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Video Transcript
Rebecca Powers 00:24
Welcome to this week’s edition of On the Money with Secure Money with Brian Quaranta. I’m Rebecca Powers, so happy to be with you. Of course, Brian is the creator of Secure Money Advisors Great to see you, as always.
Brian Quaranta 00:36
You know, I have to tell you, I’m always so impressed that you accurately pronounce my name. It’s been butchered all my life. And you get it right. All the time. So, thank you for that.
Rebecca Powers 00:50
I appreciate that.
Brian Quaranta 00:51
Well, you know, we had to call, my great grandfather was called Brian, he was called Frank Q, because nobody could say the last name.
Rebecca Powers 00:57
Well, around the studio, everyone calls you BQ. And I said, Oh, you know, where did that start? And you’re like, they just do that. And people, nobody wants to say my name. Yeah, you get all these funny nicknames.
Brian Quaranta 01:07
Yes, there’s many different versions of it I’ve had over the years.
Rebecca Powers 01:10
Initials. Well, I just want to say, congratulations to you and all of your clients, because you’ve had so many referrals. Yeah, business is booming. It’s all about trust, respect, take, you know, education. And if you call, you get not only a copy of this book, you’ll actually mail it, he’ll ship it pay for handling, you know, some commercials you say $5.95 for shipping and handling.
Brian Quaranta 01:33
Yeah, we don’t do that.
Rebecca Powers 01:34
You are so much about promise, and respect, and your word that you really want people to have this.
Brian Quaranta 01:39
I do.
Rebecca Powers 01:40
Before you come in for the complimentary consultation, let’s talk about that free first visit, what you accomplish and what goes on. What does that look like?
Brian Quaranta 01:48
Well, you know, first off, the reason I want to get that in people’s hands. Yeah, is exactly for what’s happening right now in the stock market. Yeah. I just believe in protecting someone’s lifetime of work. When you spend 30, 40 years, maybe even longer, working, accumulating money. It’s really hard for me, after 25 years of doing this, to watch people sit there and roll the dice and gamble with their money. And yet, they’ll continue to get advice from big box firms that it’s okay to take risk. And when their money goes down in value, the answers that they’ll get from the financial advisors are, don’t worry about it. It’s just a paper loss, this shell to pass Hang in there, you’re in it for the long haul. And I came from that world in 1999, when I got into the business, that was the world that I’ve got brought into the financial industry with was taking risks with people’s money. And I just look at the way financial planning has been done. And the way that it’s been taught to new individuals coming into the financial space. So, if you’re a new financial advisor, going to work for a big box firm, you’re probably going to learn how to diversify a portfolio amongst different stocks, bonds and mutual funds. That’s great if you’re helping someone accumulate money, right, and they’ve got 30 years in front of them. But those strategies and techniques that you use to accumulate your money, Rebecca, they’re not the same that you use when you go to retire. Because the fundamental framework of what you need the money to do changes
Rebecca Powers 03:28
Completely different.
Brian Quaranta 03:29
Completely different.
Rebecca Powers 03:30
You’ve made us understand that accumulation. Is your gathering, gathering, taking that right? It’s not really thinking about it. And then once you turn that on a need that income, I mean, we all need in our lives before retirement income, yes. But we’re never taught that you have such a powerful story. And I know we’ve said it twice before on the show, because I keep track of everything we do. But I want you to tell it quickly how that’s why you went independent as an independent fiduciary, you’re sitting on the same side of the desk, you’re on the same team. There’s no conflict you’re not getting commissions from the more that you sell, get that little quick story that really set your sales for your career.
Brian Quaranta 04:06
Yeah, you know, if you’ve come to one of my educational events, or you hear me on the radio on KDKA, Saturday mornings, I always tell this story, because this is the story that really kind of changed my life. But very early on in my career. Matter of fact, the first financial job I ever had for a big firm in Pittsburgh. The first day on the job, they said to me, Hey, kid, you’re going to be answering the phones for the next couple of weeks. And so, I did. And during that point in time, the market was dropping. This was the end of 1999; the tech bubble was bursting, and people were losing a lot of money. And I took a phone call from an individual that was very panicked and very upset that he had lost a lot of money. And the first thing he says to me when I answer the phone, he says I need to sell out of my investments today. I can’t afford to take any more losses. I need you to liquidate things immediately. Well, I don’t know what to tell this individual right. I don’t know I have to tell him. So, the thing I did was I said, well tell me your financial advisor’s name. And I’ll go speak to your financial advisor and come back with an answer. So, I did, he gave me the financial advisor, I go back to the financial advisor. And I said, you got a client on the line, he’s, he’s, he’s lost money he needs to get out of the stock market. This is money that he needs to live off of. And the financial advisor says to me, Brian, you’re going to learn very quickly in your career that you can’t just sell when the markets down. He said, We don’t sell, we are long term investors. So, I need you to get back on the phone with this individual and let him know that everything’s going to be okay. That it’s just a paper loss to hang in there. And remind him that he’s in it for the long haul. So, I’m writing this down. And none of it really makes sense to me, because again, it’s my, it’s my first couple of days on the job. But I’m a good employee. So, I went back, and I repeated what I was told. And I said, you know, I want you to know, I spoke to your advisor, he said, everything’s gonna be okay. Don’t worry about anything, this will pass. And it’s just a paper loss, and you’re in it for the long haul. And what he said to me next truly changed my life. He said, Brian, I’m 75 years old, how much damn long haul does this guy think I’ve got left, I need this money. This is 45 plus years of work that I’ve saved this money, I don’t have a pension. The only income I have is Social Security. And that is not enough for me to live off of. So, every time I pull money out of this account, not only is it going down in value, because I’m pulling money out, but it’s going down in value because the stock market’s losing. And I learned very quickly that day, that it’s very easy to tell somebody else to risk their money. Especially if you get paid a fee or commission that do it exam. Think about that one. That’s right, you’re getting paid a fee, regardless of whether the account is up in value or down in value. But yet, you’re telling someone with confidence to just hang in there that you’re in it for a while.
Rebecca Powers 06:56
Oh, he was telling you to tell him.
Brian Quaranta 06:57
He was telling me to tell him.
Rebecca Powers 06:58
But your conscience..?
Brian Quaranta 06:59
Yeah. Was it, was it was against my moral guidance, right? Yes, it just there was friction there. When I said, this doesn’t seem right to me, you know. And of course, spending more time on that side of the business. I’m listening. And I’m going, you know, this is not what I want to do. And this is why when I write about, you know, building your retirement in my book, Right Track Your Retirement, I talk about the fundamental shift that you need to make as you approach retirement, where we have to think about how to protect our money, but still position it in a way that we compete, keep pace with inflation, pay for the expenses that we’re going to need to pay for in retirement. But I write about it in detail, because I want you to have this information, I want you to start to think about retirement differently, I want you to hear a different message than what you probably been hearing for a very long time. So, I want you to call 1-888-382-1298, you can call the call that number right now schedule a time to come in for a complimentary Right Track Review. It’s about a 45-minute review, where we will help you get some clarity around the way you should start thinking about retirement planning, versus just gambling with your money. Now, you can also go to onthemoneyoffer.com. And there you can request a copy of the book I pay for the shipping handling, just like Rebecca said, it’s absolutely free. I don’t know how to make it any easier. So go to onthemoneyoffer.com, get a copy of the book. And when you’re there, you can also schedule a time for the Right Track Review and come into the office.
Rebecca Powers 08:23
And even if you’re not a reader, like myself, I was an anchor for 20 years. But I don’t like to read books, I really don’t. But it is very short, very easy to read, very simplified chapter so you can even highlight the chapters and it’s definitely worth a read. All right, stay with us. We are here with Brian Quaranta, we’re talking about risk and retirement, they do not go together. How do we secure your money, it is possible, we’ll be right back.
Brian Quaranta 08:46
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 will 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 09:01
The last thing you want to do is have a really good job and you’re in your 60s retire and be looking for work again in your late 70s.
Brian Quaranta 09:09
The average person might say, well, a good portfolio would be a good mix of stocks, bonds or mutual funds. A good portfolio is all designed around the five key areas income, taxes, investments, health care and legacy planning.
Neil Major 09:23
Because we’re not just product pickers here, what we do best here as we build retirement plans,
Brian Quaranta 09:28
nine out of 10 people when they walk through the door, we’d 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 09:39
People, you know, can actually see a vision once we start to really build out their plan.
Brian Quaranta 09:44
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 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 dream of.
Rebecca Powers 10:14
Welcome back, we’re talking about your retirement and more importantly, how to take risk out of your retirement savings. It is possible. Brian, I want to talk about that first appointment, because for me and my husband, it was so eye opening when we saw the Morningstar report, when we saw these things, this was the actual risk we were in these were the fees we were actually paying. Mind blown. Yeah. Let’s talk about that Right Track Review?
Brian Quaranta 10:39
Yeah, well, it’s a very comprehensive review. I mean, first off, the one thing we really like is that if you are on the right track, and you are doing the right things, we’re not there to sell you, we’re going to be honest with you and tell you look, keep doing what you’re doing, you’re doing the right things. But if there are areas that need to be potentially changed, or you’ve got unwanted risk, that you may not know about, or you have high fees in areas that you don’t know about, where you might have the wrong financial product for what you’re trying to accomplish, we’ll let you know that you don’t need to move forward, that’s up to you. But you’re gonna get an honest review, without worrying about the pressure of having to make a decision or onboard with us. So that’ll be up to you of whether or not we’re there stare to deliver the information. But yes, we have a number of reports and technology that we use to evaluate the current plan. And it’s now yours. It’s a third-party software to third party software. Yeah, very important, because any financial planning firm can go out and purchase the software, a lot don’t, because it’s expensive, expensive. But we use Morningstar, we use Riskalyze we use a number of calculators to help calculate certain things. So, but we build out this report for you so that you can understand what risks are you taking? What fees are you paying? What’s the probability of success of your portfolio? How much income are you going to be able to take out without running out of money? What rate of return is to the big one? A lot of people don’t realize this. What rate of return do you need your portfolio to do in order for you to accomplish your goals? That’s how many people don’t even know.
Rebecca Powers 12:16
Most of us, because we weren’t taught this, right? None of us were.
Brian Quaranta 12:19
Right. So, we were just taught, you know, well, I do a review with my advisor, and they talk about performance.
Rebecca Powers 12:25
And we trust one guy who’s at a box with a big name. And I’m gonna hope and pray that I have enough to retire.
Brian Quaranta 12:30
That’s right. So how do you know if you don’t know what rate of return your portfolio actually needs to do? How do you know if you’re on the right track?
Rebecca Powers 12:36
You mean, you have to set a goal? Yes, to get somewhere how novel Brian.
Brian Quaranta 12:41
Well, so I write about the three interest rates that you need to know about in the book, by the way, it’s the spin down rate, the preservation rate and the legacy rate. And when we come back from this break, I think it’s time to take a break, Yes?
Rebecca Powers 12:53
We got about five more minutes.
Brian Quaranta 12:54
Okay, we keep going.
Rebecca Powers 12:56
It’s your show, you pay the bills.
Brian Quaranta 13:00
But let’s talk about it. So, the spend down rate is very, very simple. So that is, if I want to take out a certain amount of money, so we have to understand is that about 85 to 90% of people retire and they don’t have a pension, we have social security, right. And that’s a form of social security is a form of an annuity, it’s going to pay you a monthly income, as long as you’re alive. All right, the amount that you’re gonna get from Social Security is all determined on what you paid into it based on your earnings. So, most people will tell you that that Social Security is not going to be enough money for them to live off of. Okay, so how do you get the extra money that you need? Well, people are going to be relying on their retirement savings. Now that comes in many different shapes and sizes. That can be a 401k. It could be a 403. B, it could be a 457. It could be an IRA account, a Roth IRA account, there’s many different retirement savings vehicles that people put money into, okay, all have different rules. When you start to distribute the money. Yeah. But people will tell you that they are going to need that money. They use that money to live off of, okay, well, if I’m going to withdraw that money, what rate of return do I need to get, and the spend down rate is what rate of return do I need to get to where maybe that account spends down to zero by the age of 95? So, it’s just spread out? Right? That’s your minimum rate. Yeah.
Rebecca Powers 14:18
And then there’s also all kinds of tax ramifications. So, there’s also tax planning, we’re gonna get into all of these things.
Brian Quaranta 14:24
Yes.
Rebecca Powers 14:25
Of course, you touch on that in your book as well. What do you think the biggest misconception is when people come into your office and they’re so relieved? The weight is off their chest. They see what’s really going on. You give them kind of different scenarios, and they pick one.
Brian Quaranta 14:36
Yeah.
Rebecca Powers 14:37
What is the biggest misconception?
Brian Quaranta 14:38
Well, it’s the interest rate. So, I would so let me finish this because we’ve got the preservation rate that I want to talk about, because the misconception is not understanding the rate of return that you need. The preservation rate is up, I want to pull out a certain amount of money. And I want to preserve that principle, what rate of return do I need? And then of course, you have the legacy rate if I want to pull a certain amount of money out, but I still want to grow my money. What rate of return do I need? Three rates. So now you can start to figure out what’s the average return that the portfolio needs to do. So now when you come in for your review, you’ll know exactly what the portfolio needs to do in order to stay on track. Most people just have no idea that once you figure that out, now you start to go ahead and you can solve the retirement puzzle problem, right? But go ahead and ask me that question. You’re gonna ask me again, I forget what you asked.
Rebecca Powers 15:20
Oh, just what’s the biggest misconception? I know that you have told me that 9 out of 10 don’t have a written plan.
Brian Quaranta 15:26
Oh, for sure.
Rebecca Powers 15:27
That’s number one. Yes. But what’s the biggest thing when they’re so relieved that oh, gosh, if I had only known this sooner, I guess.
Brian Quaranta 15:33
Yeah. Well, well, there’s five areas that people don’t understand that has to be solved for. Okay. Number one, most importantly, is your income strategy. Okay? Most people are just investing in a diversified portfolio of stocks, bonds, or mutual funds with no real income strategy, right? If I was just like, well, we’ll take 4% a year out, right? Because that’s usually a rule of thumb that they use. Number two is going to be your tax strategy. Right? So, when you withdraw money, you got to pay taxes on it. Well, how are you going to handle that? Because one of the things you got to think about in retirement, is how is our taxes and inflation going to affect your purchasing power? Right? Because if you need to withdraw $1,000 a month, and you’re in a 20%, tax bracket, well, you’re only going to net $800, right? Well, here’s the problem with taxes, they can change the rules in the middle of the game anytime they want. So, they can all of a sudden say, Oh, I’m sorry, well, your tax rates going to 30%. Now, just by raising taxes, your withdrawal that you need of $1,000, after you pay, taxes is only going to net you $700 Now, right? So, they don’t understand the tax implications of withdrawing money, retirement. Three is your investment strategy to things that you were doing to get to retirement at the same things you’re going to do to get through retirement health care event, most people are going to have a health event, the question is, When are you going to pay for it? How are you going to take care of that? Right. And then of course, your last one is when the good Lord decides to take you home, right? And you leave all that money to your family, friends, charities, whatever, the big question is, who’s going to be the largest beneficiary, the folks that you’re leaving it to, or the IRS, because remember, the IRS comes in on every part of your life, you know, and they’re gonna get you believe me when you die. So, folks, go to onthemoneyoffer.com, get a copy of my book, I mean, all of this that Rebecca and I are talking about are in the book, don’t hesitate on this, don’t procrastinate. It’s very easy to procrastinate on things that we don’t want to do. This is not one area that you want to do that right. And if you are working with somebody, I would tell you come in, have an open mind, get a second opinion, as I always say, you can’t get a second opinion from the person that gave you the first opinion, okay? When you come to our office, nobody’s going to sell you anything. Nobody’s going to press you to do anything. We’re there to truly provide you with the information you need. So that you can make the decisions that you need to make that are best for your situation, onthemoneyoffer.com You go there to get a copy of the book. Also, while you’re there, you can schedule a time to come in for a Right Track Review, or you can just call 1-888-382-1298. And our team is standing by to take your call and get you scheduled.
Rebecca Powers 17:56
And you can always go to onthemoneyoffer.com To make that appointment as well and get that book and remember the QR code and your phone at it. It’ll take you right to our landing page. Alright, stay with us. We’re talking about your retirement, and how to take the risk out of that word retirement, we’ll be right back.
Announcer 18:19
To work never seems to end until the day it finally does. After nearly a lifetime on the job. You should be rewarded for all the time you spent working. Whether that’s crossing off items on your bucket list, learning a new passion or rekindling the love of an old one. After all, life isn’t over when you stop working. It’s the start of an all-new chapter, the one where you’re the writer and you get to choose how your story will go. A way to achieve that is by having a clear financial plan to sustain your golden years. The biggest fear most retirees have is if they’ll have enough money to maintain the lifestyle they’ve always enjoyed. Having a plan to help protect you against the curveballs life often throws will help to maintain your lifestyle. Call today to get your free written financial plan. See me live everyday to the fullest and enjoy the retirement of your dreams.
Rebecca Powers 19:09
Welcome back to On the Money with Secure Money with Brian Quaranta and the name of the show is On the Money with Secure Money. I love that you put the word secure. Yeah. Because that is number one. A penny saved is a penny earned.
Brian Quaranta 19:23
That’s right. Yep.
Rebecca Powers 19:24
So, if you can just save someone some fees?
Brian Quaranta 19:26
Yep.
Rebecca Powers 19:27
Save someone a penny here and there. It adds up.
Brian Quaranta 19:30
Yeah. And you know, what rate of return is worth risking 40 years of work?
Rebecca Powers 19:37
It’s bizarre.
Brian Quaranta 19:38
It’s bizarre. It really is bizarre when you think about it. You know, I was I have said for the last 20 years. There needs to be a better system. Think about the days of the pension. How easy was it? You put in so many years’ worth of work. And when you retired, you got Social Security and you got a pension That was enough money that people to live off of and you knew what it would be. And you knew what it was that they would have if you knew what it would be, if you had extra money saved. A lot of people didn’t even have to take risks, because you could go to the bank and earn a nice interest rate by and bank CDs. I mean, you back 40 years ago, I mean, they were maybe at 10 or 15% interest. So, I mean, it’s nice to even see yields coming back up. I’ve told, you know, a number of our clients, because look, I’m not against the stock market, I want to make that very clear. Okay, so we are not a firm that doesn’t believe in the stock market, I just believe in a better model than having 100% of your money in the stock market, I still believe in the stock market over the long haul. And if you look at it in 10–20-year periods, it does tend to go up permanently, it just temporarily goes down. The problem is people are risking money that they cannot afford to lose. So, in my book, right track your retirement, I talked about the proper way of diversifying a portfolio in retirement, you got to have some secure money. And then you have to have some risk money. But that risk money is money that truly needs to be long term money. It’s the only way that it can be done. But if we made it simpler for people to retire, think about this. I’ve said, what if we could bring back the pension in a different way? What if there was a way to get people guaranteed money? The problem with the pension was if you left your job, you left your pension, right or you didn’t qualify for it. So that’s not good, because Gen Xers have probably had five jobs. Right? So, but what if you could take that pension from one job to another? Yeah. And the employer could say, well, if you come to us, we’ll put this much money towards your pension. And now it’s a pension that can be portable. Okay. Well, the Secure Act, which I don’t have time to go into what law this was, but the Secure Act was a change in retirement stuff, IRAs as well, the Secure act 2.0 came out and said, they’re going to start allowing annuities to be in 401 K plans. Now, I cheered as loud as I could share when I heard this. Now, some of you listening might think to yourself an annuity. Why would I want to put money in an annuity that ties my money up? It’s probably got a lot of fees. I’m never going to go to get my money out. I’m never going to earn any interest. Well, if that’s what you think you don’t understand annuities, right. You don’t understand a new is you understand an annuity is probably because somebody that was trying to sell you something else probably explained annuities to you, in some in a way that made you feel like well, that’s the worst investment in the world. And I’m telling you right now, why would you hate an investment that guarantees and protects your principal and provide you with a lifetime of income? Right?
Rebecca Powers 22:58
Guaranteed lifetime growing income. And compliance said that I can tell this personal story. I didn’t know that I was with an insurance salesman. I thought it was a financial adviser. Fiduciary, I didn’t know it was my 20s. And he told me a bunch of products and I had a variable annuity which I know you’re gonna spit out. Yeah, because they are bad. So, I think in the past, annuities have gotten a bad rap, I guess is my point. Sure. But now as you know, I took all of my 401 K money from my 20 years in television as a news anchor and put it in a fixed indexed annuity. Yep. And I lose zero. I get some of the gains, but not all of the gains. Explain how it is tied to the market, but not in the market. It sounds too good to be true. But they are phenomenal, especially right now.
Brian Quaranta 23:44
Yeah. So, if you look, if you if you lift up the hood, and look at the engine inside of these fixed index annuities, essentially what they’re doing is just buying an option on an index, right? And index is the DOW, the S&P the NASDAQ. So, when I say index, just think about those indexes. Well, when you buy an option on the index, there’s only two things that are going to happen at the end of the year, it’s either going to be up or it’s going to be down. That’s it. If it’s up, you’re going to earn some of the interest. So, let’s say it’s up 10%. Well, you might only earn 70% of that, or 7%, right? If it’s down, you get a 0.
Rebecca Powers 24:21
Zero is my hero. I wanted to get a t shirt that says that right?
Brian Quaranta 24:25
Now, a lot of people might ask, Well, why do I only get some of the gains? Well, when you buy an option, there’s a cost to buying it. Right. So, the cost of the option is what sets the participation of what you’ll get at the end of the year if the markets up. So, in this case, if it’s up 10 And you get seven, that’s because the insurance company had to pay to have this option for you to participate without putting your money at risk. Now, professional traders do this all day long, right? Professional traders buy options. You know, they buy calls, they buy puts they sell calls, they sell puts And most professional traders do not risk their actual capital, they are just spending money to buy the option to either participate or not participate in an individual stock or an index, because they know that they would pay a little rather pay a little bit of money and be able to control the risk versus just putting their money in and having no control of the risk at all. So, think about like buying, I don’t know, Microsoft, right? Well, do we know what Microsoft is going to be three months from now? What price it’s going to be one does. But what if we had the option to buy Microsoft in three months, and we had the option to buy it when it was when it was up, but we got it for today’s price? So, let’s say it’s at $50.03 months from now it’s at $70? Wouldn’t you like the option to buy it at 50? Yeah, rather than buying it at 70. That’s what an option gives you the opportunity to do. And so, this is a very simple strategy that the insurance companies figured out. But what else they figured out is they figured out how to not only give you some upside of the market when it goes up but protects you when it goes down. They also figured out how to create a strategy within those products to provide you with a private pension, guaranteed income for the rest of your life. If you die the rest of your wife’s life, or your husband’s white life. If you both die, any balance in the account is paid out to your beneficiaries.
Rebecca Powers 26:22
With no probate. Yeah, because that’s another reason we loved it.
Brian Quaranta 26:27
Yeah. Right, because it’s got a beneficiary document. But here’s the real key. The real key is this. What happens if you’re taking money out? And you’re living a long, happy, healthy life? And the balance of that account goes to zero? Are you out of money? Well, if you are in the stock market, you would be out of money. That’s it, game over. In an annuity, you still get your income. That’s called insurance. Exactly. So, we insure our homes. Yes, we insure our cars we insure our health. Folks, let me ask you, why in the world, would you not insure the most important thing you’re going to need? And that’s your monthly income? Would you drive around without car insurance? Would you walk around without health insurance? Why are you walking around without income insurance? Because that’s what the annuity does. And I write about it in the book right track your retirement. Again, go to onthemoneyoffer.com Get a copy of the book scheduled time to come in and see the team. You will get a lot out of that meeting; you’ll get a very comprehensive look at what you’re currently doing and some suggestions of how to make your current situation better. If you’re already doing good things will let you know you’re on the right track. So again, onthemoneyoffer.com or call 1-888-382-1298 The team is standing by right now to talk to you and get you scheduled.
Rebecca Powers 27:45
And we want to say a sincere thanks to all of you at home for watching and for telling your friends about us. We really appreciate it. We hope you’ve learned something today. We’ll see you next week.