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This is a snow-bike. It's a dirt bike converted to ride in the snow. Scene 1: In this scene you see people climbing the Wall Street Wall, making their way towards wealth. Most do it without the safety of a rope. Scene 2: When the markets crash, those without a rope will tumble to their financial demise. Moral of the story - "Sometimes you want to climb with a rope." There are ways to participate with market gains, but not lose when the market crashes. Hi everyone, welcome to the wealthy and wise Wednesday for our podcast and video this week, hope you are doing great? Yesterday I believe, yeah yesterday was I am doing this on Tuesday to get ready for Wednesday. Sorry trying to get everything in my mind but on Monday I spent a day up at the mountain riding snow bikes. I don't know if you are seeing this, I will put a picture up just so you can see it if you are watching the video. By the way, I am going to show a few pictures on this as well. So if you are on the podcast make sure you go and take a look at this. You can just go to wisemoneytools.com/35, that will take you right to this podcast episode and if you scroll down, you will be able to see a few pictures. Anyway, the first picture I am going to show you is from the snow biking yesterday, we ride this thing called a Timbersled, and if you have never seen one, what you do is take a dirt bike, so I happen to take a Yamaha 450fx and you take the wheels off and you put a track on the back and the ski on the front and the kit is called a Timbersled and you just can ride in and out of a tree and up and down the mountains and yesterday the snow was, we had about foot and half of fresh powder on top of some packed snow from previous weeks and man you can just fly through there and it was almost like powder sugar, it was so light and flying all around, it was just a great day. So hope you have some fun over the past weekend and enjoy some of your outdoors, wherever you may be. That might be skiing or snowboarding or if you are in the warmer climates. Maybe when swimming to the ocean. Anyway, hope you had a good weekend? I am going to talk to you about you know this market crash has been on everybody's mind and it really wasn't much of a crash, ended up dropping about 9 or 10%, I believe and then it recovered fairly quickly and stand a little bit again but it's got everybody just a little bit worried, a little bit nervous and I thought that I would show this couple scene if you will, this cartoons scenes, I love to have this drawn up because I think they do a really good job of explaining. It is kind of some philosophy or some strategies that you can use. So this first one is kind of scene one of scene two and couple of things that you notice, one is we have got ourselves mountain to climb and this mountain is kind of in shape of the wall street or the New York stock exchange, so it is got to, it is a mountain but it is shaped like the New York stock exchange depicting that everybody is trying to climb to the top of this mountain. What is at the top of the mountain? Well it is wealth, so this is how people feel like they have to attain wealth is investing in the stock market and taking risk and you will notice we got a few climbers, we have got a few climbers, we have got some guys on their way to wealth and some are climbing up the columns in front of New York stock exchange, some are coming up on the backside, some are coming up on the left and the right and just about everywhere. But you notice one thing about them is that they are scaling this wall really without any protection, without any safety, and in this case without a rope. You will notice one guy in the middle, he is scaling the same mountain but he's got a rope and that rope kind of depicts a way to get to wealth without taking all the risk. When you are scaling the wall street machine so to speak and you are doing it without any assistance, without any safety net, then you are basically taking all the risk on yourself and now switch to scene 2. Scene two has a little market crash, a little earthquake if you will, you will notice that the earth has opened up, the rocks are cracked but because of that earthquake or that shakeup in the market price, we have got those that were scaling the wall street wall without any kind of safety net are now tumbling and falling off the mountainside and they have got nothing to cling on to but the guy with the rope, he is still just doing okay. He has made his way to wealth and he has got the rope. So the whole purpose of the story and maybe the caption that should be there is, you can make your way to wealth even with a rope. And it is really true, there are many safe ways toward wealth. It doesn't mean that you are not going to take some risk here and there and take advantage of some opportunities that might come along. But there does come a time, this might be in your 50s, in your 60s, in your 70s but whatever that might be but there does come a time when you want a rope, when you don't necessarily want to give up on making money and growing your wealth but you want a safety net, you want to make sure that if the market does crash, you have got a rope to be hanging on to and you are not going to be wiped out and tumble to your financial demise. There are ways to do that, you know there is a lot of talk out there and literally tens of billions of dollars going into what they call in desk annuity and the reason is because index annuity give you the opportunity to still participate when the market goes up and everything is doing well but he has a rope in the sense that when the market does take its correction or has a crash, you can't go backwards, you can't lose, the worst that can happen is the flat or zero year. I am not going to go into all the new ones and how they work in this podcast and video but I just want you to know that there are ways that you can have a rope. Now, does every financial adviser use them? no. Does every financial adviser like them, love them or advocate for them? No. and for the most part what I have seen out there is those that don't use them or like them are typically your fee-based adviser because you can't charge a fee for people who own an index annuity, so it takes money out of the fee part and as a result, they do not like it. There are three types of annuity, there are a fixed annuity, a variable annuity and an index annuity that I was talking about and you want to know the differences between the three. I am not a big fan of the variable annuity because that doesn't put a rope around you. There is kind of a string and there is some protection but not necessarily a rope and the index annuity certainly have the rope and you can still scale the wall street's wall and still build your wealth as that market grows if it does continue to grow but then have the safety of that rope. A fixed annuity is just essentially that, it is basically kind of like a glorified CD, it gives you a set rate of return and an interest rate. The problem with those right now, you can imagine with where interest rates are and our current economic cycle. It is really hard to kind of get the head in those because the interest rate or the crediting rate are so low. So again, I didn't want to make this so product specific and talk about you know whether or not you should or shouldn't have an index annuity, I just want to kind of to pick that there is a way to still participate in the markets and have the safety net of a rope. [00:09:22] for everyone, of course not, every product has its pros and cons and the reality is there is really no such thing as the perfect product or a perfect investment. There is always going to be give and take here and there but what I would probably encourage you to do is if you are in your five, maybe ten years away from retirement, you have got some money that you just want to make sure it is going to be there, you want to put a rope around it just in case there is a market crash. It is something certainly to consider. The other side of an annuity is that they are originally designed to be an income stream that you can never outlive. They are essentially like a source of security or pension, once you lock in the income, you can never outlive it no matter how long you live assuming you take the live option and you can also have joint live options with you and your spouse so that your income can last through both of your lifetimes. Lot of different ways to go there but again the idea here is just to show that there is a way to protect a lot of your assets if you want to and put a rope around them so to speak in case of a market crash and with all the jitters that are going on now, I mean how many people thought oh, this is another 2000 or another 2008 when we saw the market give back 10% just in a couple of days. You also can see how fast that can change, I mean this literally change overnight and we dropped a 1000 points from 500 points, I mean it is just so quick. In fact, we have the largest single-day point lost, wasn't the greatest percentage loss but it was the greatest point loss in a single day in history. So it can turn fast, so I guess the moral of the story and the moral of this depictions of the cartoon that we got here is that if you are ready to put a rope around you, take advantage of what is going on and take a real hard look at where your assets are and how much you can potentially lose and more importantly is are you scaling the wall street's wall without any safety or protection and could fall to financial peril. You know Warren Buffet and many other analysts will tell you, we typically go in ten years cycle that within that 10years period of time, we have both good and bad years and we have gone Oh wow, almost 9 years without really having a bad year. So we are in our 10th year of really not having an economic turndown and guys like Warren Buffet are sitting on the sidelines with plenty of ropes, they have 105/110 billion dollars in cash. It is not even on the market waiting for some sort of opportunity to buy in when the market does make a correction. So they are definitely harnessed in and protecting their capital and since they are and I say they; Warren Buffet, Charlie Munger and many others like them who use that style of investing. They are again harnessing, [00:13:06] down and not getting too involved in this market because it just didn't have much value there. So it is good, it is good opportunity, maybe a little wake up call, maybe give us the time to look at our portfolio and re-evaluate that we want to put our rope on some of our money and make sure that if the market does take it crash, we are not going to be falling off the wall street wall. So I hope that was interesting and a food for thought, again to see this depiction, if you are listening to the podcast, go to wisemoneytools.com/35 and you will be able to see this depiction and scene and of course, if you are watching on the video you will be able to see them. Well as always any question and specifically about how to put a rope around you, please reach out. I will always reach out to [email protected] and we will do our best to answer your questions just as quick as we can and in the meantime you have a great week, enjoy whatever weather that you have as we move into springtime. All that is going to change in the few months, so take advantage of your winter if you have one. Meanwhile, I am going to ride hopefully again this weekend and enjoy another day up in the snow. So that is it for this podcast and video, have a great week and I will talk to you later, take care.

Hi everyone, welcome to another wealthy and wise Wednesday, glad you can join me today on this podcast and video, hope is going well for you. Today, I am going to spend quite a bit of time on this chart that I was recently given and I think it is pretty telling for a lot of different reasons. You know we have kind of got this mindset that wall street keeps us in, you know a few weeks ago, I shared you that cartoon of how wall street just want to keep you in the traffic, dodging cars, going towards wealth right down the middle of wall street and taking all that risk and those time where it is time to get out of traffic and I kind of want to depict this, showing you this chart because it is critical that there are times in your life based on what you are trying to do and where you are at. Maybe you want to be out of the traffic [00:01:23] and there are ways to do that and unfortunately a lot of advisers' kind of missed this and don't really use this as part of a particular strategy. So let me kind of show you how this chart works, how it looks and then kind of talked about it based on where you are at, what stage of life you are in and some of things that you probably have to concerned about to make sure your money is going to be there when you need and would last as long as you do if not longer. Okay, so I am just going to bounce over my computer and put this chart and we will talk about it from there. Okay what we are seeing here is [00:02:07] industrial average from 1896 to 2016 and you might not be able to read a lot these little, they are basically things that happened and they occurred in the economy [00:02:23] along the way like for instance the one at the very top, number one is it says Ford basically Ford build the first assembly line in Detroit and then as you can go down you can see Russian, Japanese war and you get the Titanic sinking and you get basically all these events throughout history going on but what I really want you to focus on are these recovery times in the given period that we have seen market drops and you can see the very first one going back basically from 1900- about 1906. We had a pretty good market increase [00:03:23] and then about 1906 we had a 19 years' period of time where the market just ran flat all the way to about 1924/5 and then we really started with the market and what basically happened there just to kind of refresh our memory. That is when borrowing and merging first came about. People could go out and leverage one dollar. I can't remember exactly what it is but I think they could get you know 10-1 on their leverage so it might have been 5-1 but the point is you can take a dollar and go buy $5 or $10 worth of stock, so huge leverage was going on and that is what drove that market up from about 1925-1929 [00:04:23] when we ultimately saw the next crash, so basically between 1900 and 1925, 19 of the years were just basically recovery years just going sideways and drop, climb a little and drop and really never got anywhere. When the crash occurred in 1929, that dropped the market all the way back down to levels that we are seeing in early 1900. So it wiped away about 30 years of market and then to get back to where it was in 1929, the recovery time took 25 years, so looking at it from our perspective, if you retire in 1929 or were trying to retire in 1929 and you had a $100000 [00:05:23] it took 25 years for your money to be worth a 100000 again. And again you can see all the different things that went on, we are price controls, we had Pearl Harbor, France Falls, World war 1, let's see what else went on in that period of time, steel workers strike, the Korean war, I mean all kind of stuff are [00:05:49] suffers a heart attack and you can see all the different things that happened from 1931 to basically 1955 and that you know 25-year period of time is when the market just basically was in recovery mode. So a thousand dollars in 1929, took 25 years to become a $100000. Then we fast forward, we had some pretty good years, we recovered and we get out of that until the 70s [00:06:23] and then it looks like about you know '70/71, we had another sideways movement where it takes a 16 years to get out of that trap, so from about 1970 to 1986 and this is where we have got all kind of things going on with inflation and then what else, we got president [00:06:51] we have got the Panama Canal treaties, I mean all kind of stuff going on from 70-87 where we just don't really don't really do anything. So again if you are one of those people looking to retire around 1970 and the market had been doing good for you, you went sideways pretty much your entire retirement time. [00:07:20] And these I might point out is a good time to reiterate what is called sequence of return. This is extremely important to understand if you are going to be retiring say in the next 5,8,10 years and the reason is this, if you happen to retire and you are going to keep your money involved in the stock market at least to a certain extent and you are also going to try to live off of the income, dividends, or distribution of some sort coming off there. What you must understand is that if you take out money and we also have some sort of a market drop, that is like a double whammy and that can just basically get you in the situation where you could run out of money so much quicker than projected. So it is really easy for us to say oh, market goes up 10% on average [00:08:23] so you are going to be fine taking out 5 or 6% every year and you should be just fine. The problem is thinking about retiring in 1929 and everything is great and you got all of these money, you start taking distribution and the market crashes. So the chances of your money lasting throughout your life expectancy just gets more slim when those markets continue to go sideways. Sideways and down is just horrible for people who are trying to live off their money. Obviously if we are in 1970 and you can see that it just basically is up and down but more or less a sideways market for 16 years and you are taking distributions, chances are you are running out of money pretty quickly. [00:09:19] Well we all know what happened but I guess we don't all know and I assume everybody is my age and we know that we had the Reagan Bush years where the 80s and the market just went crazy and all of a sudden we go from about 1980something and almost till the 2000 we end up going up pretty quick and pretty straight. And then here comes all things like the .com [00:09:56] where we end up losing tons like trillions of dollars in the market almost overnight from that but then we recover from it and this last one going back to like 2008, it has been a six years recovery time and then if once again we think about when you potentially retire if you would have retired in 2007 [00:10:24] let's say, everything is looking great and you have got your money [00:10:27] you start taking distribution and then all of a sudden 2008 with the credit crisis and the financial debacle and all of the failures of banks and market just tense and now you have not only taken money out of 401k but also lost about 40-50% of that value, you may not have time to recover and this has been a long 6 years period of time before we get back to where are. And then now we have escalated once again and the reason why this chart is kind of a good chart to look at right now is because of what the market has done this last week or two. Where we have given up quite a bit of growth pretty quickly and again if you are taking money out and spending it, distributions and watching it drop in value [00:11:25] you could again once run out of money before you run out of life. Okay so what is the moral of the story here and what can we do about it. Well this is where we can talk about the type of investments that you can go up with the market but never down and the worst year that you will have are sideways and best or better than that is that even when you decide to lock in an income that you can't outlive that can never go against you no matter what the market do. So you can make sure and insure yourself that you can an income that you can't outlive. In the meantime, if we have a 2008, if we have a 1929, if we have a 2000 where the market drops substantially then we are not going to lose. [00:12:23] Our worst year is the flat year and so we don't have to worry about these huge stock market losses and if the market continues to grow and still go up, we get to participate on the outside as well. Now who is this good for, is it good for a 20 years old or even a 30 years old. It probably not, this is more for people who are within that 8-10 years range before they are going to retire and just want to get out of the traffic, make sure that their money is going to be there for them and then obviously make sure that they have an income that they can't outlive. So those are some important details if you will and things to keep in mind as you near retirement, where are you going to get your pay cheque, are you going to involved to a market and then finally is that pay cheque going to last you the rest of your life? [00:13:25] And I like to use what is called the pay-cheque which is really good but then how would you like to have a play cheque as well or you can just have fun, enjoy life, vacation, go see family and never have to worry about that and just enjoy your play day because remember in retirement for the most part, every day is Saturday and every day is an opportunity where you can enjoy your life and do some fun stuffs if you have a play-cheque along with a pay-cheque, it can make for a very happy and exciting retirement. So I hope this was informative, so you kind of see you know if you are in your 20s and a market crashes, you are probably going to be okay. Maybe in your 30s, you start getting in your 50s and you start thinking about [00:14:18] of 15 years' recovery time. That could get kind of scary [00:14:22] and ultimately if you are within five years of retirement, you may want to be dialing back the risk and get out of that traffic and find better ways to make sure your money is going to be there for you when you retire. So I hope that was informative, kind of really opened your eyes to maybe where we are at and maybe where you should be. So anyway any questions that you have regarding just about anything financial send them to [email protected]. I will answer them just as quick as I can and in the meantime, if you have any suggestions, ideas, topics you want to talk about. Feel free to send those in as well, we love to hear from you and so love the comments and the feedbacks and appreciate it, these podcasts and videos are helping [00:15:15] so that is it for this week, turn next week. Take care.

What can tip the scale to send the market down into a correction or dip? In this episode, we'll talk about how inflation can be a spark to ignite a market burning.

What is going on in the market today? As of 15 minutes before the close the DOW Jones is down nearly 1000 points. This is a special episode and what this might mean to you.

Hi everyone! And welcome to another Wealthy and Wise Wednesday. We're halfway through the week, just a couple more days until the weekend. Although if you're like me, I don't get much of a weekend. Seems like always something going on and it's a time for me to catch up on some of the books and videos that I like to watch to keep up with what's going on in the financial world. Anyway, hope you're having a good week. 00:00:56 I had kind of an interesting experiences last few weeks. I was asked to go on a radio show. It's a financial radio show and talk about some of the things that we do, and one of the things they want to talk about were annuities. And I guess he had seen my video on annuities. Now, just like with any other investment out there, there's no really such thing as the absolute perfect investment. And so, annuities have to fit certain situations to make sense just like any investment, right? 00:01:34 Well, this particular talk show host was of a fee-based financial advisor who doesn't use annuities. And so, he asked me if I'd come on and talk about annuities. And I said, "Sure! I'd be happy too." And a few days later, I get this email saying, "I'm not sure you kind of know what's going on, but I'm not a fan of annuities, high commissions, and long-term investment products that they are," and yada, yada, yada goes on and on about what he doesn't like about annuities. 00:02:15 And I said, "Hey! That is perfectly fine. I think it's really good for the public to understand different investments and how they work and as I just mentioned, annuities are not for everyone. If you're trying to go around and making annuity fit for every situation, you're probably not going to be a very good financial advisor. But for many, it fits perfectly. 00:02:41 I mean, some of the most famous annuities that you know of are pensions. Pensions are basically annuities. Another one that's very famous that you might heard off, it's called social security. Yes, social security is basically an annuity. And annuity was originally designed to build up a capital base and then when it was time to retire, you would start an income stream that you could never outlive. Live to be a 120, live to be a 150. They still have to pay you. So, for many, that makes a lot of sense. 00:03:14 The other thing about annuities is because they're safe, they can't go down in value of at least, well, there's actually one annuity that can, it's called a variable annuity and I stay a million miles away from those. I don't think those fit in hardly any situations, but another topic. Indexed annuities, fixed annuities, safe guaranteed, can't lose money. So again, for some that want to just have some of their money protected, know it's going to be there, know it's going to give them an income stream they can outlive. It can make sense. 00:03:48 For others, it's a horrible investment because it doesn't fit what they're trying to do. And so, I'm perfectly happy to talk about the pros and cons of annuities. That's what I told him. I said, "Hey! That's okay. Throw up the different things that you think are bad about him and let's discuss them and try to figure this thing out and hopefully your audience will learn something. And so, that's how we kind of ended it and I had the date scheduled to do the radio show. And it's actually scheduled for tonight. 00:04:24 But just a few days ago, I got an email from him and evidently, he had looked over some of the other videos and podcasts that we have and how I talk about a lot of different things. And one thing that I talk about quite often is fees and he said, "You know what? I'm not sure we'll do this show because I just don't know if what you're gonna talk about, what I want to talk about." And I said, "Hey! Look, again, if your show is about educating the public, we can come up with some really good things to talk about." And I said, "I'm not, as you know, you probably have seen some of my stuff out there. I'm not a big fan of fees because I think fees are just an annual commission." 00:05:15 And although this whole push in Wall Street is fee-based planning, and you might heard this term, fiduciary. It's just about to drive me crazy because these guys think that if they're a fiduciary, they put this halo on and they can never make a mistake. The idea with the fiduciary is they're supposed to do it's in your best interest. Well, my feeling is if advisors aren't doing what's in your best interest to start, then they shouldn't be in the business and certainly, it should be someone that you should work with. It's beyond me why we had to make a rule. Well, I get it. There are a lot of unscrupulous people out there. So I understand the rule but it's sad, maybe I should say that we had to actually make a rule to say that you have to do what's best for your client. I mean, that just seems so natural and it just seems what you should be doing. 00:06:16 Anyway, this fee-based planning is just killing people. And I want you to think about this for just a second but let's really dissect and get right down to the nitty-gritty of what a fee is. A fee is nothing more than an annual commission, and that commission gets taken off the top of your account every year. Of course, most of them are charged quarterly but you're gonna get charged and it's going to come right out of your account every year. And again, it's an annual commission. We can tie a bow around it. We can put lipstick on it. We can do whatever we want. But a fee is nothing more than an annual commission that's paid right out of your account value. 00:07:00 Now, there's only one way in my opinion that the fee can be worthwhile. One is they're either making substantially more than you would if you just bought the index because they have some amazing approach to investing or they save you big bucks when the markets crash as somehow they miraculously get out of the markets a perfect time so that you don't ever suffer losses. So if they're making up their fee by getting you either a greater rate of return or less loss on the downside, might be worth it. But let me tell you after 30 plus years of doing this, there's just not many of them out there. And no one will tell you they can do that anyway, and if they do, you probably should run. 00:07:52 The reality though is that those fees are going to eat into your ultimate profit, your ultimate nest egg that you're going to take of income in the future. And you might have seen this. So I'll give you just a quick little run down because this is kind of interesting. But if you take three guys and I think actually, Tony Robbins came up with this example. Now, Tony Robbins isn't a financial guy but a few years ago, he wrote a book on managing money and that kind of stuff, and this kind of came up in that book. And what it does is, it depicts three friends who each have a hundred thousand dollars. They each grow at the same rate, 35 years old, $100,000, grown at 8%, and the difference is in the fees. 00:08:43 So what they did is, the worst scenario was, the guy was paying 3% in fees. And I know some of you think, "Well, 3%. That's pretty high. My advisor isn't charging me 3%." But hold on just a second, there's a lot of things about fees you might be missing. There's usually a management fee within the mutual funds that they sell you, then the advisor tax on a fee and then there's about 17 different fees and costs and expenses that you may not see, especially in your mutual funds. So it's really not uncommon and especially, if it's a 401(k). You might have seen some specials on 401(k)s and what's going on there. But it's really not uncommon to be up in in that 3, even 4% range in fees when it's all said and done. 00:09:35 Anyway, so the first friend is paying 3% in fees. At the end that period of time, he's 65, he's going to retire. He has $432,000 left. Okay? And that's what it's grown to. His friend paid 2% in fees instead of 3% and he ends up with $574,000 and some change. Well, that's a difference between those two friends of $142,000. Where did that $142,000 go? Yeah, to the fiduciary, to the guy who's supposed to be doing what's in your best interest. Alright. The guy with the halo on, who's just a fee-based planner and he doesn't take commissions. And this is what's happening out there. They have another friend who only paid 1% in fees. So we got 1%, 2%, 3%. And this guy ends up with $761,000 because he only paid 1% in fees. 00:10:39 Now, don't get me wrong. I don't think 1% is really a good fee. There are so many places out there where you can get down to a quarter of a point or .15% so you can even reduce fees off 1%. Don't think just because this scenario turns out best for the guy who pays 1% that that's actually a good fee to be paying. Most of the time especially for guys just buying mutual funds for you, you can do that. You can buy mutual funds for yourself. You can buy indexes, which typically beat the active managers anyway. 00:11:18 So again, just because this guy only paid 1% and he came out better than his two buddies doesn't mean it's the best scenario of all. But he does have $761,000. He has $187,000 more than his second friend who only paid 2% in fees but he has $329,000 more than the first guy who is paying 3% in fees, almost double. But here's where it really gets kind of interesting, because someday, you're gonna want to take income off of your investments, 401(k), other investments, mutual funds, all that good stuff. And I get asked all the time, what's a good rule of thumb? How much should you be taken off your investments each year? 00:12:08 Well, little bit varies, depending on what you're doing but with the Wall Street Journal after a lot of tests and I won't go and tell the details, say that there's what's called a bullet-proof withdrawal rate and that's 3%. Okay? Now, the idea is if you take 3% of your money every year, you're probably gonna live the rest of your life and have plenty of money. If you take more than that, you run the risk of running out of money before you run out a life. So let's just use 3%. 00:12:36 Alright, so we got the first guy who has paid 3% every year in fees and now he's going to start taking the income off of his $432,000. Well at 3%, that means he's gonna get $12,960 a year in income. Now, if it's been deferred all these years, he's going to have tax come off of that. Okay? Remember, this is getting 8% every year, year in, year out, without fail. This isn't an average. This is an actual return that's a big concept to really understand and grasp as well. 00:13:11 Well, the second guy who's paying 2% in fees and he has $574,000, well, he's going to take $17,220 a year. So he gets about 5, 6,000 dollars more than his first friend. The last guy who is paying 1% in fees who has $761,000, he's going to get an income stream at 3% of $22,830, nearly double what the first guy received. 00:13:49 So keep your fees as low as you possibly can because as you can see, it can make a huge difference in your retirement. But it's my job so to speak to educate and empower you no matter what the product or what the investment is so that you understand it. And as we talk about these concepts over the months and months coming up, I hope you get a lot out of it. 00:14:13 Any questions you have, shoot them to my email at [email protected]. And always want to answer those just as quick as we can. Make sure you subscribe to the videos and the podcasts so that you're always informed and up-to-date and all that stuff that's really going to help you out. So stay tuned for those. And in the meantime, you have a great week and until next week. Take care.

00:00:29 Hi everyone! And welcome to another podcast, another video on this Wealthy and Wise Wednesday. Hope you're doing great and ready to finish out the week strong. 00:00:41 So I've been thinking about this concept for quite some time, and the concept is basically, how we're persuaded to invest and save by called traditional financial advisors. And as I thought about this and thought about this and thought about this, I came to the conclusion that one the best things I could do are have it drawn up in kind of a cartoon. 00:01:14 So I want you to see this cartoon. Obviously, if you're on video, I'm going to be showing it to you here in just a second. But if you're on the podcast, make sure you go to wisemoneytools.com/30 so you can see this cartoon. Although I'm going to do my best to kind of explain what's going on here and the reasoning behind this. I think it would be great if you can take a look at it as well. 00:01:46 So here we have this cartoon picture and we're downtown New York on Wall Street and we have you as the investor running down the middle of the street dodging all these cars and these cars are market crashes in inflation and interest rates, in risk, in fees, just to name some of the more obvious risks that we take when we're investing in the traditional Wall Street fashion. 00:02:21 Others are income for life and where that's going to come from, the sequence of return, deflation, I mean there's a whole slew of cars that could be on this thing as well. And you kind of ask yourself, well, why is this guy or why am I running down the middle of Wall Street and dodging all these cars? That's essentially depicting that we're the ones taking the risk when our financial advisors push us toward investing in markets and speculation and all that stuff. 00:03:00 And, don't get me wrong on this, because I am an investor. I like investments. I'm not opposed to investments in any way, shape or form. I'm kind of opposed to the traditional methods in which they're purchased because it does, it just sends us into traffic right down the middle of Wall Street, dodging all these cars, hoping we're going to be okay in the end. And you'll notice at the end of the street, you'll see this, the kind of a pot of gold is wealth. 00:03:36 Now, wealth is…it's kind of an arbitrary word because it means different things to different people. So I kind of like to define wealth in one kind of succinct sentence. It's hard to say. One succinct sentence and that is wealth gives you the ability to do what you want, when you want, without having to worry about running out of money. And again that number may be different for everybody who's listening out there but that's kind of the goal in life, to get to a point where we can sustain ourselves, where we can retire and be able to do what we want, when we want, and not have to worry about money. 00:04:27 And of course, we want money to last at least as long as we do. So that's kind of the definition of wealth. So you got this guy running down the middle of Wall Street, dodging all the risks and things that we had to deal with as investors on their way to wealth. But what you might not notice right away is what's going on, on the sidewalk. 00:04:50 You notice there are people on the sidewalk, out of traffic, and they too are making their way towards wealth. And some of these people that might be on the sidewalk are some of these great investors like Warren Buffett, Charlie Munger, Mohnish Pabrai, and Guy Spier, just to name a few. There's plenty of them. Many of them like Carl Icahn and Ray Dalio. I mean, great investors. 00:05:26 But what they do is they are able to get their way to wealth and on the sidewalk, out of the traffic, out of harm's way because of the way they do their investing. See, most of us are really just speculators. We don't know why we invest in things. We don't know the purpose, the rationale, and the supporting numbers. We tend to just take a financial advisor's word for it and we jump in the middle of the traffic. 00:06:00 What's interesting and the sequence or the sequel to this cartoon is the next one where you in the middle of the traffic are trying to get on the sidewalk. You notice that there's a lot of people getting to wealth on the sidewalk. And so, you want to be on the sidewalk as well but every time you get close to the curb, your financial advisor who does the traditional style investing pushes your back in the middle of the street and says, "No. You'll never get to wealth if you're not dodging all this traffic." And all you want to do is get out of traffic. 00:06:41 And so, what obviously this leads to is there are ways to get out the traffic. In fact, you know who else is on the sidewalk out of the traffic? Chances are it's your financial advisor. Certainly, all the Wall Street Executives are walking on the sidewalk because you're paying the fees so that they can walk on the sidewalk. 00:07:06 It's interesting but there's been a study on mutual fund managers. There's not very many of them who actually put their own money in the fund that they're managing. Now there's been an argument that well, that's because if they had their money in there, it would cause emotion and they might make decisions based on emotion. But the reality is it doesn't matter. That's a horrible rationale. If these money managers who are supposed to be so awesome especially in these mutual funds aren't even managing their own money, they're walking on the sidewalk so that you can keep paying your fees. You take all the risk. They have no risk if the market goes down and they can slowly and just methodically walk on the sidewalk towards wealth. 00:07:57 And so, we want to be on the sidewalk. That's the easy way towards wealth and there are certainly ways to do that and it's kind of the stuff that we've been teaching, that you keep your powder dry, that you keep your capital in a place where it's accessible, that eventually, opportunities are going to come along where you can walk on the sidewalk and safely and predictably grow your money to even a greater extent on your way to wealth. 00:08:29 So if we start looking at the oncoming cars. But if we look at those oncoming cars and the different risks that we take, we're at different stages in our lives. For instance, if we're in our 20s and 30s, maybe market crashes aren't going to be that impactful on this but they're amazingly impactful. I mean, crush us, run us down. If we're 5, maybe 8, 10 years away from retirement and a market crash occurs, we may never recover. I mean, even in this last so-called recovery, it's been a great number of years. I mean, they've been fantastic, but it took about the first 7 or 8 of those years of recovery just to get some of these people back to where they were in 2008. 00:09:27 The one constant that kills us, that kills everybody is those darn fees. And I hope you've listened to my podcast and watch my videos on fees because that is the killer, that's what keeps Wall Street execs on the sidewalk and you in the middle of the road right in the traffic. So as you near retirement, as you get to that 5, 7, 8, 10 years from retirement, this is when you want to start getting out of traffic and at least get on the sidewalk with some of your money so that it's not at risk. 00:10:04 In the meantime, if you're young and you're growing, building wealth inside of a location or a vehicle where you don't have to stay in the traffic, where you can keep the powder dry, where you can have access to it for opportunities, where you can stay on the sidewalk and then when those opportunities come along and like Warren Buffett says, when it starts raining gold, you can go out with a washtub instead of a thimble. When you can start buying $10 bills for $5, that's when you want to get your money involved and have access to capital. 00:10:46 So I hope you take a good long look at this cartoon depiction. I think you're going to find it interesting and there's a lot of stories that can go behind that. But the main thing is that you don't have to stay in the traffic. That's where Wall Street want you, that's where your financial advisors, for the most part, want you. And so, if you can find a way toward wealth on the sidewalk, you've got a much easier path to getting there. 00:11:16 So I hope this has been helpful. I hope it's been kind of an eye-opening as well. And like I say, take a good long look at that and see where you fit and see what kind of risks might be coming your way. And then hopefully, we'll have a sequel to this. And again, in terms of how the financial advisors just keep pushing you back into traffic when there comes a time when you just want to be out of the traffic. So, well, until next week. Take care.

Dan Thompson has Justin Walker and Jeremiah Vickery with him on this podcast. We talk about some of the financial mistakes we made when we were younger. 00:00:31 Dan: Hi everyone! And welcome to our Wealthy and Wise Wednesday podcast and video. Today, I brought Justin Walker. 00:00:39 Justin: Hi guys! 00:00:40 Dan: And Jeremiah Vickery. 00:00:41 Jeremiah: Hi everyone! 00:00:42 Dan: On the podcast and video today, these guys head up the financial planning arm of our team and they do awesome job. But it is fun to talk about the old times and mistakes that we've made so I thought this will be a good opportunity to get a sense that not everybody goes through life making the right financial decisions even quote and quote… 00:01:14 Justin: Including us. 00:01:15 Dan: Yeah. 00:01:16 Justin: Including us. 00:01:17 Dan: Financial advisors. So we're going to talk about some of the mistakes that we've made and I'm going to let Justin start it off. Tell us a little bit about maybe some of the financial mistakes that you've made early on in life. 00:01:30 Justin: Well, I remember when I got into this business, I literally had like fifteen hundred bucks to my name and I had some people tell me, you're young, take advantage of these opportunities and if you fail, it's okay. There were several times where I was living on credit cards, just trying to make ends meet just so that we could pay for school, clothes or food or whatever for our young family. There was a time that I looked at my wife and I said, "We have like $70,000 of credit card debt." 00:02:08 Dan: 70? 00:02:09 Justin: Yeah. 00:02:10 Dan: 70,000. 00:02:11 Justin: Yes. 70. I either got to make it in this business or we're going to have to go find something else and it was really stressful at that time, but my wife said, "Just buckle down and go to it." That was wise counsel because instead of worrying about it and almost letting it debilitate me I was able to focus on it and work on that debt and get it paid off within a shorter time frame. 00:02:39 Dan: So moral of the story. Don't live off credit card debt. 00:02:42 Justin: Don't live off credit card debt. I actually made a living, I didn't really make a living on it but I moved credit card from one credit card to the next, keeping zero percent on those credit cards for a year or two. 00:02:54 Dan: As often as you could. 00:02:55 Justin: Yeah, until I was able to pay them off. 00:02:56 Dan: Ugh! 00:02:57 Justin: Yeah, not a fun time. 00:02:59 Dan: This thing over your head, huh? 00:03:00 Justin: Yeah. 00:03:01 Dan: How about you Jeremiah? 00:03:02 Jeremiah: Well, to add to Justin's story and I think all of our clients come to us because they eventually realized that they don't know everything there is to know about money. And the reality is how did we get really good at our jobs? Well, we've made mistakes that a lot of people out there have made and we're trying to help clients get out of those mistakes and just like Justin's story with the credit card debt and then coming up with a balance transfer idea. All of those are strategies that came on the fly, that are now part of our criteria when working with clients that are in a debt consolidation mode. Our goal is to try to help clients get to more financial freedom, have more control over their finances and eventually their time. And I think one of the stories that I would like to share is just becoming over-extended in a specific market area. For me, that was about a decade ago with real estate. The real estate boom through the early two thousands I had just come out of college. I had a great paying job and I didn't know anything about the markets. I mean I had a Scottrade account. I had a few people talk to me about insurance but the one person that we trusted in our family was a real estate professional and she had advised us that we need to put all of our money into real estate. And so, that's what we did. We started buying a real estate. And that worked really, really well until 2008. 00:04:19 Justin: I was going to say that's a decade ago. That's 2008! 00:04:21 Jeremiah: And then things got really hard when we decided that, you know what? We want to try to get some of that cash back and we went from what looked like on paper and you guys we'll learn this as you listen to more podcasts about realized gains and unrealized gains or realized losses and unrealized losses. We had a lot of unrealized gains. Have you ever thought about all of the profit that was sitting in the house, the equity that you have in a business venture or something like that? Well, none of it is real until you sell it. And we found out that the hard way, that when we wanted to go to sell our real estate in 2008 and 2009, no one wanted to buy it. So my lesson in life was don't become too overextended in any one area. 00:05:03 Dan: And that's funny that you mentioned that because so many people look at their statements from month to month, no matter if it's real estate or the stock market or whatever, and once they see that high, that's what they think they're worth. 00:05:18 Justin: Right. 00:05:19 Dan: And that's what they think they can grab and then a market correction comes along and those losses set in or like you, you could sell that real estate and all of a sudden, because nobody typically gets out at the absolute height and times perfectly, all the profit they could have gleaned out of that investment. But if you see it on paper at any given time, you think that's what it should be worth. Sadly, most people just ride their roller coasters up and down. 00:05:52 Jeremiah: Well, where the value in working with advisors like us and Dan come from is, we have that non-emotional connection to the decisions that we help clients make and I think that's one of the key differentiating factors when dealing with clients—is that every decision that you make with your money is an emotionally charged decision—that sometimes why it's so hard to make a decision. Having us help clients through that process, help guide them, really gives them the confidence to pull the trigger. 00:06:25 Dan: Well, we all live off of the two main emotions, greed and fear, right? We either do things because of…And greed is probably the wrong word but desire for gain, let's just say. 00:06:37 Justin: Yeah. 00:06:38 Dan: Those two driving emotions can make as make a lot of bad decisions a lot of times. So you're right, we got to do some of this stuff unemotionally. Wait, so when I'm a young guy, I'm just married. I need a car, right? And I hate to beg on my dad's especially since he's passed away. He is a great dad but didn't know much about money. And we were never taught anything about finances. So he says, "Oh, you need a car. Well, let's just go buy one." And instead of looking for something that was just really inexpensive that we could maybe pay cash for, he says, "I'll even cosign." 00:07:27 Justin: Awesome. 00:07:28 Dan: So we go buy this car that's way out of our league especially that I don't even have a job. I mean, we're just barely married. I'm trying to figure out what I'm going to do in life. And we go sign up for this 5-year note on a car that's something we shouldn't even be driving just it's a nice sports car, it's kind of fun. He's a cosigner and I'm strapped with this payment now for five years. And oh my gosh! It was just the most horrible decision that we could have made. That could have been a car, but sadly, I see it now with student debt. 00:08:07 Justin: Oh yeah. 00:08:08 Dan: These kids that are just strapping themselves down with tens of thousands of dollars in debt not really knowing what they're going to do and how they're going to get done with that debt. 00:08:17 Justin: Yeah. 00:08:18 Dan: I think it's just kind of a crime but whether it's cars or credit cards, I didn't even have good enough credit to get a credit card. 00:08:25 Justin: Well, I was surprised, I did too honestly. 00:08:28 Dan: So I could not have lived off a credit card if I wanted to but we just lived on rice and beans. 00:08:33 Justin: Barely made my credit better because I kept transferring them back and forth. Who knows? I don't know. 00:08:38 Dan: Oh man! Well, so than fast forward a few more years and I'm finally making fifty bucks a month or something. I don't know, not much. I'm barely making enough… 00:08:45 Jeremiah: Don't thank yourself, Dan. Don't thank yourself. 00:08:47 Dan: Yeah. That's right. Yeah. And I'm really struggling and I'm behind on car payments, right? 00:08:55 Justin: Yeah. 00:08:56 Dan: So I go over to my in-laws and I say, "Hey! I'm pretty sure the repo man is coming after my car. Can I hide it in your garage for a few days? Until I can muster up the money to catch up on some payments. So we did that for a few weeks. Drove it in the day and then hit it at night. Oh my gosh! 00:09:17 Justin: That's stressful Dan. 00:09:18 Dan: It's very stressful. 00:09:19 Justin: Wow! 00:09:20 Dan: So moral story in my case, don't. First of all, cars are the biggest waste of money. But if you have to have one, get something you can just get it done with. Buy a $2,000 car if you have to and just get it done with quick and don't strap yourself with five or six years of payments. No matter who's going to cosign. You know what's funny? Because you think we learned our lesson on the car right? Go a few years forward and now I'm really going to date myself because we were VCR people. 00:09:54 Justin: Nice! 00:09:55 Dan: We didn't have DVDs. So we the VCR. And there was one portable one that you could pull it apart and you could carry it around and you could hook up this monster camera and then you can record at family get-togethers and all that. So I wanted this VCR. It was a thousand dollars. And a thousand dollars than would have been ten thousand, right? 00:10:23 Justin: Big payments on that back then. 00:10:25 Dan: So I made payments. 00:10:26 Justin: Right. 00:10:27 Dan: Fifteen bucks a month. And sad to say, I got behind on those a few times. I had to refinance that. 00:10:32 Justin: You know what? I think they created layaway for guys like you Dan. 00:10:35 Dan: Yes. 00:10:37 Justin: No, that's why layaway doesn't exist anymore. 00:10:40 Dan: Oh man! The thought that I bought a thousand dollar VCR on payments and had to refinance that with a 35% interest guys, as we went along. I mean it was just some bad financial decisions. 00:11:00 Justin: We all do it, right? We all do it. The emotion gets the better of us and we find ourselves a little bit of a fickle sometimes. It's good to remember those things I think in the long term. 00:11:12 Dan: And to teach your kids. 00:11:13 Justin: Yeah. 00:11:14 Dan: That's one thing I can say. My dad was a great daddy, just didn't know much about money and he didn't make much money. Almost everything I learned about money I had to learn the hard way. 00:11:27 Justin: Yeah. 00:11:28 Jeremiah: Well, I think most people do and I think the key strategy there that we've all maybe picked up on as faster than other people is just don't make that same mistake twice, right? Fool me once. 00:11:38 Dan: Right. 00:11:39 Jeremiah: But don't fool me twice. We've all learned our lessons from those mistakes in life but it's not repeating them that has allowed us to become successful. 00:11:49 Dan: Yeah, I remember being new in the business. I was probably maybe a year into the business, things were finally starting to get moving and things were going well and I met with this couple. And he was 63, going to retire in a couple years. We sat down, looked at everything. Talking about a wakeup call, it's almost heartbreaking for me as well because these people, you think $70,000, they had $90,000 in credit card debt. 00:12:23 Justin: That's crazy. 00:12:24 Dan: Plus, their house, plus a couple of cars and they were going to retire in two years. And here's a guy, we're talking about the early eighties, he was making a hundred thousand dollars a year. Could not figure out a way to manage and save. And I just looked at him and I said, "I'm only at this a year. I don't know what to tell you. I don't even know how to get you out of all that debt in two years so that you can retire." But it actually was really good for me in the sense that I said, "Man, I don't ever want to be in that situation." 00:13:00 Justin: Yeah. Well, I had a similar situation, not about the debt but just not being able to keep track of their money. They're moving from across the country and when they got here, they'd sold their home for around $150,000 probably of equity and across the country in their move they stopped and had vacation and they got here they only had $25,000 that they thought they had been robbed. They thought that they had literally somebody got into their account and took their money. We started looking into it a little bit more and they had spent every single penny of the 125,000 that was missing. They had spent on stuff. 00:13:37 Dan: Just not even knowing what's going on. 00:13:38 Justin: Just not paying attention. 00:13:39 Dan: Ugh! 00:13:40 Justin: Yeah, so I mean, there are all kinds of those stories that we see and it happens to each of us in different ways but it's important to keep track of that, to see where it's at. 00:13:49 Dan: Well the other thing I wish I would have done early on, so if I could go back and rewind time, first of all, I wouldn't have bought that car and I would have used some of that money for car payments and invested earlier even if it was twenty or twenty-five bucks a month. I wish I would have invested earlier into something. So I think if there's anything to come out of this, I would say that the biggest mistakes that more people make than not is they get into debt too early. It takes them too long to get it paid off before they can start investing. And as a result, they missed sometimes 5, 10, 15, 20 years of compounding and growing their money because it's all going to the bank or other financing institutions and credit cards. And that could be money they could be having in their pocket and in building their wealth. 00:14:46 Justin: Yeah. 00:14:47 Jeremiah: That's true. 00:14:48 Dan: So anything else guys? Any other big glaring mistakes you made in life? 00:14:54 Justin: Oh there's lots. I don't know if I should share them here but I agree… 00:15:00 Jeremiah: We don't have time. 00:15:01 Justin: Yeah, we don't have time for all the mistakes that we make but I think it's just important to realize that everybody's in the same situation. On Facebook, on Instagram, you always see the best situations of every individual and you're not seeing the despair and the hard times that they're having in life and we all have them. We're all there and I think it's good to realize that we're not alone in anyone's situation and we don't have to be super secretive about our money. There are lots of people who have been through it and they can help you walk through those situations and make it easier. 00:15:32 Dan: Yeah. Well, do yourself a big favor. If debts a burden, we can even give you some really good ideas and some spreadsheets and some ways to knock that out as quickly as possible. Obviously, saving and investing early on in life is going to give you a leg up as you get out 10, 20, 30 years from now. So certainly, be thinking of that. But just take this time especially to begin the year to think about some of the objectives you want to accomplish this year and whether that would be to eliminate debt or just to be a better saver or to learn how to handle and manage your money and learn about different investments and investment tactics. All those things would be really good things to do for 2018. 00:16:19 Justin: Agree. Knowledge is power. 00:16:21 Dan: All right, perfect guys! Well, thanks for joining me. You guys are going to see and hear a lot more from these guys as we go along but is good to have them with me today. You guys have a great Wealthy and Wise Wednesday. And by the way, as always, any questions you have, shoot those to [email protected] and I'll answer them just as quick as I can. Otherwise, have a great weekend. We'll talk to you next week! Take care!

Why Annuities Seem Confusing Hey, thanks for joining us on this podcast. Before I forget, I'd love to hear from you. I get questions all the time from our listeners and viewers, but what I'd like you to do is send me a topic or two that you would like to hear more about on a future podcast. Go ahead and send your suggestions to [email protected] and in the subject line, put TOPIC. Okay, great….look forward to hearing from you. I know one topic I get asked a lot about is annuities. There is a lot of noise out there, both pro and con regarding annuities. I've always been of the mind that there is no such thing as the "perfect" investment. Everything we can invest or save in has its pros and cons. What happens way too often is advisors just sell without regard to an investment being a good fit. I can tell you, if an annuity isn't right for your situation, it will be a lousy investment for you. If it fits your situation, it can bring a lot of peace of mind to your finances. So first off, it has to fit. I'm the first one that tells a client if it's not a good fit. There is no need trying to pound a square peg in a round hole, it's just going to be a bad experience. I'd rather not do any business than bad business. Okay, now that you know that any type of annuity needs to fit, have you ever looked at one? Do they seem confusing? Well, they don't have to be. I'm going to give you the simplest way to understand annuities, and more if you answer just a few short questions, you'll be able to determine if an annuity should be something to look at or to avoid. You know the worst thing that you can ever do is get an investment or a product that doesn't fit. It's like trying to pound in a nail. A hammer would be a useful tool, but somehow you ended up with a saw, and it' just doesn't do the trick. There really is no such thing as the perfect investment. However, you can come close if the investment meets the majority of your objectives. Annuities are no different. They can be the worst thing for some, and the best thing for others. So, what is the basic premise an annuity? There are two words Safety and Income. That's' it, if you someday want income you can never outlive, it might be a fit. If you are tired of playing the traffic on Wall Street, that may be a good fit too. Now, three are basically three types of annuities. Fixed Fixed Indexed And Variable. They are all annuities, they all have the option of generating income you can't outlive, but they differ in how the annuity company grows your money. For instance, a fixed annuity is more like a bond or a CD. Each period gets a specified interest rate credited to your value. The period can be 1 year or as long as 10 years. A variable annuity is invested in the market and you can go up and down based on the market returns. In a variable annuity, you take all the risk and can lose money, whereas the fixed and the fixed indexed annuity you cannot lose money due to the market dropping. An indexed annuity participates with a market index, such as the S&P 500, when it goes up, you go up, but you cannot lose money when the market goes down. How do you know if one or any of the different annuities makes sense? Here are a few considerations. There are three types of investors which one are you? There are Bulls who only see the market going up – then there are Bears who only see the market going down – and there are those who are a cross between a bull and bear who simply don't know. These crossbreeds are the most common. Bulls think the markets are going up and there is money to be made. They don't fear the market and aren't worried about the ups and downs of the economy. Bears have no confidence in the market, don't think the market will ever go up again and just want some kind of return on their money that they don't ever have to worry about. Crossbreeds aren't sure what's going to happen. They aren't necessarily bullish or bearish and all they really want to do is protect their nest egg. They wouldn't mind gaining when the markets do well, but they don't want to lose money when the markets aren't doing so well. So, know if you look at the three types of annuities, and match them up with the type of investor you might be it would look like this. Bulls use variable annuities because they see no downside in the markets. Bulls are hard to find these days by the way. Bears like fixed annuities because they just want something each year and they don't care how much it is, just something. And cross-breeds seem to lean towards Indexed annuities. As mentioned there are a lot more cross-breeds out there these days. Why do you think that is? Well, many of them have seen the market go up and down and have no idea if we are about to crash or keep going up. They want to take some of their money off the table. They want to quit playing in traffic, yet they still want to grow their money. What an indexed annuity does it lets you participate with the market gains or the upside, but you can't lose when the market tanks. It's kind of like getting the best of both the bulls and the bears. Okay, so those are the three types now let's see if an annuity makes sense in the first place. Here are a few questions. This isn't scientific, but I've noticed over the years that if you answer yes to 6 or more of these questions, then an annuity might be worth exploring.

1. Are you concerned about losing money?
2. Would you rather have a return OF your money than a return ON your money?
3. Will you be taking income from your savings or investments at some point?
4. Is leaving money to your heirs without probate important to you?
5. Do you want an underlying guarantee of your principal investment?
6. Are you able to leave your money invested for the long term?
7. Do you want to protect a spouse or other family member with guaranteed income after you pass?
8. Do you want to set up a paycheck you can never outlive – then forget it and enjoy life?
9. Do you want to grow your money, but have no downside risk?
10. Can you wait till you're at least 59 ½ before you begin taking income?

So, how'd it turn out for you? If the answer to at least 6 of those question was yes, well then, now what? Well here's where you want an expert to help you through the annuity maze. It doesn't have to be confusing, but unfortunately, there are probably 200 or more different annuities. Each company may have 5 to 10 different annuities, each one with a different objective. Why so many? It's because some annuities are designed and are more efficient if you're only interested in growing your money. Others are better designed to maximize income for life. And finally, others are better for maximizing the growth so you can pass your money on to the next generation or your spouse. What I do is filter through the sea of annuities and find the 2 or 3 that will work best for your particular objectives and make the process very easy. So, no need to be confused. And again, an annuity is a horrible choice if it doesn't fit. They aren't for everyone, but if they do fit, they can bring a lot of peace of mind to a volatile economy. First off, determine if an annuity even makes sense by reviewing those questions again, then you and I can work together to see if there might be one that fits your situation best. It's my objective to make the process easy and less confusing, but first, we don't even know if it's a good fit, so let's start there. You can also download my book called, "Prepping for Income, where you can learn even more about the how annuities work and the different designs. Feel free to reach out and shoot me an email with any questions, and I'll answer that just as quick as I can. [email protected] Finally, investing and annuities can be confusing, but it doesn't have to be – you just need the right help as you go along. Take care,

Well, hi everyone! Welcome to another Wealthy and Wise Wednesday. In this podcast and video, I wanted to cover a few critical issues that come up regularly, as people call in from all over the country. They like the idea of a well-engineered High Cash Value Life Insurance Policy but want to know exactly where it fits in.

00:01:01

So let's talk about that for a second here. If we break down the steps to what I'll call the 5 Steps to Financial Freedom, they may look something like this.

00:01:12

First, you need to know where your money is going. Some don't like to use the dreaded "B" word, "Budget" to track their income and spending. And I get that! And this can be overwhelming for some and maybe even pleasurable for others. Let's not say pleasurable but some of you like to know where every penny is going and that's okay. If you don't get a hand on what's coming in and what's going out, it's just going to be really frustrating until you can control and save.

00:01:44

Well, once you know where you're at, then you can determine what you can put aside, right? Now, there are thousand different answers to how much you should save. Well, we're going to go over that another video as we go along but suffice it to say, save as much as you can. At some point, your goal should be at least near that 20% of your income and certainly 10%.

00:02:08

So now that you've got money and you know where it's going and now you can start saving it, the next step, step 2, you need to have what's called a MOD.

00:02:18

That stands for a Money On Demand account. This includes all the safety nets usually provided by other insurances. There are times where you have to have money on demand for unforeseen events. Now, this would include car insurance and homeowners insurance and health insurance.

00:02:35

If you're a professional or a business owner, you probably going to have liability insurance of some sort. Some of these insurance policies depending on the state that you live in, they may even be mandatory. I know in our state, you can't even drive a car without having mandatory car insurance.

00:02:52

Now what I find interesting is that even though the risks mentioned are certainly risks, the risks that we aren't necessarily guaranteed in our lifetime that are going to happen or occur, you aren't guaranteed a car accident, luckily, or assured that your house will be violently damaged in a tornado just because you carry the insurance, right?

00:03:17

We carry it just in case. It's our safety net. But this is what's interesting, there's one event that is 100% guaranteed to occur at some point in your lifetime. What do you think that is? Well, at some point, we all get kicked off this planet. Yup! At some point, we're going to all die. So, even though it's a 100% sure that we're going to die, there's still those who die without life insurance.

00:03:55

Now, isn't that kind of silly? We don't anticipate a car accident. We carry car accident insurance. We don't anticipate a hurricane and a tornado and a flood but we carry homeowner's insurance. Yet, there are thousands and thousands of people out there who know at some point they're going to die but they carry no life insurance.

00:04:14

So we have a budget that we want to make sure that we have our MOD account. That's our Money On Demand account. You might call it an emergency reserved, whatever you want to call it. I love the thought that it's Money On Demand just in case you have some unforeseen instances. And then, of course, you want to have your insurances in place as part of that Money On Demand, the car and homeowners and all that good stuff.

00:04:48

Now, the third step is what we call E&O. Now, if you're a financial professional, even a medical or dental professional, you'll probably know the term E&O. And you might think of it as errors and omissions insurance, which certainly is important in those industries. However, for us, E&O stands for emergency and opportunity.

00:05:15

Now again, this is where a solid well-engineered cash-valued policy can come into play because it can cover some if not all your Money On Demand for life insurance. But it can also be an exon place to store funds for your emergency and opportunity needs. Okay?

00:05:34

Now an E&O Account or an emergency and opportunity account, it needs to be safe. But it also needs to be liquid, so a retirement account like an IRA or a 401(k), that's a lousy place to store emergency funds. So, what we want to do is put it in a place where we can have access to it because remember, it's for emergencies and opportunities.

00:06:01

So, let's quickly look at what an E&O Account might hold so to speak. You should have somewhere between 3 and 6 months of expenses as your emergency fund. 6 months is optimal, of course, but it may take you a little longer to get there. And that's okay, right, because we are going to save every month and build up our capital accounts.

00:06:30

And all you need to do is simply figure out your expenses in a given month and then multiply that by 3 or 6 and that's what you need to have in your emergency fund. Alright? If you have a car, maybe it's on its last days. You've been hearing some clinking and clanking and it's not starting all that great.

00:06:52

Well, maybe it's a good idea to have some money for some potential upcoming car repairs. Because car repairs shouldn't be part of your emergency fund. That should just be part of the fact that "Hey! Cars don't go forever." And that's the same way with maybe some home repairs. Any kind of repair that you might need that wasn't anticipated, not bad to have a few bucks set aside.

00:07:17

But it's not your emergency fund because emergency funds are more or less based on losing a job, not being able to work, a short-term disability, that kind of stuff. So, think about adding some money to your E&O Account for repairs and other maintenance as well but not consider it part of the emergency side. It's just capital that you can use for a maintenance item that may come sooner or later.

00:07:47

Now, opportunities are a bit different. This is money that you want to have available that would take advantage of opportunities. Now, here's a thing, there are capital expenses too. Let me give an example. You might want a new car or remodel your kitchen, this is typically major purchases or expenses that you can also include in your future buying needs or your future capital needs. But the opportunity account should also hold funds that you may want to use for an investment or a business opportunity.

00:08:21

Now, one word of caution here, when we use opportunity funds from a High Cash Value Policy, we want to take loans and invest in opportunities that make sense, that are predictable. That have a very strong potential for a good outcome. We also may want to use some of this money for the major purchases again, the cars and remodels and those things.

00:08:55

But when we do that, we want to make sure whether it's an opportunity or a purchase. That we get those loans paid back. That we replenish our opportunity fund. Because it makes no sense to build this up, to take those funds and get it invested and lose it or to put it into a car or a home and never replenish those funds. So it's extremely important.

00:09:26

Let me give you an example. Let's say for instance that you're going to buy a fixer-upper home. Alright? Your plans are to make improvements and then sell it. And you could access the capital needed for your High Cash Value Life Policy. Okay? So you do that. You get the capital, you do all the repairs and now you're going to sell that property.

00:09:45

What you want to do is pay back your policy of course plus the interest plus any interest that you want to charge yourself on top of that and replenish that capital. So it's ready to be used again. This is a good use of money. Now, another word of caution, because you want to get that money back in, again you want to feel very confident that the opportunity or in this case the house is a viable opportunity. And that there's a high probability that you're going to get those funds paid back into your E&O Account at some point.

00:10:23

Don't cheat yourself! You don't want to lose that money. The best part about an E&O Account is that it can be also one of the safest, tax-advantaged, income-producing accounts for you during retirement as well. So you kind of get double whammy here and you take advantage of a lot of different things that are going on inside of that policy. And I'm going to talk more about that in other videos especially when it comes to retirement income. So you're going to want to check that out. Make sure you subscribe. That's the best way to know that these videos and podcasts are coming out.

00:11:17

Okay! So, after your emergency and opportunity account is established and being funded continually, now it's time to maybe get out of debt. Get rid of that debt. Once again, there are a thousand ways to go about doing this. And as a side note, you may want to attack the debt after your emergency account has been created. And, maybe before you start building your opportunity funds, you may squeeze in ahead debt or at least have a plan that you're knocking out that debt as you go along.

00:11:56

There are some, I won't say good debt, but there is some debt that's reasonable and then there's some horrible debt. If you're talking about credit cards and things of that nature, horrible debt. A home mortgage, maybe not so bad. And we will again attack that in some other podcasts and videos. But suffice it to say, we definitely want you out of debt. And all the mortgage, all that stuff, so much depends on your income level. And how much you can put towards your debt and still save at the same time.

00:12:34

So one of the best methods I've seen for getting out of debt is commonly referred to as the Snowball Method. Now for some, it's best to knock out the highest interest rate loans first. For others, they want to see that success quickly. So it's best to knock out that lowest balance first. That gives you that boost of confidence as you see that debt go away. That you can keep going and moving on.

00:13:06

And what we can do is help you stay on that track and help you determine which way is the best way to go. But that Snowball software is available. It's usually out there on the web. It's just a spreadsheet. And it's really kind of neat. But the idea is that the Debt Snowball, what you do is you pay out your first debt and that payment that you were using for the first debt now gets added to the next debt.

00:13:36

So, let's say for instance that you had a debt that was $50 a month and you pay that off. Now you have that extra $50 to add it to the next payment or the next debt. So let's say that that second debt was a $100 a month. So again, you've paid off the $50, you're already paying a $100 so now you have a $150 towards debt number 2. And you just see that Snowball over and over and it gets pretty exciting. In fact, most people can knock out all their debts, including their mortgage in as short as 9 years, maybe around 11 for some. But you can get that thing knocked out pretty well or pretty quickly. So that gets paid off.

00:14:20

Now you have a $150 to add to debt 3 and then so on and so on. So, I'm going to put a spreadsheet for that, in the notes or in the bottom of this video as well so you can take advantage of that Snowball debt. And again, it's just a spreadsheet. You're throwing your debts, tells you exactly what to do, how to do it. But that's a critical part of financial freedom and it's certainly a critical part of being able to now take more capital and have it for opportunities.

00:14:57

So, just a quick review. We first determined where the money is going. We've set up some sort of a budget, we're committed to putting money away every paycheck. That means if you get paid twice a month, you're putting away money twice a month. Alright?

00:15:18

Second, you're assured that you have Money On Demand in case of an accident, health issues, a death, family needs, your property. Everything is protected. So we've got Money On Demand and most of those again are covered by all the different insurances that we typically have or must have, depending on where you live.

00:15:37

Third, we've created our E&O Account or Emergency and Opportunity Account. Again, a well-engineered High Cash Value Life Insurance Policy works great for this. This is where you're going to keep your 3 to 6 months living expenses for an emergency. And it's also going to be where you pack in the capital for opportunities to take advantage of as you go along.

00:16:06

Now, one other side note here, there's no cap to how much you put in the E&O Account. Right? There's no cap on how much money you put into your Opportunity Account. Once you see that this can produce income down the road and a tax-free income, it may be an account that you heavily fund over the years. Because not only can you use it through the years, for all the different things that you may need capital for, but it's one of the best and highest-producing tax-free income streams during retirement. And then lastly, it leaves a legacy and a nice benefit for your family.

00:16:49

Okay, so the fourth thing we've done is we've knocked out our debt. We've eliminated our debt using the systematic program such as the Snowball. And this just feels good to literally owe nothing to no one. And so we definitely want to get you to that point. That's step 4.

00:17:07

So, now the 5th step. The 5th and final step to financial freedom is really getting down to having money work for you. We call this Wealth Squared. Meaning that you now can use the same dollar twice. So, it's a squared effect when you're using your policy properly. So, as we've mentioned we've already designed our E&O Account and we've got a source for all the tax-free income as well. And it's working and it's compounding and it's doing all the heavy lifting now. It's just as important to worry about your money as to what your money is doing! Is it wise to put money at risk if you can't afford to lose it? Right?

00:18:03

Well, here's a quick risk test and this is a very simple one. If you can't walk away from an investment that you put money in and it does nothing to your finances if you lose it, well, that's a good simple test. Right? If you can afford to lose your money and will have no financial impact on your future, then that's a good definition of risk capital.

00:18:28

But here's the problem, after asking that risk question, there are so many people over the years, the majority of people will say "Well, I really can't walk away from this money." But guess what, where do you think the majority of their money is? It's at risk! And one of those places that are at risk is inside of a 401(k). There are several risks there.

00:18:54

One is you can't access it 'til you're 59 and a half without some substantial penalties. The other for the most part it's invested at risk. And, you're just constantly throwing more money into the bucket of risk. And, maybe you're trying to dial it back a little bit, who knows. But typically what I see is most people have the money that they say they cannot walk away from at risk.

00:19:24

Well, most people who established an E&O Account, that's what we're trying to do. We're trying to put it in a place where you don't have to worry about risk, it's got some guarantees, some safety nets and that's where we should start. We kind of do a backward here. We tend to put our risky investments first. And then we might save a few pennies on the side in a more safe location. Just because you may be able to afford to lose your money, doesn't mean that you have to.

00:19:58

You don't have to always play in traffic. Emotion plays a huge part in investing and it may just turn your stomach just the thought of losing money. And quite frankly, with some of the things you can do, you don't have to lose money. In fact, Warren Buffett says the first rule to investing is "Don't lose money" and the second rule is "Refer to Rule 1."

00:20:19

And I'm finding that many wealthy people are choosing to keep more their money safe and in a tax-advantaged environment rather than putting it at risk and crossing their fingers especially with the bubble that we seemed to be in right now. They seemed to be even less trusting of risky investments and sadly the unkept promises of many Wall Street advisors.

00:20:45

So, for all of us ordinary or real people across the country who are not insiders getting inside deals, we have to love the fact that we can get a very favorable income stream from a well-designed cash value policy without the risks of the markets destroying our future. And, in the meantime, have access to the cash so that we can take advantage of opportunities that we're comfortable with, whether it would be owning a business, investing or whatever. It's all available to us.

00:21:22

So those who do not have the benefit of a properly-engineered High Cash Value Policy, tend to rely on one of two options. Okay? And this is just where we're at.

00:21:34

The first option is just to put it in a very low-interest-rate environment such as a CD or even a fixed annuity and, it's just frankly, it's just not cutting it. Can you imagine right now a million dollars in a CD will send off about 8 to 10 thousand dollars a year in income? And you know what's worst?

00:21:59

It's taxable. Yeah! So you got a million dollars that you've saved and put away. You want to keep it protected so you put it in the bank CD and that's going to send you off about 8 to 10 thousand dollars a year. And, that's assuming the bank is paying the highest interest rates that you see out there right now.

00:22:20

Well, the second option is to keep your money at risk. And, as we've talked about, that's maybe not a good option especially as you're near retirement. I did a video a while back that I called the 1.4 Million Dollar Disaster. So, if you want to see what that's all about and how these people just had way too much money at risk, go ahead and check out that video.

00:22:46

The fact is you can't keep money at risk when you're relying on it for retirement. We saw this in '08. We saw this in 2000. Accounts cut in half. It's almost a sure fire way of making sure that you're going to either run out of money before you run out of life or be extremely depressed when you lose 10, 20, 40, 50% of your assets.

00:23:10

And I can tell you, there's a better way. It's safer, it's more predictable. And, oftentimes, does better than those taking the risk anyway. So, you might at least take a look at it and see how that might fit in your situation. And it's a long-term investment opportunity or it's a long-term investment program. So you want to get involved as quickly as you can.

00:23:35

So, there you have it. Those are the 5 Steps to Financial Freedom that I'm hoping you're taking advantage of right now. It's the beginning of the year. It's time to set those New Year's Resolution and start building up your wealth in such a way that it's going to make much more sense and be much more effective.

00:23:58

Remember, this is not a run-of-the-mill or what I call a traditional style insurance policy. It has to be designed properly. And don't assume that any agent, or every agent, or advisors know how to do this. The majority of them, I'm sad to say, really don't have a clue. Never heard of this. Never tried to use it. And it might be more of a disaster to be talking to somebody like that.

00:24:20

There are many who would rather just put your money at risk. I should say many advisors would rather just put your money at risk, charge you an annual fee for their quality and active management and then let you ride the roller-coaster and the ups and downs, watching your money year after year and be frustrated, have your stomach turning, not knowing "am I going to get where I really want to be financially."

00:24:41

So, bottom line, there is a better way. You don't have to settle for the Wall Street way, that's been pushed on your throat for years and years and years. And it just doesn't work long-term anyway.

00:24:59

Wow! That was a lot. But it was the beginning of the year. I want to get a lot in front of you so you would just build a grasp even if you just take one or two of those concepts. Get it going in your life so that 2018 just becomes an awesome year for you. I hope it was informative.

00:25:18

Please, let me know if you have any questions. I'll be happy to answer them just as quick as I can. Where do you send them? You send the questions to [email protected]. Again, I'll answer them just as quick as I can. Also, if you want to in that email, request a personalized plan of attack for 2018, and we can figure out a way to get you on track and get you exactly where you want to be financially, request that in your email as well.

00:25:51

I hope this video is extremely helpful for you and like I say, it's a great time of year to get a good financial start on what you wanted to do maybe for years. But this is the year to get going and I'm really, really excited for you. So, hope you have a great week. Look forward to talking to you and make sure you subscribe so you never miss a video, never miss a podcast. Until next time, have a great week! Take care! LINKS: DEBT REDUCTION SPREADSHEET - debt-reduction-calculator_10

Hi everyone! And I'm glad you could join me today on our podcast or video on this Wealthy and Wise Wednesday. Hope you had a great week especially since this is probably going to be posted just a few days after Christmas. 00:00:14 I hope you had a wonderful Christmas. Christmas is always a great time around our home. Even our older kids still love it, get a little bit anxious and excited. It's really a lot of fun. And now that they have kids and when the grandkids at Christmas, it's hardly anything any better than to be able to play a little bit of Santa Claus. 00:00:34 So I hope you had a great Christmas. I also hope you have and are prepared for a wonderful 2018 both in all respects, physically, spiritually, mentally, and for us financially, making sure that you're on track anywhere you want to be, financially speaking. 00:00:56 Years ago, I used to tell this story about compound interest and it goes something like this. So let's suppose you're all warm and cozy in your bed tonight and you're just dozing off and suddenly this genie appears in your room. And the genie has two things in his hands. 00:01:19 In one hand, he says, "Look, I've got $100,000 right here in my hand today that I can give you, or in the other hand, I have one penny. And what I'm going to do is I'm going to come back every night and I'm going to double that penny. So here's your penny today. Tomorrow, I'll come back with 2¢ and then 4¢ and 8¢ and I'm going to do that for 30 days. 00:01:49 And so, your choices, $100,000 today or a penny double for the next thirty days. And you don't have your calculator with you and you're wondering, "Man, what should be the answer here? $100,000 today, right now, no questions asked, or a penny doubling every day." 00:02:12 You do some quick math. Okay, 1¢, 2¢, 4¢, 8¢. Even by day 7, you only have 64¢. By day 10, $5.12. And you're like, "Oh wow! I don't know. That hundred thousand sure seems pretty good and you can quickly get to about day 12, day 13. Day 12, you're at $20.48. Day 13, you're at $40.96. 00:02:50 So here you are, you've been going at this. The genie's been showing up in your room, almost two weeks straight. Well, at 2 weeks, you have $61.92. First is the hundred thousand and that's about as far as you can go with the math in your head real quick because the genie wants an answer. So what's your answer? What would you do? $100,000 right now or a penny doubling every day 00:03:18 It's hard to answer that because so many of us probably think that $100,000 is a good bargain. Well, let's just see what that looks like. So we know at day 14, so two weeks and we were at $61.92. At day 15, $163.84. Day 16 double that, 327.68. Now, let's fast forward to day 20. 00:03:47 Now day 20, we're getting into some doe. Actually, let me back up today 18 because at day 18 we finally start thinking that this might be some money. Because at day 18, you have $1,310.72. You go, "Okay. So now, that's starting to get somewhere. So that means what's the next day? $1,300 x 2? $2,621. Now, $5,200. Now $10,400. Now $20,900. $41,900. $63,800. $167,000. Then $335,000. Then $671,000. 00:04:39 Wow! This is getting exciting. $671,000. So let's see where is break even. So at day 24, he's bringing you 63,000. Day 25 he brings you 167. So if you were just patient for those 25 days, he brings you over $100,000. 00:05:05 So now you're way ahead of the game, plus all those days before, right? So day 26, 335,000. Day 27 671,000. Day 28 1.3 million dollars in your hands. Day 29 2.6 million dollars. And finally, by day 30 you get 5,368,709.12. Wow! 00:05:38 Well, you can now get a glimpse of the magic of compounding. Although we don't typically double every day, we can double over extended periods of time. And do that time and time and time again. Einstein actually calls this the eighth wonder of the world because it's almost magical what happens with compounding. 00:06:02 The problem is people. They give up compounding and they don't let it work for them for really their lifetime. When you think about letting money compound from your early 20s to your late 60s when you might start taking income for retirement, that 45 years of compounding can do an enormous amount of good for you even if your rate of return isn't huge. 00:06:33 And if you're taking advantage of some opportunities along the way with the money that you've saved in your capital account, we'll call it, then you might have even taken or even might have had those years where you really compounded and grown. I always like to use Warren Buffett as the example because he's probably maybe the greatest investor ever. So many financial advisors out there just have you investing, investing, investing, investing. 00:07:05 Whereas Warren Buffet's more of the approach that you put your capitalist side and you get ready for those opportunities that come along and then like he says, when it starts raining gold, you go out there with a washtub and you collect all you can. And that happens about every 10 years or so. We go through cycles where we have a boom and a bust or at least a growth spurt and then maybe a drop back. 00:07:37 And Warren Buffet's always been of the mind that you wait for opportunities and you buy what is commonly referred to as value investing. Even though he really doesn't call it value investing because that can mean different things. What he's really doing is he's just taking advantage of markets that go on sale. This, of course, in his world is buying businesses which are usually stock companies but it's also been for real estate for him. 00:08:08 He's done enormously well in real estate and that's the same thing that we can do. What we have to do is we have to put our money aside into a compounding account and as that builds and grows, it gives us opportunities to take advantage of markets when they go on sale. As he says, buying $10 bills for five bucks. And how many bills do you want? Right? That's kind of what happens after boom and bust cycles. 00:08:41 Whereas your traditional financial advisors are just going to keep telling what you needed is keep throwing your money into the market every month, every month, every month, and they call it dollar cost averaging. I don't want to go too much into that because I'm going to do a podcast and a video on dollar cost averaging here soon but let me just give you a glimpse of what that means. 00:09:04 What that means is that in an up trending market like we've had in the last six years let's say, every time you bought, you bought at a more expensive price. Right? So every month that that market went up and you put more money in, you paid more than you would of the month before. 00:09:23 Now, we got to understand that not everybody has a lump sum but this is what the fallacy is for financial advisors to tell you about average rates of return because average rates of return are always based on putting money in at a point in time and letting it go for ten years. So in other words, if an advisor says, well the average rate of return on this for the last ten years has been 8% or whatever. That's assuming you went back ten years and you dropped in your number, 10,000, 100,000, million, whatever that is. And let it go for ten years. 00:10:03 Now, whole another subject, average does not equal actual returns but let's just presume that that was the case, that at ten years ago you put in a hundred thousand dollars and it averaged 8%. 00:10:18 Well, if you dollar-cost averaged along the way and if we take like I say the last six years into account, you've actually bought into a market that got more expensive every single month or certainly every single year. And as a result, you've lost. Dollar-cost averaging did not work for you. Dollar-cost averaging only work twice in the last ten years. 00:10:45 So if we take the last ten years, there are only two years out of those ten where dollar-cost averaging made sense because the markets kind of fluctuated up down, sideways, and you were able to take advantage of that. So anyway, we're going to talk more about that. 00:11:00 The point is that what we want to do is put capital away, capital away. Save, save, save, save, save. Build up this big pile of money in a compounding account and especially a tax-free one. And as you guys know we like to use tax-free avenues for our money. So we build this up and then when the opportunities come along and we can buy ten dollar bills for five bucks, now we've got capital to go out with the wash tub and take advantage of it. 00:11:31 So the compounding effect of money is just almost magical and I want you to take advantage of it. I'd never want you to miss a day. That's why it's so hard to get back yesterday. And why delaying the time where you start saving is just potentially a killer because especially as the younger you are, you want to have as many years as you can to compounding growth. 00:12:01 So compound, grow. Put away money as fast as you can and build up this pile of capital so you can take advantage of opportunities so that you don't maybe, we'd all love to have a magic genie show up but since usually it's not a genie going to double your money every day. What we want to do is make sure we are in opportunities where we can do that ourselves. What do you think of that? 00:12:29 That is an amazing concept. So as we go into 2018, get yourself focused. Pay yourself first. Really one of the most magical things you can do is pay yourself first. Goes way back to the time when that book Richest Man in Babylon was written where they said you should pay yourself first. And when you do that and you set aside 10, 15, 20% of your income and pay yourself first, get it set aside, so that you're building up that compounding account and then eventually take advantage of wonderful opportunities as they come along and they will come along. 00:13:14 Who knows if we're in a bubble right now? It's just crazy out there. There's really no value to most of the stocks that you might look at and it's hard to say, "Wow! This is a good value right now, just everything's over-inflated." So it's a good time to maybe, I don't know, pull some money off the table, set it aside, get it again in a compounding account and then wait for those opportunities. 00:13:42 So there you go! Welcome to 2018 in just a couple of days. I hope you have a great year ahead and all these that you put together. Keep listening to the podcast. Make sure you subscribe. Subscribe to the videos. Stay informed. We're gonna do our best to keep you on top of these financial topics and some tips and tricks to make sure that you're getting where you want to be financially. So that's it. Hope you have a great week. And I'll talk to you next week. Take care!