Winning in Retirement

Portfolio Design

• Akers Financial Group

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Brian Akers and Alex Monk discuss portfolio design for retirement planning on their radio show. They emphasize the importance of starting early, with Alex noting that most people in their 30s don't think about retirement. They stress the need for a comprehensive financial plan, including tax efficiency and risk management. Brian highlights the significance of understanding net worth and the importance of diversifying investments. They also discuss the impact of emotions on investment decisions and the necessity of regular portfolio reviews. The show concludes with a call to action for listeners to schedule a free consultation with AKERS Financial Group.

Unknown:

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:

Welcome to Winning in Retirement. I'm Brian Akers, president and founder of AKERS Financial Group, and also the co-host of Winning in Retirement. Here today, I have with me Alex Monk, certified financial planner, practitioner, financial advisor, working with AKERS Financial Group for almost 14 years. Right, Alex?

Alex Monk:

14 and a half years, so you round that up to 15, which is basically 20 years of experience.

BRIAN AKERS:

You just keep rounding everything, don't you?

Alex Monk:

Good man,

BRIAN AKERS:

it's just like you must have been the guy that got rid of the penny and kept rounding up. They don't need a penny anymore. Also,

Alex Monk:

oh yeah, it's been a good run, and I absolutely love it here, Brian.

BRIAN AKERS:

I appreciate that. You know, great job with our clients. I know they love you, and they love, they love seeing you and your little boy and everything else.

Alex Monk:

It's fun to share life with these people. I couldn't do anything with my time, and enjoy it more.

BRIAN AKERS:

The coolest thing about being a financial advisor is we're there to help people to reach their goals, to help them win. The radio show is called Winning in Retirement, because no matter what stage of life you think about the future, you think about retirement, you think about what I'll do, how can I win, what's it going to look like, and it starts to motivate you to save money.

Alex Monk:

Wait, wait, wait. So, you just said that no matter where you are in life, you're thinking about retirement. So, you're telling me everybody that's 35 right now is thinking about retirement?

BRIAN AKERS:

They're not. That's the problem. Those in the radio show, I was winning in retirement. I shouldn't listen. I would say yes, you should, because the little things you do in your 20s and 30s, the less you have to do later in life.

Alex Monk:

I mean, it's a big deal, but it's so far away.

BRIAN AKERS:

But no one else is going to save for your retirement more than yourself. There's not going to be pensions. The social security is going to change in 2034 There's going to be money saved by you, and that's

Alex Monk:

it. What?

BRIAN AKERS:

Yeah, it's

Alex Monk:

terrifying.

BRIAN AKERS:

So, gotta get started now. And one of the things that we found when we were talking to our clients is that when we save our money and we put money in different places, we never really think about all of our money as a portfolio, as the whole thing being a portfolio of your investments. We think about it all together, and that's a process we want to walk you through today. Top-down portfolio design of what are you doing with your money? Where is it going? Is it working for you like you're working for

Alex Monk:

it? Who, I like that. That is good. And then, how do you tell, like, what are your benchmarks? What are your goals? Like, I did good based on what. How you feel?

BRIAN AKERS:

I love doing a net worth number and judging our overall approach to planning by your net worth. How's your net worth? Let's say you're starting negative, that's most people out of college or out of high school, and just getting started, you get negative, then you gotta get above sea water, get the plus one, then you start,

Alex Monk:

you might go down a little bit,

BRIAN AKERS:

especially when you buy things, right, you buy things where you know what you're down,

Alex Monk:

but that is like the best way to look at it. But I agree with you, but explain to me why, like I don't understand why wouldn't I just do the same thing in every single account I have.

BRIAN AKERS:

Oh, that's that's a different answer there. So it goes like you go to some brokerage houses or names, wireless, sure, and they get your portfolio, and hey, you're number three, we're gonna put you in a number three, your Roth, your IRA, your joint account, your kids account, all exactly the same funds, computer trade, it set and forget type thing, and we totally disagree with that. We believe that financial planning dictates how dictates how you should invest your money. Each portfolio and the taxation to the future will actually tell us the risk, the time horizon, and how to invest

Alex Monk:

it. It's actually quite fun. That little puzzle that you just brought up.

BRIAN AKERS:

Now it might seem like we do the same thing in certain situations, because we've gone through the screening process and narrow it down to what we want to recommend for Ross and what we want to recommend for money that's more tax efficient in a taxable account, and that's because that's the job that we do,

Alex Monk:

right. Well, and you know the thing that I, I want to stress the most to people is that we are on the same side of the table as the client, like we succeed when they succeed,

BRIAN AKERS:

right?

Alex Monk:

So it's not a battle, like I am sitting with people trying to get what they want out of their investments.

BRIAN AKERS:

Well, that's that's the key thing, is what they want. So one of the key ingredients to your personal portfolio design is why. Why are you investing the money?

Alex Monk:

Well, taxes,

BRIAN AKERS:

that's the only reason.

Alex Monk:

I mean, that's usually the first reason when someone walks in for the first time, they're like, "I'm worried about taxes,

BRIAN AKERS:

so they want to say, like, pre-tax now, pay less today,

Alex Monk:

or they're just, you know, that's a hot button that they hear. And then I say,"Okay, well, what do we have going on? Like, do we have a manageable tax situation? In does your money match what you're trying to do?

BRIAN AKERS:

What tax bracket are you in? And the hard part, some people don't know what brackets they're in, some do, some know every, every number, some are the opposite. And the idea is portfolio design takes lots of information together, but we have to start with your personal why. Why are we investing this money? Where's the money currently? Is this going to be coming from paycheck money, money in the bank, inheritance money, money that's already in retirement. Where's it coming from? Because that'll tell us there are choices that we have on the next level of recommendations,

Alex Monk:

and those choices are different as your income changes and your scenario changes, like as often as they change the rules, people's lives change just as fast, if not faster, so you know part of this process is seeing these clients regularly make

BRIAN AKERS:

you said that people's lives change faster and faster,

Alex Monk:

yeah,

BRIAN AKERS:

that they actually change.

Alex Monk:

I mean, sometimes, yeah,

BRIAN AKERS:

of course it changes, right?

Alex Monk:

I mean,

BRIAN AKERS:

and so

Unknown:

what's a

Alex Monk:

trick question? Like, it always changes,

BRIAN AKERS:

your portfolio should change with it. Yeah, that makes sense.

Alex Monk:

But you would, you would have to meet with somebody that knows these things.

BRIAN AKERS:

Shouldn't it be on like a dial that turns down one notch every, every, every year on automatically, no matter what your situation is about?

Alex Monk:

I mean, if you're a business planner, then yeah, but if you're a financial planner and you're the answer is absolutely not.

BRIAN AKERS:

Yeah, so what we're doing right there was trying to talk about the idea of set and forget. One idea is they do target date, set and forget, set your money in there, and it dials back, you buy bond funds, and what ends up happening is before you know it, you have 25% US stock, 25% international, you have so much foreign bonds,

Alex Monk:

40 year old the other day,

BRIAN AKERS:

yeah,

Alex Monk:

in their 401 k said they've been retired for 10 years

BRIAN AKERS:

because

Alex Monk:

they were in a retirement 2020 or 2015 retirement income, that was

BRIAN AKERS:

a selection they had,

Alex Monk:

yeah, and it mapped automatically over from their old plan, and I don't even know how it got there, but it was that way for a while,

BRIAN AKERS:

yeah. So, what we do with people is this: you bring your login and everything with you to the first meeting. Bring it, bring a statement if you can. If you can't, we log in and get it for you. We look at it, we say these are investment choices, is what you're in, is that what you should be in?

Alex Monk:

And if you're thinking, like, well, why is it so much work, because we want to find the best answer for you. Like, there, there might be great things in your plan, but we need to see what else you have. If that fits, if it doesn't, how much money you're making? Can you do this anywhere else? Right, how does that all fit together?

BRIAN AKERS:

I love the word maximize. Let's maximize our contribution. Then let's maximize the growth. Should you really have a money market allocation, if you're 25 years old, 45 years old, or should the money be buying the market each and every paycheck? I think it should.

Alex Monk:

I don't see a reason to time the market at that age, unless you're, I don't know, you're buying a house in the next month, but, like, long term, generally,

BRIAN AKERS:

but you see our successful multi million dollar 41k people, they have years ago when things were at its worst, they were buying, they maxed the max their contributions out 24 532 you know, just put the max in and bought the market, market went down, they bought the market, market went up, they bought the market, but

Alex Monk:

see what you're saying there as a result of good planning,

BRIAN AKERS:

it's cause they know that money's for the future. They don't need it tomorrow. If they need money tomorrow, we put that somewhere else,

Alex Monk:

correct? And the goal is to not get scared, it's to get excited when this happens, right? Because we're buying stuff on sale, that's how you make big returns.

BRIAN AKERS:

So your portfolio design will then dictate each and every account what is best. We believe in a lot of things in planning. We need to be out of debt. We need to be getting yourself out of debt. We need only asset-based debt, not credit card type debt. We need to get rid of that. That's a great investment to get rid of the credit cards, to make sure the money's flowing and saving for whatever your goals are. That's why are you investing, getting it organized? Where is the money now? And how to get it invested in the best way. Can we find a way to do Roth? What's your time arising before you retire? Do we have time for it to grow, time for it to grow up and come down? Market does that, goes up and down, but you don't need all your money tomorrow, no retirement, you need your money over time,

Alex Monk:

right? And most people, they want to know, how much do I need, like how much? And then my answer is, how much are you going to spend?

BRIAN AKERS:

Yeah, cash flow,

Alex Monk:

cash flow,

BRIAN AKERS:

so it's not a big number on top of your head, like$2.7 million It's what is your cash flow need, right? I love telling someone who's been very frugal, they don't have a high paying job, but they live within their means, save money, and I say, you know how close you are to retirement, because you know what your monthly number is. You know what you're living within. You're happy with this lifestyle, and you don't need to have 10, $12 million to reach your goal. You can be there at$700,000 and that person was halfway there at the age of 40.

Alex Monk:

And sometimes, if they have a pension or something like that, then you know. Their burdens even lower, and they're always shocked to realize that because of that frugality early on, they're able to have a much easier retirement because the cash flow,

BRIAN AKERS:

especially when someone in their 20 saves, and then they get that first double between 20 and 30, their money doubles, then they get another double, so basically 100,000 becomes 200,000 becomes 400,000 comes 800,000 As you have time to double, a lot of people put things off, they don't save till later, they don't have enough risk, they might have their whole 401 k in a money market making 3% Hey, that'll double every 24 years.

Alex Monk:

Well, I don't have enough money to take risk, Brian. I hear that all the time, and I'm like, well, what do you, what do you mean?

BRIAN AKERS:

Oh, you're never going to have money if we don't let the money work for you. So, in a portfolio design is where we figure out how much should be in stocks. Let's diversify it. Not all of it should be in stocks, but if money's for 30 years down the road, that money should probably be in stocks, but the money you need this year, next six months to a year, not in stocks.

Alex Monk:

I, I don't think that you get the incremental amount of return by taking that much more risk, right? In the short period, so having your cash flow identified not only makes you a longer term investment with your other assets, but it helps your tax planning.

BRIAN AKERS:

Tax planning works out well. I do. I do love Pan Tax Now, never again through Roth IRAs, Roth four 1k is Roth any way we can get a Roth, right,

Alex Monk:

except for David Allen.

BRIAN AKERS:

Oh, that's pretty good stuff. Oh man, not really. So the quarter's flying right by. We were talking about how do we start portfolio design, and that's all about why are we investing the money. What is your financial plan? Says we'd love for you to maximize in every way, but that doesn't always work out. What happens is a save what we can, save where we can, but invest and let that money work for you. That's what we're learning here in the first quarter, as we talk about portfolio design here on winning in retirement at AKERS Financial Grow. We're local, we're independent, we don't report to a big company on Wall Street, we report to you. We do have offices in Lutherville and Farsi, around the Mid-Atlantic region, and we have clients all around the country, even a few around the world. It's so easy to begin winning in retirement. Let's give, so go ahead and give us a call to schedule your free meeting with one of our team of advisors by calling 833 W I N R E T I R E, that's 833 win, retire. 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. Should stocks be in your portfolio, no matter your age? We'll talk about this when we return in a moment,

Unknown:

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.

BRIAN AKERS:

Welcome back to Winning in Retirement. I'm Brian Akers. Here with me today is Alex Monk. We're both certified financial planner practitioners from AKERS Finance Group, and we do welcome you to our second quarter of our show. Alex and I have put together a show called Portfolio Design.

Alex Monk:

Oh yeah, interior design guys here or not?

BRIAN AKERS:

Portfolio design,

Alex Monk:

gotcha? Yes,

BRIAN AKERS:

and we're not talking about exactly which stock to buy inside a portfolio, but or the allocation of duration of the bond funds, or talking about is how you design, how you put it together when it comes to your financial planning, and how we do it for people. Yeah, so far in first quarter, we use how to get started. We're talking about the why you should invest your money, make sure you understand your why, let your money work hard for you, understand a little bit about what's going on, where the money is that you're starting with, and how to get it to where it needs to be to reach your goals. Now, the second quarter, I got asked Alex

Monk this question:

Should stocks be in your portfolio, no matter your age?

Alex Monk:

I mean, I think the answer is yes. I mean, I can't tell you how many people I've seen inherit things from their parents, like some old school utility stocks, or you know, whatever those dividend hogs were from way back in the day. What, you don't like that one?

BRIAN AKERS:

Dividend hogs,

Alex Monk:

is

BRIAN AKERS:

this a funny word? I'm not sure what you mean by that.

Alex Monk:

Like, can you explain the power company where you know people from, I don't know, Great Depression era would save and do dividend reinvestment programs, sure. And then I see a lot of times their kids, baby boomer age, inherit, and it's a lot of the similar stocks just hold them, they just hold them.

BRIAN AKERS:

I call it, I call that a marriage, where it's just sort of an inheritance, and they sit inside and just let it grow. They don't really look at it again,

Alex Monk:

and you know it's funny that we bring this up, but I had same conversation with somebody this week. He's like, you know, I'm going to inherit these stocks from my dad, and they've worked great for him, so should they work great for me? And I'm like, you know, if your goal is to have just that amount of dividend income, then you know, sure. Do you feel like you're dishonoring your dad? Had by not holding them, like there was almost like an attachment there, but when you inherit them, it's a great time to make the changes, because you get a step up in basis pretty much most of the time. So, if you are going to make changes, that's the time to do it, and make that money fit your current life.

BRIAN AKERS:

Yeah, I was thinking about a client. This is a perfect client who did that. They passed away in their 90s, about probably a decade ago, but they had a collection, and Harriet, this collection was the whole Baby Bell combo. It was electric companies from the 70s, and then basically they just reinvested their dividends. He wrote down the dividend every month in his, in his book, he had money in the bank. He wrote down the interest every, every month in his book, and he had money everywhere. And so I started talking with him, and I said, Well, why, why, why are you investing this way? Well, I've always had this stock, always had that stock. I said, Well, you know this stock, I bought this electric company. He goes, Oh yeah, I've had a long time. I said, Well, do you know who owns that now? He goes, he goes, no, I said Enron. So this was after Enron came, went, and disappeared, right? So that basically what he thought was one of the many dividend paying stocks, because, yeah, I wasn't quite sure what happened there, but it was just like a collection versus a portfolio designed with purpose. And so what I did was about a decade of working with him and going over what he had and working on a mindset of how this is all work together and what is missing. What are the missing parts? If you only buy what you're comfortable, it could be someone that has real estate only, someone has CDs only,

Alex Monk:

dividend stocks,

BRIAN AKERS:

seven stocks only. It could be the baby bells from the 70s and 80s, it could be right now, it could be s5&P 100 only, could be the tech stocks only, it could be AI only, those kind of things where you get so contrary to one area you miss the design part, the purpose part, the investments that are designed for each and every moment of life,

Alex Monk:

and the volatility along the way, like that's like a huge part of portfolio design, is being able to handle that volatility and use it as a positive thing.

BRIAN AKERS:

If you have time, then we can accept volatility. If they

Alex Monk:

think you're always going to have time with with the proper structure,

BRIAN AKERS:

yeah, that they have a quote for Warren Buffett saying something about never, never lose your money. You think Warren Buffett never lost his money? Now I believe Warren Buffett invested long term, and every time he was down, he'd buy more of it and be invested long term. He was buying something long term, but he lost money. He lost money in trades, but the idea of the concept of never lose money, is you're not trying to bank money in one day, you're not trying to get rich quick scheme,

Alex Monk:

or at all on red or black or something, or

BRIAN AKERS:

trying to get wealthy very fast. Wealth has accumulated over time, and it does work. It works extremely well, especially those that are savers that live within your means.

Alex Monk:

Said earlier, the doubler. Let's go back to that.

BRIAN AKERS:

Yeah,

Alex Monk:

so that you were saying how it's really fun to see that first doubler, but like for me to sit across from people that I've had as clients for 10 years plus, right? And I can say, look, just since I've known you,

BRIAN AKERS:

yeah,

Alex Monk:

this is where we are, and if you guys keep living the way you live, it's going to double again, and they're, they're just like, you know, their head just explodes. Like, what do you mean?

BRIAN AKERS:

Well, I have these group of clients that they used to be $2 million clients, now they're 4 million, and now 4 million. I'm talking them through Maryland estate taxes at five 5 million held 16% and how they need to start spending. Let's go shopping is what my presentation has been.

Alex Monk:

I told this one couple, I was like, "I dare you to go, go spend

BRIAN AKERS:

right, because

Alex Monk:

they already have more than enough money, more than enough income, and their kids either don't need it or aren't set up to handle it. So, it's like, what is the purpose of all this, and I'm like, hey, it's for your value, your life, like, do whatever's on your list.

BRIAN AKERS:

Yeah, but you know, like, so we talked about these successful people that are very, very frugal, and they save and don't spend, and then 90% of Americans are not that. So the reality is, if those listening to the show, there's combination now savers seek advice, seek planners, and that's why we end up having a lot of them, because that's what they want to do. That doesn't mean they started out as great savers, that just means they became greater and greater savers when they saw how well it works,

Alex Monk:

and also there's usually like little bottlenecks or choke points, like in people's financial lives, where they, you know, I don't see how we're ever going to make it, and then three years later all their debts paid off, because it's, you know, the timing, and it's just being able to understand, hey, this is not forever, this is not permanent, what's part of the plan, and then when the debts start falling off and the we. And keep coming in, it's, but it's hard to see that if you've never done it, like I couldn't imagine retiring without a planner,

BRIAN AKERS:

it's like anything without coaching, you need some coaching, so this quarter we're talking about stocks should be in a portfolio, when the story I want to tell about is at a lady sold her farm, she had a lot of horses and those horses went to some some friends of hers, and so we want to create the farm profit into a fund to then create like a pony endowment fund. It's a, it's our own private way, we call it, not officially endowment, but it's an investment portfolio. And I told her we need to buy

Alex Monk:

money,

BRIAN AKERS:

we need to buy stocks in it, we need to have stocks and have been a portfolio designed to be able to pay the pay for the horse, feed the horses, because she views them as her horses, and horses live a long time,

Alex Monk:

and they're expensive,

BRIAN AKERS:

they're cute, think they might live 20 years like a dog, or a little less than like a dog, they're 4035, 40 years, maybe 35

Alex Monk:

ah, horse money's crazy, horses, just I'm terrified of them, so it's a little weird for me,

BRIAN AKERS:

so the idea is we took some lump sum from the sale, and that lump sum we invested in stocks, and now we're up about basically 100 and some percent, and we've paid out every year the money takes to take care of the horses, and the money is higher than it was to start. And the joke at this time was she's let's call her in her mid 80s now, and she's like, How much longer will this last? I said, as long as the horses last, the money will be there, and then it'll go to the character that the people in charge of the horses, who's going to be in charge of them after she sometimes her

Alex Monk:

have your hay and eat it too. No, is that does that hit there,

BRIAN AKERS:

or you can go with that one? Or, hey, hey, let's go with that

Alex Monk:

joke. Okay, but

BRIAN AKERS: the idea is this:

stocks, why have stocks and portfolios at eight that are paying out? Imagine that we had recommended a 2% CD back when rates were at that rate 10 years ago, not stocks, her money would be flat to negative because we're withdrawing at maybe a 4% rate, making two.

Alex Monk:

The math never works,

BRIAN AKERS:

never works. So, endowment funds, things like colleges and scholarships, all these things that are out there, we try to build those portfolios with 40 to 60% in stocks, and you allocate around it, and you build based on a purpose of distribution and income, dividends and interest to pay out. You

Alex Monk:

just said there's huge that distribution part, right? Because endowments do the same thing, but they had expected cost for the next couple of years, so they know their short-term liquidity needs,

BRIAN AKERS:

right? So they have that sit on the side with no risk, because that's where it's coming from. That's gonna sell a stock to pay you your next month's market risk, like some of these portfolios do. They basically 100 bucks from, so every fund send you 100 bucks, and I.. that's just crazy logistics,

Alex Monk:

I mean, while the market runs up, they, they say they're right.

BRIAN AKERS:

Yeah, so if someone has money invested, the target date fund, the idea is they lowers risk every time. I think endowment that stays the same risk, you create the math, the calculation to give you the distribution rate that you need, say it's a 5% payout, you work that out, get the flow going, and the stocks are doing their job. When you have to reallocate every couple years, I'm not a quarterly reallocation guy, I'm a year, two years out, maybe longer,

Alex Monk:

especially when we're talking long-term assets, because as part of your portfolio you need some of these stocks, but you need some hard assets, whether it's real estate, gold, commodities, whatever it is, and some of these other assets, they don't necessarily present principal risk, but they present time risk.

BRIAN AKERS:

Absolutely. How about this one? About what do you do with the stocks? Do you diversify the stock? Do you diversify the size of the stock?

Alex Monk:

Oh my gosh, in what scenario?

BRIAN AKERS:

Okay,

Alex Monk:

how did I get the money? Is it what's the tide line?

BRIAN AKERS:

So you're diving into for the portfolio design, the timeline dictates how diversify, because when you add small mid cap stocks, you add risk

Alex Monk:

correct

BRIAN AKERS:

and volatility. If you want to diversify internationally or to buy different type of stocks, from value to growth, that the difference would be based on the risk level that you can absorb,

Alex Monk:

right, and that is how much time can you go through without having to sell something that you don't want to, and what I find is people, they add risk on in ways that I don't necessarily agree with, right, they go to last year's performance, whoever was the winner, that's who I want, you know, sometimes that will work, but a lot of times you chase, and then you get, you get burnt. So, having the right mix and understanding each piece

BRIAN AKERS:

helps you take that risk. Yeah, so we're talking about stocks in a portfolio, and we brought up the word endowment. The end, the endowment is really trying to make this money last a lifetime, let the money outlast you. It's all about portfolio design, that's what the show's been all about today. Because we want retirement to be like this, where the best part of retirement is getting your time back, where you decide how to use your time before retirement. Your time is tied up with other commitments, you know, mainly your job. A lot of that goes away in retirement. Your time is now consumed by things that you want. To do, it's so easy to begin winning in retirement. Go to our website at AKERS Financial group.com scroll the schedule meetings section, and let us know you like to schedule your free consultation with one of our team of advisors right there, that's a K E R S Financial group.com or call us 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 in-person meeting with one of our team of advisors. How do emotions affect your investment decisions? We'll talk about this when we return in a moment.

Unknown:

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.

BRIAN AKERS:

Welcome back to Winning in Retirement. I'm BRIAN AKERS from AKERS Financial Group. Here with me today is Alex Monk. I'm certified financial planner practitioner. Yeah, got a degree in accounting and

Alex Monk:

to the hilt,

BRIAN AKERS:

lifestyles,

Alex Monk:

bonds,

BRIAN AKERS:

yeah, financial advisor. advisor, investment advisor, representative, stock broker, insurance agent license- all the above, all put together into a package of a financial planner that implements what you're doing. We're considered a fee and or commission, depending on what's the best for the scenario when it comes to the client's needs and what they've already done during their lifetime,

Alex Monk:

so like we can meet you wherever you are, like some people are one track, this track, that track, we got them all.

BRIAN AKERS:

We have some that are collectors, they bought from everyone they've ever met in their career, and so they have all these different investments, they might have paid commissions or high commissions to get into things, and we don't automatically just sell everything like some people out there do what we do is we look at what they have, see if it fits or not. If what they were sold has a purpose with the ongoing plan of the client,

Alex Monk:

right? And does it work for them as it sits now? And will that be the right answer in five years? And how are we going to handle it? And, like, that's my favorite part about working here, is we don't have to do everything the same way, because not a single client is exactly the same. So, the answer is, and I know you always support me, is what's best for the client,

BRIAN AKERS:

and what's best is the answer. And so, like, in your case, I know you've had a couple, I call them, like, variable annuities have a lot of structure, and they have a lot of surrender charges, and they have lots of bells and whistles inside, and so in many cases that you see them, we take them over as broker of record. You work within the plan to see if it does fit their scenario, and we wait out the surrender charge to see what is best. Then we calculate when interest rates change, see if there's a better deal.

Alex Monk:

I have one client that came to me, then they had left, they were from out of state, they came somewhere, and this guy had sold him like a million different variable annuities.

BRIAN AKERS:

Yeah,

Alex Monk:

and it took us probably three years to get it all done, but a lot of it stayed there. We had to figure out what benefits they had, what you know, and I wanted them to know the right answer, like, and it was weird they were still paying him through these annuities, but they didn't feel comfortable asking him questions about them, so I'm just like, well, then you got to take them off,

BRIAN AKERS:

right? Oh, I've had a couple scenarios, and one had 14 different annuities, ended up being the exact same annuity, exact same 16 year surrender charge sold in all different titling types, but 14 of them, every dime of the of the couples of money they had to their name was invested that way.

Alex Monk:

Yeah, like that's the things that we have to try to prevent, like there's people out there that are bad actors, and I hate that, like that makes me sick to my stomach.

BRIAN AKERS:

Right, so you have to look at, so we call financial fingerprint, that's where your money is, and then we have to invest that money based on where your money is. What's best for you means you have to know what you have, you have to understand it, then see how it fits, and then build a plan, like in the scenario, like the 14 policies altogether. We started immediately doing 10% withdrawals out of every policy, building up cash, and then guess we built up cash, and a year later that person came back and

Alex Monk:

reinvested, took

BRIAN AKERS:

the cash and reinvested another annuity, the same annuity, and the client just said yes, because they're used to saying yes, and then when they came back in, I was always mad, mad at them, and I said, Do you want me to be your advisor or not, every financial decision from here on, you got to run through me, and I just had to do it that way with them, because their scenario was they didn't, they felt bad saying no to someone who spends time with them, almost like they had to pay them, but they owed them. I tried to explain their sales people, they get told no,

Alex Monk:

and they move right on,

BRIAN AKERS:

and they move on to the next one, but what's best in your scenario? Your scenario is what matters. This show is about portfolio design, and one of the things that we've found is this: that most people have never thought about their investments. Everything they own has a portfolio designed for them and their purpose.

Alex Monk:

Does that count there? This one there,

BRIAN AKERS:

and how does it all work together

Alex Monk:

based on when they got.

BRIAN AKERS:

It's funny when we put it all together, and all of a sudden they go, "I've never seen it all together like that before. Now, younger people, it's a little easier, because sometimes they're all on the all digital, and so they can actually line up a portfolio.

Alex Monk:

You would think that, but

BRIAN AKERS:

no, I had a guy that works in tech, he's in his early 30s, he'd never even opened his four 1k account, never even started it. He was saving his bank, earning like zero, and he then starts four 1k after six years with a match he never had. So, there's the assumptions are bad right now. The one we'll do here in the second quarter, or second half here, in third quarter here, I would love for us to have a conversation about when you're all emotional, the news, the noise of the world, everything going on, how does it affect your investing, and what's our answer to how to handle

Alex Monk:

it? Well, I mean, my job is that exactly right, like I talk people off the ledge when things go bad, and it's, you know, having that plan, that structure, like I want to train clients to have their emotions go differently, because when the markets go down, we're going to make money,

BRIAN AKERS:

absolutely.

Alex Monk:

And then you say, well, how is that? What do you mean, Alex? Like, what? That doesn't sound right. It's because we're never all in, and we own other asset classes with equities that protect on the down, not always perfect correlation, but a lot of times it is, it takes volatility way down.

BRIAN AKERS:

Yeah, so emotions, emotions give us almost the wrong reaction to a market. So the talk I like to always give is the concept of fear, hope, and greed. When you have fear and you're afraid of the market, typically what do you do? There's nothing, right?

Alex Monk:

I mean, fear, you either avoid or you take action to

BRIAN AKERS:

get out,

Alex Monk:

avoid further.

BRIAN AKERS:

It's, and so that means that the market's gone down, and now you have fear, you're selling at the low, not doing what you should do, which might be buy at a low,

Alex Monk:

might be.

BRIAN AKERS:

I know it's true. So, fear, the fear that you have based on whatever is in the news that day, the noise. I can tell you that every day there's going to be something that makes us want to not invest, a reason, some purpose, something going on in the world, something going on in your life that you should not buy.

Alex Monk:

Well, I, all I view it always as the fear of the unknown. Because when you hear these news cycles, how does that impact you? Like, if you don't know that it's scary, because they are paid to have 24 hour news cycles, like they

BRIAN AKERS:

want you to listen.

Alex Monk:

You can watch the news all day long on 100 channels, if you wanted to. This

BRIAN AKERS:

is best examples of snowstorm. I mean, no matter if it's half an inch or 30 inches, they're gonna play it up to get you to watch.

Alex Monk:

Yeah, they're gonna do flashes into, like, hey, incoming storm alert. Yeah, sometimes it doesn't even snow, so like we have to take that into account, just along with, like, the political volatility, whether you're on one side or the other. Yeah, great. Like, I hope, I hope that's the way you feel, you know, blah blah blah. But, like, let's look at your money and make sure that it doesn't matter who's in office,

BRIAN AKERS:

right? So, your design is attaches your purpose, then it gets you down to levels of which account are you, might gonna take my risk in, and is that money for today, tomorrow, next week, or is it for three, five years down the road, or more? I can take the risk, the up and down, fear, hope, and greed is the emotions where, when we're fearful, we wanna sell, when things are starting to come back up, we get all hopeful and excited, it starts running up and going real high, hits all-time highs, and we get greedy because we think it's going to go forever. And the thing about greed is, when that's at all time highs, the thing would be, is that what you need for your portfolio? Is all your money at the high? Should you diversify, take some winnings off the table? Should you be selling at a high and then buying at lows? And that's really the best advice, is buy it, buy the lows, sell the highs, realign your portfolio when you feel things are high.

Alex Monk:

When markets are near all-time highs, and I'm having my reviews, I look people square in the eyes, and I say, if you had to do blank in the next three years, like you're gonna die, what would it be? Let's get that to cash.

BRIAN AKERS:

Yeah,

Alex Monk:

and now we're long-term investors again,

BRIAN AKERS:

right? I believe taking winnings off the table, getting that money on the side, make sure we fulfill the plan of having 12 months of income, we know where second year is, we have a flow going, and we can let the money that's at risk roll. One way, take the emotions out, the younger you are, is when you're saving and investing, save and invest every paycheck, let the money go in, set it up automatically. I think you should have an IRA bucket, Roth bucket, and a personal investment bucket, where you're putting money in every month, like a bill, and before you know it, that money accumulates and starts to roll.

Alex Monk:

And if you need help hiding it from yourselves, that's what we do as well. I just got a meeting this morning, and it was like, if you can't do. It on your own, I can make you do

BRIAN AKERS:

it now. I got a perfect example of trying to explain changes that life, you know, investment changes, markets change, the news changes all the time, it's up, it's down, good and bad, almost as much as your beard changes in one day. So, Alex Monk can grow a mustache and beard in 24 hours,

Alex Monk:

but nothing up top, you know,

BRIAN AKERS:

it's impressive of the beard growth that you can do.

Alex Monk:

Some of them, your beard

BRIAN AKERS:

grew since the show started.

Alex Monk:

They've been growing in clear, which I think is quite interesting.

BRIAN AKERS:

Growing in clear,

Alex Monk:

yeah, they're clear.

BRIAN AKERS:

I'm sorry, would that be gray? Gray, white, white comes out first, usually a certain age. But the idea is

this:

there are changes, and these changes happen quickly and I want you to understand that your money, it's like if you look down straight down, you only have a short term vision, that short term vision is not for investing, when you're looking long term, you're looking to the future, looking for opportunities, that's long term investing, let's let your long term money be invested like long term money, your age isn't going to matter on this. There will come a point in time where we'll say things such as what risk level do you want. You don't need to take one more level of risk. Your money is good. Why are you risking? Is it is this money now the kids' money? When invested like that, that's fine. Like, do you really need another double to hit your goals?

Alex Monk:

And then that's the fun part, right? Like figuring out what it is that you want this stuff to do for you now.

BRIAN AKERS:

Yeah, and getting someone to that financial independent stage of life, where they know they're what's good and know they're in good shape, is a great place to be. But this is a multiple years, multiple decade battle of getting them to focus and grow their money.

Alex Monk:

And the best way I try to project that to people is like I asked them, who are you in 10 years, right? And then they say, well, we're living in this house in a different, you know, whatever country, state, etc. And I said, well, everything you told me five year plus plan, so we got to start today.

BRIAN AKERS:

Yeah, and we try to knock it down into actual budgets and all. So this quarter we're talking a little bit about emotions, emotions, how it affects your investment decisions, the emotions will teach you or tell you to do the opposite, is what our advice is. We need you to have your money have a purpose. Your portfolio is designed around that long-term purpose. You're in stocks to be in stocks, you're sticking with it. Yes, you can take some profits, but you're not going to go zero on the stock allocation. So, as we've been building this up and talking about it. Portfolio design is so that you can relax and enjoy your retirement years, because you've done all the work. If you don't save early, if you don't let your money work for you, you're going to have to work for your money. Financial planning done by AKERS Financial Grow. We love to do this. We love to help you from where you are now to where you need to be by looking at your portfolio risk, looking at what you've already accumulated and where it is, so we can give you a better answer. So, go ahead and give us a call, so we can help you win in your retirement years. You give us a call at 833 win retire, that's W the 830 3w I N R E T I R E, and we'll schedule a free in-person meeting with one of our team of advisors, that's 833-946-7384 or you can visit our website at AKERS Financial group.com Does your portfolio change as your needs change? We'll explain when we return.

Unknown:

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.

BRIAN AKERS:

Welcome back to Winning in Retirement. I'm Brian Akers. Here with me today is Alex Monk, for financial advisors from AKERS Financial Group. We're both certified financial planner practitioners, and we serve as advisors for our clients. Now you've been listening to our show, or maybe you haven't been listening to the show. You can always go to our website at AKERS Financial group.com that's a K E R S Financial group.com On that website, you'll see the radio podcast tab, hit that, you can listen to any of our past shows, even this show. And here at the beginning, that you might have missed, you can also play us a little faster speed if you want to get through the slow part.

Alex Monk:

Oh man, my wife says I'm a slow talker on the radio, and it's so offensive, and I'm like, come on,

BRIAN AKERS:

it's not offensive. Slow is good. We want everyone to listen and understand we're doing. I don't change my voice or who I am on the radio. I don't try to be super entertaining, I just try to speak. I'm sorry, I try to just talk and explain things the way we try to work with our clients. We enjoy our clients, and we want you to hear that as we talk. We want you to hear how we try to give answers, understanding that when we bring up a topic, just because we've done this topic this week, we've done it today. We do it with the clients each and every moment. It's amazing how much we apply every show to our day to day with our clients.

Alex Monk:

I mean, it's not a this is what we do, like this is in our lobby.

BRIAN AKERS:

Yeah, you can come. Did you ever watch This Week in Baseball growing up? Are you too young for that?

Alex Monk:

No, I used to know that

BRIAN AKERS:

one. Yeah, it was. Before ESPN, that was before you were born, but then it kept playing for a while. This week in baseball show highlights, it was really just great, and little stories. The guy was incredible at it, but I always think about financial planning shows as well. What's this week in financial planning? What's going on? So we try to treat it that way. So portfolio design isn't about changing based on what's this week in financial planning,

Alex Monk:

or what the news tells you that you need to own,

BRIAN AKERS:

or the emotions of it, or what you at a birthday party, someone told you to buy a certain stock or something,

Alex Monk:

because they made blank some crazy number, but like for me, I know how those numbers work, so that's a concentrated bet.

BRIAN AKERS:

Yeah,

Alex Monk:

are you okay with that risk if that's the only one that you had good for you, but usually I do this for a living. I'm not always right.

BRIAN AKERS:

Yeah, so what's interesting is when we have clients or proposed clients, new clients, new people come in to see us, and they have a certain label on their statement, we sort of know what's how it's invested before we turn

Alex Monk:

it. Yeah, I can usually tell you why they're there, why they're here. Yeah, based on where they're coming from.

BRIAN AKERS:

Why is that? Give me a quick, pick a unnamed company. I'll

Alex Monk:

just do an unnamed company that starts with, like, a J, for example, right?

BRIAN AKERS:

No, no, J,

Alex Monk:

okay,

BRIAN AKERS:

just an

Alex Monk:

unnamed company.

BRIAN AKERS:

Yeah, good.

Alex Monk:

And usually they want tax management, or they want

BRIAN AKERS:

sure.

Alex Monk:

How does it all fit? Or what is my, like, retirement projection look like? Or how does this blank..

BRIAN AKERS:

how do I use this money? I see this account. What does it mean to me,

Alex Monk:

right? Like, what is this big number in this account that's, you know, wherever it may be. And that could be, you know, I'm just..

BRIAN AKERS:

I like when they say, um, so after they move their money here, they go, why are we meeting again? And they said, well, all we did is bring the money over, now we got to fully implement, and you need to give me more information, and why do you need tax returns? Why do you need to know my liability limits on my insurance? Why do you need to know my benefits.

Alex Monk:

The great thing for me is even once we're done all that, and I still want to see them. They're like, "What the heck is going on? I'm like, "I just want to see what's going on with your life. Make sure every, like, you know, we've already put in the work.

BRIAN AKERS:

It all works together. When you think about cookie cutter, cookie cutter would be sort of the easy way to manage money for people, everybody gets it the same way, we stamp it all the time. Now that's not us, we're, we have a lot of employees because we don't use cookie cutters, we free cut, and so that ends up being every advisor a little different with the people, each client's different, every fingerprint is different as they come in, and we take them from where they are, and then we start building around it,

Alex Monk:

right. But within, you know, you say like everyone's a little bit different, but you, you put a lot of time in, and I know we do this through our investment committee to make sure that everybody here is on the same page, and

BRIAN AKERS:

of risk level of how they approach cash flow retirement, how they get ready financial independence, how we support Roth accumulations. How we maximize at work, maximize growth. Let 401 ks run, let the Roth run. All those concepts are core beliefs of AKERS Finance Group.

Alex Monk:

And for me, like I have never seen a place that puts this much, I guess, moat or distance between the way that we do it, and new people like we have to make sure that it's done this way, because

BRIAN AKERS:

it has to be done right, because we are putting our entire career and a reputation on the fact that, hey, let us guide your retirement, and you're going to be okay throughout all those retirement years, the good days and the bad days, the portfolio is going to work. Your investment in financial plan is going to work through the good days and the bad days and the worst day, right? That's what good financial planning should be able to do.

Alex Monk:

And I usually bring that up in the first, second, or third meeting, whether it's callously just a joke, because it's not really fun.

BRIAN AKERS:

Oh no, they people don't want to talk about death or disabled or memory issues. There's all kinds of hard, hard situations,

Alex Monk:

and sometimes, like, you know, a year or two later, they're like, 'Hey, Alex, remember when you killed me off at 85? I'm like, 'It was just a simulation.

BRIAN AKERS:

Well, the one I had today, she goes, 'I'm sorry. The husband said, 'Yeah, that the other money manager has us living in 95 We know that's not true. And I said I agree with that, but what we're gonna do about it? If they think you're gonna live forever, they're gonna take higher risk. Do you really want higher risk?

Alex Monk:

And you know, it

BRIAN AKERS:

doesn't, but doesn't matter

Alex Monk:

if there ever is like a fear of longevity, then we need to address it. Yeah, because if you're your parents, both all of them made it to 90s, like you're probably gonna live for a long time.

BRIAN AKERS:

Well, stats are saying that if two, there's a couple that they're both healthy at 65 50% chance one's gonna make it to 90. And my comment back to that is, will your money make it? Will your money last as long as you do? Your portfolios, if your design. Of your portfolio for growth, that's nice, but what if you need income, you know, the more income you need, the lower risk you should take, because you're using that money on an ongoing basis,

Alex Monk:

that's fine, Brian, they make funds with growth and income in the title, so that's handled,

BRIAN AKERS:

or you go high yield, you've seen portfolios designed with the highest yield investments out there, and they're paying 910, 12% yield, and then they don't understand why the principal is disappearing,

Alex Monk:

or like they come in at their trading account, they're like this one's paying 20, yeah, heard about this one, I'm like, yeah, it's paying 20 because

BRIAN AKERS:

it dropped,

Alex Monk:

there's nothing left,

BRIAN AKERS:

right, there's no cash, and there's no cash,

Alex Monk:

there's nothing left,

BRIAN AKERS:

and so the thing would be, is like, is this money sustainable

Alex Monk:

and then for me like I don't want to take risks with my safe money let's take our safe money and make sure it's safe like how does that happen is that set up do we have that and that's the key to find out how much of a long term investor you are with the rest of your portfolio yeah you got money you know six months cash flow in the bank, you're working 3040, you know, let's take some risk,

BRIAN AKERS:

yeah,

Alex Monk:

no issues,

BRIAN AKERS:

yeah, it's a growth. Now, tax efficiency has been a huge thing. Now, tax brackets are great, we love that, we love Ross, but when we have money saved outside of that, taxable accounts, one of the things that's really important to us is to make sure we're not paying tax on things we don't need to pay tax on,

Alex Monk:

you know, that's a.. I've gotten quite a few clients just recently because of Irma and their old money manager not taking advantage of all the tax rules, or at least putting some time in to structure it slightly differently to avoid massive taxation when the client doesn't do anything

BRIAN AKERS:

right,

Alex Monk:

and that's like, how do you plan for something that you don't know until the middle of December? Like every financial institution says they won't guarantee anything after the 15th of December, so we need to have our tax planning done in November. If you're holding on to mutual funds in a taxable account, you don't know until Christmas.

BRIAN AKERS:

Yeah, the mutual funds design can really kick your taxes with that income surprise income at the end.

Alex Monk:

And look, if we're going to break an IRMA level, let's do

BRIAN AKERS:

it. IRMA is income-related monthly adjustment amount for those over 63 years old as they get ready for Medicare, and your Medicare premium rising for a year, and understanding that, and understanding how it applies, and thinking about thinking about it now, it doesn't have to be something you change your whole life about, but sometimes you don't want to automatically pay more money when you could have avoided

Alex Monk:

it, right? And if you're going to incur that additional penalty, make sure we at least get the most out of that, whatever bracket we're in,

BRIAN AKERS:

right?

Alex Monk:

Instead of the call in January the following year, when you can't do anything about it, and the client's upset because they owe taxes,

BRIAN AKERS:

right?

Alex Monk:

And they're like, what happened?

BRIAN AKERS:

Yeah, so the idea here is, does your portfolio change as your needs change? Are you changing your portfolio from accumulation to income, how are you doing that? Are you taking less risk as you get close to retirement? Your portfolio design, is it dictated on what's going on the market today, or is it dictated on what you need it to do for you today and tomorrow?

Alex Monk:

Right, and that goal is very different. It is

BRIAN AKERS:

different, and it needs to be focused on the overall plan, where you need to have a plan, not everyone even considers having a plan.

Alex Monk:

What do you mean?

BRIAN AKERS:

Oh, I, I always say women love financial planning. Men typically don't. Men like to get there quickly when it comes to finance, finance, and wealth. Women plan, and they do save and grow, and they're, they're some of the best planning clients, because they do that, they, they do the work it takes, it grows, it reaches their goals, they accumulate it, and it hits the numbers. The men that chase the hottest investment that week, the problem is, is sometimes they're going to hit the right one and do real well, but then they're not, and they're not gonna have anything to fall back on, because they put one all in with

Alex Monk:

it. Yeah,

BRIAN AKERS:

there's this balance of planning, and it's portfolio design, design where you have some, some core money, your money to meet what you need for the rest of your life. You got to set that aside,

Alex Monk:

and you know the best part about identifying that is for people to be able to live their lives on the process of this, and not feel guilty, like, oh, I.. it's, you know, whatever. I went to vacation last year, or whatever, you know, I splurged,

BRIAN AKERS:

right?

Alex Monk:

I don't know if that's going to ruin me. Yeah, I like the.. oh, yeah, we're doing this because we can.

BRIAN AKERS:

Wow, yeah,

Alex Monk:

and it feels that much better.

BRIAN AKERS:

Yeah, it's great when it all works out, right. And so we have a lot of clients where we've gotten to that point, and it's just nice to review with them and just keep it going. Harder part are newer clients that need to understand what it takes, the work it takes, and understand that they'll get there, they just got to stick with it, and that's something I like to coach them on and help them get ready and keep rolling, and

Alex Monk:

my favorite thing is being there for the client to make. Sure, that whatever their needs, their what they see is value, they get that out of their money.

BRIAN AKERS:

Absolutely. Thank you very much for a good show, Alex. I really like portfolio design talks with you. It's been a lot of fun.

Alex Monk:

Always good, Brian.

BRIAN AKERS:

Yeah, so today we covered portfolio design. We do 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 a 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 to 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 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:

You've been listening to Winning in Retirement with your host, Brian Akers, of AKERS Financial Group. AKERS Financial Group offers securities through Arkadios Capital, an SIPC and Finra member firm. Advisory services are provided through Arkadios Wealth. AKERS Financial Group and Arkadios do not share any common ownership. Neither Arkadios 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, and/or 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.