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Producer:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to the Act of Wealth Show with your host Ford. Stokes Ford is a fiduciary and licensed financial advisor who places your needs first. You’ll help you protect and grow your wealth. The act of wealth show has grown because activators like you want to activate their retirement planning with sound tax efficient investing. And now your host Ford Stokes.

Ford Stokes:
And welcome to the active wealth show Activators. I’m Ford Stokes, chief financial adviser, and I’m joined by Sam Davis, our executive producer. Sam, say hello to the folks.

Producer:
Welcome to the Weekend Activators. I hope everyone is enjoying their weekend. It is June. It is hot in Atlanta and I hope everybody’s got their A.C. on and staying cool.

Ford Stokes:
No doubt. It is definitely hot in Atlanta right now. I know people don’t really like the term Hotlanta, but it is definitely on point right now. This could be one of the hotter summers we can remember, obviously. Welcome to the weekend. A double welcome the weekend after the rough financial week in the financial markets. It was just a difficult week for sure after the Fed decided to hike interest rates by 0.75% or 75 basis points. And they want to act more aggressively to battle inflation, which sits at a 40 year high and is battering American consumers. But experts say the rate boost, which is the largest increase since 1994, could impact personal finances in a variety of ways, too. And we just want to share here some smart money moves that you could put in place to try to get you into a better position as as interest rates potentially rise even further for the balance of the year. Number one would be to lock in your mortgage rate. If you’ve got a mortgage, try to lock it that in and don’t stay with an adjustable because it could go way higher. Sam, you got a mortgage and now mortgage rates are sitting at where are they sitting compared to where where you were able to lock in last year? Yeah, it.

Producer:
Was a couple of years ago actually in the summer of 2020. So it’s been two years and mortgage rates are just over double the rate that we got now. So definitely feeling good about taking advantage of cheap money back then. But yeah, it’s getting a lot more expensive to borrow now.

Ford Stokes:
Another financial advisor, Robert Gilliland, said that it really makes sense to be aware because it seems like interest rates are going to be going higher than what we’ve been used to over the last decade or so or even longer. And so it’s a good idea to be aware of the fact that likely interest rates are going to keep climbing and you want to really review where you are regarding your mortgage and make sure that you want to lock in a fixed rate. If you’ve got a five or seven year arm, you know, an adjustable rate mortgage. So because you want to manage your payments and it just may make sense for you to lock in rates. Also, you want to pay down credit card debt and make moves to reduce interest paid on balances as much as you possibly, possibly can. And then also, you want to shop for higher yield savings accounts or even bonds like bonds, you can get up to $10,000 an eye bond and it’s tied to the inflation rate. And that can get you a much higher rate of return. And the last time we looked at it, it was over 9%, the 12 month interest rate within a bond. You also want to reassess your investment allocations. You really should be meeting with your financial advisor and be sure that that you kind of accounted for stress tests that plan for a higher inflationary environment.

Ford Stokes:
You want to stay invested, obviously, and we’re likely in for a bumpy ride as there’s there’s going to be more clarity on inflation, interest rates and even geopolitical events. You want to stay diversified and you want to obviously avoid trying to catch a falling knife here. That’s you know, you don’t want to have to necessarily time the market. It’s probably more important to stay invested and stay the course. But also, you really should be considering. A little bit of a bond replacement strategy with taking some market risk off the table with reinvestment risk and. Also with interest rate risk, with increasing interest rates, that’s a concern. Also, you’ve got systematic and unsystematic market risk that are associated with bonds. And one of the ways to eliminate that is to invest a portion of your money, let’s say 1020. 30, even up to 40% of your overall portfolio into a fixed indexed annuity. So, you know, original modern portfolio theory that was born by Harry Markowitz in 1952. That’s a 70 year old strategy now. Used to be 60% stocks and 40% bonds. We might want to consider 60% stocks and 40% fixed indexed annuities, or a combination between fixed indexed annuity annuities and a structured note ladder structure notes. We’ll get into that here in segment three and segment four.

Ford Stokes:
But I wanted to kind of walk through. That if if you do that, you want to make sure that you’re investing in a structured note ladder with five notes and five consecutive months with five different banks and five different starting points. The indices also with structured notes. Those are securities that do involve market risk. The market is going down at this time, so you need to be ready. But as long as the S&P 500, the NASDAQ 100 and the Russell 2000, as long as any of those three do not lose 30% of their value from the time you invest into a structured note from the pricing data that structured note over the next 12 months, your principal would be 100% protected, but any of those three indices could go down 30%. And if it does, then you lose your principal buffer. It would. It would. It’s what’s called a trigger event. But if you feel like it’s not the market, it’s not going to go down another 30% from here, which I’m not sure how confident people are in that in that scenario. But if you invest in five different notes with five different starting points, it’s more than likely that a majority of your of your notes are not going to are not going to hit the buffer level or have that trigger event. So you may want to consider a five structured note ladder as a portion of a bond replacement.

Ford Stokes:
But also you may want to consider a fixed indexed annuity that can get you market like gains. Without market risk. Sounds pretty nice, right? We want to get you the best we can, the best deal we can on any investment or financial products or insurance products that you would purchase. And a fixed indexed annuity. We like to invest in fixed indexed annuities that are accumulation based annuities that have a 0% income rider fee. Right now, when you’re planning your for all of your investments, the most important thing you can do, in my opinion, is to get fee efficient. Market efficient and tax efficient fee efficiency and tax efficiency are guarantees you can actually get. You can try to negotiate a lower advisory fee and portfolio fee with your financial advisor or go to a new advisor that’s got a lower financial advisory fee and. And portfolio fee. Our fees for our clients are less than 1%. And we’ve done it that way on purpose because. As fiduciaries. We’ve got to put the needs of our clients ahead of our own. The next is that you can also get tax efficient by implementing a Roth ladder conversion as well. And there are only two types of tax free investments out there. There’s Roth IRAs and life insurance.

Ford Stokes:
They’re the only two. And also back to the life insurance piece. And annuity is a life insurance product and actually insures against you living too long to try to help you not outlive your money. Also, it’s a good idea to get a product that’s got a historical rate of return with a high participation rate in the underlying index that you’re fixing. Next annuity is linked to and how these things work is what they do is they take 100% of the money you give them. They invest in the ten year treasury and the ten year Treasury now is over 3.275%. I think it’s over 3.3% today. And what they’ll do is they’ll take the 3.3% over the next, you know, at the end of month 12. And they’ll invest that 3.3% that you’ve got that you got in return for investing in the ten year US Treasury for a year. And they will invest that money into options. But your money is invested in the ten year US Treasury. So we think that’s a really good idea. And it’s also where they have to financially reserve 100% of the money you give them. So for all the hundred pennies you give them, they’ve got to put 100 pennies into the ten year US Treasury. They have to put it into a safe financial product. They can’t put it into casino stocks or something like that or gold stocks.

Ford Stokes:
They have to put it into what is considered to be one of the safest investment products on the planet, which is the ten year US Treasury. But then they invest in options into indexes like the S&P 500 or the Credit Suisse Raven Pack or the. Credit Suisse Momentum Index or the Barclays Atlas five Index or the Jp morgan Cycle Index, etc.. And all these indices you can actually see online and see their performance on a daily basis. You get your statement once a year from the annuity company or the insurance company, but you get to see how your index is performing. But also, be careful. Don’t invest in a product that’s only got like a 38 or 32% participation rate in the underlying index. Like a lot of these products have got S&P 500 par rates. You want to invest in one that’s giving you 90 to 95% participation in how that index does. We’ll talk more about that when we come back. The break, we’re also going to talk about this market volatility and what you can do. And we’ve got a great financial wisdom quote from Will Rogers, and we’re going to talk about how to reduce your risk during these volatile times. You’re listening active. Well show right here on AM 921 the answer. We’ll be right back.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Producer:
Listen to the number one show on the weekends on AM 920. The Answer To Protect and Grow Your Hard Earned Money. The Act of Wealth show with Ford Stokes, your chief financial advisor, Saturdays at 12 noon and Sundays at 11 a.m..

Ford Stokes:
Welcome back to the active also activators on port stocks are chief financial advisor I’ve got Sam Davis on the board here is our executive producer and we’ve seen a lot of market volatility in 2022. The markets have been falling since Q4 2021. And obviously you’re concerned, everybody’s concerned. Now is the time to do two things. Number one is stay invested. You need to have smart risk investments like structured notes, like we talked about. And we’ll talk more about that here in this segment and a little bit in segment three and four as well. And structured notes are a securities. They’ve got an underlying derivative with a bond. So it’s a bond plus a derivative. And there’s three indices that the structure notes that we offer. They’re American style that are measured each day and against. The three underlying indexes. So one would be the S&P 500. The second one would be. The Russell 2000 and the third would be the Nasdaq 100. And as long as any of those three indexes do not lose 30% of their value from the pricing date or the purchase date of your structured note, your principal would then be 100% protected, but any one of those three could lose their value and your principal buffer would be lifted and your money would just simply ride the market until a maturity date also. These notes cannot be called in the first six months, and they also cannot be called in a negative position, and they wouldn’t be called the negative position because the bank would have to deal with them as well.

Ford Stokes:
So. And they’re paying a handsome interest rate. But they are securities. They do involve market risk. But the way to minimize some of that market risk is to spread them over five different notes with five different banks, with five different starting points, the indexes with over five consecutive months. That would give you five different interest rates as well. So you’d have complete diversification in something called a structured note ladder. That is something really to consider. I would not consider investing in a single structure node only one time I would consider investing in a series of structured notes. That’s what I would do. You also need to be working with a licensed financial advisor that can utilize tactical asset allocation that’s going to rebalance your portfolio at least on a at least on a monthly basis. That’s when your portfolio is actively managed. You don’t just set it and forget it. As Sam said during the break, like if you’re just a buy and hold and you’re just burying your head in the sand. Sam, what do you say at break? I want to I don’t want to quote you.

Producer:
I said, if if you’re taking a look at all this volatility and what’s going on this year and you bury your head in the sand, I would dig a bigger hole because that’s not the right strategy. You need to have a plan.

Ford Stokes:
No question. And you want to rebalance, have your portfolio rebalance regularly to maintain its structure. You also don’t want to make emotional decisions no matter how much money you have. We know it’s important to you. We do. You don’t want to convert your savings to cash and make sudden changes that could cause you to miss out on the top trading days in the market either. You just want to take care and take advantage of the only two types of tax free investments out there, which would be Roth IRAs and life insurance. If you’re in your thirties, forties or fifties, or you’re a business owner, life insurance can be a great vehicle for you to minimize the taxes you’re going to pay during your retirement years. There’s only two types of tax free investors out there. That’s Roth IRAs and life insurance. And when we implement a Roth ladder conversion. We take money from our IRA, from your IRA, and we move it into your Roth IRA, and we like to pay the taxes each year on those conversions using an investment account or a savings account or checking account money or or current income so that your money will move over dollar for dollar from your IRA to your Roth IRA. And if you can minimize taxes during this difficult time, another really good idea, too, is to do conversions while the market is low and when there’s rebounds. Then. You’re the money.

Ford Stokes:
If you’re moving money, if you’re moving assets over in kind, which is you’re just moving those assets without liquidating them from your IRA to your Roth IRA. And when the market rebounds, then your Roth IRA will go up more than it. Then it would have had you liquidated the assets and just put cash in. So that’s a good strategy as well. So there’s a lot of really good strategies to implement a raw voter conversion also. There’s usually no better time in the world to do a Roth ladder conversion than when the markets are down, because you can get that bounce and that bump within your Roth IRA after you’ve moved the assets. Number three is you want to to protect and grow your hard earned and hard saved money with fixed indexed annuities. Again, we like accumulation based annuities. We like annuities without income rider fees. So we can save you that 0.95 all the way up to almost 2% in fees. The other thing is, if you’ve got a. Fix the next annuity that’s got an income rider fee and you haven’t turned on income yet. We’d love to talk to you. I would encourage you to visit Active Wealth dot com, click that schedule at a consultation button in the upper right corner and reach out to us. Also, you can just give us a call at 7706851777. Again, that’s 7706851777. And we’ll do a complete annuity rethink for you.

Ford Stokes:
We’ll do a full annuity x ray so you can get an understanding of what your the risk you’re taking and the fees you’re paying. And if you got a variable annuity, I would encourage you to get out of that variable annuity if you possibly, possibly can. Because that would be a really good idea. And. You want to review the fixed indexed annuities or the variable annuities or the fixed annuities or the multi year guaranteed annuities that you have in your portfolio now? You want to understand how they’re really working, the fees you’re really paying, and if you don’t just give us a call at 7706851777. And we’re happy to help you also. We’re going to do everything we can. To put you in the right annuity product for you. That’s got the right underlying index that’s that’s performed well over time. And so you can get. You know, rates of return 83 plus percent of the time. Overtime. It’s basically that’s what the historical average of some of the indexes that we work with that are tied to some of the fixed indexed annuities that we market and sell. And also you get the chance to eliminate the portfolio and advisory fee because the insurance company or the annuity company, they pay us. The advisory fee. They pay us a commission and we do not double dip and we can’t double dip. We’re not it’s it’s improper and unethical and illegal to double dip.

Ford Stokes:
So there’s no advisory fees or portfolio fees on a fixed indexed annuity. From a financial advisory perspective, you might have some account fees and things like that, but you’re. You’re going to eliminate that 0.95 to 1 and a half to to two plus percent. You’re paying that financial advisor for advisory and portfolio fees because they they get paid by the insurance company. And so that commission or that fee is is. You know, the responsibility is is basically supported by that insurance company, but you can delete the advisory and portfolio fees from that portion of your portfolio, which is a really good idea. Let me ask you a question. Why are you paying advisory fees on your bonds if your bonds are paying you income anyway? Then it’s a really good idea just to delete those advisory and portfolio fees, don’t pay them and still get income because that’s what a fixed indexed annuity is. It’s an income based product that can. Outlive you. That way it’ll help your you outlive your money. I mean, fixed indexed annuities are insurance products against you living too long? Which is a really good idea because we’re all living longer. I mean, the CDC came out last year and said even in post-COVID world, if you’ve got a couple that lived to be over 65, both of them lived to be over 65 years old. There’s over a 60% chance at least one of them is going to live to be over 90.

Ford Stokes:
And by the way, I got I’ve got a secret for you guys out there. The ladies live longer than we do. So if you’re a responsible husband and you want to take care of your spouse, you want to take care of your wife. And you want to make sure she’s well taken care of. Then you really need to have a plan. You ought to consider replacing the bonds in your portfolio with a fixed indexed annuity so that they can get income. Also, you should have a fixed indexed annuity to plan for the eventual loss of 33 plus percent in Social Security income when one of the spouses passes away. We’ve talked about this example before, but let’s say the husband worked outside the home and he’s making $30,000 a year in Social Security income benefit. And then. The woman who worked inside the home and worked harder than he did. Amen, ladies. Right. And you’re talking 15,000 bucks. She’s getting 50% of his benefit. But when he passes away or let’s say he happens to pass away first, which is likely the case, he passes away first, she gets his. So she gets $30,000 a year, but she loses hers. So she’s losing 15,000 or $45,000 total that comes in via Social Security income benefit into the home each year. On the day he dies. And if you don’t have a plan to backfill that 33% loss in Social Security income, you really should come talk to us.

Ford Stokes:
We’d love the ability to help you. We really like helping people with Social Security maximization reports. We like helping them plan with a retirement income gap analysis. And we also give you a free financial plan, your 95th birthday, and we give you a Roth ladder conversion plan as well. We do all that on the front end for free. It’s a $100 value because we’re fiduciaries and we’ve got to put your needs ahead of our own. And we want to make sure you can make an informed financial decision about your hard earned and hard saved money. So the best way to do that is to pick up the phone and give us a call at 7706851777. Again, 7706851777. Or schedule a free consultation at activewealth.com. When we come back from the break. We’re going to share that incredibly wise. It’s actually the wisest financial quote I’ve ever heard from Will Rogers. You’re going to want to hear it when you come back from the break. And we’re also going to talk about reducing your risk during these volatile times. Also, who should really be working with a licensed financial adviser? And nine ways to live comfortably during retirement? You’ll see active wealth show right here on AM nine. And the answer will be right back with that Will Rogers financial quote.

Producer:
If I had $1,000,000. If I.

Ford Stokes:
Had $1,000,000.

Producer:
Well, I’d buy you a house.

Ford Stokes:
I would buy you a house. And welcome back, Activators, the Active Wealth Show Ford Stokes chief financial adviser. I’m joined by Sam Davis, our executive producer. And Sam, you just brought up a great life expectancy from birth in the United States chart from 1860 to 2020. You want to kind of go over what what you found on that chart?

Producer:
Yes, very interesting. So I actually did some additional.

Ford Stokes:
Research back.

Producer:
To when this country was founded in 1776. America’s birthday is coming up here in just a few weeks, which is very cool. But the life expectancy in 1776 for an American born that year was only 35 years old. Obviously, now the life expectancy is right around 80 years old. But centenarians, people who are 100 and older, is one of the fastest growing segments of our population. So it just shows that people are living longer, which makes products like a fixed indexed annuity all that more attractive because whether you live to be 9100 or 120, you’re covered for life.

Ford Stokes:
Yeah, it’s amazing. You know, Al Roker and Willard Scott, they would interview and celebrate people that turned 100 years young on The Today Show for years and years. And the number one consistent thing that they asked, they said, how did you live this long? And the number one thing that they shared was they walked every day and they kept walking and many started walking in their in their forties, fifties and sixties, every day. And they kept going and they definitely started walking after they retired in their seventies or sixties or seventies. So I would encourage you to make sure you get out and walk and try to walk a mile or two a day and keep your body moving. Now, I promised everybody that we would talk about this financial wisdom quote from Will Rogers. So let me let me hit you with it. He said that people should be more concerned with the return of their principal than the return on their principal. Amen on that. And you really need to be working with a licensed financial adviser that is going to work hard to protect and grow your money. That’s held a fiduciary standard that is going to be there to rebalance your your your investments, but also help you stay invested, especially during this difficult time with with market volatility and a market downturn. You really need to have somebody guiding you and diversifying your portfolio and doing everything, everything you need to do. But also don’t just stick it all just in the market. You should consider replacing your bonds with fixed indexed annuities and or a structured note ladder or a combination of both in my opinion.

Ford Stokes:
Build that new 6040 with 60% stocks and maybe 40% fixed indexed annuities or 60% stocks and 20% fixed indexed annuities and 20% with a five note structured ladder that keeps rotating year over year. That’s that’s what I would be doing. And we’ll talk more about what I would do next week. But I’d I would strongly encourage you to follow Will Rogers advice and make sure that you’re very concerned the return of your principal rather than return on your principal. And with that, we wanted to we’re talking in detail about replacing the bonds, your portfolio with fixed indexed annuities. Sam, go ahead and play. If you would for me. Go ahead and play. Chapter 15 for my book in 8360 about replacing the bonds in your portfolio. Chapter 15 Bond Replacement With Fixed Indexed Annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. At my firm Active Wealth Management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities first.

Ford Stokes:
Here’s some information on the history of bonds in the United States. Historical bond volatility. The 1900s saw two secular bear and bull markets in US fixed income. Inflation peaked at the end of World War One and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The US government kept bond yields artificially low until 1951. The long term bond yields were at 1.9%. In 1951, they climbed to nearly 15% in 1981. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created. Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of 15% to 7% by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold. See Chart 15.1 to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history alone, you can see how uncertain the future of bonds is.

Ford Stokes:
Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds. Bonds and interest rates have an inverse relationship. When interest rates fall, bond prices rise. Due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows as of May 24, 2020, the ten year Treasury note was yielding 0.64%, and the 30 year Treasury bond was at 1.27%. Reinvestment Risk of Bonds. This is the likelihood that an investment’s cash flows will earn less in a new security. For example, an investor buys a ten year $100,000 Treasury note with an interest rate of 6%. They expect it to earn 6000 a year. At the end of the term, interest rates are 4%. If the investor buys another ten year note, they will earn 4000 instead of 6000 annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic Market Risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue, but the correct asset allocation strategy can make a big difference. Unsystematic Market Risk. This type of risk is unique to a specific company or industry, similar to systematic market risk. It is impossible to know when unsystematic risk will occur.

Ford Stokes:
For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk. Business risk. There are two types of risk internal and external. Internal refers to operational efficiency. An external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markup. But they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you are actually paying. Standard and Poor’s estimates of bond markups is 0.85% of the value for corporate bonds and 1.21% for municipal bonds. However, markups can be as high as 5%, up to $50 per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time, unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss.

Ford Stokes:
As we discussed above, annuities will provide you with an income you can never outlive. So you want to avoid the bond risk. I hope that that chapter really helped. But you want to avoid the bond risk by replacing the bond you hold with fixed indexed annuities to get market like gains without exposing your hard earned and hard saved wealth to uncertain financial market conditions. Also, you can get better returns with less fees. You’re going to delete the advisory and portfolio fee that that advisory charge you. And because the insurance company is going to pay them a commission and you don’t want to overpay for an underperforming asset because right now bonds are underperforming. We’re in a slightly rising interest rate environment and they’re also not paying all that great. The other thing is, is that the go for price earnings ratio is right around 22 for US equities. But conversely, and as in comparison, which is crazy, the current US corporate bond market is averaging a go forward price to earnings ratio of 135 times earnings. That’s a go for PE ratio of 135 plus. My question is, which more would you have concern over one that only needs 22 times earnings to pay you your money back, or one that needs 135 times earnings to pay your money back. For me, I’d rather go with the 22 rather than 135. So if you don’t think there could be a corporate bond bubble, I would beg you to reconsider. I would also beg you to consider replacing and eliminating the risk that you’re dealing with with US corporate bonds unnecessarily, especially if you don’t know the bonds that you hold in your in your portfolio.

Ford Stokes:
All the more reason to get an analysis done of your portfolio and you can just schedule a consultation with us at Active. Welcome again, active wealth. You can generate consistent income for retirement and for life. You can grow your money tax deferred and you can eliminate the advisory fees, as we’ve talked about before, that you pay for bond income. We’re going to tie all this up with a nice, neat bow and segment for. Makes you come back. You’re going to hear about. The nine ways to live comfortably during retirement, no matter how much you’ve saved, ways to really do a good job with this. And we feel like you deserve to work with a licensed financial advisor who is a fiduciary, who can provide you a comprehensive plan that not only makes you money, but also makes they make more money when you make more money. And that’s why we’re structured. That’s the way we structured our relationships and our partnerships with our clients. Come right back to learn about the nine ways to live comfortably during retirement. I see the crystal raindrops fall and the beauty of it all is when the sun comes shining through. And welcome back activators the act of well show. I’m George Stokes, your chief financial advisor. I’ve got Sam Davis here on the board as our executive producer. And go ahead and play that inflation demonstration.

Producer:
It’s time for an active wealth inflation demonstration.

Ford Stokes:
So I’m getting my gas. Sam at Racetrac and I paid $4.99 for premium gas at the race track in Cumming, Georgia, which near where I live, because we have we have to live near to the gym where our girls compete. That was still a hefty price, but we’ve seen premium gas on average, according to gasbuddy.com. Premium gas goes all the way up to $5.64. That’s a lot that’s a lot of money per gallon. I’m also only able to get $125 worth of gas to put in my Roush Ford F-150 truck. Shout out to Roush Racing and shout out to the Ford Motor Company. I wish I was related to Henry Ford, but I’m not. But I’m proud of the name. And and I was I was giving my name because it’s a Southern tradition. The name, the first born son, after the maiden name of the mom and my mom’s maiden name was Ford. And her family came from Storm Lake, Iowa. They came from the Midwest. And and my grandfather was a landscape architect and a real estate broker and developer. And he had a putting green in his backyard. That was incredible. And and I used to play in the sand traps, just playing with sand castles and stuff. Shout out to my grandfather, Chuck Ford. I know he’s looking down on me and and proud of what we’ve been able to build at active wealth and proud of being able to partner with people like Sam Davis on our radio show the last two plus years.

Ford Stokes:
And I just want to say, you know, you’ve got to do some different things regarding inflation. You need to maybe eat out one last time a month. You need to really coupon for grocery stuff or go to warehouses like Costco and Sam’s versus just go into the local grocery store, be a little bit more inconvenient on yourself to save a little bit of money. Right now, the average household, it’s costing over $500 more just to live each year, each month from this time last year. That’s a big deal. Sam’s got up here. Different gas prices from GasBuddy and other sources. But it’s remarkable out there what’s going on and. You don’t have to drive too far to start hunting for gas prices and good gas prices. But I would and we’re we’re in a decent part of the country, at least we’re not in California or New York. But the taxes on gasoline in this state are much higher than they are in Alabama. So if you’re traveling in from Alabama, make sure you fill up in Alabama first. Now let’s go into the non ways to live comfortably during retirement. Number one is you want to stay invested again. You want to make sure your money is growing with the market, especially with this inflationary time period. Number two is you want to implement a Roth ladder conversion before the age of 72, before required minimum distributions kick in and start impacting your retirement.

Ford Stokes:
You also got to work until you’re age 67, if you can help it and and then start taking Social Security, you want to get to your full retirement age so you can get 100% of the Social Security income benefit that you are owed and don’t settle for less by taking to early. Let me ask you, as you’re driving around, do you deserve more than $0.75 in the dollar? Will. Sam and I do, too. We think you deserve more than $0.75 on the dollar or two. And the best way to do that is to not start taking Social Security at age 62 and a half. You want to take Social Security if you can, if you can make it at all and not put too much pressure on your portfolio with too many withdrawals between age 62 and one half and age 67. You want to make it to that because it’s likely that you or your spouse are going to live. Well past 80 years old, which is well past which is well past the break even point. You also want to pay your house off. I get asked this all the time and the happiest clients that sit in front of me are ones who pay their house off. They downsized and pay their house off, or they just paid their 30 year mortgage and they were done.

Ford Stokes:
You also may want to move into a smaller house, have lower maintenance fees, and then invest the difference. Next at number five is you want to bank the money you save from a zero mortgage into an investment account. You don’t just want to spend it. You want to save for the rainy day, even during retirement, if you can help it. Number six is build your own personal pension you can never outlive. And the best way to do that is with a fixed index annuity, and we can help you do that. So a lot of people like to provide negative feedback on fixed indexed annuities. It’s interesting, though, after 2008 and 2009, that amount of vitriol and negative publicity on fixed indexed annuities that comes from the wirehouse is out there and the banks that that stuff really slowed down because those people lost $0 during during that time period. And guess what? The people that own fixed the next annuities on the money they have invested in with fixed indexed. They’re going to lose 0% this year. You need to think about that so you could receive higher than 4% of your principal from your fixed indexed annuity each year. You can also grow your principal and get market like gains without market risk. Now, in a year like this year, you may get a 0% return, but zero is your hero.

Ford Stokes:
That’s a lot better than than your portfolio’s in 10% on your bonds and and ten, 15% on your S&P 500 stocks. That’s 25% total. Number seven is replace your bonds completely. Try to replace your bonds. Absolutely. Completely. Two strategies for that. One would be a fixed indexed annuity and the second would be a structured note ladder. And we would just repeat the ladder each year and that portion would roll over into it. We wouldn’t, you know, that. Plus the gains would be all we would invest in on the structure ladder. We wouldn’t look to double and triple the structured note ladder exposure or allocation within your portfolio. Number eight is accurately calculate your monthly expenses. I bet to shock you how much more everything is costing you right now and build a positive, not a negative retirement income gap at the start of your retirement, because it’s going to widen. It will get worse as inflation kicks in. Where in your you will lose buying power if you do not stay invested and you don’t have an idea and you don’t have an income plan or a or an expense plan. And number nine is just diversify your accounts between tax deferred taxable and tax free. You really should have some tax advantage or tax deferred and tax free investments. And if you don’t, we can help you do that, even if you’re just doing it at $7,000 a year for your IRA and Roth IRA and each account for each spouse.

Ford Stokes:
And you could put up to $28,000 if you got $28,000 in household income, if you can afford to save it a year. All you need is ordinary income to do it. And did you know that when you invest in a in a41k, you can also still invest $7,000 into an IRA and 7000 into a Roth IRA? You can do that. So I would encourage you to just that every year, if you can, that’s if you’re over 50 years old, if you’re under 50 years old, it’s 6000 a year. You deserve to work with a financial advisor who can provide you a comprehensive plan. We want to help you divest the IRAs out of your portfolio, visit active wealth to get your free Roth ladder conversion plan. We’ll do that. Absolutely. At no cost to you. And next week, we’re going to talk in detail about what I would do during this difficult time. I think you’re going to find that very interesting. We’re going to go through it in detail. We’ll go through it step by step. And we hope everybody has a great week. Go, Braves. Let’s keep everything going. Really, really excited. As of the recording of this show, we are at 14 games in a row and counting. So go Braves and we’ll talk to you guys next week.

Producer:
Thanks for listening to the Act of Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets, to schedule your free consultation, call your Chief Financial Advisor Forward Stokes at 7706851777 or visit Active Wealth Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor BCM An active wealth management are independent of each other. Insurance products and services are not offered through BC but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
A purchaser should evaluate and understand all of the risks and costs of an investment in structured notes or sions prior to making any investment decision. A purchase of an RSN entails other risks not associated with an investment in conventional bank deposits. A. Purchaser may not have the right to withdraw his or her investment prior to maturity or could incur substantial penalties for an early withdrawal if permitted. A purchaser should carefully read the disclosure statement and any other disclosure documents for a structured note before investing. An investment in SSNs is not FDIC insured and is subject to credit risk. The actual or perceived credit worthiness of the note issuer may affect the market value of SNS. Sns will not be listed on any securities exchange. Even if there is a secondary market, it may not provide enough liquidity to allow purchasers to trade or sell SNS. As a holder of SNS, purchasers will not have voting rights or receive cash dividends or other distributions or other rights in the underlying assets or components of the underlying assets. Certain built in costs are likely to adversely affect the value of SNS prior to maturity. The price, if any, at which the notes can be purchased in secondary market transactions, if at all, will likely be lower than the original purchase price, and any sale prior to the maturity date could result in a substantial loss. Sns are not designed to be short term trading instruments. Purchasers should be willing to hold any notes to maturity. The tax consequences of SNS may be uncertain. Purchasers should consult their tax advisor regarding the US federal income tax consequences of investment in SNS. If a structured note is callable at the option of the issuer and the SN is called, the holder will receive only the applicable redemption amount and will not receive any coupon payments that would have been payable for the remainder of the term of the SN.

Producer:
Sns are not FDIC insured, may lose principal value and are not bank guaranteed. This material is provided for informational purposes only and should not be construed as investment advice or as an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary. The value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively. And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be either suitable or profitable for a client’s investment portfolio. Historical performance results for market indices generally do not reflect the deduction of transaction and or custodial charges or the deduction of an investment management fee, the incurrence of which could have the effect of decreasing historical performance results. Economic factors, market conditions and investment strategies will affect the performance of any portfolio, and there are no assurances that it will match or outperform any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and types of securities held by the strategy. Not FDIC insured may lose principal value. No bank guarantee.

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