Wealth from Wisdom

5 Toxic Investing Behaviors That Could Sabotage Your Retirement!

October 28, 2017
Wealth from Wisdom
5 Toxic Investing Behaviors That Could Sabotage Your Retirement!
Chapters
Wealth from Wisdom
5 Toxic Investing Behaviors That Could Sabotage Your Retirement!
Oct 28, 2017
Carson Wealth
Show Notes Transcript

Investors are prone to making irrational decisions. The simple truth is that what feels good, or what satisfies an immediate impulse, is not always compatible with generating positive, long-term returns

Speaker 1:
0:00
Okay, and here's the legal Mumbo jumbo, the opinions voiced and Wellframe 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 and SEC registered investment advisor.
Speaker 2:
0:30
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 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 bear and tall of fame advisor, Ron Carson, and straightforward and objective advice and how you could make your money go further in retirement. And now here's your host, Ron Carson. Did you sell your stocks in a panic during the last major stock market correction? Have you missed out out
Speaker 3:
1:12
on the second longest bull market in history because you still don't trust the market or are you tempted to jump back into the market now even though it's at record highs? Guess what? If so you are not alone. These are just a few of the many investing behaviors that could sabotage your retirement. You're listening to wealth from wisdom. Thank you for joining us. I'm Paul West and we have a great show for you today. Ron is on vacation, so I'm joined by my cohost, Jim Caldwell. Welcome Jim. Thank you Paul. Glad to be here. Hey, you know a Jim, we're all human. We get excited when the stock market goes up, but guess what? We panic. We start to freak out when the stock market comes crashing down. That's the way we're wired, right? Why do people like roller coasters, the ups and the downs and the thrills that go with it.
Speaker 3:
1:57
But they enjoy the, the scary parts just as much as the fun, but the panic is more severe. But unfortunately, if you apply these behaviors to your investing that could cause you to buy high and sell low and ultimately this could erase years. And we've been in one of the best bull markets we've ever had. And if not a decade of hard work savings and your personal sacrifice, but not only can these investor behaviors to hurt you in many ways it goes well beyond the stock market. Jim. So coming up on today's show, we're going to share five toxic, yes, toxic investing behaviors that could sabotage your retirement and more importantly, how to keep emotions from getting the best of you. I think about emotions all the time. Jim. It's Halloween, it's October. Uh, my daughter and a bunch of our friends went to haunted houses and it was fun to watch the trepidation and fear that people have for those types of places. But in terms of our personal finances, we're all happy and Giddy when things are going up. But when things start down, it's not the same thing. So Jim joins me today. Jim's one of our advisors across the welfare wisdom radio network. We're glad to have him. I'll have him on the show here today. He's also got a background in coaching and the athletic fry. So Jim, welcome to the show. And what do you think about emotions and how they affect decision making?
Speaker 4:
3:17
Well, Paul, I'm glad to be here today. Appreciate it. Um, you know, emotions, too many people make decisions that are just based on emotions. And normally what I've seen is people that they don't have a plan. If they have a plan in place, then they don't have to make emotional decisions. Got a call last week from a person who had listened to a radio show and they were concerned about, hey there, 10 years from retirement. Uh, they're concerned about their, their investments. They're not sure if they should get out of the market, not sure if they should stay in the market. And immediately I said to them, do you have a financial plan? Do you have a personalized game plan? And they do not have one in place. So my first recommendation and, and our discussion then centered around what it would take to have them either come in and do a financial plan and what documents they would need an information to move forward.
Speaker 3:
4:08
Yeah. So what sparked it? Were you a coach in gym? I was football and baseball. Football and baseball. Okay. So you help people all the time, and I'm sure people had natural ability, but as a coach, what did you have to do? You had to get the maximum potential out of everyone, right,
Speaker 4:
4:24
exactly. I mean we always had a saying that as coaches, we were there to put our kids in a position to be successful. So if you want to translate that thought process into the financial world, it would be to have a game plan to have, have a, have a practice plan, be able to go through and have drills necessary to be able to
Speaker 3:
4:42
do that. Yeah. So did you ever have the best athletic team but lost a game? Oh, many times I did. Okay. I hope you would say yes, but, but why do people not always with the best talent or the best decisions or the best data, are the best information not win? Well, they fail to execute
Speaker 4:
5:02
when it counts. I mean, how many times do you see teams first and goal inside the five and they failed to score a touchdown? Well, it, most of the time that's execution. They didn't have the proper preparation ahead of time. They didn't call the right plays or they didn't do the necessary blocking and tackling
Speaker 3:
5:19
six. Yeah. Or they got nervous, right? They let emotions take over. They, when you talk about when somebody goes into huddle and you can look in their eyes if they want to be successful or not, you can tell that all the time. And it's probably no dissimilar to investor behavior and decisions. So let's get into those five toxic investing behaviors that could really sabotage retirement. So number one, this is allowing emotions to drive your overall investment decisions. So there's a famous quote, of course, by Warren Buffet, be fearful when others are greedy and be greedy when others are fearful. I love that Jim is just, it's so important for us to think about, people tend to move in masses, but they tend to move too late. As we talk about the housing crisis, we talk about the financial crisis. Everyone moved to late and only a few people actually benefited because they fell in the trap of hearing what their neighbors were doing, what they read in the paper, what they read online, and making investment decisions based on how they felt other people were doing than their own.
Speaker 3:
6:24
So now here we are, and I think investors are stuck in one of two camps, gentlemen. One is they're still hung up in there through the 2008 financial crisis. They saw a huge run up in the market and they believe this market is unstoppable. So at the very least they're completely complacent and have it made any adjustments to the portfolio. So there's high risk there, and I'm sure we can talk about that, but there's a second camp. There's this camp that said, you know what, enough is enough. When the last major correction happened nearly 10 years ago. So they sold everything most likely for a loss and now they've been sitting in cash since then and worst yet they're in the trap of missing out on one of the greatest bull market. So now they're too fearful to jump back in. So Jim, we've got two different sides of the equation there of emotions. One, people think they're unstoppable. I call that overconfident and that the market's not going to stop on this, you know, fast flowing train or two, they didn't get on the train and then they're afraid to ever get on because they might get run over or they might lose everything out of the back end of the train.
Speaker 4:
7:29
Well, I, I hear what you're saying and I think the, the bigger of those two would be, you and I have heard this, I believe number of times, is people, right before the election last year, all went into cash. They were concerned not about who was going to win, but what the ramifications of who would be our next president. Now they've missed this huge run up and they're like, okay, do we get back in now? Or how do we get back in? Or, or what would the process be that we could, we could make some money and make up for lost time?
Speaker 3:
8:00
Yeah. Well, I mean, I'll go back to your coaching days of, Hey, if you're up by a big score, is it time to coast or do you gotta make sure you still get the game closed out versus if you're behind, you can't. If you're down 21 points in a football game and you're in the fourth quarter, I don't know about you, but I've never seen a 21 point play. No. Those, those, those are tough.
Speaker 4:
8:21
The dial up, I will tell you that from experience, but I will say [inaudible] to your point, how many times do you see teams with a nice big lead and they go into a prevent defense? They rushed three, they drop eight and the next thing you know, a, a 14 point lead has come down to maybe a possible tie game. So
Speaker 3:
8:37
they get too defensive. Yes, exactly. And so there's gotta be the right balances, but the right coaches know how to, I would say manage the behavior because you watch it on the sideline of children are athletes. They get ahead, they stopped trying hard, they're not as concerned and they take their hands off the wheel or off control and vice versa. It's fascinating to watch the behavior of those that get behind and that they either a quit or be think it's impossible or see slowly try to claw their way back and saying, okay, if I solve this problem or I make this advancement, then I can make the second advancement. The third advancement to eventually get to the goal, and this is the same way as investor behavior. If you are falling into that second camp gym that you missed out on getting back in, so you've missed out this long run, the worst thing you can do is continue to sit out based on your overall goals.
Speaker 3:
9:33
So actually I got a call in from a client, not a client prospective client talking with us about these questions and he's a business owner. He's had a lot of cash. And so eight and he's afraid to get back in. But he's also afraid that hey, since the Trump rally, could there be another 10 20% out there. So my conversation with them is, is go into a solution that gets you in the market but has some downside protection. And no, I don't mean an annuity, I mean a way to hedge your money correctly. But the empower of this is if the market advances, you can take advantage of 60 70 plus percent of the upside of the market. But if you protect yourself on the downside, and you only have, call it 30 20% of the downside, you can be in a much better situation.
Speaker 3:
10:21
So illustratively say you have $100,000 or $1 million, put whatever number you want in your head right now as you're listening. So if the market was up 100,000 and went up 10% and Europe 107 you'd be okay with that. But it's, if the market went down 10% and you were only down three, so you're at 97,000 versus 90, you feel a lot more comfortable. And what made it really interesting for this individual was that if you wanted, then pull your money out because you want to go buy a home or a Condo, are you on a fund? Your children's educations from your investments, you're not going to be forced to sell when the market's back down. And that was the greatest fear of a person like this. And I totally agree. And that reminds me of, uh, of a, of a client that contacted us. He's five years from retirement.
Speaker 3:
11:09
He's got a huge four o one k plan. And obviously in most of those 401k plans, you don't have those type of choices that will give you the downside protection that you need. So we chatted a little bit and we had, I had him research an inservice distribution to make a long story short, he was able to move some of that money out of the four o one k to give him that downside protection. But we still left some money in there to let him dabble with and play with and then keep a good eye on that as to, you know, what that was doing and where that was going. Yeah, well those emotions, they based on those withdrawals impact taxes. And I think about a lot of people, could they be paying fewer taxes in retirement, Jim, or what's the most efficient way for them to get money from their IRA?
Speaker 3:
11:53
They're four one k. Um, and for many of our listeners, you have questions about your investments. So why don't you let us prove to you how we can help make the most out of every dollar you save for retirement. If you don't know this about us, we are the number two an independent advisor in the country. According to Barron's, we were selected as one of America's top wealth advisors. According to Forbes, we've often been featured on news outlets. It's just CNBC, Fox. And of course we're fiduciaries. One simple phone call could literally change the course of your retirement. Our operators are standing by right now to help answer your questions at (888) 419-8513 if you've already have an advisor now getting a second opinion can only benefit one person and yes, that's you. Call us. (888) 419-8513 that's (888) 419-8513 coming up next are fear and greed driving your investing decisions. I'll share how you [inaudible]
Speaker 2:
12:49
could use these emotions to your benefit. 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 hall, the same advisor, Rod Carson,
Speaker 3:
13:00
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. When the stock market goes up, you think you're invincible, but when the stock market goes down, you go into a panic. Welcome back. I'm Paul West and you're listening to wealth from wisdom and join my cohost Jim Caldwell. Unfortunately, these are the investing behaviors that could cause you to buy high and sell low. And ultimately it could erase years, if not decades and decades of hard work, saving sacrifice and all those emotional things that go with it. So in this segment, Jim and I are going to cover more of the five toxic investing behaviors that could sabotage your retirement and really what you need to do to keep your emotions in check. We know you got to keep your emotions in check in many parts in life.
Speaker 3:
13:53
Stay calm. It's such as theme out there and we don't want emotions to get the best of you. So first we talked about not allowing emotions to drive your investment decisions. And one of the things we didn't talk about, Jim, was trying to time the market. This is really a fool's errand. Go look at the paper all the time. The beginning of the year, you have top pundant predictions for the year. And guess what? Most years, 50% of our right or above and 50% are below and wrong. So even the pros who have spent a lifetime as an investor or trader don't know what's next for the market. And the big opportunity here for all of us is to avoid risks related to the market. And that's something we have to do. So as we think about this gym, what do you think?
Speaker 4:
14:36
Well, I mean it's been proven that we deal in an irrational market that when, when it's a bull market and it's going up, people are buying and when it's a bear market and going down, people are selling and that that really is just the opposite of what you should be doing. And there's a lot of things determine when you
Speaker 3:
14:52
should get in or out of the market. But it's been proven over the years that if you get in and stay in and have the conviction to be there, that you will have higher returns in someone who, who's trying to time and get it in and out of the market. Yeah, you're definitely right. So let's move into number two. So number two, you have saved for your retirement or you're currently saving for retirement, but you don't have a plan. So it's been reported that seven and 10 of us as Americans do not have a plan. And I can't tell you enough. This is a recipe for disaster because it really all starts with this. Think about anything you've done in life. You created a budget for that first time you wanted to buy your first house, right Andrew, when you were getting together for that, and it starts with you need to have professionals on your side when you had a plan to build a will.
Speaker 3:
15:37
What'd you do? You had to go to a professional when you had a plan for your taxes. What'd you do? He must like it went to professional. But your plan has to work together. And that's where people make mistakes. Your plan is not only your investments, but it's your accounts. It's your fees, it's your social security, it's your income and having the most positive impact of all of those things working together. And that's what a key part of having your plan. But for those of you listening, one of the big mistakes we see is not having your spouse on the same page of you as your plan. This is a huge, huge toxic mistake because of the emotion that goes with it. We already have enough emotion and going on and making sure we feel that children or family members are taken care of, that we have the right business or right job and career.
Speaker 3:
16:29
We don't need additional stress emotionally from not being on the same page financially with our spouse. Paul, that's a great point. And had a situation just last week where we presented a plan for, for a husband and wife and you could see the, the anxiety on the husband's face throughout the whole presentation and you could see the, that the wife was very comfortable because we had spent a lot of time in previous meetings, um, directing a lot of our thoughts towards her and it was centered around the fact that she had a pension and she had a monthly pay out for, for, uh, uh, the rest of her life. But if she were to pass away, her concern was those payments would stop. And so we came up with some, a plan a plan B or plan c solutions so they can consider. And when we showed that to him up on the screen, you could see the relief come off their face.
Speaker 3:
17:18
Yeah, I'm, I'm sure you could because they don't talk about it. I say it all the time. No one goes to dinner on a Friday night and says, hey honey, let's go talk about finances. You actually may say you do, but then once you get there, you find every other topic under the sun to talk about, hey, what's happened with kids? What's going on this weekend? Hey, do you see that those, that group of people sitting over there, what do you think they're talking about? You find every excuse possible to avoid that. So as you think about it, are you really, if you have a plan, updating your plan, Jim is so important. So you're really going to an advisor and getting an update and making sure you're on path. It's okay if the road veers a little bit. But what you don't want it is the road veering so far that you don't reach the end line and it's probably, I'm going to go back to your football and your coaching days, Jim, you coach players to follow the game plan and sometimes the game plan goes awry a little bit.
Speaker 3:
18:15
Sometimes individual plays go awry, but it's up to that individual to get the chorus back on track. And that means making a cut faster or changing the angle or blocking someone. They weren't supposed to that suddenly there now, and you make a great point about changing of plans. So know when you put together a personalized game plan or a financial plan, it's not a static plan. It doesn't just go into a vault and sit there until someone passes. It's always changing. And I know that when we would put together our game plans for our kids, we would tell them, hey, here's plan B and here's plan a and here's possibly plan c. So there was never any panic. And the reason we did that was to take the emotion out of the game for them and make it simpler for them to perform. Yeah. So since we're talking about toxic, uh, investing behaviors, let's talk about some horror stories where near the Halloween time period here.
Speaker 3:
19:08
A horror stories of course, it makes me think of horror movies. Uh, of course. Nightmare on elm street, you know, some major characters, Jason and Freddy. Uh, the Auntie. Do you have a favorite Halloween movie? Uh, no because I scare easy. So I tried to avoid those kinds of shows. Oh, so maybe you should watch like it's a great pumpkin, Charlie Brown or something like that for you. I prefer, it's a wonderful life at Christmas time with Jimmy Stewart and those guys. All right, well see then you're a type of person in emotionally we've got to protect from making mistakes. So you're two horror stories. One, people taking unnecessary withdrawals from their 401k or IRA plan. I can't advise against this enough. They think, oh, I'm going to pull money out because I need to fund an investment or I want to pay for something and they don't calculate the taxes or the penalties that go along with that.
Speaker 3:
20:03
Another horror story, and especially Jim, I'm concerned about this now, so unfortunately we operate in a world where people want to get rich quick and they try to take shortcuts. We're seeing way too many people take too much risk in the market right now when they shouldn't because they have no fear that the market's going to go down. I mean they have no fear right now, which is scary to me. But then I think about sometimes people hear a air quote tip from a friend or they're searching online and many people have heard about low cost docs are penny stocks and they make investments in these things hoping they move up significantly and the reality is is they're priced that way for a reason. Their likelihood for success is not great. So don't think you can go apply a lot of your money on to one of these and they're dramatically going to grow like crazy because to me it's very similar to saying, hey, you know what, I'm going to go over to the casino and put a lot of money on what I think is the best bet, but it's still, there's a high likelihood of loss and I'm not talking small loss, 5% 10% I'm talking up to 100% loss and your money and you're making a gamble in bed and I'm sure for many of you who buy these low cost docs, you're really not doing the due diligence in research like you should be doing.
Speaker 4:
21:28
Paul. I had a situation just like that Friday and the gentleman called up and they had listened to the radio show and they asked me what I thought of a of a fund and I went online and looked it up and it's fantastic. It's up 22.3% this year and you know, low fees, low expenses inside of it. And I got to talking a little bit more and actually walked him through our risk survey that we have here. Took about two, three minutes to do that. And when I started to match up the answers they gave me with regards to risk and risk tolerance and how much they were willing to, to to lose versus the up and down side of that fund, it just didn't match up to stars, did not connect. So, um, we're going to have an additional conversation down the road, but that's what we're running into right now where people taking on more risk, they think maybe they're conservative or moderate mentality when it comes to risk, but in, but in essence they're much too aggressive in their present portfolio.
Speaker 3:
22:27
Yeah. And that's a danger, Jim, that we see from everyone is taking on that type of risk. And I always talk about individual stocks. So if your company allows you to take individual positions, whether through your aesop, um, or other type of retirement plan, that's great. And it is certainly a way to wealth, but you also need to figure out when is the right time to actually get out of that because that's all part of having a plan you got in. It helps you accumulate wealth, but you have to now translate that wealth and do other things, investments for your life, income for your retirement part. And I don't want people to get trapped and so emotionally stuck in. That's why these are toxic investor behaviors. And as we think about your retirement plan, many people you fall in love with your company. I love where I work here at the Carson Group. I know you do as well, Jim and is, we love what we do, but at the end of the day, when it comes to our time to retire and do those things, you're going to have to figure out, okay, how do I change from the love there too? Understanding that was a means to help me continue to live my life the way I want it to. And I think that is one of the biggest toxic traps that we see.
Speaker 4:
23:44
In addition to that, I you see people
Speaker 3:
23:46
that have worked for publicly traded companies for years and years and years. They're loyal to that company. They accumulate many, many shares of that company stock through their accumulation phase. But now it comes to the distribution phase. The risk is they have all their eggs in that one basket and they need to diversify and it's like pulling teeth to get them to do that. But at the end of the day, that's what we're here to do and we need to get that done. And I think about that, that helps create tax situations. And Really Jim is, we know taxes play a huge role in planning for your retirement. And I remember it's not what you make, but it's what you keep. And really when you get into retirement, you have more control than any other time in your life. Over that lever and how you structure your investments can actually have a huge impact on how much you pay Uncle Sam versus really how much you keep in your pocket.
Speaker 3:
24:37
So you could legally save several, excuse me, save several thousands of dollars per year in taxes. Yes, you could. And let us show you how there's no cost to this so you really have nothing to lose. If you saved 100,000 or more, our operators are standing by right now. You can call them at (888) 419-8513 what you learn will cost you nothing but could save you thousands of dollars and possibly more that number again, (888) 419-8513 (888) 419-8513 coming up next on wealth and wisdom, you're ignoring a critical piece of the retirement puzzle and without it you're destined to fail. I'll share what it is coming up next on the wealth from wisdom for radio network. How could you make your money go further in retirement? Learn how next unwell 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.
Speaker 3:
25:37
Now back to wealth from wisdom with Barron's hall of Fame Advisor. Ron Carson. There are some things in life when you can get away with winging it, but retiring is not one of them. Welcome back. I'm Paul West and you're listening to the wealth from wisdom radio network. I'm joined by my cohost Jim Caldwell. Did you know that seven in 10 Americans don't have a financial game plan? That is a frightening statistic and this is one of the fastest recipes I know of to run through your entire life savings far too soon. No one wants to be 85 years old and broke. So coming up in this segment, we're going to continue to share more of the five toxic investing in behaviors that could sabotage your retirement and how to keep your emotions from getting the best of you. So far. So far we've talked about number one, allowing your emotions to drive investment decisions and how to be careful with that.
Speaker 3:
26:28
Number two, so you've saved for retirement but you don't have a plan. So let's move into number three, complacency. And as I think about this gym, we're really in the second longest bull market in history and people are beginning to think there are a lot smarter than they actually are related to this. There are eight or nine years older since the last financial crisis, which also means they're eight, nine years closer to retirement and they have not adjusted their portfolios to adapt to these changes and that's going to leave them vulnerable. They're taking on more risk than they realize or more risk than is necessary and better yet it's an ever changing world. Stocks are at highs, bonds have continued to run at crazy levels, interest rates, um, who knows what's going to happen to them, but they certainly don't look like they're going down. They look like they're headed up. Even life events change for all of us. We all hit monumental birthdays properly over that time period. Uh, I, we've gone on trips. We've probably had the birth or death of someone in our family. A lot has happened since then, but one small event in our portfolio could throw things out of whack, which really could leave us all very valuable.
Speaker 4:
27:40
Well Jim, you know Paul, I've seen many cases of that were, um, I know I've talked to a client one day and he was, he's the guy that handled everything in their house and the wife said his definition of handling their investments was he'd get a statement in the mail and he just tossed it in a pile. How many times? We've all seen that with many people, but it kind of goes back to the football analogy. You know, often it's to a sells tickets, defense wins championships. And in the situation we're in right now, we have a very offensive financial market right now. And I was, I was getting a glass of water this morning and one of our Carson group coaches was in there and he starts laughing. He goes, look at the market. It's never going to go down, is a gym. And I really feel that's where people are today. And I think now that's where we have to be the most careful and be proactive in, in evaluating our portfolios and make sure that our risk tolerance matches up with where we are.
Speaker 3:
28:33
Yeah. Well, I think about those of you listening today. When's that last time you actually made an adjustment? So if you do it yourself, when did you make a change and did you make a change because you did thoughtful research or tied it back to your plan? Or did you make a change because you watch something on the news that day and logged into your account and made that change. And if you're grinning right now because you did that, I'd like to tell you that's okay. But boy, I hope you made the right guests because that's all you did was make a guest at that standpoint. It's got to tie back into your plan, but it's gotta be the right calculated move for you and how it works overall and really does it mirror your appetite for risk. I think about everyone's been moving their money into equities.
Speaker 3:
29:17
Not everyone, but most people, Jim, and are, they're taking more risks than they ever could before. That's because they're complacent. They're complacent on risk and their comfort level. But like we talk about what's going to happen the next time the market moves down 5% in a month or 20% over six months, we're going to have fear. And fear is one of the greatest emotional behavior things out there. I mean, there's so different levels of emotion. People get reluctant, people are optimistic, we can get excited, we can get exuberant, we can turn in denial, we can be fearful, panic. I think about panic the next time the market goes down, it's gonna happen. But that's going to lead into depression, continued to fear. And then ultimately indifference. Like, Oh, oh well I lost everything. I can't fix it. But the reality is, Jim, you can fix it right now.
Speaker 4:
30:08
Paul, to summarize that, I mean what we're seeing in that I've seen is people are blindly trusting their financial advisors right now because everything is on cruise control. Everything is going up. Everything is, is, is perfect in everybody's mind. And it, now's the time when you really need to go in and evaluate your portfolio and make sure it's doing what, what you want it to do.
Speaker 3:
30:29
Yeah. So we talk about all the time, is now a good time to retake your risk tolerance questionnaire with, with your financial advisor or through whoever else?
Speaker 4:
30:39
I feel you need to be doing that and, and obviously there are tools out there to be able to figure out where that should be. Should it be a moderate conservative or aggressive. Um, also there's a way to stress test your current portfolio based on possibly some alternatives that could help you play defense should this market correct at some point in time in the future.
Speaker 3:
31:01
Yeah. And if your advisor is not offering up to that, do you really have the right person? And I was in New York last week, Jim and I had a chance to speak in front of a lot of advisors telling them where I think the future's going, but also what we're hearing in the trenches across our Carson group. You know, we work with over 1200 advisors. We work with, you know, thousands and thousands of clients that we help every single day. And as fascinating to me because many of the people in the room worked for very large firms. They worked, you know, for the wirehouse firms that UBS or Merrill, RBC or someone like that, and they had a sense of complacency. Oh, we don't really think that people need to go look at their risk tolerance question and there's a much, or you know, I'm not sure everybody's going to want to do everything from a technological perspective.
Speaker 3:
31:47
And this was fascinating to me because you and I and Ron and the entire Carson group network, our job is to listen to clients. Right now what we're hearing from clients is give me a way to take my risk tolerance online. I don't want just to tell you, but giving me some empirical evidence that shows that happen. Give me some results on what that looks like and then help me stress test to make sure decisions I've made are appropriate. And one of the fun things to do as part of these complimentary consultations we give people is give them a stress test. And it's fascinating to me. He gym to watch people's reactions because they think, oh, I'm doing really good. Well they might be doing good but they're taking on 2030 40 we've seen up to almost a hundred percent more risk than the market to generate their own return.
Speaker 4:
32:40
Take it a step further, not just a stress test on their portfolio but on, on us as people because because we, we burn the candle at both ends all the time and we had a situation where a client came in and portfolio, we reevaluate it and and did the risk tolerance but he was the big thing. They had a long term care contract in place which was, which was excellent because you know if something happens to us health wise you could drain your portfolio unless you're, you're properly protected. Long story short, we wouldn't in an evaluated their contracts and were able to move money from one contract that really would become cost prohibitive down the road to something where they would have it all paid off within 10 years and still be 67 years old when then they could be able to have the option to kick in. So security. So there are other things you need to consider, not just what's in writing but, but the two legged person sitting in front of you.
Speaker 3:
33:40
Yeah, I call it the, I already have.dot dot syndrome. Like you said, I already have insurance, gym check done. Don't need to look at it again. They can go sit at my fireproof safe. I already have a, we'll check done. Don't ever look at it again. I already have a trust check. I don't, I've got to look at it again. I could keep going with these I already have, but that doesn't mean what you wanted it to be. One of the favorite things I feel like an advisor can do with a client is review their beneficiaries with them at all their meetings to make sure that we're not being complacent on how you truly want to transfer your wealth. It's fascinating when we work with many spouses is they've worked so hard to earn their money and eventually at some point some are certainly lucky and fortunate and made the right decisions that they get a transfer that money to their families.
Speaker 3:
34:32
But sure as heck they better not to be complacent, that they didn't make mistakes on how they actually wanted to transfer the money to everyone. So I think about, you know, for all of us, you know, do you really have an Ira, four oneK or other type of retirement account, have you put the right beneficiaries in place for those? But also, when's the last time you updated those investments? Gym With these retirement accounts? And do you have a strategy inside of them that can help reduce your taxes? And when are you actually gonna withdraw these monies from these accounts and your retirement, your IRA or four? One K is often the largest asset greater than the size and dollar amount of your home get. It sits in your corner and largely ignored, especially if you're doing it yourself. And that can wind up costing you tens of thousands of dollars in every time and taxes, penalties or fees. So let us prove to you how will you can make the most out of every dollar in your IRA 401k so you've saved 100,000 our advisers are standing by now to take your call at (888) 419-8513 it doesn't cost you a dime, so you've got nothing to lose. Once again, you can call us at (888) 419-8513 coming up next, are you over confident about your ability to retire? I'll share with you why you could be in for a rude
Speaker 2:
35:48
kidding. 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 pick 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. Do you think you're in great
Speaker 3:
36:14
financial shape and that you could retire in the next several years or is it possible that you're not even close? Welcome back. I'm Paul West and you're listening to wealth from wisdom joined by my cohost, Jim Caldwell. I've seen this movie a thousand times. Someone is overconfident about their ability to retire and then there's that inevitable wake up call when they learn. There's much to be work to be done, but often not enough time. So coming up in this segment joined Jim and I were going to share more of the five toxic investing behaviors that could sabotage your retirement and most importantly, how to keep your emotions in check and from getting the best of you. So let's move to a motion number four over confidence. This is a big one gym. I mean anyone who has a mass to any kind of wealth, literal small has the potential for being overconfident about their financial future, whether it's about the total dollars, whether it's about the risk, how much they can spend.
Speaker 3:
37:06
So it's really about thinking of when people get together and build a plan, how do they make sure they're not over confident, that the money they've earned over their lifetime is going to work out correctly. Social Security, is that going to be taxed? Are they going to be taxed over all? What's pre and post tax? How much is going to Medicare? How much is it going to go to their kids? What are all of those different factors of the puzzle? And we got to make sure that all of those pieces line up together. And one of the greatest things, I'm seeing an overconfidence right now. Jim Relates to investor behavior with winners and choosing winners. So a lot of people like to back winners, whether athletics, of course you've been spending some time talking about their favorite sports teams. Actually it's interesting if you think about it, I heard that if you think about your professional sports team, think about who won the championship in that sport when you were in second grade.
Speaker 3:
38:00
And that's often the sports team that year favorite allegiances to, but with the markets, I think about allegiance, it's about the recency effect in behavior. This is one of the biggest drivers of bad emotional behaviors, the recency effect. So what's a current trend right now going on? Fang F A, n. G. People believe in this because of these four individual securities, Facebook, Amazon, Netflix and Google have gone up significantly and now they're overconfident. Many people that there will be no end in sight for the growth and maybe they're gym, but they could be wrong. And are they reaching this overconfidence complex based on some of these things that are out there in the market today?
Speaker 4:
38:44
Paul, we see that all the time. And I really think it comes back to the basics, the blocking and tackling. And that is do these two, these people as they get closer to retirement, have a financial plan in place? Do they have a, a bridge from the accumulation stage to the distribution stage? I can give you an example of, of a client who I talked with last week, they're getting ready to retire in the next 60 days and they have a huge 401k plan and we want to make sure that that money is going to be able to be distributed accordingly. And the big concern there is, what if this market does correct before I retire? What if my account value goes down 10 or 15% so I advise them as we do with many of our clients who have outside assets to call their person who oversees that. And, and he talked to somebody on the phone and basically said, oh, don't worry about that. So, not only are our clients complacent, but so are some of the people that are managing their money.
Speaker 3:
39:46
Yeah. So one of the courts I started the show with, and I'm, and I say it again, be fearful when others are greedy and greedy when others are fearful. And right now, Jim, what are we seeing? Greed. A lot of people are headed that direction. They're afraid, not afraid. They're not afraid. That's the problem. And so they're taking on more risk and why they're over confident in what they can do. And that's scary because of what can happen. And so as we think about different families and people, be careful on your level of overconfidence cause the gate could be dangerous to you. So the fifth toxic behavior you can have, and I think I just want to stress this because when you think about the future, the future is different. The past is bedrock. However, the mistake number five people make is making all of their investment decisions based on past performance.
Speaker 3:
40:38
The, here's the reason why we tell you past performance is not a guarantee of future results. You don't know where the past is coming along. You want to look into the horizon. Yes, we all have that rear view mirror in our car, but we can't solve where we just came from. We can all look out in the future. Is there construction? Is there a storm on the horizon? Is there a lot of traffic? We're using ways app and all of those things to help us, but we need to figure out a way to not look at the past, but how we look forward
Speaker 4:
41:07
and if you want to relate that a little bit to sports, I mean you have to bring your a game every week. So let's just say college football, most of those games are played either Thursday, Friday, most of them on Saturday. If you look at last weekend or two weekends ago, there were a number of upsets and it was because some of those players, players were reading the press clippings. They weren't properly prepared, they didn't, they didn't plan for the, for the upcoming game. They took it for granted that they could just show up and go through the motions and, and you can't do that. You just, it, it doesn't work. You look at someone like a Tom Brady who's won multiple super bowls, he brings it every day, every day. And that that's what you need to do as you translate that into how you manage your money. Yeah,
Speaker 3:
41:48
well they have a game plan also put together and then they make adjustments. I love the best coaches and the best advisors. You know, the maybe the first half didn't go exactly as you wanted, but those halftime adjustments and think about your life. I'm not saying it's equally in terms of the number of years, but you'd go through the retire the accumulation stage of your life to the de cumulation of using your money and your income and your retirement to be careful on what you do. So I know we spent a lot of time talking about sports. We talked about some of our favorite Halloween movies. It makes me think about some toxic songs or Halloween based songs. So here's some fun ones to throw out. Let's see if you can guess the artists here. You ready for this game jam? All right, think we can do far away. All right, I'll start with you with a very, very easy one. Thriller, Michael Jackson. All right, so that's good. People are strange. Tough on trucks. You there the doors. I'm not old enough for that. Oh you're not. Okay. We got it. We're tracking. All right. That's a tough one. But you're going to hear every year on the radio at this time where wolves of London.
Speaker 3:
42:56
I got you a trick there, Warren Zevon. So another fun one. I don't even know who sang it, but I gotta say it. Cause this is one of the famous movies of all time Ghostbusters that comes out and probably the most famously played song of this time of year monster mash that comes out. So all of those have a theme about being toxic or Halloween. Scary. We talked about favorite movies or favorite characters, but let's go through five mistakes that all of you could and we're trying to help you avoid making, which is one, don't allow emotions to drive your investment decisions. To have a plan in place to make that happen. Three, don't be complacent. Complacent is a huge mistake you can make for overconfidence. This is one of the strongest emotions we see and especially right now, people are overconfident in the market. And Five, don't make an investment decision based on past performance.
Speaker 3:
43:50
Yes, sometimes that's the only thing you can look at. But somebody could have been in great in the past, but they adopted a methodology that doesn't apply in today's world. So this helps me think about are you really meeting with your financial professional on a regular basis? Are you talking about things other than investments? Taxes, how to generate income in retirement, getting the most out of your social security benefits or protecting yourself against inflation, or actually, Jim, we talked earlier this week. Then inflation is showing major signs of going up. Now, if you're not doing this, that might be a huge red flag to you and you could only be getting one piece of your retirement puzzle from your advisor. Let us prove to you how you can make your money go further in retirement if you don't know who we are. We are the number two independent advisor in the country.
Speaker 3:
44:36
According to Barron's, we've been selected as one of America's top wealth advisors. According to Forbes, we've been featured on numerous media outlets such as CNBC, Fox, plenty of their sources, and of course importantly for you, we're fiduciaries trying to help our clients out and always putting their best features first. So our advisors are standing by now to take your call at (888) 419-8513 I remember there's no cost. You've got nothing to lose and a getting a second opinion would only benefit you. Call us at (888) 419-8513 (888) 419-8513 thanks for joining me Jim. This is Paul West and thanks you've been listening to the welfare, wisdom radio network
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, okay.
Speaker 1:
45:30
And here's the legal Mumbo jumbo. The opinions voiced and welfare wisdom with Rod Carson or for general information only, and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. 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 C an SEC registered investment advisor.