Wealth from Wisdom

Living Past Your 100th Birthday

February 03, 2018
Wealth from Wisdom
Living Past Your 100th Birthday
Chapters
Wealth from Wisdom
Living Past Your 100th Birthday
Feb 03, 2018
Carson Wealth
Show Notes Transcript

There are over 450,000 people over the age of 100. Humans are living longer than ever, but are they ready for the longer retirement that comes with that? Ron & Paul will teach you how to prepare yourself for a longer retirement than you expected.

Speaker 1:
0:00
Okay, and here's the legal Mumbo jumbo. The opinions voiced and wealth from wisdom with Ron Carson or for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SEC registered investment advisor.
Speaker 2:
0:31
The stock 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. He lives in Austin, Texas, where he sits on his front porch, smokes his favorite
Speaker 3:
1:13
bar, and drinks his whiskey. He's America's longest living veteran, his name Richard over 10 and he's 111 years old. You heard me right, smoking, drinking, and live in the good old life. You're listening to wealth from west. And I'm Ron Carson with my cohost Paul West. And thanks for joining us today. That may seem like a great tale on the surface, but there's hundreds of thousands of people just like Richard who are living well beyond the 100th birthday. In fact, there are 451,000 of these people in the world today, and that number is projected to explode over the next several years. Matter of fact, to singularity university is saying we're going to have what's known as breakaway velocity on life, meaning will die of natural causes anymore. So why? Why am I telling you this story? Well, the statistics are black and white. We're living longer than ever before and we're on the eve of having that extent dramatically and you're probably are thinking to yourself, you know, am I prepared?
Speaker 3:
2:22
And that's exactly the kind of thought we want you to have is we don't want you to have too much life at the end of the money. You know, if you've lived into your eighties nineties or maybe even made it to your home with the birthday, would you run through your entire life savings way too soon? This is where we want to talk about here on wealth from wisdom, ideas on how do we protect the downside, because if you protect the downside, the upside will take care of itself. I'm Paul. This was one of those things that boy, his financial advisor, we've been trained our entire careers that people need to get to. We always off. We could get up to a hundred are pretty safe. I'm not so sure if that's the case anymore. So being aggressive on giving assets away, I think I'd be a little more conservative going, how long may I have to have, which could be a good problem.
Speaker 3:
3:13
If you have good health and you're feeling good. I just listened to a podcast over the weekend about Mel Gibson and stem cell. His Dad, by the way, 92 years old, was given 48 hours to live, had stem cells and Panama and is now a hundred a hundred. 100. Wow. 100. Yeah. Fake about the ramifications. I mean we're doing that today outside the US. There's a lots of, I guess ethical issues and morality issues. But point is we, the genie's out of the bottle there. We have the technology to do it and according singularity we're going to be able to grow, replicate every body part. By the way, did you know the cure? Not even the person you were seven years ago.
Speaker 4:
4:01
Do you know your body? You can look in the mirror. Welcome.
Speaker 3:
4:04
Your body completely replaces every single cell every seven years
Speaker 4:
4:08
except for hair. And I was like, I wonder how many people were visualized. And Ron, I loved how you started that. I'm thinking about your front porch, your favorite beverage whiskey or cigar ice tea. Um, I was actually talking with some people this weekend and, um, I know it's still jokingly a dinosaur activity, but I still love getting the Sunday paper and sit on my front porch and reading it and having a cup of coffee. And I do visualize myself to whiskey in it. Uh, it depends what day, Sundays no, but were well behaved, but I could in my retirement or as I plan for the future. But you got to think about how do you enjoy those things and what happens and uh, what was on this last weekend, the grammys. So going and watching people there. So staying came on and he, I mean, so you just think about how old do you think he is by the way? Right now? Any guesses? 78. Okay. Your little author, you guess a little higher than I thought I was thinking you were going to guess under Mick Jagger. Yeah.
Speaker 3:
5:09
Yeah. You are, aren't perform 10 years ago, like guy was ripped, I mean, amazing.
Speaker 4:
5:14
66 years old and just still actively perfused. Look 78. He looks better than you may not like that. So, uh, don't be mad when you're listening today to a steak. But as we think about it, your people are performing, I think of musical acts. When they hit 50 you really, they really stopped and now they're going into their seventies and continuing to accelerate because they're having fun and longevity shows them that things can happen and is you're thinking about your wealth, what's going to happen to you? You're probably going to live longer than you expected. I know on last week's show we talked about you're going to retire sooner than expected. That's a double whammy. You're going to live longer than you thought and on average you are forced due to early retirement or job cuts or whatever it is to retire through you, sir, sooner. Well, that's both ends of the spectrum here, that you better have enough wealth created for yourself that you can last throughout your lifetime.
Speaker 4:
6:11
And that's why having the right plan and having some downside protection. Listen, Ron, you and I have been talking about this. We're in these incredibly frothy markets right now. It is people, it just to me this morning on macro or talking on our, on our macro call, that'd be one. I'd say one of the more pessimists, this pessimistic portfolio managers we have here at the Carson group actually pointed out, there are some companies that are fundamentally still it really great values, but it depends. I mean it just depends what you're buying. For example, TD when they reported earnings this last week, million trades a day record the top two stocks that we're trading where marijuana stocks and blockchain stocks and they accounted for 10%. So when you say frothy, you know, some of those things are just crazy valuations. Yeah, no and I didn't think of it overall is frothy.
Speaker 4:
7:06
As people look at returns, people see the s and p was 12 for 12 and 2017 of being positive. Uh, but I think one of the favorite phrases is, you know, today's show is what we also see is fomo. And you know what Fomo stands for the, alright, good fear of missing out and people are still extending themselves. And it always concerned me when everyone is taking more risk than they should. And we're starting to see that more and more. Uh, we've had some market events recently. You know, you're talking about our portfolio managers in Omaha here last Tuesday we had record attendance, we had so many people in the room and it wasn't everybody asking about the market and they were, they're asking where can they get above average returns. And what that says to us is that's directly related to they want to take more risk than they need to.
Speaker 4:
7:57
Well, but Paul average, and let's define what they mean when they say average, average. I want to just share the single most important factor in how you protect yourself from running out of money is to make a higher return with less risk. And here's a guaranteed way and we really can't ever say guaranteed, but behavior based on the last 30 years. Let's just preface it with that. Dalbar look at this. Paul Dalbar looked at the composite return of investors over a 30 year period and compared it to what's everybody compare themselves to the US Sfi hasn't. Certainly now it used to be the Dow, but now it is definitely the SMP. Roughly over the last 30 years, the s and p has been about, what do you think the returns Ben Glass 30 years averaging per year? Uh, about 9%. It's a just a little over 11 okay. So good guess,
Speaker 3:
8:56
what do you think the average composite investor, meaning everybody average of the good, the bad. When they say average investor, right? Who are they talking about? The average s and p or the average of the investor over that same 30 year period?
Speaker 4:
9:10
I'd say about 50% of that. So I have four, let's call it five and a half percent. Okay. Five and a half. Which would be a huge difference just to get close. 2.4699999999999998% so that's about a Ford. Yeah, 25% of them.
Speaker 3:
9:24
That's worth less than a fourth. Right? So average, if you can just protect yourself from investors have terrible at getting out and getting back into the market and then they're taking on when they're in, they're taking on more risk than they should. And then when they get out, they're afraid to get back in because they experienced more pain. When if you just went in and really said, you know, I'm only going to take the amount of rest, it's appropriate from what I'm comfortable with. We'll adjust. As you know, big macro trends change and I'll talk about, you know, agon and the world population are a little bit feeding the world theme. But beyond that, I mean it's like just don't shoot yourself in the foot because it continues to how I've been in this profession at 36 years and I continue to see if people that do the best just stick to the plan. Yeah. I thought,
Speaker 4:
10:10
see, one of our portfolio managers said it really good thing this week here, Ron, which was enjoy it, write it and have the right allocation. So look at your balance. I mean, how many of you are listening right now and got out of the market right before the Trump election or how many you got out of the market several years ago and what are you doing right now with your cash? You can't, you're kicking yourself that you missed out on this. So you have two choices. One do nothing, which is what many of you are doing. So you're making a mistake because you're doing nothing or too, you're figuring out how in the world am I going to beat everyone else and make this up. So then you're extending yourself on the polar opposite where the advice is, sit down and talk with an advisor and planner. Get that allocation and game plan set up. Get in your allocation. Now, who knows the market could keep going up significantly here this year or next year. And do you want to kick yourself in more, Ron? I mean, we know people that sent money in end of December and still haven't invested it. And so look how much they've missed out just here in January because they waited and waited and say, Hey, I'm just gonna wait a few weeks. Things I think things might not be good. Well, they got a problem now because they missed out on an opportunity, you know, this week,
Speaker 3:
11:21
well it was on Fox with Stuart Varney, which I love. We've got some good, he just got to get some rhythm, really fun, but he was asking me about Trump and the big thing, and I think a lot of people out there, I've heard about this Trump tax plan and you know how these new changes are going to impact investments, your estate plan, healthcare and retirement, and as I was sharing with him, there's just tremendous amount of confidence out there, but you need to take advantage of this gift or whether you like Trump or not, you need to take advantage of the tax plan and one thing's for sure, you've got to do something about it and you really just can't watch the and the headlines and really understand what it is you're going to have to do. So the time to capitalize on your opportunities, what the new Trump tax plan is right now, not a year from now with your CPA today, here we are, 2018 we're just getting the years started. This is exactly the time you need to start planning. Give us a call. We've put together some great information on this very specific action plan. What you can do, we had a great workshop on this as well, Paul.
Speaker 4:
12:24
There's a video now on Carson wealth.com
Speaker 3:
12:26
we're actually recorded and you'd go to Carsten. Yeah, Carsten wealth.com and give us a call. (888) 419-8513 remember, it's not what you make. It's way to keep a penny saved is way more than a penny earned because you don't have to pay taxes on that and it can have a profound impact on your future. Call (888) 419-8513 (888) 419-8513 I'm Ron Carson with my cohost Paul West, and you're listening to wealth and wisdom.
Speaker 2:
12:52
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, 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, the statistics
Speaker 3:
13:13
black and white. We're living a long time. Matter of fact, we're living living longer than we ever have before, and you've got to think about how, what kind of impact is this gonna have on me and what kind of impact is this gonna have on my retirement and really just my future in general. Hey, welcome back. I'm Ron Carson with my cohost Paul West, and you're listening to wealth from wisdom. The last place you want to be as 85 years old, full of life and flat broke. We call that to having way too much life at the end of the money. Coming up on this segment, we're going to continue to talk about longevity and the grave consequences. Really the pain and consequences that can have from running out of money way too soon. If you protect the downside, the upside will take care of itself. And Paul, the big one we share in the last segment is behavior is so big. I mean the difference between how people actually do versus the stuff that you own is staggering. But what are some other things that you know, that really people can do to protect their downside?
Speaker 4:
14:10
Yeah, well, I mean some of it, Ron, is the statistics are staggering, is setting up an easy to use trust. And I trust his scary word of people. They don't understand it or it's a legal word. The do you realize that 90% of your money that if you want to give to your family doesn't make it to that third generation. And the reason why is what happens. It wasn't money earned or set with parameters to protect it. And it gets spent in ways that a lot of families don't want it. So think about this, nearly everybody listening today, if you have children or grandchildren, if you're not here, the place you want your money to go is them. But what if it gets stuck in probate and now you've got to go pay an attorney, your CPA, thousands of dollars to figure out actually how to allocate it.
Speaker 4:
14:55
And then you've got to figure out where in the world does it go. And it wasn't written correctly or worse yet. What if something happened? One of your kids passed away or what if a life event happened and they got divorced and now I'm an inlaws going to get something to son or donor law, your money. And yet they're not even related to your, you know, affiliated with your family anymore. Nobody wants that to happen. So you do have to sit down and spend time and this is one of the most important things people can do for their longevity because when you get an unfortunately a mental state where you can't understand that anymore, you don't want to be stuck in those conflicts. And so now is the time to address them because there are these tax law changes and I think you were right earlier in the prior segment, Ron talking about that is you've got to come in and relook at that because as your trust were written in the past, they may need to be updated. And it's so fun when I can see somebody come in, they completely forgot what they did. By the way there like I did that. It's done. Well it's, it's not a dust collector. It has to be living and breathing. Cause what if like your grandkids, you put money away for them to go to college. What if they don't go to college? Where do you want it to go? Then? Um, what if your kids ended up remarrying and those all those things you have to consider and you better start thinking about them. Paul
Speaker 3:
16:09
people come in, you're talking about a trust and were like kids, why did my parents picked US trust company? Like I don't know. You know, they, they, you know, they banked. There are, we don't have any relationship there. So I think you need to put some thought into, you know, thinking about the future and I agree. I mean we have a lot of clients that for me personally, I don't, I want to give my kids and I've given my kids a gift of struggle so they can appreciate it and they've been conditioned to believe which is primarily true. There's going to be not a lot given to them. It's going to go to our family foundation will support our community and Dreamweaver. We provide into life dream. So the terminally ill elderly Jeannie and I and we started this five years ago, that's where most of it will go. So you know, trust and trust arrangements and what it's going to happen. You don't want to take that gift of struggle from somebody cause I, I've seen it ruin their lives time and time again.
Speaker 4:
17:06
Yeah, well you just immediate something simpler in terms of just make sure the beneficiaries on your account, for those of you that are listening today and you've got a retirement plan, so you're investing in your four o one k or your four o three B here in Omaha area. Make sure you've got the right beneficiary setup on it.
Speaker 3:
17:22
Well and that's a huge mistake of not running out of money setting, you know, doing the stretch distributions. There's a lot of things that can be around retirement plants to minimize your taxes and also extend out how long that income's going to last. Matter of fact, tax loss harvesting alone, I was looking at an actual client going back over the last 10 years just by effective tax loss harvesting generated an additional 1.76% a year. Additional additional, just buy the same exact things but having a tax optimization. So these are the little things. What kind of difference you don't want to run out of money could 1.76% and a lot of cases Paul, 1.76 is way more than people or even earning a lot more and money market accounts.
Speaker 4:
18:07
Yeah, that's just for tax harvesting. So, um, around, I was talking to a family member the other day, we've all had our parents or aunts and uncles and people we've lost, they've passed away or we've had others that have gotten sick or have to deal with illnesses that go along with longevity. And I thought I'd just share the story of, so when you think of a state sale, what do most people think of from a price perspective when they think of a deal, right? Discount discount sale for a reason, but a state often in the past meant to people. The mental thing was the people are no longer here, but however estate sales now, and there's plenty of you listening that maybe have experienced this, is you're going to have an estate sale because of longevity that you need to support your mom or your dad or your aunt and her uncle who are in a living facility that needs full time care and they need help.
Speaker 4:
19:02
Um, and actually going to read an email here, we got Ron is, um, you know, this upcoming weekend is going to be the estate sale for our family. This is a bitter sweet weekend for us because of all the lifetime of memories and photos and it's fun to see those things, but how we're using the money. So I mean, I think about that, that's a conflict for everyone because you have the memories you've created, but you still have a living family member, family members that need the income or need the dollars, uh, or there's just, they know they're not going back to the family homestead anymore. So you as the children are the beneficiaries are the executors there. You've got to make some tough decisions. And I thought the word bittersweet was really appropriate, um, from this individual because of the fact of taking all those life's memories. But realizing once this is done, this estate sale, all those memories from that home are gone. Cause so depressing. Well, I don't mean it to be depressing,
Speaker 3:
20:02
but if it is because you know, that's like your life. It's all your memories. We call true wealth. All that we have the death can't wait. Death can't take away money. Can't buy.
Speaker 4:
20:10
Yeah. Well, and we also talk about memory. Money is sometimes we tell people it's okay to spend something to build and generate those months, those memories because uh, your money's not going with you. It's going to transfer to the people you want it to. But that's the important part about longevity is if you don't have the right plan in place, you may be forced in the strategies. And so other things that we can tell you or recommend is, do you have a longterm care strategy in place? And it's not always the right decision for everyone, but it's one of those you should check off and look at. And by the way, if the advice we can give you is go get that information from a somebody who is going to give you unbiased advice. If you go ask an insurance company, if you should buy long term care, what do you think the answer's going to be wrong? They're probably going to sell it to you. Get paid a commission something or in your best interest. And by the way, it might be right for you, but it may not be. And that's where experienced professionals that aren't paid by those organizations directly, that can make a big difference in getting you the right recommendation.
Speaker 3:
21:15
One of the other things Paul, is because people panic, going back to that behavior, you know, accounting for investors not even getting 25% of the market over that 30 year period. It's cause they do the wrong thing at the wrong time. They panic now, right now is the time to do a stress test on your portfolio. We can provide that and it's very specific. It's, it's, it's, uh, it will show you what your downside risk is and if you'll look at it and say, I can sand that, then you're properly allocated. If you go holy buckets, there's no way I could stand that. Then, you know, you're gonna, you're gonna capitulate. You're going to do the wrong thing at the wrong time. And now as the time to readjust the portfolio, we've had 200 days now. This week has been, this last week has been more volatile. We've got 200 days without back to back declines of a quarter of 1% all time record low volatility. So I think people were load into a false sense of security thinking Omari just doesn't go down anymore. Yeah.
Speaker 4:
22:13
I'm afraid that people are making, I was just on a phone call, Ron, uh, before coming in here to record. Uh, and the end of the just says, you know what, I love to go home at night, read everything, see how my stocks are doing, and then make a bunch of trades about what I read well there. And he's like, he started citing all these great examples. Uh, but it's only over the last two and a half years. And candidly, I mean, since the market has been moving up, most people can go home late at night, read information and be fortunate enough the decision paid off. But what's going to happen is the next time this market moves down, those decisions they made, they're now going to get in those behavioral statistics you're talking about and start selling at the wrong time when they shouldn't because of fear or greed and waiting too long for these things to come back. And that's what's dangerous about the markets. And that's what you don't want to do is put yourself in a period of longevity because you were so greedy that now you're stuck working longer or um, forced to sell assets you don't want to sell. Get rid of those bittersweet memories. Are those things that you don't want to do?
Speaker 3:
23:17
Yo, the thing that I hear that always burns my ears when I hear someone say this time is different. In this last week there was a millennial, I'm gonna pick on your generation there, Andrew is they were saying they're finally comfortable investing in the market because they believe things that put in place. So another 2008 financial crisis can't happen and I've like, I had to read it twice like I thought it was a joke at first and they were being 100% sincere. If that's the kind of thinking this driving people's behavior today, it's that's not going to end well and you think a lot of the young investors have never experienced real pain. We had a meeting today about a new brand new financial advisor says he's got it all figured out. I go, how long has he been in the business? Eight years. Yeah. He doesn't know.
Speaker 3:
24:00
No downmarket doesn't know what a doubt what a down market is. You as investors need to know. You need to get a second opinion. Here's a couple of things we can do. We have a risk tolerance questionnaire. You go fill it out online. Go to Carson, wealth.com and also we have this digital allocation tool that will trust us, your portfolio to tell you exactly, exactly how much downside risk your portfolios subjecting itself to and give you an idea. Is this a thing that kind of downside risk you want to have? We have a lot of accolades. We've got cfas, we have attorney. CPAS were true fiduciaries, which means we sit on your side of the table. We're required by law to put your interests first, which is difference between a broker and Anna fiduciary and it really is a big deal in one simple phone call. Could Change your future today. Put, put a really competent, proactive team in your corner to help you make the best decisions possible. Call (888) 419-8513 get a second opinion. It only benefit one person. That's you and your family. Give us a call. Eight eight eight forty nine four eight eight eight four nine 85 (388) 849-8513 I'm Ron Carson with Paul West. And you're listening to wealth and wisdom,
Speaker 2:
25:18
trust, transparency, accountability. These are the values that drive Ron Carson and Carson wealth. You're listening to wealth 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 put learn right here and right now on wealth and wisdom with Barron's hall of Fame Advisor, Ron Carson. How many people
Speaker 3:
25:43
do you know that are thriving? I mean really living well into their eighties nineties maybe. You know, some people just celebrated their 100th birthday. You're listening to wealth and wisdom. I'm Ron Carson with my cohost Paul West, and thanks for joining us today. Living a long and prosperous life is something we all wish for. We all want to do, especially if we feel well, but the question is, can you afford it? The last thing you want is too much life at the end of the money and it's all about doing things today. They're going to have a big impact on the future. And Paul, we've talked about a lot of different things, but another one is what is your emergency cut plan, right? You know, the lifestyle that you want. But if you had to on bare bones, not the nice to haves want to have but absolutely essential, what's that budget look like? Cause when times get tight or there's uncertainty or uncomfortable, because you've said I can stay on a 20% decline in my portfolio is down at 19, I'm not ready to pull the trigger, but I really want to, I to see on how
Speaker 4:
26:44
little money I can actually live so I can feel comfortable that I can go there if I need to. Yeah, I think it's actually an interesting exercise, Ron, uh, for people to try to live a month living that way. And what happens, and for our listeners today, could you, and you may not want to, but could you, and that'd be interesting to watch what the results are for people. I bet you would find some things that show you how much you really, truly appreciate them and things you're like, Eh, I'm not so sure I need that anymore. Um, but we don't want you to do it where you don't enjoy life. Because you've got to think about that too. And I think it's a tragedy to Paul. Yeah. Well we're actually, there's a great conversation actually earlier today I thought it was fascinating was have you ever bought something when you had two choices, something was a little less expensive than the other, but you really wanted the one that was slightly more and you went with the one that was less expensive and then you regretted forever.
Speaker 4:
27:39
Why didn't I just upgrade and get that one better? And what do most people say? Hands down. They wish they could change it over again. The closet, you know, do you love wearing your best, choose your best suit. I mean, it lasts longer. So actually quality does, does pay off. It does. It doesn't mean you need a ton of them, but it's the feel good factor. I know when I go shopping, I find that piece of clothing that like, you know, this is, this is one of my favorites. We all have a Goto. Um, I think about my wife, coordinators staying with her. They all love a certain thing that fits just right or probably feels right. It's amazing what it can do to your confidence. But at the same thing, by the way, happens with your confidence, with your investments. If you know that it fits right and it feels right, then you're in the right place.
Speaker 4:
28:22
And I had a call today, Ron, and is, it's so dead on to actually the feel and fit is the individual said, Paul, I'm almost embarrassed when you look at my portfolio. I know you're going to laugh at it. And I said, why would I laugh at it? He said, because I know it's not right for me. I'm in my mid sixties. It's way too aggressive and you're going to tell me different. I said, well, the good news is, is all we have is the future to look at so we can make changes and adjustments were here. I'm not going to laugh at it. You made choices and you were fortunate this choices, you've been in a market that's moving the right direction, but that doesn't mean it's always going to be that way. And I said, if you had to do it over again, would you buy the same portfolio?
Speaker 4:
29:03
He said, no, because that's why I'm calling you. Because I got fear now that I'm way extended than I ever could before. And one of the, you know, tips for our listeners today, Ron, I think we should share, is what can they actually do for longevity? So what's a rule of thumb of do it? Yourselfers they assume 4% that I can take 4% out of my money every year and really survived through the rest of my life and that that's old school. And we just saw the statistics by the way, are not saw heard from you. You're making 2.4699999999999998 you can't pull out 4% yeah, I don't know how that math works. So, but this, this rule is now doesn't for longevity. That's an old school rule. So now that longevity is much longer and you're sharing from singularity and other places, it could be forever.
Speaker 4:
29:49
It doesn't count for tax. So is that 4% then tax it? Was it really a lot more than that? And how does this sequence all of your returns? Are you pulling it all at the same time or different times? You have to think about all of those. So whether you have a brokerage account or you have an IRA or a spouse, IRA or a Roth, a pension, oh, then that thing called social security, we've talked about enough on this show is all of those now influence your longevity. And I think one of the most famous things that people think about is, I want to start my social security now because I don't want to miss out. So there's that fomo again, the fear of missing out. But if they've got all these other income sources, why not wait? But if they can't handle it, they're just so worried about it, then make the decision and move on from it. But don't regret it
Speaker 3:
30:35
for a sequence of return or a sequence of withdrawals is so important. By the way, I got throw this out there. This was really cute yesterday. Uh, you said you're going to laugh at my portfolio. So Scott rouse of a friend of the firm who have known for a long time, uh, I was out in his, he's, he's into the car business and I was out looking all those cool cars and he has a sign in the place. He says, uh, my team is accustomed answering dumb questions I want to make as original such thing, at least in our world is a dumb question because it is, it is a complicated profession. If, if you don't ask it, that's the only dump thing. There is absolutely no dumb questions. And we take all kinds of questions, emails on anything. You can email me ourCarson@carsongroup.com, our Carson and Carson group.com. No such thing as a dumb question. No, there is no,
Speaker 4:
31:27
now there's not an officer. Why don't we talk about market events? So I was out at our San Francisco Bay area office over the last week and we had an event and we talked about the market. So our chief investment officer was there, um, we actually rolled out also our sustainable impact. So looking at the right investments, looking at specific companies and their care of the world. And one of the things we had there, and this is really fascinating, was I got up in front of the audience and we were fortunate because of the relationship you've created with singularity university is we had a crypto currency expert in the audience. And I asked him if he'd come up and speak, but before I did that, I asked the audience and I said, all right, how many of you want to talk about bitcoin? And about half their hands went flying up and the other half were shaking their heads sideways.
Speaker 4:
32:09
No, no, no, no, no. So we decided to do it anyway. And then they spent so much time asking questions because they were fascinated about it. That there's over a thousand, but there were no dumb questions. By the way, in the room, there's people that were super sophisticated and knew about bitcoin and ethereum and light coin and all these things and actually understood the blockchain technology to people. Question was, how do I actually get a coin? Do I really get a coin into somebody gives to me, that's not a bad question for our listeners today. Coin, right? It's the
Speaker 3:
32:40
furthest thing from what you actually do. You expect it's like a nickel. Somebody is handing you a piece that you get to use. Well, you don't hear with this. So we have to spend time educating everyone. And what's been fun about this crypto currency craze, uh, is helping bring everyone up to speed. Uh, cause there's been a lots of challenges even recently about a foreign databases being hacked and looking at it. And you got to make smart decisions on what you want to do with it. Because talk about ruining your longevity plan. If you don't understand enough, it could be super dangerous on making investments in bitcoin or other things. If it's a amount of your portfolio you're not willing to lose and I think that's something important we talk about here, Ron, this is related to Bitcoin, but it's worth noting for seven transactions a second and that's how many transactions a blockchain bitcoin can actually do.
Speaker 3:
33:35
It uses 30 times as much energy as visa for those same transactions because of the security protocol. If you brought bitcoins, a transaction volume up to visas, it would be using as much electricity as the rest of the world put together. Wow. Wow. That's why this craze with bitcoin is, by the way, I think blockchain is going to be huge for the future. It's going to change the way we do business, but bitcoin probably isn't going to be the one that wins out for this very reason. It just takes so much energy to process. Yeah. Well I was, I was at a local bank recently in a great bank here in Nebraska and they asked me what I thought about bitcoin and I said, well, we might as well go across the river and put your money on red or black because we just don't know.
Speaker 3:
34:18
Now the technology is absolutely going to survive with blockchain, who the winners are going to be. We don't know yet, but we'll help keep educating people on what that is. So Paul, we're talking a lot about things here in protecting the downside, but it really starts with income. Getting the right amount of income, people sitting in, money market accounts, getting absolutely nothing. It's just a bad choice. And the good news is there's a lot of great options today. I think people just assume there's not and we have some exciting things where you'd be surprised for the risk and the income you can actually receive. It doesn't hurt to take a look to get a second opinion. There's absolutely no cost to do this. Give us a call. (888) 419-8513 the income that you could generate could make the difference between the future that you want and the one you have to settle for.
Speaker 3:
35:06
That's (888) 419-8513 eight (884) 419-8513 and Paul, when we come back, we're going to take a walk. A really cool walk down memory lane. I went back and I started in this profession in 1983 I picked 1982 to actually share these stats with our listeners, but we're going to have some fun. We're going to go back and look at what things look like in 1982 and then on our next show we're going to compare him to actually how they are today and if you want me fascinating to look, you're going to be fascinated, but give us a call. If you want a second opinion, you just want to talk about anything. There is no such thing as a dumb question. You're listening to wealth and wisdom. Ron Carson with my cohost Paul West.
Speaker 2:
35:51
He seemed good times and bad times and he's got the gray hair to prove it. Are listening to wealth from wisdom with Barron's hall. Hello, same advisor, Ron Carson. He's a published author and he's been featured in Forbes, investment news, the Wall Street Journal, CNBC, and more. Now back to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson.
Speaker 3:
36:12
Hi, I'm Ron Carson with Paul West and you're listening to wealth and wisdom today. We've been talking about living way too long and maybe having way too much life at the end of the money. It's a very specific things you can do about it. And you've heard a lot of this stuff before, but the biggest one, the biggest takeaway from today is behavior. Your behavior is going to drive success. When you look at the Dalbar numbers, investors over the last 30 years, I've done a terrible job of just even getting the return of the market because they do the wrong thing at the wrong time. And Paul want to go back to 1982 this was right as I was entering the profession, uh, worth Hawk about the mindset at that time and just the way investors will actually feeling about the market. It was the Fed funds rate in 1982 and he guessed what the Fed funds rate actually was.
Speaker 3:
37:09
5% 18% all right. How old are you, Paul? Well, I'm 41 now, so then I would have been six in 1982 so I knew it went high in the 80s I just didn't know because you probably didn't, you probably weren't borrowing from the Fed when you were six I should have been been 10 year Treasury, 15% k mortgage rates, 16.25% matter of fact, I remember my first house and Jeannie and I were excited because we got Nebraska first investor finance, I think it was Nifa and a and we've got like 11 and a quarter and we're like, wow, what a deal. Then we really got a big break, but 16 and a quarter household debt to income, 62% it's a lot higher today. We're, we'll talk about that at our next show. US government debt to GDP ratio was only 30% total us debt to GDP 0.9 [inaudible] productivity was was 2% inflation.
Speaker 3:
38:20
What do you think inflation was in 1982 4% 8% wow. 8% personal savings rate, 10% think of that number. Labor participation was 64% and median age of the baby boomer then, which I'm one of with 26 and you know, in the world, global trade barriers were actually falling, which today, you know, we're starting to resurrect trade barriers. But I see and here's what, here's what the mindset was at that time period is now, matter of fact, I don't remember if it was Newsweek or fortune, they on the front cover of the magazine, they had a caption that, you know, the market is dead with us. The bowl on its back in a sword going through it because look at it. I mean there's positives. There's not a lot of positives in this yet. It was the best time we were on the eve of beginning of the most incredible bull market in history and, and, but people missed a large portion of it because they're trying to figure out, matter of fact when things are perfect, as you know, like buffet says, be afraid when everyone else is brave and be brave and everyone else is afraid.
Speaker 3:
39:43
Right now, nobody's afraid to speak of the general public isn't. So let's 20 used to be concerned and this was why we think having a stress test, measuring the downside is critical. You can give us a call, eight eight eight four nine 85, 13 these absolutely no cost or obligation or email me, our Carson and Carson group.com we'd be more than happy. We'll do it. It's complimentary. Matter of fact, if you want us to do it, you don't want us to contact you, we're more than happy to do that as well. Uh, but really major, major, how much downside you have today.
Speaker 4:
40:14
You do. I mean, so I think about my relevancy stories. So I'm going to move up a generation from you for a few of our younger listeners today. So my first house was in the late nineties and I was so happy I got in at eight and a half percent. So you're talking about 82 so this was 1998 and very happy with that as a 30 year mortgage rate. And so now I think about today, could you imagine if a 30 year and now Andrew are, um, twentysomething in the room here. Just said he got his 30 year at 3.75 it's about your first house. Yeah. He just got a 3.75% could you imagine, would you even consider it at 8% no, he's laughing. There's no way plus percent. Yeah. You can't even imagine. But what if that was your only chance to get it? Then you probably pass
Speaker 3:
41:01
morning in [inaudible] 82 and 82 at 16.25% right?
Speaker 4:
41:05
Yeah. So I mean times change, but what do you have to learn? Is that how you approach it? I was, I saw since you were quizzing me, Ron, I use my best friend there, a Google of saying the average price of a stamp, then 20 cents so it just, some people are gonna say, well, what's the stamp? Do you even use it anymore? Andrew's not eight because he uses Venmo and other techniques to pay for things that life's different. But I also look at this Amazon effect on what it has on economy, and this is important, Ron. I think for longevity because people also with digital payments, I think there's certain as stretch themselves. And let's watch what happened, and I just saw an article earlier today and I'm going to ask our portfolio managers about it. Tomorrow is consumer spending is going up and is consumer saving starting to go back down a little bit? And if they're not, they're starting to spend more. So again, our people getting a little past their skis at the moment because they just think there's no risk out there. So why not spend more because they don't have to worry about the downside.
Speaker 3:
42:09
So I got a question for you, Paul. I love, love Amazon. I mean it is incredible. They anticipate my needs. I can buy things with a click. It's like yesterday I'm ordering toilet paper and dog treats and light bulbs and it's like I don't even need to go anywhere. And it's just great.
Speaker 4:
42:28
Is that why you don't shave anymore? They lost their razors in the mail. Okay. But here's my question for you,
Speaker 3:
42:35
which if you had to bet on a retailer today, who would you think is going to be more dominant 10 years from now? Sears or Amazon?
Speaker 4:
42:48
Oh, there's not, it's not even a decision, Ron. No, not at all. Right,
Speaker 3:
42:52
right, so it's not even a, it's not even a real decision except you talking about cheap at value and all that. Earlier, you know how many people are stuck in business, even financial advisors around or using old ways of doing research, they haven't leveraged technology. The question for some people to ask in order to offset longevity risk, are you working with a financial advisor that's the equivalent of Sears or have you migrated to the Amazon way of doing business because it makes a night and day difference now? Only the experience you're going to have, but the resources they can bring and the breadth and the depth of which they can evaluate risks and opportunities in this global economy that we live today.
Speaker 4:
43:38
Yeah. It's interesting you say that, Ron, because I've taught, I've talked to several people this week that are with places that I feel like mutual funds are dinosaurs now, like they don't use them, they're not efficient. So I've ran two portfolio stress test for families that have called in the show. One found another 47 basis points, so 0.47% of extra expense in these funds. Another one found 0.72% extra. Think about that on $1 million portfolio and additional $7,200 of expenses you weren't aware of or your advisor didn't do a good job. That's a problem and you got to be using very efficient methodologies and not ways of Sears, but ways of him as
Speaker 3:
44:19
well. And mutual funds aren't tax efficient. We just saw that that can be up to 200 basis points a year and actual return. Get a second opinion. There's a reason why we're Barron's hall of fame team. We're located right here in Nebraska, 60 some locations around the country or around 140 stakeholders will be 180 about year end. We really have a great team. Give us a call, (888) 419-8513 and get a second opinion on the downside of what your portfolio is. You can go to Carson wealth.com and really are you with a dinosaur. You're with rocket ship cause it's gonna make a difference for how you do in the future. Also, if you like what you hear, I put out some videos. Call Ron since you can go to Carson group.com and go to insights and sign up for the video again. It's been great. We'll see you next week and we'll be talking about all of these things. We looked at 1982 what they're like here in 2018 I'm Ron cars off my cohost, Paul West
Speaker 2:
45:15
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 Ron Carson or for general information only, and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investing involves risk, including possible loss of principle. No strategy assures success or protects from loss. Past performance is no guarantee of future results. Advisory Services offered through Cwm LLC, an SCC registered investment advisor.