On the Money with Secure Money: Episode 67

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Video Transcript

Cynthia de Fazio – 00:21

And welcome to On The Money with Secure Money. My name is Cynthia De Fazio and I’m joined today by Brian Quaranta. He is founder and president of Secure Money Advisors. Brian, how are you today?

Brian Quaranta – 00:31

I’m great, Cynthia, how are you doing?

Cynthia de Fazio – 00:32

I am doing fantastic. It’s always a pleasure to see you. And I’m just so excited to hear about everything that’s going on with you and with the office. So, let’s talk about how busy you been.

Brian Quaranta – 00:44

Very busy, very busy. We always are, you know, we think between a TV show the radio show the educational events, clients talking about us to friends, family members, coworkers, were a very busy office, and I wouldn’t be able to do it without a great team. You know, that’s one thing that I really appreciate about what secure money advisors has become, is the culture that exists there. And of course, the fantastic team that we have. And that’s it’s good when you have a really great team, because they make me look really good.

Cynthia de Fazio – 01:15

Well, let’s talk about your team because it keeps growing. So how many people do you have now?

Brian Quaranta – 01:20

Believe we got about 12 to 15? Right now. So yeah, 12 to 15 people right now. And it does, it takes a small village to provide the financial planning that we do, and of course, also the servicing that we do every single year. Sure. And, you know, we’re very particular of who we choose as a team member. Because you know, there is a certain person type of person that we want, and we want them to mesh well with a team. And, and I know we’re doing the right things, because people will always tell me, you know, if they’ve been interviewing multiple advisors, you know, to, to help them with a retirement, when they do finally, you know, settle on us, I’ll say, you know, what made you decide us over the other two firms that you were looking at? And they’ll say, well, why don’t you guys provided us with a plan. But to there’s something about your office, your team has just been absolutely outstanding. And you know, it’s important, because I think if people are going to choose a retirement planning firm, yes, you want a great advisor, but you, you shouldn’t be working with just one person. And the reason is, is because the world is too complicated. Today, it moves too quickly. Servicing needs to happen immediately. And I hear a lot from people that are working with just one advisor, they’ll say, well, I’ve called and they don’t call me back, or I don’t see them for reviews. And they just feel you know that they met with them one time, and they were promised a service and the service was never delivered. And that happens a lot. I hear it because I coach advisors all over the country, that will tell me that, you know, because they’re kind of a one man show or a one woman show, they have a hard time delivering on the servicing aspect of things. And so I would always encourage people, you know, when you are interviewing a firm, ask about the team to who else is on your team? What’s your servicing model look like? What can we expect over the years? As we work with you the question to ask.

Cynthia de Fazio – 03:11

Absolutely, that’s a great point. Because obviously, people want to know that you genuinely care and that you’re going to be accessible when they need something that’s absolutely correct. whole team is just peace of mind, actually, because I can’t tell you how many people that I’ve talked to, they’ve said, you know what, Cynthia, I haven’t heard from my current advisor in over a year. Yes, that’s scary.

Brian Quaranta – 03:31

Yes, it’s 100% scary, because, you know, we’re supposed to, you know, there’s supposed to be a level of service there. You know, and for our clients, it’s great, because they watch me on TV. So there’s education happening every single week, because a TV show they listen to will be on the radio, which, you know, people can find us on the radio on Saturdays, mornings on 94.53, Ws, and they can find us on Sunday mornings on W DVE. So, we’re out there in the in the community, really educating on financial planning. And, and of course, you can also go to our events tab, and you can, you know, find out where we’re going to be typically, we’re at a local university, or we’re a library, and you can come out and we do a lot of educational events, and our clients come to those because, remember, retirement planning is a lot of stuff. You know, it’s just not about investing. You know, we talk about this on the show a lot is the five key areas, the income part, the taxes, the investments, the health care planning, the estate planning, that’s a lot of stuff. Oh, sure. And, you know, so when you’re, when you’re educating people on all these moving parts, you know, and you’re taking care of something very specific, let’s say they’re getting ready to retire, right? Well, when you’re when they’re focused on maybe how they’re going to generate income and retirement and how they’re going to reposition their investments. Maybe they don’t really connect the dots on the Health Care strategy yet, right. But now they’re coming to the educational events that are listening to me on TV and I might be talking about a different strategy, and you know, they’ll come in for the Review and also kind of talk to you about what you were talking on TV about a couple of weeks ago. And that so that really helps, you know, our team and myself service to clients even better, because they get to see me every week, they get to hear me every week.

Cynthia de Fazio – 05:14

So, talk to me a little bit about someone who has come into the office recently that knew that they needed a plan, and that they wanted to work with you. What was their situation? Like? What made them come in?

Brian Quaranta – 05:25

Yeah, well, I mean, I had a, I had a recent lady come in, that was recently divorced, she was referred actually by a client of mine. And this is the first time that you know, in her life, she’s been more of a homemaker than anything else. And now through divorce, she’s gotten a sum of money. And, you know, she hasn’t worked because she’s been a homemaker. And, you know, at this point in her life, she’s not really thrilled about having to go back to work. And I showed her that actually, we don’t have to, you know, and she’s up the age where we could start collecting Social Security. So, I showed her with, you know, with what took place with a divorce and what and what she is entitled to with Social Security, that if she wants to work, she can, but it’s her choice, but she doesn’t have to, and I showed her how to build a plan. And that was very emotional for her because the, you know, after those that many years of having to now be on your own, and, and, and, you know, losing that income from the spouse, and having all those years of being a mom and taking care of the house, and now, all of a sudden being in this position, where now she has to do all this. That was a real peace of mind for her to have this plan that was laid out for her, so that she could go on and still be grandma, and, you know, and be the homemaker that she’s good at being. And I think that’s great, because my mom was a homemaker. Yeah. Yeah. And so, and that’s an incredible job. As a matter of fact; I’m watching Kate do it right now. You know, Kate was an HR director for a company downtown in Pittsburgh. And, you know, we did make the choice, you know, with the second baby, that, that we would, you know, pull her away from that. And, you know, there’s days that I come home, and I don’t know if I would be good at that job.

Cynthia de Fazio – 07:14

I’m sure that you know.

Brian Quaranta – 07:15

I don’t know. So, you know, it’s definitely I had read an article, I think it was Money Magazine, that I had saw the article, and they were actually showing what a stay-at-home mom would actually be worth. Yes. If you, did you. It was like $125,000 a year. Yeah, that you would have to pay. So. But anyway, yeah, so that is an example of somebody coming in, that knows we, that they know they need help, they want our help. But then there’s examples of people that come in, and, you know, maybe they’ve been working with their advisor for 20 years. And they say, you know, I think everything’s okay, I have some concerns about maybe performance not being there, or maybe losing a little bit too much in the market when the market would go down. And, you know, they’re really there just to kind of see if there’s anything better that they could be doing. And they really don’t have any intentions of making a change, if you will. But as we bring them through the process, and we open their eyes up to other things that they should be thinking about, they then now have something to compare, and they’re going oh, wow, I didn’t even know all of this existed, I didn’t know that this is the way it shouldn’t be being done. And now when I compare the you compare where they are, and what they could be doing, a lot of those people will make the decision to wind up hiring us. And that’s challenging, because, you know, they’re breaking a relationship after 20 years, a lot of these people have, you know, personal relationships with their advisors, maybe, you know, they’ve gotten close to them over the years. So you know, breaking up is a little bit hard to do. It always is the song.

Cynthia de Fazio – 08:56

It is. Well, this is the perfect time for us, Brian to talk about the offer that you have to the viewers at home. It’s a very special offer. So, let’s dive into that before we open.

Brian Quaranta – 09:07

Yes, Cynthia, the right track Retirement System was really designed to help people determine whether or not they’re on the right track. And folks, I designed it for you. Because every year for the last 23 years, people would come into my office and they would say, Am I on the right track? Am I doing the right things? And I always say if you weren’t on the right track, when would you want to know and in the world we live in today we have technology that can determine help you determined whether or not you’re doing the right things. And what’s nice about that is it removes the opinion. You know, you don’t have to worry about somebody trying to sell you something you’re purely just looking at the mathematical data to make an informed decision of what to do and our right track Retirement System will help you find out whether or not you’re doing the right things in the five key areas that I talked about income taxes, investments, health care, strategy and estate planning. So, for the next 10 callers who call in right now we are going to give you a copy supplementary, right track retirement review. You’ve got to do your part, though, you’ve got to call us today, call 1-888-382-1298. and schedule your appointment with us today.

Cynthia de Fazio – 10:11

Brian, thank you so much to the viewers at home, the phone number to call is on your screen. That number is 888-382-1298. We know you have a lot of questions for Brian and his team about how to plan your perfect retirement, Brian has the answers for you, all you have to do is pick up the phone and take advantage of the opportunity today to know that you’re on the right track. Again, the number is 888-382-1298, we’re going to take a very short commercial break. But don’t go anywhere. I have so much more with Brian when we return.

Brian Quaranta – 10:41

So everybody can tell you how to invest your money. There’s not a lot of people out there and a lot of firms that can teach you how to use your money. Most people also tell you that they’re scared. And the reason they’re scared is because they’re afraid of running out of money.

Neil Major – 10:55

The last thing you want to do is have a really good job and you’re in your 60s retire, be looking for work again in your late 70s.

Brian Quaranta – 11:03

The average person might say, well, a good portfolio would be a good mix of stocks, bonds and mutual funds. A good portfolio is all designed around the five key areas income, taxes, investments, health care and legacy planning.

Neil Major – 11:18

Because we’re not just product pickers here, what we do best here as we build retirement plans,

Brian Quaranta – 11:23

nine out of 10 people when they walk through the door would ask us, we just want to know if we’re on the right track. And I always say if you’re not on the right track, when would be a good time to do it. Probably now,

Neil Major – 11:34

people you know can actually see a vision once we start to really build out their plan.

Brian Quaranta – 11:39

This is about you if you’re not getting what you need. And you feel that when you walk out of the advisors office, it’s time to get a second opinion. And you can’t get a second opinion from the person that gave you the first the difference at secure money advisors. As a fiduciary firm, we help you manage the risk, build the income and give you the retirement.

Cynthia de Fazio – 12:11

And welcome back to On The Money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian Quaranta. He is founder and president of Secure Money Advisors. Brian, a wonderful show we’re having today obviously talking about the importance of planning your retirement and just not diving in without a plan because that can be detrimental to so many people. So, we have some viewer questions to get through. And I definitely want to tackle this one because this is a hot topic right now. And I just think we should talk about it says Brian, I’m really concerned about inflation. Can you explain how this can impact me especially entering the retirement years?

Brian Quaranta – 12:48

Yeah, well, inflation is really simple. It’s just the cost of services and goods going up, right, just causes more money to live. So, it’s a fancy way of saying prices are going up, across the board, across the board, everything, everything is going up. So you know, and you hope that things like social security try to keep pace with it, which you know, Social Security this year, gave a six and a half percent cost of living adjustment, which was really nice. But your plan also has to be built around helping keep pace with inflation. So, but the way that you can do that is a number of ways. One, we always talk about our bucketing strategy. And the reason why we talked about the buckets, the three buckets make money pension money risk money, is because risk money is a way of keeping pace with inflation. But the only way you’re going to keep pace with inflation with risk money is for that money to have a long-term time horizon to grow. And the reason I say that is because if we’re in an inflationary environment, and you’re pulling money out of your stock investments, okay, you’re actually preventing that portfolio from growing at a rate that’s going to help keep it ahead of inflation because you’re dragging the return, or the performance of the portfolio down by pulling money out of it. So, the proper way of doing it, we’re not even talking about market volatility there, we’re just talking purely pulling money out and slowing down the growth of that portfolio because money’s coming out. So, one of the ways you combat that is you carve a little bit of money off and you create an income bucket. And that income bucket is what I call a bridge that bridges for about 10 to 15 years, maybe longer if we can 20 where we generate cash flow from that bucket, which means that now that risk money can just continue to grow, you don’t touch it, it compounds on itself. And now we’re going to keep pace with inflation, right? So those are the appropriate ways of doing it. Keeping expenses down is obviously a way to keep pace with inflation because if you have low operating expenses when I say operating expenses, I’m talking, you know, everything that we have to have a home, gasoline, you know groceries, you know electric at all that kind of stuff, if you can keep costs low there, if cost of living goes up, it’s very easy to, to offset that, because expenses are low revenue, your expenses are already high. And now you get an inflationary environment, it can be tough. But this is what planning can do for you planning can give you the clarity and the peace of mind. Because when you plan, and I know that’s a very general term planning, it’s a very broad brushstroke here of, of what we really do. But it’s really about going through the math, and we have a really great way of laying this out to give people that confidence and clarity that I don’t care if inflation rate goes to 8%. I know a lot of my clients are going to be just fine. Yeah, yeah. And I’ll know how and I know how to fix it. That’s the other thing, you know, and it’s an easy thing to fix. So, we don’t really we’re not really concerned about it too much. Because the model that we build are designed to mitigate inflation, there’s just a mitigate risk. And, and because of that modeling, we know we have a high probability of success.

Cynthia de Fazio – 16:03

Okay. So basically, it’s like putting guardrails up on your retirement.

Brian Quaranta – 16:07

Yes, a good, good way to put it right. It’s retirement guardrails. Yes. Okay. Yes, that’s exactly right.

Cynthia de Fazio – 16:13

Well, this is a great question as well, Brian, this is actually coming from cranberry says, I’m curious as to what you think about the 4% retirement rule? Is it still accurate? And if it is, what type of stocks and bonds mix, and annuities would be appropriate to use with it the 4% rule?

Brian Quaranta – 16:30

Yeah, well, first, for those that don’t know what the 4% rule is, let’s identify what it is. So basically, the 4% rule was created in the early 90s by a financial advisor in California, you can look all this up on Google. And basically, what the rule said was that if you had a million dollars, it doesn’t matter, I’m just using a million dollars as example, if you had a million dollars, you could pull up 4% In the first year of retirement. So, 4% on a million dollars would be 40,000. And then each year, you could increase the withdrawal by the rate of inflation. So, let’s say the rate of inflation was 3%. Well, that means the next year’s withdrawal would be like 41,000, and change the next year, it’d be 42, 43,000. Right? So, the income that you would be taking out of your portfolio would go up a little bit each year. Okay. That’s the idea behind the 4% rule. They also said that if you had a 6040 split between stocks and bonds, and you follow this 4% rule, you should have enough money for the rest of your life. Well, if you look at where, you know, things were, when this rule was created, in the early 90s, the markets were a lot different interest rates were a lot different. But yet, the 4% rule is still being talked about, like a relevant strategy. And quite frankly, it’s outdated. It’s like a flip phone, you know, nobody uses a flip phone anymore. That’s true, you know, so you don’t want to build your retirement with a flip phone is what I’m telling you. You want to text. You don’t want to text with a flip phone nightmare. That’s right. So the 4% rule, it actually has a high probability of failure now. And that’s because bonds don’t pay as much interest you have interest rate risk, you have market volatility. Matter of fact, the Wall Street Journal came out. And they said that, depending on when you retire, and what rate of return, you get, the 4% rule could have a failure rate of up to 56%. Wow, think about that. So, if someone is building their plan, and taking advice from an advisor, based off the 4% rule, there is potentially up to a 56% chance of failure. Could you imagine signing paperwork right now. And walking out of that advisor’s office, and right before you’re about to back out, the advisor says to you, hey, just want to let you know all that paperwork that you signed today to build your plan and the way that we’re going to generate income. I don’t know if I told you, but there is a 56% chance our plan is not going to work. I can’t even imagine. I don’t know. And I take that even further. Wow. Let’s say we’re about to get on an airplane. Oh, yeah. Let’s say we’re about to head to Hawaii on an airplane. And right before we’re about to back out of the gates, the captain gets on the intercom. And he says, folks, I just got word from the tower, that there’s a 56% chance that we may crash into the ocean before we get to why if anybody would like to get off the plane, how you can get off the plane. Right? And I talked about this at my educational event. And I always say to people, what percentage of failure right? What percentage of crashing in the ocean would you be comfortable with? And I’ll say Would it be okay, if it was only 30%? They’d say no. What about 25%? No, what would it need to be? Everybody tells me it needs to be zero. Okay. So the point of that is that we don’t want to build our planning model around something that has a failure rate, right? There’s a different approach to that. We call it the bucketing approach. And this is where we use three buckets of money versus the 4% rule to create time and leverage and protection and just a better way of generating cash flow.

Cynthia de Fazio – 19:42

Absolutely. Well, thank you, Brian. Excellent response to that question. This is a great question as well as his Brian, I’m 92 years old college from Butler and I want to invest some money with a company that has a bond fund where they buy and sell bonds and you receive a share of the return that they are able to produce. I’m sure there are a high Hundreds of companies that do that. But what is your experience? Ben?

Brian Quaranta – 20:03

Yeah, well, again, I mean, I, you know, I don’t know what specific investments being talked about there. And I’m actually quite fuzzy on that that investment. But, you know, let’s just talk about bonds in general. I mean, you know, I’m not a big fan of utilizing bonds anymore. And I just don’t, I don’t think the risk is worth the reward. I mean, you know, even a corporate bond right now might only pay, you know, 2.52, maybe 3%, you still have interest rate risk. So, you know, a lot of times what you can use in place of a bond and what I use in place of a bond for my personal investments, and it’s right, for me, it might not be right for this person. But it is an annuity, I use a fixed annuity, because I can get a guaranteed rate of return three and a half percent. And on top of it, I’ve got no interest rate risk. And I know that the interest I’m going to get is going to come in every single day. And I don’t have to worry about if interest rates go up, I don’t have to worry about my portfolio going down because the bond prices were affected. So, to me, it’s a little bit more of a stable way to approach it. And some fixed annuities like the one that I personally own, if interest rates go up, the rate in my account actually goes up. So that’s a nice trade off, you know, and, and a lot of times, when you buy fixed accounts, and an example of a fixed account, I would compare that maybe to a bank CD. Whereas if you bought a CD at like maybe 3%, for five years, and interest rates went up after you had it for one year, the interest rate doesn’t go up, you got to hold on to that 3% rate for five years. With these fixed annuities, the rates go up, it goes up. So, you know, again, people just don’t know what they don’t know, and product design have become very different. But there’s always the traditional approach. And, you know, the traditional approach is great. But there’s also great alternatives out there today that have been created by the big retirement companies to help with the new environment that we’re in. Well, Brian,

Cynthia de Fazio – 21:52

I know there’s a very special offer that you’re going to present to the viewers at home. Let’s talk about what that is before we open the phone line. Yeah, the

Brian Quaranta – 21:59

right track retirement review Sunday, we really have spent a lot of time building this out and helping people determine whether or not they’re on the right track. So, folks, for the next 10 callers who call in right now, we’re going to be offering you the right track retirement review. It’s really designed to help you determine whether or not you’re on the right track. I always say if you’re not on the right track, when would you want to know that when would be a good time. Truly the right track retirement review is designed to give you clarity and confidence about retirement. And if you are on the right track, we’ll be more than happy to shake your hands and tell you to keep doing what you’re doing. But take advantage of this. It’s not very often that you get to come into an office, sit down with a licensed fiduciary and go through your financial plan. So but you’ve got to do your part. You’ve got to call the office today. 1-888-382-1298. Again, 1-888-382-1298.

Cynthia de Fazio – 22:49

Brian, thank you so much to the viewers at home, the phone number to call is on your screen and that number is 888-382-1298. We’re going to take a very short commercial break. But when we come back, we do have time for one more viewer question. It could be yours. Stay tuned.

Brian Quaranta – 23:05

If I could help you increase your income. If I could help you pay less taxes, if I could help you potentially maximize the returns of your investments while reducing risk reducing fees if I could help you prepare for a health event or more importantly, when the good Lord decides to take you home to make sure that the money you’ve accumulated over your lifetime goes to your family and to your charities rather than the IRS. Would that be worth the time to come in and get a second opinion.

Cynthia de Fazio – 23:36

And welcome back to on the money with secure money. My name is Cynthia De Fazio and I’m joined today by Brian Quaranta. He is founder and president of Secure Money Advisors better known as Brian Q.

Brian Quaranta – 23:47

Yeah. Brian, you because Cynthia has not been able to say my last name for the last

Cynthia de Fazio – 23:53

three years. I’m getting better and

Brian Quaranta – 23:55

getting better. You’re getting better. Yeah.

Cynthia de Fazio – 24:00

One time we had that little we’re going to do a charity.

Brian Quaranta – 24:02

We’re going to do it. But you know, my grandfather was known as Frank Q because nobody could say Quaranta was it’s a real tongue tire for a lot of people. So it’s been butchered all my life. I can remember playing football and I can remember making a tackle and somebody saying in the in the booth that tackle just made by number 58 Brian Courtney. I mean, I don’t know even where you get Brian Courtney. So I do get people that ask all the time. How do I say your last name? I said just it’s Brian Q it’s a lot easier.

Cynthia de Fazio – 24:34

I love that. I love that. Well, Brian, we have time for just one more viewer question. And I think this is actually a very good one. It said, Brian, I would like to invest money from my stock portfolio into something else, specifically a good ETF either in gold or exponential technologies or possibly healthcare. I know that not all ETFs are created equal. I wanted to get your opinion I’m already invested in some traditional stocks and index funds.

Brian Quaranta – 25:01

Yeah, well, first off, obviously, we should tell the audience what an ETF is that it’s, it’s in a exchange traded fund, which is different than a mutual fund. Number one, it has a real share price, meaning, if the share price is $10, right now and an hour, it goes to $11, I can sell that ETF and get that share price immediately. Whereas you compare that to a mutual fund, a mutual fund is a little bit more expensive. It’s got a net asset value price, which means that if that share price right now is $10. And it goes to $11. And I sell it right now I don’t get $11, I have to wait till the end of the day. So by the time the end of the day comes that share price could have went from $11, down to $4. And I would get the $4 price. So it’s not as friendly when it comes to trading quickly, and getting real time pricing. So and these ETFs come in all different shapes and sizes. There are ones for utilities, there’s one for technologies, there’s one for gold, and all kinds of different stuff. I like them, you know, we use them in our portfolio. We like to use a lot of Vanguard ETFs. They’re very, very low cost. And anything that’s low cost is a benefit to the client, because lesser fees means more return for them. But you know, not knowing much about the situation, I wouldn’t be able to give very specific advice, but I think it’s important for people to understand what an ETF is and what advantages it has. And you know, certainly we believe in them because we use them at our office.

Cynthia de Fazio – 26:29

Yeah, Brian, thank you so much for that excellent response. We only have about a minute and a half left of the show this week. Any final words of wisdom that you’d like to give the viewers at home?

Brian Quaranta – 26:37

Yeah, have a plan. But the most important thing is you can have a plan, work with a fiduciary advisor, sit down with somebody really map out a game plan for yourself, you should have a roadmap of where you are where you need to go. And make sure you’re covering the five key areas of retirement planning. Make sure that when you are addressing things with your advisors, that you’re going over your income strategy, you’re going over your tax strategy, your investment strategy, your healthcare and your of course, your estate planning. If you’re making sure all those five key areas are taken care of every eye dotted, every T is crossed, you’re going to have a really well-designed plan. If you’re just working in the investment space and your advisor and you are just talking about performance. Probably a good time to get a second opinion. And that’s why for the next 10 callers, we are going to offer you the right track retirement review that you’re going to be able to come in and help determine whether or not you’re on the right track and whether or not you’re doing the right things, but you got to do your part. Call us today. Pick up the phone. Don’t procrastinate here. This is not the time in life to kick the can down the road. Get yourself a good plan. Get yourself on the right track 1-888-382-1298 schedule with us today.

Cynthia de Fazio – 27:40

Brian, thank you so much to the viewers at home. Thank you for spending time with us today. That number is 888-382-1298 Be safe. Be happy, be blessed and we look forward to seeing you back here one week from today.