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The #1 Wealth KILLER


Albert Einstein once referred to compound interest as the 8th wonder of the world. Saying he who understands it earns it; he who doesn’t pays it. And he couldn’t have been more right. Today we’re going to be looking at the miracle that is compound interest and how can protect my retirement as it relates to the #1 killer of your wealth. Let’s get started. So the #1 wealth killer is debt. Yeah, I know, big shocker. But it’s really true and today we’re going to look at why that is.

The truth is, having too much debt can put a limit on your greatest wealth-building tool – your income. While it may be tempting to invest rather than pay off your debt, compound interest is a force to be reckoned with. In fact, I recently dedicated an entire video to its power. Financial advisors often use the example of Jane, who invests $100 per month ($1,200 per year) from the age of 18 to 25 and earns an average of 10% per year on her investments. By the time she stops investing at age 25, her nest egg will be worth just over $15,000.

However, before you start investing, it’s important to consider your debt load. Here are some reasons why paying off your debt first may be the smarter choice:

High-interest rates: Many forms of debt, such as credit card debt or personal loans, carry high-interest rates that can negate any potential investment gains.
Risk: Investing always carries some degree of risk, and if you have high levels of debt, taking on additional risk may not be advisable.
Stress: Debt can be a significant source of stress and anxiety, which can have negative impacts on your overall financial well-being.
Freedom: Paying off debt can give you a sense of freedom and control over your financial situation, allowing you to make better long-term decisions.
That being said, paying off debt doesn’t mean you can’t invest at all. Here are some steps you can take to balance debt repayment and investing:

Create a budget: Determine how much money you can allocate towards debt repayment and investing each month.
Focus on high-interest debt: Prioritize paying off high-interest debt first, as this will save you the most money in the long run.
Consider employer-matched retirement accounts: If your employer offers a retirement plan with a matching contribution, take advantage of it. This is essentially free money that can help you save for the future.
Seek professional advice: A financial advisor can help you create a personalized plan that takes your unique financial situation into account.
In conclusion, while compound interest is a powerful tool for building wealth, it’s important to consider your debt load before investing. Paying off high-interest debt should be a priority, but that doesn’t mean you can’t invest at all. By creating a budget, focusing on high-interest debt, taking advantage of employer-matched retirement accounts, and seeking professional advice, you can balance debt repayment and investing to achieve your financial goals.

Over the course of the next 45 years, those investments will continue to grow. Assuming that it continues to grow at an average annualized rate of 10% per year she will end up with $1.1 million in her portfolio at age 70. That’s all achieved with eight years of investing $100 a month. Jane becomes a millionaire by investing $9,600 of her own money. On the other hand, we have John. John doesn’t start investing at age 18. Instead, he starts at the age of 26 (just after Jane had finished all of her investing). He also invests $100 a month. However, unlike Jane, he does it from the age of 26 all the way until the age of 70. John invests $54,000 of his own money over the course of those years and ends up with a nest egg of just under $950,000. So John ends up with approximately $150,000 less than Jane. This is in spite of the fact that he invested six times more of his own money than she did.

It’s no secret that excessive debt can put a damper on your ability to build wealth using your most powerful tool – your income. While the concept of compound interest is widely known to be an effective way to grow your money over time, paying off debt may seem like a counterproductive move. However, it’s important to remember that not all investments are created equal, especially when you’re dealing with debt payments.

Let’s take a look at an example: Jane invests $100 a month for 7 years starting at 18 and ends up with a net worth of $1.1 million at the age of 70. Now, let’s say John starts investing $100 a month at the same age and earns an average of 10% per year, just like Jane. Even if John continues to invest until he’s 100 years old, Jane would still have more money than him, and her lead would only increase with time. In fact, at the age of 100, Jane would have $19.2 million to her name, while John would have $16.7 million. This just goes to show the power of compound interest, as famously called by Albert Einstein as the 8th Wonder of the world.

However, when it comes to investing, it’s important to consider the context of one’s financial situation. Comparing someone who is debt-free to someone who is not will not provide an accurate comparison. While Jane invested $100 a month for 7 years, John was dealing with debt payments and didn’t invest anything for those first 8 years. But what if John managed to free up an extra $200 a year, or less than $17 a month, by paying off his debts? In that case, he would come out ahead of Jane by the time they’re both 70. And if he freed up more money than that, he would pass Jane even earlier.

So, what’s the takeaway? While compound interest is undoubtedly a powerful tool, it’s important to also consider the impact of debt on one’s ability to invest. Paying off debt and freeing up funds for investment can ultimately lead to greater financial success in the long run.

And given the state of the average American debt situation, $17 a month in payments is a remarkably conservative estimate. According to articles in business insider,
CNBC, and Forbes the average American debt situation looks like this: About $9,000 in credit card debt which is
often split between several cards. $30,000 in student loan debt. And assuming a used vehicle was bought a little
over $21,000 on a car loan. That’s around $60,000 in total debt. If we assume 18% interest on the credit cards
and 4.5% interest on the other loans and terms of 5 and 10 years on the car loan and student
loan respectively, the minimum payments could be roughly $900 a month. Freeing up that much cashflow could make a
tremendous difference in the previous example. Let’s look back at John’s situation from before
and assume that his household’s debt situation was that of the average American. John uses his $100 a month of excess cash
flow to pay off these debts.


Based on the numbers it would take him roughly
six years to become debt-free. This is assuming he did not work any extra
hours or sell anything to get out of debt faster. Once he was debt-free he would have almost
$1,000 a month left over to invest. If he starts the process of becoming debt-free
at the age of 18 when Jane was starting to invest he would have become debt-free by his
24th birthday. If he then turned around and started investing
the full $1,000 a month he would actually be further along in his investments by his
25th birthday then Jane was. Granted this is largely because he has invested
more money than Jane has at this point. Jane by her 25th birthday had only invested
$8,400. That’s quite a bit less than John’s $12,000
but think of the potential payoff of this down the road if John keepS investing that


He’ll also likely be able to lead a much
better lifestyle than Jane in the present due to his lower monthly expenses. Jane may eventually equal him in that regard
if she gets her debts paid off, but for those first several years after John is debt-free,
it is worth noting. Remember, compound interest is an incredibly
powerful mathematical force. But it can work just as hard against you as
it can for you. So it’s important to make sure that compound
interest is your ally in your finances, not your enemy. So with that being said how do we avoid this
killer of wealth? First, if you’re lucky enough to not have
any debt right now research some ways to ensure that you keep it that way.


If you’re planning to go to college look into
ESA or 529 plans. They are ways to start saving for college
while lowering your tax burden (which is always a nice perk). Also, look into scholarship opportunities
or PSEO. Don’t be afraid to have a summer job and work
during the school year part-time. For the record, this can also be a good option
in high school to give yourself a head start financially so long as it doesn’t take away
from your studies too much. Make sure that you always have an emergency
fund. It should contain three to six months worth
of expenses so that you don’t have to take on debt for those moments when life happens. Make sure you have insurance for those catastrophes
that you wouldn’t be able to cover with your savings. Catastrophic health emergencies are a good
candidate for this.


If you’re already in debt, learn about how
people have paid off their debts. Then choose the strategy that is most likely
to get you (and keep you) completely out of debt. Three of the most popular strategies are the
debt snowball, debt avalanche, and debt tsunami. I have done videos on all three of those and
they will be linked in the description. The debt snowball is the one made famous by
financial personalities such as Dave Ramsey. It has you order your debts from smallest
to largest balance and pay them off in that order regardless of the interest rates on
those debts. The plus side is the momentum you can build
up for yourself by quickly wiping out those bills. The downside is it isn’t the most mathematically
efficient way to get out of debt, all else being equal.


The debt avalanche is the more mathematically
efficient option if you can stick to it. It has you order your debts from highest to
lowest interest rate and pay them off in that order. This is regardless of the size of the loan
itself. The upside is the fact that you’ll be paying
less in interest. The downside is in some situations it may
take quite a while to get rid of that first bill. For those who are more motivated by seeing
the balances of the debts themselves going down this may not be much of an issue.


For those that are more motivated by the lowering
of bills, this could be an issue in some situations. The debt tsunami has you order your debts
from the most emotionally stressful to the least emotionally stressful and pay them off
in that order. In some cases, this could mean paying off
the largest balance that also has the lowest interest rate first. However in my experience that is not commonly
how it goes. Most of the people that I’ve seen use this
strategy tend to use it because there are personal loans between family or friends that
are causing a lot of stress in the relationship. The person with the debt uses the tsunami
to get rid of that loan first and then often switches to a different strategy such as the
snowball or avalanche. Which is another viable option for many people. There’s nothing stopping you from starting
with one strategy that will help get you going and then switching to another that will work
for you longer-term.


I know a lot of people who have started with
the snowball to get themselves some momentum and then switched to the avalanche once they
were on a roll so that they could save on interest. Another thing I would recommend looking into
is the power of the debt snowflake. If you haven’t heard, the debt snowflake is
a strategy where you find ways to free up money (or just happened to find the money)
that you can put towards your debt payoff strategy. The nice thing about it is it works well with
any of the other three strategies I mentioned. While by itself it isn’t game-changing it
does help your primary strategy do its job a little better. And as we know every little bit helps. If you need more motivation make sure to check
out Dave Ramsey’s YouTube channel and their debt-free screams playlist.


It’s filled with a lot of amazing stories
of people paying off loads of debt on various levels of income and getting to see their
relief when they are finally debt-free is very inspiring. You might also find their Turning Points playlist
interesting. It is essentially interviews of people who
have become debt-free talking about what made them decide to go through that process and
achieve that lifestyle. I’ll leave a link to both playlists in the
description as well..

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How to Make $100 Per Month in Dividends #shorts

if you want to make a hundred bucks a 
month in dividends it is going to take   quite the investment to get to that point 
but if you want to know how much you need   invested i'm going to show you how to do the 
math because it is fairly straightforward   the first thing you need to do in your calculator 
is turn the monthly amount into a yearly amount   so if you want to make a hundred bucks a month 
just take a hundred and multiply that by 12   meaning 12 months in a year and you're going to 
get 1200 bucks which is the annual amount that   you want to be making in dividends now just look 
up any stock that pays out a dividend and find   their dividend yield so in this case coca-cola 
is paying out a current dividend yield of 2.59   now just go back into your calculator and 
take your yearly amount which was 1200   and divide that by .0259 in the calculator 
and that is going to give you 46 332 bucks   that you need to invest today in order to make 
100 bucks a month in dividends through coca-cola

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401K to Gold IRA Rollover

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Norway’s $1.4 Trillion Wealth Fund That Humiliates The World

Have you ever wondered why social security is absolute garbage? Every year, they collect 12.4% of everybody’s
income up to $18,000. Yet, they’re projected to fall short of
their payouts by 2034. Some people blame it on the pandemic, others
blame it on bureaucracy, and others suggest that it’s simply a side effect of people
living longer than ever before. While all of these are valid points, none
of these is the fundamental problem with social security. You see, the fundamental problem with social
security is that it generates no real wealth. In 2021, Social Security pulled in $1.118
trillion in income. But $1.001 trillion of that was from contributions
and $41 billion was from income taxes charged on benefits. Social security only generated $76 billion
in investment-based income which is a measly 2.61% annual return. Given that that barely keeps up with long-term
inflation if that, it’s no wonder why Social Security is trash when it comes to creating
real wealth.

Now, you don’t actually have to worry about
social security running out because I’m sure they’re gonna either increase the tax
rate, decrease benefits, and/or print money to make up the deficit. But, what if there’s a better solution. What if instead of investing in low-yielding
bonds, social security invested in the stock market, real estate, and energy not just in
the US but internationally. This would generate true returns for social
security, and they would not be nearly as dependent on contributions. At first glance, this might sound riskier
and it is, but this is exactly what sovereign wealth funds around the world have been doing
for decades. And the most successful fund of them all is
Norway’s Sovereign Wealth Fund also known as the Oil Fund. As of December 2021, the Norwegian Fund boasted
a total of $1.4 trillion worth of assets. To put that in perspective, Social Security
only controls $2.9 trillion despite the population being 61 times larger. On a per-capita basis, Social Security has
$8,825 worth of assets per person. Meanwhile, Norway boasts a whopping $260,271
worth of assets per person. Norway literally has over a quarter-million
dollars worth of assets per person.

Now, I’ve been picking on Social Security
thus far, but really, Norway blows the rest of the world out of the water as well. China’s wealth fund, for example, controls
$1.1 trillion worth of net assets. But compared to their population, that’s
not even $1000 per person. So, here’s how Norway built the most successful
sovereign wealth fund in history. HISTORY:
Taking a look back, the history of Norway’s wealth fund dates back to the year 1960 when
Norway’s prime minister Einar Gerhardsen got Norway involved in the oil business. He gave oil companies from around the world
licenses to come and search for oil within Norway. Oil companies were allowed to keep the profits
they generated, but they had to pay petroleum taxes and leases to Norway to continue operations.

It took a couple of years to get the ball
rolling but starting in 1966, oil companies flooded in looking for oil. Within the next 4 years, they drilled 37 wells,
and on the day before Christmas Eve in 1969, they struck oil in the North Sea in an oil
field called Ekofisk. This turned out to be the largest oil field
ever found at sea, and by 1971, oil production would begin. It didn’t take long for Norway to start
raking in loads of money, and soon enough, they started to discuss what to do with the
money. This was not a fast process by any means as
it would drag on for 12 years, but eventually, in 1983, they came to a consensus. They decided to create a fund that could invest
the profits generated from the oil industry hence the name oil fund.

The best part was that the government was
only allowed to spend real returns which are the returns after accounting for inflation. This seems like a no-brainer, but it’s not
nearly as common in application. We can’t give Norway too much praise though
given that their government was just as slow as the rest of the world. It wasn’t till 1990 that Norway actually
went ahead and created the fund, and it wasn’t till 1996 that the fund received its first
cash injection from the Ministry of Finance.

It took 36 years to get to this point, but
at least they did it, and now, it was time to invest. INVESTMENTS:
One of the hardest parts of running a successful investment fund is effectively investing all
the capital. Even investing moguls like Warren Buffett
struggle with this issue. Norway also fell into this trap early on and
they would end up investing all of the money into government bonds. But, fortunately, just one year later, they
diversified heavily into equities.

Norway approved for 40% of the fund’s capital
to be invested into equities, and they gave Norges Bank Investment Management the responsibility
of investing the money. Within just 6 months, the bank converted all
40% into equities, and with that, they were booming. In 2000, Norway approved the fund to diversify
into 5 emerging markets, so Norges had a pretty broad set of choices when it came to investments. But this didn’t mean that they could just
invest in anything. There are 4 main categories that are blacklisted
from the fund for various reasons. First of all, the fund is not allowed to invest
in any weapon production companies like Boeing, Airbus, and Lockheed Martin. Secondly, the fund is not allowed to invest
in any tobacco companies. Thirdly, the fund is not allowed to invest
in any companies that cause environmental damage.

This one is a bit ironic given that all the
money is the fund originated from oil, but I guess they’re limiting their environmental
impact as much as possible. Anyway, the last major category the fund is
not allowed to invest in is companies that are notorious for human rights violations. Fun fact, Walmart was blacklisted for this
reason till 2019. With all these guidelines, Norway was chugging
along through the 2000s quite strongly, but then the 2008 financial recession rolled around. In just one year, the fund lost 23.31% or
nearly a quarter of all their investments. Many people in this situation would panic
and sell all their stocks, but Norway wasn’t concerned. In fact, they were excited and optimistic
to buy the dip. In 2007, Norway increased the fund’s allocation
to equities from 40% to 60%. And in 2008, they created a 5% allocation
for real estate. Honestly, they couldn’t have played this
any better. They brilliantly bought up the bottom of the
market, and they have been rewarded extremely well. In 2009, the fund posted a 25.6% return and
the fund has grown 5x since the recession.

Today, the fund boasts an annualized return
of 6.56% since inception which is a bit lower than the S&P 500 7-8% annual. But, the Oil Fund is 18 times as diversified
as the S&P 500 with stakes in 9,123 companies spread across 73 countries. At the end of every year, Norway reveals all
of its stakes in a massive 400-page document. It would take forever to go through all these,
but just skimming over the most notable ones, they have $21 billion in Apple, $17 billion
in Microsoft, $7.8 billion in Facebook, and $14.5 billion in Amazon. Considering all this, I don’t think you’d
be surprised to hear that the Oil Fund is the largest stock owner in Europe. And given how strategically they’ve played
the market so far, I think they more than deserve that title. WITHDRAWALS:
Having all that money is great and all, but what’s the point if you can’t spend it. As we previously touched on, Norway is allowed
to withdraw real returns from the fund every year, but Norway didn’t even do this till
2016 when they made their first withdrawal.

Since the 1990s, Norway has averaged about
2% inflation per year, so this would mean that Norway is allowed to withdraw about 4.5%
per year because that’s their real annual return. But they don’t even allow for that. Norway limits its withdrawals to 3% per year
which is very similar to the 4% rule with the S&P 500. The rule goes that if you withdraw 4% or less
every year from an investment into the S&P 500, you’ll never run out of money.

So, it’s again quite smart that Norway has
limited withdrawals to 3%. After all, you don’t want to kill the golden
goose. When the country needs money though, Norway
doesn’t hesitate to take out the full 3%. In 2020, for example, Norway withdrew $37
billion from the fund to battle the pandemic. Anyway, looking forward, Norway predicts that
the worst-case scenario for the fund in 2030 is $455 billion and that the best-case scenario
is $3.3 trillion. If the best-case scenario plays out, the Oil
Fund would overtake social security in assets in the second half of this decade.

And at that rate, the fund would have $1 million
per citizen by 2040. Having said that, there’s no question that
the Oil Fund is a massive success financially. But, critics argue that the fund isn’t nearly
as successful when it comes to ethics. ETHICAL CONCERNS:
Probably the biggest criticism against the Oil Fund is that all of its contributions
are derived from oil. But the truth is if Norway didn’t take advantage
of the demand for oil, someone else would’ve filled the gap.

Over the past 60 years, it simply wasn’t
feasible to produce renewable energy on such a large scale. So, if Norway avoided oil, it’s not like
customers would’ve switched to renewable energy. They would’ve just gone to Saudi Arabia
or Canada for oil, and these countries have plenty of oil to make up for the disparity. So, personally, I don’t believe that Norway
did anything unethical by leveraging its resources or the demand for oil. Another major criticism against the fund is
that their ethical boundaries aren’t enough. As a country, many argue that they have the
responsibility of being a good role model and supporting productive businesses only. One of the industries that critics argue the
fund shouldn’t be involved in is gambling and betting. This has actually been an ongoing issue for
many years now, and Norway has taken steps to ban investments in casinos. But so far, nothing concrete has taken place,
and the fund invested into Draftkings as recently as March of 2021.

And finally, the third biggest criticism against
the fund is that it’s controlled by Norges bank. Norges bank basically has full control of
the fund, and as long as they don’t break any guidelines, they can do whatever they
want. The bank does have 500 well-qualified financial
professionals, but at the end of the day, final investment decisions are left to just
17 finance ministry bureaucrats. When the fund had less than $100 billion,
this wasn’t a very big concern. But now that the fund is reaching into the
trillions, these guys have substantial financial power. They could use this power to prop up their
own investments and/or manipulate the markets. Aside from having a lot of power, many argue
that these leaders aren’t actually that great when it comes to investing and that
hiring better leaders would lead to far better returns. While all of these points are fair, I don’t
think you can complain too much given how well the fund is performing in comparison
to the rest of the world. APPLICATION TO THE US:
Given how successful the sovereign wealth fund has been for Norway, would it be possible
to apply such a system to the US? Well, some states in the US already have a
sovereign wealth fund like Alaska.

The Alaska Permanent Fund was created back
in 1976, and similar to the Oil Fund, the Permanent Fund is made possible through oil
revenue. As of 2021, the fund had $81.9 billion worth
of assets, and they disperse roughly $1600 per year per resident. So, clearly, such a concept is not foreign
to the US; however, it would be quite difficult to create a national sovereign fund especially
if it was funded using contributions. Here’s the thing, while such a program would
be extremely helpful to people with bad spending habits and little to no investments, it’s
not all that helpful for disciplined savers and investors. At the end of the day, such a fund is just
going to match the market if that. So, many would far prefer to just do that
themselves. If such a fund was created though, it wouldn’t
be all that hard to manage logistically. For example, if half of Social Securities’
reserves were converted into a wealth fund, that would entail investing about $1.5 trillion. While that’s a large amount, it’s quite
manageable within the financial world. After all, BlackRock has nearly $10 trillion
under management.

So, creating such a fund would definitely
be more of a political issue than a logistical issue. Personally, I’d be a fan of converting Social
Security into a wealth fund given that any sort of return would be better than Social
Security’s 0% real returns. But that’s just what I think. Would you guys support a sovereign wealth
fund? Comment that down below. Also, drop a like if you’re a fan of Norway’s
wealth fund.

And of course, consider joining our discord
community to suggest future video ideas and consider subscribing to see more questions
logically answered..

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Retirement Struggles: 2 Things I Struggled With When I Retired

what's going on everyone welcome back to the show 
so as you guys can see now I'm on the road and   I am on my way to Las Vegas there's a convention 
the National Association of broadcasters   convention and so I'm gonna go to that see what's 
going on when it comes to the new technology comes   the cameras and audio equipment things like that 
but I wanted to talk a little bit about retirement   and I just want to add on to the video that 
I posted a couple of days ago and if you guys   can do me a favor like I've I've stated in 
previous videos actually I stated only in   one video the last video that I posted about 
please support the retirement content because   YouTube is not promoting this out the same 
way that it would promote some of my other   videos so like if I post a video on a social 
security update usually YouTube will promote   that but when I talk about retirement for 
whatever reason YouTube does not promote that   now you guys can do me a favor by just hitting 
the like button subscribing to the channel   hitting the little bell notification all that 
good stuff that helps with the algorithm but   by also sharing this content with your family and 
friends and that helps with the algorithm as well   so I'm almost I'm actually almost to Vegas I've 
been driving for the last two and a half hours and   I just thought about something I wanted to talk 
a little bit about when it comes to retirement   so as you guys know if you don't know 
I retired about it's been a year in   a year and six months no not 
a year a year and four months   and one thing that I did not anticipate and this 
is I talked about some of the things in a previous   video and I'll post a link to that video so you 
can check it out but one of the things that I   didn't expect and this is more of a negative when 
it comes to retiring is that a lot of the people   that you work with so your friends at work and I 
consider friends at work and your friends that you   grew up with they're kind of in different banks 
right they're not the same because your friends   you grew up with I have friends that I grew up 
with and they've been my friends for for years   and years but when you start working somewhere 
of course you're going to develop friendships   but it's kind of a situation where I don't 
want to say it's a forced relationship   but you do have to spend a lot of time with 
those people anyway and sometimes that develops   into a relationship where you might go out 
to lunch together and you might even spend   time outside of work with them and so one of 
the things that I didn't anticipate is those   people that you do have relationships with at 
work and you go to lunch and things like that   some of those people will not be around when you 
retire so they might continue working and you   retire and you don't hear from them anymore and so 
that's one of the things that I didn't anticipate   I was thinking you know what some of these friends 
we've had a friendship for years let's say five   ten years and it was okay when we were working 
together because we saw each other a lot and   we spent time and talked about different things 
and all that but when you retire it's different   now you're not a part of of the company anymore 
you're not a part of the the the the the workforce   um and so you don't see that person very often and 
you might not have even talked to them that much   on the phone or text with them that much when 
you were working because you saw them all the   time but now that you're retired it's totally 
different because now you don't text them and   you really don't hear from them so that was 
a big thing that I had to kind of adjust to   and there are some people that I still talk with 
there are some people that I work with that I   still talk to on a regular basis that I go out 
to lunch with even now that I'm retired I still   got to go out to lunch with them and spend time 
with them but some of those people I was already   doing that before I mean that it was already it 
was already established like I met them at work   but we already had a friendship outside of work 
and so that friendship was able to continue   where is there some other people that I had 
relationships with didn't really spend too   much time outside of work with them and those 
are the people that you you really don't hear   from maybe I'll hear from them once in a blue moon 
if someone got fired and they wanted to share this   information with me for whatever reason that that 
kind of stuff where something happened that was   drastic at work where they want to share that with 
you and so I think it's just something that you   should think about when you retire who's still 
going to be around as your friends and who is   not going to talk to you anymore or pretty 
much they're going about their business and   you're not a part of their life anymore and like I 
stated I've had I have friends that I grew up with   and they're still my friends today and I spend 
time with them so this is not anything for me   it's not a big deal but it's just an observation 
it's something that I didn't really anticipate I   was thinking that some of the people that I 
spent a lot of time with at work I probably   still be in touch with them after I stop working 
there but it is it it's not that's not the case   and so I just wanted to mention them now there 
are some other things when it comes to retirement   that are were Shockers to me things that aren't 
really you know positive and I wanted I talked   about in the previous video I talked about all 
the the positives of retirement and they're   the positives far outweigh the negatives when it 
comes to retiring and so I just wanted to mention   this and I'm really when it comes down to it 
if you are in a situation where you have the   opportunity to retire especially if you have 
the opportunity to retire when you're younger   and you can afford to do that I highly highly 
recommend taking taking that that uh that leap   because there are so many things that you can 
benefit from if you retire and what some people do   is they will especially if you work 
where you're receiving a pension   what a lot of people will do is they'll go ahead 
and retire and start pulling that tension in and   then go somewhere else and get another 
job in in the law enforcement community   this is very common you see this a lot because 
you're working in law enforcement you're working   for the government you're usually going to receive 
a pension and they will take that pension and then   go and they can do the same job go to another 
agency that has a different Retirement System   and then they can collect their pension 
after they've retired from the the first   uh the first law enforcement job and then go 
to another law enforcement job and double dip   and so that's very very common and not you know 
I'm not talking about just police officers and   things like that I'm talking about people 
who work for a government in general so it   doesn't even have to be just law enforcement most 
government jobs they have pension plans set up   and so they will do that exact same thing 
they'll leave they'll go somewhere else and   they'll they'll be able to collect a pension 
as well as work another job and and double dip   and so that's another option but I I highly 
recommend as soon as you can if you can retire   do it there are a lot of people out there that 
are struggling at work and they might not ever   be able to retire and that's really sad and 
there's some people that are doing fine at work   and they can retire but they don't know 
what they're going to do when they retire   and so they just continue to work and just my 
opinion that's the wrong the wrong way to do   things not everybody I mean some people they 
love their job and that's why they stay there   and they they don't know what they would do 
without their job and I completely understand   that one of the other negatives when it comes to 
retiring is now you're no longer on a schedule   whereas when I was working I had a schedule 
got up at a certain time in the morning Monday   through Friday eight at a certain time 
in the morning got to work ate lunch at   a certain time everything was was structured 
whereas when you retire that structure is gone   and that's one thing that I had to to learn really 
fast was I need to have a structure so if that   means me creating my own structure or something 
working a part-time job or doing something I need   to have that structure because if not then I end 
up not doing anything for days on end where it's   like okay I I plan to do something and then I 
just keep putting it off because I don't have   that structure and so that's something that's 
really important and something that I've learned   just in this year and a half that I've been 
been retired I've learned the importance of   I need to be on a on a schedule and I need to 
stick to that schedule so I can get things done   and so I just wanted to share that with you 
guys and those are the two main things there   when it comes to retirement that I've noticed 
just in this last a little over a year   the fact that some of your friends at work you're 
probably not going to hear from when you retire   and the schedule aspect you need to be on the 
schedule and I say that I shouldn't say you   need I need to be on a schedule in order to get 
things done when I retire because that's just the   way way I am and I've been working for the vast 
majority of my adult life on a schedule and so   it's hard to be off the schedule when you retire 
and so I just wanted to share that now I want   you guys in the comments below if you guys can do 
me a favor let me know some of the the struggles   that you found in retirement so let me know that 
in the comments below and if you like this video   please give me a thumbs up please subscribe for 
more next time you guys see me I'm going to be   in Las Vegas and I will continue to post videos 
every day so that's not going to change but I   just wanted to give you guys a quick update and 
yes I'm on my way to Vegas next time you see me   it'll probably be me shooting a video out of the 
hotel so it'll be a little different environment   and I might even show you some some stuff from 
the the actual uh the conference that I'm going to   so that's all I have like the video 
subscribe for more please share like   I said please share this video with others and 
I will talk to you guys in the next one goodbye

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The 4% Rule for Retirement: What You Need to Know!

one of the most common retirement planning 
questions people have is how much money can   I pull from my portfolio every year and live on 
in retirement and that's where the four percent   rule comes in handy and it basically says that 
if you can pull four percent or less from your   Diversified portfolio invested in things like 
stocks and bonds and live off of that amount   while keeping the rest invested then there's 
a good chance that your money is going to last   20 30 years or more and as a frame of reference 
if you had a million dollars then four percent   would be forty thousand dollars if you had 
five hundred thousand dollars it would be   twenty thousand dollars per year and it's not 
set in stone it is based off a study that was   done many years ago and has held up well over 
time but there are instances where people as   they get older could pull more or if they retire 
early maybe they want to consider even doing less   than that but it's a really good way to get 
a frame of reference on looking at how much   you've saved and what that can translate 
into in retirement as far as income goes

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7 Ways One Simple Action Improves Retirement

– In this video, I'm
going to blow the lid off of the most common
mistake made in retirement and in the process bring
clarity to your next move if you carry a lot of debt. Coming up next on "Holy Schmidt." – Holy Schmidt! (object splats) – Recently, I ran into a friend of mine at a hotel lobby in Chicago. He's someone I hadn't seen in years, but someone that I had always
meant to keep in touch with, so it was great seeing him. We got on the subject
of debt and it was clear that he had read a lot of the
books out there on finance. He talked about good
debt, bad debt, no debt, an emergency fund, all of it. But the problem was, in the discussion, it was clear that he was
misapplying many of the concepts. He had read the words in the books, but he actually had not
applied them correctly. One particular point in the
conversation was very tense. He said to me he would rather have $50,000 in low-risk securities
and $30,000 in debt, even credit card debt, as
opposed to having just $20,000 invested in low-risk securities.

When I asked why he thought this, he used some strange
end-of-the-world example and said to me that, "If
we're all living in caves, and this is the end of the world, I would rather have $50,000
in cash than $20,000 in cash because the credit card companies would have a lot more to worry
about than little old me." (thunder claps) "Okay," I said, "But if you're living
life in the real world, you have real credit card companies that have debt collectors that go out, and they try to collect the debt. They actually put a judgment against you. And if you have a judgment against you, they can put a lien on your assets, particularly your checking account, at which point you won't have any cash because everything in there
will go to pay down your debt.

He looked totally confused.
So I help him translate. "If what you're saying is that you would rather pay your grocery bill than your credit card bill, I get it. That will last about a month, maybe two, before things start to go horribly wrong. But let's assume that you are
not being hunted by zombies. (zombies snarling) And you're not trying to determine what the best currency
is in the apocalypse. (knife sharpening) Debt is real, and it needs to be paid." Here's why you should have
no debt in retirement. By the way, if you have
debt, even a lot of debt, I've got you covered. There's another video
that I have, outstanding. I'll put a link in the
description below that you can use to get rid of your debt
very, very quickly. But I digress.

get back to this video. First, for those of you
who think like an investor, you'll know that the higher the return, the higher the risk, generally speaking. If for example, you invest
in US government securities, that means your investment is as safe as the US government itself, that is, if you hold your
bonds until maturity, and you don't sell them
in a choppy market. (cow bell ringing) But assuming you hold your
government investments until maturity, the five-year US government
note is currently paying (keyboard clicking) 3.39% as of five seconds
ago according to Bloomberg. On the other hand, if you invest in high-tech
Silicon Valley startups, your return could be
15, 20, 30, 50% or more, or you could lose it all. That's how high-risk investments work. But what if you could get
US government type risk and Silicon Valley type returns? (cash register rings) Well, that is the best of both worlds, and there's only one way
you can really do this, and that's to pay off your
outstanding credit card debt.

Let me explain. Imagine that you had $10,000 to invest, and you could either put it
towards a dividend paying stock that paid a 4% dividend. That would be a very good
dividend, by the way. Or you could use it to pay
down your credit card debt, and let's make the math
easy for this example. Let's assume that your credit card company only charges you 4% on your credit card, but whether you had a
4% dividend paying stock or you had a 4% credit card, your cash flow would look about the same. You would just use your dividends to pay off the interest
on your credit card. Of course, dividends are
actually paid semi-annually or annually, and credit card
payments are paid monthly.

But let's ignore that for just a moment because the point of this is not that. The point of this example is that if you had $400 of dividend income and you use that to pay off the
interest on your credit card or you didn't have $400 of
interest on your credit card, the cash flow would
look basically the same. Now, this is where people
get confused. (blows) Earning $400 of dividend
income is not better than avoiding $400 of expenses, and credit card companies don't charge 4%. In fact, they charge between
18 and 23% on average. In fact, the average according
to Wallet Hub is 19.07% as of today.
(whip whips) So your return on investment
is 19% in this example, not 4%, and it is as guaranteed as the government interest
on the government bonds, maybe even more so 'cause if you don't owe debt, you don't have to pay interest on debt. That's guaranteed. Is the dividend guaranteed? Nope. In fact, the company can
cut the dividend tomorrow, or they can go out of business, and you can lose all of your money. Now here is the sinister
part to all of this.

If you receive a $400 dividend, do you have to pay taxes on it? In most cases, unless it's in a Roth IRA, but if you avoid $400 of expenses, do you have to pay taxes on
the expenses that you avoid it? No. In almost every example,
you'll have more spendable cash if you avoid paying a dollar of expense rather than receiving a dollar of income. Now add a bunch of zeros onto that, and it becomes real money, which brings us to the next point. Even a modest improvement in cash flow improves your retirement
picture pretty dramatically.

Here's why. When you're living your life, the fun discretionary stuff usually comes from the last 5, 10, maybe even 20% of your monthly income. The average retiree who carries debt spends 38% of their income
to service that debt. Now imagine what you could
do with 38% more income, particularly noting that the
last part of your cash flow is what's used to pay
for all of the fun stuff. Then, and this is big, if you
have an extra 38% in income, this is a great margin of safety cushion in case something goes wrong. This happened to many of us recently. In 2022, the average retiree
lost between 15 and 20% of their account value if they had their assets
in a target-based fund, which is over 80% of retirees, by the way. If this was that type of year,
(warning bell alarms) and you didn't have that cushion, this would mean that you'd
have to continue to sell assets at a reduced price and
crystallize the losses just to sustain your life. But if you're like my friend
Rulph from the Chicago Hotel, you're going to use that extra cash flow to build your apocalypse fund.

The rest of us call it an
emergency fund, by the way, but whatever you wanna call it, it's something that you
can designate as extra cash in case the world changes
on you all of a sudden. Importantly though,
you're using your assets to pay down your debt, so
that's taking a step back, but that will allow you to
take multiple steps forward because you're not paying
high interest on that debt, and you have extra cash flow to rebuild your emergency
fund the right way. Next is just the effect of
having debt in your life and the effect it has on
your health and wellbeing. Let me explain. I am personally in the middle of several weeks of a very
challenging point in my life.

Now these challenges are good challenges because I'm pushing ahead on
projects that are important and the end result is that they will yield some incredible outcomes for both me and for other people. But it is really stressful,
as you can imagine. And while the outcome will be great, this is a lot harder than
just doing regular work. But here's the most important thing. At the end of these projects, there will be a lot of celebration (fireworks exploding)
both for me and for others. They will have a very
positive outcome at the end, but if the stress wasn't due to something that would conclude at a point
in time and conclude well, imagine having to deal
with that level of stress every single month. This is what I'm talking about. The debt holder is worrying
about how to afford life. It's not a carrot, it's a stick, and this worry goes on at the
end of every single month.

This can very quickly affect your physical and mental health. Next, this will improve your relationship with family and friends. Imagine being able to
spend more time and money on those that you love, your spouse, your kids, your friends, being able to go out more
often, do more things. Most relationships that end
end for one of a few reasons, money being one of the big ones. So if you're taking the
money issue off the table, or at least moving it to
the side a little bit, relationships tend to get better. We talked a lot about credit card debt and personal debt in this video, but the question always comes
up when talking about debt, what about mortgage debt? Well, there are two answers here. The first is the mathematical answer, and the other is the personal side answer. Mathematically, if you have a mortgage that's 3 or 4%, and
inflation is running at 6%, well, there is an argument to be made to keep that debt outstanding
as long as possible, but imagine how you would feel
if you had all of that debt from the mortgage
redirected into your life.

That's the personal side, and that's the side that most
people actually care about. If you like this video,
check out that video. It's a video on where retirees spend 80% of their income in retirement, and it's one of my most popular. This is Geoff Schmidt.
Thanks for watching..

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Gold IRA rollover – Satori Traders

a gold ira rollover can protect your retirement savings from today's rising inflation americans are being assured that inflation is transitory but prices keep going up from 1963 to 1980 silver prices increased by 2700 percent and the price of gold increased by 1600 percent savvy individuals are recognizing that today's inflation could significantly reduce the value of their retirement savings they are concerned that inflation will make their desired retirement unaffordable so what's the solution how can americans protect and secure their retirement savings from the ravages of inflation the taxpayer relief act of 1997 provides one answer to that question this law allows investors to hold physical precious metals inside their ira accounts money in existing retirement savings accounts can be moved into physical precious metals using a gold ira rollover in fact all of these account types are eligible for a rollover or transfer keep these important ira facts in mind investors may have more than one ira open opening a gold ira does not affect existing retirement accounts investors are allowed to move funds from one tax advantaged account to another without penalty and only one rollover or transfer per year is permitted when funds are transferred from an existing ira to a precious metals ira the transaction must be completed within 60 days to avoid tax consequences there's a simple four-step process for opening a precious metals ira one open a self-directed ira account with an irs approved trustee two fund the account three choose a custodian to hold the physical precious metals and four pick which medals to hold in the account the account can be funded with either a rollover or a transfer there are two options for funding a new account in a rollover funds are wired from the current account trustee to the trustee for the new account in a transfer funds are first distributed to the investor and the investor then deposits all or some of the distribution into the gold ira account these tax rules apply to precious metals iras only irs approved metals can be held that means silver gold platinum and palladium distributions can be taken in cash or physical metal distributions are treated as ordinary income at the investor's tax rate and precious metals held inside an ira are not subject to the 28 tax rate for collectibles to protect and preserve your retirement savings with a gold ira rollover click the link below

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Is Now A Great Time To Invest In A Gold IRA?

investing in gold is one of the wisest choices 
you can make nowadays but have you thought is   this the right time to buy or should you wait in 
today's video we will examine whether or not now   is a good time to invest in a gold Ira we have 
seen inflation overseas conflicts the pandemic   and many other events affecting the value of money 
and during these times people who have invested in   precious metals are some of the least affected and 
of those precious metals gold is the best choice   full disclosure this information may not 
all be accurate as market and policy changes   may happen from the time this video has 
been published how gold performed in 2021   as a result of more investors shifting to riskier 
Assets in response to a strengthening global   economy demand for Safe Haven assets like 
gold decreased by around 4 percent in 2021   indications that central banks May speed up 
slowing down their huge pandemic driven money   production to kick-start the economy were to 
blame for it how will gold perform in 2023   these economic uncertainties are not close to 
being solved this year especially with the war   in Ukraine as the conflict goes on there will be 
a remaining impact on the commodity market and   Russia will play some cards in dealing with these 
kinds of sanctions besides these technical factors   gold reserves may also fall as inflation can 
impact the mining Tech and exploration sectors so   it is quite possible the prices of gold will go up 
by next year is it the best time to invest in gold   the short answer is yes the ideal time to invest 
in gold is when a recession hits the market at the   time of this video being made the United States 
is in a technical recession and with inflation   being at an all-time high we're seeing volatility 
in the market which we haven't seen in a long time   the great thing is that Gold's value has 
remained relatively steadily over time even   during difficult economic conditions and that 
makes it a valuable addition to any portfolio   and investing in gold through an IRA is the best 
way to protect your Investments today if you'd   like to learn more you can get a free gold IRA 
kit by visiting the website shown in this video   or in the description this kit contains valuable 
information for starting a new account adding   assets to it and picking a custodian instructions 
on how to buy gold and other precious metals store   them and withdraw money from the account could 
also be included in the kit if you've found our   video helpful make sure to hit that like button 
and subscribe to the channel thanks for watching

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Generation Wealth – Official Trailer | Amazon Studios

– If I wanna work 100 hours a
week and never see my family and die at an early age
that's my prerogative. – I would have money as big as this room. And kiss it. – 33 pounds of gold and diamonds
given to me by superstars of the world. – I love money. Come to me. – I've been a photographer for 25 years. With my lens focused on wealth,
I noticed that no matter how much people had, they still want more. I wanna figure out why our
obsession with wealth has grown. It seemed to be a shift
in the American dream. – I know the name's of the
Kardashians better than I know the names of my neighbors. – This fictitious
lifestyle fuels this sense of inadequacy. – I have the classic Birkin
in almost every color. – The bags start $20,000 and go up. – I realized wealth was
much more than money. It was whatever gave us value. Fame, sex, even plastic surgery for dogs. – It's kind of like the end of Rome.

Society's accrue their greatest
wealth at the the moment that they face death. – If you look great and
you have a nice car, I'm all for it. But at the expense of what? – [Woman] You sell your soul to the devil. – You're so hungry for it you're blinded. – I am on the FBI most wanted list. – All of us are following the toxic dream. – If you think that money
will buy you anything and everything, you've
never ever had money. – Dollars, dinero, money is what it takes..

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Pay This Off Before You Retire – Retirement Planning Tips

in this video we'll look at what expenses you should think about getting rid of before retiring and a few mistakes that retirees make when it comes to expenses in retirement there's a few things that you may want to say goodbye to before you say goodbye to that wage or that work income we're going to cover this in three parts it's going to look like this first we'll go over needs and wants and then what i'd call highway robbery and then also what to ear mark in retirement we've seen that the retirees that can get rid of these expenses before retiring have a little bit more breathing room and they feel better about their retirement plan because when you're planning for retirement we usually think about really two types of expenses it's the needs which are the essentials the absolute must-haves to just live you know as you think about my maslow's hierarchy of needs those things at the base layer and then there's the wants which are the the nice to have things but then there are other types of expenses that really don't fit into that category of needs or wants those are the things that we need to be done with before retirement and by the way i'm dave zoller and me and my team we run streamline financial it's a wealth management firm focused on retirement planning and we've been helping people personally for 13 years and streamlines been around for 22 years and we created this channel to share what's working with our clients so that you can benefit too so if you're close to retirement be sure to subscribe because i share one new video each week to make your retirement a little bit better i also put some free resources in the description below like my favorite diy retirement planner if you're more of a do-it-yourselfer so let's get into the list and then as you're watching if i leave something out please share it in the comments below i'd love to hear from you and then also i'll try to reply back to depending on how many comments i get so the first two you will probably agree with but you might not be thinking about the other ones and i want to show you ways to prepare and just make sure that your retirement is a little bit smoother by using our retirement planning software the first one which you already know is to pay off high interest debt which i sometimes think of as highway robbery it's when those interest rates are just so high and they're charging people it just seems unfair right that high interest debt i'm referring to is usually credit card debt and sometimes it's student loan debt and you'd be surprised at the number of people who in their first year of retirement they still have a large monthly payment towards credit card payments or student loan debt and this should be the number one thing that we should focus on to really reduce before we say goodbye to that job income or that wage because if you retire with credit card debt and then you get serious about paying it off in retirement then that means you've got this bigger amount that you got to take from investments which could alter your retirement plans i helped a woman recently who's not a client but she was looking at her plan and she wanted some help and she had about 20k of credit card debt she also had over a million dollars and her regular expenses adding on this 20k of a lump sum expense to her plan it really made quite an impact and once we looked at that together it gave her the motivation to work a little bit extra and extra hard to get this debt payment down to zero or get the credit card debt down to zero before retiring because she'd have a greater peace of mind and it would just increase her confidence as she was going into retirement that peace of mind it's key right i'm sure you're feeling the same way i actually want to share a little bit more about how to achieve this before you retire and during retirement and i share that at the end of this video so stay tuned the next ones are expenses that you can either pay early or at least you want to earmark these in your retirement plan and i'll show you what i mean when i say earmark that just means setting aside funds for specific purposes and either not including those funds in your retirement plan or including them but at least showing the specifics within the plan and i'll show you some images coming up of a retirement plan and how to do this number one thing to earmark is any big travel expenses that you're looking forward to that first year of retirement or really the first few years of retirement a lot of people kick off retirement and they'll really have a big special trip that they've always wanted to take or a place that they've always wanted to go to and lots of times that vacation it's going to cost more than the typical vacation that you might take on a regular year it's really that cap to uh ending work and then really doing a bigger than normal trip some clients choose to take one of those european uh river cruises that are pretty popular and they can cost 10 to 20k or more and knowing that this is a bigger than normal expense or a lump sum expense coming soon into retirement you can either pay that ahead of time like actually many of the cruise places make you do or you can at least earmark it in the plan and make sure that it all works with everything and i'll throw it in there as an example coming up soon here's an example of a retirement plan that's based on annual expenses going up each year three percent regular inflation rate and then over on the left side we can add some expenses that are bigger and irregular you know not the regular every year expenses but things we can earmark so that we can see the impact of on the plan before actually spending the money and doing it this way we can add some peace of mind to your retirement plan and your confidence as you're spending money and so you can just feel that it's a good decision and feel good about that vacation or whatever it might be a few other bigger than normal one-time expenses we've seen are related to your adult kids if you have them whether it's final college expenses or maybe a wedding that you want to help out with or future gifts maybe towards a home purchase or something like that for those you're not really able to pay those before you retire because we don't know when they're going to happen so earmarking them is the next best step and setting funds aside to make sure that these potential expenses that you might have in the future are ready and available ready to deploy when needed one mistake that we've seen some retirees make getting close to retirement is not factoring in these one-time expenses and then getting caught a little off guard when it's time to pay for them especially if we're in a market like we are now now you might be thinking one big expense that i did not mention and before i share that one if you enjoyed watching this video so far and you found it helpful please click the like button so this can hopefully spread to other people who are like you and might find it helpful as well so that one big expense that you might be thinking of that i didn't mention yet is paying off your whole mortgage before you retire and this is a big one for many people as you've heard before behind every financial decision there's also an emotional one as well and many people they feel very strongly or maybe adamant on on being debt-free in retirement and that's a really good feeling for for many people for others depending on their financial decision it actually a mortgage could actually make sense in retirement some people see it as a fixed expense which doesn't go up with inflation it actually gets cheaper as everything else increases with inflation and as one dollar can buy less and less over time which is basically what what inflation is it may be at really attractive interest rates as well and some people want to have a little bit more flexibility in their retirement accounts by keeping some funds available in their non-retirement accounts versus using that money to pay off the mortgage the more important thing to to think about when deciding whether this makes sense whether to pay it off or not is try to measure first just the emotional feeling or comfort with debt you know yourself and then also your spouse if you're married and then step two is map out both scenarios what does it look like that plan that we're just looking at over here what does it look like if you pay off debt early or don't pay off the mortgage at all look at the difference see which one's okay lots of times it comes down to the strength of the emotional feeling around debt for one person in the relationship or if it's just you then it's just whatever you prefer when we're thinking about paying off expenses or earmarking things in retirement get help from a financial professional a cfp could be a great place to start but i'd like to hear from you what did i not mention as we're thinking about these different expenses in retirement i'd love to hear your thoughts about these expenses and especially the thoughts on mortgage having a mortgage in retirement and i want to share another video about how increasing peace of mind and making sure that you get both parts needed for a successful retirement the sad thing is that in this industry the financial industry most of the time they focus on one thing but here's a video to watch that'll help you think about and prepare for both sides of retirement so hopefully i'll see you there and if you haven't already subscribe and then i'll see you in future videos take care you

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Retirement: I’m 60 Years Old with $900K in Savings. Can I Retire Now? What is My Risk Capacity?

so you're 60 years old with nine hundred thousand dollars saved and the question is can you retire in today's video we're going to look at a few different decisions that could be made the impact those decisions have on the plan with the overall goal of not running out of money hi I'm Troy sharp CEO of Oak Harvest Financial Group a certified financial planner professional host of the retirement income show and a certified tax specialist in today's case study we're going to look at a situation that's not too dissimilar from what we normally encounter in our day-to-day operations here at Oak Harvest Financial Group so we have James who's 60 years old he comes in and he says Troy I want to spend about seventy thousand dollars and I'm just tired of working I want to to this year to be my last year so I want to spend seventy thousand dollars I think I'm going to live to about 90 years old pretty good health and I want this fifty thousand dollars to increase with inflation over the course of my retirement but for the first 10 years and what I hear you talk about in this go go spending phase I want to spend an additional 20 000 per year bringing that first 10 years of spending up to 70 000 per year then that go go spending goes away and then we have the inflation adjusted 50 000 to plan for from age 70 to age 90.

Hey just a brief Interruption here to ask you to subscribe to the channel now what that does for you is that puts us Oak Harvest Financial Group and all the content we produce in your little TV Guide so you have a much easier way to come back and find it later share this video with a friend or family member and also comment down below I love to respond to the comments now if you have any questions about your particular situation or you'd like to consider becoming a client of Oak Harvest feel free to reach out to us there's a link in the description below but you can always reach out to us and give us a call and have a conversation to see if we might be a good fit for each other James tells us that since he wants to retire as soon as possible he he thinks it makes sense to take Social Security the first time available so claiming at 62 a little more than two thousand dollars a month at twenty five thousand dollars per year he also has that nine hundred thousand dollars broken out to four 401K money of 700 Grand then 200 000 in a taxable account or what we call non-qualified outside of the retirement account very important to point out here that the tax characteristic of these two accounts and the Investments inside them and the interest and dividends and the withdrawals from them are taxed differently so that's part of an overall tax plan now James also has a home that's completely paid for and worth six hundred thousand dollars but he's told me that I don't want to use this to fund any of my retirement goals I've lived in this home for a long time I want to stay in the home but we know from a planning perspective that we do have that in our back pocket if it's needed down the road so James's total net worth here is about 1.5 million looking at the paid off home of six hundred thousand the 700 Grand inside the 401K and the 200 000 of non-qualified or taxable account assets now as part of the process to understand where someone is and where they're trying to get to we have to understand how is the portfolio currently allocated so James tells us that Troy I know I've wanted to retire so I've been investing aggressively and trying to get ahead of the game but here we are in 2022 and the markets have pulled back some so that double-edged sword is starting to kind of rear its rear its head but we see James's 93 stock so one of the questions that we have from an internal planning perspective is if we keep this same level of risk while we retire and start taking income out of the portfolio what does that do for what we call the risk capacity or the portfolio's ability to take on risk while Distributing income in the retirement phase so we have to look at the guard rails and guard rails are essentially a statistical calculation of probabilities of the portfolio returning this much on the high side and a good year and this much on the downside in a bad year if these guard rails are too far apart and we're taking in income out if we run into a bad couple of years that bump up against that bottom guardrail but we significantly increase the risk of running out of money so part of the analysis of the planning is is this an appropriate guard rail for this type of portfolio given the desired income level so with everything we've looked at so far the question is if James continues doing what he's currently doing and retires with the desired spending level the assets that he's accumulated living until age 90 what is the probability that he has success well it comes in at about 61 so that's probably not a good retirement number it's something we want to see if we can work to improve so I'm going to pull up the what if analysis here and start to look at some of these different decisions that we could make and see if we can get this probability to increase okay so now we have the what if analysis where we have two different columns up here on the board right now they're identical we're going to keep this one the same as the base case everything that we just went through but now we're going to start to change some of these variables to see what the impact those decisions have on the overall retirement plan and this is much more of an art at this stage than it is a science because we want to start to explore different scenarios and then see what is most comfortable for you once you understand the impact of these different decisions you can take some time to kind of way think about them weigh the the pros and cons and now we're starting to work together to craft you a retirement plan that gives us increased probabilities of success but also something that you feel very very comfortable with so the first couple of options we have which are the most simple and usually have the biggest impact on the plan is that we can either work longer or spend less so James says no I don't want to spend less I have a specific plan I want to get my RV I want to travel the country I want to play some golf I've done my budget I need to spend that 70 000 for the first 10 years so the first thing we'll look at is the impact of working another couple of years so I've changed the age here to 63 as far as Retirement the only variable we're going to change at this time I don't want to change too many variables at once I want to see the impact of different decisions how they impact the overall plan okay so that gives us a bit of an increase but the next thing I want to look at here is social security so Social Security is a very valuable source of guaranteed lifetime income first it's an increasing stream of income it increases with inflation but two no matter what happens with the stock market that income is always going to be coming in so instead of taking the 62 and having a significant reduction in the lifetime income that we receive because I don't want to change spending we still have the 50 and 20 in here I want to change the Social Security from taking it a 62 to taking it at full retirement age okay so changing the Social Security election day gets us up to 76 we're definitely moving in the right direction here after a conversation with James and he realizing that you know what I do feel really secure with that increased social security income because if the market doesn't cooperate I know I'm still going to have that much higher income later in life so that would lead us down the road to say okay let's look at adding more guaranteed lifetime income if we can get your Baseline income to cover a majority of your spending needs then we don't need the market to perform necessarily as well later in life so now we want to look at the impact of adding more guaranteed income to the plan which has the effect of providing more security later in life because if the markets don't cooperate we know we have a certain level of income being deposited every single month no matter how long we live so if you go to our website here it's Oak harvestfinancialgroup.com com we have up top an income writer quote where this is constantly searching for the highest amounts of guaranteed lifetime income that are available in the marketplace simply input the variables here so in Texas age 60 Ira money income starts we're going to start looking at seven years here and I know the dollar amount I would want to put in 300 000.

The good news here is you can input any of these different variables we don't ask for your information so it's a calculator tool that you can play with on your own Single Life payout and we get quote okay so here's the output screen we have all of these different companies over here when you see the same company twice it's because that company offers multiple different products with the same income Rider so an income writer is just an addendum or an attachment to a contract that guarantees no matter what the stock market does a certain amount of Lifetime income based on the specifications you input so about thirty three thousand dollars here so that's about 11 percent of the initial deposit with that income starting in year seven this is why we call it a deferred income annuity because it gets a guaranteed growth to calculate a guaranteed lifetime income that you then would incorporate into your plan so in this what-if analysis we come down here we I've already inputted so three hundred thousand dollars and then we just calculate these scenarios okay now we're up to 87 percent here so now things are starting to look a little bit better let's make a couple of different adjustments here because remember when I talked about the guard rails that's too aggressive of a portfolio given the income need especially in the beginning years but now that we've added some deferred income into the plan the portfolio's capacity for risk increases later in life and all that means is because there's so much income coming in the portfolio can withstand a bit more volatility later once Social Security and the Deferred income annuity kick on because you're needing to take less from the portfolio so let's make a couple more adjustments here so after retirement we don't want to keep the the current investment strategy let's get a little bit more conservative here go from an aggressive plan to something a little bit more conservative and then you know what let's also say now that we're starting to move in the right direction instead of retiring at 63 what happens if we retire at 62.

Get your retired one year earlier than some of these other numbers okay now we're at 83 percent retiring at 62. I want to look at one more variable here because you may want to get a part-time job James may want to be a starter at a golf course maybe he wants to work in the church and he can get ten thousand or fifteen thousand dollars a year maybe just wants to work two three months out of the year so the next thing I want to look at is if we've done all this now what happens if during this first 10 years of retirement he decides he wants to work three months out of the year or maybe just a part-time job and work one or two days a week so instead of needing twenty thousand dollars per year we just need another ten thousand let's say from the portfolio so really that's only earning ten thousand dollars extra in retirement income you could do that driving Uber many different choices there you know what I'm just going to decrease this no I'll leave it there now with James deciding to maybe work part-time here to reduce that spending need in the first 10 years let's see if we can also get them retired at 61.

Okay so now James has decided that working part-time and hey we're talking 10 grand here so this isn't a lot of money now I want to see what happens if we go back to the original goal that James had of retiring as soon as possible at age 61. so we're going to change this back to his original goal 61 calculate all scenarios and now this gets us up to 94 so we started at 61 if where James was originally at whenever he came in if he kept doing whatever he was already doing we got him up to 94 percent here okay I want to take a minute before we finish the final Concept in this video to discuss some of the adjustments we've made so far to get James from 61 to 94 so first and foremost we adjusted the Social Security election strategy secondly we added that deferred income annuity thirdly James has decided to work part-time to generate ten thousand dollars per year in those beginning years to help reduce the burden of taking out an additional twenty thousand dollars of retirement income and then finally we've brought the guardrails in on the Investment Portfolio which helps to eliminate very bad outcomes that could happen with his original 93 allocation to stocks we haven't totally went to bonds or cash we've just brought those guard rails in by reducing our Equity exposure in the beginning years of retirement we can always adjust that later now last thing I want to do is look at what we call the combined details all of these things together in a spreadsheet just so we can see how these different pieces are working together and then look at what we call different Monte Carlo analyzes so now I want to share with you some of the individual trial analysis that we run just like we would for a normal client to help identify not only where the weak spots are in the portfolio but how these different decisions that we're making impact the overall client balance and it's not just looking at what we call an average rate of return it's looking at a thousand different simulations we're going to look at a couple here and the Order of the return so check out the video if you want to understand more about this concept you can click the link up above and the title of the video is how eleven percent average returns could destroy your retirement and that'll really get home that concept of it's not about what you average but it's about the order in which you realize returns over the course of your retirement during the day distribution phase so here we have this individual trial and we're gonna it's the median scenario out of a thousand different scenarios so I just want to go through this fairly quickly with you and based on some of the adjustments to the portfolio we see the investment return column here so all of this I think averaged out to I think it was about four and a half percent gross returns I can go back and double check that in a second but you see it's it's never four four four four four four four four or six six six six this is what it looks like in the real world so James retires essentially the beginning of 2023 we have the Deferred income annuity clicking on here we've changed Social Security to click on here so if we add these two together come heck or high water there will be minimally 74 000 almost 75 000 deposited into his bank account every single year now if we look at the retirement need it's about sixty one thousand dollars plus the discretionary Go-Go spending is about twelve thousand two ninety nine so about seventy three thousand dollars but what this does is because we're getting so much from these two sources it really reduces the need for the portfolio to perform and if we kind of go out go on out through retirement you see Social Security isn't increasing income so later in life now we're up to about 89 almost 90 000 of income and our ninety thousand dollars inflation adjusted retirement income need is covered by the amount of guaranteed lifetime income that we have in the portfolio which then allows our portfolio balances to stabilize because we're not needing it to support our lifestyle later in life so this is just one example here but we see the ending portfolio value even though it spends down a little bit in the beginning years okay it starts to stabilize because the income provided from the decisions that we've made put us in a situation where we don't have to withdraw so much from the portfolio Okay so now I want to look at a different trial and just to confirm here the 500th scenario was an average of 4.6 but you saw the different order of those returns and how we actually got to 4.6 okay so if we slide this up here let's assume it's a pretty bad scenario this is going to let me change it here find a worse return okay so this brings the average down to 3.05 and we still see in bar graph form here that the portfolio value still is stabilized and it's primarily because that change in the Social Security decision and adding the Deferred income annuity it still puts us into that position to where if the market doesn't perform we have enough income from guaranteed sources that we're not dependent on the stock market to provide us income in retirement especially later in life when we typically are more conservative and most people that I've worked with don't have the same stomach at 80 or 82 to stay invested in Big Market pullbacks as they did when they were 52 or 62.

Now what I want to show you is the comparison to what we just looked at in the individual trial analysis to the original plan that came in at 61 percent with all the original inputs so if James just wanted to retire not go see anyone make any adjustments I want to show you what that looks like on the individual trial analysis so remember in this scenario we kept Social Security at 62 no job so the spending stayed at seventy thousand twenty thousand was that go go spending no change to the portfolio so we still have the aggressive portfolio which brings in the possibility of some pretty bad outcomes and no deferred income annuity here to help stabilize the income generation later in life as well as the volatility impact on the portfolio so when we when we look at this so here we go um had James has a 900 000.

You see we have none of the annuity income here Social Security starts out at about 26 000 for him a little more than two thousand a month now look at the investment returns here because it's a more aggressive portfolio the range the guard rails are increased here and then finally the spending we have the fifty thousand plus twenty thousand increasing for inflation with the Go-Go lasting 10 years so in the first 10 years of retirement we see things are going pretty well even at this spending level because we have some pretty good returns in here even though we have a couple bad years but what happens is the income because of inflation the income need increases later in life and we see it really just takes a couple of bad years here minus 21 minus 12 we go from a million to 755 and then it's pretty much all downhill from there in this particular scenario running out of income except for Social Security which is now only up to about forty four thousand dollars per year compared to the other plan with the Deferred Social Security so full retirement age and the Deferred income annuity we were at I wanted to say it was around 85 88 000 um of income not dependent on the stock market here we're only at 45 in the mid 80s so that means we have to take more out of the portfolio so it's more susceptible to bad returns later in retirement now the big takeaway here is this is what a good retirement planner does it's not necessarily about the investment returns it's about determining how much money you should have in the market when you should take Social Security we didn't even get into taxes here additional benefits could be provided through tax planning but what you should do with taxes and identifying those spending goals and those needs in order to get you retired and stay retired and then staying connected to this plan over time that's what a good retirement advisor does it's not about outperforming the market it's about finding a plan that gets you and keeps you retired just a brief reminder here to subscribe to the channel now what that does is that puts us in your TV Guide here on YouTube so it doesn't cost anything but if you subscribe to the channel you can come back to us much more easily down the road make sure to comment down below and also share this video with a friend or family member that you think could benefit from what we're talking about today [Music] foreign

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