Episode Transcript
[00:00:00] Speaker A: 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.
[00:00:18] Speaker B: This is another Money Show. Get set for another hour of the latest financial information and economic news affecting your bottom line. J R and Anthony are committed to helping more Americans like you optimize their income, reduce their tax risk and reach financial freedom. So let's start the show. Here are your hosts, Anthony Correo and JR Ratchford.
[00:00:42] Speaker C: Here we are, your hosts, Anthony Correo and JR Rochford, taking a break from our day to day as financial advisors with Rochford and Associates, a fully independent fourth generation family office right here in Sun City, Arizona to bring you news that you may not hear on those other financial shows. We are aware that the last thing you need is another money show, but we appreciate you being here and hope you had a very, very Merry Christmas.
[00:01:08] Speaker D: So, and the good news today we are actually recording this show on the 17th of December. So you may actually get what exactly what you get on those other radio shows. We really can't do current events, you know, from the 17th until the day you hear this, which be what, the 28th or 29th.ish. So yeah, today we're going to talk a little bit about finances instead of current events. A lot can change between now and next Saturday and we're aware of that. So we're actually, we're going to record two episodes back to back. We're going to record this episode and keep it pretty much financial. And then we're going to record the show that you heard last Saturday. So you are officially traveling through time with J.R. and Anthony and the one and only Sam Davis. Sam, welcome to.
[00:01:52] Speaker C: It's gonna not be on that show too, because I think you're going to talk about Jan and Yellen and how she's apologizing and I think that would have been hilarious.
[00:02:00] Speaker D: That's going to be part of it. Well, maybe you could listen to it later. Maybe you could go outside of your comfort zone and actually listen to one of our shows.
[00:02:05] Speaker C: I do listen to it. I listen when we record.
[00:02:08] Speaker D: I don't, I don't hear it when we record. I have to hear it later. Yeah, yeah, it's, it's kind of. I mean, I hear part of it but not all of it. So anyway, so we hope you had a great Christmas. Like Anthony said hopefully everybody's safe and happy and healthy. You know, we're getting ready to go into 2025. So I, and again, this is hard for me because when we record on Thursdays and you hear us on Saturdays, everything we bring to you is pretty timely. I don't, I mean, we might all be dead. I mean, nobody might hear this show.
Merry Christmas. I don't want to spend the holidays dead. So why don't we jump right into finances and stop my usual ridiculousness.
[00:02:47] Speaker C: Let us be a boring. Another money show this episode. Actually, no, now's actually a really good time because nobody wants to talk about their finances ever towards the holiday. So now that the holidays are over, now it's like, oh, I gotta get my act together is probably what everybody's thinking right now. So it's a good time for this.
[00:03:04] Speaker D: And we, a lot of you don't even know this, but our number one expertise is in New Year's resolution.
So if, if your New Year's resolution is to save more money, spend less money, protect your money, grow your money in that order, any of those things, that's actually where we, we excel. So make sure you set up an appointment, sit down with us. We'd love to be a second opinion. I'm going to, I, I'll still be me today. I'm going to rant a little bit. I'm gonna rant about my industry for a second and then we'll hopefully give you some ideas and some tips and that'll make you jump to your computer and email us or pick up the phone and call us at 623-523-0444.
So you know, everybody that I listen to, a lot of people that I hear, they. This time is different. Have you heard that, Anthony? You know, I mean, the stock market, when you came in the office like six and a half years ago, I believe the Dow Jones Industrial average was around 23, 24,000, which was insane high considering in October of 2007 through March 9th of 2009. They never fixed anything. They swept a whole bunch of things under the rug. I mean, there was a lot of lipstick on that pig. But, you know, mortgage backed securities, derivatives, a lot of stuff that is not good for the financial health of our country. It never really changed. They did, you know, there was the Dodd Frank regulation. So they did put in place officially the rules to do a bank bail in. So, you know, we bring that up once in a while. I do hope you've looked that up. If you listen to us for any Length of time, you know that we want. You familiar with the term bail in and all that means in the 2008 correction, they did a bail out. The government supposedly using our tax dollars, just not the printing press. They, they picked what companies get to stay and they, they picked banks that were systematically important. What, what the. First of all, what does that mean? You know, I mean, if I have money at a bank or a credit union or a loan shark or whatever, that money is important to me. So to me, that institution is systematically important. But the government, who has friends and lobbyists and Jamie Demon and so forth, they decided some banks get a handout, that's a bail out. I'm trying to figure out the difference between.
So, yeah, so a bailout is basically where they take taxpayer money, give it to gm, give it to aig, give it to bank of America, whatever, and keep them afloat. So the scope of things is such now that it's not going to work. There's not enough money. There's no money. I mean, let me tell you that, you know, we have money for all these other countries still.
[00:05:59] Speaker C: Our M2 money supply like quadrupled in four years. So we've got so much money. Stock market only goes up. Jir, Bitcoin only goes up. Everything only goes up.
[00:06:08] Speaker D: Can I, can I clear the air on something? I guess now, the end of the year, you know, fresh start and all this. When I was a young boy, I was the same height, but when I was a young child, my family once in a while used to play Monopoly.
So that's one of the warm memories. So when I knew on a weekend that we were going to play Monopoly, I used to go to the Monopoly box and I'd take a few bills and I'd hide them. I actually used to cheat at Monopoly. And you know why I did that? Because I knew my sister was, it was like it wasn't my idea. I knew she did this, so I thought, if you can't beat her, you join her. And I used to cheat that our whole. I don't know why I brought that up.
[00:06:49] Speaker C: I guess this is the best analogy I think you've ever made for how all of this works.
[00:06:53] Speaker D: It's not.
[00:06:54] Speaker C: I didn't understand before. I finally get it now.
[00:06:57] Speaker D: Well, there's. It's with. This is Monopoly money. And the government, you know, we don't produce anything, we don't make anything. You know, under Trump, are we going to bring back manufacturing? Is that going to be a thing? Are they 100% tariffs on Mexico, Canada, China, is that going to force us into making stuff? I can tell you our workforce is going, you know, you want $20 to flip a burger, how much are you going to want to make Zoloft? How much are you going to want to make life saving medications? So it's going to be interesting to see how this country plays out the next 1, 2, 3, 4 years.
[00:07:33] Speaker C: So you need to stop bashing that minimum wage, though. $20 to flip a burger. Yeah, because you can't afford anything if you're not making that now.
[00:07:40] Speaker D: No, I, no, and I see that, Anthony. What's so funny is you think I see it differently than you and I really don't. I don't know how anybody gets through this world. Right now. I'm 60 and I'm watching and I mean, I have a house. I mean, I can't Even imagine being 20, 25, starting to go out on my own. I have, my youngest son is 20, so he's at that age range where he has to be thinking about his future, his career, should he have kids? You know, does he want to buy a house? Let's say his ultimate goal is the, you know, from the 1950s Rockwell picture the American Dream. He, you want a house with a white picket fence and 2.4 kids. I always wondered about the 4.4 kid. Is it a midget? I don't know what you call them. A little person, Is it an amputee? I mean, what is the point for kids? But anyway, so I don't know how anybody does it. And believe me, I do understand that even if you pay somebody who's 20, 20 bucks an hour to flip a burger or make Zoloft or whatever they're gonna do, they can't get in the house. There's no way. You know, average house in Phoenix is what, $450,000? Sam said four tenths of a child is retriever. Amen. So, and, and I'll tell you what I mean, golden retrievers are a lot cheaper than children. So new, new dream. Get a golden retriever. Sam put on the board a few seconds ago. Sometimes I feel like the stock market is just a graph of rich people's feelings. The. That's, that's very profound, Sam. The, the whole thing with the stock market, it's, well, it's smoke and mirrors. I mean, we've talked about the fact that the Dow Jones industrial average is 30 companies, and when one doesn't perform to their satisfaction, they quietly take it out and replace it. This past year, they took out Walgreens and put in Amazon. We've brought that up a few times.
[00:09:28] Speaker C: So it's wild to see, you know, this is kind of my generations seeing like Sears and JCPenney go out of business. These big blue chip companies. Now we're starting to say Walgreens. Like who would have imagined Walgreens drop in the way that they have in.
[00:09:44] Speaker D: CVS auto parts stores?
[00:09:47] Speaker C: Yeah, I mean, it's crazy because we've played clips on this show before of Jeff Bezos. He's like, these large corporations, like a hundred years, that's about all they're gonna do because somebody's gonna come and replace them. He's like, don't expect Amazon to be here in the next hundred years. Imagine you're saying that.
[00:10:07] Speaker D: I mean, you've played that clip on the show a couple years ago. Was that tied in with, you know, the company is not the stock and the stock is not the company?
[00:10:15] Speaker C: Well, that was a different. I will say, you know, if Amazon, this big equal company, but they've done, they've done capitalism. Correct. And at least Bezos and the bits that I've seen him speak, he seems self aware. Whoever else is very delusional about how all this market stuff works.
[00:10:31] Speaker D: You've seen Bezos bits. So I believe Anthony said you're a big evo company and we are always looking for sponsors. So if we retract that, would you come on board and pay for our show every week? So, yeah, I mean, things are changing. My grandfather that, you know, I mean, in his day and age, you bought a big blue chip stock. There weren't that many of them like there is now. And you held it, you got your dividend, so you got an income off of it. You, you sold it one day and got your money back. But you did what was right for the country. You kept retail going. We really, I mean, manufacturing has been waning for decade after decade. So we have definitely been a debtors nation. We're definitely a consumer nation. I mean, this whole thing works on us buying stuff. So I, you know, and now we've got people in Sun City that are asking us question about Bitcoin and XRP and marijuana stocks. My grandfather would be rolling in his grave. But grandpa, if you are rolling around in there like a hot dog on a QT grill, I got a question for you. I mean, where is JCPenney? Can I go out and buy Montgomery Ward now? Kmart, you know, I mean, some of these big blue chips, they're all gone. I mean, Anthony's Right. Things change, you know, things change rapidly and I think it keeps getting faster. So what do you do? And you know, we're going to get into this, but our whole thing is diversification and moderation. When people say, should I buy gold, Should I buy Bitcoin, whatever. Should I buy whatever? Yeah, sure, sure. I mean, we can help you figure out how much. We can help you ascertain your risk tolerance. Oh, I use the word ascertain. I guess we can bleep that out later. I mean, we can help you figure out your risk tolerance. You know, all financial advisors, we're really, we have, we're really important. We get, you know, we're smart and all this. So we get taught certain things. You know, we get taught the rule of 72. How long would it take you to double your money? Interesting rule. We get taught the rule of 100 when you're new, which basically, if somebody comes into our office and they are 60 years old, you know, and we're a brand new advisor, we don't know much about, you know, the fact that our job is definitely an art, not a science, you know, you, if they're 60, you're going to put 40% safe, 60% growth. If they're 80, you're going to put 80% safe, 20% growth. Following along. If you're 20, we're going to put 80% growth. So a couple things with that. It gives you a great benchmark in general on how to start with risk tolerance. The problem is everybody is different. My father, who is dearly departed, he was 28 years older than me and much more of a risk taker. He was more into stocks and bonds. Sandy and I were putting money at North American Company into fixed annuities. We wanted to protect and grow in that order. So when I say this job is an art, not a science, you really have to figure out what people's stomach and discipline is like. They give financial advisors charts and graphs.
We have the 10 questions, you answer about your time horizon, all this stuff, and then boom, we're a genius. We know where to put your money. So one of the things with that. First of all my observation, after almost three decades in this industry, everybody is an 8 to a 10 when things are going up. I mean, pretty much across the board, everybody's an 8 to a 10 on the risk scale when things are going down. Anthony, you've been in the office almost six and a half years. You've never seen it. That's impossible in light of what's going on in our world and in our country. But you've never seen a down market, per se. You saw literally.
[00:14:08] Speaker C: It's not impossible because I've seen it. I've seen that happen.
[00:14:11] Speaker D: You saw it for 30 days. You got to see the March of 2020, you know, the V. The real deep correction that literally reversed on April Fool's Day. I mean, so. I mean, this. This is insane. And you know what I started out by saying? Oh, you know, people are saying this time is different. No, no, it's not. We are in the biggest bubble in the history of any financial market, any time, any country, any world, ever. And I stand by that. The manipulation is huge. When we talk about the S and P being floated by seven stocks, that's 500 stocks. And yet if you took out seven, the thing would collapse. Give me a break. The Dow Jones 30 companies, you take out one, put in another one whenever you want. It's all manipulated. And then you add things like Apple, iPhones, you know, they're. They. They're being made in India for pennies on the dollar. And then we're, you know, we're paying 1200 bucks or whatever the heck they cost now. It's just this whole thing is weird. And it's not going to go forever. I'm sorry to say that I think you, Anthony, are going to see something way bigger than what I got to see in 2008. You know, I mean, I got to see the tech bubble in 2000. That was pretty significant. I was relatively new, so a lot of it was. I mean, I didn't understand it as much as I do now. Looking back, I think what you're going to get is way worse. You know, we. We are this country. You know, if you have 10 different things that are wrong, I won't bring up the 10 pillars today unless you push me to it. Something's going to give, and it's going to be like dominoes. And I think where our focus is on the financial side, I mean, tell me if I'm wrong, but I think you're going to see big, sweeping changes. You know, what's. You know, what's good for you. You're in your young 30s. You've never been married, no kids. You. You've got a house already. So you. You've got an. You've got a base. You're established. A lot of people your age, they're not established yet. And what I mean, is it going to be when they're 40 that they can afford a house? When I bring up Jay, who's 20, you know, I mean, when the average house is like, what, $450,000 and the interest rate is 6, 7, whatever, it's just, it's, it's dead.
[00:16:25] Speaker C: So it's going to be people inheriting homes. So if you can keep your homes to pass down to the next generation. But that's really how everybody's going to get their own first.
[00:16:36] Speaker D: You're right. It's not how it traditionally has been in this country, but you're right. I mean, I can see the value. So. And, and I mean, I guess that's good for you and Jay. I mean, I'm sick.
[00:16:46] Speaker C: Generational wealth transfer now, too. You do it with life insurance.
[00:16:49] Speaker D: Yeah, and we're. Yeah, I guess I better start moving a little quicker because the main things I want to talk about are generational wealth transfer and I want to talk about income. But to finish up with everything that's going on, you know, you could take the $20 minimum wage to flip burgers and you could put it at $40 an hour. There's no way you're still going to be able to afford the American dream. You can't have two kids and a golden retriever and a house on $40 an hour. That's, that's so the minimum wage. To me, it doesn't really matter. Until the system collapses and things reset, we're in deep trouble. But look at the world. You know, last week we talked about, you know, Germany, we talked about France, you know, South Korea. The world is, is collapsing. Canada, you know, I'm reading this morning again. Today's the 17th of December. I was reading this morning that, that Canada is in deep, deep trouble. They are collapsing. So when you make sure people cash.
[00:17:41] Speaker C: Grab while they can, then things are going up. Now what do we do about it?
[00:17:46] Speaker D: Yeah, no, and the rich always get richer. It's so clear to me. The rich get richer, the poor hover, and the middle class shrink. So all of the people that are very rich, you know, don't forget this past year, 2024, Warren Buffett, Elon Musk, Zuckerberg, a lot of these people sold millions and millions of dollars worth of their own stock. So guess what? They're ready. You know, we, we talk once in a while about commercial real estate. If you HEAR the term CRE, there's 10% is the average of vacancies in commercial real estate. 25% are behind or late on their payments. From what I understand the. And we told you 2025 and 2026, we told you a couple years ago, it's going to start at the end of 2024. And these, they're not going to be able to refinance at these new rates. So Donald Trump, love him or hate him, he's going to be able to buy a whole bunch of office buildings. So is Warren Buffett, so is Mark Zuckerberg, you know who's not me and you and Sam, maybe all three of us could go in on the Empire State Building, if that's still the thing, and buy one. So let's back to finance. I do want to slam my industry for a couple seconds, and then we're going to get into some ideas for you. So, you know, one thing they teach us when I talk about the rule of 72 and the rule of 100, they also teach us. And Anthony, you came into an independent office. You're in a family practice. You haven't had the same corporate training. You know, I mean, I had it through Woodman Financial Services. I had it in the 90s at MetLife. I was actually in Secaucus, New Jersey. Back then, we didn't have quite the drone problem. I wonder if that's going to solve it.
[00:19:17] Speaker C: I don't think I got any training. When I joined your office.
[00:19:19] Speaker D: You really didn't. I mean, and I ignored you because, I mean, I don't even know how you got into the office. I had a locksmith, so. No, I mean, you got a totally different experience. You came in and just started helping clients. I sat with you on appointments. I mean, you did your own studying. You passed your exams. You do your ce. I mean, you do your requirements, but you just came into the industry running, not walking. So some of the corporate training, I mean, it's. You know, they trained me at two different companies that I remember. And a little bit when I first went independent on how to keep people calm, I mean, there was little training. The thing about it's only a paper loss when I tell people they better get ready to hear that again. This unbelievable skyrocketed market is not going to go forever. And when it changes, I think this time it's going to be a doozy. And here come the advisors with their blue suit, white shirt, red tie, highly polished shoes, and their job is to keep you calm. And we're told to do that. So if you're down 20%, the whole speech, it's only a paper loss. This was what was right for you. You don't want to stray from your plan. You're not smarter than the market you know, keep calm. My thinking is, where were these advisors for 15 years when the market's going up with barely a correction or two? Why aren't they saying it's only a paper gain? Why haven't you taken profits every single year for 14, 15 years and put it into something safe for your income, something safe for your generational wealth transfer? Buying a property that's passive income. A lot of people have made enough money over the decade and a half where they could have taken money out of their retirement type money out of their savings, out of their growth and they could have bought a home.
[00:21:05] Speaker C: Are they actually making that money though? Because that's the other thing too. It's one thing for, you mentioned where it was the market was at when I was in the office.
Right. Versus the peaks in, was it the dot com bubble? The peak was what, about 15,000 for the Dow. And then we reached that peak again in 2008. And then since then, you know, when I joined the office, it was, things didn't make sense, but we were in the 20,000 range. It was like, well, we've hit these two other peaks that were devastating when they collapsed and that didn't make any sense. Since then it's doubled. The thing is, I'm not seeing those returns on any statements I'm looking at.
[00:21:46] Speaker D: But you know what you're hearing? All the people we, the number one way we grow as a family practice, second opinion. Somebody says you ought to see these guys, you ought to let them look at your statements. You know, we, the number one way we grow is to see what other people have done before we got to them. Right. I mean, because we're not really going after younger people. We're not buying demographics lists. We are 100% referral. So it's second opinion. And you know what, And I've watched you and you're good at this. You're smart, you're an engineer by trade. You left a perfectly good engineering job to come into this family practice. And you know what you're talking about. So you articulate things to people that make good financial sense. They don't want to hear it. They don't want to capture money to buy an apartment complex or, or a rental property. They don't. They want to keep growing the money. But you're right, they don't have any more money, not to the proportion of what we've seen. I mean, you're right.
[00:22:40] Speaker C: I mean, people taking a lot of risk, not making that much. It's one thing if you're in safe assets. And you're not making that much because of course you're not, but you're safe. And I get that. But I'm seeing a lot of portfolios with a lot of risk that are not making near the returns that you would expect.
[00:22:56] Speaker D: Do you know why?
[00:22:57] Speaker C: That it's eight companies that are carrying the entire market. So unless you've invested in those eight companies and only those eight companies, you're not seeing these returns because the market is not doing as well as it's projected to.
[00:23:10] Speaker D: And do you want to know another reason? Do you know why? I think it's even more important that you're not seeing what you should be seeing. When the market when you started was around 23, 24 and now it's 44, went over 45,000 in a year that we have chaos. A year that we literally should be extinct in the markets. Record after record, what, 57 all time highs this year. It's just insane. You know why? We don't have sports stars, we don't have a niche market of entertainers and people with huge money.
The rich are getting richer. We see middle class. That's our number one market for us. So these people on the radio that say if you've done the heavy lifting and you have at least 250,000 to invest, we don't say that if you have $5,000, we still want to try to help you. We want to help people. We don't ask what you have before you come in for the appointment. We just help people. So we are not seeing. And we do have different levels of wealth. We do have millionaires, we do have different levels. But our thing when you have people with $10 million and up, and I had some of those with my father, we had bigger clients when I was younger. He had the right circles. My father was in Terravita in Scottsdale. He went to a church called Community Church of Joy. There was some wealth in his area. So I went into homes in Scottsdale because they weren't going to come to Sun City. And there was a different atmosphere. We had a heart surgeon and this heart surgeon. I don't remember specifics, but I mean the income was like 5 million a year. You know, we managed over 10 million for just this one man. He was making money. The rich get richer. If you have a lot, you can get a lot more, you know, so it's different.
You know, Sam, Sam put on the board. People need to find out if their portfolio aligns with their personal risk tolerance, appetite. I love that you know, the bottom line of what we've shared this first half hour is if you're in a fog, if you're in a daze and you're not sure if you're positioned correctly, if we do have the biggest collapse since the Great Depression or before, sit with somebody. If you have a good rep and you trust them and they've been keeping in touch with you and they are aware that the world is rife with problems, you're in good hands. If you want a second opinion for us, set it up. We don't have to talk about current events and the articles that we bring you every week in the office. We can stick to your statement. And you know what, the offer I'll make to you is if you sit with us, let's say you have a good representative. We're not poachers, we're not going to steal you. We'll even give you the questions to ask your representative to make sure they're being aware. Awaken nimble with your portfolio because as far as I can tell on this earth, next to your health, your money is the second most important thing and you've just had a 15 year run up in the markets with barely a snag. So I don't know, I just think that the clock is ticking. As Marissa Tomei would say, my biological clock is ticking. So we are getting close to break time. I think I've said enough about financial advisors and shared my feelings that I'm not going to say we are like used car salespeople or timeshare salespeople, but we definitely are in an industry that is very heavy on pressure and quotas. So you can take the most honest advisor in the planet, on the planet, or in the planet probably you want one on the planet. And if they have pressure and quotas, they have to keep your money moving. They have to get your money from you over them and then they have to keep your money no matter what. And usually if they do assets under manage, they have to keep your money invested. With that said, why don't we take a break and then I will stop slamming you and me and Sam and our industry and move on to some ideas and solutions. If you would like to sit down with us, we would love that and be honored to help you again. We are experts at New Year's resolutions. So we are at 623-523-0444 or email us teamnothermoneyshow.com don't forget to check out our YouTube channel. We just got to 500 subscribers. So Joe Rogan, settle down. Joe has been, like, watching our numbers. We're at 500. So that's, you know, for little people that, you know, have no idea what we're doing. We are very lucky that we have Sam and Shelby and Amerilife behind us because they know what they're doing. So we'll be right back. Thank you for being with us. And again, we hope you had a wonderful Christmas.
[00:27:44] Speaker C: Sleigh bells ring, are you listening? In the lane snow is glistening A beautiful sight we're happy, happy tonight walking in a winter wonderland.
[00:27:59] Speaker B: You're listening to another Money Show. To learn more and contact JR and Anthony, visit anothermoneyshow.com.
[00:28:12] Speaker D: Welcome back to another Money Show. Thank you so much for being with us. As you know, we greatly appreciate it. If we can ever help you, we are here. It really reach out to us. If you have show ideas for us. I mean, all I do is, you know, I mean, don't worry about me over here. I spend about 10 hours a week getting ready for the show, but I don't need help. Don't worry. So if you have show ideas, let us know.
On the financial side, again, I mean, we don't have to do what you hear here in our office. We can actually be serious financial advisors for you. So let us know. We'd love to be a second opinion. We are at 623 523-0444 or email us teamothermoneyshow.com so, with that said, I definitely think we should give you a little bit of our mindset on financial planning and see if that resonates with you.
Anthony, I have a question for you. What's first, income or generational? I'm gonna let you pick because it's Christmas time. And by the way, I hope you did your Christmas shopping. One thing that's good about me, as long as I Christmas shop for Sandy, I'm done. Because Sandy shops for you. Sandy shops for the stuff on Christmas. The Magnus. Sandy shops for Jay. So I just. She even shops for the dogs. She's got a Christmas present for Buddy. So. Yeah. Yes, the office dog has a Christmas present.
[00:29:35] Speaker C: So should we actually just talk about wasteful spending? Is that.
[00:29:38] Speaker D: No.
[00:29:39] Speaker C: So make your income go further by cutting out wasteful spending, like buying dogs presents.
[00:29:46] Speaker D: Okay. And let me ask you a question. If you tell me when you're gonna die, I mean, tell me pretty close to when you're gonna die, I'll tell you exactly how much to spend. I'll Tell you exactly how much fun to have. I'll tell you exactly what kind of life insurance to buy. If you've ever wondered, do I need term insurance? Do I need, you know, index universal life? Do I need guaranteed universal? Do I need. Who will tell you all of that? So, and actually we'll tell you all of that anyway, but we'll use actuarial tables. So, you know, a lot of what we do is kind of dry, it's a little bit boring. So, but, and let's get into the life insurance. As long as we're talking about reckless spending. So if you have kids, let's say you have kids, let's use two. You have two kids and you are middle class, modern income, you've always gotten by, you've been able to get into a house and everything's good, you're going to retire one day. So how do you change the trajectory for your future generations? Do you win the lottery? Do you start a business on the side, little side gig and hope it turns into a billion dollar corporation and then sell it? I mean, what's realistic on how to make your kids better off than you? It used to be, it kind of turned. You know, baby boomers are the last generation that are really going to be okay. You know, you look at long term care, the possibility of that need. You look at all the senior communities in Sun City around us, Anthony, some of these places, eight, nine thousand dollars a month. So I'm sorry, but baby boomers, the huge generational wealth that's transferred, you know, to them, that we're about the last generation that's going to have that kind of money coming in. So what do you do?
So we have a solution.
Let's say you have a couple and the woman is in slightly better health than the man, you might want to use her. And let's say you put $1 million of a life insurance policy on her life so she has to qualify medically. So basically she takes out life insurance and you spend every dime, you spend every dime out of your 401k, your IRA, even the equity in your home, you put all that together so you enjoy the fruits of your labor. Of course, at the end, you know, in Sun City, when people get older, a lot of their money goes to doctors. That's no fun. I still think you should travel, take a cruise. You know, do not plan on saving any money for your kids. You worked hard, you inherited whatever, you have this money. But if you know that they're each going to inherit a half of a Million dollars. That is quite a nice start. That might be the way that they get into a home. If you use your home equity, the other thing, it's tax free. Well, take this planning a little bit further because how much is a million dollars of life insurance on the woman? And we understand that you have to look at, should it be term, should it be whole life, should it be universal in the middle, or should it be a combination of those? So we look at all that. Well, here's where we go further. Let's say the kids are in their 20s and they're starting to be, you know, responsible, and they can understand that. We get them involved in the meeting and we start talking about them sharing the premium, you're looking at pennies on dollars. You're looking at paying pennies to get dollars one day. You're looking at the half a million being tax free, which makes it worth More like 750,000 each. And we, we have them help with the premiums. And then eventually, whether it's a year out or two years or five years or 10 years out, they take over the premiums completely. If they decide one child says, well, you know, I can't afford it. I'm not going to do this. Then you modify you, you rearrange the plan in. One might just not care. They might not be able to see that far down the line, and then they're out. You know, the other child might take the whole policy on. Anthony, anything to add to this? I feel like I'm rambling.
[00:33:59] Speaker C: You are rambling. But hopefully people got the point of that. That's what I was like. I don't know, maybe he'll get to that point. Essentially, what we're saying is there's right, two guarantees in life, right? The joke is death and taxes. But death doesn't always have to be necessarily a bad thing, right? There are, there's things that extremely rich families do that middle class families and poor families do not. And a lot of that is based around using life insurance. And life insurance, you know, you're going to hear radio shows and commercials, be your own bank and this and that, and I've never seen any of those actually work. However, what I have seen change people's lives is the death benefit for life insurance.
So if your kids, grandkids, whoever, fund a policy on your life one day, that will pay out and it'll pay out tax free. So you can either fund it yourself, you can have them fund it.
You know, I.
If my family has not the greatest health. So of Course, you know, I've had this conversation with my family. It's a little late for us. However, for myself and for all the families we help that have younger kids with parents that are about my age, we have this conversation. We take out life insurance on people in their 30s. I took out my policy in my late 20s. It's a $500,000 IUL. I benefit from this?
Not at all. This is strictly for if I have kids. And if I don't, it'll be my brother and my sister. They'll get a quarter million each, tax free. But my policy is like $115 a month. Absolutely nothing. So you get started on this early. Now, how this will work is if I do have kids, you know, they'll inherit house, cars, whatever my miscellaneous is. My old investments plus this 500 000. If they are smart, they do the same thing on themselves with all this extra money for the previous generation. So it's a trickle down effect. Unlike the trickle down economics of the 80s, this is a trickle down effect that actually can work, but you have to start the process somewhere. So I wish JR would have done this and my mom would have done this and my dad and you know, and their grandparents.
Oh, I know you had your policy and you cashed out. You can tell that story afterwards. But so I'm trying to be that change. You know, I've learned so much in the six years of joining this office. I was an engineer. I didn't care about my money. I was always a saver. So my investments didn't really matter to me. I just made sure I kept putting stuff away into the banks. I'm still very much a saver today. But I didn't have the forethought and the planning to do something like what I'm just talking about now if it wasn't for coming to work for Junior. So now we're trying to take that knowledge and pass it on to you guys. So Jared, tell me about how, why, why there isn't a life insurance policy to pass down to me one day.
[00:37:11] Speaker D: Yeah, well, in the, the long story, because you've heard it, my father worked for MetLife and he sat down with me and he said, I'm basically buying you a life insurance. You're going to be the insured, I'm going to pay the premiums and then I'm going to give it to you one day and I'll turn it over and then you pay the premiums. It was a base policy. It was a whole life. It was an L98 was the type of policy. It was $100,000 base, but he was overfunding it. So this thing by now, I mean, I don't want to exaggerate, but, you know, at 60, by now, this thing would be worth, I'm guessing 300,000 at least three times if I kept on with the schedule he had. And that would have been all cash value. I mean, that would have been huge.
So anyway, I married a young lady and we. Yeah, and Sam just put tax free. I can't emphasize enough the fact that life insurance, when it comes out tax free, that is huge because Medicare, Medicaid, Social Security, they're all broken. So guess what? Our taxes are going to go up over the years. I know Trump's in office, he's going to extend the 2017 tax program, and I get all that. But even right now, I mean, when you add, you know, say you add $300,000 to your income one year, that's going to be a big tax bill. So tax free is huge. So bottom line, I went through a divorce. I was married for a brief period of time, went through divorce, was angry at the world, angry at women, thought, I don't need this. You know, I mean, there's no reason for this. And I took the cash value that wasn't that much of the time, and I bought a motorcycle.
So, Anthony, instead of you and Jay inheriting large money tax free, you can actually, I gave you a motorcycle. I gave you a 1982 Kawasaki CSR 305. So you're welcome. Your inheritance was done.
[00:39:07] Speaker C: It is that motorcycle you bought. Oh, is that the same one you bought back then? That'd been really funny.
[00:39:13] Speaker D: No, it was, it was a Harley. I mean, it was a decent, it was used, but it was a decent Harley Davidson. It was, it was worth some money.
[00:39:18] Speaker C: Still need to get that motorcycle running. It's on my list of all the other project cars I have wasting away in my backyard.
[00:39:25] Speaker D: Excellent. So, and you know what part of why I don't think we have the conversation as much as we should with people about life insurance. First of all, the last thing you want to meet in your life is a life insurance salesperson. That's, that's probably the last person you want to talk to. And, and that's the, what we're trying to do is use that as a part of a financial strategy or an all around financial plan to get you ahead and get your kids. Okay? If you don't care about your kids, there's no reason to do this, there's no reason to do a 529. If you have a little one and you're like, my parents made me pay for college. They can pay for their own. They then don't do it. We have other ideas. We have. Sam said he would have thought I would have bought the motorcycle first and then gotten the life insurance.
[00:40:11] Speaker C: Yeah, that would have made way more sense.
[00:40:13] Speaker D: And you did it the right way. You got your policy first and then you bought a Corvette, because I've seen you drive, and there's no way this ends well.
So back to life insurance. You know, part of what bothers me in Phoenix, it's in the summer, you don't see it so much. In the winter, there's a car wash on the news. Every weekend somebody's got a car wash because they don't have enough money to bury them, to creamath and whatever. You know, there's GoFundMes. There's all these ways where you don't need to take care of your own situation. Other people do it. We're not talking about that. If you want a $25,000 final expense insurance policy, we do those. We can help you with a burial policy so you never have to have a GoFundMe account. You know, we can help you with that. We're talking about wealth transfer. We're talking about changing the future of your family, inheritance, legacy.
[00:41:01] Speaker C: We're talking about something quite a bit difference. But because of that, I do want to touch on term policies, though, because it is. If you can't afford an IUL and term is all you can do, especially if you have dependents, do a term, do something. You know, we're not gonna. We don't push it hard in this office. Obviously, we discuss it with anybody who sits with us, but that could potentially be a game changer. We're not huge on term policies because they pay out. You know, they're cheap, but they're cheap for a reason, because they pay out less than 2% of the time. The insurance companies are fairly positive you're not going to pass. So they're just going to take all that money and run with it. Now, I have had people that have enough money to do the IUL planning and generational wealth transfer that we've just discussed. And they said, well, Anthony, I was told by Dave Ramsey that I should get a term policy and invest the rest. And I say, why aren't you investing that money now?
Just invest the rest. I mean, you have the money. You're obviously making the money that's why you're in this office talking about what to do with it. Why aren't you investing the rest now? And the answer is, nobody does.
Taking a term policy, invest the rest. Not bad advice. It really isn't. It could potentially work out better. I doubt it will, but. It could. But you won't. Nobody does the invest the rest. They take that money, they, they buy them term, they get the minimum, and then they spend the rest like they do with anything else. Costs go up, lifestyle goes up, things happen, and they never get back around to investing. You have to have a saving mindset. All of this, all the financial advice in the world really doesn't mean much unless you one get lucky or you're a saver. Because we have a ton of clients who have a ton of money who have never made a fortune in their years, but they saved. We've also sat with people that are bringing in 2 to 300,000 a year right now that really don't have anything to show for it. It's incredible. So it's saving, it's a mindset, it's what you need to do. Or you just inherit a bunch of money or win the lottery. So we can at least help you with one of those, because we are trying to win the lottery. Yeah, well, I'm not. I don't buy tickets. J.R. is going to win the lottery and then I will inherit it since I didn't get his life insurance.
[00:43:17] Speaker D: Like my father always used to say, a running motorcycle.
[00:43:20] Speaker C: At least I guess I did get a motorcycle. All right.
[00:43:23] Speaker D: What? My father used to say, your odds of winning the lottery, whether you buy a ticket or not, are identical.
So I don't know how much time we have left, Sam, but let's switch gears a little bit. You know, I'll touch on long term care real quick and then I want to talk for a minute about income. So long term care insurance, the landscape has changed dramatically. So the days of buying, you know, a three or four hundred dollars a month policy, what they're going to do is they're going to take your premiums, you know, for five years or 10 years, then they're going to raise those premiums until you leave. So, you know, we have to have a different strategy when we sit down with you, you know, part of our modus operandi, we're going to try to do asset based long term care. And all that means we're going to look at your assets, we're going to look at what we could leverage if we need to. If you need that sort of care. You know, we're not a fan of these, but you know, in our back pocket we have two different people we trust that can talk to you about reverse mortgages. I've only seen it work out, I think two or three times in almost 30 years where it really was in their best interest. 100%, no gray area.
So the other end of that spectrum, you take care of your spouse, take care of yourself, spend down your assets. And then in Arizona there's a plan called all tax which basically is, you know, the stigma should be gone, that you're on the dole. It's money you put in through your tax dollars and they will take care of you. You're going to lose some of the choice you have if you're self insured or insured through your own long term care plan. But there is help for you. So you can do a reverse mortgage. You can sell your home, downsize into a small condo or whatever and have somebody come in and take care of you. There are options. The biggest thing is don't call US when you're 75 or 80 and say, you know, I think my husband's getting dementia, you know, he just got diagnosed. I mean, we need to do something. Call when you're in your 50s and 60s. I'm going to put the cutoff for long term care Planning at about 68, let's say about 68 is when you really need to have a plan for what you're going to do. What have you saved in your life, what you know, what assets can you leverage? You know, we talk all the time, you can do life insurance or you can do a fixed annuity that has elevated benefits. If you need long term care like you put in $200,000 and if you die, your beneficiary gets $200,000. If you need it for income, you turn it on it for income using your $200,000 plus growth. But if you need long term care, it turns into say 4 to $600,000 for care. So it's leveraged. You know, you leverage your assets and then that helps you take care of yourself. The thing is you've got to know these things exist. You can't just get lucky and run into a salesperson that's going to be honest enough to tell you, do not buy that traditional pay long term care insurance. Here's the whole picture, here's everywhere from self insured to using insurance, whether it's traditional or asset based. And here's altecs, let's let's figure out where you fit. And yes, we're talking about planning for five years, 10 years, 20 years into the future. So that's one of the things we help with. I want to get to the most important thing in our office.
When Anthony says when you put a good base together and you have lifetime income and you have more income than you have expenses, then you can be foolish with your money. You can buy XRP and cat, slap and hawk to it and all this stuff once you have your needs covered. So we think that financial planning is about moderation, diversification. You have your generational wealth transfer addressed. You have your long term care planning addressed. Your income outweighs your expenditures. You know what, let me ask you a question, Anthony. If you have money in stocks, bonds, CDs, let's say you have a quarter of a million dollars in one of those products when you start living on it for income, when you're in your 60s, 70s, 80s, 90s, and you run out of the $250,000 in a stock and a bond, and I'm not even talking about the historic correction I think is coming, let's just use savings. So you run out of the $250,000, what happens?
[00:47:39] Speaker C: You know, like anything, you run out of money. You run out of money.
[00:47:42] Speaker D: You run out of money. What happens if you put that same money in an income plan with an insurance company? Say you're getting $2,000 a month. Yeah, actually, I'm going to give you a little example. We had a client in Sun City and this woman, I don't know, about 20 something years before she passed away, we leveraged some of her money into a fixed insurance company product, a fixed annuity. So she could never lose money. We had growth potential, but she could never lose money. She turned it on for income. It paid out 1900 and something a month for life. So fast forward, actually she had it more than 20 years. Fast forward, she gets to be, I'm guessing she gets to be about 85. Her money runs out. The money she put into this thing runs out. So in any other vehicle that means the money stops. You don't get your 1900amonth, but we put it into a lifetime income product. So she runs out of money at say 85. So she gets 1900amonth. From 85, she lived to about two weeks after her hundredth birthday. So for roughly 15 years, this woman got another 24, let's say thousand a year. I mean, what other vehicle can do that? And a lot of people, they, you know, they've heard Dave Ramsey, Suze Orman, Ken Fisher. You know, the last thing you would ever want to do is talk about insurance company products. Well, you know, I'm always reluctant to even say the word annuity because people are like, oh, I don't want one of those. Well, wait a minute. You know, Tom Hegna comes out of me. Did you, did you, do you take your Social Security? Well, yeah, of course I do. Ooh, you shouldn't. That's an annuity. You put money into this thing. Now you're taking, well, part of it back. That's an annuity. You win the lottery, you can either take half of your winnings in a lump sum or you can take all of your winnings over 20 years. What do you think they put that in? They don't put it into a stock that could cut in half. It's through the state. So they put it into an annuity. So we are a fan of protecting and growing in that order.
What do you think, Anthony? You want to tell me more?
[00:49:53] Speaker C: No. I mean, it's really that simple. And you hit it. You nailed it when you said it. It affords you to take any chances you want, really do whatever you want. Once you have income, if your income is in excess, you know, of your needs, you're just going to build up your savings. If you have all these assets and not enough income, you, there's running the potential to draw down your savings and have nothing at some point.
[00:50:20] Speaker D: So, and I hate to bring it up, but part of, you know, when I'm always so worried about the stock market and who knows? I mean, by the time you hear this, maybe there have been some changes. I think the Santa Claus rally might be different this year. But let's say you're, you're risk averse. You know, you get to your risk tolerance and you're honest about it, and you really are a 3 to a 4, not an 8 to a 10 like everybody is when it's going up. So you put all your money in the bank. You know, first of all, you better have more than one account if you're putting over a quarter million dollars in the bank. On paper, they have insurance. What we're going to explain to you and show you how to find the FDIC, the Federal Deposit Insurance Corporation. They currently have 1.2% coverage on your money.
Let that sink in. I'm not talking about your over quarter million. That's completely uncovered. That's not guaranteed in any way. Unless you're Mark Cuban. Then you're going to be fine again. The rich get richer, the, the poor hover and the middle class shrink. But let's say you have $50,000, 150,000, $200,000 in the bank and we have a modern day run in the banks, which I would say we've been in for years. It just hasn't grown legs yet. And basically banks start going south when the commercial real estate bubble starts to pop. We are probably going to see some of that start happening. The government said we're going to do a bail in. They said that we're going to wash our hands of this and we're basically going to close the doors of the bank like we're Cyprus or Greece. And you are going to have to have your money seized because, sorry, we can't help you when that happens. They're going to come back and say, you knew the terms, you signed the electronic agreement.
[00:51:57] Speaker C: Did you not read the terms and conditions?
[00:51:59] Speaker D: Right when I was a kid, it was pink, white, yellow, you know, legal size paper that you couldn't read even if you were as smart as, you know, you, Anthony. So this, the whole thing is very sketchy. So market collapse, you might lose some of your money, you know, bank, you literally might get 98% of it seized. You know, insurance companies keep 100% reserves on your money, 100% capitalized or they cannot operate. So we want to explain all of this to you. We want to go from your income to your emergency fund, to your daily expense to your three years out, your five years out, your 10 years out. We want to help you all the way through your life, including past your life, into the generational wealth transfer we talk about. And we want to change your life with your finances.
[00:52:50] Speaker C: Wow.
So do we apologize to everybody now that they had to sit through an actual financial show? I promise we weren't going to do this.
[00:52:58] Speaker D: This probably sucks, huh? Yeah, I mean, we're really.
[00:53:00] Speaker C: I'm bored doing it.
[00:53:03] Speaker D: You're bored? Well, I mean, yeah, no, I mean.
[00:53:06] Speaker C: Not nearly as exciting. Hopefully last week was better, but we're going to record that one next.
[00:53:11] Speaker D: I love the articles because they're timely and I talk to a lot of people. A lot of it's messenger and text. I don't talk to a lot of people, certainly. Especially if I have an Android and they have an iPhone. I wonder if that's been resolved by now. It's so funny because most people have no idea what I'm talking about unless you listen to the show or you kind of deep dive into your news. You probably don't even know that the Chinese have hacked our cell phones actively. Well, I have nothing to hide. Good for you. So, yeah, I don't. I mean, I love doing financial planning. I love being a financial advisor. You know why? Because I feel like it's such a dirty industry and I feel like we're very honest and I love what we do. I mean, we help people. One person, one couple, one family at a time. And we do it honestly.
[00:53:57] Speaker C: You know, you have to say honest that many times. I don't know if I can trust you.
[00:54:00] Speaker D: I had a client named George who has since passed away and I said thank you for trusting me when he first became a client and he freaked out a little bit. He's like, if anybody ever says trust me, I run.
Well, we are getting close on time. This is the last show of 2024, so this is it. We are going to be back in 2025 and we, you know, I mean, under Trump, maybe we have to reevaluate and start doing more financial shows. We'll try to make it more exciting than today. We'll try to find some way to make them more engaging. But this is it for the year. You know, I, I mean, I. Boy, I mean it's gone so quick. March will be three years for us.
[00:54:44] Speaker C: Merry Christmas. Happy New Year's. If. If getting your finances in order is a part of your resolution, reach out to us team@AnotherMoney Show.com find us on the web and schedule appointments with us. Straight from anothermoney show.com give us a call. 623-523-0444. That number again, 623-523-0444. We'll see you again in 2025.
[00:55:11] Speaker B: Thanks for listening to another money 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 no obligation consultation, visit anothermoneyshow.com investment advisory services offered through Brookstone Capital Management LLC. BCM. A registered investment advisor. BCM and Rochford Financial 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 involved risk and unless otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results.
[00:55:45] Speaker A: Remember, all of JR and Anthony's listeners receive a free financial consultation just for listening to the show. Visit anothermoneyshow.com to learn more and schedule an appointment. Thanks for listening to another Money show and subscribing wherever you listen to podcasts.
