How to Reduce Fees and Keep More of Your Hard-Earned Money

9.1.23: Audio automatically transcribed by Sonix

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

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 Active 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 Active 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, your chief financial advisor, and I've got Sam Davis, our executive producer, here with us on this Labor Day weekend. Yes, that's right, folks. Your Active Wealth Show folks are not taking the week off. We are here for you on this Labor Day weekend. And Sam, there we had a we've got a lot of special announcements today. But first of all, go ahead and say hello to the folks. Welcome to the weekend activators. It is the unofficial end of summer and beginning of fall.

Producer:
It is Labor Day weekend. College football is going to be on the televisions. It is going to be on the fields. It is an exciting time of year and hope you're all enjoying your weekend. And thank you for making the Active Wealth Show part of your weekend as well.

Ford Stokes:
Yeah, we appreciate it. Also, thanks for making us the number one listen to radio show on AM 920. The Answer on the weekends. We just sincerely appreciate you as an activator. Also, if you're wondering who an activator is as you're driving around Atlanta or you're listening to this on ActiveWealthShow.com you're listening to the show on wherever you can get podcasts or that's Google Play or iTunes, Stitcher, Spotify, etcetera. I would just say this. An activator is somebody who's looking to build a sound. Financial plan. They want to build a smart financial plan. They're trying to make sure that they minimize the fees that they're paying. They're trying to reduce the risks that they're taking within their portfolio. And they're also trying to generate important retirement income and also trying to protect and grow their hard earned and hard saved wealth. They're also trying to build that market efficient portfolio as well. All of those things are also folks that listen to the Active Wealth Show. So we really appreciate you. So, yes, it is college football time, Sam. Super excited about it. It's been a long time coming. And us Southerners, we were always jonesing for that college football where toe meets leather and and we get to cheer on our favorite teams. And good luck to the Georgia Bulldogs and the Georgia Tech Yellow Jackets this year and also Georgia Southern Kennesaw State's coming on. And they had their first player actually drafted this past year. So congratulations to that milestone that was achieved by Kennesaw State this year. And also, we can't leave out Georgia State. They've got quite a program there, too, and they've got the former Turner Field is their stadium. So great job there to the Panthers. My wife actually graduated from Georgia State and her second degree when she entered dietetics degree. So we pull for the Panthers. Um so let's talk, Sam, about a thing that happened in a big way. It was a seismic shift in game show lore this past week when Bob Barker passed away.

Producer:
It's this week in history.

Producer:
This week in history. It kind of lines up for what we had planned to to talk about this week and remembering Bob Barker. But this week in History, 1972, The Price is Right began airing with Bob Barker as its host, The Price is Right, as aired 10,000 episodes since its debut. It's the longest running game show in the United States. It was actually named the Greatest Game Show of all time by TV Guide. And unFordunately, Bob Barker did pass away just a few days ago, August 26th, 2023. He was going to turn 100 years old this December. So he passes away at the age of 99. I was so disappointed forward. When I read the news, I immediately went to YouTube and pulled up old prices. Right. Highlights just to feel that nostalgia and kind of see Bob Barker smiling face one more time.

Ford Stokes:
Well, a lot of people were saying that he came closest without going over by living to be 99 years old. And that was some interesting memes. We're just so excited that he lived such a great life and just want to thank you for entertaining me during all those sick days during, you know, elementary school and middle school. Didn't have a lot of sick days during high school, unFordunately. Had to had to keep powering through. But it was great to be able to, you know, sit down on the couch and watch The Price is Right from 11 to 12. Also Miss Bob, and our thoughts and prayers go out to he and his family. And just thank you, Bob Barker, for entertaining us for. Decades and decades. And we all love The Price is Right and which Drew Carey, all the best and a long standing, you know, stint as the host of The Price is Right as well, just as Bob did.

Producer:
Yeah, absolutely. He is a pop culture icon. The show is iconic from the nametags that look like price tags to the big wheel and the showcase showdown to Plinko and that long, skinny microphone that Bob Barker held for all those years. And now Drew Carey is holding. It is just an iconic piece of Americana and unFordunate to see him pass away. But man, what a life. 99 years.

Ford Stokes:
Yeah, those games are incredible. I love the dice game. I loved it when they would putt to it just and obviously when they spun the wheel to see who came close to a dollar or to get a dollar and get $10,000, that was always really cool to see. Actually, I had a friend of mine. A girl that I went to college with. Her name is Dana Southard, and she's she's got a different married name now. She actually won the showcase and she won a boat and she liquidated her money. So. And then invested it. So I just, you know, shout out to Dana and we were all sitting around and waiting to watch that thing because it was taped. And that was a pretty cool moment right after college because she was a flight attendant and just happened to, um, on a layover go to The Price is right and they pulled her down and and all that stuff so it was in her Delta flight attendant uniform. So shout out to Dana. That was a pretty neat deal. So on today's show, we're going to talk about a lot of stuff. We're going to give you a strategy on how to keep a little bit less money in that checking account when you're a pre-retiree or retiree and get that get more money working for you in the market, but also still give you money there in case you need it, in case there's, you know, a tough time or you've got a need like to pay for a wedding or rehearsal dinner or you need to buy a car or anything like that.

Ford Stokes:
We're going to share that strategy at the beginning of segment two. We've also got our financial wisdom quote of the week. I'm going to let Sam read that here in a second. There's also a major US bank that was. Lord for overcharging millions of dollars. And we're going to share those details. We're asking if you're paying too much in fees. We've got a beating bank segment, and we've got two really important financial terms of the week. And we've already covered our This Week in History with Bob Barker starting in 1972 with The Price is Right. And Sam, let's go ahead and read that financial wisdom quote of the week.

Producer:
And now wholesome financial wisdom. It's time for the quote of the Week.

Producer:
This week's quote of the week comes to us from former Nobel Prize winner Albert Einstein. And Albert Einstein once said compound interest is the eighth wonder of the world. Those who understand it earn it. Those who don't pay it.

Ford Stokes:
Yeah, amen on that. And what that means is you really need to stay invested and you can stay invested in a strategic asset allocation portfolio or buying stocks or in a tactical asset allocation managed portfolio as well. We kind of employ strategic and tactical asset allocation with our portfolios. So something to really consider there. And Albert Einstein was a pretty smart guy. The other thing I would say is what we've talked about before is the best time to save money is when you have it. So don't regret not saving money. And for all the activators out there, if you're still working or if you've got excess money that's coming and you've got a positive income surplus during your retirement. I would challenge you to try to save at least 15% on your money month over month, because if you do, you can really start making that money work for you and get that compound interest. Also, if you're saving beyond what your 41K and your IRA or your Roth IRA. And you're just putting into a taxable account. You're already ahead of the game if you're getting money into a taxable account because you're looking at capital gains at 15% or 20% versus that traditional.

Ford Stokes:
Ordinary income tax rate of, let's say, 24% plus in state of Georgia, 5.75%. So be very careful about not saving 15%. Do everything you can to save 15% on your income, 15 to 20% if you can. So when we come back after the break, we're going to talk about this one major US bank who was found to be overcharging investment accounts. And we're also going to talk about how to beat bank CDs in segment two and think you're really going to like what's out there And. In segment three, we're going to talk about this one strategy that you can implement to not put as much money just sitting in your checking account. You'll see Active Wealth Show right here on AM 920. And so we're so glad you're with us here on this Labor Day weekend. And everybody, stay safe out there this Labor Day weekend and come right back for the next segment of the Active Wealth Show right here on Am. 920. The Answer.

Charlie Kirk:
Charlie Kirk here. If you're concerned about your investments, rising taxes from the Biden administration, then I encourage you to listen to the Active Wealth Show hosted by my good friend Ford Stokes right here on Am 980. The Answer. Listen to the Active Wealth Show Saturdays at noon and Sundays at 11 a.m. The Active Wealth Show right here on Am 980. The Answer.

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC, BCM, a registered investment advisor, not an actual client of active wealth management.

Producer:
With the traditional 60 over 40 portfolio having its worst year in more than four decades now may be a great time to consider more than just stocks and bonds. Ford Stokes, author of Annuity 360 and host of The Active Wealth Show, wants to help you retire with peace of mind. Schedule your free consultation today at ActiveWealth.com. That's ActiveWealth.com.

Producer:
Investment Advisory services are offered through Brookstone Capital Management LLC a registered investment advisor. Thanks so much for listening to the Active Wealth Show. Make sure to rate us everywhere you listen to podcasts including Spotify.

Ford Stokes:
And welcome back Activators The Active Wealth Show. I'm Ford Stokes, your chief financial advisor, and I've got Sam Davis, our executive producer here. And Sam, one thing that we forgot to mention on the front was latest news. And you and I are both big US golf fans and we're Ryder Cup fans. And one really interesting thing is Zach Johnson just named his six captain's picks for the US Ryder Cup team that are going to play in little less than a month Now over there in Marco Simone on the Marco Simone course near Rome, Italy. And Sam, you have a big announcement as the co-host of this show about what you're doing during the Ryder Cup this year.

Producer:
Yeah, I am a huge golf fan and I'm very pleased that my wife and I will actually be traveling to Italy and be attending the Ryder Cup this year. So it all starts on Friday, September 29th, day one of the Ryder Cup. And my wife and I will be there on the first tee. Very excited. Captain Zach Johnson, His picks are in a big team of 12. I kind of go through the names here. Sam Burns, Pat Cantlay, Wyndham Clark, Rickie Fowler, Brian Harman, the open champion from this year. Max Homa Brooks Koepka, Collin Morikawa, Xander Schauffele, Scottie Scheffler, Jordan Spieth and Justin Thomas. So there's your 12 American golfers who will look to win on foreign soil for the first time in three decades, and we're very excited to see them go for it.

Ford Stokes:
Yeah. I mean, I'm super excited that you and Bailey are going there, and I'm super pumped up to hear how that goes. I think you're going to give us kind of a little roving reporter report from from that first day just what your impressions were. And the coolest things for you and Bailey are just to record and get that back to us for the show so that all the activators can hear about the great time that Sam and Bailey are going to have out there in Rome, Italy, at the Marco Simone course. That course is extremely hilly. I understand. So you're going to enjoy get your running shoes on, get your hiking shoes on, because I think you're going to be up and down quite a bit walking that course.

Producer:
Yeah, it's going to be really cool. You know, just as we're getting football season, college football season started this weekend, we're just four weeks away from Ryder. The Ryder Cup, which is such a big event and very excited to be in attendance this year.

Ford Stokes:
What I love the fact is back to the activators here. What I love, the fact is that you guys are going is really the first time you're experiencing Europe. And it's also amazing that you added into, hey, let's go ahead and and get to a one in a lifetime event. Let's get the tickets that you did that early in the game. And what's been great about it is you've been able to enjoy planning the trip and then you also be able to enjoy the trip itself. And for you, activators out there for pre-retirees and retirees, I would encourage you to try to do some really unique moments so you can spend more time with your family or at least, you know, your spouse and your partner. I would encourage you to really try to find those one, two or 3 or 4 special. Trips. You want to go on a year and still stay within your budget but help you really enjoy that quality time with friends and family. I think that's a really big idea. Also, try to spend more time with friends and because that's one of the biggest regrets that we've heard from hospice nurses who've talked to people like, I wish I'd stayed in touch with my friends throughout the years. That's another really good, just happy retirement tidbit there. And I just want to say congratulations on selecting to do that. That is a really good idea and you're going to get to experience one of the one of the most special things in sports when they're teeing off for the first time for those first four matches on that Friday and being there at the first tee and how raucous and crazy that that scene is, I'm super excited for you and Bailey and can't wait to hear what y'all think about.

Producer:
Yeah, we're so excited and can't wait to wear the red, white and blue there in Rome and support our boys and hopefully they bring that Ryder Cup back to the United States.

Ford Stokes:
That's great stuff. So now let's transition back into what's going on in the world of finance. So. Sam. We had a major US bank that was found to be overcharging investment accounts. Can you talk a little bit about what happened there?

Producer:
Your active wealth market update.

Producer:
So this is breaking news from just this past week. A major US bank found to be overcharging investment accounts. And it was found that for years Wells Fargo overcharged almost 11,000 investment advisory accounts, about $27 million total in fees. And that was according to federal regulators. Wells Fargo agreed to pay a $35 million civil penalty to settle the matter without admitting or denying the charges. But I expect if they were settling for more than what they were being accused for, they may have been guilty in in the matter, to say the least. The agency said Wells Fargo also paid account holders about $40 million, including interest to reimburse those customers who'd been overcharged. And regulators said Wells Fargo failed to use compliance systems designed to ensure billing systems contained accurate data and didn't effectively monitor that the bank was not overcharging clients. This was this was over a period of time between 2014 and 2022.

Ford Stokes:
The reason we're sharing this is twofold. Number one is you really shouldn't be paying more in fees and you need to inspect what you're expecting from a fee perspective. Next is if you're paying well over 1% and advisory and portfolio fees and the banks do charge a significant amount of money or in a higher percentage on fees, I would ask you, why are you doing that? Why would you consider working with a private wealth management firm that charges less than 1% and advisory and portfolio fees together that also have. Portfolios that are managed through ETFs that are delivering a lower expense ratio. Expense ratios with your 4k or traditional bank portfolio, that's heavy in mutual funds, you're looking at a 0.72 over 1% just in an expense ratio plus a 1.25 to a 1.95. The average is usually around 1.5% in average annual portfolio and advisory fees the banks are charging in addition. So you could be paying upwards of. 2.5% or more if you are with a bank, just if you're trusting that big bank name. I would ask you to really reconsider and at least get your portfolio analyzed and we're going to give you a free portfolio analysis.

Ford Stokes:
Absolutely. At no cost to you. All you've got to do is reach out to us at ActiveWealth.com, click that schedule a consultation button in the upper right corner and we're happy to help you. It's mean. All we're going to do is give you a free portfolio. Analysis doesn't cost you anything. We'll also give you a financial plan, your 95th birthday. It's got your current plan, then one with our recommended plan. And we'll show you what it looks like when you make your portfolio more tax efficient, fee efficient and market efficient. What could really happen? Also, what happens with a bond replacement strategy and how you could potentially save over six figures during retirement through a an effective and strategic Roth ladder conversion plan. If you've got over $400,000 in your IRA or above. So all you've got to do is go ahead and reach out to us at (770) 685-1777. Again, that number is (770) 685-1777. And we're happy to help you with a free portfolio analysis to make sure you're not overpaying in fees. This is kind of a shock to see and to hear. Also, remember, as we transition into our beating Bang segment.

Producer:
Need a higher rate of return from your safe money. Listen up. It's time to beat the bank CD rates.

Ford Stokes:
You know the banks with the FDIC rules, they're required to reserve between 3 and 10% as a financial reserve, whereas with a fixed indexed annuity or life insurance products, they have to reserve 100% of the money that you give them in. What they do is they invest in the ten year US Treasury. So if you want to put money into a bank CD. For two years. Just realize your financial reserve on that product going to be 10%. Whereas if you put money into a multiyear guaranteed annuity, which is one of the ways to beat bank CDs by getting a higher rate of return, we're seeing advertised migrates at 5.25%. On a two year major and or a three year major. Even higher. What I would encourage you to do is go ahead and reach out to us if you want to get 5.25% over the next two years and also deferring tax payments, you would have to have until you take the money back out of that multiyear guaranteed annuity. All you got to do is reach out to us at ActiveWealth.com and click that schedule a consultation button in the upper right corner. We're happy to help you. I would venture to say that money markets and some of the bank CDs, especially with the traditional bricks and mortar banks like Wells Fargo, Truist and Bank of America, etcetera, those are not paying out anywhere near 5.25% the same time period, the same term. So you really can't beat the rates that you're getting with bank CDs by investing into a 100% financial reserve product. And we're happy to help you do that. All you've got to do is reach out to us at ActiveWealth.com.

Ford Stokes:
Many of you have. You know, 50,000, 100,000, even $200,000 sitting in your checking account because you do not trust what's going on in the market. Are you are you been wary about what happened in 2022 with market volatility? Also, what's happening with political unrest in this country right now with the current resident in the White House? You know, I understand. I understand your concern, but I would also say you need to get invested. And one of the ways to get invested is the 100% financial reserve product. That's a really good idea if you consider that. So again, I would I would strongly encourage you to reach out to us at ActiveWealth.com, click that schedule a consultation button in the upper right corner and you'll get booked directly to my calendar and we'll share the options with you for sure. When we come back from the break, we're going to talk about one more strategy. They could allow you to not put as much money just sitting in your checking account, not earning any interest. I think you're gonna like to hear this because you're also going to be able to get access to money in case you've got a rainy day or you've got a need or a large purchase or you need to pay for that rehearsal dinner or that wedding for a child or a grandchild, or you need to help with college education funding, things like that. All you got to do is listen to us in this next segment. I think you're going to like this strategy. Go ahead and come right back to the Active Wealth Show right here on Am. 921. The Answer.

Producer:
Thanks for listening to the Active Wealth Show. If you like what you're hearing, subscribe to our YouTube channel to watch videos from this program and other recent episodes.

Ford Stokes:
And welcome back. Activators The Active Wealth Show. I'm Ford Stokes, your chief financial advisor. I've got Sam Davis here with us, our executive producer on the board. And we were talking about and teasing a strategy to help you keep less money in your checking account and allow you to also stay more invested, whether it's into a strategic or tactically managed portfolio. Also a structured ladder. If you wanted to do that over five different notes with five consecutive months, with five different starting points to the indices, we can help you with that. Structured notes are also at risk products, by the way. They are securities, They are market securities. So you would need to understand what's available and what what happens with those. But then you can also invest in safer products like a fixed indexed annuity or a multi year guaranteed annuity. We just talked about in the last the last segment talking about multi year guaranteed annuities is a great strategy to beat bank CDs. Now let me give you another strategy. So almost every couple I talk to or even, you know, widow or divorcee or single person that comes into my office and our new offices, by the way, are located right off McFarland really near Halcyon. On exit 12 on 400 when they come in to talk to us. They've got 50 or $100,000 plus sitting in their checking account, and that makes them feel more comFordable. And imagine if you were able to get interest on that money and you didn't have to keep as much money in your checking account to still feel safe.

Ford Stokes:
Well, a lot of retirees and pre-retirees don't implement this type strategy. They'll implement it when they're sending their kids to college, but they won't implement this strategy. While they're retired. And I would encourage you to do that. So a lot of people, they've paid their house off, which is great. The other is. That that mortgage payment is no longer eating up one of their two Social Security payments because they've got their house paid off, which we think is fantastic. The next is I would encourage pre-retirees and retirees to get a home equity line of credit and just have it open. You've got with most of these home equity line of credits today, I would encourage you to work with a regional bank or a credit union because some of the top bricks and mortar banks are charging a pretty hefty amount. But I would encourage you to consider, you know, those those large banks are not going to necessarily offer you the best rates because they've got the brand they can take advantage of. But I would encourage you to work with a community bank and get that home equity line of credit just to open it. You've got ten years to be able to draw money and usually 20 years for repayment is usually what the terms are. Let's say you get $100,000 or home equity line of credit. That's 100 grand. You don't have to leave in your checking account if you feel like, you know, I need $100,000 in case there's a rainy day or in case the kids call me and I need to help them out or I.

Ford Stokes:
You know, we've got to do something for the grandkids or, you know, one of our grandkids needs to get an MRI. And it's it's out of network or they don't you know, our kids don't have health insurance coverage to cover that or there's a surgery involved or whatever that is. Or if you need to you want to buy a boat or you want to buy a car or you've got one of your cars fails and you need to go ahead and get a new car. I understand why you need to keep 50 or 100,000 some a lot of people are keeping 200,000. One interesting in and a lot of you people are probably head nodding as you're driving around Atlanta right now or you're listening to us on our podcast. The older you get, the more money you feel like you need to have on hand because you're probably not going to go back to work. But if you implement a home equity line of credit and you just go get that. You can have access to the dollars you need in case there's a rainy day and you can get the rest of the money working for you. So imagine. And you can also keep that money that you were going to leave in your checking account. You can keep it safe.

Ford Stokes:
You can put it into a 100% financial reserve product like a multi year guaranteed annuity. And have that money just working for you. We've got multiyear guaranteed annuities are paying 5.25% on a 100 grand. That's $5,250. Let's say we round up for easy math. You put enough money in there to get $6,000 a year. That's $500 a month. That buys a lot of groceries. And you don't have to to go ahead and take any loan on that home equity line of credit at all. But at least you have it there and it's there for safety. I would encourage you to go ahead and try to reach out to your local community bank. A bank we bank with here at the Active Wealth Show is the Piedmont Bank, and we can put you in touch with Roosevelt Downs, who's our our folks. We may have her on Sam on the Active Wealth Show here in the coming weeks. I haven't talked to her about it, but I would encourage you to get a home equity line of credit, especially as. Housing prices have risen so much that I think they'll loan up to 80%. On the actual value and you know that obviously less the the mortgage that you've got. But let's say you crept up there and let's say you've got zero money. In a mortgage, you've got you owe nothing on your home. All you do is you pay your taxes each year. Your your property value taxes. One other hint to if you're over 65 years old, in most counties, you can file your homestead exemption, but also you can get exempted out of paying for the portion that is for public school.

Ford Stokes:
And that can reduce your property tax bill as well. I would encourage you to do that as well. So make sure you you take advantage of that homestead exemption and also try to reduce your taxes by not paying for the public school tax portion of your property taxes. But I hope this little tidbit has helped you try to keep a little bit less money sitting in your checking account and do a better job at protecting and growing your wealth in a safe way. I'm not saying go ahead and shove all the money in the market. I'm saying do a better job at keeping it safe and getting a higher rate of return. And now let's talk about our financial term of the week. Our financial term in the week is correlation of asset. Correlation is a statistic. Correlation is a statistic that measures the degree to which two securities move in relation to each other. Also, if you come in and get your free portfolio analysis, that's part of our institutional level, Morningstar analysis will do on your portfolio. So you've got to do is reach out to us at active Worldcom that schedule a consultation button and we'll we're happy to help you understand. Now your assets are correlated specifically to your top 20 holdings. Correlation of assets is crucial for retirees and investors to understand because it directly impacts the diversification and risk management strategies within their investment portfolios.

Ford Stokes:
Here are a few reasons why proper correlation is important. Number one is risk management correlation measures, how to assets move in relation to each other. Assets with low or negative correlation tend to move independently from one another. By investing in assets with different correlation patterns, retirees and investors can reduce their overall portfolio risk. If one asset class experiences a downturn, another may perform well, helping to mitigate losses. And then diversification. Diversification involves spreading investments across different asset classes. Understanding the correlation between these asset classes is essential. If two assets are highly, positively correlated, they move, they may move in the same direction, potentially amplifying losses during market downturns. Conversely, assets in low correlation provide more effective diversification, offering better protection during turbulent times. In Number three is Stability of returns. A well diversified portfolio consisting of assets with low correlation can lead to more stable returns over time. This stability is especially important for retirees who rely on investments to generate income during retirement. By reducing the portfolio's volatility, retirees can better plan and manage their expenses. Here's the deal. If you don't have stable returns and all of a sudden you need to liquidate some assets to get income, then you could really be putting yourself in a bad spot. Come right back after the break and you're going to hear this one financial term that could really help you in your sound financial planning.

Producer:
With soaring inflation continuing to wreak havoc on everyday budgets, there's never been a more important time to cut costs. But do you know where to begin? I'm Matt McClure with the retirement radio network. Powered by a life. There is no question costs have been soaring.

Sharon Epperson:
About one third, 34%, say they are worse off financially this year than a year ago. Almost half, 46%, say they've had to cut household spending due to inflation.

Producer:
Cnbc correspondent Sharon Epperson recently reported on a survey that sheds more light on how inflation has been impacting us all. Even those who earn six figures a year.

Sharon Epperson:
These high earners say the first expenses to go are dining out at restaurants, entertainment outside the home and travel and vacations. More than half also say they'll delay big household purchases.

Producer:
That high inflation has led the Federal Reserve to respond with interest rate hikes. The goal is to increase costs to tamp down demand. Esther George is president of the Kansas City Fed.

Esther George:
Already we've seen the committee's policy actions lead to a very sharp tightening of financial conditions, but.

Producer:
It hasn't done enough yet and costs still keep rising. So what should you do? Well, we have a free resource called 23 retirement cost cutters for 2023. It's full of ideas to help you make the most of every penny. Things like take advantage of senior discounts, eliminate unnecessary subscriptions and cut back on clothing expenses.

Sharon Epperson:
Look at your needs and wants, Figure out what's optional and what you can cut out.

Producer:
The last one on the list of 23 retirement cost cutters for 2023 is perhaps the most important. Seek advice from a trusted financial professional. That's the best way to get in-depth financial advice in retirement planning that's customized to you and your goals. Just make sure whoever you consult for financial advice has years of experience and credibility you can verify. So do you know the best way to cut costs in 2023? That's a key question to consider as our budgets get stretched to the max with the retirement radio network powered by AmeriLife, I'm Matt McClure.

Charlie Kirk:
It's more important than ever for conservatives to stick together. That's why I recommend you to reach out to a fellow conservative Ford Stokes of Active Wealth Management. Active Wealth is offering listeners a free financial consultation worth over $1,500. This free report will show you the fees you're paying, the risks you're taking with your current portfolio and can help you maximize Social Security benefits. Visit ActiveWealth.com.

Producer:
Today Investment Advisory Services offered through Brookstone Capital Management, LLC BCM a registered investment advisor, not an actual client of active wealth management. Remember, all of Ford's listeners receive a free financial consultation just for listening to the show. Visit ActiveWealth.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:
And welcome back Activators The Active Wealth Show. I'm Ford Stokes, Chief Financial advisor. I've got Sam Davis. Here with us is our executive producer. And Sam, our next financial charm of the week is sequence of return risk. And I know that's a term that you're really focused on and somebody that that worries about retirement income for our activators and for our clients. Just your thoughts on secrets of return risk and go ahead and give them the definition. Yeah.

Producer:
So this is something that's really important to understand and I think it ties back well to our quote of the week from Albert Einstein, with compound interest being the eighth wonder of the world, understand that compound interest activators can work for you, but also against you. So here's the definition sequence of returns. Risk is the risk that retirees and pre-retirees face when experiencing poor investment returns early in their retirement years, which can lead to a depletion of their portfolio, significantly affecting their ability to sustain their desired lifestyle throughout retirement. You know, there's a few things that sequence of returns risk will really affect you in these ways, and it's going to be an impact on your portfolio with having those assets significantly reduced early. The long term consequences because a big drop early is going to affect that value of that portfolio because remember, we're all living longer. Your retirement could be 3 or 4 decades long. And this this sort of effect is non-reversible. It's much harder to go back up than it is to go down. You know, I've heard people say the stock market goes up like stairs, but it goes down like an elevator.

Producer:
And so I want to take a look and kind of walk through kind of this chart of various losses and the gains needed to recover. So for a lot of people would assume that if you lose 20% in a down year like 2022 and then you gain 20% back the following year, then you're back to where you started. But because you're working from a reduced principal, you're going to need more gains to recover from losses. So, for example, if you lost 10%, you're going to need more than 11% gain to recover. If you're down 20%, you're going to need 20. 5% of a gain to recover. And this is where it really starts to add up with compound interest. If you lose 30% in a given year, you're going to need to gain back 43% to get back to even. And it only gets worse from there. And so for your thoughts on sequence of returns risk and how pre-retirees and retirees can protect themselves from losing too much too early, Yeah.

Ford Stokes:
So from March zero eight to March zero nine, the S&P 500 lost 50.1% of its value. And so were the people that were in Spy, you know, the Spider fund of of that of the S&P 500. They had to come back 100%, literally 100% within our lifetimes, not that far removed. And also with what's going on with commercial real estate, because not everybody's coming back to work Now, what's going on with credit crunch? And there's over $1 trillion of loans on commercial real estate that are coming due by the end of 2025. That's according to CNBC. And I would just say that could be a time bomb for the economy as well. You've got to be very careful and vigilant about what you're doing. You need to do everything you can to avoid what's going on. Also, the curve from zero eight going back up, we're almost you know, you can see the actual curve. We can actually give it to you from 2000 to 2012 and show the different losses that mean you literally lost. A decade or more. They call it the lost decade from 2000 all the way to 2012. That is a huge loss of time for many people. It would be like over 40% of their retirement where they got zero gains from the year 2000 all the way to 2012. That the S&P 500. Literally came back to the same level that it was in 2000. All the way back to 2012. And so we can't afford to lose that. That kind of time with our retirement, we do need growth on our money so we don't just spend all our money and so therefore, our money can outlive us.

Ford Stokes:
It's a sequence of return. Risk is very important. And also implementing potential bond replacement strategies is another great way to go. When you've got interest rate risk and reinvestment risk with bonds, if you stay invested with a fixed indexed annuity, you can get some market like gains without market risk. That's another one. And I just think you really need to worry about your income and also protecting your principal as well. So again, here's how you can protect your retirement from sequence of return risk. Number one is diversification. Just diversify your portfolio to make sure that you can help mitigate the impact of poor market performance within your portfolio. Number two is getting guaranteed income that you can get that with a multi year guaranteed annuity or a fixed indexed annuity. And also a fixed annuity, including guaranteed income sources like annuities that can provide consistent stream of income regardless of market conditions. It also keeps you from liquidating assets when the market is down, so it really hurts the value of your portfolio even beyond what the withdrawal rate is. Next is an emergency fund. Maintaining an emergency fund outside of the investment portfolio can provide a cushion during market downturns, reducing the need to sell investments at low prices. And if you're tired of worrying about your future and you're ready to work with someone who sits on the same side of the table as you, give us a call or visit ActiveWealth.com and click that schedule a consultation button in the upper right corner. We genuinely love meeting our listeners and helping you get on the road to your successful retirement. Let us help you stabilize and strengthen your retirement plan today.

Producer:
And once again, that number is (770) 685-1777. Or you can just visit our website ActiveWealth.com. You'll find the phone number there as well. If you prefer to give us a call and you can check out our past episodes and learn more at active wealth. Show.com.

Producer:
Your active wealth Market update.

Producer:
All right, ford, we want to talk about some renewed uncertainty in the market. A famed hedge fund manager is expecting some stock market volatility. And that renowned hedge fund manager is Michael burry who successfully wagered against the US housing bubble in 2008. That was a gutsy call that became the focal point of the book and the film. You may have seen The Big Short, and now Burry is betting against the US stock market in its latest 13 F filing with the Securities and Exchange Commission or the SEC. Burry's firm Scion Asset Management, disclosed a substantial amount of put options against ETFs exchange traded funds that track major US stock market indices. Put options In case you don't know, activators, provide the holder the right to sell an asset at a predetermined price. The value of put options typically increases when the price of the underlying asset drops. Portfolio has a combined value of 1.6 billion, and these options account for more than 93% of that portfolio as of the end of June this year. So if you're concerned about the stock market's future, like Michael Burry, there are some investment opportunities there outside the realm of stocks that can protect but also grow your hard earned money.

Ford Stokes:
Yes, you can invest in fixed indexed annuities and track the performance of underlying stock market indices. So we've got access to some great proprietary fixed indexed annuities. We'd love the opportunity to talk to you about that, to be able to get you up upwards of 20% in an immediate bonus into the income account of those annuities. And also there's some really high participation rates. And also you can track the performance of underlying stock market indices with these fees while providing a floor of protection that protects the investment 100% contractually between you and the annuity company is also have a 100% reserve requirement. As we've talked about before. So they have to reserve 100% of the money you give them and they invest in the ten year US Treasury. And then they take interest off of that each year and invest into options in different market indexes. And that allows you to have that market linked index growth. All you got to do is reach out to us at (770) 685-1777 or visit ActiveWealth.com. It's the fire.

Producer:
So let's recap what you may have missed. It's the final countdown.

Ford Stokes:
The final countdown is on this week's show. We talked about two important financial terms for you to understand. Correlation of your assets and also sequence of return risk. And again, if you didn't know a lot about either one of those terms, I would encourage you to go ahead and pick up the phone and give us a call at (770) 685-1777 or visit ActiveWealth.com. We also gave you a strategy on getting a home equity line of credit available Just have it available. Don't necessarily utilize it so therefore you can put more money earning you important interest or you can actually invest in things like a multiyear guaranteed annuity that could pay upwards of 5.25% on a two year multiyear guaranteed annuity from multiple carriers we have access to. And we talked about the importance of minimizing fees within your portfolio and we talked about what's going on with some of the US banks, with the SEC and things that have been publicized or we read straight off of the Yahoo! Finance page and and also CNBC's page today on how the banks have gotten in trouble about overcharging and fees and also just the power of reducing fees and risk within your portfolio. Listen, if you're going to be a bear, be a grizzly, seek everything you can, all the information you can about investing, and also how to plan for retirement so you can build a successful retirement. We're going to talk more about how to build a smart retirement plan when we come back next week. Hope everybody really enjoys this Labor Day weekend And enjoy the college football, everybody. And go USA and the Ryder Cup here in the next 30 days. Have a great week, everybody.

Producer:
Thanks for listening to the Active 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, Ford Stokes at (770) 685-1777 or visit ActiveWealth.com Investment Advisory services offered through Brookstone Capital Management, LLC BCM a registered investment Advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, 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:
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.

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