Wealth from Wisdom

Navigating Fact vs. Fiction in Financial Advice

July 21, 2018
Wealth from Wisdom
Navigating Fact vs. Fiction in Financial Advice
Chapters
Wealth from Wisdom
Navigating Fact vs. Fiction in Financial Advice
Jul 21, 2018
Carson Wealth
Show Notes Transcript

Every day you are force-fed investing advice from all directions. How can you tell what is good advice and what isn’t? On this episode, learn how to navigate the fact and fiction of financial advice.

Speaker 1:
0:00
Okay. And here's the legal Mumbo jumbo, the opinions voiced and welfare 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 and 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 CW m LLC, an SEC registered investment advisor,
Speaker 2:
0:31
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 250 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.
Speaker 3:
1:09
30 people coming. Then I'm all right. Awesome. It starts tomorrow. Yeah. Every day you're being forced fed, investing advice from every direction. I mean every direction it comes from us, from the TV, from the radio, what you're listening here today in print. And some of it, you know, it was pretty good information, but how do you know what's good and what isn't? Because much of it is advice that maybe made sense 30 40 years ago, but not today or it's just flat out bad advice. And if you should follow this advice, it could be a big disaster. Welcome to wealth and wisdom. I'm Ron Carson with my cohost Paul West, and what we're going to talk about today is what's fact and what's fiction on some of the most common myths that we hear? The newspaper, the magazine articles, TV, online blogs, and your uncle crazy, Bob.
Speaker 3:
2:06
You know what I'm talking about? There's an endless amount of financial planning advice, claiming for example, social security benefits or Medicare and Medicare and social security would be broke. Is that true? And what you should you do about that and Iras and four zero one k's and do yo do a Roth and when did you do a Roth and when did you convert generating income diversification, you name it. The world is full of people that are world's authority on their opinion. And we're going to help you really separate what's right from what's wrong. And Paul, we hear this all the time and this is where if you is get a piece of advice and you don't process it in the world of your individual situation and puzzle and you react to a piece of information, at some point you're going to forget why that made sense, why you did it.
Speaker 3:
2:58
And I'll use my own example. I used to read men's health, every single issue of the magazine. It was great. And, and while we still is it still around, I don't even know. Um, but at the time, I mean I was young, got man growing up, I was reading all these articles about, oh, you should take this. So I read this article and I go, that makes sense. Pretty soon I was taking so many things and I couldn't even remember why I was taking any of them cause they never probably saved the article. And I remember going in to um, there was a place, there was a book I read healthy at a hundred, uh, back then that was going to be a big deal. I am getting up there in age, not a hundred yet though. And there was a place in Omaha in this book, healthy 100.
Speaker 3:
3:42
They'd come in and they do a complete analysis of your blood and look at all the, really tell you exactly what you should take. So I was so confused because I was taken individually. Each one of them made sense at the time, but I didn't think about it in the context of me overall. And so when they did my, my blood, they came back and said you've got toxic levels of some of the stuff that you're taking. I mean it's really, I mean I was way out there. You're way deficient here. You got way too much of this because no one was coordinating all the different things I was putting into my body. Right? Same thing is true with advice you're getting, you know, you hear a piece. If you don't start off with a strong foundation as to what it is you're trying to accomplish, what your family index number, what's your downside risk number is then on then and only then can you start to apply any bits of advice that you're going to receive? No,
Speaker 4:
4:31
they're on, I think it's for a lot of people is that it's the latest fad, right? It's whatever they've learned or heard recently they tried out. It's like, why does so many people who do you see in the gym in January, it's their fad. They they tried to do and then they move onto what's next because they're not dedicated focus, but we see the best financial plans and the best people who are doing great are the ones who are focused on it and worry about their number, not what everyone else is doing. I think about you and I both liked coffee. I think we have a disagreement on what the best coffee places that you can go to, but when you, when you go order at a Dunkin donuts or a Starbucks or wherever, a lot of people personalize their order. Right. So I wanted to share this with you Ron.
Speaker 4:
5:17
I think this is interesting. So here is the most personalized order ever received at Starbucks. So I know you left Starbucks, right? So somebody ordered a double restreto venti half soy nonfat decaf organic chocolate Brownie iced vanilla, double shot gingerbread Frappaccino, extra hot with foam whipped cream upside down, double blended with one sweet and low and one nutrasweet. So that's one coffee order by text. Yeah, that was yours. Yeah, it's on its way. But that's, I guess that's what the person likes, right? Wow. Yeah. I think, I mean can you imagine being the person taking that are like, ah, sorry. What'd you say? Would you send that to me? I'm going to go to Starbucks and order that. You want to know what it tastes like. I want to see what it tastes like. It's basically they just go grab everything behind the counter and throw it all in there.
Speaker 4:
6:04
Yeah. Yeah you do. But at least I'm going to say that person says, okay, that's what they want. And that's what they got. But instead of figuring out everything else on your own, and I look at, I was doing a financial plan and meeting the other day, Ron and everybody talks about how much life insurance is enough for them. Is it right? Is it not? Of course, if they go to a life insurance only farm, they're going to tell you you need the moon. Uh, but what's fun is to be able to tell people you have the right amount for you. Is it needs based or your kids still in grade school or high school or college or do you have enough saved up in your retirement where you really don't need any? And I think it's, you're going to learn a lot about the advisor or planner you work with if they'll tell you, I call it the truth is when you don't need any mark, get rid of it. But if you do need to add more and figuring out the right balance because people don't know. And by the way, just because you bought life insurance two years ago or 10 years ago, 15 years ago, it doesn't mean you shouldn't change your plan. This is actually one of the most important things you need to do because your needs change. The world change, life happened. But just because you bought something doesn't mean you don't ever have to
Speaker 3:
7:12
had her look at it again. Well, and there's, first of all, insurance is a wonderful tool if used properly. Oh wait, my favorite saying related to insurance as to a hammer, everything looks like a nail, right? And and so as long as it's properly used, here's the issue. There's a ton of class action lawsuits over the last 10 to 15 years. Why? Because insurance policies were sold improperly. They were sold with these not, you know, not, not focused on the guaranteed ledgers, but these assumptions about interest rates staying high. Of course we know what's happened to interest rates and all these assumptions made about what it was going to cost, you know, to, to fund the life insurance policy didn't come true. And that's why you really need to go into it understanding what is the tool, what's the best product to use. And this is, this was one of the myths that, you know, one myth is you here is you don't need insurance.
Speaker 3:
8:05
And the other myth is that's all you need because a lot of people use guaranteed. There's, you know, think about, um, the living balance sheet. There was a company out there that it's all insurance base and they believe in it. But the reality is it's like I said on Varney last week, I'm not a bear, I'm not a bull. I'm a realist. And don't get caught into extreme saying, hey, we've got lots of tools out there and let's figure out how to use them and understand what the different tools do and don't do it. Let's talk about Medicare for a minute. Medicare big. What we hear, I think people believe, and I'm shocked at this to this day, still believe Medicare is going to pick up most of my out of pocket costs and the, and the related estimate is a 65 year old. Today we'll have about $400,000 when you factor in medicare premium, supplemental premiums, deductibles and Copays, they'll come out of their pocket.
Speaker 3:
8:54
That's a lot of money. Yeah. That's a lot of money if you're not planning prize. Also Medicare data finds those under 70 spend about 7,500 per year in healthcare cost and that figure more than doubles over 16,000 by the time that person reaches 96 years of age and a different study by Hewitt and associate shows, healthcare expenses can cost retires 20% of their annual income and 70% of people are going to actually need some form of long term care, which Medicare really does not cover. It can cover a little bit of it depending upon conditions. What kind of carrot is small amount of things gotta be really, really conscious of.
Speaker 4:
9:35
Yeah. And I think Ron, for a lot of people, a misconception they have is one, medicare will take care of everything. It doesn't too. How many of you are listening and you know, still work for an employer and you have a health insurance plan and your health insurance plan has a deductible. You're probably doing a monthly payment, but one of the things you like about your health insurance plan is, remember when there's a thing in there, it's called out of pocket maximum. Yes. So that makes people feel good. You know what, there's a floor. I can't, you know, spend more than $10,000 out of the pocket. Whatever it is. Guess what? With Medicare, there's no protection there. There is no out of pocket limit. You could, if you have events and serious things go on, it could be quite significant to you and something you need to think about it.
Speaker 4:
10:23
Let me share a quick story around with everyone. So many, if people once our number one goal, we want to retire early. So instead of at age 66 which is what Social Security Administration that runs America has, many of you wants to, I want to retire at 60 and I want him to retire at 62 I said, great. How are you going to fund your health insurance between age 60 and 65 that's a biggie. And I run the numbers. Farmer on our team does. You should see their faces. It's kind of like the Starbucks Barista who just got my order. A few. It's a go on the show. They're looking at you like what? It can't be that much. It is. It's so much money. If you got to sell fund or you go to the affordable care act and you need to bridge the gap until you turn 65 Medicare, your financial advisor or planner better be shown you those numbers because they are real. We're talking tens of thousands of dollars, so if you want to retire early, it's great, but just make sure I have to give a big shout out. Beth. She knows one of our planners, Ron [inaudible] birthday today. But anyway, I'll have to go tell her. Happy Birthday, bathroom. All of us here at welfare wisdom. But she pointed out of this couple who want to retire at 62 what the true costs that from 62 to 65 or on the coon believe it. And they were so thankful because now they have it budgeted.
Speaker 3:
11:37
Yes, it's, it's a big deal and you got to plan for it. And do you ever wonder if you have too much money in the stock market or not enough or do you worry about making a mistake and not knowing where to begin? So ultimately you just do nothing because you're paralyzed. I get, and I know that there's even a bigger cost of doing nothing, and that's why it's at the Carson group. We have this five step action plan. This is your opportunity to learn what you could be doing, how get the most out of every single dollar you have. We make it simple and easy by focusing on five critical pillars of investing, including reducing your biggest expense in retirement. That's taxes, how to turn your savings and investments into an absolute income workhorse. Also unconventional strategies that could help you get the most out of all kinds of benefits, including Medicare, social security, and a lot more, more importantly, how do you measure your downside risk? How do you get income in ways that are really not the way she, you thought about getting income and making sure that you have this coordinated plan that you talk about so you can get and stay retired and accustom of living that you've grown to love. And 13 I'm Ron Carson with Paul West and you're listening to author and whistles.
Speaker 2:
12:51
He seems good times and bad times and he's got the gray hair to prove it. You're listening to wealth from wisdom with Barron's hall of same 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 bear and taller boom advisor, Ron Carson, between newspapers,
Speaker 3:
13:13
for magazine articles, TV shows, online blogs, and your next door neighbor. Harold. There's no shortage of advice on what you should do with your money, how you should plan for retirement, but there's a lot of misinformation out there and we want you to understand what's fact and what's fiction. Welcome back to wealth and wisdom. I'm Ron Carson with my cohost Paul West, and thank you for joining us today. Today we're talking about second, setting the record straight on. A lot of myths that are out there, a lot of bad advice and misinformation that puts people down, frankly, some rabbit holes and put some really backing them into a corner so they can enjoy their retirement. And Paul, we're going to talk about withdrawal rate. There's, there's a myth floating around out there. That's the 4% rule. We're going to get that a moment, but we were talking about Medicare in the last segment I think we should cover. I think it's important. There's a handful of items that Medicare simply does not cover that people think Medicare does cover it. Yeah. Many of us have contacts right
Speaker 4:
14:06
in her eye care. Guess what? Not covered. So we're almost one of people's favorite things to do when they get to retirement. What's the number one thing they want to do? Travel. Travel, right? Does Medicare covered outside of the u s no, except for Mexico, Canada and the Caribbean. So right now you're listening, you're on Medicare and you have a trip planned. You're going to Europe for the first time and you're super excited. You better figure out what you're going to do just in case something happens because it doesn't count. And so you better think about that. Other things, longterm care, like we talked about, dental services still need dental care, right? We're going to lose her t get through whatever else happens, the root canal or whatever. Those things aren't covered. So be careful. You know, you need to know the things that are not included because they could be just as impactful as the things that are, if you're not aptly. Yeah.
Speaker 3:
14:54
Prepared for that boy. And be careful. Traveling out. My, my brother in law earlier this year was traveling and got sick, was at a resort in Jamaica, went to the hospital. His insurance didn't cover him. They wouldn't treat them without cash. After they went through all their cash at about $10,000 in cash and they basically just fleece them of their cash and you ended up making it back and was in the hospital here and had some surgery. He was okay, but it's like it really all you just assume you're going to be somewhere on everything's gonna be okay. And he was young, young, he's in his forties he just imagine if you're having to deal with that and you're older, it's even more difficult and you have no coverage.
Speaker 4:
15:36
Yeah. On Ron, what do you do then? If you don't have cash with you and you're down there, talk about maybe die. Yeah,
Speaker 3:
15:44
I, you've got a whole other issue of getting the body back, which I'm not making light of that. This is a big deal. This is a major deal. We've actually had this happen before with clients and you don't think about it. We were on, we were on a cruise years ago with some clients and we had a client that he didn't die at sea, but he almost did. And so there's this plan for the worst hope for the best
Speaker 4:
16:05
and, and things. You know, I remember Ron, we took some of our top stakeholders on a cruise a couple of years ago and we left port and, um, I can't remember where we were, Miami, uh, Miami, but we're, we dock Nassau. But remember we left in the middle of the night and all a sudden I walked out and we were heading back into port because somebody had passed away on the boat and they had to let them off. And that person then had to get their body shipped back. And I mean, this was what, three years ago? So those, unfortunately life does happen and I can't even imagine, you know, the, the tragic nature people went through. So I think it's maybe a good time. And we've talked about one big myth about insurance and what that applies with Medicare. And another big one we see all the time is myths people have about retirement. And Hey, if I just take 4% out per year, I'm fine. I don't have to worry about it. And I think what we have to tell people is that's not,
Speaker 3:
16:56
and this number, Paul, for whatever reasons, been floating around for a long time and it really depends on lots of factors. So Forbes calls the 4% spend down rural absolute rubbish, um, and used should be used. Yeah, but think about this for a minute. I mean, we're in a world where today the 10 year Treasury is 2.86% and we have interest rates. Low bonds are giving you a lot less, I mean, 4% assists. Say you're investing in cds today, cds are offering almost nothing. Can you take 4% out of that? Absolutely not. Well, what if you had an all stock portfolio? If you have an all stock portfolio and you can withstand the ups and downs, you'll probably take out more than 4%. But how many people could sand and should have that kind of volatility on their portfolio? Then you look at some non traditional investments, um, something that, you know, Payson come, think about the housing Yo for the single family housing that we did. So all of a sudden, okay, that's a nontraditional way of getting income. So don't apply just a rule because the rules that get you into trouble cause it means everything has everything to do with what your risk tolerance level is and what kind of investment you're comfortable making.
Speaker 4:
18:09
Yeah, absolutely. And Ron, I think about the 4% rule. It's not only in retirement, but it's what are you doing the right things leading up to your retirement case in point, recently we were helping a family, you know, prepare for retirement and thinking about are they doing all the right things. Um, and then like many of our listeners today run, they've got a hodgepodge. They've got stuff with one advisor here. I use the dreaded B word of broker there. They've been doing some stuff on their own insurance and all these things. But what we found, and so we do this for anybody, so is we'll do a complimentary review of their portfolio. But as a fiduciary, we have an obligation to tell them what's working well and what's working not. So this family I went through and said, you know what, your fidelity account, that looks great.
Speaker 4:
18:57
You really got that asset allocated. Well, they've got a couple of accounts with a brokerage firm here. One looked really good. Ron had a great asset allocation. Exactly on target for what they need to do. The five 29 needed a minor shift, but then we got to their IRA and Ross. So those are what tax deferred and the Roth will be eventually tax free. You once they're above 59 and a half, they have ability to do this and this. We're looking at all of this run. You won't believe this, so you know what they had in their accounts? Bonds, but not corporate bonds. They had municipal bonds inside of their IRA accounts. That's a travesty. I can't believe a financial advisor would put them in something like this. I hope it was a mistake, but it's a, it's an egregious mistake. The thing about that, why would you put a tax free investment inside of a tax deferred account? You wouldn't. What does that tell me? Their advisors, I was off the ball. They put them in a model portfolio, they weren't looking at it. I mean, and that's scary to me.
Speaker 3:
20:00
So the Roth is really bad because, well either case you're taking tax free income and converting it into taxable income. If it's deferred, the Iras, the worst, worst, well but the same now you're taking a lower return tax free, you're not going to get any benefit from that whatsoever.
Speaker 4:
20:16
Yeah. And I know you shared the 10 years at 2.8 currently, you know, plus or minus a little bit there. Munies pay less than that and corporates pay more than that. So why wouldn't you want to get the Max Corporate? You can inside of there. So like right now, if you have a bond portfolio and you have, and by the way of course, what were they run bond mutual funds. So yeah, so just adding paint horse. So, but if you have a bond allocation and you have an IRA account, do me a favor, go check it today or tomorrow. And if you have Muni bonds or you just want us to look at it for you and make sure that you're on the right pathway, you know, you call us eight, eight eight four one nine 85 13 or if you want, you can send me an email and our team@infoatcarsonwealth.com several people did last weekend, Ron. And we're happy to look at that and give you a complimentary opinion of how that works. Because I don't want people to be hit with that same mistake because you just don't know enough. And you know what Ron, I am sure the advisor sat across the table from these people and said, hey, I got you in bonds. And there's like, okay, great. Yeah, well they didn't realize this. They're missing out about 2% of growth and they're compounding the tax impact when they didn't even need to do.
Speaker 3:
21:29
I'm actually going to do an article, uh, and my column in Forbes on fixed index annuities are so much, I'm doing the reason cause you saw so many of them. Well, yeah, but as we've seen something right comes through or people own on, unfortunately, fortunately these, you know, there's a lot of radio shows that are promoting this stuff. Um, and going through my research, I'm looking at some of the articles, there was a great article in USA Today about how on these fixed index annuities, you really can't just withdraw the money. Normally you have to take an annuitization out. It's so the person doing the researcher said that's rarely ever disclosed to anybody. And then they go on to talk about the expensive expenses. And on average, what do you think a hundred thousand dollar annuity, a fixed index annuity actually pays the advisor, the person selling it.
Speaker 3:
22:25
I even hate to use, let's say salesperson, what does it pay? We say broker role. That's really what the Er, yeah. What do you think? It pays him a six to 8%. It pays you, you're right on it between seven and 11 7:00 AM 11 seven 11% and that, and, and the appeal sound pays $10,000 off the bat. Yeah. But it's not apparent right away because it's part of this. You don't really know, okay, how am I going to get the money out? That was, this was what this research said that they really understand that in order to get what they're promising, you got to go through what's known as this annuitization. You just can't take it in a lump sum withdrawal, which is okay if you go into it and you know that's a case, but the article goes on to point out that's not how they're being sold.
Speaker 3:
23:10
People think that they, hey, I'm getting upside with no downside participation. You could literally take, Oh and here's the other thing is never really talked about is you're part of the insurance company's general account. You're a general creditor. If they would go broke, then you're in line just like everybody else where like if you own stocks, bonds at TD, fidelity, Elser custodians, those are separate accounts. I mean, if TD fidelity went out of business, heaven forbid your assets are segregated, they're not part or not, not subject to the general crowd is a major, major difference. And, and you could do the same things if really like that. Today you can use the instruments to cap your downside, capture the upside, and you have total transparency and liquidity. Anytime you want it there, it'd be more on this. So watch for my piece and Forbes a pride to be working on that over the summer.
Speaker 3:
24:01
Um, the IRS, so I was talking about another person that's coming after yet, not just insurance companies on the salespeople, but they're licking their lips and they can't wait to get their money, their hands on your money. And that's in the form of taxes. Every time you do something, we pay taxes on your IRA or four zero one k, your pension, your social security bents events, your investment income, taxes on your home, taxes on your estate when you pass away, it just never, never, never ends. And matter of fact, one of the largest expenses you're going to have in retirement is taxes. And we talk a lot here on wealth and wisdom is you can't just figure out what you owe after the fact. You need to do planning right now so it's not a field day for the IRS and there's some things we can do.
Speaker 3:
24:50
We have a tax savings action plan and we'll show you how to install your money out of the IRA 401k or other retirement accounts. Also the one overlooked opportunity and the Trump tax plan. Another one is, and we talked about this this morning, Paul, with our group and you can actually direct directly out of an IRA to charities and have that be part of your arch. A really powerful strategy. Give us a call. Eight eight eight four nine 85 13 that's eight eight eight four nine 85 13 I'm Ron Carson with Paul West and you're listening to wealth and wisdom.
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, he's a published author and has been featured in Forbes, investment news, the Wall Street Journal, CNBC and more. Now back to, well, from wisdom with Barron's hall of Fame Advisor, Ron Carson, claiming your social security benefits generating income, reducing your taxes asset allocate,
Speaker 3:
25:47
you should have diversification. There's enough advice on retirement planning to make your absolute headspin. Welcome back to wealth and wisdom. I'm Ron Carson. If my cohost Paul wasn't, thanks for being a part of the show today. We're talking about all these myths that revolve around retirement. What you should or shouldn't do, and there's a lot of information and before you can apply any of it, you need to make sure what your individual situation is, what's your risk tolerance is all the factors that are unique to you. And then you can have a chance of having the advice actually makes sense to where you actually use it. Uh, Paul taxes are a biggie. This is one where people leave a lot of money on the table. Oh, it's crazy, Ron, because there's so many different techniques and I tell people is, and I know you like all my car driving analogies, is you have your hands on the wheel controlling your taxes in retirement for most of the time. Especially between age 60 and 70 then you ever will in your entire life. But if you don't make the right decisions, then then just going to compound
Speaker 4:
26:44
the tax problem, whether it's social security cause that can be taxable. By the way, also we talked about Muni bonds earlier in an IRA. Huge, no, no mistakes we made and if you see somebody do that, be careful. But actually a municipal income can be included in your social security calculation. So that means your benefits can be taxable up to 85% but technique you said right before the break run, I want to come back to, cause I wanna make sure our listeners to, they understand. I would say most people are charitably inclined and they give him a, or at a minimum they give money to their church or to their favorite charity or whatever that may be. Dreamweaver foundation, the United way when everyone we were, I know you do. We all do so that when you become 70 and a half, you have to take this RMD.
Speaker 4:
27:30
I know people hear us talk about all the time, but one of the simplest techniques to do is called a qualified charitable distribution. So for example, what if you had to take $10,000 out of Your Ira, your mandated, that's what the IRS says you have to, but you always give $3,000 a year to your church. Why not have that come directly out of your IRA? You don't have to pay taxes on it. It reduces your income. And guess what? The church still benefits. That's a win, win, win less taxes, charitable and more powerful for you. So those are techniques. And if your advisor, by the way with not giving you ideas like this, that's a problem too because I will tell you there's two pain Pete points for most people. One, do they feel okay? Do they feel okay that they're on the right path in retirement or before they get to retirement? And the other is taxes. People hate paying taxes. And when we can help as planners give them the best tax saving techniques are on, everyone loves it and you're just, you're happier, right? Everyone loves. If I helped save a few bucks, I didn't have to pay taxes on.
Speaker 3:
28:37
Well in a penny saved is more than a penny earned because at penny saved you don't have to pay taxes on it. You don't write to compound for you. Hey Paul, I want to um, great accomplishment this week. I know you've worked your tail off, you get your CFP, which is a great accomplishment. They do not give some designations. I give out the CFP is not one of them is not a, I used to saw, you know, not only doing and leading our organization and Carson wealth here, but all the hours you had to put into it. And it's a congratulations. It's, and, and I know you learned a lot through the process.
Speaker 4:
29:09
I did Ron. Well, thank you. I mean, and you know, for our listeners and everyone, it's um, you know, self learning is one of the best things we can do, um, as professionals. And just for me personally, I've been in this business 20 years, but I really run, I look at the future of our business was based on, I'm thinking about when you started to about investments and as, hey, just go invest my money. And that's what people think. Well there's a shift going on right now and if you haven't done the shift with your advisor, yeah, I think you make a mistake is the power of the advisors who can give you planning advice, whether it's the taxes we were just talking about all those things. And there's only one professional designation that helps you be ultra prepared for that and that as the CFP certificant status.
Speaker 4:
29:50
And so I've actually spent the last 18 months, Ron, preparing for this. So a huge shout out to Courtney and my kids for putting up with me over this time period because I said I do a help run our Carson wealth from here. Um, and you know, I take a lot of time, as I said, at night and on weekends to prepare, actually went through a four day steady course. But why did I do this? I wanted to be better to help my clients be better. And I know this and I know it's going to help the firm, but most probably is going to help all of these people. Because if you are a doctor, what do you have to do? You got to pass all of these exams to be able to actually practice. Now when brokers get into this profession, take life insurance people, what do they have to pass their life insurance exam?
Speaker 4:
30:38
Or they have to pass if they want to be a broker, a series six or series seven or on all that does, it gives them a license to sell the CFP designation that you have. And I have in many other people have here at Carson. And by the way, only 61% of people who took the exam last year passed it. So if that tells you, and these are by the way, are mostly the best of the vast that even try to pass this. Think about how many, there's what? It's a couple thousand people per year. Try this. So think about all the people that don't, that are never going to, that don't even step up to the
Speaker 3:
31:11
well it is and it's a big commitment. I mean there's some other designations out there. Um, the, um, and I won't even name them, but literally you could sit down on a weekend and go through the test and get it done. The CFP, it took me three years to get through it the way they did it then I was assuming it took you some more amount of time from the start time you started at the time you finish and when you're out there today, and this goes for anybody or doing business with, would you go to a doctor to do surgery that didn't have their MD? And he said, no, no. I, you know, I really learned about it on the Internet and I've seen some other people do it and I've read and heard of watch lots of nip and tuck shows. Right. I got, I got, I got this.
Speaker 3:
31:51
That is your favorite. I saw that on iPad. I've never actually seen the show and tell the truth. How crazy would that be if someone's doing a plan, they need to be a CFP or a CPA. I mean Cpas to make graphs go and, and, and by the way, if someone's doing your taxes, they should be a CPA. If someone's managing your money, they should be a c f now the CFA is the equivalent to the CFP and the CPA. And if you're getting a state planning done, it needs to be a j d and he'd send me an actual attorney, a real attorney, right. Again, just like the MD dot. Someone who studied it or watch some stuff online. I literally, I'm a pilot. I fly, I remember someone telling me that they could literally go fly a plane now and they had no lessons and it's because they played some game that was like they said, a silver Honda civic dead serious.
Speaker 3:
32:46
There were a hundred percent dead, sir. Is that they've thought on a simulator. Malcolm X, I'm not getting on a plane with, well, they worked for United now I just made that up United. I was just kidding. Um, but no, this is serious stuff. It's, it's it, it is. Things baffled me in our world. One is when you see these companies being fine time and time again and why people stay with him, I guess maybe they just get used to it. But this is one where when you get to, you know, you, you wouldn't consider working with a doctor didn't have an empty, why would you trust your financial life to people that don't have, uh, committed specialty and education background and training specifically for what they're giving you advice around. Yeah. Well Ron, I have to say one of the things and you know, thanks again and it's, it's been fun to go through this process of obtaining a certificate.
Speaker 3:
33:33
I've got to finish up the final pieces here. Uh, and we'll be raring to go. But one thing I actually like I learned and I want to share with our listeners. So when I deal with disability policies for clients, so many of you listening today, we as a company have a disability policy. Everybody says they check off the list. I got it. But I outsourced that. I like, I sent it to a professional to help design that for our clients because I don't know enough about it. What was fascinating for me when preparing for this exam was I had to learn all about it and all of the details, how it worked, even though I outsource it today to better professionals. And what most people don't realize is, is that the disability policy through your work is often taxable income to you and they don't realize it.
Speaker 3:
34:16
So they look, so let's say you made 100,000 a year, most disability policies are at 50 per 50 to 60% of income. So that means if you made 100,000 you'd only get 50 and you're going to get taxed on that 50 so really you're only making, call it 35% of what you were before, but people don't think that way and it was fun. We actually did a financial plan the other day, Ron, and we've showed everyone their disability please, what was taxable, what wasn't, and they had this look like, oh my gosh, that's so cool. I never knew that. And helping people think through that because they just, they don't know. They just say, check off lists. I've got my life insurance done, I got my disability done, but the numbers do matter inside there. The numbers matter. The numbers matter a lot. Matter of fact, here's a number.
Speaker 3:
34:55
We're in a nine year bull market and are you taking the appropriate level of risk emotionally can withstand and it was in was it is within your risk budget and we do a thing. Well, major downside risks through a digital allocation tool. Had a great conversation this morning with someone. It's like, wow, I was determined to have had no idea I was taking the kind of risks that I'm taking. Now's the time to know that with the market at all time high, maybe Derosa portfolio, look at going into it. Maybe it's a bond ladder, a Muni ladder, irreplaceable capital strategy, but you want to at least know it as second opinion. Never hurts. Give us a call. Eight eight eight four nine 85 13 that's eight eight eight four nine 85 13 it's your money, it's your life and it's your responsibility to take care of yourself. Give us a call. Eight eight eight four nine 85 13 I'm Ron Carson with Paul West and you're listening to wealth than wisdom.
Speaker 2:
35:48
Trust, transparency, accountability. These are the values that drive Ron Carson and Carson. Well, you're listening to wealth from wisdom with bear until 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. Now back to wealth from wisdom with Barron's hall of Famer, Divisor Ron Carson. As you plan for retirement day,
Speaker 3:
36:14
if you rely on some of the traditional rule of thumb from yesteryear, it could turn into a financial disaster and you may never able to be, be able to recover from it. Welcome back. I'm Ron Carson with my cohost Paul West. Thank you so much for joining us today. We're talking about a lot of different things that we do every week here on wealth and wisdom. But today we're talking a lot about the bad information that you can get out there and make some really big mistakes. And two of them, Paul, are, hey, you're not gonna, you're gonna live to 100 and today that's really dangerous because you don't want to have too much life. At the end of the money. We are making advances, we have lots of people living beyond a hundred and some cases it had, you know, pretty decent life and that's only gonna get better or worse.
Speaker 3:
37:02
The bidding up on how you look at, if you didn't plan for it, could be a miserable existence and you just have to be really, really careful. Right now, projections suggests there will be 3.7 million sectarian across the globe at 2050 and I'm going to take, that's the under, I want to take the, yeah, I mean this is a under estimated number one. I think it was going to be way ahead of that. And my son grant or Carson, my grandson, he'll live to close to 200 years of age. You think he will? Yeah. Well, barring an accident, sure. From, from just, you know, general life. He will live to close to 200 years of age soon as you got to look forward to. Yeah. So there's a lot, lot of um, a lot of reason to be conservative, put things away, plan for the worst, hope for the best and things will work well.
Speaker 3:
37:51
Yeah. Well, I mean I think life happens and you're watching more and more people vibrant. Ron, I think it's fun. Like you look at someone you're like, Oh man, they're a 65. Well actually they're 75 where they're so vibrant and full of life and you know, they got many years ahead of them. And I know we talked on the show before, but you know, we just had a phenomenal experience in April. We had a chance to sit down and have lunch with Charles Koch. Is he 81 or 82? [inaudible] 82. Yeah. And think about how much energy I would have guessed he was probably 52 with the amount of energy he had. Metaphor. I probably talk about that lunch, Paul with you and I and him probably once a week at least. It's still, I go back and look up my notes. Amazing. Anyway, if you want me to send, I've got some really cool notes from Charles Koch. Send me an email@ourcarsonandcarsongroup.com and I'll send them to you. Yeah, no that's great. And I think that just proves
Speaker 4:
38:37
that people are gonna live for a long period of time and you also have to, you always need to be prepared for the unexpected. And I like to watch sports and it's a passion of mine. And my wife, Courtney, loves to play tennis. So what tournament just ended Wimbledon when? When it was just over and it was fascinating. I was watching, you know, the two semifinal matches were amazing. The men semifinals and I got, I actually watched, yeah. Did you see that? Isn't there Anderson match? The final set? I just wrote this down two hours and however long. But their endurance was like, what a six hour plus match. But it ended 26 to 24 that was the fist set. So if you think about it, that's four sets alone plus the force. So they played an eight sets watching. I mean I was so captivated. But do you play tennis by the way?
Speaker 4:
39:21
A little bit. How that corny beats me. I play with my daughter Maddie and we've, you know, I've had one lesson in my life, um, but we're fairly evenly matched, so it's great exercise. I can't imagine go on that many hours. Oh my gosh. Yeah. But they were just, they had to keep going and they had to keep digging in the well, and I think about is your financial life, would you be able to make it that long? Yeah. Would you, I mean seriously, if you looked at it, could you make it or sources and that kind of financial or health conditions, financial conditions. I, so Ron, I'm going to take the unders on that. I would say most people aren't. They've only prepared for what they thought it's there. And I think that's one of the big mistakes we see people happen. Let's talk about retirement and living that long.
Speaker 4:
40:03
So here's one of the things that happened. People retire and they don't think they're going to need as much money. What do they do? Two things. One, I'm going to go back to the travel. People love to travel and so if you've been going and you've been working in in a eight to five environment or you worship or better yet, depending on how you look at it, what if you were in an environment where you traveled all the time for your career? And so all of a sudden now you're at home and you're like, you're twiddling your thumbs. You don't know what to do, do. You're going stir crazy. So you do two things. One, you set up travel, you do weekend trips, you do cruises, you do whatever you want to do, or you go meet people for breakfast, for lunch and dinner. So you're eating out.
Speaker 4:
40:43
Expense goes up a lot more than people often budget for in retirement and you have to be ready for that because you're, when you're, you have a free schedule, Ron, you tend to spend more money than you actually realize because you're bored and so what makes you feel better? Some people, it's spending money. I bet. I've seen this rule of thumb, Paul, since I started in this business in 1983 it was the same number, 70 to 80% according to the employee benefit research institute, 52% of retirees spent more than 95% of their income and you hit the nail on the head. There is, there is, there's just, you're going to spend a lot more and less. You're careful unless you planned for it. Figure out how much you can afford
Speaker 3:
41:34
to spend, especially if we're going to live a long life and don't spend any more than that. The other thing, we see this at dream weaver, Paul, you know we started a foundation, well, by the way, we'll do a hundred over a hundred dreams this year. It's really last year with about 50 zero more than double it. We're having our boots and buckets fundraiser, uh, the end of September. You can go to dream the dream dream weaver.org if you want more information because it is expensive, but the people were doing dreams for their impoverished. They're elderly, they're at the end of their life. And a lot of times we talk about the percentage here. It's because of of uncovered medical that just wiped him out, wiped them out. Totally. So this is where you have to have the holes in the boat plugged. And one of them is if you don't have adequate health insurance, it can totally, all of these rules and all these rules of thumbs don't matter if you've got a risk that, that you're exposed to the could completely eliminate all your retirement resort.
Speaker 4:
42:36
Yeah. So I know Ron, last segment, you're kind to me, you know, it said, hey, I passed the CFP exam earlier this week, which I'm super again thrilled about. But one of the things that is now the planning board is really integrating the test too is making sure firms like Carson and leading firms like us are doing the right planning for elderly clients and being concerned about dementia and helping think through cognitive challenge that go along with that as well. And I think your advisor and planner better be a good communicator about that because now imagine this, if somebody is mentally sick and they're financially sick and what you just talked about as people get financially sick because it just happens, they get healthy sick and then it costs financial sickness from what their resources were and that's like that compounding effect like that. That's that snowball that wants to picks up steam going down a hill you can't control.
Speaker 3:
43:28
We're actually, we're just waiting for an API that we can consume to integrate some technology for our clients. For those that want it to start measuring whether dementia, starting Devon impact on their ability to make decisions. And this is a, these are the nontraditional things that wealth management firms are going to have to do in the future to really add value to their clients. And this is going to be a biggie. And it's, you know, why you're feeling good and you're healthy. You can agree with your team to say, I want to go and take an online test every year. And when it starts going to yellow, you've got permission to start talking to my family about this and, and get out ahead of it. So you don't have, because all of a sudden you become vulnerable and there are plenty of people out there that will do pure out of your money.
Speaker 3:
44:14
And that's another thing, right? You're not making great decisions and some of these families don't avoid it. It's one of those, one of those you want to hear. That's why you are failing. You've got to have the hard conversations. So we are the Carson group. If you don't know who we are, go take a look. Um, and get to know us online. A lot of great information. We have a lot of, uh, material that we can get to you. But more importantly, there is no such thing as a dumb question. Come in and have a listening session. Get a second opinion on what you're doing. Take a look, just get to know us. There's nothing we can sell [inaudible] product that we're going to offer. You just come in and say, Gosh, let's take a look at what I'm doing. Can't you add value if you can last for the business? If we can't, we'll absolutely tell you. We want you to just change your relationship to change it. Give us a call to schedule that. Eight eight eight four nine 85 13 what you'll learn will surprise you. 888400900 85 13 (888) 419-8513 I'm Ron Carson with Paul West and you're listening to wealth and wisdom
Speaker 2:
45:15
risk, 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:
45:29
Okay. And here's the legal Mumbo jumbo. The opinions voiced and wealth from 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 mean 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 CW m L L C an SEC registered investment advisor.
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