Making Smart Decisions with Josh Tirado

Josh Tirado: [00:00:00] welcome to the making smart decisions podcast. I am your host, Josh Tirado. And for today, we're going to be discussing the concept of: I already have a broker. I already have an advisor. I already have a financial coach. I'm all set. Congratulations. Truth be told [00:01:00] more than half of my current clients said to me, oh, I already work with someone when they came to me.Okay. I appreciate that. If you come to me and we work together later in life, chances are you have some. Now that's a broad category. Some people refer to the person that sold the life insurance 20 years ago, or the person that set the Roth IRA 15 years ago, and some mutual funds they never heard from, again, as their person, some people have a broker who calls them.Maybe they have a little bit of money invested, or they're doing some fun stock picks, but they have somebody, perhaps it's a brother-in-law who's in the business and, or a sister-in-law, they run ideas. They have our questions, pass them from. If you are successful and ever reached a certain age, chances are, you've worked with some financial professional in some capacity, someone referred you in, you met somebody, somebody and you have someone, you have an advisor, you have a broker, you have someone who does something like along those lines. But what I always find interesting is the [00:02:00] clients first, and they tell me. But we're having a discussion already about what they're doing.So there must be something lacking, or some question in the back of their mind sums for interests that they're willing to talk to me about it. Maybe they think they're missing out. Perhaps their grass is always greener, people. Maybe they just want to be well-educated to make the smartest decisions they can, and that's all well and good, but know that a vast majority of people who work with advisers already came from someone else who had an advisor.You either needed something more from that relationship. And you wanted someone who was a trustworthy advisor, who did planning with you, who had a holistic approach, who put together all your needs. I heard someone a long time ago. Their favorite phrase was. We help clients crystallize their objectives. And that's a great way of putting it, allowing people to understand where am I am going from, where I am, how do I get there?And I am then putting that together. It's not the. I have this great investment. It might be a great investment, but it's a great free view. Does it help you accomplish your goals [00:03:00], or is it better for Susie down the street to help her reach her goals? Is it a great investment, but it's designed for someone who's 30, and you're 60, or someone who's 80.And you're 52. It would be best if you had something specific for you. So people come to me and say, Hey, I've worked with somebody, but maybe we don't have an ongoing relationship. Perhaps they were a commissioned person. They were a salesperson, or I haven't spoken to them in a while, and they're looking for something more.That's why we worked together. Also, maybe you've worked with an advisor for a long time. That person has retired. That person has passed. You disagreed, or you just felt you needed a different. You're comfortable working with an advisor. You see the benefits. You want to find someone or a company to work with that fits in better with your set of values, your personality, and that you can work with.There's a financial magazine for my industry, they've started a section an article in the front of the magazine every month. And it discusses my life as a., And they [00:04:00] interview different clients, advisors, and different walks of life, all over the country and the people that relay their experiences.Sadly, the majority of the articles that people are relaying a negative experience may have positive returns on the investments with the people. Still, the relationship and the service weren't there. Something happened. And most of these stories involve those people saying, I know I need a professional. Still, I needed to move to a different professional.So they were the right fit. That happens time and time again. So if you already have somebody that's terrific, if they are not providing for all of your needs and you think there might be, and this isn't being worried about, the grass is always greener. This is seriously. I think I could be doing something better or having a better experience.I know I should talk to somebody. I should have spoken with me now. I have my specialties. If you're not a good fit, I'll refer you to somebody else if you are. Terrific. We'll talk through that. Every client starts with a 20-minute meeting where we discuss what they're looking to get off the relationship and what my company offers, [00:05:00] and we call it the right fit meeting.Cause we're looking to see, are we a good fit? Should we move on together, or are we not? That's very important that meeting is like the equivalent of the dating stage, where you figure out if the two you're a good fit and whether you should pursue a relationship or not. So just because you have a broker or an advisor or somebody, that's awesome, but make sure it's the right relationship for you, that you're getting the most out of it that you possibly can.Thank you, and go forth and make some smart decisions.

Josh Tirado: [00:00:00] Welcome to the making smart decisions podcast. I'm your host, Josh Toronto, and today's title. I'm going to affectionately call when life smacks you in the face. I did a podcast a long time ago, where I referenced a quote from Mike Tyson about being punched in the [00:01:00] face. But this is a little different.This is more about you're minding your business on a mundane Tuesday afternoon, and all of a sudden, something major in your life happens. Are you prepared? Are you ready? This was brought to mind. I was on a call with a client this morning. She mentioned that her husband, also a client of mine, had been in a car accident not doing anything reckless, literally sitting stopped at a stop sign, other person driving incredibly fast through a residential area, being careless blows her stop sign, loses control of the vehicle, T-bones my client.And now. Several days in the hospital, several weeks later, several surgeries has a couple of months of rehab ahead of him. He will be okay. Thank God. He will be okay. But several months of recovery needed to get a wheelchair, need to outfit his house. Again, as I said, he didn't see that after several surgeries and a long road, several months of recovery, and several months more to leave back to a hundred percent.He was going to the store it happened he [00:02:00] has a job with flexible time. They are very understanding. They're working around it. These clients well-prepared. They have savings through the job. They have good health insurance, and things will be okay.But their life has been majorly impacted for the next several months. And we both know him getting T-boned like that. Yes, he had several broken bones and torn things and multiple surgeries, but it could have been much, much worse. So that just really affected me this morning and brought to light how quickly life can change in the blink of an eye.This is not some avail attempt to encourage you to buy more insurance. This is just a fact of life. Do you have savings? Do you have insurance? Do you have a plan? Do you have yours? Do you have a healthcare power of attorney? You have your wishes drawn out if you are incapacitated. What do you want to have happened?If things go south and something terrible happens to you and you pass, [00:03:00] what do you want to happen at your funeral? COVID is brought to light when you start hearing more and more about people that have passed away, not just from COVID, but I'm telling you. The famous people that young and old to make the headlines, right?Because they're famous people for one reason or another, you hear about the passing. And so many times you hear, wow, that person was still so young. And a lot of times young people ignore the need to put together the will and their final wishes and that sort of thing. But it's necessary. So if you take a little time and it's not.It's not, but it's more affordable than you think. If you take the time to address that, and you take the time to work as a professional to draft that, and you work with a professional like myself to make sure your finances are in order in case something happens. We can't protect against everything.It's life happens, but we can still protect against many things and prepare and hedge our bets and be in a good position. Should something happen? Devastating things happen all the time [00:04:00], and everyone thinks, oh, it never happens to me right up until it does. So this may sound a little more somber.I want to get the energy up a little bit, but be aware of things that happen. And this is just a quick little reminder. Do your annual physical with your doctor. You shouldn't have to pay for it. Most insurance covers. And you get some blood work done. You see your doctor. A lot of people are like; I want to know what's wrong with me.When I say many people, I'm referring to actual family members that I know that say things like that, but you should know if there's something wrong so you can correct it. You can amend it. You can cut off the past. Take your health seriously. Take your finances seriously. And in doing that, think about this.You take care of the finances. You're working on your health. Even if you're not perfect, you're working on it. You take her to the finances. You take care of the legal side. It should help you sleep better. That is your permission to have fun, enjoy [00:05:00] your life. Go do fun things and not be so worried about, oh, what could happen?Cause if something happens, you've done at least, you've done everything you possibly can. And then go live your life. It's an excellent permission slip, and you're doing the right thing. And it, and thinking about this too, if something happens to you and people I've heard this from clients, I'm not worried about it because if something happens to me, I'm dead, and that's a hundred percent true.But if there's anyone that you love or care for in your life, those people are left behind in dealing with it. So realistically, you're doing it for them. And the other thing is what if something negative happens to you, but you don't die. You're now alive, and you're currently dealing with it. So some of you and your loved ones are dealing with it. I know this is heavy stuff but plan to take your precautions and then live your life without that fear and go forth and enjoy.But random Tuesday afternoon, bad stuff can happen. be [00:06:00] prepared. Shameless plug. As you know, we do the podcast, and I'm here to help with a lot of that. I can refer other professionals to you. They can help with a lot of that. You can talk to your family and friends. See if you had a positive response with somebody, and they can probably refer you to somebody that can help with these different topics.But seek it out, make it a priority. Please don't wait until January 1st or January 2nd to say, oh, it's a new year. I'm going to take care of these items. Now start it now because it can take a while to get these items set up with how slowly things are moving in a post-pandemic world. So start it now. So we can be done by the first of the year.It can be done in January but take the first steps. That's my public service announcement for today. Please be. Thanks, go forth and make some smart decisions.

Josh Tirado: [00:00:00] Welcome to the making smart decisions podcast. I'm your host, Josh Tirado. And for this episode, we are going to launch into some myth-busting. In media currently, it seems as though there is a plethora of misinformation, and it seems that being [00:01:00] first or having your topic be popular is more important than being correct.There are a lot of common myths out there surrounding finances, and I want to debunk several of them. My goal is to provide you with a little bit of background information on it. So you can make your own smart decision about whether it's a myth or whether it applies to you.So the first one is some advice that I, when new clients come in, that they've received from the HR department or that they've heard and it's maxed out your 401k. I hear that day in, and day out to me that's a myth. I don't think that's a right fit for everyone. To maximize your 401k, the total amount you can put in ends up being a significant amount of money, or it could be a significant percentage.My, this is a rule of thumb. My rule of thumb is to contribute enough to get the employer match. So maybe be very clear about this. Also, if there is no employer match or legally, there needs to be one, but it's minimal, not every year. You may have better options outside of a 401k,[00:02:00]. The main advantage of your 401k is to max out your employer match, not max out the 401k plan.I say that because if you put in a dollar and your employer matches it with a dollar, you immediately have a hundred percent return on your money without taking any risk. And there are also tax advantages to it. However, if your employer only matches say up to the. 3% or $3 that you're putting in, and they don't match above that.And you're putting in 9%, 12%, 15%, something really large. And they're only matching that first piece. The rest of it is still an address. But there may be other better options. Often the investment options inside your 401k plan are pretty limited as to what's in there. The fees can be high. They changed rules several years ago to make fee disclosure more prominent and make fee disclosure clearer.However, in many cases, you still don't get the complete picture unless you really dig into the numbers with all the fees are so your 401k. [00:03:00] It Can be more expensive than it needs to be. Your options can be limited. And the rules concerning 401k versus other types of investments are different. So depending on your situation, it could be advantageous because you can take a loan.It might not be advantageous because it's very locked up, and there might be. A vesting period before that money is all yours to take with you. So there's a lot of pros and cons here, but what I want to say is the maximum foreign case, not always the best option. You want to put it enough to get the employer match.So you get an immediate return on your money. And then, above that, take a serious look at, should I do a different IRA on my own and have control over it? Should I do a Roth IRA? Should I do a brokerage account, so it's not necessarily tied up until I reach age 59 and a half, and I could use the money sooner for something else?Maybe I have short and intermediate-term goals where this money doesn't have to go towards retirement, but instead, I have a goal that's coming up in the next two years, five years, ten years that I need to save for, to reach instead [00:04:00] than have it be tied up for. The tax advantages are significant, but they're tied to retirement.So what I'm saying is that whole max out your 401k, not always the best solution. The second myth I want to go over is that all debt is bad debt, and don't get me wrong. I have several clients who, at one point in their life were in substantial debt. And they managed to get it all paid off, and they're pretty successful.And sometimes, the debt is for education. Sometimes the debt was for launching a business. There are a million different reasons to have debt. It's not always credit card debt, or somebody made poor decisions. They might have a lot of debt. They worked very hard to get out of the debt, and now they're very debt-averse.They don't want to go back into debt. And they make that conscious decision. When I say, okay, you could leverage someday. Versus paying it all off and long-term, here are the numbers that work out better for you. If you did not pay all cash and were to use some debt, they understand that, and they're willing to forgo that to sleep soundly at night, [00:05:00] they don't want to have any debt.So they make that decision. Other people understand it and leverage debt. For instance, in a business, it's very hard in many cases to start a business without taking on some debt, or you start the business, but to grow and reach next. You need more money and often, rather than using your cash reserves, if you're lucky enough to have any borrowing some money, especially at very low-interest rates, is a much smarter decision where you keep your cash on hand for any needed.Some people call it dry powder. You can borrow the money and leverage it. And then you can also, on top of it, get tax advantages or write-offs for that debt. So leveraging that debt and what other people would many people referred to as OPM other people's. Utilizing that debt is a really smart choice.And in the end, we'll put you further ahead. There's, of course, bad debt. You don't want to run up credit cards at 20%, 25% interest, especially to buy consumer goods that you don't need. But all that's not bad. I recently got a new car used, but new to me on the used car, the [00:06:00] financing was right around 2% and made a lot more sense to me rather than buying the car to finance it at 2% interest and use my money for other things, invest it, grow the business.Do what have you that provides a return, same thing for a mortgage. Some people are blessed to put down a large amount of money to buy their house, or you can buy. And this market is so crazy. Sometimes that's what you have to do to win the bid, to get the house. If you do that, I still have as you take a mortgage out afterward, because when you can get a mortgage that is around 2% or 3% with positive tax implications on it, that's amazing.You can borrow the money at 2% or 3% and do something else with your cash, where it stays liquid. It remains available to you, and you can get a better return on it elsewhere. So paying off the house earlier, putting down a huge, down payment, long-term when you have your advisor run the next.You may be behind by doing that rather than putting down less and using your other money for other purposes. [00:07:00] So when I say all debt is bad, all that is not bad, you can finance a car, you can finance a house. Those you can finance your business. Those options can work out well.If you are one of those people, though, that needs. Be debt-free to be comfortable. Then we do that and work around it. Just know that in many cases, if you can deal with a bit of discomfort and go with some debt, it can benefit you. I have some older clients the house has paid off, but we'd looked at again.Each house like house mountain, home, insert, whatever home you, you think of where you'd want to spend some time. They're able to refinance their house and use some of those proceeds to buy the second property. And that property gives them a lot of joy and helps them achieve their goals of where they want to be and where they want to spend their time.That results in a mortgage. But they're trading off that mortgage, a very low-interest rate for an asset that will most likely appreciate, and they get to enjoy it for a lot of years. So it's a good trade-off. So all I'm going to [00:08:00] say is approach debt. All debt is not bad. There's another thing.A good rule of thumb that I advise is that if you own your home and have more than 20% equity in the house, I advise clients to get a HELOC or a home equity line of credit. Generally speaking, in this current environment, it is relatively easy to get little to no fees at all for opening one and usually little to no fees for maintaining it.Now it's a home equity line of credit. So the bank looks at it and says, okay, have all this equity. We're willing to give you a line of credit extended for whatever it is. Say, 50,000 bucks. You're not using the 50,000 is sitting on the sidelines, but you're approved for it. It's set up. You can use it if you had to if there was an emergency, but if there is an emergency and you need the money, generally speaking, it takes too long to set up the home equity line of credit.So you don't get the money fast enough. And if things are bad finance-wise or say you lost your job. They're less likely to give you the line of credit because now you say you're unemployed or you're injured, or something has happened. So get it while the times you're [00:09:00] good. If you have the equity in the house, set up the.Don't use it, but no, it's there for an extra rainy day fund, just in case we still want to have savings. We still don't have cash on hand, but in case of an actual emergency, you can write a check out of your home equity line of credit and have access to that money. And now your home, which you're not going to sell, but you want to maintain that asset.You now have access to some of the equity in that property. All that is not bad debt. Next myth: 529s are just for college. And this comes into play when people say, what if my kids don't want to go to college? Or is the economy changing? Hey, I think my kid is entrepreneurial, or maybe my child wants to go to technical school and college.It isn't going to be the road that they take. There have been changes all along, but at the most recent changes, 529s have become very flexible. You don't have to use them for college. You use them for master's degrees, doctorates, trade schools, technical schools, private high schools.I know some people using the 529 money to help pay for private [00:10:00] kindergarten. It's also been extended. We're now can cover room and board books, materials, supplies, not just to. If you're thinking about putting the money aside for your child and you're like, my child might not want to do college.Maybe they want to be a chef. Perhaps they're going to be a welder. Perhaps you want to use it because they're trying to go to some specialty high school. Perhaps it's well; my kid got a full ride to college and a full scholarship. They don't need to pay for their undergrad, but they're going to go back for their master's or something.The money. So it's becoming extremely flexible. If you want the tax benefit, you have to use it for a qualified educational expense. So if your child is entrepreneurial and you want to perhaps give them seed money for a business or give them down payment for a house or something, the money, if it comes out of the 529, will not have the tax advantages anymore. So for many of my clients, I tell them to straddle the fence some money into a 5 29 for education, some money into a brokerage account, if they want to [00:11:00] put it aside, near the market for the child. So they can use that money completely unencumbered in whatever way can benefit the child.Now caveat, I make sure that the clients can take care of their long-term goals. First, the education for the child comes after once they make sure they've taken care of themselves. We're important goals because you can borrow for college. You can't borrow to retire.So we cover that first college. Second. So 529s are great. They become a lot more flexible. They're not just for college. More people can use them. So what if you put money in a 5 29 for your child and they decide either they don't need it. Or they don't go that route of education where they can't use a 5 29.What happens to it? Bear in mind, the 5 29 is actually in the parent's name, and the child is listed as a beneficiary. The money stays in the parent's name and continues to grow tax-deferred. And then it's treated just like another IRA that they can access after age 59 and a half. So the money can stay invested, stay in your name, and just be used for retirement.[00:12:00] If you're trying. Doesn't need it for any educational expense. You do not lose out on the money. Also, the money can we transfer from child to child? You can transfer it between cousins. You can go to a niece or nephew. You can use it for yourself. You can use it for your spouse if you have to go back to school.They become much more flexible, not nearly as restrictive as they once were when they started. I don't think it's just for college, but you might want to do it in conjunction with a brokerage account or other savings. So you have a. The last myth I want to address today is that life insurance is too expensive.Life insurance is not a fun topic. It isn't. But I want to put this in context. When I first got licensed to do insurance and investments, my insurance license came first. I was 20, the very first person I ever approached about selling life insurance too. And I sold life insurance to the person who was younger. The cost was lower.Okay. We set it up properly for his budget—several months in, we decided it was too expensive. [00:13:00] He was young. Do you want to bother with it? And he dropped his life insurance. He canceled the policy, not right away, but within the following year. And this is sad. It's unfortunate. And I'm not trying to make an example of this, but I want to say this for educational purposes.He drops the insurance about a year later, he is in a motorcycle accident, and he passes away, and he didn't have the insurance. Now at that point, there were no beneficiaries, no spouse. Yes. It took a financial toll on his family, and his parents had to pay for things and bury him. It could have been much more financially devastating if other people were relying on him.But at the end of the day, it's still, and we're talking 20 plus years later. It still bothers me that he thought it was too expensive. He didn't see the need. He dropped the coverage, and then shortly after that, he passed. So please don't think life insurance is too expensive. And I know there are many advertisements on TV and people always harping [00:14:00] about, oh, how cheap it is for $15 a month.A certain person who is in good health. Can you have a jillion dollars for $15 a month? You see those advertisements all the time. Yes. 99.9% of the time. There are too good to be accurate, but that being said, if you're in good enough health to get insurance, as long as you qualify.The insurance is generally not that expensive. There are many different types of policies, many kinds of plans. You can get something in place that suits your needs and more than likely is affordable or is less than you think. Please don't ignore it. Please. Don't think the stuff you get at work.If you get insurance from work is enough. In every client I've ever met with, the amount of insurance they get from work is not enough. Even if they pick up the supplemental, additional insurance, it is not enough. And if they switched jobs, it doesn't go with them. So your insurance, your life insurance is important.It also applies to disability. Insurance is not as expensive as you would think, especially if you're a business owner, because you can get the insurance to cover your business and keep your business running. If you get injured, [00:15:00] not just necessarily pay you out. So it's great. You can still draw money from the business, but the insurance policy is paying to keep your business up and running until you can go back to work.There are options out there, and please do not wait till it's too late. These items are not that expensive. You can get them. So those are four very common myths that many clients, many financial articles, many TV shows I see all touch on. And depending on your situation, they're going to be false for the majority of people.Thanks for your time, and go forward and make smart decisions.

Josh:  This is Josh Tirado. And thank you for joining the Making Smart Decisions podcast. What is the true cost of pet ownership in 2021? let's dive into the dog dilemma. In some reasons studies, some data showed that the initial purchase of a dog in the United States is ranging anywhere from roughly $600 to $2,300.[00:01:58] It's also showing that annual care and maintenance of that dog is running between $600-$2300 a year. In fact, one survey shows that 40% of Americans are spending an excess of $3,000 a year on their dog, but in reality, they're budgeting a hundred dollars or less per month towards that same expense. Now, I love dogs.[00:02:23]I own two doodles, two Ozzy doodles, half Australian shepherd has standard poodle they're brother and sister. They're great. My kids love them. My wife and I love them. They bring a lot of joy to our family. I will say this though. They are designer doodles. They were not inexpensive to purchase.[00:02:41]And because of allergies in my family, I had to go with a dog similar to them. So adopting a dog will be searched and cannot find anything. So we had to go down that route. So let me just preface that with, I love my dogs. Buying a dog is not cheap. Giving the dog good food, good vet care is not cheap.[00:03:01] As a matter of fact, I have in many people do have health insurance on their dogs. And my pet insurance is now $68 a month. But if you'd look at the cost of something going wrong and incurring vet bills, those bills can be very expensive. So the pet insurance, I think is a useful hedge against that.[00:03:22] Between Christmas and New Year of 2020 more dogs were put up for adoption and were abandoned or turned into the shelter than any other time during the year. And that's true year over year, I think 2020, was worse because of the pandemic.[00:03:38] People are out of work. People cannot afford their animals. People's living situations are changing and they cannot afford it or are unable to take their dog with them. And they're putting their dog up for adoption or trying to give it away. But also when you look at that initial cost, if you're paying a couple hundred, a couple of thousand dollars to buy the dog and that same amount of money every year to maintain a healthy lifestyle for your dog, as well as the time commitment to having the animal in your life or multiple animals.[00:04:06] I think a lot of people quickly realize how expensive and what a commitment it is. And it is a true commitment. I just want to say, this is almost a cautionary tale, and I feel very badly that a number of people got dogs over the summer when it was cute and to get them in your outside and the puppy stage, and you come into the winter and suddenly the dogs inside a lot more.[00:04:25] And the dog is now at that age where they can tend to start chewing and be destructive. And a lot of people want to get rid of the dog. So for some, it's a cost issue for some, it's a personality issue. I just want to caution people going to 2021, and beyond to please seriously consider your family situation.[00:04:45] If you can have a dog if you should have a dog, and then also what breed and what is the right setup for the dog. Now, this can be applied to cats and other animals as well, but generally speaking. The dog is the more expensive of the common household pets, but please take a serious look at it, make sure it's a smart decision and a long-term decision that you can go with.[00:05:08] I know the animals bring a lot of love and joy to people, but if you can't keep your animal that love and joy are going to go, and isn't worth it because then you're going to be heartbroken and so will the animal. So let's make smart decisions looking forward when we are picking out a household pet and a new best friend. 

Josh:  This is Josh Tirado, welcome to the Making Smart Decisions Podcast. Today's title is going to be Buyer Beware and is going to be a Storytime. When you picture this, we have changed the names, of the hypothetical clients to the Smiths and the other advisor. We'll call him John.  Just imagine that we can peer in and see everything that is going on with that situation and what we can learn from this situation.[00:02:02]John had some very nice clients. They were friends, they're friends of the family for a number of years. They became clients. They were very happy clients. Then one day John is in his office and he gets a phone call from a new advisor. That's sitting with his clients of Smith's and they inform him that they are switching to this other advisor.[00:02:20]John's professional. John keeps his composure, handles the phone call, cause whatever information they need to help facilitate the transfer of the accounts. And then afterward, John follows up to see what is going on. Try to do a little quality control. Maybe you want to call it an exit interview and see how to see if he can further assist those clients.[00:02:39] During the phone call, the clients reveal that they are leaving because of the information given to them by the other advisor. Now here's where we need to start to learn a few things and we can glean some knowledge from this story. The other advisor told the clients that if there'd been another major market meltdown like there was an in 08', 09' and the market had gone down another 30 or 35%.[00:03:05] The client's money would not last long enough. They were new in retirement- a year, maybe two years in, and this advisor said, if the market goes down 30 to 35, we have another 08' or 09', you will not have enough money. You will outlive your money and your money will not last.  The client got very scared and very concerned about that.[00:03:28] And was obviously very worried. The other advisor proceeded to recommend to put them into a product that would give them a guaranteed lifetime income that they could not outlive. However, later on, we come to find out that is a contract they're locked into now for life. And the amount of income they have is really not enough.[00:03:50] To support their needs and their goals now nevermind in the future, once you account for the cost of living and inflation increases. as John was speaking with him, he thought that was pretty interesting, but they were very scared because of what the advisor told them. And the advisor also told them that she had run their numbers and it looks at their situation and the investments they were in that they would definitely run out of money.[00:04:15] John inquired and said, Oh, okay. Did she provide you with a report? Could I see the report? I want to take a look at it, make sure the numbers going in there accurate. No, the other advisor never gave them a report. Never let them see the report, never give them a copy of it. John then says to his clients that is true.[00:04:31] If there was another Oh eight Oh nine. And if the market was down by 30 or 35%, you would not be able to recover from that. And you would run out of money. However only a third of your portfolio is actually in the market, not the entire thing. And out of that third, they had used investments that had saved the nets and safeguards in involved in place seem if the market started to drop, their investments would have some sort of protection or guarantees or moved into cash.[00:05:02] So there was no way the investments could go down 30 to 35%. So the client got more irritated, I believe at that. But John was just trying to explain to them, yes, it is true. If you lost a third of your portfolio, you would not have enough money, but only 30% of your money is in the market. And there are safeguards in place at the most you could lose is only 10 or 15% of that 30%.[00:05:24] So really you were in no danger of ever running out of money. The client did not like that. Did not heed that advice. Thanked John, for his input and said, they're going with the other advisor. They felt better about the other advisor and trust the other advisor more because he felt the other advisor was being more honest with the data.[00:05:46] Fast forward several months, John gets a call back from that client and says, Hey, I know there's still an account left with you. I need some cash. I want to close out the account. John happily obliges and asked why do you need the cash? The client says to John I've been unable to get ahold of our new advisor via phone or email for the past several months.[00:06:09] In fact, the only way I can get a response from the new adviser was to threaten to file a complaint with the state department of insurance. They are now very stuck. Is it this advisor? It turns out did not have the appropriate licensure. To do what they were doing to comment on what they're commenting on.[00:06:28] Never really ran the numbers, never provided a report, basically just operated out of fear to take advantage of the Smiths and the Smiths. And in a very sad, heartfelt moment said to John, we really should have spoken with you before jumping the gun and moving to the other advisor. We probably could have avoided all of this and have been in a better position than jumping at it.[00:06:53] But we were scared and we felt we needed to act.  This is a sad situation because now they're contractually obligated to do some of the other things they're doing. And it's hard to unring that bell,  yes, this is a hypothetical. But this happens.[00:07:09] This happens in every town and every city and every state across the country on a regular basis. And there are many laws out there to protect seniors and to protect investors. And they're adding more and more laws and rules all the time. But if people do not heed common sense and purely act on emotion, No amount of laws and disclosures are going to protect them because they will ignore them and move forward because you're driven by your emotion, especially fear.[00:07:41] So if anyone is considering making a drastic move, Please take a step back, take a breath, review, all sides. Talk to everyone. Again. Most professionals are very good people. If you're considering doing something else or leaving them or working with someone else, they're more than happy to work with you. You, give you the pros and cons and you know what, if they don't take the news while you're going someplace else and they become mean or belligerent, or they don't want to work through, they're not nice.[00:08:07] Then they're lost. You probably shouldn't have worked with them in the first place, but anyone who's a professional. , especially if they're licensed as I am and they're a fiduciary, they will listen to you. They will work with you and help you make a smart decision. So please buyer beware.[00:08:24] When it comes to making major moves with your money. The other thing I heard this acronym recently was called halt H A L T. And what it stood for was hungry, angry, lonely, or tired. You should never make any major life decision when you are hungry, angry, feeling lonely, or you're very tired, any major life decision, whether that is calling somebody up, who you perhaps should not reach out to, whether that's making a financial decision, whether that's going in and buying something off late-night television, whatever it is.[00:09:02] Make sure you are in a good mental place before you make any sort of life decision. And don't be motivated by spur of the moment and fear of something encouraging. You have to do something right now and it's major and it's doing it right now or lose it. Chances are that something you don't want to be involved in that person's not looking out for your best interest.[00:09:20] So that has been our storytime for today. Please heed that advice and moving forward. Make smart decisions. 

Josh:  This is Josh Tirado, and welcome to the Making Smart Decisions podcast. Today, we are going to touch on the most common traditional types of investments. That may sound very boring, but it is not. We will cover it quickly and you will be very well informed moving forward.[00:01:55] So when I say the four types of traditional investments, one is newer than the others, but we're talking stocks, bonds, mutual funds ETFs. Now I do understand there are other things. There's cash, there's gold. There can be real estate. There are precious metals, there's currency. There's a lot of things out there, but when clients come to me and I look over their portfolios of what they have before they've come to me, or they're asking me questions on investing, or they're doing some investing on their own.[00:02:21] What I see time and again, are stocks, bonds, mutual funds, ETFs. The reason being mutual funds are what is in everyone's 401k. And 403Bs. People like to buy mutual funds. It's easier. ETFs have become more popular year over year. Because they follow an index and they are usually a more cost-effective method of getting into investing than mutual funds.[00:02:48] And then you have traditional stocks and bonds where instead of painting with such a broad brush, covering an index, you can be very specific with individual stocks and bonds. So those four things are what I see. Day-in and day-out most often stocks, bonds, mutual funds ETFs. So let's start with the basic stock at its core.[00:03:06] You own a share of stock. You're owning a share or a piece of that company that you're investing in. And that is how you had company ownership. You bought a share of stock. Usually, you're buying multiple shares of stock. It's a company as well. Ideally, the company grows. People think the company's more valuable.[00:03:24] The perceived value of the company goes up. Your share of stock becomes worth more than what you paid for it. You bought it for $10 a share. The company does well and grows that share becomes more valuable because, from $10 to $20, that is a growth stock. There's also a value stock. That is where the company is giving a dividend.[00:03:43] So the company really might, and this usually falls into line with larger, more established companies. Not always, but often this company is doing very well. They're not trying to necessarily grow larger. They have a dominant share of the market throughout there, but they're doing well and they're continuing to try to grow their profits.[00:04:01] And they're passing that along in the form of the dividend. So every year for every share of stock you own, you might get 1%, 2%, 3%. The highest I usually see is four or five, but usually, three, three to 4% is a good dividend. So if you own a hundred dollars worth of stock and it's paying a 3% dividend, you will receive a check for $3.[00:04:23] You can take that money and run. You can reinvest it. And that 3% goes across whatever you own, whether you want a hundred dollars of that shit that stock a thousand dollars of that stock, a hundred thousand dollars that stock you're getting that 3% dividend. So you're making your money on your return by them.[00:04:38] Giving money to you in the form of a dividend, that's really how they're sharing their profits. Or do you have a stock that is going up because the company's value is going up and the value of your share is going up? So at its core, a stock is a piece of that company. Now, things have changed quite a bit in the economy and it is not always based on is this the best company making their product your stock is not necessarily directly tied to how the company is doing. Sometimes it's affected by the industry that the company is in, it's affected by the market cycle. What's popular right now. Is that a popular industry? Is it a popular company? Are they making a popular product or not?[00:05:18] Is it something in demand they're at different times of the year, different things are more in demand. So a lot of those outside forces now coming into play. Or it's not just the core of the company. It's the, it's what that company represents and how it fits into the greater economy. A bond. Is what they consider to be a debt instrument.[00:05:39] So basically the company needs to, or the government or whoever is issuing the bond, the raising money to accomplish something, whether it's growth, whether it's some sort of initiative with governments, municipalities that usually they're building a bridge, they're building roads with a company they're trying to expand.[00:05:57]They're running on a new product line, they're doing something. And instead of borrowing the money, they're raising the money. So you offer a bond. So you're giving the company money in exchange for shares of the bond. Now, again, it depends on what type of bond, but sometimes the value and the prices of the bonds fluctuate too, depending on how popular and how in-demand the bond from that company is.[00:06:16] So the value of your share of the bond can go up or down. But the basic reason you're buying a bond is to get the interest off the bond. Similar. To a dividend being paid to a stock interest, being paid to the bond, yearly basis. So when you buy the bond, you say, okay, I'm going to buy this bond.[00:06:35] And this bond is paying me 5%. So again, you want a hundred dollars. You're going to get a check for $5. Now bond interest is usually paid out quarterly, not annually like stock dividend is, but it's the same general concept. So stock. Piece of the company bond, you're essentially loaning money to the company in exchange for them promising to pay you interest.[00:06:57] The values can change on both.[00:06:59] A mutual fund is a collection of stocks or bonds or a mixture of both and sometimes cash and some other things. But generally speaking, mutual funds hold at least 30 to 50 individual stocks. Usually, more usually a couple of hundred individual stocks, usually at least a couple of hundred.[00:07:19]Individual different types of bonds. So collectively you are saying, okay, I don't have the money to buy all these different stocks or all these different bonds. But if I give my money to the mutual fund, my money is pooled with other investors. They have a big enough pot of money that they can go buy these different stocks, these different bonds.[00:07:36] And then they're being professionally managed. Many mutual funds are managed where they're buying or selling the stocks or bonds. Towards a common goal of either a certain risk level or a certain return. There are some mutual funds where they're very passive or they just buy and hold those stocks or bonds for a year.[00:07:53] And then at some point they might re rebalance it.  Basically, you're collectively adding your money together to get broader exposure to stocks and bonds or some sort of custom portfolio within the mutual fund. That is why they're so popular inside 401k plans. There tend to be additional fees on the mutual fund because you have someone managing it and the day-to-day costs of buying it, as opposed to you just buying a stock or buying a bond and potentially paying a small commission to do that.[00:08:19] The mutual plan has an extra layer of fees, but you are receiving benefits for those fees. Now, this product ETF or exchange-traded fund came out a number of years ago.  It's becoming more and more popular every year. The exchange-traded fund trades in real-time, every day, like it's a stock. There can be managed, but oftentimes there's little to no management.[00:08:42] So it reduces or removes that level of fees that the mutual fund has. And the ETF, again, invest in a pool of stock or a pool of bonds, but usually, it will follow an index. Dow Jones, industrial average, the S and P 500, the Russell 2000. There's a number of different indices out there, and it can be for stocks or bonds, and your ETF will simply follow that index.[00:09:07] Again, you're pulling your money when you invest in it. And they buy all the different holdings in that index and follow that index. So it can be much cheaper than a mutual fund and mutual funds only counter value once a day. At the end of the day, after the market closes.[00:09:21] An ETF trades during the day, very actively like the stock does. So generally speaking, when you out there, if you're dealing with an advisor or your 401k, what are you doing on your own stocks, bonds, mutual funds, ETFs. Each one has value. Each one has its appropriate place and its appropriate use, but those are by far the foremost common items you're going to run into.[00:09:44] 

Josh:  This is Josh Tirado, and this is the making smart decisions podcast. Today, we are going to dive into ESG investing. So ESG investing stands for environmental, social, and governance investing. It refers to a class investing that is also often called sustainable investing. This is more of an umbrella term for investments to seek positive returns while having longterm positive impacts on society, the environment, or the performance of ethical businesses at the same time, oftentimes in the past, this was just called socially responsible investing.[00:02:13] A lot of times people see the term SRI or sustainable investing. In its early years, it was mostly focused on green companies and green energy companies back in the day. what that meant was while this was a worthwhile noble investment in a noble cause. The performance was not very good.[00:02:35] The problem is when you just want to focus on nothing but green companies, you are really narrowing your pool of investment companies, investment choices. So they tended to be smaller companies, startups, riskier companies because of their size and their relative youth in business. And also they're all focused on the same industry.[00:02:53] So you were really into this one niche. And if that niche didn't go well because of the current economic cycle or news, all of your green investments would suffer.[00:03:04]So it became a problem. And this was early on when I started trying to use these investments with my clients that cared about this was we had to put aside a certain pocket of their investments to say, okay, this is going to be more aggressive, and this is going to be focused on green. And we still are well-diversified with the rest of the portfolio.[00:03:25] That has evolved substantially over time. Things are just no longer just green investing. Now can have sustainable investing, which happens in a myriad of ways, not just energy. Okay. You can look at energy. You can look at forestry. You can look at waste management. There's a number of things. Also, this gave rise to[00:03:41]a level of investing that oftentimes had social moral or religious filters attached to it. So you're investing with certain principles from the Bible, certain principles from the Koran, or just things you didn't want to get into. There was a category of investments where they did not invest in anything that touched:[00:04:02] firearms, tobacco, alcohol gambling, and some cases even nuclear energy. So there are all these different filters and different ways of investing that you can do now to have your investments being in line with your core beliefs. Things have become easier over time. Things have become more diverse over time and the returns have become better.[00:04:23] But in general, this type of investing, let me just caution you, I've seen work best for some of my older clients who have more money or clients in general who have more money because oftentimes once you narrow the focus down. So tightly to your chosen area of sustainable or social or governance or whatever you want to do within the ESG world[00:04:50] you're limiting the scope of what you can invest in as far as different size companies, different types of companies. And it becomes very niche-focused. So when I see people doing this, even to this day, they're more concerned about, yes, I want to return, but I want to have a positive social impact, but it will not necessarily maximize the return on their money.[00:05:10] So we had to make sure they have enough money to accomplish their goals or enough of their money is invested aggressively enough or appropriately enough to get them the overall return they need. And then this is a piece of money. That is in line with their beliefs and makes them feel good. And we still try and get a return, but generally speaking, the return on investment in this category will trail.[00:05:32]Other investments and protect and potentially more, more traditional type investments. This will trail, this has been changing over time. It's going in the right direction, covering more and more investment options, more and more money managers or doing it. They're offering more ETFs based on this more mutual funds based on this.[00:05:48] So it is very interesting, but I think it's a very important decision and discussion to have. With your financial professional as to how this complained to your portfolio. I do not think that this should be your entire portfolio, and I don't want to rub anyone the wrong way, because I don't think you should invest going against your beliefs.[00:06:08] But at the end of the day, there very well may be a trade-off between your beliefs and the performance of the investments. And you just need to know that going in. And take proper precautions and do some proper planning around it. So it's a great niche of investing, but again, you have to be, you have to be careful,[00:06:25] 

Josh Tirado:  I'm Josh Tirado. And you're listening to making smart decisions. [00:01:47]When choosing a financial advisor, there are many different ways that they can charge you today. We are going to go more in-depth and unpack the different options that are available out there, and which option is best for you.[00:01:58]I'm going to do three broad categories. There's a person who is paid on commission. There is a person who is what they call fee only. And the last option is an advisor that is fee-based. I'm going to save fee-based for last because I admittedly I am biased because I am fee-based.[00:02:18] And from a compliance standpoint, let me say right now, I don't know which one of these is right for you.  they are very individual decisions, and each one of these options has different pros and cons. And you have to decide which one is right for you and your situation.[00:02:36]Let's start with, somebody gets paid via commission. They are a sales person inherently. There is nothing wrong with salespeople. The world does not go round unless things are sold, and people buy, but understand that person's responsibility first and foremost, lies to the company whose product they're selling.[00:02:55] secondarily; their responsibility lies with you. But first and foremost, they're a commissioned salesperson representing a certain company or a certain product or a family of products.  [00:03:09] When you're doing your due diligence and looking to hire somebody,  look on their website, but not just on the first page, dig down a little deeper. There's usually a lot of extra disclaimers around commission saying that they are a commission, and they are selling certain products.[00:03:24] Just know that certain things pay more than others. And the responsibility, first and foremost, is the company that they're representing, not to you as the consumer. Next is the complete opposite end of the spectrum and advisors that are fee only. This is often viewed as best for the client or taking the high road.[00:03:47] So some fee-only advisors. Charge a fee for giving advice; whether that be an hourly or annual retainer, they're purely giving advice. They're charging you a fee. They do not handle the investments in the insurance or anything in any way, shape, or form.  Then there are fee-only advisors who charge a percentage of the assets that they manage for you.[00:04:11] Generally speaking, they have higher minimums because you need to bring over a certain level of assets for them to charge enough for it to be worth. their time as business personnel manage the assets. So fee-only can be a fee for the advice. It can be. I'm just charging a fee for the assets that I manage, or it could be both.[00:04:29] It could be a separate fee for advice. And if you need the asset management, they switch over and put that hat on. And there's a fee for the separate skills and time that goes into managing those assets. Most fee only people I've met are very proud of being feeling, so they do not handle anything.[00:04:47]that is commission-based whatsoever. It's purely a fee that is cut and dry. That is easily disclosed. And that is option number two. Now we're gonna go to option number three fee-based, which is what I personally am. And what I mentioned before, I'm biased towards. Over the past 20 plus years, I've come to the conclusion that I feel fee-based at this point in time is the best and offers the best outcome and the most options to my clients.[00:05:19] I am charging a fee for the financial plan for the retirement plan, for the advice and the 401k for the advice on insurance, for the advice on whatever we do. And we always start with the plan because I don't know what to suggest to you as a course of action until we have a plan.[00:05:38] And that plan is the client's plan. That's your plan. You're telling me your goals, your dreams, what you want to accomplish. We are then taking them and backing into them. How can we achieve those financially? And then we discuss what the options are and the different strategies we can take. To achieve those goals.[00:05:57] And if those goals are achievable or if they have to be edited, but we are looking at your plan to achieve your goals. From there, we can look at what do we have to do strategy-wise to accomplish those goals and strategy-wise, what works best for you? What makes the most sense? What investments are right for you?[00:06:14] What insurance do you need in place to backstop your plan? What level of savings things do you need? What is the biggest? Threat factors that could derail your plan that we have to look at them and plan for whether that's 401k, social security investments, whatever it is we put together.[00:06:33] The plan first, you are paying a fee to get that plan. If one of the recommendations is that we should have some actively managed money, and you want me to manage the money then again, just like fee-only, there's a fee there to manage the money. There's a fee there to put together the plan.[00:06:52] Cause you're basically paying for the time and the set of skills to put all that together. But then I'm also still able to do commission-based products. Now I do not lead with commission-based products. I don't use them that often, but I feel that I would be doing a disservice to my clients if I completely excluded that set of investment options that are commission-based because.[00:07:16] There are some investments out there that the structure and they're normally insurance-based investments. The structure, those investments do not allow them to be fee only. They're set up to charge a commission. There is no way to waive the commission and to just charge a fee. In some cases, I can waive the commission.[00:07:37] However, the company that's providing that product does not change the cost to the end consumer. They just simply. Keep the commission instead of paying it to me,  life insurance, for instance, and there's a commission on term care.[00:07:52] There's a commission. There are certain annuities that provide guaranteed income that you can outlive that are part of your liquidation strategy. To provide income and retirement. There are certain other investments that are set up as on a commission basis. Now some of them are now at a spot where they can be fee-based instead of commission-based and I'm gravitating towards that.[00:08:16] But there's a whole category of products out there that are structured for a commission, and there is no fee option. I don't want to exclude them and say that the clients do not have access to all these products because of their compensation.[00:08:30]it is disclosed in advance that if we do these certain products or I'm recommending these to you as part of your plan if you move forward with it, these certain products or these certain strategies, There's a commission that will be paid. And here's what the commission is versus the fee. So it is disclosed.[00:08:49]. And oftentimes, the reason we go with the commission versus the fee is the commission is a onetime payment. At the same time, the fee may be ongoing for five, 10, 15 years. And the fee option actually becomes more expensive over time than the commission option. That's also something that I'm very proud of.[00:09:07] The industry is working to correct where they're saying, okay, if you charge a fee, you can only charge a fee for a certain amount of time until it reaches what the commission option would have been. And then you can no longer charge a fee, which is also great because it levels out that cost to the client.[00:09:23] So what I'd like to say with fee-based is it gives you the option. If something is commissionable and that's in the client's best interest, if something is a fee and that's in the client's best interest, it gives you the option to go with either one, and you're disclosing it to the client. So there are no surprises.[00:09:39] They know what is going on,  you can make that informed decision. But I don't want to be in either one of the other two camps where I can't offer something else. I enjoy being able to offer what's out there. In fact, I think one of the greatest things about being a financial advisor and an independent financial advisor is that I can offer virtually anything that's out there, and I can vet it, and I can see what is best for my clients.[00:10:03] And I can make that recommendation, and we have new things come available that are changing, and we can grow with over time. And I don't have to come in and say, okay, I'm only charging you a fee, but I can't handle these other things for you that you need help with.[00:10:17] I want to be there to help in whatever capacity as possible. So for some people. The commission is a better option. oftentimes too, if your accounts are smaller, a lot of the fielding fee-based people may not take you. or if you need help in certain areas that they're not specialists in for some people feel only is the way to go to get the money management help is purely just paid for, Hey, I want this advice and I'm going to go handle everything else myself.[00:10:42] I'm a do it yourself type a person. I just want professional advice. Or I want a professional who's only charging me a fee to manage the assets fee-only is a great option. And then you have, fee-based where we start from the field only structure. And then, we make recommendations to you as to how to reach your goals.[00:11:01] And then those recommendations may be a fee. Maybe commission-based, they may also be entirely out of that realm, on a regular basis. I'm suggesting clients have more money in savings and a rainy day count than anyplace else. And that's often going right into their checking or their savings account or something at their bank.[00:11:19] So we are not compensated on it, but we are compensated for giving them the best possible advice. So whether that advice is something that I provide or the bank provides, it doesn't matter. They're getting that unbiased advice. So that's something that I've seen come up. Time and again, and with more and more frequency.[00:11:35] So that's something I really wanted to address for those different options. 

Josh:  This is Josh Tirado. And on this episode of making smart decisions, we are going to touch on umbrella insurance. So let me dive into the ever-exciting fun world of property and casualty insurance said no one ever. Auto insurance, homeowners, insurance,  renter's insurance. These are things that are necessities.[00:01:54]And oftentimes people overlook umbrella insurance. So let me just quickly touch on this because this might actually be the coolest, most useful insurance item that you don't have or never heard of.  Umbrella insurance,  the reason I call it that is it's an umbrella of protection over you.[00:02:09] It's a personal liability insurance policy for protection. And this comes into play. Let's say someone is injured at your home. Let's say you're in a car accident, someone's injured and somebody wants to Sue you there. There are certain limits and they're very low limits on your homeowners on your auto policy.[00:02:27] And they're suing you personally. So this personal liability protection kicks in and covers you in case of an unfortunate incident that requires someone taking legal action against you. Now that being said, the reason I think underutilized is it provides a great value for $1 million of coverage.[00:02:46] Most companies charge under $300 for the year. oftentimes some around $200, you can get a million dollars of liability coverage for the year. And I think that is that's an outstanding value and many people do not have it. And I have this coverage. As a matter of fact, there was a period of time when I was recommending this to every one of my clients.[00:03:06] And it got to the point where my clients were so aggravated that their insurance person had not recommended this, that they came back to me and asked if I could sell it to them. I said, no, I don't do property and casualty, but it did lead to a thought where I did take on a partner. And we started a property and casualty insurance agency.[00:03:25]We started one week. We grew it and we sold it. So despite the fact that my, my practice as a financial advisor is what I enjoy the most. And that's why I've continued with it for 20 plus years. There was a period in time where I did have a partner and we also did insurance. So I'm pretty well versed in property and casualty.[00:03:44]And trust me on the umbrella thing. It is very useful.  Here are the common triggers and the people that most likely should look into it. If you have children, especially if you have children and you have a pool or a trampoline, because if you have children and your children have friends and people are playing, oftentimes somebody can get hurt.[00:04:02] Trampoline just increases that risk and a pool, whether your children or not exponentially increases that risk. So if you have a pool, trampoline, or children, umbrella insurance is a very good idea. If you have teenage or early twenties drivers in your household. So someone who just got their license up to say the early to mid-twenties, who's driving and still lives at home, or is on your policy.[00:04:25] Very oftentimes there when leading causes of accidents and they're one of the leading causes of lawsuits stemming from those accidents, and this can help cover you and your household as well.  Young drivers. Children a pool, a trampoline. And then lastly, I'm going to say a business owner depending on your business structure, you can have some liability protection and coverage there, but there's no law stopping people from attempting to Sue you personally, as well as professionally.[00:04:52] And having this coverage in place it is a really nice backstop that has a really nice safety net. So again, children, business owners, or just extra peace of mind for anybody out there for a very small amount for the year can provide a lot of coverage. So my recommendation is that most, if not all people at least look into getting umbrella coverage, if not securing it, because I think it's a real value, especially in this society today.[00:05:18] That is as litigious as we are. 

Josh Tirado: [00:00:20] Welcome to the making smart decisions podcast. I'm your host, Josh Toronto. And today, we're gonna touch on the importance of a financial advisor. If you're getting divorced now, this advice applies equally to both men and women, but in my 22 years of experience, I believe that men need to heed this advice even more.[00:01:25]So the divorce process is often awful and draining and takes too long. Whether that takes too long, the six months, or whether that takes too long is three years until everything is resolved. Whatever it is, it generally takes too long and feels way too long, and is draining at that point. You have many other things going on, and you may not be making the smartest decisions.[00:01:45] I'm talking about one for your current money and investments and to whatever's going to happen with assets being divided up through the divorce. I've personally worked with some people where there's a big discussion about what they're gonna do with the house. And it really came down to one person, loved the house, one of the house, the person didn't want it, which is great.[00:02:03]But the person that wants to stay in the house was like, okay, I where'd, I get the money from, to pay off the equity in the house to the other person. They thought they were gonna have to sell the house individually assets. I asked them. Do you really like the house? Their response was yes. I love the house.[00:02:16] I want to stay here. Bearing in mind that this is the man in the relationship, I showed him a way to use money from a different source to give the property the proper amount of equity. To his wife so she could get a different property. And he was able to maintain the house, and it was affordable. He was thrilled because he thought he had to sell the house and lose the house that he works so hard to remodel and get the way he wanted, and he loved it, and she did not, and she wanted to move on, and he thought he was gonna have to lose it.[00:02:43]He did not. I've also run into people that through the divorce, if I'm divorced, the decree said one partner or the other partner, a set amount of money. It never said where that money had to come from or what form it was in. And in talking to partner one, they just wanted to write a check from the first available thing to give it to partner, to make the whole thing go away.[00:02:59]But in hindsight, that would have cost them a lot of money in taxes and penalties and put them in an inferior position. So we were able to discuss, okay, here's where we should pull the money from. And we did it in a systematic, intelligent way. And it's saved partner, number one, quite a bit of money in taxes and potential penalties partner.[00:03:18] Number two, they got everything they were owed and in a timely fashion. And we're happy with getting the money, and partner one realized that if they'd done the way they were going to do it without first consulting with me, it would have cost them far more in taxes and penalties. And we were able to avoid that.[00:03:33]really. Work with a financial advisor. It could be that depending on the relationship, both parties may want to keep the same financial advisor, or you might want to find somebody else. I see pros and cons to both or the past several years of my clients. Some clients have gotten a divorce.[00:03:47]They both retained me. We had a relationship, though. Going back to the prior one case, 10 years, the other case, 15 years, we worked together before the divorce. And they both knew that no one knew the situations better than I did. And they both hired me separately. And we split up the relationship and the contract so that each in our separate contracts, I couldn't divulge Anthony on either side.[00:04:07]And I worked with both sides. I knew the kids. I knew the husband and wife. I knew what they wanted to accomplish, and we worked together, which helped make it more amicable, and everyone got what they needed. And we were able to work with both sides. Now, the attorneys, still two separate attorneys, got their fees.[00:04:22]And it still dragged on longer than it needed to. But when the rubber met the road of where money was coming from, what was going here, what was going there, we were able to work together, sorted out, and it worked very well. I spoke to the clients that have also divorced the same thing I worked with both sides.[00:04:35] And some of them were a couple of years removed from divorce now, and both sides continue to work with me. And it goes smoothly. If the divorce is much more contentious or much angrier, it doesn't hurt that one side. It's a different advisor, but I really think that both people should have some advice.[00:04:51] So it's handled properly. And honestly, especially when the divorce decree comes down from the court and says, X number of dollars needs to change hands. And it doesn't say where it's from. It gives us a great amount of planning to do to protect both parties. And oftentimes, to the divorce decree, we need to get X number of dollars in insurance.[00:05:08]Life insurance in place to support the divorce decree. At that point, we take a look at, okay, what sort of insurance do we already have? What sort of insurance do we have from work? And what are the most cost-effective options? If we have to add more in what type of insurance do we have to add to the portfolio to fulfill those obligations w we can set that up and make that happen as well, instead of the person who's trying to.[00:05:28]Shop around on their own online. We were able to do it in a much more systematic, intelligent, and cost-saving manner. The reason I want to focus on men is this isn't necessarily reflective of my client base. But nationally, the number I see is that oftentimes the man leads the financial discussions with the advisor.[00:05:47]when the divorce occurs, the wife will often get thrown adviser, but the men tend to circle the wagons and internalize and don't reach out to their advisor for help. And I think they really need to reach out to their advisor for help, or if they're advisory to someone who helps them manage some money or make some investments.[00:06:03] And I don't have a true relationship where they're meeting with the person several times a year and doing the planning. They need to start that you need to find someone who can do true planning and work with them to help them through that process. So men don't. If you're going through a divorce, please don't ignore that.[00:06:16]Take care of your own mental health and take care of your financial health. And consults and professionals. And anybody going through a divorce should have a professional. I see it where the men often neglect that aspect, and it's not good financially for anyone involved. So that's my 2 cents on the divorce. 

Josh Tirado: [00:00:20] Welcome to making smart decisions podcast. I'm your host, Josh Tirado, and today we are discussing a very fun topic. The topic of what do clients like the most?  In a recent survey of my clients, the number one and number two items they liked the most and why one was the educational aspect. Where we take complex things, make them simple, actionable, relatable, and explain how this will benefit them or discuss those two or three options and let them make an educated decision on which route they want to take that they're most comfortable with. So the educational aspect was big.[00:01:37]The second component was constantly looking for something new to add value, whether it's an investment strategy, whether it's a product that's out there, whether it's a change of philosophy, whatever it is staying current. And I really think that's one of the main advantages of working with an advisor, and I'm biased, but working with a fee-based advisor.[00:01:54]Who is working off of a plan with you? Not just managing assets because we're having serious discussions. For my average client, three times a year, and we're going over different things. And each year, we try to bring some additional value. I might not have a brand new topic. Every three or four months.[00:02:07] We might not need one, but we're constantly searching for something. So one finding unique. Things that can add value to the client and then to being able to translate those unique opportunities or products to the client to make an informed decision. And I want to touch on the product side a little bit of it.[00:02:23]Because again, this comes up time and again, and I make this comment jokingly to many clients, but I often referenced the old golden rule. And I slight twist on it. So I would say, the golden rule. He who has the gold makes the rules. And I know that it's not the true golden rule, but it's very applicable while investing as your money grows.[00:02:41] And as you put more aside and reach different levels of wealth, more opportunities pop up. I can offer clients who have an account balance of over a hundred thousand dollars that I can't offer to someone with an account balance of 25,000. I can offer things to someone with an account balance over 500, over a million, or at different income levels.[00:02:58] There are different things out there. And everyone grows and gets access to these things eventually if the money keeps growing. But what I want to say that there are certain things that we can offer to most people, Almost everyone. It depends on your situation, but there's a lot of value out of things.[00:03:11] And I want to touch on a few of them very quickly. One of them is 401k management. The vast majority of people out there that are still working have a 401k. It doesn't apply to everybody. It's currently about a third of the client, a third of the companies out there offering 401ks, but it's growing dramatically every single month is the ability for the advisor.[00:03:28]Working with a money management firm to have a contract with the 401k company and your employer to be able to go in there and manage your 401k on your behalf. So if you have a self-directed option inside your 401k, which allows you to create a little brokerage account, that is the window we were allowed to use, and then we have a signed agreement.[00:03:45]what we do is we go in through that brokerage window. And we're then able to put new investments in your 401k and actively manage those investments. So it used to be that this was all on you. And in a lot of cases, it still is. Like I said, only about a third of the companies out there offer this, but for the ones that do it, it's a tremendous way to have more choice in your 401k and someone watching it for you in real-time.[00:04:06]for my clients have been using it over the past two years,  results have been. Very good across the board. So I'm quite pleased with it, but either you have an advisor helping with the 401k or an advisor helped me with the 401k and can directly access the 401k through a money management firm.[00:04:21] And help you manage it. Now, when I say directly access it, we're not asking for a username. We're not asking for a password. We're not taking control. We're assigning all the appropriate forms as though you're opening up a brokerage account. That account is within your 401k, and we're using an amen money management company.[00:04:36]Just like we may be using a third-party money management firm to help manage some of your money outside of your 401k. We're using a similar firm to help manage it within your 401k. That's a great advantage. And another thing is alternative investments. Now you do need to have a minimum net worth and a minimum household income.[00:04:51]Either both or one of the other has to be even higher, but as long as you have, as long as you reach the minimums, you have access to alternative and investments. Now, so alternate investments are great. Some are not. Some have received a bad rap in recent years. Some have been a real advantage.[00:05:03]Two people, but they're often in things such as currency, real estate, several oil and gas partnerships. Sometimes I know a lot of those. Were used heavily in the eighties, and I had a lot of trouble. But there are several different things out there. Some of these alternative investments are restrictive because they're privately held. Some are in mutual fund form.[00:05:20] So they're very illiquid and publicly held. So there are a number, different ways to do it. But what I suggest is it's not the same old as some stocks have some bonds. Even at a more modest level of money invested, you can have access to stocks to bonds. Still, also if you're interested the real estate and some of the other alternative investments. New ones are coming out all the time now. It takes a while for them to get, be regulated, and be approved on different platforms to be sold or used in your portfolio.[00:05:44]But there's a lot of options out there, and new ones are coming to market all the time. Recent events or the past year with COVID and the economy, different things have really limited some of the alternate investments for folks. And some have just made the very liquid ones available and the illiquid ones not as available now. I don't want to paint anything with too broad of a brush.[00:06:02]Some of the liquid ones have many advantages and are great, but there's no one size fits all. Each thing is on a case-by-case basis, but the alternatives are great. So far, we've already touched on helping you manage your 401k, some alternative investments that are not as correlated to the rest of the market and get your returns from a different type of asset.[00:06:17]That's really great. I want to mention some, there are some annuity products out there, and they're becoming so popular. I think they'll eventually end up with their own asset—class their own category. Many people refer to them as buffered products, and essentially you have an annuity where you're still offered upside potential where you're tracking an index for the market.[00:06:33]But if the market goes down, the insurance company issuing the annuity has a clause in there where they will absorb the first certain percentage of loss. So if your account, a lot of them that I've used are, is 10%. So if the account goes down 10%, they absorbed the first 10% of loss over the first year.[00:06:49] there's a trade-off there. You're also not receiving a hundred percent of the index. So you're tracking the SME 500, and you're probably walking away with something close to 90%. If it goes positive, 90% of the positive return, but that's an exchange for them being willing to absorb 10% of the loss. Now.[00:07:03]If this sounds familiar to some people, it's because they basically took the best parts of a variable annuity and the best parts of an indexed annuity and smashed them together. So it's not as extreme where it's only investing, or there's a hard floor where you can't lose any money, but your returns are limited.[00:07:18]And they went into the middle where they're providing some safety net with generally higher returns, higher participation, in the indices. So you have the chance of a higher rate of return. There are some other nuances to it involving the lack of fees and smaller things. But they're becoming very popular.[00:07:32]I've used them successfully in my practice for the past. Going on eight years, and a lot of advisors are starting to offer them. It is not a one-size-fits-all. Again, that product has to be the right fit for you and match your goals and objectives, but it's neat. An option that didn't use to exist.[00:07:44]I just haven't used it for seven or eight years. Maybe they ran a little bit before then, but they're really coming into their own now. And it's another great option. So now we're looking at 401k things. We're looking at alternative investments. We're looking at being able to add a layer of safety and protection through this buffered style.[00:07:59]An annuity product even a touch on insurance, it used to be that you had life insurance or long-term care. And now you have combinations where they're called hybrid policies, where it's long-term care on top of a life insurance chassis, for lack of a better term. And you're able to get the benefits of both insurances rolled up into one product.[00:08:16] You're spending one set amount of money to cover both problems. So multiple birds, one stone, and it becomes very efficient from a planning standpoint. There are things out there, and there are things out there that you don't often see when you're just reading some financial articles. Are you using A free calculator? You find online, and forgive me. I don't want to bash all financial calculators. I even have some on my website. But they're a far cry from having an actual collaborative relationship with an advisor and discussions in multiple meetings to put together a plan for you. And then multiple meetings implementing that plan year over year after year.[00:08:45]We can accomplish a lot more, but using some of these tools works really well and has a lot of value to my clients. I'm going to compare the use of these tools to adding salt. To the soup, a little bit adds many flavors and a lot of value to any recipe. Too much can ruin the whole thing.[00:08:59]again, it's one of those, I won't say tread carefully, but it's one of the things where, Hey, each thing is not right for everybody, but if it's right for you and your situation, it can add a lot of value, So I just wanted to touch on those things as to what the clients like the most I've heard recently.[00:09:11] And it's these different types of products.[00:09:13] 

Josh Tirado: [00:00:20] Welcome to the making smart decisions podcast. I'm your host, Josh Toronto. And today, we are discussing pensions. Is it a sheep, or is it the Wolf? Or is it just a Wolf in sheep's clothing? Let me jump into the pension thing here and try to delineate a little bit.[00:01:19] When I am talking about pensions. I am talking about pensions from companies, not from the government, and quasi I mostly pension from smaller branches of government. So not necessarily federal pensions, but maybe something along the lines of that, of a state pension. [00:01:35]The vast majority of people no longer have a pension 40 years ago, the vast majority of people. I had a pension, and that was a big push on retirement. Pensions became very expensive. They were hard to manage. They went away. The 1980s saw the rise of the 401k, and that really replaced the pension.[00:01:49] So it used to be that, Hey, I had a pension, the company put so much money aside. Maybe I contributed to it. Maybe I didn't, depending on what setup you had. And when you retired, you got a certain amount of money, which was guaranteed for all these years in your retirement. And it was awesome. And everyone worked towards their pension fund people for years joked about the gold watch, and I got a pension.[00:02:05]When I retired, the pension became hard to manage. It went away. And the onus of retirement transferred from the company you worked for over to you with the rise of the 401k. Because now you're consuming your money. You're getting a match from the company. But now you have to manage the investments that are in their project.[00:02:21] How much is going to be in there? So it's no longer the company during a pension taking care of you. It's you taking care of your own money? Pensions used to be far and wide, very accepted, very common pensions are not that anymore—several large companies over the past 10 years.[00:02:35]Have eliminated their pensions for people under a certain amount of time, say employees are there for less than five years, less than 10 years. And new hires, no pension people that have been there longer than that, the pension's there, but it's frozen. And then you have some older people that they know will be retiring out or taking a package in the next five years.[00:02:50]And their pensions remained fairly unchanged, but the companies had moved away from pensions. Let me discuss that for the few of you out there that still have pensions. Let me touch on that from a private company. Again, I see this left and right with my clients. The pensions are being frozen.[00:03:02]The pensions are going away. They might give you a lump sum, payout of some money towards your 401k, but then the pension is going away. So when I am doing retirement planning for my clients and have a pension, what is becoming increasingly popular as a stress test is. We don't count their pension at all.[00:03:17]It used to be that we would say, what if something happens? You don't get the projected pension cause it's 20 years out. And maybe the company doesn't do as well, or maybe they freeze it, and we would show them a reduced pension.  My clients are savvy.[00:03:28]They're smart people. And not just smart because they choose to work with me. But because they are smart, savvy people. We're looking at the associated risks with the pension and the companies' health, they're working for. Even the healthiest companies are getting rid of them.[00:03:40] So we've actually started just eliminating the pension from their retirement planning projections. And we want to make sure that they can afford to retire on their own. And if they get the pension, great, it's gravy, but they're not relying on it. So I caution you if you are not doing. [00:03:54] a [00:03:54] Josh Tirado: [00:03:54] separate IRA or Roth IRA or 401k, and you're just relying on a pension.[00:03:59] And you're not within five years of retiring. That will probably not work out for you as well as you initially thought. That is the overwhelming trend in the United States today. So please be very careful again, we don't even consider their pension. If they're more than five years out from retirement or dramatically reduce the pension projection, the federal government will do everything in their power to stay.[00:04:20] And I'm jokingly saying, stay in business. But the government can raise taxes, collect more money and continue to govern the people, and make their pensions work. They make the pensions happen now—several government pensions of receiving the pension. You're not receiving social security, so you are not able to quote-unquote double dip there.[00:04:35] So please bear in mind that, Hey, if I'm getting this pension, you're not getting social security again. The pension there is more reliable, but we don't know how much you're going to receive from that pension, or could it be changed in the future? So please, once again, take a little control, take some more of the money into your own hands and do some other outside investing, just online, a pension.[00:04:53]Then we have this kind of strange hybrid scenario called smaller pensions where it's state-run. Some states have done a very good job of managing their pension fund. And the ones that pop into mind first are just the States that are managing the pension fund for teachers, police, firefighters, state workers, that sort of thing.[00:05:11] some other States have horribly mismanaged it and even passed rules where they were allowed to borrow money out of the pension plan, to cover expenses and nothing to do with the pension, with no requirement to pay it back and no requirement to pay themselves any interest. So now, not only is that money has not been returned to the pension plan.[00:05:25]But that money was not invested. Earning return for the pension plan during that same period of time. And now you have a woefully underfunded pension, which will result down the road in people receiving a reduced pension. Potentially, the States could even default. There are some States that when COVID hit, and they were running this so much economic, no grant, they had already been in economic trouble for the previous 10, 15, 20 plus years.[00:05:46] But COVID hitting amplified it to the point where there are some States considering, and they publicly announced this, the governors publicly announced it, that the States would consider bankruptcy as a way to restructure the debt and what the obligations of the state were. It would be interesting to see if those pensions were going to, depending on the bankruptcy court, if those pensions would be protected.[00:06:07] Or if they only had a fund the pension with some minimum amount of money or who knows what was going to happen. But all I know is that if I was relying on a pension and I plan to receive a pension from the state for my years of hard work, and that state was in such bad financial straits, it was considering going bankrupt.[00:06:25]And the pension fund is massively underfunded. I'm not going to feel too comfortable about that pension. And I know a lot of people that are working on getting their 25 years, so they can get out and get their pension, but there are talks repeatedly about what's going to happen with that pension.[00:06:38]I know some teachers in that position. I noticed some police officers in that position and some firefighters in that position. It's scary because, in many instances, they don't have separate money put aside. Even if you're on a state level with your pension, please put money aside into your own IRA or your own brokerage account and work with an advisor.[00:06:55] So you can plan around the pension, and if you get the pension and it's unchanged, terrific. But there's a really good chance that Your pension will be changed. Very high likelihood that your pension will in the future not be in the same position that it's in now or what's projected to be.[00:07:08]So again, please put some money aside to offer yourself there. So, in general, pensions are great. I want to count, consider them to be gravy and not the main source of retirement. I'm very concerned about the state of pensions. Moving forward in this country. 

Josh Tirado: [00:00:20] Welcome to the making smart decisions podcast. I'm your host, Josh Tirado, and today we're going to discuss sequence risk or sequence of return risk or something that sounds really boring and dumb and not useful to you. But in reality, it is actually a major major risk to your retirement and your investments.[00:01:26]That's what we're gonna jump into today. So let me give you the definition of what sequence risk is. According to Investopedia, sequence risk is the danger that the timing of withdrawals from your retirement account will have a negative impact on the overall rate of return available to the investor.[00:01:40] Let me boil that down for you. Timing is everything. When you pull your money out of your retirement accounts can affect how much it is their long-term. Now that makes sense to me, but in reality, it's just math. Okay. It's math. It's boring, but it can really affect you. Obviously, the stock market and your investments, whether it's stocks, bonds, real estate, what have you? It does not go up in a straight line. It can go up and go down. It can go sideways, different things. You can have several bad years in a row followed by several good.[00:02:11] You have several good years followed by several bad. You can have interspersed and in differing magnitudes. Whenever you hear people talk about the market, you often hear, Oh, over any 10 year period, the market has returned X or Oh. Since people start investing in the market, it has averaged this sort of return and gone up.[00:02:28] Yeah. That's an average. That is not what you're getting every year. It can be more. It can be less. I'm amazed that people jump in, and they're like, after so many years, Hey, the market's supposed to average this. I don't have that. I have this. It could be more, it could be less, but that's based on timing. And that's based on the sequence of returns within the investment.[00:02:47]Now that gets magnified. When you go to retire, and you're going to pull your money out. Let me take this a step further. In my world, you see many things to say, sequence risk sequence of return risk That sort of thing. When I do a financial plan for someone, and we're focused on the retirement and the withdrawal, there are two main things in this sort of realm that we stress test for one is called bad timing.[00:03:07] And I think bad timing is the most practical implementation of sequence risk. Bad timing says, statistically, the worst time to lose money. Or have poor returns is in the first two years of retirement because it's at that point that you have simultaneously stopped, contributing, started withdrawing. Now your seed money, which needs to grow like a snowball rolling downhill, has been reduced by less than optimal returns.[00:03:33] Okay. Maybe you were planning on 8%, you only got 4% of your planning on something positive, and you actually went down and lost money. So those first two years are imperative that you really protect them because you can't dig yourself into a hole there. After all, there's no more money coming in to fill in the hole, and that money needs to grow to protect you.[00:03:49] Long-term. One of the main things that we stress test against is bad timing, where we take a look at what you're invested in and the likelihood that you'll lose money. And, those first two years of retirement, when I say lose money, It's not guaranteed. Still, historically we can look at how the investments you're holding have fared in different years and how much on average they'll go down, and we can look at, okay, here's the likelihood that they will go down in this first two years.[00:04:11] And here's the percentage they could go down.  One way you get rid of sequence risk or the bad timing risk is to diversify properly. Because rarely does everything go down or go up at the same time. So we start to reduce the overall amount of risk, and we properly diversify. And by doing that, we can dramatically reduce the chances that you will lose money in those first two years of retirement, which is the most important, but secondarily and almost as important is we run a Monte Carlo simulation.[00:04:40]When I say the chance of you making a certain amount of money for a certain number of years, you're not living your money, is based on this Monte Carlo simulation. What do you mean? The money? Carlos simulation in my world with planning takes a look at.[00:04:51]Not just your overall portfolio, not just the average you're holding, but it takes a look at the different types of stocks, the different types of bonds, the different types of real estate, whether it's large-cap, small company, international, whatever it is, it looks at all. And then it takes a look at historical what they've done as far as when they've gone up when they've gone down.[00:05:09]And what is the likelihood of that happening? And the Monte Carlo simulation runs a thousand plus sometimes depending on what you're running a couple of thousand different scenarios with different sequences of returns. So a lot of good returns in the beginning followed by bad, a lot of bad followed by good, and vice versa.[00:05:24] And it does it for every asset category that you're currently invested in. And then, we'll run a scenario showing that for all the asset categories that we plan on you being invested in. At the time of retirement, you will give you your probability of your money lasting and how much is in there. A lot of the free planning software that's out there takes a look at what average returns are and says to you, here's the number you need to have when you go to retire.[00:05:46]But that number is really a moving target because that number might be there on the day. You retire. But your life expectancy after you retire may be 30 years. So that number is one snapshot. One day, we need to take a look at what you are invested in overall, how much you need to pull out of there, what sources you're pulling it from.[00:06:02]And this sequence of return risk over five, 10, 20, 30 years. In fact, we look at the sequence of return risk. As to your proper asset allocation while you're still accumulating money leading up to retirement because in what order you get, your returns or losses in the market affect you even leading up to retirement.[00:06:19]It's amplified in retirement. But it's all-important. So when you deal with the professional, we'll stress test for bad timing at the beginning of retirement. We will run a Monte Carlo simulation to stress, test you for the sequence of return risk during your accumulation phase. And we'll rerun it for the projection when you retire in your withdrawal phase to make sure that money will last.[00:06:40] And then, on top of that, we still make sure that at the proposed end of your plan, there is still extra money there. There is still a buffer because you need more money. It would be best if you had that safety net when you're just trying to figure out a number or look at some free software to give you a number of some projections.[00:06:56]I have never seen it where it considers all of these different variables and stress tests it for you. And that's really what you get with the professional. And that's really important. So sequence risk sequence of return risk may sound really boring. But if you don't address it, it could be one of the number one detriments to you having a successful retirement.[00:07:13] 

Joe:  Hello, and welcome to the show. My name is Joe Woolworth. I produce the making smart decisions podcast with Josh Tirado. I'm here today with Josh Tirado and David Morgan.  The founders of the Amplify program that we are going to learn about today. [00:00:31] So let's get started, guys. Josh, tell me a little bit about Amplify.[00:00:35]Josh: So amplify as a program that we created, and our slogan is your immediate and sustainable giving strategy.[00:00:40]Joe: Great. So you guys are going to work with individuals to help nonprofits by helping individuals give more money to nonprofits, basically. [00:00:48] Josh: That is correct. Our end goal is to get more money to the nonprofits for today and in the future, hence our immediate and sustainable giving strategy. [00:00:57]Joe: how did you guys come up with this idea?[00:00:58] Like, what was the logic behind partnering up on this? [00:01:01] David: . I've been in the nonprofit space for a while, and one of the problems I think this solves is. Everyone's going after more followers, and it's really about quantity. And that can make you look good, but a lot of nonprofits have a problem getting to the depth, and connecting to givers is how they'd like.[00:01:18] And so I think this can do that. It offers a tool to say, yeah, we'd love for you to, for example, buy our coffee. But what if you can connect with us more deeply, even in a generational way. And so I think this removes an obstacle in being able to do that. [00:01:33] Joe: And David, you have experienced in the nonprofit world.[00:01:36] David: Yeah.  Around 2013, my wife and I founded love abounds and just really briefly. So we do village development in Zambia that looks like clean water. Right now. We have two homes for abandoned children, and we have a women's empowerment project that teaches women to be entrepreneurs themselves by farming chickens.[00:01:55]That, and then. Also, really quick to Condi coffee is a coffee company that we started that funds all of that or helps fund all of that. So we've been in the space for a while, and we really enjoy it. I love entrepreneurship in all its forms, and I liked that you. [00:02:09] Joe: guys, obviously. Are passionate about people giving to nonprofits because it can make on people's, and now you're forming this amplify program to help people be better-equipped givers.[00:02:20] So tell me about the strategies on how you guys are going to help people amplify their giving. [00:02:29] Josh: So I'd like to touch on just two examples of two topics of two strategies we can use. And these strategies really came to light because, as David mentioned, he's been in this space or working.[00:02:38]As director of a nonprofit and working with nonprofits for a long period of time, I've been working with nonprofits and specifically several churches for the past 22 years to help with giving. And the same problem came up repeatedly; where there's some legacy giving where people wanted to give a family gift when someone passed away. However, all nonprofits need operating capital.[00:03:00] Now they need money. Now it helps them for their mission, not just necessarily in 20 or 30 years.  Over the past 20 years, we see the same problems over and over again. And Dave and I thought you know what? There has to be a better way. And what if we came up with a formalized program to help the nonprofits and put together a nice structure for their giving.[00:03:18] And that's where we originally came up with amplify. So two examples I want to discuss one helps to amplify the current gifts. The other one helps to amplify future gifts, and there are several different planning strategies we can utilize. But here are two prevalent ones. The first one is called the donor-advised fund.[00:03:35] What this allows the person to do. This is the person donating the money. They can donate virtually an unlimited amount of money into a donor-advised fund. Now, the donor-advised fund sounds technical sounds nice. The platform I use, they have actually branded it as the giving fund. I think that's a more accurate description.[00:03:52] The donor can donate a virtually unlimited amount of money into the fund. And they receive a tax break on the entire amount that they contribute to the fund. Now, it says the fund, and it's not one mutual fund. It's actually set up as a brokerage account. They have control over managing and working with the professional to manage the brokerage account's investments and grow it.[00:04:13] And from there, they determine. Which qualified five Oh one C3 charities will receive some of that money. And if they're having a great year, they can donate more. If they're having a down year, they can donate less and donate to one charity. They can donate to multiple charities. You have total control over it, but the donor receives Benefits cause he had a huge tax break.[00:04:31] They can manage the money. And we also encouraged them to turn it into a legacy. Play, involve the children. If they're older, involved, the grandchildren, get them involved. So that way, they're getting in the habit of donating and enriches their souls. And it's a great family thing as well as the actual dollars.[00:04:48] And then when the original people pass away, they can even leave it to the family, and the family can continue to manage it and donate to the charities, and you can create a great legacy. But what's great is you're managing the money. You're growing the money, but you're giving it now. So you can see what's happening.[00:05:03] You can see the fruits of your labor and the fruits of your donations with the nonprofit and the nonprofit benefits because instead of waiting for the person to pass away to receive the gift, eventually, you're getting more money now. And if that person was going to donate a set amount of money, now they're getting a tax break on that money, which allows them to donate even more money if they want to kick in some of those tax savings and it's invested.[00:05:24] So that gift can really start to snowball year after year and create a perpetual gift. So the donor advice fund slash giving fund is a great strategy where everyone benefits now, instead of necessarily in the future,  [00:05:37] David: from a non-profit perspective, I think many times, donors can feel like it's really risky to give a big gift.[00:05:46] And that makes sense. So what you want is somebody who has the expertise of having done this before the financial aspect, the estate planning aspect. To be able to say, yeah, you're in safe hands. This is what we can do in a very predictable way. It's not giving the non-profit a large some, and we're not sure what will happen with it.[00:06:07]I think nonprofits are really leaving a lot of money on the table just because. There's no program to guide and answer questions from this perspective. [00:06:18] Non-profits are just—overworked, underpaid. And I think what's daunting to them is doing a whole nother campaign to raise more money from the same people who usually give them money. So that's an obstacle they're trying to overcome. What's beautiful about this is we don't have to be a part of some giant campaign that takes a lot of energy and money.[00:06:40] We are. Asking people, is this a strategy? Is this a tool that could help you? And if so, that can make a huge impact with very little time and energy spent on the nonprofit. [00:06:52]Josh: I fully agree. And what you're saying is it's not the reaching out to your members or the people who donate for another ask of more money instead, you're empowering them and giving them that tool that you said, but you're empowering them and giving them that tool to show how they can give more money.[00:07:08] David: Exactly.[00:07:09] Joe: Yeah. When you guys are describing it, I've never heard of anything. You got a financial advisor and an attorney who focuses on estate planning coming together, saying, guys, we want to help you figure out how to maximize your impact with your giving.[00:07:20]. I've also never heard of some of these strategies that you're talking about, one of the questions that I had that I'm just curious right about, is this for super-wealthy people? Is this for people that have millions? [00:07:29] David: definitely not. I'll let Josh speak to it, but I think this is very approachable for all different size nonprofits and donors. [00:07:38] Josh: I fully agree. And if your question is it for people with a million dollars to donators and for people that have a hundred dollars to donate? My answer would be yes.[00:07:44] We have enough strategies, and all the strategies are scalable that they can work for virtually anyone at any time. [00:07:50] Joe: So if you're planning on regularly giving to organizations that you're passionate about, this could be something that could really help you amplify your gift. [00:07:56] Josh: Absolutely. This will dovetail in and allow you to give a bigger, better gift and a more sustainable gift as well.[00:08:01] David: So you're talking about [00:08:02] Joe: giving funds. What's [00:08:03] David: another strategy. [00:08:04] Josh: Okay.  So the donor advice fund AK the giving fund. Is while we're still active. Now we want to donate on an ongoing basis. The other most popular giving strategy is to leave something to a nonprofit.[00:08:15] Once we pass away. One of the major obstacles when it comes to that is people also want to leave something to their family when they pass away. And they're very concerned because oftentimes, there are limited funds, and people generally tend to want to take care of their family before the nonprofit, before the charity.[00:08:31]And they don't want to say okay, I'm gonna drink this money to the charity. Disinherit their family. So we came up with a strategy that we have coined the split, inherent strategy. So using some different financial tools and some different estate planning techniques, we can take a set amount of money.[00:08:50] And again, amplify that gift. So the donor can leave a substantial amount of money to their family and leave a substantial amount of money to the charity at the same time. So no one is left out. Both parties get a good sum of money. And while working with two professionals like David and myself, Chances are, we can show you techniques where you would already be able to give more money to your family than you thought you were going to be able to in the beginning, and also leave a gift to the charity simultaneously.[00:09:18] That's where our client, the split inheritance strategy, where you can benefit a larger number of people or causes. [00:09:25] David: From an estate planning perspective,  I think this is really a classic example. Someone will tell me, okay, I want to leave $25,000 to X nonprofit. Since it's completely unpredictable, what the exact size of your estate will be, I have to tell them, Hey, that's risky.[00:09:41] What if there's only $30,000 in your estate? You're disinheriting your family. But with this, we can predict how much is going to be in these accounts. And so we're taking away that risk. We're not, and there's no way where that we're going to disinherit the family. [00:09:57]Joe: It doesn't have to be one or the other.[00:09:58] And like you were saying, even involve those family members in that process with you and pass on a legacy of giving and making an impact, which is really cool.[00:10:06] David: Absolutely. So [00:10:07] Joe: how do people get in contact with Amplify? [00:10:11] Josh: So to hear more about the Amplify program, David and I have put aside time on our schedules, and you can go to in the show notes; there'll be a link to Calendly, and you can go in there and schedule a follow-up 15 to 20-minute phone call with David and myself.[00:10:24] We can answer all of your questions, do a little bit of a deeper dive and explain how it can actually help and benefit your nonprofit. And from there, the next action step after we have that discussion is if you like what you hear. And you think it's a good program and your charity could benefit from it.[00:10:39] You would, then we then roll out the full version of it  to the members and anyone interested in donating [00:10:45] David: completely free of cost to the nonprofit. So if you're [00:10:48] Joe: working in a nonprofit or you're an individual that represents a nonprofit and you want to help your people amplify or giving, go ahead and click that calendar link.[00:10:55] Find out more. [00:10:56] Josh: I would say that you can also send us an email in addition to clicking the Kelly link. Josh at JT financial group Works. If you're finding this podcast based on our landing page on the website, there are links there as well to the email.[00:11:12]You can email us or click on the County link to set up your free 20-minute consultation with David and me; we can answer all of your questions, do a little bit of a deeper dive and show you how this could potentially add value to your organization.[00:11:25]Joe: We look [00:11:25] David: forward to talking to you. [00:11:27] 

Josh:  Hi, I'm  Josh Tirado. And on this episode of Making Smart Decisions Podcast, we are going to touch on the emergency fund. What is it in? Do you need one? Most financial advice starts with the basis of you should have an emergency fund. And a lot of people just view that as a savings type account and yes, you should absolutely have that it might seem pretty simple, but let's dive down into that a little bit deeper when it comes to the emergency fund, the old rule of thumb was you should have put aside three months worth of living expenses.[00:02:12] Not three months worth of your salary, the three months worth of your bills, and your living expenses to get you through something tough[00:02:19] Over time, what I tell my clients is that has evolved and I recommend a good starting point is three months' worth of living expenses. Ideally, you want to get up to about six months worth of living expenses. The reason being if you suffer a sickness or an injury or some other sort of serious issue, and you cannot work, studies show that most people are back to work within six months. If you could have six months' worth of living expenses, put aside most illnesses and injuries that you'll be able to recover from them within six months and get back to them.[00:02:51]So I think the emergency fund is important. I think you should shoot for three months' worth of living expenses, build up to six months worth of living expenses. And then depending on your situation, take it from there. More is not bad in that sort of situation. But also bear in mind. It doesn't just have to be sitting there in a savings account.[00:03:08] It could be invested in something very conservative, earning you more money than a savings account, and still be relatively liquid where we can get a transferred back into your bank account or into your hands within. 24 48, 36 hours. So if there really is an emergency, you can still have your hands on the money within a day or two.[00:03:29] It doesn't have to be where you need that money that day. So for many of my more conservative clients, when their emergency fund continues to grow, we will keep a portion of it in savings or checking as cash. And the rest of it, we do start to siphon it off into an investment account where they can earn something on it, and it is still.[00:03:48]Very accessible and relatively liquid.  do think the emergency fund is a basis for very many people. I think you just start with that. And I think the three to six months of living expenses is also a good rule of thumb.  

You're listening to making smart decisions with Josh Tirado. Today's topic is what questions to ask when you're interviewing a financial advisor. So essentially, I'm giving you the questions to ask when you're interviewing me. Here's what to ask me when I'm trying out for the job of being your advisor; I started this off because this is a very, very often asked question on Google. And if you Google, what questions to ask an advisor or how do you interview a potential advisor money manager, There are an absolute ton of questions out there. What I find interesting is most of them, especially at the top of the search, are very operational in nature.[00:02:20] They're having to ask your advisor questions, such as what clearing firm are they using for the investments. What is this fee? What is that fee? what is the timeframe to handle X, Y, or Z? How are you handling these options? But nowhere are they going into asking about what is the person's investment philosophy? What value you add the does the firm offer?[00:02:42] Do they have any unique value proposition? How often are they going to be in touch with you as a client? Are they going to be conducive to your needs or not? but rather than asking questions to form a relationship.[00:02:53] And to truly interview the person that you're to going to be trusting with your money. They're asking things that are very operational, very basic in nature that I really don't think help you make a decision or gain a comfort level to work with that professional. The other issue I have with a number of questions or questionnaires out there. Does he give me the questions to ask? And then they don't tell you what the answer should be. So what good does the questionnaire have if you ask your advisor all of these questions without getting the answers? Then you have no point of reference.[00:03:22] If the answers are a quote, unquote, good or bad, or right for you and your needs. So, what I'm going to tend to do today is give you a number of what I think are valuable questions, my answers to those questions and how it relates to you[00:03:38], number one. Are you a fiduciary? My answer is yes. And I think the answer should be unequivocal. Yes. A fiduciary legally must put their client's financial interests ahead of their own. And not all financial advisors are fiduciary. The last two people that have interviewed me to become their financial advisor.[00:03:58] The number one question they asked me was, are you a fiduciary?  in this day and age and moving forward, I think the answer has to be yes. Why would you hire a professional who wasn't legally required to put your interests ahead of their own? I mean, that's, that's the whole reason you need trust behind it.[00:04:12] But I think that's the right step forward in starting that conversation. Are you a fiduciary? My answer is yes. I think the answer should be yes. Question two and question three, roll into another. Let me give you both questions and then tell you how those answers for most advisors will probably overlap.[00:04:31] And the next question is, how are you compensated for your services? And the fourth question is, do you get paid by anyone other than your clients? So this goes into there's a variety of ways. Advisors can be compensated; they can be compensated via commission. They can be fee-only where they're just charging a fee to manage your money, or they're charging a fee for the advice, the financial. [00:04:53] planning [00:04:54] Josh: or, in my case, I'm, fee-based I say fee-based because 80-90% of my practice is based around the fees for managing money and the fees.[00:05:05] First and foremost, for doing the financial planning for my clients. There are still some investment options out there that longterm are cheaper for you as the client to do on a commission basis. Then on a fee basis. And one of the big pushes right now, in the compliance-world, related to my field, is to try and make that a level playing field that if you're charging a fee, at some point, you stopped the fees of the fees equal to what, the commission would be.[00:05:31] Or the commission structure is more in line with what a fee structure would be. And I think that's, that is excellent. That's a great move forward, but there's still. Some investment strategies and some investments out there that just by the nature of how they're structured, presently in 2020, are not offered on a fee platform.[00:05:51] They're only offered in a commission format. The next question is, are you paid by anyone other than your clients? Again, that's what fits into are you paid commissions by some company as opposed to the fee?[00:06:05] So I really think these two questions go to go together. The other followup is if you're paying a fee, what are the terms of the fee you want to know? Are you paying an hourly basis? Are they going to bill you every time you meet for the hours they spent with you and behind the scenes, are you paying quarterly?[00:06:23] Are you paying semiannual? Are you paying annually? What is the structure? Does it fit, with your needs and your budget? And most importantly, based on the fee you're paying, are you getting the services that you need in the want for what you're paying? I don't need to have a discussion with you about value.[00:06:42] You understand the value, but oftentimes "You get what you pay for" really does resonate, even in this industry. [00:06:51] The next question. Is what is your investment philosophy or approach? Now? I think this is an important question. I also think it's kind of a loaded question. As things change over time, your needs are going to change. Perhaps your advisor's philosophies are going to change. Not only because they've had a change of heart, but they're adapting to the environment and what's going on around you.[00:07:16] There's an old saying that everyone's strategy works right up until it doesn't. Mike Tyson often said everyone has a plan until they get punched in the mouth. Things change. The world changes rapidly. So there's nothing wrong with adjusting your strategy. If anything, I think that's a smart move, but you do want to know what their basic philosophy and approaches. If someone's very aggressive and you're very conservative, you're not going to get along.[00:07:39] It is not going to be harmonious—type practice. So ask him about their philosophy and approach, but understand that that can change over time. And as it changes, that's a conversation they should have with you, but don't be alarmed. Don't hold it against them. If it's changing, it's probably changing for the right reasons.[00:07:56] In my case, we've, we've trademarked an approach that we call practical tactical. The practical part being is there are a core investment philosophy and a core of stable investment holdings that, that we view the base of your strategy. It can be in different accounts. It can be different investment products, different investment types, but we have a core.[00:08:19] The tactical part is then the overlay. I liken it to adding seasoning to a soup. It doesn't take a whole lot to change the flavor and add a whole lot of taste to it.[00:08:29] So our strategy is practical. Tactical. Some places use something similar. They referred to it as core and satellite. some firms refer to it as just being properly diversified. It's all in how they structure it, but there should be some sort of philosophy.[00:08:44] Next question. Do you specialize in certain types of clients now while this is not necessary? It is really nice. If you're in a particular situation in your, in your financial journey in your life, or you work in a particular field or for a particular company, and that advisor specializes in that field, that company, or your individual needs, Now I've heard that some people have said to them, other advisors I met, I said, Oh, who is your ideal client?[00:09:11] What markets do you serve? And they look at me and say something like, Oh, I focus on serving women. I handle the female market. I'm like, okay, that's great. That's still the majority of the population of the country. So when I'm looking at this, I'm saying. Are you doing financial planning for retirement?[00:09:30] Are you doing financial planning for college? Are you just focused on managing the investments? Are you doing a full plan for someone? Retirement planning. A lot of people focus on the accumulation phase. There are far fewer that focus on the distribution phase. Once you retire, making that money last for you as long as possible.[00:09:49] So there are different specialties. So definitely ask what they specialize in, what type of clients they'd like to work with for me when I look at what type of clients like to work with are nice people, fun people. When I ask my clients for referrals or my clients give me referrals, they notice in somebody in.[00:10:06] Then I'm going to enjoy working. They know I'm not the guy that's calling somebody with a hot stock tip. They know, and the person that's there, that's reliable, and we're doing sound planning. . So find out what sort of people,  your potential advisor specializing.[00:10:22] This goes right into the next question. What services do you provide your clients? Well, depending on what services you provide, those services are just going to support the type of client or the specialty that you work in. The next question is, do you have any minimums for me to work with your firm.[00:10:38] Do I need to bring over a certain level of assets or a certain amount of money to invest with you? This is especially popular. If the firm is charging fees based on the level of assets, this is less popular, or the minimums can be reduced if you're doing holistic planning. So I'm doing a financial plan with someone they're paying me for the time.[00:10:57] To help sit down with them, review their goals and objectives, clarify them, and develop a plan to reach them. Then I give them advice on how to reach those goals. It has nothing to do with how much money they're giving me to manage. So there's a distinct difference there. Do I have a minimum? Does my firm have a hard minimum?[00:11:17] No, we do not. However, on my website, you will see that we have a suggested level of household income, and we have a suggested minimum level of assets. That is something because some of the more advanced planning techniques that we use do require a certain level of assets or income to qualify or to participate in them.[00:11:34] So it is a little bit easier, and we can provide more value to the client if we're at certain levels, but we do not have a hard minimum. Next question. How often will we meet? Some people want to meet annual semiannual, quarterly. Some people want to have, and this flows right into the next one. How often will I hear from you?[00:11:54] Meaning the advisor and how so the meeting and how come I hear from you? Kind of go hand in hand.  over the years, I've tried semiannual. I've tried quarterly; quarterly seems to be too often. And for people that are very busy, it's a lot to meet quarterly. Semi-annual. It is never quite enough to really review your money only twice a year.[00:12:16] So it might seem odd, but the trifecta is the ideal number of meetings for my clients that I found over the past 20 years. So we will meet three times a year. Oftentimes two of those are in person. One of those is virtual. They will receive regular emails from me, newsletters from my, phone calls, if something's urgent, of course, or even text messages, if something's urgent.[00:12:39] And I encourage them to let me know whenever there's a major change in their life at work promotion, demotion bonus, someone gets married, someone passes away, someone's born relocation, whatever it is, I want them to reach out. So you're going, we have three formal meetings a year. The communication is ongoing and.[00:12:58] That two-way communication is very important. So you can constantly adjust the plan and make those turn by turn directions and change it for the client to get the best possible outcome.[00:13:09]Another question, why did your last client hire you? And that feeds right into the next question of what do your clients like about working with you? I feel those are two sides of the same coin because what the clients like is going to be a reason why they hired you. This is important, and this is the spot where the advisor can give you their mission statement, their value proposition, or whatever they think differentiates them from other advisors.[00:13:38] In my case, The top three things that clients have resonated with when we've researched with the clients is why they hired us. is our focus. The three main focuses are the first education.  first and foremost, we are educating them.[00:13:51] So that way, they're comfortable. They sleep at night; they understand what we're doing. But second, the educational part is also for me constantly taking classes constantly going to a different symposium, a different meeting. Researching different investment products, researching different investment ideas, constantly trying to learn and bring them best.[00:14:10][00:14:10] Now the followup of that is we are never pushing. We are trying to introduce ideas. We're trying to add value. If the client's not comfortable with it, they're not comfortable with it. I only want the things that align with their values when they're comfortable with it. So we'll share ideas if they don't want to do it.[00:14:26] That is fine. We'll find another way to do it. Or. We'll just put it on the sidelines in perpetuity, or we're constantly trying to often the best of what's out there and then let them make the decision if they're comfortable or not. And then third, I want to say we're here and we treat clients like family.[00:14:45] It may not be the family that they were born into. It may be the family that they want to have the desire, but we treat the clients like family, and we treat them very well. So what brings them in the door is the education. On both sides, the ongoing ideas and options and strategies to constantly improve what they're doing and then the being there for them and treating them like family.[00:15:08] And I really hope that you get something similar to that when you speak to whatever advisor you're interviewing. Next question. How do you measure success with your clients? And here are a couple of examples of client's ability to achieve their goals. How a client feels about their money and how much money they've made or lost in the past year or over the years, you need to make sure that how the advisor view success is the same way you're viewing success.[00:15:37] So the two of you are aligned for me. It's about the clients achieving their goals and reaching milestones along the way that we know they're on pace to achieve their goals. Of course, the return on their money matters quite a bit, but again, There should not be looked at in a small part or in a fishbowl because some client comes to me and says, for instance, Oh, how did the, what was the return on this investment in the last quarter?[00:16:03] Well, that investment strategy might not have performed well in the last quarter, but might not have been designed to then investment strategy. Might've worked really, really well over the past three or four years, but the last quarter to economically, that strategy was not set up for success. So I advise that if you're looking at the returns on the money, It should be a portion of the overall value that the advisor brings.[00:16:26] But look at it more longterm a year, two years, five years, 10 years, and go through a couple of economic cycles because the short term for better or worse can be very, very misleading. The experience also comes into play there. Have they been through downturns? Have they been through recessions? Have they been through depressions?[00:16:45] Have they been through a pandemic? How have they helped guide their clients? So you also have that level of not just how they are viewing success. But again, that feeds into the other question of how often are they in touch with you? Are their goals aligned with yours? The next is, are there any conflicts of interest I should be aware of?[00:17:04], for instance, and this was cited in an article as an example of the conflict of interest that one adviser might charge a higher fee for a certain service than another advisor. Well, each advisor has different strengths and weaknesses and sets the practice up the way they want.[00:17:21] They might be charging more than a different advisor because they're actually much better at that service or that specialty. They might be charging more because they're located in an expensive metropolitan area, as opposed to a very rural area. It's not necessarily a bad thing, but that could be considered a conflict of interest.[00:17:40] So  a fiduciary has to give you a copy of certain disclosure documents, and it will list if there are any conflicts. And if there are any, how they address them, how they avoid them[00:17:51] next question is, how does your team work together? To work with me and then feeds in the next one up. Will you coordinate your advice with my tax situation?  how our team works with the client and especially when it comes to tax advice, is we are open to working with. All of the client's professionals, we would ideally like to be the leader of the financial team and help to organize things.[00:18:14] But quite often, the client already has a CPA in place. The client already has an attorney in place. The client oftentimes already has a banking relationship in place, and we need to work with all of them to achieve the ultimate goal, so coordinating with the other professionals in their lives.[00:18:31] It Is absolutely paramount. And we incorporate all members of the team. If they don't have a certain member, they don't have an accountant, or they don't have an attorney.[00:18:41] We can help them in finding one, but we definitely want to have an open line of communication with all of their professionals. So when it comes to, how do you coordinate their tax situation? Other things we work with all those other advisors. The final question is what happens next. So you're having the meeting with the advisor, and you like [00:19:00] him [00:19:00] Josh: or her.[00:19:01] And for instance, in my firm, we do an introductory call. Some people call it a discovery meeting. Some people call it a right fit, meeting some to call an introductory meeting, but there's a 20 to 30-minute phone conversation. First, I don't ask them to send over statements or any personal information.  And we have a conversation about whether or not we're a good fit. And if we'd like to work with one another and we take it from there and from there, or the advisors should be able to list.[00:19:23] Next steps. Ideally, there's a timeline, but they can list. Okay. Here's what we're going to cover in our next meeting or meeting after that. Here's when we'll sign some documents, here's when everything will be set up, here's when we can review it together and make sure you're comfortable, but they should be able to give you what the experience is going to look like and the timeline you can follow.[00:19:41]. And that is the most comprehensive list of questions I was able to find that I think it gives you some real insight as to whether or not the relationship will be successful and whether or not you're making a smart decision in hiring that advisor. 

You're listening to making smart decisions with Josh Tirado. Today's topic is the backdoor Roth IRA. In the last year to the backdoor Roth IRA, concept has gained popularity. If you Google it, you will find a number of articles online, explaining and detailing the backdoor Roth IRA. And also a lot of times it's.[00:02:04] Heavily sprinkled with the author's opinion on the strategy. So I want to talk today about some of the rules concerning the backdoor Roth IRA, how you could utilize it. If it's something that is for you or not, and what you want to consider. First and foremost, let me say that consulting with your professional.[00:02:23] When it comes to the tour Roth IRA, whether using a backdoor Roth IRA or doing some sort of Roth IRA conversion, you definitely have to speak with your professional because we have software. We can run multiple scenarios and compare and contrast and see if this is the right strategy for you. For some people, it's a home run. For some people, it should really be a no go.[00:02:44] And there is a large amount of a gray area. But a lot of it's dependent upon your strategy. And what I don't like is a lot of the articles I'm finding online concerning the backdoor Roth IRA concept, as I said before, heavily influenced by the author's opinion and a lot of the opinions for or against the concept.[00:03:02] Are based on some outlier factors and really what would not have applied to the majority of people out there, but what would apply to the minority. So they're looking more for the exception than the rule. the Roth IRA, there are some limitations to contribute to a Roth IRA.[00:03:21] There is an income limitation. [00:03:23]For instance, in 2019, if you are a single head of household person filing your taxes. If you make less than 122,000 modified adjusted gross income, you can contribute a maximum of $6,000 a year to Roth IRA. If you're age 50 or older, you can contribute $7,000. That's been adjusted in the year 2020. You have to make less than 124,000 modified adjusted gross income to maximize your contribution.[00:03:53] Above 124,000 up to 139. The amount you can contribute is reduced and above 139,000. No contribution is allowed. If you are married and filing jointly, the number that you have to make is less than 196,000 from 196 to 206,000; your contributions are reduced a to 6 and above no contribution is allowed at all above that.[00:04:16]Also, the contributions are available. You can make them up to the following year. So say you wanna make a 20, 20 contribution and you're now in 2021, cause you wanted to see how your income is going to look to see if you're going to be allowed to contribute or not. You can still make a 2020 contribution in the year 2021.[00:04:32] It just simply has to be done earlier than April 15th or whenever your taxes are filed. And before that, you can make a contribution for the preceding year. Again. It's something to 6,000 a year or 7,000 a year for age 50 or older. And you do have to show that you made some income.[00:04:49]also you can be, you can, there are different rules concerning the spouse, whether or not the spouse is working, the spouse can also potentially contribute. So what we're looking at here are people that would like to do a Roth IRA, but make, and I'm doing air quotes that are making too much money to be able to contribute to one.[00:05:05] So this concept of a backdoor Roth IRA has become very popular. there are a few methods. The two most popular are if you're working and you're enrolled in a 401K plan, and your 401k offers a Roth 401k option, you can utilize that regardless of your income, you can contribute to the Roth portion of a 401k.[00:05:25] And it's also not subject to the six or $7,000 limit. It's subject to the normal 401k contribution limits. So you can put even more money into it. That's pretty straightforward. The other concept is to contribute to a traditional IRA, the six or $7,000. And either you can do it right after you contribute, or you can wait and let it build-up, but you contribute to a regular IRA, traditional IRA, and then you do a conversion and convert the traditional IRA over to a Roth IRA.[00:05:56] The conversion is not subject to your income. So if your income is above those thresholds, you can always convert a traditional line. At least the way the law stands. Currently, . you can convert a traditional IRA to a Roth IRA. Now the main difference here is traditional IRA is pretax money where your contributions tax-deductible, a Roth IRA is using after you've paid tax post-tax money.[00:06:21] So there's no deduction. And if you make a contribution, there's no deduction. They will both grow tax-deferred, but in the end, everything you pull out of a traditional IRA will be considered ordinary income. And it'll be subject to taxes, normal income tax, a Roth IRA will grow tax-deferred, and then every single pull out of it, both principle and gain will be completely tax-free.[00:06:45] So the trade-off is you don't get the tax break in the beginning, but in the end, everything you have in there is completely tax-free. Now there's a lot of speculation about what our tax is going to be in the future. If this is a good strategy or not, if you are receiving a lot of your income down the road and , if it's coming in the form of capital gains on other investments, that's currently taxed a lower rate than income.[00:07:09] However, most people are relying on income and retirement coming from IRAs and other pretax sources. So it will be counted as taxable income. It is very nice to have options when you go to utilize your income in retirement. And when I say options, some money is pretax. So when you pull it out, it's taxable; some money has been contributed after tax.[00:07:32] Maybe it just went to a brokerage account. Or where you went into a Roth IRA at that point, it gives you options. We can say, okay, somebody should come out of a traditional IRA where it's taxable. Some of that can come out of a Roth IRA or another investment where it's not taxable, and you can really have much more control or what your taxable income looks like in any given year in retirement.[00:07:55] So I liked the idea of being able to access to a Roth IRA as well as a traditional IRA.[00:08:01]I won't say it's a problem, but where a lot of these articles come in is they're suggesting that depending on the level of income you need or what tax bracket you're going to be in retirement, maybe doing a Roth or rough conversion is not a good idea, but a lot of these articles are addressing some in their forties or fifties.[00:08:17] And it's hard to project when you retire, and you're in your sixties, seventies or eighties, and you're going out 20 or 30 years, what tax rates are going to look like, what tax bracket you're going to be in. So I'm very much of the opinion of it is great to have some pre-tax money and some after-tax money and straddle the fence, if you will.[00:08:35] So no matter what the landscape looks like, you can adjust accordingly. So when it comes to a backdoor Roth, we really have to analyze the number of features going in. Where are you getting the money from? How are you going to pay the taxes on the Roth conversion? Do you want to give up the tax deductibility now, and will it really benefit you?[00:08:54] Generally speaking, when I found clients is the longer that they're invested, the better, the Roth will work for them. And if they have an outside source to pay the taxes, do when they convert a traditional IRA to a Roth, because you're going from pre-taxed after tax. So it's going to be taxable at that point.[00:09:12] What I find is if they have to tap into that investment to pay the taxes, do it's a huge hit on that investment. And generally, those scenarios don't work out, but if they have an outside source to pay the taxes and they have a long enough time to stay invested, the Roth quite often is a better strategy.[00:09:28] Again, one size does not fit all. It's very individualized, but I really want to touch on the backdoor Roth, demystify it and just let you know, it's two very sound legal, financial strategies. To get access to Roth IRA money, whether you should do it or not. Again, consult your professional more than happy to take that phone.[00:09:48] Call that email, visit the website, happy to run those numbers for someone, and help walk you through. Suppose it's a smart decision. 

You're listening to making smart decisions with Josh Tirado, and today's topic is life insurance and marijuana. before you start going into your preconceived notions of this topic of life insurance and marijuana, let me start with a quote from a very old hall of fame baseball player, Yogi bear. He was asked once, what is the best type of life insurance to have?[00:02:06] And yoga was quoted as saying, I don't know which type is the best, but I know that none is bad. So [00:02:12] let [00:02:12] Josh: me start first and foremost with the need and the importance of life insurance. And at the time this is being recorded. It is September and September is actually national life insurance awareness month.[00:02:24]But on the topic of life insurance, things over the years have changed dramatically in regard to life insurance and marijuana. And this has been brought to my attention because, in the last several months, I have literally handled half a dozen insurance cases for people who are using marijuana and needed to upgrade or update their life insurance.[00:02:47]And almost every one of these people is a professional who has a very high household income. They all married with children, but marijuana is being used for a number of different purposes. Some of them it's recreational. Some of them it's strictly medicinal and prescribed by the doctor.[00:03:03] Some are in States where medicinal marijuana is not yet legal, but marijuana is being used for medicinal purposes. To allow them to not use some traditional pharmaceuticals. The marijuana was able to take the place of some other drugs that they don't want to have to continuously take, and they can use less marijuana with the same effects than taking the prescription drugs, and they've admitted it to their doctor.[00:03:27] It's in their medical records, and it's all on the up and up. But these people are very concerned, saying, I'm using marijuana. And a number of cases, technically it's still illegal. at least on the federal level with not the state. And they're very concerned as to how it's gonna affect their life insurance.[00:03:41]I'm here to tell you that things have changed dramatically, but let me give you a little background. I'm insurance licensed now for 23 years. And when I first started, you can not test positive for marijuana and get life insurance. You would be declined because it was drug use, and they did take, they did test the urine samples for THC.[00:04:00] To make sure you weren't using marijuana. And if you don't realize this marijuana is fat-soluble, so it stays in your system for quite a long time. And this was always a concern for people that use it recreationally, fast forward 20 something years, and the trends companies have much more data to go on.[00:04:17] And this is what every insurance company bases their prices and their acceptance on is their own individual data, which is why some insurance companies are more favorable towards health issues than others. I have some companies that are very lenient. If someone has heart disease, I have some that are more lenient.[00:04:34] If you're diabetic, I have some that are more lenient based on your height and weight. if you're a little too heavy for your height, those things come up, but each company has a different appetite, and based on their own data, they decide what's a good risk or not even comes to tobacco.[00:04:48] Now, they have a lot of information over a lot of years concerning marijuana. So they're able to adjust that. And this is, let me make one point here. This is where it's important to have access or use an insurance person that has access to a number of insurance carriers. I have over 30 insurance companies I can utilize, and no one company is the right fit for every person and every need.[00:05:09] And the appetite of the insurance company changes over the over time as well. Sometimes they feel they've taken on too much risk in a certain area or certain health conditions, and they move on to another area. But the bottom line is there's a number of large—respect insurance companies, a-rated insurance companies, national companies that are very lenient or accepting towards marijuana.[00:05:30]when we look at the marijuana use, if you're admitting to it and it's in your doctor's records, there's no need to be scared. There's no need to hide first and foremost. One of the questions asked when you apply for life insurance asks about drug use, different things, ask about marijuana use.[00:05:47] The important thing is that you admit to it and say, yes, especially if it's in your doctor's records. Cause it will be found out anyway. And you don't align the life insurance application because the last thing you want to do. Is pass away, go to use the life insurance, and they have to do an investigation because there are concerns that you lied on the application. so first and foremost, if you're using marijuana, don't say no and try to cover it up because if they find it, they then feel that you lied about drug use, and he will be declined coverage.  when the question is up to you, use marijuana, you say, yes, they ask frequency and purpose, and you let them know.[00:06:25] For some companies, as long as it's recreational, it's below a certain number of times per week. you don't even get rated. You can't get the best rating. You can't get super preferred or best preferred a slight preferred, but you can still get a healthy non-smoker or preferred health rating for some companies, depending on the amount of marijuana you utilize, they will give you a smoker rating.[00:06:47] Or a light smoker ratings. So you'll still get a standard healthy person, but there'll be more of a surcharge added on for smoking. Cause they're going to classify as tobacco use. And it does matter if medicinal or not, if you're using it in an edible form, if you're smoking it, whatever the delivery system to your body matters too.[00:07:06] So you tell them how often when you're using it, how you're using it. Okay. And that can help your agent determine which company is the right fit for you. And they can find a company that best meets your needs, medicinal or not. So when the marijuana question comes up, don't be scared. Don't think you're on meth and get turned down.[00:07:24] Don't think that it's going to cost you a lot more money. There are good companies out there that will double-take you. the one caveat I've seen is I know some of them that was declined because it was not medicinal marijuana, and they were using it multiple times a day, every day. And the that was just too much to not have a prescription for, but if you're using it to reduce your dependence on some sort of another drug, (by the way, when I say the itger drug, I'm referring to prescription drugs) if you're using it to, reduce or get rid of your dependence on some other drug, or you're simply doing it too, improve the quality of your life, or you're using it recreationally, or you're using it because.[00:08:06] 2020 has been such an awful year, and this is what's helping you through. You're still able to get life insurance and get it on a favorable basis. The other thing I would like to bring up as well is in this day and age, because of social distancing, everything that's going on. A number of insurance companies have also gone away from traditional underwriting, where they're doing blood and urine, where they're simply doing a questionnaire and a 10 to 15 minute telephone interview.[00:08:33] Now. If you answer yes to certain questions, one of them being marijuana, they will usually then require a followup, blood, or urine exam two to confirm that. But in most cases, you can get insurance up to a million dollars of coverage without having to go take a physical exam, they might need to pull doctor's records.[00:08:50] But again, some online questions and a phone interview is enough to get what they need to be able to it. Tgat  fun Life insurance and marijuana discussion. It may not be as racy or controversial as you thought. But, if someone is using marijuana, please, don't let that'd be a reason to not get the life insurance that you and your family should have. 

Josh Tirado:  I'm Josh Tirado. And you're listening to making smart decisions. Today's topic. I want to discuss  the fiduciary standard and how that applies to financial advisors in this segment. I'm also going to discuss my personal experience and how this plays into my practice, but please know that this is a very touchy subject.[00:02:02] The standards for this are influx, constantly changing.  I am going to try to be as weary and correct as I can be in doing this. So according to in grant, this is not the end all be all, sure, but according to Wikipedia, a fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties.[00:02:25] Typically a fiduciary prudently takes care of money. Or assets for another person. Now that fiduciary definition is a little different than Wikipedia. That's a little different in Merriam Webster's dictionary. And right now the sec security exchange commission and, the CFP board certified financial planning board and different entities are working on the wording of what they feel is the appropriate fiduciary.[00:02:52] Definition and responsibility and standard that they can hold members to.  there's a lot of going back and forth with that. But what I want to say is that the core of it is trust. The fiduciary responsibility is that someone is trusting you to help them handle their affairs, their decisions, their money, their assets, the underlying thing is trust.[00:03:14]And trust can be very subjective. It's hard to define that where it's going to be legally binding, but as far as I'm concerned, whoever you're working with as a financial advisor, the number one thing, the first thing that needs to be there is that level of trust. Whether they're fiduciary or not, whether they're required by law or not, that's a discussion for a different time, but I feel that it's not just a legal responsibility, but that's a moral responsibility that there should be trust there that you're acting in the other person's best interest at all times, because that is why you're being hired as an advisor that you put that person's interest ahead of your own.[00:03:55] So to me, the fiduciary responsibility is very important. And let me just discuss a little bit of how it fits into my own personal experience. So I've been insurance licensed for over 22 years now. I have been securities investment licensed,  over 20 years now. So my practice has span the time when I have seen the tech bubble.[00:04:18] Burst in 2000, 2001, I have been here through the financial crisis and the corresponding mortgage and housing crisis in Oh eight Oh nine. now I'm around now living through 20, 20 COVID-19 and all the craziness that the market, the job market, interest rates, inflation, everything that everyone is seeing right now.[00:04:41] So my experience I have been through three major. Downturns and recoveries, and I've helped my clients through them. And each one has been very different. The reasons that caused it have been very different, but the underlying what happens at the end of the day with the money going down, the money going up, and handling someone's emotions, and that trust.[00:05:02] That's continuous that's dealing with humans and the human condition and trusting and caring for people and guiding them through what has happened in each one of those instances. So to me from day one that trust a fiduciary, that moral responsibility has always been there, but now legally it's becoming more important than ever.[00:05:24] And you do need to ask your advisor and you're interviewing someone or your current advisor, ask them if they're a fiduciary. Because there's a certain licensing to have. There's a certain title on what they need to have.  depending who they're governed by, they might be a fiduciary. They might not be.[00:05:39] if you've worked with your advisor for 40 years and you trust them and they're awesome. They're probably putting your best interest ahead of their own, and they're doing what they should, whether they're legally responsible or not. But I think that fiduciary and that trust level are extremely important.[00:05:55] And I do not think that should be overlooked in today's market. That should be question number one. And also the feeling you have for that person, that gut feeling. Do you trust that person? Do you get along with that person? Do you like that person? Because I'll tell you right now. I'm much more proactive in reaching out to my clients, and they are in reaching out to me.[00:06:16] They hire me for a reason. They know I'm there, I'm working for them. during good times, people are usually happy during the bad times when people grumble and complain. And I'm very fortunate. My clients are educated on our strategies. What we're doing,g when things start to go down or things are happening, geopolitically or things go quote unquote, bad.[00:06:35] Generally speaking, my clients are not too worried and I'm reaching out to them, but that is when an advisor is most needed, most effective. And that's when the trust and the fiduciary responsibility really kicks in when things are not going perfect. When they're not going smoothly, when they have to help you through things financially, emotionally, and help manage the situation.[00:06:57] That's when a good advisor is worth their weight in gold. And that trust has to be there.[00:07:03] 

Welcome to making smart decisions with Josh Tirado. Today's topic is investing in 2020 and beyond the survival of the fittest. Now, if you think back to school and learning about the survival of the fittest, but I imagine it is a lion running across a Prairie, tackling another weak animal, and having lunch. And if that's not what you imagine it is now, because I just planted that thought in your head, but that would be completely wrong.[00:02:07] When Darwin actually looked at the survival of the fittest, one of them reads organisms best adjusted to their environment are the most successful in surviving and reproducing. Therefore, it is not always the biggest, the strongest, the fastest, but rather the animals or organisms that are most adept at adapting to their environment because, in the wild, the environment is always changing in the market and in society.[00:02:33] And especially in 2020 and beyond, because this year has been amazing. Things are constantly changing, and people who just. Sit by and go with the flow or stick to whatever they've been using that  has been working for a long time and aren't adapting will be passed by. So it's not often, you probably hear survival of the fittest compared to investing, but in this case, I feel that is very important.[00:03:00]2020, and moving forward, there are a lot of things going on, geopolitically, the market interest rates, the pandemic we're dealing with. And things are changing, and they're changing rapidly. People who can adjust their goals, their investment strategies, they're planning to adapt to that environment will survive and thrive.[00:03:21] People who are not adapting will be left behind. I feel that one of the greatest attributes that a person can continue doing throughout their lifetime is learning. And the learning also applies to investments. In fact, in a recent poll of my clients, the top two reasons that clients chose to work with me and have stayed with me over the years are, first and foremost, the issues they're educated on.[00:03:48] The planning concepts that we're using the topics, the investments they're in, and they've gained a comfort level with their strategy. And what they're doing second is this survival of the fittest type theory. Clients have commented that they're getting new and better ideas. for me on a regular basis, and they feel so they're very cutting edge.[00:04:09] That doesn't mean we use every single idea with every single client. And it doesn't mean that we're looking at things that are a flash in the pan. Things need to have a track record. Things need to be well-vetted, but in constantly trying to improve, you don't have lazy money. You don't have things sitting on the sidelines.[00:04:25] You know that things are moving, things are changing. And if you adapt, you will do a better job and be able to hit your goals quicker. When I put together a financial plan for someone, I view it as the roadmap to their success. And that's why our slogan is guiding your journey, but constantly evaluating what's going on and looking and changing and adapting is essentially the turn by turn instructions to keep you on that map, headed in the right direction and achieving your goals.[00:04:55] So when I look at investing in this crazy year of 20, 20 and beyond, I think some things are gonna change a number of years ago, people started using the phrase a new normal,  I do think some fundamental things have changed, and people are going to have to adapt. So the better you can adapt forward, the quicker and most efficiently you can reach your goals. 

This is Josh Tirado. You're listening to Making Smart Decisions. And this episode, we're going to touch on longterm care insurance. So when it comes to the topic of longterm care insurance, there has become more public acceptance recently, but for a very long time, People did not want to discuss longterm care insurance.[00:02:00] They would actually just rather discuss life insurance, longterm care insurance because the concept of being here and not being here was easier than the concept of being here, but being physically impaired in some way and needing longterm care.  I started selling longterm care insurance and handling it from my clients about 20 years ago.[00:02:18]the market for it has come. Full circle. it's come so far in 20 years. It is amazing how much better is now. It also amazes me, the understanding that the general public has and the need for it. And also the level of care. brief history when longterm care first started out, they were called nursing home policies.[00:02:37] designed to cover the cost of a nursing home over time, though, that has greatly evolved in longterm care has actually become an anti nursing home or facility type policy where the purpose of longterm care is to help you stay independent and in your own home and deal with whatever has happened to you.[00:02:54] And if possible, recover from it and go back to living, as opposed to saying, we're just covering the costs of what's going to happen for the nursing home. It's actually much more of a recovery and lifestyle enhancement type policy. So it will cover a number of things. But what I want to address is when it first came out, and a lot of people still have this preconceived notion when it first came out, I very much likened it to your auto insurance.[00:03:20] You paid for it, you had it for your entire life, and you really hoped you never used it. And in the end. All that money for all those years was gone. You didn't get anything back, but you were happy that you didn't use it the way they structure longterm care insurance. Now, previously, that what I just described was a traditional longterm care insurance policy that only, I think, comprises about I'd say 10 or 20% of longterm care insurance that is put in place today.[00:03:46] And out of my personal practice, I haven't used a traditional policy in over eight years. The new policies are hybrid policies.  this is going to get a little technical, maybe a little nerdy, but you'll see why this is important.[00:03:59] Just second longterm care insurance is governed by the laws for health insurance. premiums can be raised coverages, and things can be changed. The newer policies. Or a hybrid policy where it's a combination of a life insurance policy and a longterm care policy, but the base of it is life insurance.[00:04:20] So the whole policy is governed by the laws that govern life insurance, not the laws that govern health insurance and those laws are night and day different. it's more advantageous for you as the consumers, the end-user to have it based on life insurance. You now have a base of life insurance with a longterm care insurance rider on top of it.[00:04:39]And with that allows you to do is not lose out on your money. the way it works now is the money you put into that policy is going to stay there, and it will also provide longterm care. It will also provide a life insurance benefit. So he'll get from the standpoint of. If you need longterm care, this hybrid policy will provide you with longterm care benefits.[00:05:00] If you passed away and did not use your longterm care, this hybrid policy will provide you with a life insurance benefit. If, at any point you decide, I don't want this policy. Either you're older, and you need or want the money out of it, and you don't want to use it. Or something has drastically changed within healthcare in this country.[00:05:18] And longterm care is now paid for by the government or becomes passe. And you no longer need it at any point. If you want to cancel a policy, depending on which policy you have, you can get back a hundred percent of the premium that went in. Some policies give you back about 75 or 80% of the premium that went in.[00:05:34] But there is a few more benefits. so there's a little bit of a trade-off with what direction you want to go in, but you can get back most or all of your premium. So if you think about it that way, what does actually becomes is a different asset allocation you think about, okay, where can I pull the money from?[00:05:55] And what was it doing, where it was, and move it over into a hybrid longterm care policy. And that money is now providing me a life insurance benefit. It's providing me a longterm care insurance benefit. And if at any point I need my money, I can get my money back out of it without there being a penalty.[00:06:13] your money's still sitting there as an emergency fund. Now you can look at and say; my money's not making a return when it's sitting in that policy. True. But at the same time, you're also no longer paying a life insurance premium, or longterm care premium is covered. Bring those for you at the same time.[00:06:28] I can't say it's a no-lose type of situation, but it covers you. If you need care, it covers you if you pass away. And if at any point you want to get the money out and cancel the policy, you can take your money out. So the policies have come a long way from what they used to be.[00:06:42] And. It is the fastest-growing insurance or investment product currently in the country. And if you look at the number of people that will need longterm care, at some point in their lives, it's yes, you have better than a 50% chance of meeting it. And the fact of the matter is statistics show women need it more often than men.[00:07:06] That's just something because our life expectancy isn't as long, we tend to die first. And, oftentimes there's, a woman in the household to help take care of the man. So maybe he doesn't need the care. It's important for men and women, but there's a almost a 50/50 chance that men will need it.[00:07:22] And there's a greater than 50/50 chance that women will need it. on a personal note, I put my mom's policy in place probably about 15 years ago. And it was before these hybrid policies came to be, so hers is still a traditional policy because it was that old.[00:07:40], but from a personal standpoint, I did it because. My father had ms. I had ms for a lot of years and didn't need longterm care and needed that help before he passed away. And I can see what it can do to a family, one, the stress of having to care for someone and to the cost. So personally, I've always thought it was important, but it has become so important now If you are a fiduciary advisor to your clients, if you're a field near fee-based advisor, doing planning for your clients,  the courts have even determined that longterm care is so important that it must be offered to your clients. So I know for a fact there's been a number of cases, one specifically in Texas, but there's been a few cases brought up, in recent years where.[00:08:26] An individual or a couple has sued their financial advisor because the financial advisor did not recommend longterm care insurance to them. And then they had health conditions that required longterm care and how much it costs and the devastation it did to their net worth. They felt that if that person was a true fiduciary, they should have made them aware of longterm care.[00:08:48]They brought suit against them, and the court sided with the clients, not the advisor. So in some States, if you are not recommending it for your, to your clients, and educating them on it, you are not standing up to your fiduciary responsibility. So I personally have a form that once new clients, assisting clients, whoever, if you're 50 or what, as soon as you turn 50 or over, we are having a discussion about longterm care.[00:09:12] And I'm having to actually sign a form saying that you've been educated on it either you already have it, you've applied for it, or you've chosen. Not to take that route, and you do not want to get longterm care, but anyone 50 and over I'm absolutely having a discussion. I'm recommending him. Now, bear in mind that is an insurance product.[00:09:30] It is still based on your health and your insurability. So it's not guaranteed that everybody can get it as you can't. There are things we can do to work around it, but I think it is very important, especially in this day and age, when Most times these hybrid policies you're paying for it out of already existing assets.[00:09:46] You can get paid for it. Lump-sum, spread out over five years, 10 years. Some of them can even spread out over longer, but you're just reallocating money to this problem. You're not necessarily having to pull more money out of your budget to fund this and potentially lose the money. You're simply reallocating money.[00:10:02] That's already there. And you can be used in a variety of ways. The other thing I just want to touch on briefly when it comes to longterm care, and it says so many people will need it. Oftentimes it's simply used for the short term. You might need it for a couple of weeks, couple months, maybe you're recovering from some sort of joint replacement.[00:10:21] You're recovering from heart surgery, you fell, and something broke, or something happened, and you need assistance. Longterm care. Can come in after you've exhausted. The health insurance that pays for that, the longterm care can come in and help pay for that until you've recovered enough. And then you can go back of longterm care back to living your life, and then whatever's left there.[00:10:43] The rest of the value of your policies is still sitting there for perhaps the next time you use it. So please don't think of it as a later in life or end of life situation. This can actually be very enabling to continuing to have a healthy and active lifestyle.[00:10:59] 

Welcome to the Making Smart Decisions Podcast with Josh Tirado.