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We have a great show lined up for you today. We are talking about how to get a decent return
on your safe money. Really important topic
with interest rates where they are. So sit back, relax and enjoy today's show.
Retiring Well with Michael Reese. Providing financial security
in any economy. Today is the day you can take control
of your financial future and eliminate worry about your money forever.
Retiring Well with certified financial planner and retirement
planning expert Michael Reese.
How in the world are you supposed to get decent rates
of return on your safe money? That's a question that
millions of retirees are facing these days and
even if you're not retired it's a question you're probably asking as well.
What I want to do before we jump into this topic
is to first check out what is in the news.
This week in the news
we have from the Journal of the American Enterprise Institute
the title is the "High High Cost of Low Rates"
What they're talking about is this: they're saying monetary using combined with the promised increase
both GDP growth and interest rates would jump-start this
stagnant economy. They're saying the recent Wells Fargo Gallup Survey
that one in three investors report that low interest
rates have forced them to delay retirement.
What they're saying is, about a third of the people that were
getting ready to retire have chosen not to do so.
They have chosen to continue to work because low interest
rates are so low that they can't afford
to retire. Forty-two percent of people
now investing say
that low interest rates have made them doubt
that their money will last as long as they do. They're worried about running out of money.
Nearly forty percent are retirees, those who are already retired
have reported reduced consumption because of low interest rates
What does that mean? It means they're spending less money, they're buying less stuff.
These low interest rates are affecting those who are retired,
those who are working toward retirement
People are desperately looking for answers and one of the big mistakes that people
are making is that in order to get higher
returns, what are you doing? You're out there chasing
risk. You're increasing the risk of your investments
to get better yields. Folks that's a really
bad idea. In fact, that brings up our lesson
of the week. Don't chase risk
to get better yields. Again,
I'm going to say it one more time, lesson of the week, don't chase risk
to get better yields. You know what happens when you do that?
2008 happens. The minute you're chasing risk
you get out there, before you know it, you have a little more risk than you think. 2008 hits
and boom, it all crashes down on you. Well
that's not good enough. That's not how you enjoy financial security in any economy.
What we're going to talk about today is number one,
what doesn't work. And then of course we will share with
you what does work. So, you're really
going to enjoy this. We've got a great show lined up. Coming up, don't go away,
coming up after the break, we're going to jump into the top ten
things that people are doing they think are safe
that aren't safe at all. I think you're actually going to get a laugh out of this one.
Let's talk about retirement income. Studies show that a large
number of retirees are worried about running out of money. Broken promises from
banks, Wall Street and the folks in Washington D.C. may have you worried about your own
retirement security. Secure, predictable income is the key to
protecting your retirement. You want your retirement income to be based
on math, not markets. It's one more reason that now, more than ever
you need to talk to a retirement planning specialist. Why not call the number
on your screen right now. We'd love to talk to you about protecting your retirement.
You've worked your entire life to become financially
secure so you can enjoy a comfortable retirement. But when you get there
what's next? Wall Street and the financial media flood the airways with information about
what you should and shouldn't do. But who are they working for? Who can you trust?
For the past seventeen years, I have
focused on helping people just like you protect and preserve their retirement
security, and during that time, I've identified seven different
lies, each with the potential to destroy the security
you've worked so hard to build. I believe that you deserve to know the truth
and so I've built a website that hosts a series of videos
that's free of charge that you can watch in the comfort and
safety of your own home. You don't want to miss out on these
powerful videos that shine the light of truth on what can be a confusing topic.
Why don't you go there now, it's absolutely free and
you'll be glad you did. www.retirementincomelies.com
You deserve to know the truth.
Let's talk about safe places for money that earn a decent return. You want
your money to be safe. That makes a lot of sense in today's unsettled economy
but everywhere you look, you can't find a place that pays a reasonable amount
of interest. It's frustrating. That's where we come in. Secure
places to earn a decent return are available
if you know where to look. We evaluate them everyday. It's one more reason that
now, more than ever, you need to talk to a retirement planning specialist. Why
not call the number on your screen right now. We'd love to talk to you about protecting
your retirement.
Welcome back to Retiring Well, where it's our job to help
you enjoy financial security in any economy.
We're talking about safe money and how you
can get a decent return. I like to have a good
time sometimes, we all do. I have in front of me what I think is one
of the funnier articles that I have ever come across. Here is what I was doing
in preparation for this show. What I did
is I went onto google, because that's where we do research nowadays.
One of my friends, in fact, recently showed me a picture of a library with a little
caption that says "do these even exist anymore?" with google.
Right? Everybody goes to google for research
So here is what I did. In preparing for the show, I went to google
and I typed in "safe investment alternatives," because that's what people
are looking for, they're looking for alternatives to get
a better rate of return. And when I did that, on the very front page,I got this
great website from the Discovery Channel of how stuff works.
I don't know why they think they know the answers, but apparently they
do. By the way, another lesson of the week might be
don't believe everything you read online. So here we go, these are the top
ten reasonably safe investment
alternatives according to the Discovery Channel.
I'm just laughing thinking about these. We're going to have fun with this. Here we go, number ten:
Art. They day fine art can be a good
investment because historically, the price fluctuations
in the art market don't reflect the ups and downs of the stock market. Now wait,
let's stop right there. We're talking about, remember
safe investments. Safe investments mean your money is
safe. It's protected. It's insured. You don't
lose principal. And already, what do they day in the first
sentence, that there are price fluctuations. Do you know what price fluctuations
mean? It means yes, you could make money, but you also
lose money. It goes both ways. Already they're telling
you, "hey this isn't really safe," so it's kind of the oxymoron
of the world. So, art is number ten. I thought that was fun. Number nine
this one might be my favorite one, number nine:
Investors in fine wines
can expect to make a steady return,
I'm sorry all I can think about when I think of investing
in fine wines. I know what you're doing, you're doing the same thing I'm doing. You're sitting there thinking
Wait a minute, if I invest in fine wines, what happens if somebody drinks it?
How do you fix that? You just drank my
investment. Again, it's like art,
you can make money. I'm not saying you can't make money. You can make
money in art, you can make money in wine. But you can also lose
money. These are speculative investments. They are not safe
alternatives. Number eight: Coins.
Right now, we all now that gold and silver coins are all
the rage. Well, let me ask you this,
Are you old enough that you remember buying
gold and silver in the eighties? Remember buying gold and silver in the
eighties? How did that work out for you? Or if
you know anyone that bought gold in the eighties. You know what, everybody lost
their shirts. Gold was way up here when they bought it, and then it
crashed and burned and stayed down there for twenty years.
I'll tell you what. Can you make money in gold and silver? Yes you can,
but by no means is it safe. Let's go to number seven. So, we've got art,
we've got wine, we've got coins, what could they come up with next?
Commodities. Yeah, there you go
Commodities are safe, right? No, commodities,wheat, corn, grass,
oil, soybeans. Commodities are about as risky
as they get. But they go further,
number six: Private equity. Private
equity, this is where you invest in a company that is not traded
publicly. Now I'll tell you what, I have several clients who
have invested in these private equity companies.
Every single one of them have lost one hundred percent of their investment.
How do you call this stuff safe? I don't even know.
I having lots of fun with this, this is great. Number five:
Hedge funds. Yeah they're safe. Hedge funds,
you know, hedge funds, how is
this a safe alternative. Again, we all know very risky
stuff. Number four: Managed
futures. Now you may not know what managed futures are. Similar to hedge funds,
managed future funds are run by fund managers who
pool investors' money and invest it in various financial instruments.
Basically, what are they doing? They're betting on interest rates movements, which means
sometimes they win, sometimes they lose, same thing.
Safe means your money is protected, it's insured.
This is not protected and insured. It's just
throwing the dice. How about this one? Number three:
Venture capital. We know how well that works out for
everyone, right? Venture capital, a lot of venture capital money went
into facebook before it went public and
the day it went public it then dropped half of its value. Come on.
You could lose money, it's not safe. Financial derivatives are
number two. Option, come one. That's just
a joke. And then the number one safe alternative, according to them:
Real estate.
Talk to the folks in Nevada,
California, Florida about how well that worked out for them.
You know, here's the deal. It's fun to
talk about all these folks, or all these ideas of safe alternatives,
they're not safe. They're getting a little crazy here. It's almost a joke.
What you need to be looking at are
alternatives where your money is safe, where it is protected, where it is insured.
Where you can actually get a decent return on that money.
And I don't want you to go away because, coming up, that's exactly what we're going to
talk about.
Let's talk about a customized retirement plan. Retiring today is not
what it used to be. What works for your neighbor may not be best for you.
Yet everywhere you turn, it seems like financial firms are giving cookie cutter advice.
Your circumstances are different than anyone else's.
We believe a plan should be customized to be fit you instead of trying to squeeze you into
a prebuilt model. It's one more reason that now, more than ever,
you need to talk to a retirement planning specialist. Why not call the number on your
screen right now? We'd love to talk to you about protecting your retirement.
Let's talk about retirement income. Studies show that a large
number of retirees are worried about running out of money.
Broken promises from banks, Wall Street and the folks in Washington D.C. may have you worried
about your own retirement security. Secure predictable income
is the key to protecting your retirement. You want your retirement income
to be based on math, not markets. It's one more reason that now, more
than ever, you need to talk to a retirement planning specialist. Why not call
the number on your screen right now? We'd love to talk to you about protecting
your retirement. And now, ask the expert, featuring financial advisor
Tad Hill.
Today we're talking about how to get a decent return on your
safe money. I'm just curious, in your community
what are you hearing people say is safe out there. What do they believe is safe?
And does that give you any concern, and if so, why?
You know this is one of the most important topics that we can discuss as it relates to retirement
planning, and I want you to remember we are retirement planning specialists so our strategies
planning, and I want you to remember we are retirement planning specialists so our strategies, our
topics are designed to help you understand how to protect
your money in retirement. One of the things that's very common is that people
gold and silver are commodities, very volatile.
I was meeting with a couple from Vestavia Hills a few weeks ago and
they were recounting the experience they had in the eighties where they had bought a lot of gold
thinking the same thing that people are telling us today and then all of a sudden the bottom
dropped out, and it took them twenty years to get back to where they were. Same thing
with things like blue chip stocks. Even Berkshire Hathaway was down
fifty percent in '08. If we're trying to protect our money in retirement, is that really
a good approach. So, given all
of that, what are you recommending
to the people you talk to, when they're looking for having
money in a safe place, but they still want to get a decent return?
That's an interesting question, and the truth of the matter is we have to be very conscious of
what we want your dollars to do because investments are like medicines
they're designed to do different things. So we don't want to put all your money in one place
but if the question is, what are some safe places for your money? The number
one rule of thumb is, somewhere where it won't go backwards. If
the market goes down, if we have a crash in the market, we know that this account
won't experience that. There are handful of places to do that.
You can put your money in banks, governments, insurance companies. That
sort of thing. But we have to look at where can we get a decent rate of return?
So we have to be very selective about the type of
accounts that we use and how it goes about earning interest because
some will do more than others. Do you have anything else that you would like to add
on this topic? One of the core points I want to make here, and I want you
to take away from today's segment, is that once we retire, we've amassed all of
the wealth we're every going to have. Unless you're going to inherit a lot of money,
you've got all of the savings that you're every going to have and you don't forty years to
make it back up. So protecting your life savings really is job number
one. Then we have to make sure that we can generate secure
predictable income that will last for both lifetimes. After we
take care of that problem, we've laid down the foundation of your retirement plan
then we can look at other areas like outpacing
inflation, taking care of estate planning. Investments are like
medicines, they're not all designed to do the same thing, so we have to be conscious of what we're trying
to accomplish
The time has come to share some solutions with you.
When it comes to safe money, and by safe money
I mean where your principal is safe and insured, when you put
your money in you can have confidence that you're always going to get it back.
So when it comes to safe money, where can you put it where
you get a decent return? You know what, there's really only three places that
qualify as recipients of safe money. You can give your money
to a bank. That's CDs, savings accounts, that kind of thing.
You can give your money to the government where you get
bonds, treasury bonds, savings bonds, inflation bonds.
Or you can give your money to an insurance company. Fixed
annuities, life insurance, those types of things.
What's kind of interesting is, back in the eighties, single
premium life insurance used to be a big place for people to put their safe
money. Then it kind of went away. What's funny is, today it's coming back a little bit.
My point is this. You do have options,
but what you want to do is what I tell you all the
time to do. And that is, you want to talk to a retirement
planning specialist, someone who has expertise
in this area. Here is what I want you to do, I want you to call
the number on the screen. And when you call that number, just
let him know, leave a message, say "I want to talk to a retirement planning
specialist about safe options for my money." You'll be
connected with a retirement planning specialist and I promise they will be
helpful for you. You make sure you want to do that. The other thing that you might
want to do, while you're at, is you might want to check out our website,
retiringwell.tv on that site, we have free reports and
one of the reports that I actually wrote is titled "Safe
Investment Alternatives for your Money," and it's right there on the screen
and what I encourage you to do? Go on to the website, you can download that report
absolutely free, it's only three to four pages. Why not download
it? Read it, that way when you talk to your retirement planning specialist, you'll be
better educated as to what your options are.
You know this is one of your areas, like a lot of areas, where you have
nothing to lose and everything to gain. Why not get that second opinion?
Talk to a retirement planning specialist and get some decent
returns on the safe money that you've worked so hard to accumulate.
Coming up, we're going to talk about an IRA Blow-up.
Let's talk about safe places for money that earn a decent return. You
want your to be safe. That makes a lot of sense in today's unsettled
economy. But everywhere you look, you can't find a place that pays you a reasonable amount
of interest. It's frustrating. That's where we come in.
Secure places to earn a decent return are available if you know
where to look. We evaluate them every day. It's one more reason
that now, more than ever, you need to talk to a retirement planning specialist.
Why not call the number on your screen right now? We'd love to talk to you about
protecting your retirement. He folks, Michael Reese here, I am standing with my good friend
Tad Hill. Now if you live in the greater Birmingham community,
I've got to tell you I think you should count yourself fortunate to have someone like Tad
available in your community. Now you may not know this about
Tad, but he and I both belong to a national group of retirement planning
specialists, and we get together two or three times a year simply
to share ideas on how we can help our clients. You Tad's probably given me as many
ideas as I've given him. Now Tad do you mind taking a moment and sharing with the
folks what you specialized in Freedom Financial? Well really the bottom line
Mike, is that we help our clients protect their retirement. Our
strategies are designed to give you peace of mind so that you can live
the lifestyle you're accustomed without having to worry about where your
income is coming from. You know folks if you're in the Greater Birmingham area
and you have at least 250,000 saved for your retirement
I encourage you to call the number on the screen to talk to Tad.
Let's talk about a customized retirement plan Retiring today is not
what it used to be. What works for your neighbor may not be best for you. Yet
everywhere you turn, it seems like financial firms are giving cookie cutter advice.
Your circumstances are different than anyone else's. We believe
a plan should be customized to fit you instead of trying to squeeze you into a
prebuilt model. It's one more reason that now more than ever, you
need to talk to a retirement planning specialist. Why not call the number on your
screen right now? We'd love to talk to you about protecting your retirement.
You've worked your entire life to become financially secure,
so you can enjoy a comfortable retirement. But when you get there what's next?
Wall Street and the financial media flood the airways with information about what you should
and shouldn't do, but who are they working for? Who can you trust?
For the past seventeen years, I've focused on helping people
just like you protect and preserve their retirement
security, and during that time I've identified seven different lies
each with the potential to destroy the security that you've worked so hard
to build. I believe that you deserve to know the truth
and so I've built a website that hosts a series of
videos that's free of charge that you can watch in the comfort and safety
of your own home. You don't want to miss out on these
powerful videos that shine the light of truth on what can be a confusing topic. Why
don't you go there now? It's absolutely free, and you'll be glad you
did. www.retirementincomelies.com
You deserve to know the truth.
Welcome back to Retiring Well where
where it's out job to help you enjoy financial security in any economy.
We've reached the end of our show and
in the last segment of the show, I always like to share a
story of an IRA, a 401K gone wrong.
It's what we like to call and IRA Blow-up.
This
week in our IRA Blow-up story, we have a great
story of a budding lawyer who loses his first case
on his very own. Why do I talk about these
stories at the end of every show? It's because IRAs, 401Ks,
we think, we believe that they're simple plans.
How hard is it, right? You put your money in, you pick your investments,
away you go. How hard is it?
Well, here's the problem. All of these plans have their own little rules, and if you
mess up a little rule, then next thing you know, BAM! it blows up
on you. In our story here, we have the story of John McGovern, this guy
is a Villanova college law student.
So he's a law student at Villanova University. Anyway,
he was working for the federal government. He has a
401K plan, they call it their "Thrifts Savings Plan," it's like a 401K for
federal employees. And he decides he's going to leave his government job and
go to law school, and that's what he does. He's got about
$30,000 in his 401K, or TSP,
the federal government's version of a 401K and what he
does, he takes that money out, puts half of it back
into an IRA, sixty day rollover, he does that properly. The
other half, he spends on his college expenses.
Well, he files his tax return and he says, "hey I
paid tax on the other half," but he didn't pay the ten percent penalty
because he's under fifty-nine and a half, he said, "but I don't owe that because
I used that money for college." Sounds pretty good
on the surface, right? Well, here's what happens. The IRS comes and says,
I used it to pay for college." The IRS says, "we don't agree."
and they take him to court. And so, John here
he is this Villanova Law student, so he figures he's smart enough to go ahead
and represent himself in tax court and that's what
he does. He tells the tax court, he says, "hey guys, here's the
thing, I used the money for college. That's one of the exceptions to the
ten percent rule. I shouldn't have to pay the ten percent tax.■"
plans for the ten percent rule for college. That exception
nevertheless, once having done so, he must accept the tax consequences
of his choice." In other words, "hey, you didn't follow the rules John,
you got to pay the tax." So there you go, that's our IRA Blow-up
The preceding program