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Video Transcript
Rebecca Powers 00:22
Welcome everyone to this week’s edition of On the Money with Secure Money with Brian Quaranta. Of course, Brian created Secure Money Advisors. It’s all about securing your hard-earned money. Retirement is supposed to be about freedom, right; have that peace of mind, know that when I retire, I’ll be able to pay my bills for the rest of my life. But your retirement account, we’ve learned from you, Brian, is not a paycheck. And if you confuse the two, that can sink your ship, can’t it?
Brian Quaranta 00:54
You can go broke. Yeah. You can broke, broke if you don’t understand that, you know, I mean really the pile of money that you have when you retire, the job changes, right? You go from offense to defense. You certainly do. You certainly do. And you still got to score points in the form of monthly income, right? But the strategies and techniques that you were using during the years that you grew your money are not the same strategies that you use during your retirement years. Unfortunately, the big box firms that have run the financial planning community have continued to do the same thing they just like where they roll over their money and we just reinvest it, and we take a fee from them. We give them all these fancy reports. We act like, you know, we say words they don’t understand. Say words they don’t understand, you know. And to me, that’s why I left the big box firms, right? But think about it like this. Think about what’s happening in the medical community, right? You have doctors. How many independent primary care physicians were there for so long. I mean, I never had a primary care physician that was part of a big conglomerate. Right now, they’re all being bought up, right and there’s a group of doctors now that don’t want to be part of that big box medical system, and they’re going back to the independent world. Why? Because they want to be able to stick to their Hippocratic Oath, which is, do no harm. First, the dirty little truth in the medical community is the fact that if you work at a hospital, you know, let’s just say you’re working with a surgeon. Well, that surgeon may be required to have so many surgeries a month, right? And because they’re required to have so many surgeries a month, maybe somebody that could benefit from physical therapy might be, you know, being cut open when maybe they don’t really need to be cut open, right? So there, you know, there’s little dirty secrets in everything, right? And, you know, look, I’m not saying that Secure Money Advisors is the right firm for everybody, because we’re not right. I mean, there’s a lot of people out there that like to manage their own investments. They’re okay with risk. They can stomach it. They feel very comfortable with it, and they’ve got their beliefs, and that’s okay. But there is a lot of people, Rebecca, that really do not want to risk 30, 40, years’ worth of their life savings when they go into retirement, they realize that they don’t have time to recover. When you’re working and the market goes down, you’re putting money into your portfolio, right? So-
Rebecca Powers 03:31
If you have time you can recover.
Brian Quaranta 03:32
Yeah, and if you have time you can recover, but you’re offsetting those losses by continuing to make contributions to your 401(k). So, your 401(k) goes down. You get paid a contribution goes in. It helps you buy more shares at a lesser price. You’re offsetting those losses, plus you have time on your side, and that changes. Two major things change in retirement. Number one, the market goes down. You’re no longer putting money into your accounts to offset those losses, right? And it’s not a question of whether or not the market will come back. The question is, we’ll come back to the time period you needed to come back in. So that’s why I wrote the book. Right Track Your Retirement again. If you go to OntheMoneyOffer.com you can get a copy of the book. It’s absolutely free. This information in here is so urgent for you and your family to have, because I will tell you that for the first time, you are going to read a book that is going to open your eyes to something that you probably never even knew about. And as I’ve always said, your investment plan is only as good as the people that are advising you, if the people that are advising you do not understand the basic fundamentals that I talk about in this book, or they don’t specialize in it, you are in a world of trouble, I promise you. So, get the book OntheMoneyOffer.com, it’s absolutely free.
Rebecca Powers 04:56
All right, we’re going to take one very quick question before we go to break this. Question is from Mount Lebanon, thank you so much for watching Joe. We appreciate it. His question is, Brian, I’m 64 and plan to retire next year. My biggest fear is losing that paycheck. I have social security, but will that be enough? And I know you’re going to say, you have to know his bills to know if that will be enough, yeah.
Brian Quaranta 05:16
But you know, that’s the number one question that we always get. How do I replace my paycheck? Yeah, right. It’s why we don’t see retirement parties anymore, because nobody knows when or how they’re going to be able to place their paycheck. You know, the question we get a lot of times is, Do I have enough money to retire? Nobody had to think about that. 30 years ago with pensions, yeah, they nobody had to think about, Do I have enough money to retire? They just knew that the steel mill was going to pay them X amount of dollars, or the airline was going to pay them X amount of dollars, or if they were a teacher, you know, you know, they’re the, you know, teachers’ association was going to pay them so much money. You don’t see that anymore. So, people are lost because they hear all kinds of different numbers. How much should I have? I should have a million. I should have 2 million. I should have 3 million, whatever it is, you know, I think the Wall Street Journal reported, you know, somewhere around, like $1.7 million you needed. Well, what factors are they basing that off? You know, we’ve retired people with $300,000 $600,000 a million dollars. So, I want you to know, folks, there is absolute hope, regardless of the amount of money that you have. And you know, we’re not one of these firms that says you need to have $10 million to work with us. I did not grow up with a silver spoon in my mouth. My mom and dad worked so hard for their money, and when I saw my mom and dad lose the Montgomery Ward store, and I saw that financial stress that happened to my own family, and I saw the arguments, well, I didn’t see them, but I heard them as a little kid, those arguments at night, that’s what really inspired me to learn about money, because I felt like, man, people shouldn’t have to go through this. And I just can’t express to you enough how devastating it is, Rebecca, for someone to finally retire and because somebody got paid to convince them it was a good idea to take risk with 100% of their money. Their money. After just a few years, the market doesn’t cooperate. They get scared, they get anxious, and they say, You know what, I’m going back to work. That’s not the way to do it. There’s such a better way. And that’s better way is right here in this book, Right Track Your Retirement.
Rebecca Powers 07:19
All right. Stay with us. We also have the QR code for you right there. You can also go, as he said, to OntheMoneyOffer.com. The phone number is 888-382-1298, not only do you get the book, Brian’s team will also mail it to you. Pay the postage and a little spoiler, he is working on book number two, so we’re very excited about that. All right, stay with us to your questions for Brian Quaranta. Next, how you can secure your money.
Speaker 1 07:50
The 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 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 so you may live every day to the fullest and enjoy the retirement of your dreams.
Rebecca Powers 08:42
All right, the 4% withdrawal rate, or rule rather, why it often fails, and what sequencing risk is. Let me say that again, sequencing risk, that’s a tongue twister. What does that even mean? I mean sequencing risk. You hear of so many different risks, and this is one that I think we’ve not been taught about.
Brian Quaranta 09:05
Sequence is the order of returns that you receive on an annual basis with your investment portfolio. And because you can’t control the sequence in which those returns show up, that’s where the risk lies, gotcha, right? So, you know, you might have, in your first year, a plus five. In your second year you might have a minus 10, and as in your third year, you might have a plus 20, right? So, you’re going all over. But the year that you had, you know, a minus you might have also taken money out, so you lost five in the market. You took four out, so that’s down nine. And then if you paid a 1% fee, you’re down 10. Gotcha, right. So, these are the things that people don’t think about, and this is why, when you come to Secure Money Advisors, the one thing I will tell you is that when we bring your plan. Plan up on the big screen, and we build out the Excel model for your situation, you’re going to be able to see, purely with the math alone, where the problems are. See, that’s the great thing about Secure Money. We’re not sitting there giving you our opinion of what the market’s going to do, you know, or how we feel the investments are going to produce. We’re showing you the real data with the real math, and when you look at it from that perspective, your eyes start to open up of all the possibilities that can go wrong. And what we want to do is we want to eliminate as many of those risk variables as we possibly can.
Rebecca Powers 10:43
All right, we have another question from Steve in Butler, thank you so much, Steve, for watching. He asks: everyone talks about the 4% rule. Is that still safe to follow? We kind of talked about that already, but what are the pros and cons of those, Brian.
Brian Quaranta 10:57
Well, look, I mean, depending on how much money you have right, the 4% withdrawal rule could work if you reduce the withdrawal rate. So, the Wall Street Journal came out with an article and said the 4% withdrawal rule may need to be changed to the 2% withdrawal rule, or the 3% withdrawal rule, right? So, you can still use the concept of the 4% withdrawal rule. You just may not want to use the 4% as the number, but the more you have in your portfolio, right? Yeah, right. So, if you have four or $5 million you might be able to get away with the 4% rule because you’ve got a lot more of a cushion there than somebody that might have $900,000 right? But I will tell you the people that really get it, Rebecca, that love the income annuities, are actually the very wealthy, really, yeah, because what it does for them is they say, wait a minute, you’re telling me, out of my $5 million if I take $2 million I can create over a quarter million dollars a year in income for my spouse and I, and this other $3 million I can just go do what I want, buy crypto, take risk, and I don’t have to worry about my wife panicking or being like, what are you doing with our investments? And the answer is yes, and they love it, because here’s what it does. It again, it organizes the strategy properly. I set this aside to be the baseline, right? And when I have the baseline of income, now, anything that I take risk with is just extra money. It’s not going to impact me from paying the bills, right? So, let’s say that your stock account goes up one year, and let’s say you earn $100,000 in your stock account. If you want that year, you could take that $100,000 out. You can go do whatever you want with it, yeah, go on vacation, give it to charity, whatever you want. Or you want, or you could keep it in the account and just let it defer, right? That’s the beauty. But on the year that it goes down, you don’t take any money out, but you still have the income from the annuity, right? And when people, when people see the simplicity of that, and let me say this, an annuity is not an investment, okay, I want to be very clear about that. It is an insurance policy.
Rebecca Powers 13:25
Literally. And figuratively.
Brian Quaranta 13:28
Yes. It is designed to insure the most important thing that we all need, and that is your income. I’ve said this many times, but I’m going to say it again. You insure your home, you insure your car, you insure your health. Why in the world would you not insure the most important thing that we all need to maintain our lifestyles, and that is the monthly income that we receive. The replacement of your paycheck. I would never retire knowing what I know. After 25 years of being a financial planning without having my income insured, I think it’s a very foolish thing to do.
Rebecca Powers 14:12
Absolutely, okay. So how important is it to stress test a plan against market downturns? That’s something we’ve talked about a lot on the show, and Barbara asked that from so quickly. It’s such a good point. If you feel a chest pain, you go to the cardiologist and you literally take a stress test. But we weren’t taught to do that with finances. Why, and how do you stress test for us?
Brian Quaranta 14:35
Yeah, stress testing is actually very, very simple. I mean, what we do is we take the amount of money that you have, and we say, let’s assume you went into the market. And we take the last, you know, 25 years of returns of the S&P500, and then we start to play games, and we start to manipulate returns on any given year. So, we might say, well, what if, rather than taking a plus 15% this year, you took a. Minus 10, right? Or a minus nine? What if the next year there was another loss of minus five? And then what you’re seeing is you’re seeing that spreadsheet recalculate, and you’re watching the bottom of the spreadsheet go from zero way down here, meaning you got no money to now the zero is being up here, the zero is now being up here, and you start to see the impact of just a few down years and how they can make you run out of money that much earlier. And when people start to see that in person, based around the math, by just plugging a few numbers with their own numbers, with their own numbers, now they get it. Now they understand. And if you want to make sure that your retirement is absolutely bulletproof, this is the book you want to get. The information in this book is so urgent for you and your family to have right now. This is the time to read this book, because if you don’t understand the five key areas of retirement. If you don’t understand how you’re going to replace your paycheck, you’re going into retirement already losing so do yourself a favor, whatever you’re doing right now, drinking a cup of coffee, hanging out with your grandkid, just scan the QR code at the bottom of the screen, call the phone number, go to OntheMoneyOffer.com and get a copy of the book, but schedule your complimentary session, also to come in and sit down with the team and go through your situation. There’s one promise I always make my team. Every single one of them has been trained by me, and the one thing I make very, very clear to them is that we are problem solvers. Your job is to identify if there is a real problem that exists, and if there is not, you shake those people’s hands and you tell them that their advisor has been doing an outstanding job, and there is nothing we can do for them. And let me tell you, we do that often, because some of you out there have done a great job, right, but some of you out there need a lot of help, and we’re here for you, and we want you to become part of our family. But more importantly, I just want you to get the right information, and the right information exists right here. It’s this close to you right now. In the next five days, you could have this in your hands, and you’re going to read it, and you’re going to say to me what most people say, Brian, I read your book. It was the easiest read I ever read, and I couldn’t believe some of the things that I read that nobody ever told me about OntheMoneyOffer.com, go there right now get a copy of it.
Rebecca Powers 17:52
And Brian didn’t mention this block that he also sends it to you for free, so he pays the postage, and that complimentary consultation that you’re also going to sign up for is also absolutely free. All right, stay with us. When we come back, we’re going to delve more into annuities, because there are a lot of Miss, Miss Information, what we call the personal pension, the annuities, good or bad, stay with us.
Speaker 2 18:22
We know the market is going to get worse from here. This is the biggest monthly decline in 10 years. People’s 401(k)s took a major hit.
Speaker 3 18:30
My investments are tanking. My retirement isn’t going as planned. I can’t believe I let my kid talk me into buying crypto. I mean, what is that, anyway?
Speaker 2 18:41
This was the fourth worst contraction in history.
Speaker 4 18:43
So how are you two doing?
Brian Quaranta 18:45
Your financial future doesn’t have to be uncertain. I’m Brian Quaranta with Secure Money Advisors. If you have amassed a nest egg, it’s time for a financial advisor to help you reach your retirement goals. This is one of the greatest tax windows in history. Now is the time to take advantage of this tax discount while you can. We specialize in retirement planning, tax mitigation, estate planning and more. Plan your retirement right Call now for your complimentary portfolio review and tax analysis.
Rebecca Powers 19:17
All right. Welcome back. We’re going to talk about annuities. So many of our questions about annuities, Brian, a lot of people, as you’ve said, they’ll say, oh, no, my neighbor says annuities are a rip-off. They’re not, they’re not good. First of all, why do you think they’ve gotten such a bad rap
Brian Quaranta 19:30
Marketing. Yeah. It’s very simple. There’s two people out there, a woman and a man.
Rebecca Powers 19:39
And so, the Wall Street model has always marketed. Stay away from that. Yeah, keep your money in-
Brian Quaranta 19:44
Yeah. You have to understand-
Rebecca Powers 19:45
-the stock market.
Brian Quaranta 19:46
-You have to understand annuities are not really friendly to the business model of any financial firm, okay, and the reason is because you can’t charge a reoccurring fee on them, all right? Yeah. And if you are paying a fee on an annuity, it’s not going to your advisor. It’s going directly to the insurance company, because that’s paying for your benefit, right, right? So, your financial advisor, if they sold you a good annuity, thank them. Yes. And if there’s a fee on it, they’re not receiving it, they’re not getting rich off of these things. I promise you, I will take people’s money all day long and put it in the market and charge them a fee, because I will make way more money than if I put money into an annuity, because the market money pays me every single day, every single month, regardless of whether the account’s up or down. But the reason why a lot of firms like to use only market money is because of the reoccurring fees. You know, an annuity will cannibalize or reduce the revenue of a firm. You know, we’ve talked about this before. I mean, if just look at something as simple as a million dollars, you know, a million dollars at a 1% fee is $10,000 so if you took now that million dollars and you said, I’m going to put half of it in an annuity, and I’ll put half it in the market, the annual fee for the business, the annual revenue for the business, just went down to $5,000 so it got cut in half. Yeah, and so a lot of firms don’t want to do that. So even though taking 20 or 30% of their client’s portfolio and put it into an annuity could really help the client, they’re more concerned about the fees and the revenue of the firm, then they are at exactly doing the right thing. And this is why I’ve said I don’t know how anybody can call themselves a fiduciary, Rebecca when they don’t offer annuities, life insurance, Medicare, homeowners’ insurance, estate planning, right? Because the definition of a fiduciary is to do what’s in the client’s best interest. So, you’re telling me that you are calling yourself a fiduciary. You’re saying things like, Well, we do better when our clients do better. Yeah, what does that mean? Exactly? Well, that just means when your portfolio goes up in value, they charge you more. Well, they don’t charge you more, but they get a percentage. Well, you know, if I’m managing a million dollars, and it goes up to $2 million I’m now earning 1% off at 2 million, not a million, right? So, I’m-
Rebecca Powers 22:31
Sorry, y’all, I’m not a mathematician. I apologize, but I see what you mean.
Brian Quaranta 22:36
Yeah. So, so you know that, you know, to me, it’s just a bunch of BS when it says, when we do better, when our clients do better, we do better. I mean, it’s brilliant marketing, because it sounds like, oh, wow, they’re on my team, in it together. We’re in it together. Yes, what if they don’t say is, if we lose you money, we still do good.
Rebecca Powers 22:58
And you even pointed out in past weeks, other shows, that on the bottom of your statement, it will literally say past performance does not necessarily reflect future performance.
Brian Quaranta 23:07
It says it on everything it has to.
Rebecca Powers 23:08
That’s what the law makes-
Brian Quaranta
23:10
You have to disclose that on a prospectus, right? And the other thing that is very unique is the way average returns work. I mean, think about something as simple as this, let’s say you have $100,000 okay, let’s do this math slowly. Okay, get your pen out, because I know you’re not a math person. So, we have $100,000 okay, okay, if we lose 50% of that money, what is our balance? 50,000 50,000 okay. Now, most people say, Well, if I lost 50% all I got to do is make that 50% back and I get back to even. Well, if I add 50% to $50,000 I earn how much in interest? I earn, $25,000 in interest, right? 50% of $50,000 is $25,000 so I now go back to $75,000.
Rebecca Powers 24:06
Because you added the 50 plus the 25.
Brian Quaranta 24:11
Added the 50, right, correct. So now I’m at 75,000 to me, that looks like I’m still down 25% okay, so that means if you lose 50% of your portfolio, you’ve got to do 100% just to get back to even now. Why do I share that? Because that happens even if you lose 10% 12% 14% 20% any amount of money you lose, you have to do a higher rate of return to get back to even now. It gets even more complicated. If on top of your loss, you’re compounding it by taking out withdrawals, right? And on top of it, you’re not putting any money in to offset the loss. You see the problem.
Rebecca Powers 24:53
Absolutely. This is when it does grow. It’s a smaller amount of money growing.
Brian Quaranta 24:57
It’s a smaller amount of money growing, right? Compounding loss. Yeah. I. Absolutely right. So now this is the other thing. Now let’s look at an average rate of return. If I take if I have a minus 50% return in my first year, and then I have a plus 50% return in my second year, if we’re looking at math based on averages, a minus 50. Plus 50 is an average rate of return of what zero, 0% you got it right, 0% that’s right. So now legally on a prospectus, right is and that’s what you get if you buy a mutual fund, right? The mutual fund company can now print on their mutual fund prospectus that their two year return is 0% because in year one they lost 50% in year two, they gained 50% so the average return for that portfolio is 0% now the average person would look at that and go, well, worst case scenario, I still have my money, right? I earn 0% so that means if I put 100,000 in, I still have 100,000 but averages in math do not work the same way when you apply it to money. So, let’s apply that to money now, okay, if we have $100,000 and we lose 50%, right? That means we’re down 50,000 so we’re down to 50,000 now I earn 50% back, right? So now I earn 25,000 so now I’m back to 75,000 which means my real rate of return, not my average return. My real rate of return is still minus 25% Rebecca, wow, that’s what should be printed onto prospectus, not
Rebecca Powers 26:47
Right, they didn’t teach this in school. That’s right. So that’s the yield?
Brian Quaranta 26:52
That’s the real rate of return, that’s the real rate, that’s the real rate of return. The average rate of return is different than the real rate of return. Gotcha. And these are the things that I talk about in the book. Right Track Your Retirement. It’s a simple planning guide to help you build income, give you peace of mind and confidence that you we all want in retirement. All you’ve got to do is not procrastinate. Don’t kick the can down the road. This information, I’m telling you, it is so urgent for you to get this information right now. This is the time to get it for you and your family, because this will change your family’s life. OntheMoneyOffer.com. Get a copy of it right now. Give a copy out to all of your friends. Tell them to go to OntheMoneyOffer.com or call 1-888-382-1298, my team is standing by, and you can schedule a complimentary session to come and sit down with us again OntheMoneyOffer.com get a copy of the book.
Rebecca Powers 27:49
And he even pays for the postage. Thank you so much for being with us. We love you, Pittsburgh, and we hope to see you again next time.
