Investment Freak-out or Faith

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Finishing well welcome to finishing well so I'm really excited about this tells current news report that this will be very topical today is investment freak out, looking at the stock market.

What have you or Faith you know what's it going to be an empty as I thought about this is an interesting thing that we all have this fear of the unknown right you know what's going to happen. So as you look in the crystal ball right now over the stock market of the government shutdown and all the things are going on I'm I'm guessing you may not have a real cool clear plan of what's going on but in some 56 four.

The psalmist said in a day when I'm afraid I will put my trust in you and as I think about that. The reason I can do that. Is it you know like I can mistake my hope for future right here on God. And I know that I can trust at night because I've come to know him through reading his word to praying for being around other believers. And the more I do all those things, the more I can trust them so I'm guessing Hans the reason that I'm real shaky about the stock market. What all this going on is that I don't really have a knowledge of what's going on what I'm doing. Yeah, I think the average consumer. These commentators that are just talking about this endlessly. I don't think most of know like what is causing all this volatility in the stock market wasn't so wonderful through four months ago and then it's now it's all doom and gloom and uncertainty and really talk about the tariff. Since that fall in the raising interest rates at the feds doing in their get impeached from you know just in the stuff that he's gonna pull out of Syria and Morgan have a world war and people really don't know me, I will tell you that the markets and the whole herd of the markets they don't like uncertainty sent success in just any more than you do when you're freaking out over but people like me in the market. I mean I maybe have a little better idea than you do about what's causing this stuff is still a guess on my part but the good news is that really true today show are hoping that you can gain some knowledge that would give you some faith like you know some things that were a little bit more reliable than you know what your hand through the news in this kind of thing.

So where was certified financial planner Hans shot out and of course our show.

Here is based on his book the complete Cardinal guide to planning for living and revile interment retirement which is always available@cardinalguy.com and the seven worst habit we talk about today is investments right in retirement yeah and and so that's available at the seven worst have a corset Cardinal guide.com but one of the just real precious things that then your workbook is this chart we talked about it before that outlines risk and and really begins to give us some knowledge for which we can we can have faith because you know and I think you know, I know a number of people's semi-well, but if I would it not just walk out in the street and have somebody hundred dollars. You know I wouldn't have much faith in what was happening, but if I had you Hans because I know you well you know the difference is how well you know what's going on in and in this chart helps us get to know things better will you know if it the chapter I wrote on investments in retirement income in both the book and the workbook.

Again, you can get those just for downloading a Cardinal guy.com I wrote these to be as simple as they possibly could in fact I even had some concerns that this is almost too simple into basic when I wrote you never know how things you can be taken by your audience, but if there's anything that I've gotten compliments on and a lot of them that this is from readers people to become clients is really this whole chapter in the chart that's in here most of this chapter.

All of this chapter went right from my head. Ponder the paper and certainly it was revised by the editors but I just try to keep it as simple as I possibly could.

He and you know this chart is really and assessments on page 71 of the workbook and it just goes down the left side equity stock, bonds, equity indexed annuities, fixed rate annuities bank CDs cash in money market, real estate, gold, commodities and options and then across the top of the chart. It has market risk, inflation risk, interest rate risk, liquidity risk and credit risk with a lot of risk of investments in risky business. What is it so when you get down love folks and I thrown around a lot.

We talk about high risk low risk moderate risk. We don't talk about kinds of risk and there's all kinds of subcategories of risk that you really got be concerned about okay and really the one that people are nervous about now is market risks so I don't really want to turn today show into an education on risk other than the fact that if you just worried about the markets over worried and you're worried about your money than sitting in there and waking up in it might be 10%, 20% lower in a few months or a few weeks. You know what I would say that as you probably have too much your money in stocks appropriate for your age and the level of risk that you can understand that and be the first thing an Italian if you found that your stocks are your whole portfolio has gone down less than the market has been. That's probably a good thing because it means that your invested within their more conservatively than the market as a whole and in a more conservative way, if you found you lost more than the market, then you're probably riskier than the market is not 100% sure but it's pretty much a guide and so what I'd really like is all this nervousness and stress that were getting over this to really mean something and what I'd like to see our listeners to is educate themselves a bit and really get together a financial plan because if you have a good sound financial plan written down with goals with a way to deal with these uncertainties like this, you can relax a bit.

Mean clients that I put into a real conservative place but then they get some cash on the sidelines when the market dips. A lot of times I'll call them up.

That's when we buy a little bit we get a little bit riskier because stocks are on sale and clients that I've put into a moderate risk they can sit there and say well you know were not as risky as that market as a whole. So we lost some, but you know they think they can look at their conservative stuff you said something to me. You know early as we are talking about the show that discounted and put it all in perspective that a lot of people are freaking out right now but really this isn't a huge downturn but more of a wake-up call. Yeah mean little to make it mean something so so if you're all nervous and you're wondering what's going on.

You're seeking what's going on what's causing this than what should I do you know what I miss is what should you do before that you learn where Emma and I can't tell you where to go unless I know where you sit right now and so the wake-up call is you really need to get yourself educated on what's driving this whole thing, or if you don't want to do that or you just feel like it's too confusing for you or you don't understand. Then you need to find somebody you can trust that is educated, and then you need to go to them for advice and don't come to them with a bunch of prepackaged advice.

Tell them what to do for eyes to remember that the car business that is out customer that the coming of the service driving site or just replace my starter. They diagnose the problem. Why do we need a mechanic let you know that they would tell you all the stuff that was wrong with the car your place to start in the car still and start what you told me to replace the start of my cars and start know why didn't you tell me that the know it's a matter I imagine that's the challenge. When you go into something like that think and you know it all. Well yeah he's saving thinking you know it all is just you heard this from somebody else in your loyalty that just you know me five years ago people were coming in and they're just wanted to buy Apple. They want to put all her money and ample how can I miss the point of my thing in my iPad and there's an talk about their kids and see what happens to me, just got over bid and then all of a sudden when those iPhone tens hit a thousand bucks mean and then you got a recession start nerve downturn in China. I mean it's just his tank, the great sound effect on me to use that let shoot that it is yes just taken and now everybody rolling and they want put on Amazon yeah I just read a forecast Amazon note said, you know, 18, 20% this year, something like I was just in the paper yesterday or in the news and you just for a second and think a man I get in I get Knesset were weighted, Amazon could very well firstly could be right.

The ages, all indicators look like that but they also they could be the next Apple that that all of a sudden there's antitrust legislation there's just there's so many factors that can make anyone stock of the whole market tank and there's no guarantee that the future is usually the past is going to repeat itself in the future you will say well it always recovers well always is in the past Aminah just it.

Yeah, I agree with that I'm you know I'm selling investments to so where were we really want to go with this is, let's take all this uncertainty and let's use this is a time to really make it mean something in figure out what your goals are, how much money you need to live, how much money is your fun money how much you want to leave your kids so much need for long-term care how much you get in need of one.

Your spouse is one of the two spouses passes away, the other one is along all those important things to you get a plan together and then make the investments support that planner make the investments in the money serve that plan.

Instead of you just sitting here worrying them all anxious when the market goes up and down right you listen to finishing well, a certified financial planner Hans Schild. Today's show is market freak out or faith. We had a wonderful story to share with you and how all this can come together in interesting ways and biblically. There's lots of Satan we had so much more, South Rocky by Cardinal guy, Cardinal guy.com Hans and I would love to take our show on the road to your church and Sunday school Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to Cardinal guy.com and contact Tom to schedule a live recording of finishing well at your church Christian or civic group.

Contact Tom to Cardinal guy.com that's Cardinal guide.com welcome back to finishing well certified financial financial planner or financial planner at edge of letter on child.

Today's show we are talking financial freak out on these markets or faith and in you know faith comes to a great extent with knowledge and understanding in prayer and all those kind of thing so I'm pretty excited that there is an answer to these situations and in it and a lot of it can be just discovered through you. Note the work to discover what's going on here so we talked earlier really about managing risk and that's certainly part of this chapter again for today's show. What I really want to talk about today is the use of annuities really is a substitute for bonds in the conservative side of the portfolio. Aminah challenge we've had over a number of years is you have been doing this a lot of years. In 2030 years ago you could get 456% on your bonds. That was your conservative return and you didn't have to worry about the values going drastically up and down like you with the stock market. So you'd have people allocated 60% stocks 40% bonds. It was a little easier than in over the last several years bond yields, CD yields things that are guaranteed or that have a love you know 1 to 2% to 1/2%, 3% at the best of me to be coming back a little bit lately so a lot of investors have just leaned more toward stocks and dividend stocks are more conservative stocks. Anyway, shake it, their stocks and they can go up and down and Dave swayed away from bonds or they've had it in bonds and they just complain about them all the time because I'm just that unit out there, they they almost nothing dirt yeah yeah and so the suggestion that I'm gonna make for some people is to put part of their money into what's called a fixed indexed annuity as a substitute for bonds because they share with bonds that they have a lot of guarantees that stocks don't have you not to lose money in these things and what they have over bonds as they can pay some pretty substantial interest and they can create some pretty substantial income years into the future.

So I wanted today to just tell you story about a client that I met eight years ago and I just dealing with her over the last couple days. In fact, she gave me referral to her nephew where he wants to do something with his money is very flattering when you're sitting down years later with people that bought these annuities, quite a ways back, and now were turning on that income and what was really flattering. When I told her I said now that $1850 a month that we just started in the first checks coming in January is going to come to you for the rest your life.

She said really she said I didn't get that part of that when we first she said now there's only like $250,000 or something like that in their and she said, so that 1800 a month 8050 a month can drawdown that principal will you tell me when their principles gone.

If I'm still alive. I still get the 1850 bucks a month.

This is absolutely right. She was just as formal. How do they do that and I said if you ever looked at these insurance companies are, they're not short on money they've got it figured out. So I mean I'll tell you little bit how they do it but they have themselves covered on all effect they get accused all the time of you know, if taken too much of the take in heaven. High fees and all kind of stuff which maybe that's right. In some cases, but here I have a client that's now collecting on the thing is just asking me how are they able to pay out an income when there's nothing left in the account, which began Social Security itself annuity right yeah me. It is in but there is money in the federal government account, but they've made a promise to anyone person because they know the law of averages is where I really didn't want to tell her is that not everybody like hers can live 200 and some people are going to live 200 some people relived in 97 and lived a and some are going to live to 72 and then I further showed her the show� 72 that is going to be a refund of some of that $250,000.

A lot of it to her beneficiaries so they're paying the money in the reserve back to the early death in their pan out. The monthly income to the long life minutes or so, managing get to where she gets $1800 okay so so when I met her in 2011. She had about 200 grand from an old IRA communal 401(k) from a prior job, and it'd taken quite a beating in 2008 2009 so she moved it into cash or something real safe money market at the bank still in an IRA and sheer money part stocks at that time so we put 200 grand in this annuity eight years ago and I think it's up to about 282 90 actually now have cash value but the income values are in excess of that so she got that one particular thing that she bought eight years ago spinner 1850 bucks a month that she didn't need any income from then in 2011 because she when retired. She still work along in 2013. She retired when she retired.

We turned on her Social Security and that was 1800 bucks a month. She had like $310,000 in her 401(k) at that current job is pretty nice thing for the slaves between these two IRAs or 401(k)s or whatever she about $500,000 but nothing else really have any other financial assets just a little bit and no pension and Social Security check 1800 a month and she calculated that she needed like to Social Security check.

She needed another 1800 a month to live. Now that she's retired so what we did is we took that second 310,000 and we divided up we put 200,000 in a new annuity that still bacon away.

She's not taking anything on that in the hundred and $10,000. It's been paying her $1800 a month that wasn't in an annuity that was just in a investment account. Pan out 1800 a month to your center check every month till he got down to zero and zero happen for her.

Last May and then we figured out a way to close the gap from May to December, and then start now she's got that original annuity.

I sold her pain there 1850 a month so you know that's a lot of words I spit out a lot of stuff without a chalkboard drawn, but as far as she's concerned she's got now, a Social Security check of 1800 a month guaranteed for life.

She's got an original investment is eight years old. She put 200 grand in pain or 1850 a month. That's for life. And then she's got another what was 200,000 is now up to about 270 value that is just sitting there growing so in case you need some more money or she needs some inflation protection or she need some long-term care she needs that money for something. It's just growing and at some point we can turn on income from Manhattan to make a big withdrawal from enemies. She's just got a nice taxi since I have had a annuity that had long-term. She doesn't have that in this case she didn't have that in this case again back in the day.

She really wasn't that worried about long-term care because I talked to her. She was more interested in the future, guaranteed income and so right in seller's and now we've been talking about or buying long-term care but in the meantime, she said cancer been through all that, you know, we wrote her Medicare supplement after the cancer during that open enrollment period and have been through a lot with her, she done sits it so at some point we may take care of that. But at the very least she's got that other account that's growing that she can use for long-term care, and secondly because she's single she could she have to throw the eight teen hundred a month Social Security plus the 1850 coming from the one annuity plus the 280 grand and the others just have to throw it all in long-term care and its particular for the rest of her life but going back to her last week show that gentleman had an annuity that did have it doubled the income if he went in with the long-term care rider kind of thing. What will is there a big difference in the income potential between the one that has a long term care adjustment are not.

Not for him.

No, no, for him, knowing he had the benefit of some good performance out of that annuity during the five years of its it's easy to sit down now and look backwards in say that. So to try to answer your question directly. Yeah that long-term care benefit cost system in terms of performance of the charges, but isn't a huge amount meant maybe maybe he could have gotten 16 grand a year. At this point instead of 15 that he is getting without the long-term care benefit. I'm just guessing that right but the great news is that when it comes to risk. You know there's a place for the stock market and there's a place for high-risk things.

It you know if you have the income to do that. There's a place right that's a matter of balance. The only money we put risk for Sally was the hundred and 10 grand right when she retired that we were immediately paying out and that was a very much a moderate risk.

Most clients are not can be as conservative as her. We very well could have put the 200 grand or all 310 grand at risk knowing we had this annuity that would've started paying out 1850 a month so you don't have to do everything like she's kind of an example of all annuities that she's ended up with are not necessarily recommending that for everybody or anybody she got that because she's very conservative. She had no danger of losing any of the monies that was put in the annuities or sitting here worrying about things going up and down the worst she could've done any one year with zero and so and even the year she went zero her income account would've been going up during this year so it's been them you know it's an EE just in summary, I I'd really like people to consider taking a piece of their conservative money which might be in bonds now or they might think about putting in bonds and consider and compare bonds to a fixed indexed Diane and I like which which you said earlier in the show that take this market and and and and take a hard look at what's going on and did your market stuffed to worst then than the marketer did your market stuffed do better than the market to give you an idea of of what how it is invested but essentially it is a wake-up call to say where do I really want this you know and how can I plan this and so that I have knowledge that would replace fear with faith, we can very easily plug all your investments of your statement into a MorningStar analysis give us all that from a very tactical perspective. So anybody that would like to take advantage of that. He'll feel free to text me or give me a call.

It's all their Col. guide again is Cardinal guy. Don't forget the guide.com listing the finishing well, a certified financial planner Hans Schild. His book the complete Cardinal guide to planning for living in retirement is all there Cardinal guy.com thanks Thompson. We hope you enjoyed finishing well brought you by Cardinal guy.com visit Cardinal do I.com for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as ponds best-selling book, the complete Cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows what you get. Hans book go to Cardinal do I.com if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word.

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