New Year's Resolutions for a Better Retirement Transcript: Audio automatically transcribed by Sonix

New Year's Resolutions for a Better Retirement Transcript: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Registered investment advisors and investment adviser representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, if any exist. Please refer to our firm brochure. The ADV to a Page four for additional information. Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges, as described in the annuity contract guarantees are backed by the financial strength and claims paying ability of the issuer. Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to the Active Wealth show with your host Ford Stokes for it is a fiduciary and licensed financial advisor who places your needs first. He'll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax efficient again and now your host Ford Stokes

Ford Stokes:
And welcome to the Active Wealth Show this Christmas weekend edition of the Active Wealth Show. I'm Ford Stokes your chief financial advisor and I'm joined by Sam Davis, our esteemed executive producer and Sam. This is special weekend that we need the weekend ambassador to kind of welcome us to the weekend here.

Producer:
Welcome to the weekend activators and Merry Christmas to all and happy holidays. I hope everyone's having a good time this holiday season. Enjoying time with loved ones, wrapping presents, putting them under the tree, making people smile. What a good weekend. One of the best times of the year.

Ford Stokes:
Yeah, it's awesome. Chestnuts roasting on an open fire. Jack Frost nipping at your nose. The whole deal and hope Santa had come to visit each and every one of you and also your family members. Hope you get to enjoy time with your family. Our girls just finished exams as ninth graders at North Forsyth High School, and they're super excited to be out and got to watch. Got to go to the new Spider-Man movie because there were big Zendaya fans and Tom Holland fans, so they got to see all that stuff last night. So that was great. Sam and I are here today. We're talking to you because we want to make sure that you have a great 2022. Specifically, Sam was talking about. Really, there's no reason why 2022 should not be your greatest year for retirement planning ever, and we're going to talk about ways to do that, ways to set you up for success. But the number one way, Sam, if you want to kind of share your thoughts on what people should be doing early in 2022, does your opinion because you had something really great that we talked about at the break, just your thoughts on what people should be doing just to kind of get started on the right foot in twenty twenty two?

Producer:
Yeah, I mean, no matter what it is, but especially when it comes to something as important as your personal finances, I think it's always a good idea to try to make improvement year over year over year. So whether it's, you know, working out and your personal fitness or it's your personal finances, try to make that improvement year to year. And really, it only takes a few minutes to get started. You can just go to Active Wealth, click that set an appointment button and the upper right corner and book an appointment with Ford Stokes. And you're already taking a good step forward towards twenty twenty two being your best year yet. So take a couple of minutes. Go to Active Wealth or if you don't want to do that, you can always give a call (770) 685-1777 and they can hook you up that way too.

Ford Stokes:
Yeah, I mean, Sam, you do a great job. It's nice to have a professional voice actor who's been on Chick fil A commercials and Air National Guard commercials and Chevrolet commercials and all these different national commercials. It's so great to have somebody saying our phone number and our website, so we obviously appreciate you helping us out and producing the show, and we don't know where we'd be without you. We're so glad that you've been part of the Active Wealth Show for, gosh, over two years now. It's unbelievable. So I agree with you, Sam. I think the number one resolution that everybody should have would be just, hey, just get a portfolio analysis, see where you stand, get a financial plan to your ninety fifth birthday and we've got a Christmas gift for you all you got to do. We have have three Christmas gifts, actually. No one is just reach out to us and book a book an appointment and we will give you a free financial plan. That's a fifteen hundred dollar value. And I'll talk about what that includes in a second. The second thing is we're going to give you our Nudie 360 book, which you know is chock full of really good ideas on how to build a successful retirement with successful retirement income and market like growth without market like risk. And then we'll also give you my taxes are on sale.

Ford Stokes:
Book to. And so we'll give you all three of those things. That is our Christmas gift to you. All you got to do is respond and go to ActiveWealth.com and click that set an appointment button in the upper right corner. And you can also call and leave us a voicemail. Devers not working today, but you can give us a call that on Monday or after the first year and just give us a call. Like Sam said, at (770) 685-1777 again (770) 685-1777 So let's get into all the things you get with that free financial plan. No one is you're going to get a portfolio analysis so you can understand the fees you're paying that don't necessarily show up in your financial statement. You're also going to understand the risk you're taking and you're also going to understand kind of the correlation of your assets as well. And the geographic risk, the allocation risk, the market risk, all the things you are taking right now, the risk you're taking in, the fees you're paying and whether you're getting a good rate of return for the risk you're taking, we're going to make sure that that risk reward relationship is in your favor.

Ford Stokes:
The next thing we're going to do is we're going to give you a Social Security maximization report absolutely no cost to you to help you maximize the income you generate for Social Security consistently. And we want to make the right decisions on the front end when we're dealing with Social Security, not the back end. Next, we're going to then give you a retirement income gap analysis where Social Security is part of that. Did you know that Social Security is literally it started out as a low income wage earner, retirement and now it's becoming the number one or number two source or retirement income for retirees in the United States. And you've got to make the right decisions with the with that type of income, then we're going to also give you a financial plan, your 90th birthday with your current asset allocation in your current portfolio. And then we're going to give you number four is we're going to give you a financial plan, your ninety fifth birthday with our recommended portfolios. And then we'll give you another the fifth thing we're going to give you as a retirement plan to your 90th birthday. Also, that includes a Roth Ladder Conversion plan. And if you've never seen a Roth Ladder Conversion plan, then I encourage you to pick our pick the phone up and give our office a call.

Ford Stokes:
At (770) 685-1777 again (770) 685-1777. You know, many of you have listened to the show for six months or a year or two years, and you've never called in. We would just encourage you to give us a call and and or just book an appointment with me and we'll do a Zoom call or we'll do a face to face call where you I mean a face to face appointment, where you can come in to our office or you can or I'll come see you. I do make house calls and love seeing people's homes this time of year as well, so we'd love the opportunity to help you out. However, it works for you, we will meet with you and you're not going to be passed off to another adviser. We do have other advisors in our office, but I'm here to help you. Protect and grow your wealth. I want to make sure that we're building a tax efficient fee efficient and market efficient portfolio for your future so you can retire with peace of mind. We think that's an important way to go. So, Sam, any thoughts on that as well before we kind of. Kind of tee up the rest of the show.

Producer:
I mean, it's just as simple as going to Active Wealth Show and booking an appointment to get your twenty twenty two off to a good start whenever it comes to accomplishing goals, at least for me. It's all about momentum. It's one of the most powerful forces in the universe. If you can just get a few positive things going your way, you're really going to get on a roll and start accomplishing some things and checking those things off. So Active Wealth set an appointment. Speak with Ford. You know, a lot of people think they can handle planning for retirement by themselves. But you know, I like to give this example. My wife recently said, Hey, can we do the master bathroom and remodel it? I know that if I do it myself, she's definitely not going to be happy with the result. So I'm going to go see an expert when it comes to remodeling my bathroom and when it comes to my personal finances, way more important than what my master bathroom looks like. I'm definitely going to make sure I go see Ford Stokes and consult with an expert. So visit Active Wealth, book an appointment and you've already made a great step towards accomplishing a New Year's resolution.

Ford Stokes:
Sam, you're so positive. I love. I love how you're how you're sharing the good news there. I mean, especially on this Christmas weekend, it's really important a lot of people are like, you know, what's? What's the best time to start saving? Well, today as soon as possible is the best time to start saving. And did you know, believe it or not, even if you feel like, you know, I haven't done a good enough job at saving? I don't know if I qualify to kind of work with Ford. Well, listen, we work with people that have $100000 or more. That's usually who we can help out the best. But we also work with some folks that, you know, have only 25 or fifty thousand and we help them figure out what they're going to do and how they're going to generate the income they need to not just survive during retirement, but also thrive in retirement. Also, let's remember the greatest wealth generator for you personally is your personal income and kind of what Dave Ramsey says, and we want to do everything we can to make sure that we are generating enough income for you and also doing a great job of protecting and growing your wealth so that you can really enjoy retirement.

Ford Stokes:
You can spend that time with your family, you can spend that time with your family, just like we did. So so here's the rest of the show. We're going to talk about the things that really matter when you're trying to plan for a successful retirement. All the things you should be putting on your resolution list, and they're really not that complicated. They're pretty simple and straightforward steps to building a successful retirement and to start right away in January of twenty twenty two. And we hope everybody's having a merry Christmas. Happy holidays. Hope everybody who's who's enjoyed Hanukkah had a great time with the eight crazy nights of Hanukkah. And also we want you to have a great happy and merry and successful New Year for twenty twenty two. Let's put this COVID stuff behind us. Let's put all this stuff behind us, and let's get going on building a successful retirement so that we can really enjoy time with our families. And we're going to share a lot of really good strategies on how to do that for the rest of the show. You're listening to Active Wealth Show right here on a.m. nine of the answer. And Merry Christmas, everybody.

Speaker4:
Sleigh bells ring. Are you listening in the lane? Snow is glistening. A beautiful sight. We're happy tonight walking in a winter wonderland.

Producer:
Listen to the number one show on the weekends on a.m. nine 20. The answer to protect and grow your hard earned money. The Active Wealth Show with Ford Stokes your chief financial adviser. Saturdays at 12 noon and Sundays at 11 a.m.

Ford Stokes:
Welcome back activators. The Active Wealth Show Sam. Let's go ahead and give them a market update right off the jump here of segment to

Producer:
Your Active Wealth market update.

Ford Stokes:
US stocks rebounded Tuesday from three days of selling as investors focused on a basket of positive earnings from the likes of Nike Micron and even as omicron cases continued to rise. The Dow Jones Industrial Average rose over 500 points, or one point five percent, respectively, while the S&P 500 and the Nasdaq Composite ticked higher by one point five percent and one point seven percent, respectively. Oil also rose over four percent to the seventy one dollars per barrel level as investors dipped back into riskier assets in stocks. Several earnings trickled in and helping investor sentiment. Nike rose after reporting both profit and sales that exceeded analysts estimates in North America. The company's largest market, sales rose over 12 percent. Ceo John Donahoe. You said the company is in a much stronger position than a year ago. Micron also rose after the semiconductor maker reported better than expected profits and signaled the chip crunch may ease in 2020. Twenty. Credit Suisse was among those several firms raising the price target on those shares to as high as a dollar thirty. And and by the way, Micron Technology is at ninety dollars and seventy cents right now in food stocks. Kellogg in focus after announcing that it reached a tentative agreement with fourteen hundred striking workers thanks to a wage boost by General Mills, disclosed costs tied to inflation were $500 million more than expected. As a result, higher input cost inflation is seen running between nine and 10 percent in autos.

Ford Stokes:
Nikola reported it settled with the Securities and Exchange Commission for one hundred twenty five million over allegations of defrauding investors, concluding all government investigations into the automaker. And travel stocks also are in focus as the Biden administration prepares to roll out a plan to up COVID testing and Rite Aid plans to help close up to sixty three stores across the nation in an effort to consolidate businesses, while CVS disclosed it would be shuttering some of its stores in the San Francisco area. Shocker there. Global market shares also rebounded in Frankfurt. The DAX jumped 0.9 percent to fifteen thousand three hundred and eighty one and forty one cents, and the CAC 40 in Paris also gained zero point nine percent. Britain's Fitzy one hundred advance one percent in the future for the Dow industrials is up zero point six percent, while that for the S&P 500 was up point seven percent higher. And that's kind of your market update. And let's talk about this cost of living adjustment that will be reflected in payments soon. Senior citizens and others who receive Social Security checks will soon see a five point nine percent increase in their monthly payments, the biggest annual raise since 1982. Obviously, seniors are dealing with inflation like crazy. They're seeing food at the grocery store, cost more. They're seeing gas at the pump, cost more.

Ford Stokes:
But experts warn that the boost may not be enough to offset fast rising rising inflation. I saw a meme that said, you know, the Christmas present that the Democrats have given to America is inflation, and it's a guy dressed in a raggedy bunny suit with a mask on or a surgical mask on. The cost of living adjustment, or cola goes into effect with the December benefits, but those will be paid in January. The payment dates are determined by the recipient's birth date. People born on the 1st to the 10th of the month will get their COLA adjusted checks on January 12th. People born from the 11th to the 20th of the month will get their checks on January 19th, and those born on the 20th of the month will get their payment on January 20 6th. It is important to know that the cost of living adjustment represents the largest in about 40 years due to the years rising inflation. Each year, Social Security payments are adjusted to reflect the changes in prices of goods and services like food and gasoline. But this year has proved to be a struggle, given that the benefits of twenty twenty one cost of living increase was a meager one point three percent. That meant seniors were coping with the highest inflation in four decades throughout twenty twenty one. On top of a benefit that had barely budged.

Ford Stokes:
The hope is that the more generous cost of living adjustment or cola that goes into effect next month could help seniors get ahead and keep ahead of inflation. But experts are extremely skeptical. We're still going to see a tremendous problem with prices increasing faster than the COLA, said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, an advocacy group. Even with that, five point nine percent cola inflation through November was up six point eight percent for the past 12 months. It looks like economists are forecasting that may continue. She added So retirees, anybody living on a fixed income need to be aware that the five point nine percent may look like a bigger increase than we've ever gotten. But once they go through all their household budget, they will realize it still won't pay for all the increasing bills. And I just want to say, listen, one of the biggest resolutions you're going to have this year is that retirement is more about income than it is about building one big number and you need to get sources of income. And if you don't have a retirement income plan, then I would encourage you to give her office a call. At (770) 685-1777 again (770) 685-1777. We're happy to help you. We want to do everything we can to help you generate the retirement income you need, so.

Ford Stokes:
You can thrive in retirement, you can retire successfully. And if you want, you can set up, you can just go to ActiveWealth.com and schedule your appointment right now just by clicking that set an appointment button in your upper right corner that you'll be put directly into my calendar. And I'm happy to help you. No problem, no questions ask. And we do this on the front end after everything you're asking OK for. Can you really help me listen? We work with folks really of any income in any asset level, but we generally can help people the most who have ever $100000 of investment personal assets. It's not a crazy amount of money, but we do help folks with our average size. The average client we help is usually right around, you know, over two million as an example, but we're happy to help anybody. This is what private wealth management looks like and we're going to talk about in segment four. We're going to talk about a product called Structured Notes that is an an at risk product is a security there. It does involve market risk, but you can get nine point eight zero percent. As an example from the structured note that we offered in December from Citibank that is paying nine point eight zero percent, which is pretty remarkable.

Ford Stokes:
And you can get a higher rate of return than just paying for a typical bank CD out there at point zero five percent, you're going to have to assume more risk. Don't get me wrong, but in that risk reward continuum, you're going to find that you're going to get more reward than the risk you're taking. And we also have ways to minimize the risk that is presented with structured notes because we can also do a a five note structured note ladder that will diversify your risk even further. So those are things we're going to talk about in segment four. But what I want to talk about now is really, really just kind of understanding the rules. So number one is the four percent rule. I want to make sure you understand that four percent rule is set there as a guide for the kind of money that you should look to spend on a annual basis. You don't want to spend more than four percent of your assets down, and it's a great budgeting tool, right? We don't want you to spend more than more than four percent of your assets in a given year. Well, hey, for it, I've got seventy thousand dollars of expenses and I only have a million dollars. What am I doing? Because if I spend seventy grand, that's seven percent. Well, also factors in any pensions and also Social Security.

Ford Stokes:
So if you're making thirty six thousand dollars into the household in Social Security income and then you're also withdrawing forty thousand dollars from your million dollar IRA, that's seventy six grand and you're going to make it. Now, obviously, you got taxes to pay on that. And if it's ending in your IRA, unfortunately, the IRS is your partner in retirement and we want to help you generate tax free income. And if you're in your fifties or early sixties or even in your 40s or thirties, we can help you generate tax free retirement income. No problem we've got. I've got one client who is investing two thousand dollars a month for 10 years to call it Ten Pay, so he's putting in two thousand dollars a month and he's going to generate twenty five thousand six hundred and two dollars throughout all of his years of retirement. Ten years later, he's going to turn on retirement income, and that is an index universal life policy that he's investing in. If you've never seen an illustration of it indexed universal life policy, we're happy to show you that. And then you can get an estimate of what you could be enjoying in tax free income. And listen, some people are like, Well, for you know, how that sounds almost too good to be true. We can get tax free income. There's only two types of tax free investments out there.

Ford Stokes:
There's life insurance and Roth IRAs. That's it. And we really, really work hard at that. The other is we're going to talk about bond replacement, whether you're replacing bonds with fixed indexed annuities or structured notes or life insurance, we're going to help you on a bond replacement strategy as well. And then in segment three, and that's coming up like right now, you're going to want to come back to understand how you can get more tax efficient and and move some of your tax deferred and taxable money from those buckets into a tax free bucket. We're going to help you do that in segment three and four, and we're also going to help you get a much higher rate of return with the money you would have put in bonds and why it's really important to consider doing that. Now we're going to talk about what the P ratio is, the the go forward price to earnings ratio of stocks and what the go forward price to earnings ratio is of bonds. Right when we come back from the break, I'll share that with you. You're listening to Active Wealth Show right here on AM nine 10. The answer on a Christmas weekend here on AM. Not sure the answer? We absolutely appreciate you and hope you're. We're in a great time of your family and Sam, play some more Christmas music for everybody.

Ford Stokes:
All right, welcome back activators, Am Ford Stokes, the chief financial adviser, and we're here on a Christmas weekend. We're giving you live new content free content for you. We're here to help you kind of start delivering on that New Year's resolution to make sure twenty twenty two is your greatest retirement planning year ever, where it really can set a bedrock, if you will. Don't build your house on sand, build it on on an actual foundation, so therefore it won't go away in a storm. We want to do everything we can to help build a solid foundation that generates and builds a portfolio that is tax efficient, fee efficient and market efficient. Our goal is to help you protect and grow your hard earned and hard saved wealth, and we were coming out of the last segment we were talking about, Hey, can you afford? Can you tell us what the price to earnings ratio is? The go forward p e ratio for stocks? And that's actually between twenty two and twenty three times. So the P e ratio was about twenty two to twenty three times earnings for U.S. stocks out there. But would it surprise you to know that the go forward price to earnings ratio for corporate bonds is over one hundred and fifty? Yeah, it's a big deal. You're probably driving around right now, headed towards grandma's house and you just went, That's a big deal. It is. And if you don't think there could be a bond bubble, I would beg you to reconsider.

Ford Stokes:
Also, the people, the companies that have corporate bonds and then have accumulated a lot of debt ever since twenty fifteen. And sometimes they may have trouble. Hopefully they won't have trouble refinancing that bond debt, but just want you to know. Those same companies also have common stock traded on the U.S. Stock Exchange, like the New York Stock Exchange and Nasdaq, et cetera. So we've got to do a much better job and understanding the bonds we hold and also replacing those bonds with either a fixed index annuity or a structured note or other strategies, even if it's buying, you know, a retirement house, you know, for they could also generate retirement income with, you know, rental income. And so first of all, I want you to consider getting my new book Annuity three sixty. You can just visit Annuity360.net and we're going to play a chapter from that book about bond replacement here right now in this segment. And we come back after you listen to that five minutes. Plus, we're going to kind of recap that and kind of set up for the other bond replacement version of this, which is is due in structured notes. But this bond replacement chapter is all about investing in a fixed indexed annuity so you can get market like gains without market risk. You can generate a retirement income you can ever outlive, and your money is not invested in the market at all.

Ford Stokes:
It's actually invested in 10 year U.S. Treasury bonds, and they take the interest off of that at the end of year one and invest that into options in indices like the Barclays Atlas five or the Credit Suisse Momentum or the Credit Suisse Raven PAC or the S&P five hundred, the Nasdaq 100, things like that. And if those options were to go to zero and you had a bad year and your two or your three, your principal is still protected because your principal is still only invested in the 10 year U.S. Treasury bond, it's not invested in the market. So, Sam, go ahead and play that chapter on bond replacement for my new book Annuity 360 Chapter 15 bond replacement with fixed indexed annuities. Big idea Historically, bonds have seen volatility when the market is volatile. Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. Am I firm Active Wealth management? We believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We'll talk about some reasons why you should consider replacing your bonds with annuities. First, here's some information on the history of bonds in the United States.

Ford Stokes:
Historical bond volatility The nineteen hundred saw two secular bear and bull markets in U.S. fixed income. Inflation peaked at the end of World War one and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The U.S. government kept bond yields artificially low until 1950. The long term bond yields were at one point nine percent in nineteen fifty one. They climbed to nearly 15 percent in nineteen eighty one. In the nineteen seventies, globalization had a huge impact on bond markets. New asset classes such as inflation protected securities asset. Backed securities, mortgage backed securities. High yield securities and catastrophe bonds were created. Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market, coming into the twenty first century long term bond yields decline from a high of 15 percent to seven percent by the end of the century. The bull market in bonds showed continued strength in the early twenty first century, but there is no guarantee with our current market volatility that this will hold. See Chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history of loan? You can see how uncertain the future of bonds is.

Ford Stokes:
Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds, bonds and interest rates have an inverse relationship. When interest rates fall. Bond prices rise due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows as of May twenty four twenty twenty. The 10 year Treasury note was yielding zero point sixty four percent and the 30 year Treasury bond was at one point twenty seven percent. Reinvestment risk of bonds This is the likelihood that an investment's cash flows will earn less in a new security. For example, an investor buys a ten year, one hundred thousand Treasury note with an interest rate of six percent. They expect it to earn $6000 a year at the end of the term. Interest rates are four percent. If the investor buys another 10 year note, they will earn four thousand instead of six thousand annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic market risk This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid.

Ford Stokes:
Diversification cannot fix this issue, but the correct asset allocation strategy can make a big difference. Unsystematic market risk This type of risk is unique to a specific company or industry, similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk business risk. There are two types of risk internal and external internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you were actually paying. Standard & Poor's estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point twenty one percent for municipal bonds.

Ford Stokes:
However, markups can be as high as five percent, up to 50 dollars per bond. Bonds only provide income for a finite amount of time. Unlike an annuity, which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive. And so now you kind of understand what you're looking at with bond replacement. I mean, you literally could make if you replace $400000 of a million dollar portfolio and replace the bonds and invest the $400000 in a fixed indexed annuity. You could have two point eighty nine million dollars more thirty five years later, just off that same money without any withdrawals. It is remarkable the difference every time I've ever seen any modeling between the bond and a bond portfolio like the Moody's B AAA index or whatever, and a fixed indexed annuity. The fixed index annuity on the financial modeling outpaces that every time because it gets you more market like gains, you get your higher rate of return and also the power of a fixed index annuity as you never retreat. Back, you only move forward because of the contractual relationship you have with that policy and the annuity carrier you're it's built so you don't ever lose money, you can only gain money and they take a portion of the gains and they give you a the lion's share of the gains.

Ford Stokes:
That's how it works. And we'd love to be able to give you a free annuity review, something we call an annuity. Three Think all you got to do is visit ActiveWealth.com, click that set an appointment button the upper right corner, and we're happy to do a free analysis. If you have a variable annuity, what we call sharable, don't do annuities, then I would encourage you to try to save that three to six percent in fees you're paying with a variable annuity and give her office a call, and we'll do a full deep dove annuity review for you and give you some other options and show you some illustrations of what could be possible. And I think you'll really like hearing about that. Now we've talked about replacing bonds with fixed indexed annuities, and when we come back from the break, we're going to be talking about structured notes, which is another way to replace bonds and another strategy which we think is a really good and big deal. It's something you ought to really consider. It's also what private wealth management looks like. And if you have never invested in structured notes, I would encourage you to tune in to the next segment. You listen to Active Wealth Show right here on AM 920 Answer. Merry Christmas, everybody, and play some more Christmas music for the folks there, Sam.

Ford Stokes:
And welcome back, everybody, to the Active Wealth Show, this segment, four of our Christmas weekend edition of the Active Wealth Show, I'm joined by Sam Davis, our executive producer who's awesome playing great Christmas music for all of us. And we're talking about structured notes now. That's another alternative. It's a bond alternative investment. Structured notes are security. They do involve market risk, but they also have some buffered principal protection built in the ones we are selling, and we sell a different one every month and offer it to our clients. Also, we don't get paid any commissions. We are fiduciaries and therefore we have to put our the needs of our clients ahead of our own. And so we're able to offer structured notes that pay at a higher rate than, say, if you were to walk into a bank and deal with a stockbroker or someone who is Series seven license who's looking to get their commission on the front end. Those people are usually charged between three and a half and five and a half percent on their securities commission, and we don't think that's right. We we don't charge anywhere near that kind of amount, and all we do is charge our our annual advisory fee and portfolio fee together one twelfth every single month. And for those of you listening, any of our advisors, any of our folks who are listening here, any of our radio listeners, we offer a point nine five percent total all in fee of advisory fees and portfolio fees to our radio listeners when our normal fee is between one and a half and two percent.

Ford Stokes:
So you may want to call us and take advantage of that. And that's less than what your advisor is currently charging, then. That's a great way to make sure you can reduce the amount of money you're paying out now. So I would encourage you to get our office to call it (770) 685-1777 again (770) 685-1777 or just visit ActiveWealth.com. There's a set an appointment button in the upper right corner, and you can just click that and get booked directly in my calendar. So let's get straight into structured notes. Structured notes are a large part of today's financial market landscape. Globally, investments allocated to structured notes are estimated to be in excess of two trillion dollars, even though structured notes have not been issued in the U.S. since just they just started being issued folks in the mid-1990s. As an example, the availability of information for for all of us out there about structure notes is really relatively scarce, so I'm here to educate you on it with equity markets near all time highs and interest rates near historic lows.

Ford Stokes:
There's been a growing interest in the use of structured notes in the portfolio construction process. Considering the size of this market and limited available information, it strikes us as really an opportunity as us, as fiduciaries to gain really a competitive advantage against folks who are charging more. We want to help you get a higher rate of return and pay less in fees. We just do. And also, therefore we're going to be able to build our business as well a structured note as a financial instrument generally issued by large well-known financial institution. The terms vary in both time to maturity and market exposure. Each month, banks bring out their list of calendar offerings is important to point out that issuers split their calendar. Terms between brokerage offerings or brokers are paid an upfront commission and advisory offerings. Because the advisory offerings are for fee based or fiduciary advisors like us, the issuers can strip out the commissions and provide more competitive terms for you, the end investor with monthly calendar runs, multiple bank issuers and changing market conditions. Structured note issuance is very large and diverse. And I'm here to kind of organize the offerings into three main types that the fiduciary advisers like me can actually offer you, so structured notes are not one asset class, but a type of product structure that is created to meet different client objectives, such as income growth or principal protection.

Ford Stokes:
What differentiates structured notes relative to other financial assets is that they are one of the few investment vehicles that can be used to provide a defined outcome. And so let me just give you kind of an estimated geographic distribution Asia Pacific. There are fifty one percent of the structured net market. Europe is about twenty five percent, the United States has about 15 percent and the rest of the world has nine percent of the structured note market. Structured notes are financial instruments, which consist of two main parts combined to generate a specific risk return profile in their most basic form, structured notes are investments that combine a low risk, low return component of bonds with a higher risk, higher return derivative on a selected asset, or often equities or equity indices. So you've got a bond plus a derivative on selected assets, and that equals the structured notes. Here's the deal. As long as there's a principal protection buffer of 30 percent, so as long as the S&P five hundred, the Nasdaq one hundred and the Russell 2000, as long as any of those three do not lose 30 percent of their value over the 12 month period, which is the the term of the structured note or before. The note is called and these notes cannot be called in the first six months.

Ford Stokes:
You're literally your principal is one hundred percent protected and you're going to get something like what Citibank offered last month and with nine point eight zero percent over the next 12 months and they pay you out one twelfth of nine point eight zero percent every single month. And we think that's remarkable compared to a point zero, five percent bank CD return per year, that's I mean, it's infinitely superior in rate of return. So we think you ought to consider a structured note as an alternative to bond. Placement and bond investment. And also, you can always figure out a fixed index annuity, so what I would do, a typical portfolio that we like to recommend is that somebody comes in with a million dollars. We'll take six hundred thousand and put it into our our res star portfolio. And then the next thing we'll do is we'll take 20 percent and put it into a fixed indexed annuity. We'll take two hundred thousand dollars and invest it into a fixed indexed annuity that's currently illustrating it nine point eighty four percent. And then we'll. Put the other two hundred grand into a structured note ladder with forty thousand dollars structured notes five months in a row, so five different structured notes at forty thousand apiece to diversify your risk.

Ford Stokes:
Further and get you a a higher rate of return, so if you're making, let's say, let's just round numbers, if you're making 10 percent on that structured note ladder over a 12 month period, you know that's making 20 grand off a $200000. And so as long as you don't have an event like 2008, you're going to be in a much better spot and something to consider. And a 30 percent buffet rate is really big. So I would encourage you to consider structured notes as a bond replacement. We're here to protect and grow your wealth. And we want to give you all the information possible. And remember when you're planning for retirement, if you're going to be a bear, be a grizzly, be as aggressive as you possibly can about seeking information and investing successfully. You've listened to Active Wealth Show right here on Amazon. One of the answer during this Christmas weekend show, and we enjoyed spending time with you and we hope you enjoy spending time with your families. And here's to a great twenty twenty two, and let's put all this COVID stuff behind us. Merry Christmas and Happy New Year and happy Hanukkah and happy holidays to everyone. And let's make sure that twenty twenty two is a fantastic year for all of us. We hope you have a prosperous and successful twenty twenty two and merry Christmas, everybody.

Producer:
Thanks for listening to the Active Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your chief financial adviser Ford Stokes at (770) 685-1777 or visit Active Wealth. Investment Advisory Services offered through Brookstone Capital Management LLC, BC, a registered investment advisor, BCM and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCMA are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
A purchaser should evaluate and understand all of the risks and costs of an investment in structured notes. Prior to making any investment decision, a purchase of an SDN entails other risks not associated with an investment in conventional bank deposits. A purchaser may not have a right to withdraw his or her investment prior to maturity or could incur substantial penalties for an early withdrawal if permitted. A purchaser should carefully read the disclosure statement and any other disclosure statements for SSN before investing. An investment, in essence, is not FDIC insured and is subject to credit risk. The actual or perceived credit worthiness of the no issuer may affect the market value of SNS. Essence will not be listed on any securities exchange. Even if there is a secondary market, it may not provide enough liquidity to allow purchasers to trade or sell Essenes. As a holder of SNS, purchasers will not have voting rights or rights to receive cash, dividends or other distributions or other rights in the underlying assets or components of the underlying assets. Certain built in costs are likely to adversely affect the value of Essenes prior to maturity. The price, if any, at which the notes can be purchased in secondary market transactions, if at all, will likely be lower than the original issue. Price in any sale prior to the maturity date could result in a substantial loss. Essenes are not designed to be short term trading instruments. Purchasers should be willing to hold any notes to maturity. The tax consequences of Essenes may be uncertain. Purchasers should consult their tax advisor regarding the U.S. federal income tax consequences of an investment. In essence, if a S.N. is callable at the option of the issuer in the and is called, the holder will receive only the applicable redemption amount and will not receive any coupon payments that would have been payable for the remainder of the term of the SN.

Producer:
Essenes are not FDIC insured, may lose principal value and are not bank guaranteed. This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary the value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively. And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. Historical performance results for market indices generally do not reflect the deduction of transaction and or custodial charges or the deduction of an investment management fee. The occurrence of which would have the effect of decreasing historical performance results, economic factors, market conditions and investment strategies will affect the performance of any portfolio, and there are no assurances that it will match or outperform any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the strategy, not FDIC. Insured may lose principal value. No bank guarantee.

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