AWS Full Show 8.5_01.mp3: Audio automatically transcribed by Sonix

AWS Full Show 8.5_01.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Sam Davis:
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.

Sam Davis:
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. He’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 Active Wealth Show Activators. I’m Ford Stokes, chief financial advisor and I’m joined by Sam Davis, our executive producer. Sam, so hi everybody. Welcome to the Weekend Activators and welcome to the Active Wealth Show.

Sam Davis:
And today on the show we’re.

Ford Stokes:
Talking about the importance of having a financial plan and getting that financial checkup. You get that second opinion right, no doubt. Especially, you know, you kind of want to inspect what you expect. We promised that we would talk more about building a smart financial plan or building a smart retirement plan. And on this week’s show, we’re going to talk about smart inspect, which is really the first step. Of any type of plan. And and then the next step. The other thing we’re going to do is we’ll talk about the last step, which were really one of the last steps, which would be smart legacy. And we’re going to talk about why people need a comprehensive retirement plan. We’ll have a. A detailed market update, you’ll get an understanding of what it’s like to meet with us. A private wealth management firm and how that could potentially help you as well. And we’re just really glad you’re with us right now. Kind of just we just want to welcome you to the show. We also want to let everybody know who an activator is. And activator is somebody who listens to the show. They listen to the active wealth show. They are part of the team that has made the active wealth show. The number one listen to radio show on AM 920 answer on the weekends. And we just sincerely appreciate each and every one of you as Activators who are hopefully we’re hopeful that we can help you.

Ford Stokes:
Build a successful retirement tax efficient. A fee efficient and market efficient. Retirement. That’s our plan. And we also just want to do everything we can to help you protect and grow your wealth so you can build that successful retirement. Also, our if you if you’re interested in working with us or you want to learn more, you can visit us at active wealth dot com that’s active wealth dot com. Also all of our shows are available on. Active wealth showed. That’s active wealth showed. And you click that episode button and you can get access to any of our episodes. But the best way to get in touch with us is just click that schedule a consultation button in the upper right corner. With with on active wealth dot com or on active wealth show dot com. And. Our podcast continues to grow and grow. We would really appreciate you guys and gals subscribing to our podcast show wherever you. But receive podcasts where you listen to podcasts, whether it’s Stitcher or Spotify, Google Play, iTunes, we’re on iHeart Radio as well. That would be great. And you know our big time. Offer today is we’ll help anybody that’s listening to us with a free financial plan to their 95th birthday with a free portfolio analysis. A Roth ladder conversion plan. A Social Security maximization report.

Ford Stokes:
And a retirement income gap analysis all to your 95th birthday. So you can kind of get your retirement results in advance. We call this results in advance planning. We’re here to help you. Determine your retirement results in advance, not playing guesswork here and hoping that the market goes better or goes worse or whatever. We. Can tell, we’re trying to do everything we can to help you protect and grow your wealth. Also just kind of talking about the show. Again, we’re going to go through why people need a comprehensive retirement plan. We’re going to talk about smart inspect. Or smart inspection as part of building a smart retirement plan. And that’s just really getting a look at your current. Retirement plan, your current investment plan. How correlated your assets are, the fees you’re paying, the risk you’re taking. Also, understanding the duration of your bonds, the investment grade of your bonds, and how much you have gained or lost this year on your bond portfolio. With your bond portfolio facing significant interest rate risk and reinvestment risk, we want to help you minimize those with a bond replacement strategy will probably play. Our bond replacement strategy later on in the show, we’ll also have a little fun and play chapter three from my book Annuity 360, that talks about the famous people who’ve invested in annuities. Throughout history. That’s kind of a fun thing as well.

Sam Davis:
Your active wealth market update.

Ford Stokes:
Stocks kind of rallied this week, but going into Thursday, there were some earnings news that came out. Also, the jobless claims continue to climb as well. Crocs plunged almost 15% in early morning trading before cutting losses. The maker of the foam clogs cut its full year forecast. Obviously, post summer, I would imagine. The company now expects consolidated revenues of 3.395 to 3.505 billion. That’s a lot of Crocs, folks representing growth between 47 and 52% compared to 2021. That’s still pretty good growth for them. Congrats to the company, even though they did see a little bit of a loss. Clorox shares got crushed as they have fallen off as well. Their fiscal fourth quarter sales were flat at 1.8 billion. That’s still a lot of bleach for everybody. And stocks were mixed ahead of Friday’s report. And oil slid below $90. Us stocks open mixed with the Nasdaq composite, notching modest gains while the Dow Jones Industrial Average and the S&P 500 slipped. Investors digested an uptick in weekly jobless claims ahead of Friday’s employment report for July. In commodities, oil traded at $89. Per barrel. Which is good. I mean, it’s good to try to get some of that back in line. A lot of what’s going on with inflation is tied to the cost of oil and gas. And we’ve seen it at the pump.

Ford Stokes:
Right. But also our truckers are seeing it. You know, it’s it’s just tough to deliver goods. Our manufacturing facilities are seeing it. And so hopefully they can get a handle on what’s going on with gasoline. And also, I’d like to see them stop this war on on fossil fuels. That would be nice. I think that could help us a lot. So that’s kind of your market update, just seeing the jobless claims. The number of Americans filing for unemployment benefits edged higher last week, hovering near the highest level of the year. The latest sign that the historically tight labor market is starting to cool off. Figures released Thursday by the Labor Department showed that applications for the week ended July 30th rose to 260,000 from downwardly revised 254,000 recorded a week earlier. That is above the 2019 pre-pandemic average of 218,000 claims and just narrowly missing, topping the eight month high of 261,000 recorded in mid-July. Continuing claims or the number of Americans who are consecutively receiving unemployment aid rose slightly to 1.146 million. For the week ended July 23rd, up 48,000 from the previous week’s revised level. One year ago, nearly 12.96 million Americans were receiving unemployment benefits. For months, the labor market has been one of the few bright spots in the economy, with the June jobs report showing an unemployment level remained at 3.6, near a near historic low for the fourth consecutive month.

Ford Stokes:
However, there are signs the labor market is starting to weaken with a plethora of companies including Alphabet’s, Google, Walmart, Apple Meta and Microsoft announcing hiring freezes or layoffs in recent weeks. All of them contributing that to inflation. Initial employment. Initial unemployment claims rose again during the latest week in an upward trajectory with no quick end in sight, said Robert Frick, a corporate economist at Navy Federal Credit Union. Major corporations, including the country’s biggest employer, Wal-Mart, are announcing layoffs as the economy cools. There are growing fears that the US economy is on the cusp or already in a recession. As a result of the Federal Reserve’s war on inflation, the central bank is raising interest rates at the fastest pace in decades as it races to cool consumer prices, which surged 9.1% in June, the fastest year over year increase since 1981. Activators don’t want to hear that. That’s the largest surge in consumer prices in June. In a one month since 1981. Good Lord. I mean, we are literally just going straight into Carter years here. I realize Reagan got elected in the 1980 election, but he started he got inaugurated in in 19 and in January, on January 20th, 1981. So it’s just unbelievable.

Ford Stokes:
Policymakers approved another mega-sized 75 basis point rate hike, triple the usual size at their meeting last week, and have since signaled they’re nowhere near the ending of this tightening cycle, despite signs of a slowdown in the economy. The jobless claims data comes one day before the Labor Department releases its more closely watched July employment report, which is expected to show the economy added 250,000 jobs last month. The unemployment rate, meanwhile, likely held steady at 3.6%, according to projections from Refinitiv economists. In other economic news, the Commerce Department reported on Thursday that the US trade deficit shrank 6.2% in June to 79.6 billion, the result of an increase in shipments of energy products and a decline in consumer demand for imports. It marks the first time since 2021 that the deficit fell below 80 billion. All right. And we just got a few seconds left here in this segment. When we come back, we’re going to talk about bond replacement. We’re also going to talk about in this show why people need a comprehensive retirement plan. We’re going to talk about smart inspection on your investment portfolio, in your investment plan. And we’re going to talk about how to build a smart legacy as well. You’re listening active well show right here on AM 920. The answer will be right back.

Music:
I think I’ll be.

Producer:
Registered Investment Advisors and Investment Advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosures of any conflicts of interest. If any exist, refer to our firm brochure, the ADV two A Page four for additional information. Any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by BWR. Thanks for listening to the Active Wealth Show. If you like what you’re hearing, make sure to rate our show on Spotify or wherever you listen to podcasts.

Ford Stokes:
And welcome back Activators, the active wealth show on Fort Stokes, your chief financial advisor. I’m joined by Sam Davis, our executive producer and licensed life insurance agent. So congrats to Sam on that. I wanted to check in here on bond replacement and what we’re seeing and I wanted to kind of just share kind of what’s going on and what we’re seeing. We’re seeing a lot of clients and a lot of listeners of this show that are coming in and calling us and. They’re doing so because they’re used to work with a wirehouse advisor or a stockbroker or a bank advisor or bank broker. That just the series seven license that sells it sells them, you know, commission stock stocks and bonds. And they’re making their commissions off of it. Every time they rebalance the portfolio, they reallocate their portfolio, they’re seeing their fees jump up there. They’re seeing the expense ratio within the portfolios being much higher than a typically managed portfolio, like what we would do with ETFs, with exchange traded funds. They’ve got some mutual fund, heavy portions of their portfolio. They’ve also got bonds that have lost up to 13.1% this year. And a lot of folks we’re seeing folks that are in their eighties coming in and speaking with us because people in their eighties are losing 15 to 24 plus percent. This year, and that’s in a over seven month period. Now, granted, some of the stocks have kind of recovered, but a lot of the bonds haven’t because Jay Powell can. Our Fed chairman continues to just hammer 75 basis point increases every month and they’re trying to tighten the economy up.

Ford Stokes:
And and I don’t know if they’re doing a lot with inventory levels, a lot of it’s a supply problem. And also the administration’s war on gasoline by shutting down different pipelines, the Keystone pipeline and others, and and shipping out a million barrels of oil to China out of our reserves, you know, at a discount makes no sense at all. And I’m not a fan of this administration. I’ll just tell you, I’m a Donald Trump fan for sure and sure as heck hope that the Republicans take back the House and Senate in the midterm elections. And I certainly hope we get on on pace to have a good conservative, real speaking Republican president in the next presidential election cycle in 2024. But we’ve got to deal with the here and now and dealing with it here and now. Is this typical 6040 portfolio that all these wirehouse managers and and brokers are are pitching you that they’ve pitched for years and years? Unfortunately, that strategy is not working because the bonds are getting hammered and money is not rushing in to bonds. When stocks are going down, money is rushing into cash or rushing into other things and rushing out of the market in general. And you should consider replacing your bonds with a fixed index annuity. And we’re going to play that chapter from my book Annuity 360, and you can get my book Annuity 360 at absolutely no cost to you completely free at Annuity 360 dot net.

Ford Stokes:
That’s Annuity 360 net. Just go there and put your information in and we’ll send you a free copy of a hardback. I mean, it’s an actual paperback, but we’ll send you an actual hard copy of my book Annuity 360. And you can learn all you need to know about annuities, which ones to avoid and which one to purchase for a successful retirement. We want to play this chapter for you, but. You know, Harry Markowitz got credit for being the founder of Modern Portfolio Theory in 1952. That’s 70 years ago. We’ve talked about on the show quite a bit. Should you really be using a 60 year old strategy to protect and grow your wealth? Is there an opportunity to do something new? And I would say that there is a new 6040 portfolio out there. It’s 60% stocks and 40% fixed indexed annuities. Why are you paying advisory fees and portfolio fees and even commission fees, stock commission fees for brokerage commission fees on bonds that you’re you’re buying or bonds that you hold. Why are you doing that? Because you’re getting fixed in an income anyway. And they’re just going to sit there and give you income. You really shouldn’t be paying for advisory fees on your bonds. And the best way to do that is to eliminate the bonds in your portfolio, move those over to fixed indexed annuities, get market like gains without market risk. And where zero is your hero even in a bad year, like what’s happened in the first six, seven months of this year? You know, the people who own fixed indexed annuities with our with our firm, they’ve lost $0 with those accounts.

Ford Stokes:
Is that something like you want? Do you want to get a reasonable rate of return and also put your money in something that’s protected with 100% financial reserve product where they have to reserve 100% of the money you give them in a safe product. And the ten year US Treasury bond and at the end of year one, they take the interest from that ten year Treasury bond. They invested into indexes like the Credit Suisse, Ray-Ban PAC or the Credit Suisse Momentum or the S&P 500 or the Nasdaq 100, or the Russell 2000 or the Wilshire 5000. Those are the different types of indexes that are out there. There’s there’s tons and tons of them. That’s just a subset of a few of the indexes that are available when you purchase fixed indexed annuities. Also, did you know when you purchased a fixed indexed annuity that you can actually get a 10% bonus in your money? Immediate bonus. Like you can just make 10% now. You can’t withdraw it immediately, but you can take it out. You literally can take out. 10% penalty free withdrawal each year from year one. That’s going to give you enough liquidity. I mean, let’s say you invest a couple hundred thousand dollars into a fixed indexed annuity or even if you invest $500,000 in a fixed indexed annuity. You could make $50,000 in one day. So if you want to do that and you want to get a bonus on your money or you’re considering a lump sum, taking a lump sum on your annuity, or you’re considering doing a bond replacement and replacing the bonds in your portfolio with the really safe, sound financial product insurance product called an annuity, a fixed indexed annuity.

Ford Stokes:
Then I would encourage you to pick up the phone and give us a call at 7706851777. Again, 7706851777. Or visit active wealth dot com and click that schedule a consultation button the upper right corner. So let me tell you what it’s like to work with us. So when you come in, we ask you, bring you your statements and you also have an understanding of how much money you’re spending each month in monthly expenses and what you’re going to need in monthly expenses during your retirement years. Also, we we’d like to see your Social Security statement. You bring in your Social Security benefits statements so you understand how much money you’re going to get paid at full retirement age or how much money you’re currently getting in Social Security income. We are getting a lot of folks that are over. 66, 67 years old, who’ve already started taking Social Security or coming into our office now, because they’re very concerned about what’s going on with their current portfolio, and they want us to take a look at it, and they want us to give them a balanced approach and and have a good idea of how to deal with smart risk and smart, safe investments and also how to build a smart income retirement plan.

Ford Stokes:
So we just asked you to bring all that stuff in, and then we’ll do an analysis of your entire portfolio and we’ll give you a. Financial plans, your 95th birthday with your current plan, with your current assets you currently hold. Doesn’t have anything to do with us. We’ll make sure you understand the expenses you’re paying. The expense ratio within. Your portfolio. We’ll also let you know the risk you’re taking as measured by standard deviation. Standard deviation is a measurement of financial risk. And so we’ll give you what that measurement number is on a percentage basis. And then we’ll also give you an idea of the correlation of your assets, how correlated will show you a correlation matrix of all of your assets as compared to each other? So you can see, hey, when one goes down, how much is the other one going to go up or down with it? And then we’re going to give you a financial plan with our recommended portfolios and our recommended structure. To your 95th birthday. So that’s number two. We’ll also give you a Social Security maximization report if you haven’t started taking Social Security. So that’s number three. Then we’ll give you a retirement income gap analysis. That’s number four. And the last thing we’re going to give you before you ever even make a decision to work with us. We’re going to do that. Absolutely. At no cost to you because you listen to the active well show you’re an activator and you care about your.

Ford Stokes:
Retirement plan. You care about your kids. You care about yourself. You care about your spouse. And you want to protect and grow your wealth and you want to live a successful retirement. We’re because of that, because you believe that knowledge is power and you want to inspect or you expect we’re going to do everything we can to also give you. A. Financial planning your 95th birthday with a Roth ladder conversion plan. And we’re going to do all of that. Absolutely. For free, at no cost to you. So we’re going to do all five of those things. We’ll give you one with your current plan. We’ll give you one with your recommended plan. We’ll give you a Social Security maximization report. We’ll give you a retirement income gap report. And we’ll also give you a complete, comprehensive financial plan to your 95th birthday. That also includes a Roth ladder conversion plan. And if you’re under 65 years old, we can also give you a tax free income plan using indexed universal life policies to try to help you protect and grow your wealth and generate tax free retirement income. And if you’re interested in tax free income, go ahead and reach out to us at Active Wealth dot com. When we come back, we’re going to go ahead and play that bond replacement chapter from Annuity 360. And you can get that book at Annuity 360 net. Come right back. You’ll stay active. Well show right here on AM 920 The answer to Listener Bond Replacement Chapter from my new book, Annuity 360.

Producer:
Fixed annuities, including multi year 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. Remember, all of Ford’s listeners receive a free financial consultation just for listening to the show. Visit active health.com to learn more and schedule an appointment. Thanks for listening to the active wealth show and subscribing wherever you listen to podcasts.

Ford Stokes:
All right. We just spent the last segment talking a lot about bond replacement, and we’re going to play this chapter from Annuity 360 about bond replacement. We think it’s a big deal. We think you need to understand the risk you’re facing with bonds right now. And also, here’s the Big Cliff notes. Number one is when you replace your bonds with fixed indexed annuities, you also delete the advisory and portfolio fees associated with an actively managed portfolio when they’ve got bonds, bonds by definition, provide fixed income. Guess what? Annuities do the same thing. And we like fixed indexed annuities to be able to do that. We don’t like variable annuities. We try to stay away from variable annuities for a reason because it provides it provides fees for the insurance companies. Did you know that variable annuities are going to cost you between three and 6% a year? And that’s a significant drag on the portfolio because a variable annuity is basically an annuity wrapped in it’s a mutual fund wrapped into an annuity chassis. And so we want to do everything we can to avoid variable annuities, but we like fixed indexed annuities. But if you delete your advisory fees, you’re going to save money each year for sure. 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.

Ford Stokes:
And 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, 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.

Ford Stokes:
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 of loan, you can see how uncertain the future of bonds is. 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.

Ford Stokes:
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. 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 markups, but they bundle them into the price that is quoted to the investors.

Ford Stokes:
This means you are unaware of how much commission you were 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. As we discussed above, annuities will provide you with an income you can never outlive. So now let me give you the full recap on on bond replacement. So number one is you delete your advisory and portfolio fees, as I said earlier, that could save you significant money. So let’s say you’ve got $400,000 invested in bonds and your million dollar portfolio gets 600,000 invested in stocks. If you’re paying 1.5% as an example, in our clients, we don’t charge them that much. But the typical wirehouse advisor that’s managing money is going to be managing it right around a point and a half to 2%. So call it a point and a half, that’s 600. I mean, that’s 6000 a year that you’re not paying that could pay for a lot of groceries. So I would encourage you to just just go ahead and make the change and replace the bonds in your portfolio just by reaching out to us and calling us at 7706851777.

Ford Stokes:
Again, 7706851777. And you’ll reach us in our office. Debra in our office and her team in our. King and Queen building offices were on the 29th floor of the King Building overlooking Perimeter Mall. And so we’re happy to help you. Next is you’re going to also eliminate this market risk with reinvestment risk and interest rate risk that you’re facing with bonds right now. I mean, the reason why bonds have lost over 13.1% at some point this year is because the Fed keeps upping rates. And your bonds that you used to hold or that you currently hold are worth less than what the new bonds are. They’re coming out at the higher interest rate. So why aren’t you facing that type of risk, especially if you’re in your 6070s or eighties or nineties? There’s no reason to do that. And a lot of people, oh, I went to my old wirehouse advisor. That was the thing to do when I lived in Buckhead or Dunwoody or Sandy Springs or Peachtree City or. Alpharetta or Roswell or Cumming, Georgia or wherever. Ma’am, up there in Gainesville on the lake or whatever that is. That’s what the type of adviser I was working with. Well, they have one solution and they’re giving you their one solution, which is I’ve got a 6040 portfolio, I’ve got stocks and I got bonds and I’m getting paid on both.

Ford Stokes:
I’m getting paid my advisory fees on both. I don’t we don’t believe in that. We think you ought to delete the advisory and portfolio fees out of 40% of your portfolio. And if you have a variable annuity, let us take a look at it because there are better alternatives. There’s a fixed indexed annuity that doesn’t carry with it 3 to 6%. Let us give you a free annuity x ray at no cost to you. All you’ve got to do is schedule a free consultation with us at active wealth dot com. So if you own if you can hear my voice as you’re driving around and go into Home Depot or Lowe’s or going to Publix or going to Costco. Today if you’re out and about. If you have a variable annuity, you owe it to yourself. To do a better job with your hard earned and hard saved money. Let us take a look at that and show you how you could do a much better job and also get a 10% bonus on the account value that you can surrender out of that variable annuity that could more than make up any situation on surrender fees or anything like that that you could lose by surrendering that variable annuity. Let us at least take a look at it and also show you how you could do better. And. Listen, bond replacement is not difficult. This isn’t rocket science. Again, you want to you want to replace your bonds because, one, you want to delete the advisory fees and portfolio fees you’re currently paying on your fixed income.

Ford Stokes:
Two, you want to eliminate market risk. Three, you want to get market like gains without market risk. That’s what a fixed indexed annuity can give you. Four. We want to be efficient with that. We want to try to avoid income rider fees. And we’ll help you do that. We don’t like having fees upon fees within the annuities that we work with our clients on. And we like to help get them bonuses. To help make up the difference on any form or policy they would surrender or just in in general to help them. Reinforce the move of moving, let’s say, a lump sum pension. Into a fixed indexed annuity where they can get a 10% bonus. And when we come back. We’re going to talk about other famous people who’ve also invested in annuities. That’s a fun chapter. It’s chapter three from my book Annuity 360. And again, you can get that book at Annuity 360 net. It’s absolutely no cost to you. Thanks so much for being with us here on the Active Wealth Show. When we come right back, we’re going to play chapter three from my book Annuity 360. And again, I hope I’ve done a good enough job helping you understand why you should consider replacing the bonds in your portfolio with fixed indexed annuities. We’ll come right back.

Music:
Here comes the sun. It comes as a massive.

Sam Davis:
Are you concerned about US tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to the Act of Wealth show with Ford Stokes, your chief financial advisor, to learn how you can reduce the taxes you pay before and during retirement. The Act of Wealth show Saturdays at noon and Sundays at 11 a.m..

Ford Stokes:
Hey, on today’s show, we’ve talked a lot about replacing your bonds and fix the next annuities. And I wanted you to understand other famous people who have invested in fixed indexed annuities throughout history or invested in annuities not necessarily fixed indexed annuities, because now fixed indexed annuities are not your grandfather’s annuity anymore. They’re they’re well built and well constructed to help you get an even greater rate of return and still get safety and help you get to safety in a way from market risk. And so, Sam, go ahead and play chapter three from my book Annuity 360, Chapter three Famous people who invested a significant amount of their hard earned wealth in annuities. Big idea annuities are for everyone, even if you’re not worried about outliving your wealth. Annuities are safer for your money than investing in stocks or bonds or simply not investing at all. Babe Ruth, known as the Sultan of SWAT. Babe Ruth came into his glory days during the Roaring Twenties, and his manager was worried that he was blowing through all of his money without putting any of it away. He introduced Babe to an insurance agent from the Equitable Insurance company, now AXA Equitable. From 1923 to 1929, the slugger contributed more than half of his salary annually, purchasing between 35,050 thousand worth of annuities each year. The Great Depression hit the country hard. In October of 1929. Babe Ruth was forced to retire from baseball in 1935 due to health reasons. He was unemployed during the worst time in history, but Babe Ruth had his income annuity.

Ford Stokes:
It’s been reported that he received an income of $17,500 a year, which would translate into an annual salary of more than 290,000 in today’s dollars. His famous quote still resonates today. He said, I may take risks in life, but I will never risk my money. I use annuities and I never have to worry about my money. Steve Young. Steve Young was signed out of Brigham Young University into a $40 million contract with the USFL. That was the headline. At least in reality, Young was given an annuity that would pay out something like $40 million over the 50 years that followed. Given the fact that some players were not paid for playing in the final season or other seasons of the USFL, accepting the annuity appears to have been a genius move on the part of either young or his agent. The annuity payments have lasted longer than the league, and it’s safe to say that he’s made more money than probably anyone else involved with the league. To be fair, it couldn’t have happened to a nicer guy. Even with a large signing bonus and salary, he continued to wear old jeans and drive a 19 year old Oldsmobile dynamic. In addition to outlasting the league, that annuity even outlasted the Oldsmobile car company with a staggering number of pro athletes going broke after they retire. It’s refreshing to read stories about players who made smart financial choices.

Ford Stokes:
Shaquille O’Neal, one player who’s used annuities to his advantage, is retired star Shaquille O’Neal. Over his 19 year career, he generated $292 million in total compensation. In retirement, he is projected to make as much as $1,000,000,000 from endorsements, even after his career is long over, thanks to a wise agent who made him put $1 million annually into annuities from his rookie year onward, Shaq lives off the income the annuity generates with his endorsement legacy for his children. Shaq scenario demonstrates how pro athletes and other prodigious earners can protect themselves against their own personal spending error. Allen Iverson. Nba player Allen Iverson earned $200 Million during his career, $155 Million in salary and 40 to $50 Million in endorsement deals. Iverson ended up going bankrupt because of his overly lavish lifestyle. In a December 2012 court filing, Iverson told the court that his monthly income was $62,500, but his expenses were 360,000. Luckily for Iverson, Reebok saved him from becoming destitute by paying him an annuity worth $2.3 million. In 2001, Iverson made a very smart decision that would ultimately save him. He signed a unique endorsement deal with Reebok. Not only will Reebok pay Iverson 800,000 a year for life, they set aside a $32 Million trust fund that he can begin accessing when he turns 55 years old in 2030. Since he divorced his wife in 2013, he will receive half of the trust. Another way that Iverson will be able to protect himself against future bankruptcy is his access to the NBA pension.

Ford Stokes:
He is eligible for another 8000 a month. The lump sum of this pension is between 1.5 and $1.8 Million. Most pensions are set up with single premium immediate annuities. Benjamin Franklin. When Benjamin Franklin died, he requested that the 2000 sterling he earned as the governor of Pennsylvania from 1785 to 1788 be divided equally between Boston and Pennsylvania. He wanted the money to be dispersed as a legacy. 200 years later, in the spring of 1990, the balance in the Philadelphia account was valued at approximately. $2 million. And the balance in the Boston Trust was about $4.5 million. This was sometimes called Franklin’s IRA. The money in the Boston Trust was invested using a new take on an old idea the annuity using a tax deferred index variety. The money was able to benefit from exposure to stock market growth without stock market loss. This allowed the trustees of the Franklin Institute in Boston to turn an estimated $4,400 into 4.5 million, even while it was paying out an income for 200 years. Beethoven, the social luminaries of Vienna, wanted to keep Ludwig van Beethoven from leaving their country. And so in 1809, two princes and an Archduke Guarantee the musician a generous annuity. All he had to do was stay in Vienna and compose and perform his music. His benefactors have supposedly been quoted as saying something along the lines of only a man free of worries can create with such genius.

Ford Stokes:
Interestingly enough, Vienna also saw its time of economic downturn, and one of the annuities guarantors tried to stop paying Beethoven claiming financial hardship. Beethoven sued one and continued to receive his annuity payments. Perhaps this is what inspired the literary genius of Jane Austen, whose character Fanny observes in sense and sensibility. People always live forever when there is an annuity to be paid, and annuity is serious business. It comes over and over every year and there is no getting rid of it. I know we talked about we were going to talk about smart inspection. Most of that is about just trying to inspect your you expect on the fees and risks you’re taking and the correlation of your assets. So go ahead and reach out to us and schedule that free consultation at Active Whatcom. You’ll get booked directly into my calendar. You won’t get put off to any other adviser and I’ll talk to you directly. The next thing is Smart Legacy, the best way to build. And we’ll talk more about this next week because we ran out of time. But the best way to build smart legacy is one. Make sure you’ve got your final expenses taken care of, your funeral taken care of, because that will go a long way and that will help out a lot. Also, too, you want to consider letting your heirs inherit a Roth IRA versus an inherited IRA. And we’ll talk more about that next week. It’s the final.

Sam Davis:
Countdown. So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes:
On today’s show, we gave you a pretty detailed market update on jobless claims and what’s going on with inflation and what’s going on in the markets. We did have a little bit of a rebound this past week, which is great news. And then. We talked about what what it was like to come in and speak with us and why you should consider a comprehensive retirement plan and all the different facets of what that looks like. And it’s probably more information than you you’ve got now. Again, just to recap that, you’re going to get a current plan with your current investments all the way to your 95th birthday. You’ll get one with our recommended portfolios. You’ll also get a Social Security maximization report. If you have not turned on Social Security, you’ll also get a retirement income gap plan and you’ll get a a retirement plan, a complete, comprehensive retirement plan with a Roth ladder conversion plan. Absolutely. At no cost to you. And then again, why people really need a comprehensive retirement plan. We find too many people think retirement planning is about rate of return, but they have no income plan. And that’s an issue we find that too many people have no clue about their bonds. And in many cases, bonds are over 40 to 50% of their portfolio. Number three is we find that too many people have no plan for health care expenses. And so that is a huge problem because one of the largest expenses during your retirement years is going to be your health insurance and your your health care costs and your co-pays and things like that. So have a plan for Medicare supplement insurance or Medicare Advantage.

Ford Stokes:
And in our experience, many people haven’t even thought about what they want to do every day when every day is a Saturday and how they’re going to pay for it. And we’re going to help you do that. We’re so glad you’ve been with us here on the active wealth show this week. I hope you enjoyed this show. I hope you found it informative for you. And if you did, I would encourage you to go ahead and pick up the phone and give us a call at 7706851777. Again, 7706851777. Or just visit active wealth dot com and click that schedule your free consultation button the upper right corner. And next week we’re going to talk more about smart retirement planning, different aspects of it, different elements. And we will dive directly into smart inspection and smart legacy in even more detail next week. Sorry we ran out of time this week. We just have so much to talk about and we just appreciate each and every one of you as activators. Thank you for listening to the show. Thanks for seeking more information because you understand that knowledge is power. Remember, with anything, if you’re going to be a bear, be a grizzly, but specifically with retirement planning, seek knowledge and try to show up and finish and do everything you can to implement a sound financial plan with a licensed financial advisor. That’s a fiduciary like myself for stocks, and I’m the head of Active Wealth Management and I appreciate your business. I appreciate the opportunity to work with you and protect and grow your hard earned and hard saved assets. Have a great week, everybody.

Sam Davis:
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:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered or if traditional annuities pension payments are taken and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities. They may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads or other restrictions that are not included in similar annuities that don’t offer a bonus feature.

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