Wealth from Wisdom

A Second Opinion on Your Investments Could Save Your Retirement

September 08, 2018
Wealth from Wisdom
A Second Opinion on Your Investments Could Save Your Retirement
Chapters
Wealth from Wisdom
A Second Opinion on Your Investments Could Save Your Retirement
Sep 08, 2018
Carson Wealth
Show Notes Transcript

Some things in life you can’t leave to chance, and that includes your financial game plan. On this show, learn 7 reasons why a second opinion could save your retirement.



Speaker 1:
0:00
Okay. And here's the legal Mumbo jumbo, the opinions voiced and welfare wisdom with Ron Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an sec registered investment advisor,
Speaker 2:
0:30
Doug market hit another all time. Records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 200 and the skyrocketing cost of healthcare and retirement could now run 350,000 planning for retirement. Today is a whole new ball game. It's loaded with challenges, obstacles, and trap doors that you can do this and we can be your guide. Welcome to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson. Straightforward and objective advice and how you could make your money go further in retirement. And now here's your host, Ron Carson. It's official. This is now the longest bull market in Wall Street history. You know, you probably heard this before but it just keeps going and going. It's kind of like the energizer bunny, right? Jim
Speaker 3:
1:16
hear this and think, wow, this market is truly unstoppable. Well others, there's this contingency of out of you out there that are actually having an opposite reaction. This news is causing you to rethink your risk and your exposure in the market because you know that every bull market is followed by what a bear market, every ashen or a major stock market correction and it's not a matter of if, but when, hey, welcome to wealth and wisdom. I'll Paul West and we've got a great show on tap for you today. Speaking on tap. I got Jim Caldwell here with us also. Welcome Jim. Thanks Paul. Yeah, glad to have Ya. I figured out on tap beer. It's right down your alley for what you'd like to do. Yeah. Hey man, the last bull market ended with a devastating crash and really the great recession. Did you know that Americans lost 10 point 2 trillion trillion with a t in wealth?
Speaker 3:
2:10
Ouch. However, the previous bull market, Americans had only lost in bear markets. 5 trillion in market value. Nobody knows when this is going to happen or when it will end, but we can assure you something is going to happen again. There will be a market downturn. This is inevitable. So on today's show we're going to talk with you about ways about the following one. Where's the smart money going right now? Most of you are listening and want to hear what other smart people are doing with investing and we're going to share some of those ideas and concepts with you too. We're going to talk about diversifying your portfolio now and how it is really more critical than ever before. And three, what are some specific strategies that could help insulate your principal and your income if you actually end up retiring in bear market? By the way, go ask anybody who retired in 2000 go ask anybody here retired in 2007 what started bear markets and this was the problem.
Speaker 3:
3:05
So let's think about this year, year to date. I always loved you to look at this statistic, Jim. And you know I love statistics. I do. They're fun. So we've had 36 days so far in the trading market where the market has moved up 1% or more, or fallen 1% or more. You know what? That one's doing. Pretty average. However you wanna know what's astonishing about this. We have not had one of those days here in quarter three. Ouch. Yeah. Surprising, right? Complacency. 100 setting in. Yeah. Well Boring, right? Yep. What also happens, people forget. It's the recency bias. So what's the recency that nothing in the market has changed and therefore I can take more risk or do more things. But remember earlier this year, people in February, our phones were ringing like crazy because people wanted to know what to do and now is actually a time you need to be proactive and figuring out those things to do.
Speaker 3:
4:03
So, Jim, I thought this would be fun for us today. Last week I had a ton of fun with you on the show. It was about talking about football and finance and how they're related to bear. That husker game didn't play. I felt bad for all those people that were dad there. All the hype and the enthusiasm and then boom. Done. Yeah. Well I think, you know, I've been a husker fan my entire life. I'm a Lincoln graduate and I was down there, Jim and I will tell you the energy level for that game was almost unparalleled to any other game I had been to. I still think, you know, even though the game was cancelled or postponed or whatever we're in, the final version of this story is going to be, people still got to do what they wanted to do. They got to go down, or if they already live in Lincoln, they got to go down the stadium.
Speaker 3:
4:44
Most of them tailgated had fun with their friends and family, which probably included a couple of those things on top. Worst tap, a bloody Mary's, whatever else. And then people got the joy and energy of the tunnel walk and seeing that happen. And those were things that everybody wanted and they had this feeling of emotion related to it that they wanted, that they, they really inspired to get. And I think they all left. They're confident even though the game didn't play that the right team and the right leader was on the field to guide all of those people. Totally agree. And I'll tell you what, this week's game against Colorado, it should be 10 times that. I mean cause everybody's hungry now. They didn't get to experience four quarters of football and all those expectations so can't wait for this weekend. Yeah, it was actually interesting Jim.
Speaker 3:
5:31
I mean those people are now, but they're also, why is it even more interesting? Because they're going back into the memory and their history books of prior games to remember all those old Nebraska versus Colorado clashes. But it's eliciting emotion from people. But it's also, it's funny to me is people can remember the day and the time of a game and where they were going, a specific game happened or you know like the long field goal against Colorado or they have trouble remembering barely what happened yesterday. What they had for breakfast. I can relate to that. Yeah. Well we're not going into year issues there, Jim. That's safe for all of our listeners. Well, let's talk about a little bit of a history lesson here. So as we look at the markets, and I'm not quite a history buff, I'm relying on my daughter and son who were in high school to help me remember all the history things.
Speaker 3:
6:20
We learned that there's actually, if you go way back into the bull market of the 1950s and Paul, why in the world or gym for I'm talking to myself. Is that normal? You've done that can happen. Yeah, I think we've all been down that age. But if you didn't know this and the 50s, I mean you had the SB and fund s and p 500 rising like crazy. Um, you had a Korean war going on and then actually our president had a heart attack. You had inflation, rising, interest rates rising and all these things happening, which ended up going away. Then what happened? Timing went on. Interest rates. Rose, let's talk about memory. We're talking about remembering where you were from Nebraska, Colorado Games. Jim, do you remember where you were on October 19th, 1987 yes. Actually, you're just being born dead serious because I actually was running for school board where I lived in Columbus, Ohio, and that was the first day we could put out our signs in people's yards.
Speaker 3:
7:20
Right to vote for you. I had no idea what was going on back at the office. We didn't, weren't as tuned in then. Technologywise right. Sabotage back then. By the way, if you're running for office in Columbus, Ohio, somebody said you were a Michigan Fan. Yeah. That would work over to wells. One of my good friends. So when I came up short pub or the best thing that ever happened to you, that's funny. So, but you, you, you don't remember where you, you remembered exactly where you were, but you didn't remember what all transpired that day. Cause I would say most of our listeners, if you think about it, remember how you felt on October 20 excuse me, 19th 1987 because the market tumbled more than 20%. Yeah, yeah, yeah. That was 30 years ago, almost 31 years ago. Quiet shame on you. I know it just, it's, it's a while ago.
Speaker 3:
8:10
I'm not talking about your age here, but it remains to be the worst one day crash in the history of the market by percentage. I actually remember Jim a few years younger than you are. I'm not bragging by the way. I'm just stating a fact here that I remember talking about this at school. I remember all the conversations about me and my friends and like, oh, what our parents were saying and I just remembered there was fear on our faces and I'm like, I can't remember specifically all the words we talked about by, remember our parents lost x amount of money. They lost this much. We're going to lose this, we're going to lose that and this ramping emotion happen. Is there another 20% down day like that? No. There, there are certainly, you know, as we say, all of these triggers in place now to protect it. But that doesn't mean we couldn't have again, let's go down history lane here. Uh, 2001 happen. We're, we also don't have to trigger our circuit breakers for the market multiple times. We could get to 20% couldn't we?
Speaker 4:
9:08
Yes. And that, and that's got to be a concern out there. I mean, I've talked to a number of people lately that are becoming more concerned and you know, you could see that 10 or 20% drop you, you better have some kind of defensive mechanisms available and your portfolio.
Speaker 3:
9:23
Yeah. So let's keep going on this trip down memory lane by the decade, so eighties we talked about the crash of 87, but what about the 1990s? Uh, you know, this is corporate profits were going up like crazy. Oh, the bubble, right? The big tech bubble started, you know, to begin. But remember Alan Greenspan, I don't think it's anything we haven't used on this show in a long, long time. Yeah. Yeah. But let's go back to him. Actually, there was a phrase that was morphed of this time. It was called irrational exuberance, irrational exuberance. And I think that's almost back into place here today. Jim, what do you think?
Speaker 4:
9:58
I, I'm there. Um, I think you've got a situation right now where there's, there's a group of people that think it's going to keep climbing and they're going to stay on that bus and climb with it. Then there's a group of people that are saying how much longer can this go? And then there's the other group that never got in once president Trump got elected and they're still trying to figure out when to get in. Yeah,
Speaker 3:
10:16
yeah. And one, they're probably not going to make a decision until he leaves the presidency. And um, I can't give him an advice because that's again, an emotion. Totally amazed decision. So then we moved from this irrational exuberance area into the two thousands and the two thousands we started it with the.com crash. But people had short term memory is what happened. All these people started buying homes in the two thousands and then there is these words like subprime credit, complex mortgages, all these things. And pretty soon the financial sector of the s and P was his largest. But what happened? Rates went up again. People started borrowing money to pay back and defaults climbed. And what happened at the end of 2007 Kaboom. Yup. Here we go again. That was only a little over 10 years ago. Ladies and gentlemen, Remember that? I mean it's not that long ago, but we tend to forget things that are not now super recent.
Speaker 3:
11:10
And I blame a little bit of our stupid phones we carry around because we're so addicted to the here and now that we don't tend to sit back and reflect am I get made fun of this, especially by my children. But I'll actually make a cup of coffee in the morning and go sit outside and drink the cup of coffee and just look around it. And I call it the stair, but I'm just thinking, oh yeah. Is it like reflecting on life and how many of you do that? And I think some of my best thoughts come from that strategic thinking I do because I tend to reflect, what have I done right? What have I done wrong and what more importantly can I do better for the future? And I know with you and I, we look at October of 28 when the, the, the, the market was completely, you know, essentially collapsed at that point down nearly 40%. You have to learn from those mistakes and figure out what to do with them.
Speaker 4:
11:59
Actually it was, was thinking about that a little yesterday up at the lodge just sitting outside staring and um, yeah. You know, as professionals, we're concerned about where things are right now and, and you live it and breathe it every day.
Speaker 3:
12:11
Yeah. I think about, you know, you're staring outside and I'm like, man, I can't believe how fast life has gone. I mean, I think about, are you almost at your retirement? Can you believe that you've worked 20 years at the same place, 30 40 whatever it is? Or can you believe you're 62 or 65 or 67 now and you probably don't have a retirement action plan in place. It's actually something really simple you can do and it would save you thousands and thousands of dollars in retirement. If you want a retirement actually plan, give us a call. (888) 419-8513 stop staring off into space and without taking action to make it happen. Give us a call. (888) 419-8513
Speaker 4:
12:48
trust, transparency, accountability. These are the values that drive Ron Carson and Carson. Well you're listening to wealth from wisdom with bear and the same advisor, Ron Carson,
Speaker 3:
13:00
he's a published author and has been featured in Forbes Investment News, the Wall Street Journal, CNBC and more now back to wealth from wisdom with Barron's hall of Fame Advisor Ron Carson and welfare wisdom. Today we've been talking about this longest bull market in Wall Street history, but like we've said, all bull markets come to an end and it's not really a matter of if but when, hey on Paul West and we've just got a great show for you today. My cohost to Jim Caldwell. Hey Jim. And we've been walking down memory lane here of the history of the Mark A. Little bit, sharing some fun stories and uh Oh, you're taking the break. I think it spurred your memory of a story that's happened recently,
Speaker 4:
13:36
but I look back at 2002 to two events, Paul, one in 2008 where we knew by middle of the year some of the seasoned guys that have been in a business that there was blood in the street and we were in big trouble and one of the biggest concerns we had, well two fold. Number one, people that panic and sell, they're selling at the wrong time. And number two, what are we going to do with those ODL clients over 70 and a half we have to take RMDs now they've got to take them when their account values down. Some of them don't want to take it anyway, but you have to go ahead and take that distribution unless you have a percentage in cash.
Speaker 3:
14:10
Yeah, and then that's not good. I mean that's like heaven to eat cold pizza if you don't like
Speaker 4:
14:14
we're especially as black olives on it. That's it. I'm not doing that. And then the other thing will fall to spring 2009 when things seem to stabilize to a degree. I believe the Dow was somewhere around 6,500 and it was like, is it going to go and half or do we do, we start buying in? And I remember saying to my wife, Hey, I'm either going to be a hero or a goat, but we're going to start dollar cost averaging back in new accounts. And fortunately we've had a happy ending there.
Speaker 3:
14:41
Yeah. Well we don't want you to be a goat gem at any point in time in Halloween or any other event for us. So yeah, any of the kids keep talking about this. So I mean Americans lost 10 over 10 trillion. Yeah, trillion dollars in the last bull market of what happened afterwards in what we need to help people understand is how to avoid these types of risks. So I'm going to give you an example. Those of you listening, imagine if you're retired in 2000 or 2008 and then the value of portfolio declined by, just call it 30% so you've got $1 million right now and you're right, your retire Yurik so excited. You're emotionally, you've worked so hard. And all of a sudden, 12 months later you have $700,000 how's this going to make you feel painful? Hey, I know some scared, real live people, Paul that had to put their retirement off for multiple years because that happened and most of their money was in 401k's so we couldn't help the downside at all.
Speaker 3:
15:40
It was ride the wave up and ride the wave down. Yeah. Most people that try to play catch up or never going to get there. Um, I'll give you an example. I am not, I'm a surfer. I don't, I don't know you are. You've got the Tan of a surfer gym, but I just get in a rowboat. Okay. Yeah. Well you stay with that. I'm, I'm not going to surf either though. And I would say that most people, you got to catch away if you got to time it correctly. Right. And if you're too late, what happens in trying to catch a wave? You're going to end up in the water. You're not, well, you're already in the water farther away without your, without your surfboard. Yeah. Well, yeah. Or you're going to go nowhere because you missed it and you didn't get to. If you go too early, the wave's going to come on top of you and you're not going to do anything.
Speaker 3:
16:23
So, um, the reality is you get to learn how to catch it just right to protect yourself because you want the joy of riding the wave. But it also, you don't want him to get injured from the way it would be in too early getting out of the market or two late in making a decision there because here's what happens. So you're retiring, it's 2018 you're going to retire. The first five to 10 years of your retirement are absolutely critical to your success because several things. One, Jim, thinking about how much do people spend more or less in their first couple of years of retirement, they're going to spend more. And then I believe it's going to taper off. When you get into your early eighties cause you, you don't travel as much and maybe just sit at home, you go to less husker games, you go to less Ohio state games.
Speaker 3:
17:10
He traveled less. I mean you go out to eat last, all those things happen. But imagine if you had less to work on in your first five to 10 years for that spending. This is a problem, Jim, and it's, it saddens me when I just think about this family that in 2008 we were talking to and they just retired and they ramped up their spending, but we saw all those dark clouds on the horizon. And so we said, nope, we got to move you into irreplaceable capitol. And I said, no, no, no, no, no, no. This market is never going to go bad. And when you have the complex of being invincible, no one's invincible, I don't even think people are invincible in the marvel movies. If I understand those all correctly, and you've got to put a plan together. So those who retire in a bull market face, you know, significantly bigger challenges by not adjusting correctly. It's always easier to adjust up in your risk than it is down. Going down takes a lot of calculated risk because here's something interesting. The average bear market lasts 1.4 years, 1.4 that's not very long. But if it took you five years to go up 40% and it only takes you 1.4 years to go down 40% oh that's a problem. Yeah.
Speaker 4:
18:34
You know, Paul, we've, we've got a household I've been working with and first couple of years they retired. Um, we did a plan for him and you know, we've talked to the show about family index number right there, family index number. The lower it is the better. This was like a 13 and so we poured through, I needed a 13% return per year to live their lifestyle. So are they going to get that? Well that's the whole concern. The first thing is, fortunately they've had, we're been in a bull market so that saved them a little bit, but what it was when we dissected their, their cashflow, they just going out to eat all the time, lunches, dinners. So I got him to cut back. And the funny thing is that when they went through about six weeks of cutting back, they called me one day and said, hey, we just want you to know we're not eating out as much, but we're eating it more buffets.
Speaker 3:
19:23
Well, I guess that's a good lesson learned in their game plan adjustment. Huh? Uh, you were not there. Weight loss coach at that point though. No, no, but I'm sure on Mondays days they get buy one get one free and other things.
Speaker 4:
19:35
That's, but my point here is in an up market, you're okay, you can spend a little outside your bounds, but if you get into that downmarket now we've got problems and issues.
Speaker 3:
19:44
Yeah. I think everyone needs to ask yourself, if you're listening right now, if there's any potential upside left in this market, is it worth the downside that could also happen? I mean, I look at it this way. I mean I know we beat up football analogies, but we love him. We both are passionate about football. I mean if you got third and one, is there really a need to throw a 40 yard fly pattern? No, there's not handed off. Be Conservative. Go right down the middle or even sneak it for two plays if you need to and get your retirement into the end zone. Do it the smart way. Don't get aggressive and say, Oh man, you know what? My Buddy made 25% in 2017 and I only made 16 because I was properly asset allocated. I need to catch up. It's not theirs at the end of the day. I mean, I'll take the Scott Frost era here in Nebraska at the end of the day if Scott Frost's ended up eight and three, but we won every game by one point because uh, fumbles and the ways things happened. What people care? No, no style points aren't going to matter in style points don't matter on your retirement either.
Speaker 4:
20:57
Yeah. I remember a great story there. We were playing in 1998 up in, uh, against Northwestern and it was ugly. We want to ugly. And I remember coach Cooper saying an ugly when it's better than a pretty loss.
Speaker 3:
21:12
It's true. Yeah. No, no one wants to lose. I mean, and so let's talk about ways to have an ugly loss here, Jim. Uh, so one, um, you better spend conservatively when a bear market rears its ugly head. Just be careful. Don't, don't overextend yourself to build an income bond ladder. I know we've talked about bond ladders in the past and if you don't know what they are, then you probably just need to call us at eight, eight, eight, four one nine 85, 13 and we'll help walk you through it. We don't need to do it on the show here today. You know, three, figure out how to cut your downside risk. We call this irreplaceable capital. That means downside protection. There are financial ways to do this that are to your benefit. And by the way, no, that doesn't mean buying an annuity and there's plenty of shows out there that all they pitches annuities, that's a problem because that's not always in your best interest.
Speaker 3:
22:06
But there are ways to have downside protection, we call it that irreplaceable capitol. Next, there's other ways you can do things here. Um, one, always make sure you have a cash reserve available. You got to always have that rainy day fund or when I liked it more, call your emergency fund. What's that? Go to play? Act Football. What's that play? You need that one yard when you're going to run a 34 ISO or whatever else it is to get you that first down you need or really keep your family in the game, keep your retirement plan in the game and make it happen. Also, think about other creative ways you can do this without extending yourself to maybe sometimes people forget when they talked to advisors like us, they think its investments, investments, investments. It's really not. It's really about life and helping you plan out your financial life. So sometimes the recommendations are you should actually take out a line of credit or you should use the home equity in your home to your benefit right now because that makes more sense. And you gotta use all of the plays in your playbook or the tools in your toolkit. Or I can come up with a lot more analogy because I know people get tired of my analogies.
Speaker 4:
23:16
They make sense, the good stories. And, and going back to what you said about the third one plight and to, to have that one or two plays that you know, you can run and your kids believe it, it goes back to your game planning. It goes back to your practice planning. You know, as, as coaches, they're professionals, they're paid to do that. You can't do it on their own. If you left it up to 11 young kids, ages 18 to 23, third one big play of the game to get the ball in the end zone, the odds are
Speaker 3:
23:46
that's not going to succeed. No. Well they're all going to call their own number. Exactly. I want the ball with the ball, throw it to me. Whatever. It's like every sport, everyone wants the limelight, the glory, uh, the Instagram post, the Twitter feed, you name it. Yeah, it's, it is interesting to me. So I posted a couple of things on Twitter you can follow me at, at, at Paul West coach. And my daughter always looks at it and she says, Dad, I go, what are you looking at? What I posted? Are you trying to learn? She said, no, I'm trying to learn how many likes you get. But it's true. And I'm looking at our producers here. They're both nodding their head. Yes. That's the way society is wired today. Uh, to think, how can I get as many people to like me as possible or to get my content liked?
Speaker 3:
24:32
But who cares? I don't care how many likes you get on your financial plan. I only care about one like, and that's your households, you and your spouse, if you're married and making sure they got a correct, because there's a lot of things that can go wrong in retirement. One of them, Jim, we talk about all the time, RMDs, required minimum distributions. These trigger an avalanche of taxes and every year your taxes can keep going higher, higher and higher. So there's actually a three step RMD rescue plan that we can talk to you about it. Give us a call. Eight eight, eight four one nine 85 13 there's no cost, no obligation. You've got nothing to lose. So if you'd be one of our first caller's now we'll help you out. (888) 419-8513 that's (888) 419-8513 you're listening to wealth from wisdom radio network.
Speaker 2:
25:22
How could you make your money go further in retirement? Learn how next unwell from wisdom with Barron's hall of Fame Advisor Ron Carson. Is it possible you could pick fewer taxes in retirement and keep this money for yourself? You could learn right here and right now on wealth and wisdom with Barron's hall of Fame Advisor, Ron Carson. Hey,
Speaker 3:
25:43
your fault when others are greedy and be greedy when others are fearful. Hear that quote before Jim. Yes, many times, right? Well is we think our, this is one of the most famous quotes from Warren Buffet. And why is that it's so important today. Well, with the current bull market we're experiencing, it's time to seriously reconsider the risk. How greedy are you really being right now? Are you taking more risk than intended? I mean, we've already talked about this has been the third quarter, been the most boring quarter. We're not having any 1% moves positive or negative and there's just not a lot going on. So you need a disciplined approach. And Jim, think about discipline. I love sports and talking about sports and I, one of the great events in the world going on right now, and we're not college football. I'm glad college football's here too. Uh, but the u s open for tennis.
Speaker 3:
26:34
Yeah, it's a lot of fun to watch the energy of the emotion. I mean, I think about the hours and weeks and days and years of their lives, they come into it. But I have to look one of the most successful tennis players of all time. Rafa Rafi on the doll. I mean he, he's fascinating to me. And one of the reasons he's fascinating to me, Jim, is he's the, you know, some people say he has OCD. However, what I call him is disciplined. He follows discipline in a process like I've never seen and I'm just want to share. So, I mean, did you know the following about them? This is really fascinating. So he always walked on the court with a single racket held in his hand the same way when he's leaving the court, he always walks over the line with his right foot and does not touch the line when he, when the ball's out of the play, when arriving on the court, he always puts his bag down on the bench and turns his tournament Iud face up.
Speaker 3:
27:31
Of course, we've all talked about, you know, when he's serving, he has this routine. Yeah, he's known for his pic and I'll just leave it at that. You forgot what he's picking at and most importantly, he does all these things. He takes off his jacket while he's jumping and then when he always gives us recovery drink to a ball boy to put in the refrigerator, he always grabs a towel in between points to clean himself off. He, it's his energy jail always the same way. You know what he does? He rips off the top, he folds the site over, he moves the gel up with four gentle squeezes, always the same way. And He, what does this tell me, Jim? He's disciplined. He follows a process and I have no doubt he is super successful because this, he also read jumps at the net during the coin toss.
Speaker 3:
28:17
He runs to his baseline for the warmups. He always takes a cold shower for the matches. I mean, and then when he does changeovers, he always waits for them and then he steps over the line. Guess which foot he steps over the line with right foot, the right foot. I'm glad you're listening, Jim process that goes along with that. And I think we can learn a lot, but one of the most fascinating things he does is he always has an energy drink in a water and he sets them back down on the court and always angles them the exact same way. And people have asked him, why do you do this? You know? And he said, here's the phone and this is a quote from Rafa is I put the two bottles down at my feet in front of my chair to my left one neatly behind the other diagonally aimed at the court.
Speaker 3:
29:01
Some call it superstition, but it's not. If it were superstition, why would I keep doing the same thing over and over again? Whether I win or lose, I think about that. He does their time. It's a way of placing myself in the moment of the match, ordering my surroundings to match the order I seek in my head. Wow, that's strong. Yeah, that's super strong. But boy, if Rafa was a financial planner, I invest with him in a heartbeat. Not just because he's success on the tennis court. And it is public personality because someone that follows the process, someone that doesn't let emotion takeover. Look, I love what he said is either one of you wins or loses. There's a lot of people that have superstition. What does it called in baseball when you rally cap, right? And that's what has gone. People have, oh I gotta do this, we've got to come back.
Speaker 3:
29:50
But the real successful people are the ones that follow their process on the way there. So when I think about this building a process, one word we hear all the time, Jim, is diversification. Yes. Actually think diversification can be a bad word because people think if they have diversification, oh, I own multiple ETFs, therefore I'm diversified. That's not the case at all. I just saw the other day somebody had three ETFs, but they were all almost identical. So they really owned almost all of the same stocks and all of that same concentration that's in the s and p 500 today. Anyways. And the other thing you see tied into that is, you know, people think there are certain risk level and they're not. So they may think they're aggressive but they're conservative or they may be think, oh, I'm conservative, I'm okay, and they're too aggressive.
Speaker 3:
30:37
And we see that all the time. Yeah. What about those who have multiple financial advisors? So they call that advisor diversification. Once again, I mean, this isn't diversification. If they're buying similar based investments, you're plan is sunk. Here's why. So let's say you have three different financial advisors and they're all making decisions, but who's overseeing all of them? So if you have a defensive backs coach, uh, a linebacker coach and defensive lineman coach who's making sure they're all doing the same thing, you have to have a defensive coordinator that oversees all those people and makes them accountable to him. Even though that person might still coach a position. Yeah, you can't have a play where everybody calls the blitz from each one of those three lines are, you're probably going to be in trouble most of the time. Well, I'll look for, you don't want them all to play nickel when it's first and 10 and there's no need to, I've seen many big plays in football that or that occur when the defense is front seven.
Speaker 3:
31:37
That's our d line. And linebackers are not in sync with the defensive backs. Somebody didn't get the call or, or somebody didn't rotate or somebody didn't adjust. And that's when big place happened in there. Normally negative towards the defense. Yeah. And I would say, Jim, you need to pick one of your three. If you have three. And God, I'm not endorsing it by any means. Uh, but one of them has to be the head coordinator or the general manager looking at it all over and you better make sure it's a fiduciary because if it's not there always subtly going to be trying to say the other two are doing something wrong. Right? So Jim, this is why we wealth from wisdom abroad and we're fiduciaries and there's many families we work with where they believe in advance of diversification. I can't change that. However, what they have learned, and if you need help on this, we can actually do a complimentary digital asset allocation tool that shows you quantitative numbers, not qualitative.
Speaker 3:
32:35
Hey, Paul feels the following five stocks you own are good or bad. It actually gives you your quantitative numbers. If you want us to do that, send us a copy of your statement. We're happy to go through this with you. It's super confidential. There's no cost. You can do this at eight eight, eight four one nine 85 13. But back to what I'm talking about here, Jim. I mean, I would say you gotta make sure this person's a fiduciary because investing is not a set it and forget it type of thing. Here's a stat actually heard this this morning from Brett Carson, one of our portfolio managers. So you think of when something's doing awesome. Many of you out there on mutual funds, and we've all warned you about the cost of mutual funds, but nonetheless, you may still be invested in in 92.7% of top performing funds fail to remain in the top core tile two years later.
Speaker 3:
33:26
Well, let's think about it this way. Let's reverse those numbers. Only if you're having a great year, only 7.3% of you are still in the top 25% two years later. That's a fall from grace, right? Yes. Why? Because things are always updating and changing in the world. Your portfolio, the investment strategy, the approach, interest rates, all those things. I mean, think about that only 7% or even in the top core tile later. That's crazy to me. Well, and I think it's tough to stay there for a long period of time when we talk about, that's why you can't base your investment decisions on past performance. There's gotta be some forward looking thinking to putting together your portfolio. Yeah, I mean, and a lot of people, Jim, you know, look at the past performances. It's, well it's the only measuring statistic I have and I don't disagree is a statistic.
Speaker 3:
34:18
It is not the statistic, just like, I don't know why that Ohio State University uses the in front of it. I'm not understanding that part of it, but just in case you just, it, it's just a Ohio state university. Right. I'm sure I offended plenty of people. Especially you do. That's all right. However you got to look at a context of everything together because I could right now say the best performing, you know, strategy is owning, you know, six stocks, you know, the ones that have done really well, but however, is that really right? And I, I had to be, you know, pretty sure two years from now they're not going to be the best six performing stocks in two years. So that's why you got to look at all of those Pete pieces of the puzzle together and rebalancing your overall portfolio gym. That's a solution.
Speaker 3:
35:05
And how many people have not rebalanced? They made their mistake from Enron or from Lucent or other strategies that they didn't take the time to take some chips off the table, rebalance so that they could be successful. In an order to do that, you have to put together a retirement plan so that you get some chips off the table, but also you help protect yourself from a tax perspective. If you want to be one of the first callers right now, we'll show you how to do that. (888) 419-8513 if you're the type of person who really to make sure you get the most out of every dollar you've save for your retirement, give us a shout. (888) 419-8513. You're listening to wealth from wisdom radio, network, trust, transparency, accountability. These are the values that drive Ron Carson and Carson. Well, you're listening to wealth from wisdom with baron tall, the fame advisor, Ron Carson, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more.
Speaker 3:
36:07
Now back to, well from wisdom with Barron's hall of Fame Advisor, Ron Carson, 3,460 and counting what in the world is 3,460 mean Jim, you don't know, I'm not going to set you up for failure here. So that's how many days we've been running in this bull market. And that crazy. I mean, that's almost 10 years, almost 10 years, man. I mean, what, what keeps happening just keeps chugging along. But one thing we do know, we can't control what's going to happen next. Um, however, we do know you can control two specific things. One that really helps yourself and that is you can control your next steps you make, making decisions and to partnering with a professional. Hey, welcome back. I'm Paul West and you're listening to the wealth from wisdom radio network. And thanks so much for joining us today, Jim. I've been having a lot of fun talking about different stories.
Speaker 3:
36:58
Um, can you believe all those things Rockfield and the doll does. I mean his discipline is unwavering couple of, but I didn't know all of those. That was really interesting. And we've been talking about football, we've been talking about ways to be more disciplined in your overall approach, but really it's about add hearing to the discipline is why advisors help you really get the most success. But I want to talk about behavior and emotions. Um, you know, I sit at the dinner table with my family, Jim, and it's really just I, one of my most favorite things in the world. And by the way, sometimes we argue, I think it's normal, right? How many of you argue with your families? I probably say the majority do, yes. But that's what's fun is because you know you can and you enjoy it. But when it comes time to sitting down and talking about your personal financial situation, most people are avoiders.
Speaker 3:
37:53
Jim, and this is just a fact. I mean this is what happened. So there's actually a survey done by the CFP board. If you don't know what the CFP board is, it's um, the college for Financial Planning Board and they create the certified financial planner certificate or planner, um, out there. Um, I unfortunately I one of them, it's a lot of energy and effort to become one of these. But this study asks the following question. If you do not have a financial planner, what are the words that come to mind? And so here was the word that came to mind. The most stressed follow, bide, worried followed by anxious, followed by overwhelmed, followed by non control. And lastly coming up the rear, which is still not a good one. Frustrated Jim. I Dunno about you, but those are pretty darn it and have connotations. Nothing positive about what you just said.
Speaker 3:
38:48
That, I mean the question is why is that so then they ask people why those of you who do use a financial planner, what is it that makes you feel not stressed, not worried, not anxious? And it said it helps provide a roadmap and they helped me plan my retirement. Those are big things, but here's what happens. So when they look at people who worked with a professional, and this is a CFP professional, this came from the CFP board, and what they saw was they felt that they had the people working to the highest standards, but the benefits received was they addressed a comprehensive set of issues or needs. And those without a planner also felt that way. However, they asked them to describe the number one emotion they feel, they felt, okay, I hope I can get better English, their gym for everybody. All right, we'll be fine.
Speaker 3:
39:44
Uh, is so those with no financial planner, but met with an investment person, I'm a professional is not always the right case. Cause if they not doing what's in your best interest, I'm not sure, but the number one word they felt with security. So that's good. Jim. They felt secure. However, in working with a CFP professional or financial planner, they felt confident. I like that. How do you, how do you go from security to confident? Secure means, okay. I got somebody, at least I'm talking to, it's like a blanket. A blanket can help you stay warm. It doesn't mean you're going to sleep well. The confident means you're going to sleep well and you know you're on the right pathway there.
Speaker 4:
40:29
So I, I got a story of household that came in a few months ago, husband and wife and I noticed the first couple meetings, you know, we've got a lot of competition. Everybody's in an upbeat, positive mood. And so we went to take the next step would be the third meeting. We're really going to get deep in the weeds as to what we were doing. And boy, that meeting was tough. The husband was anxious and nervous and you could see there was something bothering him and I didn't know what it was that day, but I found out later that his job of 40 years that he loved just wasn't any fun anymore. And he was down to third and one can I get the ball in the end zone so I can retire. And the good happy ending to this is we put together a wealth plan like we've talked about. He was able to digest that in his comments were incredibly powerful when we finished that meeting and now he's going to be retiring October 31 of this year.
Speaker 3:
41:22
But what, what? What got him to see the light, Jim? I mean he obviously had to make the decision. I mean you gave guidance there, but people still have to execute, right? He's like calling a play. The players still got to make the play happen, right? He, he said to me that the comfort level he had with the detail of that plan put him over the edge to feel confident to retire. Okay. So it was those things and knowing a little bit, I'm going to call it a safety net of the right team of people around them. So I hear, here's another statistic then from that survey I was just sharing with you from the CFP board. So working with a professional brings about the following emotions. 71% of people said confidence. I already told you that second. The second word they used was optimistic.
Speaker 3:
42:06
They felt better about their future, less concerned. Third, they felt at ease or calm. I remember the last time you did something, you just, you felt so good and you calm that you got something done. And it may be, you know, here it, here's an example, many of us have avoided a conversation we didn't want to have right all the time with a spouse, with a coworker, with a business associate, with um, a clergy member, whoever it may be. And we got all this anxiety build up. I mean, I can feel it right now. I'm turning red, I'm getting anxious. I don't want to do it. I just, so what I would do, I turn around and go the other way and completely avoid it. I go find something else to do, but then I muscle up the energy and strength again and I turn around and I'm going to go have this conversation and I'm nervous and it's just said, or I don't get out those first words the way I want them to.
Speaker 3:
42:57
And then I start going in the conversation and I have it. And what happens, I get this sense of relief, like all those bricks that were on my shoulder, nervous or worried about this are gone. What do I feel at ease, calm and how that happens. And I think that's what people have to feel. I'll give you an example. I was just having this conversation. Um, I don't know. We've never even actually talked about this gym. Um, do you ever snow ski? Nah, I can't do that either. That's not your, that's not, that's okay. Well there's plenty of listeners that do. I like to, it's been a couple of years, but I enjoy it. I know my oldest boy, he certainly wants to go now and so we've probably got to get that trip locked in on the calendar here soon. However, I was talking to someone who loves skiing and he is working with a non fiduciary, so he's just working with an investment.
Speaker 3:
43:45
I'll use your word professional earlier, Jim. And this person has, I'm invested in a bunch of different stocks and ETFs. And when I was asking him actually earlier today was when I was on the phone with them and said, what is your plan like? How are you going to make this happen? He's in his late forties he said, I don't know. I said, well, if you could improve, develop or change something on your plan, what would that be? He said, I just, I need to just comfort. I'm getting there. I know I got money and I know it's investing and I'm an a moderate investor and I said, I know you love skiing and I know you love skiing fast. He's actually erased in some competitions and I just said, imagine when you getting ready to race in a competition, what happens? You build a game plan, you figure out what's the perfect equipment for you, how are you going
Speaker 3:
44:32
to start at the gate? How are you going to move between the gates when you're skiing? How are you going to get down there? The fastest and most successful? Right now you're just on a casual glide down the hill and you're going to get to the bottom and you're going to to retirement. Eventually, but are you doing it most effectively? Are you taking a winning formula there? And he looked at me, said, Paul, you're dead on. Is this described your life? Are you dead on? Are you figuring out your fastest way to get to retirement? That helps you make sense without taking too much risk? If you're not or you have questions about it, give us a call. (888) 419-8513 this is the wealth from wisdom radio network. We love helping you. We love answering your questions, but you one of those first callers will able to help you out. (888) 419-8513 on Paul West with Jim Caldwell. And thanks for listening.
Speaker 2:
45:16
Risks, social security, income taxes, estate planning. Every week we talk about how to make your money go further in retirement right here on wealth from wisdom with Barron's hall of Fame Advisor Ron Carson.
Speaker 1:
45:30
Okay. And here's the legal Mumbo jumbo. The opinions voiced and Wellframe wisdom with Rod Carson or for general information only, and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk, including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SEC registered investment advisor.
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