad thing at all. And then it's that next layer of of of making sure that we have enough life insurance, but take advantage again, of what your company gives you. A lot of times. Brian, too, they give you coverage, and they cover it. Your company covers it, and some people don't even know

BRIAN AKERS: 22:37

that, right? So the life insurance decision, I believe that prior to 45 years old, through work can be the cheapest way to get it, but if you're changing jobs, you lose it, right? So one of the things to do while you're extremely healthy is to buy term insurance to cover life's needs. Half a million, a million, we've been calling a million bucks, like one unit of life insurance, because a million dollars ain't what she used to be, right? So one, two, $3, million of Term insurance is pretty cheap, and we can buy it for 30 years to cover the life that we have to that we lead, that is mortgages and kids and all that cost, where, if we die too early, our surviving spouse needs the money. Well, said, yeah, I really think that's something that we don't take advantage of as people also. And your benefits could be dependent care. There could be something called HRA, FSA, understanding how they work or how they don't work properly, understanding legal benefits, like we have clients that have the legal benefit, and then we ask them, do they know a lawyer? And it's like, well, give me the list off your website. Let's pick a lawyer out of there, right? Because you already paid for it exactly.

Paul Franco: 23:42

Yeah. But that's the whole topic, right? Brian, is how much is your job worth to you? Yeah, the reality is that it's worth a lot. So we need to make sure we're maximizing everything our company allows us to maximize. When

BRIAN AKERS: 23:53

you're comparing jobs, one has benefits and everything, one just has salary with no benefits, you need to add in the value of the benefits. It means real money to you if you, if you take the other job with the high paying you pay insurance on your own, get quotes on that. Know what that's going to cost. You don't go with no insurance, because you just don't want to. You want to save money or something exactly.

Paul Franco: 24:15

Yeah, it's very expensive. All of this helps you

BRIAN AKERS: 24:17

prepare for your retirement years. But you have to do the work. You have to put money aside. Winning in retirement sounds wonderful. Sometimes that seems so far away. We do. We want you to win financially now, not have the stress, not have the anxiety of savers and people that have goals and objectives and they're building money up for all these purposes, do well financially, because they're prepared. Because when we retire, we all know that the best part of retirement is when you get to relax. You get all your time back, where you decide how to use it. Before retirement, you're tight. Your time is tied up with other commitments, uh, you know, like mainly your job, it's so easy to begin winning in retirement. You go to our website, at AKERS financial group.com, Scroll to the schedule a meeting section and let us know you'd like to schedule your free consultation with one of our team of advisors. Right there. That's AKERS financial group.com where you can call us at 833 when retire. That's 830 3w, I n, r, e, t, I R, E, we'll give you a call on Monday to schedule your free in person meeting. Go to AKERS financial group.com or call us at 833-946-7384. To start planning for your retirement. Now, have you ever time traveled? We'll talk about this when we return. You're listening

Unknown: 25:30

to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's BRIAN AKERS,

BRIAN AKERS: 25:45

indeed. Welcome back to winning in retirement. I'm BRIAN AKERS here with me. Today's Paul Franco. We work for AKERS Financial Group. We are financial advisors from AKERS Financial Group. Our website's AKERS financial group.com that's a k, e r s financial group.com, I'm not gonna spell it all out. How you doing there? Paul, I'm doing

Paul Franco: 26:02

great. It's quarter three now. Brian, quarter three. That's

BRIAN AKERS: 26:05

true. It's all second half. Second half. What other ways can we describe it? Well, if it's hockey, now, you can't do it with hockey. Is it half full or half empty? It's half full. So we come out of locker room at halftime. This is the dictates. What's gonna happen. That's right, you'll be able to come back make a comeback. Are you wanna carry the win to the final all those things exactly. Oh, we do. Thank you for listening. Wherever you are at right now, you could be driving, you could be relaxing, driving lawn mower, wherever you're at, whatever's going on. We glad that you're here listening. The idea is listening leads to action, and that's what helps you succeed financially. We want you to win in retirement. Winning in retirement is taking your goals and dreams and making them a reality with a financial advisor. Advisor can help and guide you into what you need to do. That's what AKERS Financial Group does for people. Our show today is called jump into savings. It's understanding that through your work the group benefits the options. There are some things that can greatly benefit you that you need to take advantage of. Yes, there's things on the outside that we can also do for you and build around what the work offers, but we got to start with what's available at your work. Now, in this quarter, our topic is going to be a little weird. Now, Paul, this is very important question. Have you ever time traveled? I wish I time traveled by calling a client in the future because they were overseas. Oh, there you go. And so I called them in the future. I thought it was really funny. You sure did you did time travel? I said I was I said, this is Brian calling from Monday. How's Tuesday? And then I then I did reverse one time too. But it's pretty funny. When you think about time travel, do you watch those kind of movies?

Paul Franco: 27:46

I sure have, yeah, they're very the concepts so interesting. It's, it's, you know, it's and it's the reality Brian is that in time travel, it's like what most, most of the most, most of the movies and most of the what you see on TV, the internet, all that when it comes to time travel, it's all regarding all what, what could you What do you wish you could have done? It's going back. A lot of times. Time travel is going back, but not, not a lot of times is it going, going, going to the future. But the reality, Brian, I don't know there's, there's a lot of different ways about it, but time travel is such an interesting concept. But anyway, I got

BRIAN AKERS: 28:22

to use back to the future as a reference. There's different movies. Then they go back and try to fix certain things, and then then they mess things up, of course, exactly. But the reality is this, think about time traveling, but let's travel to the future. Let's go to your 65 years old. If you're already 65 that might be going backwards, but if you can push it, make it 8585 pick a date out there, and you think about, what does that future me look like, and are they happy with the current me? Yeah, like, if you go in the future to see what's going on is that person that you meet in the future, I'm frustrated with you in this year. Like understanding, like, Man, I wish they would have saved money. I wish they would have bought that stock. I wish they had done these things, right? Yeah, so I won the back to futures. The guy goes future, steals a magazine, a sports betting magazine, comes back and makes all the bets, all, I think, and then basically makes all his money and his wealth that way. Which is interesting, sure is. But the concept, the concept of taking that information back. You can make easy decisions when you already know the outcome. The thing in financial planning is we can predict an outcome through general planning and math and trying to make the wise decisions. We know if we have bad habits today, we won't have an outcome we want. We have good habits today, you're going to be close to the upcoming one. It's almost that simple, yeah.

Paul Franco: 29:44

I mean, I had a client where, I think I've talked about this before, but it's a perfect example with this looking back, is where we looked at their 401, K, we're getting ready to retire. And they said, Paul, how on earth has this thing grown to this value? How on earth has this happened? And I thought that was such an incredible question that we we went into the 401, K, and we went back. I showed them over time, over the last 25 years, where they started, how it grew, how much they put into it. And it all started 25 years ago. But that was that end goal, how, how, Paul, how on earth did it get to that value? It it was, it was really an interesting and fun conversation, but the reality is that that's, that's the idea is that what we save now does benefit you into the future. We don't want to be 65 and they're saying, Oh, I wish I would have saved more. Oh, I wish I would have even saved we don't want to. We don't want that to be the case.

BRIAN AKERS: 30:36

Yeah. So I believe that you explained to that person about the magic of compounding, right? Exactly, right. So how did that conversation go about compounding? Yeah,

Paul Franco: 30:46

well, that's the idea of, hey, guess what? Your money when you save it over time, the earlier you start, it compounds for you. It grows, it doubles, triples, quadruples over time. And so how I like to explain that Brian on the compound interest is, I like to explain it using this concept called the rule of 72 the rule of 72 is basically saying how long it takes to double your money. So if you take an 8% rate of return, and you take 72 and you divide it by eight, it takes about nine years for you to double your money. If you can get a 10% rate of return, it takes a little over seven years to double your money. But if you only get a 4% rate of return, right, 72 divided by four, it takes 18 years to double your money. And so that idea of compound interest, you know how I explained it? Brian, the best way is, is stay invested. Know what your time horizon is, know what the goals are that you have down the road, and build the plan out. That's what we do. We build the plan out and stay invested, stay the course, through ups and downs. We stay the course. But that's that's sort of how I like to explain it. In that compound interest is the doubling of money. You ever heard Brian the concept of, Oh, would you rather have a million dollars now, or double A penny every day for 30 days.

BRIAN AKERS: 32:04

Yes, sir. I remember that one. I remember, I remember using that when we first met. Yeah, yeah. Because when you were a teenager, I went over the idea of you put a little bit of money now and do it between the early age to age 30 and stop, you'd have more money than if you waited to 30 and state save the rest of your life, because you let the money work for you right now, there's a rule of 72 tells you how fast it takes money to double. There's a rule of 114 where you divide it by an interest rate tells you how long takes the triple. Okay, take 144 divided by the interest rate. That's for quadrupling. So these are all there's all math to it. So if you imagine that retirement is a math calculation, and we start with little savings, and let that grow over 3040, years, it's amazing. If you wait to 50 to start and you only have the ability for one double in a math then what happens is you're not going to get somewhere. The money's not going to work hard enough for you. If you have your money going out the door and you're paying interest, you're basically have negative returns, if you can. If you think about all the interest you pay on all your debt per year, and you save that instead of paying it as interest, where would you be financially? Oh, unbelievable.

Paul Franco: 33:14

So can I throw one more wrench into it? Brian, a little one. Careful where you throw it. All right, I'm gonna throw a little one ready? Okay? The idea of compound interest and your money growing, doubling, tripling, quadrupling. Imagine the younger you are when you start, or when you start when you can imagine that you did that in Roth. Imagine that you did that in Roth, where that money now, when you're putting it, if you're 4050, and you're saving it to retirement, it's growing. It's growing over time, but now it's growing for you tax free,

BRIAN AKERS: 33:44

right? So the Roth, if you have Roth 401, K, Roth, TSP, Roth, IRA, you put money in after tax, it grows tax free. Yeah, that tax free is you pay tax now and never again. That's a very good concept. And then when you add the doubling into there, that's the key thing of we want you in Roth, no matter what age you are. And I'm at a point where no matter what income you are, you got to consider Roth,

Paul Franco: 34:06

yeah, yeah. Well, the reality is, Brian, and I know you know this, and the I guess I'd love to hear an example, that is when, when you have the income, no matter what your income is, if taxes go up down the road, because that's always what we hear, right? Brian, is the idea of, well, your income is going to be lower in retirement, yeah? And we hear that a lot. Well, my my rebuttal to that is, well, is our lifestyle going to be about the same in retirement? Do we want it to be about the same? It might not be much different.

BRIAN AKERS: 34:32

Yeah, the idea that we on for one case, everybody's told you're going to be at a lower bracket in retirement years. And the thing is, is that really what you want? That means you have less money. I found that most retirees, the minimum we want is the same bring home as we were getting. That's the minimum. And so that leaves us almost in the same tax bracket. So for people in the high tax brackets, a hyper tax bracket, to me, is when you jump from 24 into the 3232 and above those brackets, you're not going. To drop much below. And so the idea is, what are all the ramifications of being at such a high taxation level? There is means testing of your Medicare. So you pay double and triple of your Medicare premium, quadruple depending on what you make in retirement years. If we go to the future self, we time travel there, that person's going to say, what did it? Will do a Roth? Please pay your tax back then. I don't want to get You're killing me up here. I mean, my Medicare

Paul Franco: 35:27

tripled. Yeah. It's like, Brian,

BRIAN AKERS: 35:30

what do you call younger Brian? Put that money in a Roth. Don't make me pay the tax in the future. That's what they would that's what I think the 65 year old Tell me. The other one might tell me to stop eating Oreo cookies or something like that, but we're just on financial right now.

Paul Franco: 35:42

Yeah, I was gonna say, when you started it, Brian, that was a loaded question. You phrase it as, where do we want to be at 65 there's, there's a lot of different ideas with that, right?

BRIAN AKERS: 35:50

Yeah, people ask me that question already, because I'm getting closer and closer to it, right? And so I think about retirement, and I think about the concept of financially independent. Financial Independence is a point in life where you know you're okay, you work because you love it, and I want to be loving and working and doing the things I enjoy, and having a balance of life. I think that's the winning in retirement. The balance of life, for me is where you're giving back, using your time for giving and and using that every way possible. And that balance comes from where you have the financial security, because you don't have that financial need. That's so great. Yeah,

Paul Franco: 36:24

that's the that's the goal, Brian, is to get have that freedom, have your time back. You decide how you spend your income in retirement, not, absolutely not that you have to pay a credit card down, you have to pay another mortgage down, all that. You decide how you use your income. Yeah, I

BRIAN AKERS: 36:41

think about, I want to retire to a beach. I had a client do that. Like in 1997 they retired to a beach. And the first year, they were at the beach. Every day I go to see him. The second year, I said, Well, how's the beach? Oh, we haven't been they did that. The first year, they're at the house, living on normal house life, you know? Oh yeah, there's a beach, like, a few minutes away. And so the idea is, retirement can be a lot of different concepts, and sometimes the retirement has to be what life you want to lead and what do you want to do with it, and there has to be more than just relaxation or watching the waves. So what happens is this, we love financial planning. Planning is where we start. Implementation and review is what we do for our people, through active money management, through insurance design, through figuring out what we need to do with everything we've built up over the years. So when we talk about jumping into savings and building up your savings, it's so that we have things to work with later, when you are ready to do all these other things in life, instead of working your job, we want to make things easy and comfortable for you as possible, so that we when we meet with you and put a plan together, it includes that, that you're taken care of, that you're planned for. That is what happens when you when you plan for things, right? Perhaps you've been sold something, regardless of whether you need it or not, not at AKERS Financial Group, we want to help you win in retirement. Go ahead and give us a call at 833, win retire. That's 833-946-7384. Or visit our website at AKERS financial group.com, financial pitfalls to avoid when we come back.

Unknown: 38:21

You're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's BRIAN AKERS, welcome

BRIAN AKERS: 38:37

back to winning in retirement. Welcome to the fourth quarter of the winning and retirement show. This is Radio Podcast. You go to our website, at AKERS financial group.com, you can check that radio podcast tab, hit right there. You can listen to this show again anytime you like. You can speed it up, slow it down. You can listen anywhere you like. All right. Paul Franco, you're here as a financial advisor from AKERS Financial Group, here to finish up our show called jump into savings, understanding what's going on with your workplace, all the group benefits and options like that. We got a big topic to finish up the show. It's about financial pitfalls to avoid. These are the things that prevent people from jumping into savings, from doing the jump. All right, so let's begin by, have you ever met someone that came in from financial planning that doesn't have a budget? Yeah,

Paul Franco: 39:25

I'd say that's actually the vast majority of people that come in, they don't have any plan in place. They kind of whatever the income is. What I'll say, Brian, what I hear a lot is, well, I make good money. You make good money. And so I've never been in a position where I've been able to, you know, not get something I wanted, basically. And so, you know what my response to that is as well. Well, are you saving anything? Are we putting anything away? Are you? Are you really setting yourself up now with this income that you have, setting yourself up for the future? Well, I don't know. We just the money comes in, the money goes out. We don't have a budget in place. Place. What I've found Brian is when you don't have a budget in place, when it goes in, it just goes out, it hits the checking account, it gets spent. You

BRIAN AKERS: 40:07

spend everything you make, yeah, now, so that means the counter to that is you need to save first, save often, send that money somewhere else, and then spend the rest. For someone like that, other people, they're spending so fast, they're going into debt. They have a negative cash flow every month. One way to tell is track your credit balances. Are they increasing every month? Are you living off of credit cards just to survive? That's not a good thing. That's gonna get that's gonna snowball into a terrible situation.

Paul Franco: 40:36

Well, imagine the compound interest we just talked about, how it can work for you. It can very much work against you. When it comes to credit cards, those high interest rates, they also compound against you,

BRIAN AKERS: 40:46

right? So, so the idea is, if you don't have any budget at all, our thing is this, you need to keep track of your money. No one else is going to track your money like you do. Financial Advisors, we're gonna try to coach you through things. We don't really want to tell you to stop buying coffee in the morning. We don't want to tell you those things, but if you say you're spending 1000 a month at a convenience store and you can't, can't save or pay off your debt, and we're going to make you look at your budget, where's your money going, so you can make a decision of how you want to change your own life. It's amazing. One of the things I like to do is to constantly see where money's going, where are all of those payments are going? Where all the things I've signed up for Do I really need them all? When you evaluate that and save yourself money, you can save yourself money. The best habit you can make is in your budget is to save first. Live off the rest. Save first. Make it come out. Make the savings be a bill. Save at work. That's why we're talking about jumping the savings. Put the money in max your match. Get some money out there. You can do that. Second one is overspending your new paycheck. Have you ever heard of anybody doing that? Oh,

Paul Franco: 41:52

you know what I like to say? Brian, I don't know. No, you don't sorry.

BRIAN AKERS: 41:57

I can guess what you like to say,

Paul Franco: 41:58

when you get a raise, when you get a raise to your income, you don't really get a raise. You start we save it that extra income that you had that if you get a raise to your income, we're still living off of that income you were making before. Let's save that difference, if we can. That's the idea and and that's because what happens Brian is you get a new paycheck, you get a higher paycheck, and you think you can just spend it all, but you know, it's, is it really? Is that really the right thing to do? That's that, that's the question.

BRIAN AKERS: 42:28

Example I have is electrician. He was on, I call him construction jobs, and then a construction job changed. He had a government construction job and got government basically scaled pay for a long contract. He raised level of his lifestyle up to that level, and then the government, the government job ended, and he went back to regular pay, and he doesn't know what to do, because he got used to that high pay. It's a new paycheck. And the problem would be, is that the habits of spending your overtime money, making it part of your budget means that you're going to work overtime forever. The habits of both people working and living off of every dime of it means that both you don't have to work forever. These habits of spending all the money create the byproduct, which is the necessity to work more and harder and just to make things break even when if you unravel things, downsize things, and make your budget work. Where you say to the budget, I'm saving this much money. Budget, you only get this much. You got to have a talk like that. You know? Yeah, have

Paul Franco: 43:29

that talk with yourself. What I find Brian is that a lot of times when people come in for those first, second, third meetings, they don't really know what their spending is like. And then when they actually look at it, they're like, Wow, it's kind of nice to it's really kind of nice to see where the money is going and trying to work through that. So it is important to know number one, just like you said, know number one, where your income is going, where is it being spent. All right, let's

BRIAN AKERS: 43:51

talk about credit cards, credit card debt. And also gonna talk about emergency fund. I believe that people need to build a savings account and pay off credit card debt at the same time, if you do not have some type of savings that's growing to handle the next emergency, if you pay off your debt, credit card debt, you're gonna have to use it again when the tire busts. You need to have the 2550, 100 bucks going into savings write out your paycheck into a separate account than your spending checking account, and then the rest of that money go against credit card debt. You need to carry a credit card with a zero balance every month. That is the best way to handle things. If you have a zero interest I think that's fine for a short period of time, until it's paid off. The credit card debt is a hard, brutal thing for Americans, and that that'll eat away all of our free cash flow. You think about all the things you can't do in life is because you're already pre committed based on something you spent a couple years ago. Yeah,

Paul Franco: 44:47

right. And the I'd love to hear your thoughts on this and the reality of, well, if somebody comes in, you said you're saving some right away, saving some to savings, and then you're still adding extra to pay down the credit cards. Which do you prioritize? First? Do you I

BRIAN AKERS: 45:01

think the savings has to be first? Yeah, I agree. I've had, I've had people where we use, they use all the savings, knocked out their credit card debt, but they didn't change their habits. They didn't build any savings. They basically spending. A month later, they're back into credit card debt. Their savings was gone or or one of the fundamental problems is they'll get a home equity loan, and now what was credit card debt is now more mortgage debt. They've risked their house. So it snowballs by getting more and more debt, consolidation loans, personal loans, all those things are usually a consequence of bad habits in the past where you never quite paid anything off.

Paul Franco: 45:36

Yeah, and that's those are real things we work with, with our clients, work through strategies to pay off debt. And you know what we like to do? I mean, what I like to do is, when we pay off that debt, let's cut that credit card. It's gone. It's gone. It's completely gone. You freed up that cash flow for you. Now,

BRIAN AKERS: 45:52

you're a cutter. I'm like, you like to cut the credit card. I have some

Paul Franco: 45:55

clients that are Paul, put it in the safe. I'm a cutter. I'm a cutter. Poor to you, Brian,

BRIAN AKERS: 46:00

I like to make sure we're doing good habits, right. I believe we need to know ourself on our finances, like, like, I know that if I go to ATM and get cash, I might as well just drop it on the ground, because I'm going to spend it fast, right? So I've tried to try not to carry the cash part, because it seems to spend faster. The credit cards seem to spend fast too, so you got to watch how you use them. I like to use one credit card that I can try to pay off all the time and try to keep ahead of my spending, you know. And the hard part, a lot of men like to blame women on spending, but usually women are spending a lot of small things, and men are using usually big chunks, and also the debt is accumulated more by the man spending, not the female spending. At least I was spending in budgets. But generally the idea is this, if you build your savings, start knocking off personal debt, then you can start becoming more successful financially. And what happens is, if people are in deep trouble, sometimes they delay their retirement savings because they're trying to get themselves out of trouble, but they haven't stopped the bad habits. You got to stop the bad habits to then start having good habits and align where your money's going with purpose, and then you start putting money away and getting that match. If you do not match, get the match. I believe you're failing financially, because that's free money. That's all part of your compensation plan. The other thing that we got to talk about is people who know they're in trouble and they will not open up the bill. Have you ever seen that yet?

Paul Franco: 47:31

Yeah. Or they sometimes, Brian, they just bring the bill in, yeah? Well, usually someone

BRIAN AKERS: 47:35

like that is usually related to someone that's a client. Might be a child of a client, and they're like, I don't know what else to do. Or their their their parent might say, can you help our child? Help this person? And then the idea is, a negative net worth is really we got to give, to give good habits. Understand your money, but we can't do it for you, but we can coach you and get you up and going for where you need to be. More debts, not the answer. It's less that, understanding where your money's going, writing it down, all these things you got to do. There's things like, the last at least five years, you've been able to put off student loans and not make payments, right? And so everybody's used to not making payments. And the reality, we try to coach people to always be making payments so that the debt will not be there whenever things occur. Yeah, I think

Paul Franco: 48:20

that's going to be a surprise to a lot of people. Unfortunately, Brian is when that, when those payments start back up, yeah, it's almost like the American way of just kicking the kicking it down the road, kicking the can down the road. But that will be a huge problem later. We need to start making payments of

BRIAN AKERS: 48:34

Congress does, right? They kick the shirt down the road and not address the fundamental problems of Social Security and Medicare, all those big things, right? So the idea today would have a show called jump into savings through your workplace. You have opportunities to start savings. Get it out of your paycheck, hide that money, send it to your future self. Make sure you putting money away. Make it a Roth Max the match. Get yourself out of credit card debt, build emergency fund. These are all fundamental things in financial planning that we just have to do it, and you have to do it now. Don't do it tomorrow. Do it now. Look at your phone. Look at your balances, look at where your money's going. Say no to something today. Say no tomorrow. Save your money. No one else is going to care as much about your money as you now. Financial Advisors, we're going to help you and coach you and guide you, and we're going to care about you the person, but we can't handle every financial decision that you you're thinking through. Right?

Paul Franco: 49:27

The situation is specific to each individual, and so the plan needs to be handled on a per per person basis. There's not a blanket answer that fits everybody. It's for each individual.

BRIAN AKERS: 49:38

I wish this was only for people that made low income. This is no matter what income you're at. I've found people that make more income spend it faster. And it's more of a problem. Exactly. It's larger. The problem is larger because I I tell them, You got to have 12 million, say, to retire at this level, and they have a million. They're like, how am I going to get there? I said, Well, you got to stop spending. I know you can afford it, but you can't afford it, right? Not long term. Yep, exactly. Yeah. Yeah, I had that talk recently. Well, it's like, incredible career, but it saved a million bucks already, but they're 40 and they want to live like they need 12 million. Says exact situation. Yep, today's going flat, but going by very, very fast. We started out with the word Jump, jump into savings, and that was our show. Thank you very much. Paul Franco, thank you. Appreciate it. You guys can listen to show through our website, at AKERS financial group.com, right there on the radio podcast tab. All right, that was what we covered. Was jump into savings. Get yourself started. We look forward to meeting with you. We want you to win in your retirement by taking advantage of the opportunity to begin planning with us at AKERS Financial Group to schedule your free meeting with one of our team of advisors. Go to our website, at AKERS financial group.com scroll to the schedule meeting section and let us know you'd like to schedule your free meeting right there. That's AKERS financial group.com or you can call us at 833 win, retire. That's 830 3w. I N, R e, t, I R E, and we'll call you on Monday to schedule a free in person meeting with one of our team of advisors. Start planning for your retirement now. Go to AKERS financial group.com or call us at 833-946-7384, thank you for listening. I'm BRIAN AKERS from AKERS Financial Group, and we want you to be winning in retirement.

Unknown: 51:16

You've been listening to winning in retirement with your host. BRIAN AKERS of AKERS Financial Group. AKERS Financial Group offers securities through archidios capital. An SIPC and FINRA member firm. Advisory services are provided through arcadios wealth. AKERS Financial Group and arcadios do not share any common ownership. Neither arcadios nor AKERS Financial Group provides tax or legal advice. Advice given on winning in retirement is general in nature, and one should seek further advice from their financial advisor, broker, attorney andor tax accountant before investing, be sure to read each prospectus carefully to understand all the risks associated with each investment. Examples and scenarios shared are meant to be for illustrative purposes only past performance is not indicative of future results.