On the Money with Secure Money: Episode 106

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Video Transcript

Rebecca Powers 00:24

Welcome to this week’s edition of on the money with secure money. I’m Rebecca Powers. And of course, this is Brian Quaranta of secure money advisors. Great to see you, Brian.


Brian Quaranta 00:33

Always good seeing you how you been?


Rebecca Powers 00:36

Doing great. Always love your energy, your information, your positive outlook, you’re always kind of the lighthouse when people are looking at things like the stock market. Yeah. And they’re looking at their portfolios. I know that your clients sleep very well at night, because you do secure money.


Brian Quaranta 00:53

Yeah, well, you know, that’s because I got started in the business and one of the worst decades ever. And that was like right after the tech bubble had burst in 99. And I saw a lot of people lose a lot of money. And that changed my life. I can remember, I had just graduated from college, and I thought it was going to go back home in New Jersey to work on Wall Street. And I had a friend of mine say, hey, why don’t you come interview with this big firm in Pittsburgh. So, I went down, I interviewed, I passed my exam, I was excited to become the best financial advisor you could possibly imagine I was gonna do anything right, I will learn as much as I could. And I get an opportunity to work for this big firm. And I’m, and I’m being mentored by, you know, advisors that have been in the business for 25-30 years, sitting in meeting after meeting with them, you know, listening to what they’re saying how they’re calculating how they’re positioning people’s money. And at that point in time, I was considered what you would call go getter, right? That was like, Hey, kid, can you go get me a cup of coffee? Hey, kid, can you make copies of this stuff? And I was really willing to do anything. And they put me on the phones one day to answer the phones. And of course, the market was dropping like crazy. And you could imagine, the phones are ringing, and who do they have answering the phones is the new guy, right? They don’t want to take they don’t want to take the calls. They’re all hiding under their desk. So, I take a call from a guy that’s very upset. And he says I want out of the market right now. And I don’t know what to tell the guy, right? So, I said, Well, who’s your advisor? You know, what’s his name? So, I go to the advisor’s office, and I say, Look, you got a client on the line, he’s very upset, he wants to go to the market today. Are you okay? If I placed a trades and liquidate and get them out of the market, and that advisor looked at me and said, Brian, I want to make something very clear to you. We do not sell when portfolios are down, I need you to get back on the phone with this individual, and I need you to let him know that everything’s gonna be just fine. And that all he’s experiencing right now is a paper loss. Now, for those of you out there that are experiencing losses, or have experienced a loss, does that ever feel like a paper loss to you? And for most people, they’ll say, No, it does not feel like a paper loss? Absolutely not. But then he gave me the magical phrase that you’ll hear all the time from every advisory firm, he said, Brian, let that individual know not to worry about anything just to hang in there that he’s in it for the long haul. So, guess what I do? Well, as a good employee, I go back. And I repeat that verbatim for this individual. And he changed this guy changed my life, because I went back and I said, I want you to know, everything’s gonna be fine. It’s just a paper loss. Hang in there. You’re in it for the long haul. And he said, Brian, I’m 65 years old, how much damn long haul, do you think I’ve got left, and his health wasn’t good. And it really made me start thinking about what I was doing in financial planning. Because you know, what I learned? It’s really easy to risk somebody else’s money, especially if you get paid a fee or commission to do it. That’s right. So, when I started secure money advisor, it was out of frustration that it wasn’t because people were, were, it wasn’t people weren’t ruining the retirement because they were losing money, they were just losing money at the wrong time when they couldn’t afford to lose money, because they actually don’t have time to recover. And this is why I built secure money advisors. It’s why I wrote my book, right? Track your retirement because I want people to have the information that there was an old way of doing it. But now there’s a new way and we want to teach the strategies of how to do it.


Rebecca Powers 04:11

Now that firm you’re with I’m sure was one of those big boxes, we call it the big box retailer. You know, they their names on the stadiums and the US Open and all this. They have this massive overhead. But you learned a very important lesson that day because you have deep deep ethics. Yes. Yeah. And you knew that that was not the right thing. But this even though it’s not the right way anymore, never has been it’s still happening. Don’t you believe that people are still unaware?


Brian Quaranta 04:36

Yeah, well, think about it. I mean, you know, you know, we were once allowed to eat carbs and we weren’t supposed to eat fats, and now we’re supposed to be fats and not carbs if your mind so, you know, and it’s the same thing with financial planning. Yeah, what we’re realizing though, and you gotta remember, we’re talking about a long period of time that Wall Street has controlled retirement accounts, right. You go back to, you know, the late 70s when they create the forum Okay, a cow. You know, you look at how much money when the stock market when the 401k account was created, it went up like a hockey stick of how much? And because they started controlling the message, people started getting away from things that they need in retirement like a pension. Yeah. Think about how easy retirement planning was when you had a pension because you knew exactly the date you could retire. You were having probably a retirement party, you don’t see those anymore. That’s right. My grandma and grandpa with retirement parties all the time, I remember that, you know, I don’t talk to people at all, because they don’t know if they can retire. Because the main problem right now in our country is 85% of the people retiring, if not more, are not retiring with a pension or they’re retiring with a 401k. Right? Well, 401k is an accumulation tool.


Rebecca Powers 05:44

So, it did its job. But now you need to make it your personal pension.


Brian Quaranta 05:47

Yes, and I write about this in the book, which by the way, if you go to right track your retirement.com, you can get a copy of my book, you can also schedule a complimentary right track review there. But in my book, I talk about the new strategies you want to start considering because you have to think about creating your own private pension. Essentially, before you do any type of risk investing,


Rebecca Powers 06:08

very first thing you need to do very first thing and retirement planning versus investment planning. I wanted to ask you, is it the same thing? Or what’s the difference?


Brian Quaranta 06:16

Yeah, well, it’s very, very different, okay, because investment planning is your 401k, right. And that’s when you have time on your side. And you can diversify your portfolio amongst different asset classes. And if the stock market goes down, and you’re 35 years old, or 45 years old, you are going to have a long time before you’re going to need that money. But when you start to get about five years from retirement, or even in retirement, and now those losses impact you more than you could possibly imagine, and this is why people are running out of money today. Right? Right, because they’re losing money at the wrong time. And nobody out there is telling them to protect a portion of their money first, it’s not that I don’t believe in the stock market. Sure, you need it for those gains, and you need it to keep pace with inflation. Gotcha. But people are gambling with 100% of their life savings. And it’s not the right thing to do. And, you know, again, like I said, I mean, it’s easy for somebody else to tell you to take risk with their money, especially if that’s their job, and they get paid to do it. And they have quotas, and they have quotas. But you know, what I always tell people is get yourself with a good fiduciary firm, because, you know, a fiduciary is held to the highest standard there is. And that standard is a code of ethics that have to be followed. Not only that, but the fiduciary is required to have a higher level of education, so that you’re going to understand the planning process in depth a lot more than the majority of your license advisors out there. And people need to understand the difference between that. But at secure money advisors, it’s really all about making sure that we protect your income first, because the most important thing that you’re going to need more than anything, going into retirement and through retirement is what I call mailbox money, a check showing up every single month, just like Social Security, so that you can go out there and do the things that you want to do. Think about the way people are building it now. They’re literally rolling the dice with 100% their money, and they’re pulling money out of the market, whether the markets up or down. And when you start pulling money out when the markets down, you’re compounding those losses, and you’re locked into those losses. And this is why the biggest concern in our industry right now is more and more people are potentially run the risk of running out of money. Absolutely.


Rebecca Powers 08:26

So, and a report recently said that more Americans were scared to run out of money than actual death.


Brian Quaranta 08:33

Yeah, that was an AARP study. Yeah.


Rebecca Powers 08:34

So, what does that tell you? That’s how scary it is.


Brian Quaranta 08:37

Yeah, they interviewed like, they interviewed 1000 people, and 90% of them said they were out of money where they fear death.


Rebecca Powers 08:46

You said the word gambling and gambler. So, I’m going to look at my notes on chapter two of your book. I love this chapter. It says, Think like a pensioner, not a gambler, right? And that’s exactly when you leave 90% Or you don’t even know what percent you have in the market. You are gambling, period.


Brian Quaranta 09:04

Period. And we’ve got to understand what risk means in retirement. Right. So, the Wall Street has done a really good job in quantifying risk like conservative, conservative, aggressive, very aggressive. The bottom line is this, folks. If it goes up in value, or down in value, it’s risky. We had 20-year treasuries because of interest rates going up that we’re down over 20% US Treasuries that’s down over 20% What happens, it’s a perfect storm. So, don’t be fooled by the fact that, you know, just because we hear the word bond or fixed income, that you’re going to be guaranteed, right? That’s not the way it works. Those still can lose so we define risk as if it can go up or down in value. It’s risky period, bottom line, you want guarantees go buy a CD, that’s a real guarantee. Right?


Rebecca Powers 09:49

But not much gain.


Brian Quaranta 09:50

But not much gain.


Rebecca Powers 09:51

But there are other safe tools that you use.


Brian Quaranta 09:52

There are other safe tools out there, which I write about in the book, and again, if you go to right track your retirement.com you can get a copy I have my book there. And you can also schedule a complimentary right track retirement review. And my promise to you is this. When you come in, no one will sell you anything, no one will pressure you to do anything, leave your checkbook at home. My promise is that the meeting will be informative, and very eye opening. As a matter of fact, you can call 888-382-1298 and schedule again, that’s 1-888-382-1298 to schedule. Or you can go to right track your retirement.com, also to schedule there, or you could scan the QR code, we’re giving you a ton of ways to schedule.


Rebecca Powers 10:38

Exactly. We have to take a very short break. As Brian said, there’s the number 888-382-1298, no obligation at all, stay with us, more right after this.


Brian Quaranta 10:47

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 11:01

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


Brian Quaranta 11:09

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 11:23

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


Brian Quaranta 11:29

9 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 know it? Probably now.


Neil Major 11:39

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


Brian Quaranta 11:44

This is about you, If you’re not getting what you need. And you feel that when you walk out of the advisor’s 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 appointment. The difference at secure money advisors, as a fiduciary firm, we help you manage the risk, build the income and give you the retirement withdrawal.


Rebecca Powers 12:15

Welcome back to On the money with secure money with Brian Quaranta. And I’m Rebecca Powers, we were talking about risk. It’s not just a cookie cutter word conservative or not, it is actually something that can completely deplete your hard-earned savings. Risk Analysis is one of the wonderful things that you’re offering as well. And talk about how it’s a third-party report. It is not biased in any way. And it’s very eye opening.


Brian Quaranta 12:42

Well, again, this goes back to why I think it’s so important that people work with a fiduciary firm. And you know, whether it’s secure money advisor or somebody else go just go find a fiduciary firm and ask that first Are you artists, because again, fiduciaries are held to the highest standard. But they’re also required to have a higher level of education to understand the planning process to provide you with a real plan and only make moves that are in your best interest. Because if moves are made outside of your best interest, the regulatory environment can take action. Right. So that’s protects the individual consumer. But in regards to risk, risk is something that we can quantify now differently than this conservative, moderately conservative, aggressive, very aggressive stuff. But we use a very powerful software called Riskalyze. That’s backed by also something called Morningstar. And what’s nice is we can input the individual’s current retirement plan, right all their individual investments into this into this software. And then we can build a plan. And then we can look at the difference. And now you’re not getting an opinion, you’re literally getting just a black and white report that just shows you the data of where you are, and what changes could be made, if any, to improve your situation. You know, and I always say, Look, when people come into our office for a review, or an analysis, whatever, you know, we call it these days. They’re there to get that analysis. And that’s it. I mean, at the end of the day, my team knows that we’re problem solvers. And if there’s a problem to be solved, we could show the problem. And if they want to solve it great. But the great thing for a lot of people is if they come in, and they are in a good position, you’ll tell them you tell them Yeah, keep doing what you’re doing. If anything changes call us. Right. So, but risk is a very important thing to quantify and understand it because when you run these reports are very eye opening. Yes. You know, think about the technology is just amazing. Because this is this can be done and quantified numerically now, without these opinions, because opinions don’t have a place in this. And when you build a strategy around these black these black and white data points, it becomes very easy to make an informed decision and that’s what I found in my life is that people are smart, they can make informed decisions. They just need somebody to guide them. That’s it and That’s our job is to guide them.


Rebecca Powers 15:00

Yeah. And besides the risk analysis, it also talks about what you’re actually paying in fees. That’s another eye opener.


Brian Quaranta 15:09

Yes, yeah. Because keep in mind folks, fees will reduce your gains and compound your losses, let me say that again, they will reduce your gains, and compound your losses, because fees come out whether you win or lose, right, it’s the same. Yeah, I mean, people lose money, the advisor or the portfolio manager still takes the fee out, right. So, you know, they win regardless. And again, I mean, we got to be very careful with the level of risk that people are taking, because when you run these reports, the real eye-opening thing is risk versus reward. And a lot of times, what these reports will show is they’re taking this much risk, but they’re only getting this much reward. Well, if I’m taking this much risk, I would like my reward to be a little bit more, it shouldn’t be this this much risk and this much reward. So, it’s got to be flipped. So that’s the beauty in doing this risk analysis, because its very eye opening for people, and they start to get some clarity around what they currently have. And when you get clarity, you start to have confidence. And we have confidence to go into retirement with peace of mind. Exactly, very simple.


Rebecca Powers 16:11

That reminds me another chapter in your book when you’re talking about leveraging the power of the two buckets, because you’re thinking, well, how are brokers losing my money, but this guy says he’s going to, you know, get me- it’s not about that. But it’s about moving some of that risky money into safe money.


Brian Quaranta 16:27

Well, it’s even more important than that, because what most people have never been taught to do is define the purpose of their money. What did the job what is given a job? That’s right, what is the purpose of the money, and there’s really only four things that the money could do for you. Right? Number one, it can provide you with income, that could be the main purpose of it. Number two is it can be safe, right? Number three is it could be risky and be in some type of growth position. Or number four, it could just be under your mattress and liquid available for dress. You know, so we have to first define the purpose of the money. And when we’re defining the purpose of the money. Now we can figure out how much money do I need to set aside for my pension? Because essentially, that’s what you’re doing. You need to create your own pension by setting that money aside. But remember the story I told you at the beginning of the episode here, yeah, the individual has said, you know, I’m 65 years old, how much longer do you think I got left? You can be in the market. But the key to being in the market is that any money that’s in the market has to be long term money. And when I say long term money, I mean, that money needs to be in there for 10 years or longer. If you want to be successful, your market money, too many people get caught up in the short-term volatility of the market. Yeah, but this is all in my book. This is all my book, all these chapters are laid out from A to Z, so people could read about this, understand it. And when they come in, they’re even more informed. And again, folks, if you go to right track your retirement.com, you can get a copy of my book, it’s absolutely free, we pay for the shipping and handling. But you can also schedule your complimentary right track review right there also.


Rebecca Powers 18:02

And righttrackretirement.com And the number again, 888-382-1298 more on how you can keep your money secure with Brian Quaranta right after this.


Brian Quaranta 18:12

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 18:26

And 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 their late 70s.


Brian Quaranta 18:35

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, healthcare and legacy planning.


Neil Major 18:49

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


Brian Quaranta 18:54

9 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 know it? Probably now.


Neil Major 19:05

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


Brian Quaranta 19:09

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 you dreamed of.


Rebecca Powers 19:40

Welcome back. We’re talking about safe money and most importantly for your retirement income. So, you have to make that income plan. Social Security is just a part of that income plan. It was never meant to be entire salaries, right? So that’s kind of one more part you’ve got these five key areas of retirement Income is a big part. So, let’s talk about Social Security.


Brian Quaranta 20:03

Well, first off, there are ways to maximize Social Security. And if you are looking for ways to maximize, you have to do that today differently than before, because you probably are going to need to leverage some of your retirement assets to be able to potentially delay Social Security to get a larger amount from Social Security. But Social Security was only designed to cover about 30 to 40% of your salary. That’s about it. So, you know, it’s a big income drop. Sure. And for most people retiring today, the only guaranteed source of income that they’re going to have is Social Security. So where are you going to get that other income from, and this is where we help people figure out through our Cash Flow Planning, we’re going to be the places to best maximize your income, because the goal in retirement really is to get your income as high as you can, but as safely as you can. And you want that income coming in every single month, just like your Social Security check is going to come in every single month. And if you’re a married couple of your spouse dies, you want that income to still come in, because Social Security, if you’re married couple is going to take at least one check away from you. Right, they’re going to take the lowest check away.


Rebecca Powers 21:05

You told me you can keep the highest check, though.


Brian Quaranta 21:07

Keep the highest check, right? But Social Security takes away the lowest check. Right? So, but I write about the five key areas in the book, because, you know, I hear so many people refer to their 401k that our IRAs as their retirement accounts. And if those accounts are invested in the stock market, those are investment accounts. It’s that simple. Retirement accounts do what retirement accounts, do. They generate cash flow, that’s what they’re supposed to do. That’s why we had pensions right. Now, if there are people out there, that might be fortunate that they don’t have to take any income from their retirement, because there’s people out there that still do have pensions, but that’s not the norm anymore. Definitely. So, but the five key areas that I write about number one is income, because without income, you can’t retire. Right? When would you retire, the day you retire, the paychecks gonna stop, but the bills, the taxes, and all the things that you want to do the things the bucket list that everybody talks about that you’re supposed to go do that most of you might not be doing, because you’re too scared to spend your money? Because you’re not you’re not sure whether or not it’s going to last Don’t live like that. You don’t have to do that today. But I talked about income so much, because what they found in studies is people that have the highest levels of income in retirement, and guaranteed the happiest, yeah, because they’re not worried, right? They’re stress free, stress free. But number two in the five key areas is the proper mix of investments, having the proper mix of investments. Number three is having a good tax strategy, because there’s two things that are going to erode people’s wealth faster than anything else. And that’s inflation and taxation. Right? So, we want to make sure that if we can get Uncle Sam out of the picture sooner than later, that’s going to be better, because people don’t realize, look, if you need $1,000 A month, from your retirement accounts, and it’s coming from a 401 K or an IRA, you’re gonna have to pay taxes on those withdrawals.


Rebecca Powers 23:03

It’s kind of like you have a silent partner and you’re taking 30%, and you think you got $1, but you only got 70 cents.


Brian Quaranta 23:08

That’s it, you got it. So, you take $1,000 out, you’re not getting $1,000 You’re only netting, you know, so you’re in a 20% tax bracket, you’re only netting $800. But you ask most people, you think taxes are going up or down the future, most people would say they’re going up.


Rebecca Powers 23:21

They’re definitely going up. And the sunset- The bill currently is sunsetting, the end of 2025. So, it’s really important to know, because you’ve got two years to take advantage of all of these and some of the tools that you use in that tax planning, not looking back a year like your CPA does, but looking forward the rest of your life, it can save 10s of- hundreds of thousands, potentially.


Brian Quaranta 23:43

Absolutely, yeah, absolutely. Because when people don’t tax plan, they have even bigger problems in the future because the IRS forces you to take money out of your retirement accounts whether you want to or not. Right now, it’s at the age of 73. Okay, and that’s gonna, it’s gonna go up over time, it’s scaled out. But when you’re forced to take these large distributions even later in life, your taxes on your Social Security go up, and your Medicare premium can even go up. Yes. Because if you make too much, your Medicare premium goes up. So, it’s this compounding effect. It almost feels like it was brilliantly designed.


Rebecca Powers 24:17

You think? Well, that’s why it’s such a dance. That’s why it’s such a serious, perfect thing. Because if you, let’s say you roll too much, you could work too much into your Roth, but you did it improperly, or they did it improperly, and it puts you into a higher tax bracket. So, there’s so many kinds of landmines. You know?


Brian Quaranta 24:36

See, here’s the thing. People mistake retirement planning with, like, trading stocks.


Rebecca Powers 24:40

Definitely think that right? Yeah, because we’ve never taught any of this.


Brian Quaranta 24:46

I employ the traders. They don’t know how to engineer anything. Okay, they don’t have they don’t have to create the material, but they don’t know how to build the bridge. Right. So, they need the fiduciary advisor. They don’t we employ the traders they don’t know how to build the bridge. Are you into your point, there’s a lot of moving parts that if you don’t have somebody overseeing that project, you know, you’re gonna get yourself into trouble. And so-


Rebecca Powers 25:08

Or if you’re a cookie cutter situation, like the first firm you are with, like, so many are, you really aren’t A, B, C, D, or E, and not that individual person, that’s imperative too.


Brian Quaranta 25:18

It’s imperative. It’s imperative. So, the last two key areas are, there’s a healthcare strategy, you know, where people are exposed the most is if a health event were to occur, sure. And, you know, I had a really good friend, 58 years old mentor of mine, in this in this financial business, and very successful, and very good friends with them. And I got a call, you know, in 2010, to Thanksgiving morning that he had a stroke. And, and that came out of the blue, no one would ever thought it, he was healthy guy. And you just never know when a health event is going to strike. Right. And for most people today, their expose of health event takes place, right? I mean, you look at the average cost of nursing home, right now in western Pennsylvania is about $14,000 a month, $14,000 a month, No one can afford that, you can have a $2 million portfolio and it’s going to kill you. Right. So, people need to get serious about this stuff. And understand that, you know, look, we’ve got very, very smart people out there designing things to help us solve these problems. But Wall Street convinces us that they still want us putting money in things like mutual funds, and individual stocks and ETFs, which are all fine. But if you don’t take care of these other things, first, none of that stuff’s gonna matter. I don’t care if your advisor earns 20% a year, if you if you’re not protected from a health event that could cost you $14,000 a month, it doesn’t matter how much money you earned over the years. Absolutely. And I we see it happen. Unfortunately, people contact our office when they’re in a crisis mode sometimes. And unfortunately, there’s, there’s nothing you can do at that point. And the last part is the estate planning part. But again, this is all in the book, right? So go to right track your retirement.com, you can get a copy of my book there. It’s absolutely free, I ship it to you absolutely free. But it’s also a place where you can schedule a right track retirement review and get this review. And my promise to you is this. If you go there and schedule that meeting, no one is going to sell you anything, no one’s going to pressure you to do anything. We’re going to give you an analysis, very black and white analysis. And it’s going to be very eye opening and very informative. So scheduled today. We look forward to seeing you there or call 1-888-382-1298. Again, that’s 1-888-382-1298 or you can even scan that QR code down at the bottom for those of you that are tech savvy. So, we’ll see, I guess we’ll see you again next week.


Rebecca Powers 27:43

Yes, this show flies by thank you so much, Brian, and thank you at home for joining us. We’ll see you again next time. Keep those calls and emails coming in. We love you.