Wealth from Wisdom

Could You Retire Sooner Than You Think?

April 07, 2018
Wealth from Wisdom
Could You Retire Sooner Than You Think?
Chapters
Wealth from Wisdom
Could You Retire Sooner Than You Think?
Apr 07, 2018
Carson Wealth
Show Notes Transcript

Do you ever dream of retiring where every day is yours to do whatever you want to do … Like traveling; spending time with your family; playing golf; or pursuing your passion? That may seem like some faraway fantasy … But there are a lot of people who will retire long before their 65th birthday. And you could too! Learn how you could retire sooner than you ever thought possible in 4 simple steps.

Speaker 1:
0:00
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 assure 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:
0:32
This Doug market hit another old 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 203 the skyrocketing cost of healthcare and retirement could now run 350,000 planning for retirement today is a whole new ballgame. It's loaded with challenges, obstacles, the 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:
1:12
two one. Do you ever dream of retiring? You know, you've heard me say retiring is an outdated term, so let's say financially secure. Do you ever dream of a life when you just don't have to get up at any certain time or you dream about the day that you can do the things you love to do versus the things that have to do travel, spend time with your family, play golf. Matter of fact, it may be starting that new business. I remember a client of mine who sold his business said, Ron, I now get to do all the things I've had to pay other people to do around the house cause I love doing it. Whatever your jam is, that's what we want for you. And for a lot of people, this seems like a far away fantasy and there are a lot of people out there that want to get to be a financially secure, want to live their life by design, not by default.
Speaker 3:
2:08
See, so many of us fall in this Rut that we just accept whatever it is. And we're going to talk today on wealth and wisdom a lot. Some ways, some things you can do to try to change that for you and your family. I'm Ron Carson with my cohost Paul West, and you're listening to wealth and wisdom. The most valuable thing you have is your time, probably your health first and then your time. So what's standing between you and the living the life you've dreamed of? Well, there's some specific steps you need to take to make that happen. And the answer may not be more money, although that helps in fact are lots of things that you can do that can really change how soon you can be financially secure. And Paul, this is one of those areas where if you protect the downside, the upside will take care of itself.
Speaker 3:
2:58
I think it's a tragedy. Our society today. Matter of fact, I just had my eye appointment this morning and the lady that was, oh my gosh, and I still can hardly see, you know, they dilate. But anyway, she's working two jobs. Um, and I'm like, so thinking, working two jobs must not love what she does. I said, do you like what you go? She goes, I love what I do. And I said, why are you working two jobs? She goes, well, you know I both of them I love and allows my husband and I to put more money away because we want to be able to travel and do the things we want to be able to do. And I said, well, what's the game plan? And she said, well, we really don't have a game plan. We're just both say we're with saving as much as we possibly can. Now that's a good start, that philosophy. But then you got to coordinate lots of pieces. It's a little things done. Exactly right when it comes to life in general, specifically when it comes to investing that make all the difference in the world.
Speaker 4:
3:55
Yeah, absolutely. I'm around where you're just kick it off the show here and talking about dreaming and I was like, it makes me think about, you know, we all get lost in, there are those moments like all of a sudden your daydream and, and you lose 30 seconds, three minutes, 10 minutes, and you're like, I was just in complete Lala land. I remember how good that feels because you're thinking about the future and what happens and what happens when you have a lot of those life moments. Wow, that was really cool. But then the B word happens to being busy and you never actually carry it out. I think what we have to do in our roles as advisors is help people actually carry those dreams out, but put a plan in place to make them happen and to make it simpler for them. I mean there's some things I think about is people have plans all the time, um, to dream.
Speaker 4:
4:45
They look at the lottery. So the lottery's a great example of people dream. And Rhonda, we get asked, you know, the, the lottery a couple times here, over the last year has gotten up to half a billion dollars. And I mean, what, what, what in the world? How is somebody going to spend half a billion dollars? We've actually shared that many lottery winners after they win, go broke and how quickly they go broke. But it's also, and we think about dreaming. I tell people to buy a ticket because it's fun to dream and think about. But the reality is those things aren't going to happen. And so when you put a plan together of what your real numbers are, you're going to feel so much better about carrying them out. That's for sure.
Speaker 3:
5:24
Well, and it's like anything, if you start sooner, anything you do is gonna make a huge difference in the end. And if you start later, not that it's not important, but you don't have as much time. It's like traveling across the country. If you're just off a half a degree, you could end up a long ways away from your destiny. But if you're trying to, you know, do it short term, you can make a, you know, you, if you make a big adjustment or a minor adjustment, it's not going to really have that big of impact. So you want to, you want to do it now or if you're in your forties fifties sixties today's the first day of the rest of your life. Do something about it now. And really, and we talk about this in a book, Scott Ford and I wrote sustainable edge about blueprinting your life, you know, living a life by design, not by default. Everybody out there, I'd say go to the end and describe right down and you can do this. We can give you a complimentary of blueprint. We will develop this process of what do I want my life to look like and then be very intentional today, not just for with financial decisions, but with other decisions. Don't just say that's the way it is, is make and do something about it so you can get your life on the kind of track interjectory you want it to be on.
Speaker 4:
6:39
Yeah. I love, you know, Ron and most people know we're based here in Omaha, Nebraska and so a lot of people talk about having a second place to live in a warmer climate, whether it's Florida or a lot of people here go to Arizona, I think a lot for the weather, but it's a direct flight so it's easy for people. I'll hear a lot of people say, well hey, I'd love to get a condo in Scottsdale. So of course most of the next question, well by when and how are you going to do that? How are you going to put this together? Don't just make it a big dream out there, but if you set a tangible goal behind it, what's one of our favorite phrases? Smack. Certified. Yup. Make your goal specific. So smack means specific measurable by when how numbers achievable. Don't set a goal of I want a house in Scottsdale, it's a $20 million house when that's not even possible, and make it compatible with what your life and what you want to live and how you want to leave your legacy for your family. Maybe your dream is to have a place there to have your grandkids come visit. Maybe your dream is you just want to be where it's warmer, whatever it is, make your goal compatible to what
Speaker 3:
7:45
I really want to, you talk about this all the time. It's life trade off decisions. What's that mean? I mean maybe if you have a second home, you have a much smaller home in Omaha or you have an apartment, um, or instead of having the second place you put that pool in and where their grandkids and kids and everybody can can be. So I think you'd give some thought to that versus just throwing it out there. I want to have this, but you don't do anything about it. Here's an interesting survey, uh, that USA Today did and it asked 45 to 65 year olds how prepared they felt for retirement and 59% Paul said that they felt very or somewhat prepared. The same percentage said they expect it to rely mostly on their own savings to fund. There were post career income. Now that's interesting that they didn't social security and they ask how much savings they had. Only a third get this almost ever 59% said they're prepared. A third had set aside $250,000 and another third would save less than a hundred thousand. And then other third had basically no savings at all. Which there's a huge gap between saying I'm ready and here's what I've got for resources.
Speaker 4:
9:05
That's a lot of ramen noodles. I mean, I don't, I don't know how that happens, Ron, out terms of, uh, I mean 59%, I'm surprised that's a little bit higher than what we see being what that is. That's just a personal bias that that's an ego bias that comes into place now is we often think we're better than what we're are. We are, we often think that we have more than what we have. What are we've always call, uh, you know, keeping up with the Joneses effect that happens in life, that tends to happen. So you think you're there but you're not. So one of my favorite things to ask people, Ron is, and we tell this to people all the time, you can actually, if you want calling the show and it will help answer this for you, is we offer a complimentary second opinions and I think it's important we're in the business of providing advice. People think that all we do is manage money. That's actually just table stakes. What we do, what we're better at actually is providing advice to people because we've been through these things before, but not in your life and helping you out, but do you actually trust your advisor enough that you wouldn't even want a second opinion?
Speaker 3:
10:14
I love that you, I don't even know you, you wrote this or said this somewhere. I thought, wow, that is so powerful. It's like, are you so confident in your plan that it doesn't warrant a second opinion? And I think most people out there are afraid and rightly so, that no matter if someone looks at it, they're going to find something wrong with it. That's not the case. There's times we see plants like, you know, I wouldn't go through the pain of making a change. A lot of times though, there's just not a lot of thought that's been put into it and there's a lot of holes and those are little things done. Right, right. We'll change the outcome of how financially secure or how well you're going to be able to retire. So I love that you're so confident in your plan that it's not worth having a second opinion on.
Speaker 4:
10:58
Yeah, and if you are, then show it to the person and I will tell you if they are a professional, they'll be able to in a short, short period of time to tell you exactly. It looks great. And if they're a fiduciary, like we all here at the Carson group, they have a legal but more partly an ethical obligation to tell you the truth. This isn't like going to another professional who's going to charge you an hourly rate. And like you said, Ron, people can find a way to nit pick something and make changes and try to convince you. But when you're looking at an entire plan, you're looking at the end result. Nope.
Speaker 3:
11:32
There, I wouldn't even consider making a change unless I could see considerable value beyond the doubt by going through the pain of change. And you know, social security is one of those two, Paul, we beat it to death on the show. But conventional wisdom for a lot of people says the Lei claiming it to maximize your benefits. But that could absolutely be the wrong strategy. This is one of those pillars need to get right and there's a lot more to claiming those benefits and you know, and you can trigger a lot of unintended consequences cause additional taxes double your medicare premium ultimately costs you tens of thousands of dollars. And the only way you can really avoid this as have a customized analysis that is customized just for you and your situation. And this, there is no cost or obligation to do this. Give us a call. (888) 419-8513 don't leave all the money sitting on the table. It's your responsibility. Take control. Eight eight (841) 900-8513 that's (888) 419-8513 will you pay more or less in taxes and retirement coming up? We're going to continue to talk about things you can do to make sure you can retire and be financially free sooner. I'm Ron Carson with my cohost Paul West. And you're listening to welfare. Yeah.
Speaker 2:
12:47
Wisdom, trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth from wisdom with their Intel 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 Famer Advisor, Ron Carson. Do you ever wish you could just stop right now, retire, do what you want? We should get
Speaker 3:
13:16
done with the rat race once and for all. And you've lived in, you've dreamed about being financially secure. Welcome back. You're listening to wealth and wisdom and I'm a coast cohost, Ron Carson with Paul West today. Can we govern this segment? One of the key things are getting it right is really understanding your risk budget. Taking too much risk is bad and not taking enough risk as bad. You have to figure out what it is you want to accomplish, take an appropriate amount of risk. And that in itself, Paul's probably one of the biggest areas we see people way off the mark on it. Normally, you know, this long bull market people have just not paid attention because they've done really well. They've taken more risks, probably more unintentional restaurant they planned on, they've done real wall and then we're seeing tremendous volatility, uh, come back. Well it seems it's actually more normal, but it seems like it since we had the lowest volatility. You're in 2000
Speaker 4:
14:10
yeah, it feels a lot different. It got last year was, and I've used the boring word because there was so little volatility that happens, right? I can't tell you so much that when we've been talking with listeners and people across the country, one of the things that's scaring me as an advisor for people out there is, is people have memories that forget stuff. We all, hey, by the way, I did it too and we only tend to remember what's happened recently when I think about risk. Budget is think about your own wealth, however much you have, whether 100,000, a million, 10 million, whatever the number is, but right now people are taking market level risk in their investments and they don't need to. It makes me think of a family that just came in the other day, low sixties, getting ready for retirement. They had saved, um, you know, up to, you know, call it $2 million and they're taking on risk of the entire market and yet they need all of this money to live on.
Speaker 4:
15:08
They have some from social security, but mainly just keep living the way you want to. You got to get a paycheck from yourself. So imagine this, if the market dropped 20%, which it does happen, we just haven't had one in a while, you'd go from 2 million to 1.6 how does that feel? And they're looking across the table at our adviser, shaking their heads like, no way. I would never want to lose $400,000. Well guess what, these things can happen and the way your portfolio's position absolutely get you there. And I think what happened, Ron is last year was so boring in terms of volatility that people decided to ramp up the risk and now they better be careful because I think you and I are seeing this market here in 2018 it is back to normal in terms of volatility and we have a chief,
Speaker 3:
15:57
a little more volatile than normal. Here's a stat on the first cause we just ended the first quarter. Um, the average time the market moves up or down 1% in a quarter is, do you remember the number from this morning? That was right around 15. I thought it was 17 okay. But you could be right. [inaudible] was like in the teens, but this last quarter, 23 so there was a not a lot. Well, I mean if you think about another, let's say it's 17 another six 15, another eight, that's a fair amount of volatility.
Speaker 4:
16:24
Yeah. Well I think about, everyone thinks last year was phenomenal because if you were fully invested in the market and you use the s and p is the barometer, as many people do, market was up 20% so so far this year we have had five weeks where the weekly increase was greater than the single best weekend. All of 2017. Wow. In that crazy. And we're only 12 weeks through the year. I like five weeks.
Speaker 3:
16:50
Got a question for you hall because there I was reading the paper over the weekend and I thought wow, this is good. It was on physical or digital paper. Digital Linkedin on linkedin. Okay. I don't, I know you like paper, I am my iPad. It's all I need. Um, what do you think the right benchmark is? What is the appropriate, and this was, this was a long drawn out, there was a article I did on Linkedin on the three questions and one of them related to market benchmarks for value, the relationship. And there was a long response to it and I thought, wow, that was really good. And their take on what the appropriate index was. I want you to think for a second, cause I had not occurred to me. I'm like though it made so much sense and we don't think about it. The appropriate index, the thing people should be care compared to his
Speaker 4:
17:39
and defense. I mean doesn't it depend on their situation on how much risk they're taking?
Speaker 3:
17:45
Okay, let me re ask the question. Everybody defaults to the s and p 500 okay, cow. If we're going to default this default cash, everything starts with cash flow goes. How many of our clients literally can take on the s and p 500 risk or should it this fat? Very like not very many though cash is where massive amounts of money are destroyed. Let me great example. Corporation last week, looking at what they carry a big cash balance at fidelity and that Eiko hello. How? When are you going to need this money? Well, we probably won't need this money but just in case we're going to keep it there. Do you know what they're getting on cash 0.3% was like 0.1 something simply what we did, we bought, okay, we're gonna study run by a third year tee bill 60 90 and those t bills or liquid any day, but they're going to ladder to you about what do you think income we were able to generate and one year for basically zero to 190,000 we picked out a $190,000 just and how much more risk.
Speaker 3:
18:50
Here's the irony, taking less risk, you know, money market assets, very, very safe, but they're not safer than a short term tracer. That is the safest there is. So the point in this article was that's the benchmark because people start with, okay, let's start with a base of zero risk and then how much can we add to it versus starting with maximum risk and then subtracting from it. I think then you've got an appropriate way to either be disappointed or elated, but the right benchmark is cash. I love, I love that. Isn't that start with yes.
Speaker 4:
19:23
Because often people, you know, we use the benchmark of inflation but that glosses people's eyes over cause they don't understand it and it's not something they can physically touch and see. But they can, cause when they log into their bank account, they see how much cash is sitting there and they feel it's zero on the risk perspective. So you know, that's like, you know, pushing the accelerator on your car. How far do you want it to push it? You know, to what, what's your own personal speed limit? Cause a lot of people, you're right, they're fine with it sitting in the garage right now, basically not moving, but they're not getting in trouble either. And there's a lot of risks people can take. I mean, I think a lot of
Speaker 3:
19:58
things that people understand cashflow to Paul because they deal with their banks. I know what they're getting there. So that's a, uh, an appropriate benchmark to measure against.
Speaker 4:
20:06
They understand cash, they understand cds. Um, they actually what you were just talking about Ron, with treasury bills that people don't understand as much. It's actually a simple concept that we can educate people better about. And whether it's, again, less risky than actually what's in your money market and your bank. There's a lot of people that have come here and we've seen them spread their cash accounts across a lot of different banks or credit unions for different coverage purposes. Again, t bills is another way that you can look at diversifying that for them. I think I
Speaker 3:
20:39
am actually a local bank is what started all of this. They were like, well, should we, we were, they were allowed to put in, it was a teaser rate in money market account for
Speaker 4:
20:48
a local bank. And I said, well, if you're willing to anyhow, I think you had to keep it tied up for like 60 days. I go, if you're gonna do that, all they're doing is turned on by buying a treasury. Just we can do it direct. And by the way, if you're out there, we will do that. We will, if you want to buy a Treasury, um, and there is virtually no charge to do that, right? There's a small ticket charge. And, uh, uh, but that, that is literally the banks are, you know, you understand what the rate you're getting. You don't understand their value, the spread that you're panky. You imagine if mo most people said, okay, I'm getting, call it one half of 1% at the bank and they're loaning it out at five. Can you imagine if they paid the five and you wrote back the check, you got to keep all of it.
Speaker 4:
21:29
But how are you got to keep only a half of 1% had to give the rest back to the bank and a management fee. You'd go crazy. You'd be, but people don't think about it though. Well, I mean it's, but Ronnie, what it does do for them, it makes them feel good and comfortable. And that's actually part of the financial plan for a lot of people. But as we think about it, then how much taxes do they pay and what do they have to pay? I think is so important to look at. We cannot let tax wag the tail here, Ron, by any means. And for those of you listening, listen, I've never had someone come up to me and say, Paul, I want to pay more in taxes. I mean, that doesn't happen. Um, but what does happen is, is people make biased decisions trying to avoid tax.
Speaker 4:
22:14
The reality is if you're paying tax on a gain, guess what is a gain better than a loss? Yes, yes. So sometimes you're just going to have to suck it up and pay taxes. And there's ways to look at it. Again, in part of the wealth from wisdom network here I was just told a recent story of a family that came in and were adamant that, you know, they've had some games in their account and they don't want to have to pay any taxes at all. Um, and we said, that's fine. That means you have to differ. But if the market goes down or co or declines significantly, you're going to have to deal with that. Um, and then worse yet, Ron, so we're sitting there talking about taxes and I said, I don't want to pay any more money to the government. So one of the things that scares me, and I'm bringing this up to the listeners because I know we have some out there, is how many people today that are going into retirement still don't have a basic well and, and it drives me crazy Ron, because I just want to help people out and I want our advisors is to help people out.
Speaker 4:
23:15
So here are all these people who don't want to pay taxes because they get frustrated with the government. And our show is not well by the way, about politics. So I don't want to get into any of that today. But if you don't want the government involved yet, you're going to not do a will. Guess who's the first person that's going to first group that's going to get involved when you pass away the government. Yes. So now I don't understand that philosophy at all. And there, there are way more many people out there that have this predicament. Stop it. It's not going to cost you a lot of money to go get basic. We'll put a place and I will tell you emotionally you're going to feel so good when it's done because of how you help pass the assets. But we can help protect your tax.
Speaker 3:
23:56
Well, and Paul, this is part of one of the strategies, right? I'm going to get financially secure. I mean you do this for your next generation behind you, but also go to your parents and to make sure that they have this done not because you want, you're greedy and you want more, but your parents would rather you and your family have it. Then just paying it needlessly to taxes. That's how I actually got my dad. My Dad would not, which drug his feet forever doing any estate planning and he hates fan taxes. Um, even worse than he hates dealing with attorneys. And so my sister and I are like, Dad, you know, if you don't do anything, here's what's going to happen and you have a choice, you can suck it up and do some planning and get this stuff done or you know, or your harder earned money's just going to
Speaker 4:
24:39
just going to go away. Yeah, no, it definitely isn't around. I think about um, simple things you do. I mean, in terms of taxes and your plan, sometimes unexpected deaths happen. If you don't have a plan in place, you're in trouble.
Speaker 3:
24:52
So Paul, give us a call if you want a second opinion and we will tell you if we can add value. (888) 419-8513 that's eight (884) 900-8513 or digital allocation tool. Absolutely measure how much downside risk you have in your portfolio. You want to know what it is and like Paul says, who's your plan so strong that it can't withstand a second opinion. Everybody should get a second opinion. Eight eight eight four nine 85 13 I'm Ron Carson with my cohost Paul West
Speaker 2:
25:19
and you're listening to wealth and wisdom. He seemed good times and bad times and he's got the gray hair to prove it. You're listening to wealth from wisdom with there. And the same 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 Famer Advisor Ron Carson. Could you retire sooner than you thought possible or
Speaker 3:
25:45
what we like to say here at the Carson grew up, be financially free to do what the heck you want to do. And the answer is absolutely. Welcome back. You're listening to wealth and wisdom. I'm Ron Carson with my cohost Paul West and today we're talking about steps, action steps that you can take to really get set up to be successful and retire sooner. We're talking about social security. We talked about measuring downside risk. What's your risk budget is and Paul, let's talk a little bit about estate planning. You talked about a will in the last segment and the importance of being able to, you know, plan responsibly for who you're going to pass your assets on to, but also look to your parents and say, are things set up? And you know, I grew up on a farm, lots of appreciation and farm ground and it works pretty well because you can die. You get a stepped up basis in the farm ground and a lot of taxes being paid. But what if you have kids that aren't, you were just saying he had an example of someone that you know, has none of their kids want to be in the family business?
Speaker 4:
26:40
Yeah. Well I think how many of you out there own real estate and whether your own family farm or are you just owned some land or you may own some commercial properties or rental properties, these are all part of your overall plan. And some of them, you know, generate some nice income but some of them don't. So, and I think a lot of you that own farmland here, uh, I mean, you don't know what to do. It's, you know, if you're renting it out, there's not a huge return at the moment of what, you know, this is especially
Speaker 3:
27:12
Ron and Paul. Just to be clear, cause I, you know, I'm still involved in farming, um, a great return based on what was for a lot of people listening what they paid for the farm ground, but not what they could sell it for today. Right? Let's make that great real estate taxes have gone way up as well. So
Speaker 4:
27:29
yeah, to reflect that and people are now struggling is there, there is a movement and many of you listening know this, uh, rural areas to urban areas still continues across the country and what's happening in, um, passing along the family land isn't always of interest to that next generation or the grandkid generation of what happened. So you're in this dilemma, you're in that tax dilemma because like Ron said, if you wait to transfer it to when you're not on this earth, they get a step up in basis. So it's a great tax decision for them. Um, but many of them don't want it or so what are they gonna do? They're going to immediately turn around and sell it to someone else at that standpoint, in payment, all taxes. But for you, maybe you're tired of owning this land and you have to figure out what to do now and if the children don't want it. And I was having a conversation this weekend actually Ron with someone. It was like, what do I do? I, I can't keep it in anymore. I don't want it. Um, I don't want to be there anymore. I wanted to give to my kids but they, they've been point blank. Claire with me, they don't want it. So you have to look at techniques and unfortunately sometimes pay in taxes is part of the technique but there's multiple ways to look at it.
Speaker 3:
28:44
No. Yeah, we have the lowest taxes we've had in 30 years. So today, this year of 2018 is a great window to make those adjustments and you know, to tilt things so they can generate a heck of a lot more income or position yourself to where you know you can, you can invest. We're going to have another, I don't know if it's going to happen this year or not. I was going to ask you earlier what, what your feeling was or is this a year we finally get a 20% get a bear official bear market. It's been a long time. Um, but you want to have some dry powder available because boy when those opportunities present themselves they you can really get some great income because Ann Inc get your portfolio generating income was what financial freedom is all about.
Speaker 4:
29:29
Uh, well to answer your question, I'm not sure I can give an exact prediction. I don't see it the next couple of months here around, but I don't see it that far out in the future is, it's the volatility showing us everyday. Now I think if you go turn on CNBC or whatever your favorite station is, you're seeing way more volatility than ever before and I think we're going to get a domino effect at some point. Um, and a lot of it is behavioral based because people, they're going to go see what did well or what didn't do well here in quarter one of 2018 and make some decisions. And they shouldn't because people spend way too much time looking in the rear view mirror when the best people were looking out the front mirror. We're trying to figure out what's out in the horizon, not what's behind us and what we pass there already.
Speaker 3:
30:11
And again, we don't suggest you try to time the market. My Gut tells me this is the year it's actually going to happen and we're going to get that bare market. Um, it could be 20, 30% decline in the, call it the s and p 500 or the Dow. However, the fundamentals are good. I mean it world economy is strong. So if you get this kind of bare market in the face of a recession, that's different. But you get it in the face of actually things being pretty good. It's a gift. If you've got a game plan to deploy assets, it may never happen, but you know, that's, or you may want to be an hedge positions and then go to unhedged. If we get a 25, 30% downward pull, which would be very healthy and very normal.
Speaker 4:
30:56
I mean when I think about it, anybody who's retired or nearing retirement wants to retire. You're within that five year window and you've got $1 million. But Ron, we have a 30% downturn, you go to 700,000 they probably completely changes your view if you're going to retire or not. But if you went up this year, so say these here goes up, if you go from a million to 1.1 million or you go to 1,000,070 thousand is it really going to change your thought process and you were trying no. So why we tell this to people all the time, downside protection is critical for you as you're making decisions for retirement.
Speaker 3:
31:37
It absolutely is. And here's, here's the bigger issue. They'll fall. So if someone comes in or no date all come in, they end up taking more risks in the portfolio. The million goes to 700,000 now that 30% drop is real painful. What? What is the bigger issue do you think though? It's not really, I mean 700,000 and they can, you know, we can do without some things. But what happens is the press is all over there place saying, oh, they're going to bring people out that talk about, you know, the could go down another 50% or another 60% it could go down, you all the Great Depression Taco come and it could be 1929 could it go down 86% and that, so people permanently lock in because they were taking way too much risk. So they go from way too much risk to no risk in the portfolio. And there's no way to reflate back and trying to guess the sanks as in a fool's game.
Speaker 3:
32:29
And I've learned that in my 30 plus years in this profession. So get the brisk budget right, and then have dry powder to take advantage of moments when you've got a strong fundamental backdrop we have in the world today. And then you get good, really good companies that trade at reasonable or below intrinsic value, you can buy them. So let's remind people what happened 10 years ago. So if you were, I'm 70 years old, 10 years ago, 2008 and you wrote the market down, guess what? You still had to take your required minimum distribution is also, so now imagine that a million goes to 700,000 you had saved it all in your four zero one k plan cause you worked at your employer forever. And now by the way, you've got to take a distribution from there when it's at a low, that's a double hit, right?
Speaker 3:
33:14
I said double painful. It's like double taxation for CE Corporate Asians that exists is no one wants to experience that type of pain. And also Ron, as we're talking about getting ready for retirement and your income plan, you have to be ready. We can't harp on this enough on your RMD, this required minimum distribution. This puts a lot of people in new tax brackets. And once again, like we talked about, no one likes to pay additional taxes, but not always. They put you in additional tax bracket because it is income. What does that affect social security income as well? That then becomes taxable and you're creating, I'm sure you've played dominos growing up in your life on it, but it's like pushing that first time on a year, boom, and they all start falling down of challenges related to taxes. Well, and a great exercise today because taxes are going to probably be the single biggest expense that you're going to have.
Speaker 3:
34:05
So getting the tax piece of it right and you know there's their swing tax preparation and tax planning preparation. You give them the numbers, they fill it out. Maybe there's a couple of things you can do right now for 2018 you should get aggressive about doing tax planning in look at the sources of income. Does that makes free you get tax free income, the types of income, dividend income and successful retirement are not build on assets alone. They're built on an income stream. Your ability to know you're going to get that income off of an asset in fortunately the goto options that past generations relied on are just dead today. But the good news is there was some pretty great options today. People were surprised by the way they come in and go, I had no idea I could do that. These are nontraditional options that can generate really good income and by the way, give you good liquidity.
Speaker 3:
34:57
In most cases, there's no cost who absolutely positively have nothing to lose. Give us a call. Eight eight eight four nine 85 13 you could generate more income than you thought possible while reducing your risk. It sounds too good to be true, but it's done all the time. (888) 419-8513 that's eight eight eight four nine 85 13 coming up next, how you could be taking on far, far more risk than you need to. What are some of the things you can do about it? We've got increased volatility the first quarter, more volatile than average, a lot more volatile than 2017 now is the time to measure how much downside risk you're taking. Eight eight 84985138884 nine 85 13 I'm Ron Carson with my cohost Paul West, and you're listening to wealth and wisdom.
Speaker 2:
35:52
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 pay fewer taxes in retirement and keep this money for yourself? You could learn right here and right now on wealth and wisdom with baron, tall of boom advisor Ron Carson. Imagine driving to work not because you have
Speaker 3:
36:16
two because you choose to. So often our society is on this unconscious journey to arrive at dusk safely and they don't even know it. Live your life by design, not by default. That does take some financial resources and you can't. You're probably a lot closer than you think. If you just make better decisions, tie everything together. Welcome back. I'm Ron Carson with my cohost Paul West and you're listening to wealth and wisdom. Today we're talking about actions and steps that you could take to put you in a better position to be financially secure or the old term, retire a lot sooner than you thought possible. We've talked about the increased market volatility that matter of fact, Paul, here we are in the first quarter. People probably had a declined, uh, and depending upon how they were invested in the first quarter of 2018 and what are you going to do about it?
Speaker 3:
37:09
Is that a wake up call to really review your asset allocation and asset allocation? There's been lots of studies out there, Paul drive 94% of the return getting it right and think of going up a set of stairs with a Yoyo, right? It goes up and down, but you're gradually making good progress and not taking on crazy risk and asset allocation and diversification. There's right ways to do it and there's wrong ways to do it just by putting, you know, putting it in 10 different funds that do somewhere thing is not diversification or asset allocation.
Speaker 4:
37:41
No. And Ron, I think you're right this first time people are going to open up a quarterly statement and see it going down. How long time? Um, but not only do they need to know that, but I think for the first time they also need to question what are they pain? Cause I'm not sure everyone really understands what their pain. Um, they know their advisor or for me the dreaded B word of broker is helping them make investment decisions on. And part of complimentary analysis is advisors should tell you from a fiduciary perspective, what are your pain? And this makes me think about a family that just came in over the last week, Ron. And they shared with us their statements and their it multiple investment places. I'm not going to call them advisors cause they were more the words of brokers then advisers, people who are giving advice bake off based on their best interest and not the client.
Speaker 4:
38:29
But it's surprise me, I'm sitting across the table from these individuals and I share with them that do you realize the average expenses you're paying for all the mutual funds you were in were 65 basis points. And it's like they look at me like I have a third eye because, no, no I'm not paying anything. Well no we have to explain to them what their pain. But then the also they were all done in a commission environment. So the advisor, or excuse me, the broker had put them in a shares. So they paid 5% on this investment. I didn't know anybody still slowly sold eight shares. I didn't either. I do. If they're doing it at net asset value in a fee based account that I met the commissionable. Yeah, I didn't either. Well what does that tell me? They're trying to make as much money as possible and not worried about the people that are sitting across the table from them.
Speaker 4:
39:21
No. What's your pain? Understand it. When I explained to these people how expense ratios take out the net out of their actual performance, the reality hit and I'd rather work with someone, the unit, if the, I know I'm paying them more than I fully trust. They're telling me everything that's important for the sleep factor of my trust with everyone. And Ron, by the way, speaking of knowing who you're working with, this was phenomenal to me. I just read this story the other day on advisor box. So the see this. So Morgan Stanley, I heard about it. Yeah, it, yeah, it is crazy. Is replacing adviser names on their business cards and they're putting barcodes in their place. I think about that. So it'll be wild to see how this plays out. Um, but the, but the guest, if the advisor leaves, they can just change who the bar codes connected to.
Speaker 4:
40:13
Absolutely. Yeah. Talk about being a number in a system versus a relationship you have with an advisor. So think about this. So this advisor box article actually even shares, it says irreplaceable brand interchangeable advisers. That's what it says. That's what it says on the business card. And I think about that. If I'm sitting there and I'm sharing my family's, but again, I get to hear that you're replaceable brand with interchangeable advisors. I think most people would not agree with that. I don't think so per you do business with people, not, not people do business with Ron Carson, do business with Paul Lists. He will do business with Jamie, our producers in a doctor. I Love My, I just referred my sister too. My doctor, Doctor Bessemer. If you're listening, shout out. He's awesome. Um, Bill, appreciate that. But he, you know, I can't just imagine if I got it.
Speaker 4:
41:09
Hey, you're not going to see best where you're going to see whoever because it's, you know, it's his firm that you really have the confidence, then it'll be hell mill. It's not, it's him. It's his people around him. Dave, his nurse and you know all the great support that he has. Yeah, well everyone, and we've actually done studies on this run and I think for a lot of people that don't understand the Carson group, not really trying to help educate in the public, but we have a pulse on the entire US financial planning community. We have a sister company that coaches over 1200 offices across the country. And what we hear from this community is, is the organizations that individual families work with, they have to have an inherent trust with the person. They got to have a good team around them, but they need to know who is the person, the name, the face, the phone number, the email that when stuff hits the fan, who do they call and they need to know who directly and that's what relationship built.
Speaker 4:
42:10
They're happy. You have teams around, but say now I'm a bar, or is that here? By the way? We did because we thought the team approach people would prefer in our advisory council said, no, we still want to, we liked the team approach, but we want to know who you gonna call Ghostbusters to coordinate all the stuff with the team. They need great people around them. It's, it's a little bit like a coach from a football team. It's, you know, so of course when Nebraska is like saying Scott Frost has got to decide who are the other great people to put around you. So who's the right offensive coordinator? Defensive Coordinator and strength conditioning and all those things is part of your team. But I still want to know, I'm going to my coach and he's going to help choose who else to put it out.
Speaker 4:
42:52
Let's take that a step further. This morning, an article about a four star recruit that pretty much had written Nebraska off. Then coach frost comes in now I think we're number one on the list. So it wasn't, the brand wasn't, it was the coach who was going to be working directly with. That's a great point and I think that's why, um, when you come in to meet with someone and a lot of people on welfare wisdom, they know that we're credible. Ron. I mean they wouldn't take the first meeting with an advisor who's part of our network without re recognizing our credibility. They do all the research online. They can read about us coming at us. Why are they coming to that first meeting? They want to make sure they like you and they trust you and that's why it's built around that. And so that's why I know your pain know who your advisor is.
Speaker 4:
43:39
That's why digital based advisors also are challenged because those people you call into, it's a different person every time. It's the reason we're on also that we have trustee services that people can rely on the same people they've spent their whole life developing relationships with because you want to be comfortable with that entire process. You're talking about credibility. I mean we are subject matter experts all over the place and we're going to now if you're a Forbes reader, we're gonna have a regular column in Forbes. We're in Barron's where in US news world report. Uh, we have a lot of good original thinking here in the middle of the country in Omaha, Nebraska. We're not group think but it's up to you to make that decision to do something for yourself. So we're talking a lot today about lots of things, but the one that's really unique to every body, Paul, is social security and you want to get this one right. You've heard us say that the delta between the best case, in the worst case,
Speaker 3:
44:32
it can be two, three, $400,000 on top of the fact, the way you take it can and will impact your social security. And we make this simple and easy. What you could learn will help you make much better decisions if you hate paying taxes. Now just wait until your throw this in the mix along with your 401k, your Ira and everything else or you want to, no downside risk. You want to take some of the steps we talked about today to make retirement a reality? Eight eight eight four nine 85 13 that's eight eight eight four nine 85 13 call is now. Operators are standing by to schedule a time. Eight eight eight four nine 85 13 I'm Ron Carson with my cohost Paul West. And you're listening to Walter wisdom
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:
45:29
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 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 l l LLC, an SEC registered investment advisor.