12.9.22: Audio automatically transcribed by Sonix

12.9.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Money Matters with Mike, with your host, Mike Zaino. Get set for a full hour on financial information and economic news affecting your bottom line. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you, too. So now let's start the show. Here's Mike Zaino.

Mike Zaino:
What's up? What's up? What's up? It's Mike Zaino coming to you live from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every week. And today is no exception. We're going to bring the heat again. On today's show. We're going to discuss getting back to the basics when it comes to your finances. And as always, I have the distinct honor and privilege of being joined by the one, the only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today, brother?

Producer:
I'm doing great, Mike. It has been this particular day where I am anyway has been a rainy one. I did not wear the right shoes, but despite being a little bit soaked, I am doing great. My, my, my shoes are drying out right now, so I'll be fine. But I'm glad to be sitting here with you and talking to you and, you know, just going to bring some great info to the folks today.

Mike Zaino:
Absolutely. You know, up here in the Carolinas, it's about the same as well. It's a little overcast. It started out nice. I was I was outside in an earlier just in shorts and a t shirt. And as the day progressed, it just got cooler and cooler and cooler. So we're in December. And just the fact that I could be in shorts and a t-shirt is miraculous considering, you know, I remember white Christmases, not too many. But every once in a while we'd have a white Christmas. So that in the South that's a relatively unheard of thing.

Producer:
It really kind of is. But who knows? You know, you don't like the weather. Wait about 5 minutes. By the time Christmas comes around, we could have a white Christmas. Who knows? You know, we'll just have to wait and see. I guess.

Mike Zaino:
It is definitely schizophrenic for sure.

Producer:
It absolutely is. But as we start off here, Mike, I want to do something that we do pretty much each and every show, and that is thank the listeners for tuning in. Of course, as you say, each and every time we get together without our listeners, we do not have a show at all. So thank you. Thank you. Thank you for tuning in. Not only can you hear us on the air, you can hear us as our podcast as well. We have that available at MoneyMatterswithMike.com. All of our past episodes are there. You can also subscribe really wherever you listen to podcast, I'm talking Spotify, Apple, all the big ones there. You can listen to those past episodes wherever and whenever you would like, and you can also reach out to us, leave us a rating on those podcast channels wherever you get it, and reach out to us as well. Just leave us a review or, you know, send us a message. Go, go to us at MoneyMattersWithMike.com and reach out because we absolutely love hearing from you and we also love hearing from Mr. Mike Zaino. And we're going to do a lot of that right now or throughout the next hour of our show. That is we've got a lot coming up here, Mike. We've got going to play a little right or wrong. It's been a few weeks, I think since we played right or wrong. So we'll see how right or wrong I am. In just a little bit, we're going to talk about cryptocurrency Boy, The cryptocurrency roller coaster continues, huh?

Mike Zaino:
It has. It's pretty much been been a gut wrenching and stomach losing freefall for the last little bit. But we'll talk all about that for sure.

Producer:
Yeah, going through the triple loop de loops and all that stuff about right now with crypto. And then we're going to talk about some some safe options for growing your wealth will have a cost cutter. And then of course, getting back to the basics is kind of the title of the show this week, and we'll talk about really managing risk and protecting the money that you've worked so hard for. That is super, super important, especially in times like these when, you know, sometimes the stock market can feel like the crypto markets some days with its ups and downs not quite as drastic, but not too far away either sometimes. So we've got all that, got a lot of great stuff coming up. But first.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
So our words of financial wisdom come this time around from maybe a little bit of an unexpected source. Here we've got the words of Abraham Lincoln to quote today. And the former president said, quote, The best way to predict the future is to create it. Boy, that's. Those are some great words there. And I think about some quote that I heard this very similar. You know, you can't wait for things to happen. You've got to make them happen. You know, And that's kind of along those same veins. I think those are great.

Mike Zaino:
Yeah. There are a lot of of great quotes that that are very similar that, you know, if it is to be it's up to me, right. I mean and that was one that has always stuck in my brain. And the bottom line is Honest Abe was very, very profound in those words when he was talking about creating your own future. Because if you want to create your best case financial future, you have to get back to the basics.

Producer:
Hungry for something to chew on?

Mike Zaino:
Here's some meat on the bone. One of those fundamental building blocks of wealth is not take unnecessary risks. Which brings us to the rule of 100. We have talked about this before on shows. It's a guideline and something that has been in financial law for for as far back as I can ever remember. But the rule of 100 states that you should take the number 100 and subtract your age and whatever result is the maximum percentage of your money that should be at risk. So for an example, if you are 60 years of age and you take 100 -60, the resulting number is 40, which means that you should not have more than 40% of your assets at risk simply because you have less time to make up any big losses. And another example is if you're 30 years old, wealth 100 -30 is 70. You should be at least up 70% in the market money participating in higher risk. But also higher reward type investments simply because you have time on your side as a much younger investor to capitalize on compound interest. And even though there may be some blips and some market corrections throughout the next several decades, again, you have time on your side. So investing while being in the retirement red zone that we've discussed a lot on this show, which is the five years preceding retirement.

Mike Zaino:
Also, while you are in retirement, that involves managing risk. And that's why we absolutely love annuities, because your money is 100% protected and annuities can provide you with an income that you can count on and use each and every single month guaranteed for the rest of your life. Keep in mind that many dividend stocks cut dividends during the COVID 19 pandemic. They weren't paying them out. And a lot of people say, well, I've got a rental portfolio. Well, guess what? Rental income isn't a guarantee either. And especially during the pandemic, many renters could not or excuse me, landlords could not evict their tenants even when they weren't paying rent because the government imposed the moratorium on evictions during any of the past economic downturns, whether it was the coronavirus pandemic, the financial crisis of 2008, and so far this year, annuity holders, they didn't lose and they haven't lost not one single penny of their annuity accumulated value and those who had already turned on income, guess what? They received all of their checks on time and in the full amount because they are contractually guaranteed for life. So mitigating risk is what I like to do for my clients and make sure that they're not taking unnecessary risks as they approach, enter and are in retirement.

Producer:
It's Yeah. And that's very, very smart advice there because, you know, as you do have less and less time on your side, which we all we all do, it happens to all of us. We don't like to talk about it as human beings, but it's very true. You have less and less time to, you know, weather the storm in the financial markets. And so that is something that people really need to pay attention to. Following that rule of 100, at least, using it as a guideline there, and keeping in mind that those fixed indexed annuities specifically are a product that could be right for a lot of folks. And we'll talk more about them coming up and and get some more kind of insight into though, that particular kind of financial product financial vehicle. But it really does offer that principle protection and growth protection as well because it is tied to a market index and get that market growth.

Mike Zaino:
Exactly, Matt. And a lot of people were lulled to sleep over the past decade from 2010 to 2020. You couldn't do any wrong by investing in the market. We had the longest bull run in the history of the market. We'd never seen anything like it before, and I like to equate it to being at a casino. Casinos weren't built on winners, were they? They weren't. Right. And well, they.

Producer:
They were built on that. Built on the house winning.

Mike Zaino:
That's that's exactly the house always wins. Right. And everybody always says when they leave the casino, dang it, I should have left, you know, two or 3 hours ago I was up. But what happened? You got greedy and you stayed at the tables too long, Some of you. And this is just a checkup from the neck up for our listeners out there. You may have just been lulled to sleep over the course of the past ten years, and then this year you've kind of gotten a dose of reality. Volatility has returned to the US marketplace and the global marketplace. And so you need to be extremely careful about where you're allocated and how much money you have at risk, because, you know, I speak a lot do public speaking events. And one of the questions that I ask my audience all the time is just to see if they kind of understand if you have $100 and you lose 50%, how much do you have? And everybody gets that one, right? Right. $50. And then I say, Och, and then you make that 50% right back. Matt, how much do you have? Well, a lot of people shout out 100 bucks and a few a very few actually understand that when you gain the 50% back, you're only getting 50% of $50, which is only 25. So if you lose 50% and you gain 50% back, you actually only have $75. And that that just showcases why it is so important that as you are in that retirement red zone or entering or in retirement, you just simply can't afford to lose 50% because if you do, you've got to gain 100%. And that's just to get back to even. And most people in retirement simply don't have enough time in order for that to happen.

Producer:
Yeah, absolutely. Especially as we look at the historic performance of the markets. That is absolutely true. And that is why, again, we say with with fixed indexed annuities, zero is your hero. We say that a lot and it's true with that. And so we'll get more into the fees, as we call them, fixed indexed annuities a little bit later on. But great, great meat on the bone there for us again this week. Mike, thank you for that. And I think it's time for us to kind of test some financial knowledge here.

Producer:
Come on down as we test your financial knowledge in right or wrong.

Producer:
So here we go. You can feel free to play right along with us if you are at home or in the car or wherever you happen to be on this beautiful Carolina weekend. This is right or wrong, of course. And and what we do here is I will present a statement to Mike Zaino, and Mike will tell me if that statement is right or if it is wrong, and more importantly, why it's right or why it's wrong. All right. This is all about knowledge. We're learning stuff here as we do each and every week. So here we go. First one in right or wrong, Mike, tell me this. Is this right or wrong? Bonds are on track to have one of the worst years ever in 2022, right or wrong.

Mike Zaino:
Matt. That is absolutely right. Bonds are down 15% this year. And according to The New York Times, this has been the worst time for Bonds in almost 100 years, Matt, since 1926. And maybe if you really look at how long bonds have been around, could be centuries during times of rising interest rates, the older bonds you may be currently holding are worth less. Why? Because newer bonds are going to offer more desirable rates. And this is why we recommend replacing your bonds with fixed indexed annuities. And that's to protect your hard earned money, eliminate fees, and guarantee yourself an income that you can never outlive.

Producer:
Yeah, and that's I'm glad I got that one right, because that's an important one to get right for folks. We'll talk a little bit later on about bond replacement with fixed indexed annuities, kind of how that works and all that. But yeah, this is a good one because, you know, you think about the old pensions that that so many workers used to have in this country. Those, of course, have mainly mostly gone the way of the dinosaur. And so if you can create that for yourself, why would you not want to take advantage of doing that? And this is essentially what you're doing. You're in a big way creating your own personal pension.

Mike Zaino:
Yeah, I love that idea, Matt, of taking control and not necessarily relying on Social Security for my retirement, especially if I have a little bit of time and can put some money into a fixed indexed annuity to allow it to grow, to never go down, and to set myself up for my own personal pension. I just think that's smart planning.

Producer:
They really, really is. It really is. So one for one for one here so far in right or wrong. Let's go to number two now. And it's about ho, ho, ho, everybody's favorite topic these days, cryptocurrency. So statement number two is this, Mike. Cryptocurrency is a safe and effective way to grow your money in a short time. Is that right or wrong?

Mike Zaino:
Ouch. That is wrong, Mat. And the reason I say ouch is because people or who are invested and have been invested in crypto, they're feeling the pain right now. All cryptocurrency investments, whether it's Bitcoin or FTX or any of those other ones, they offer no consumer protection and they are incredibly volatile. One of the world's largest cryptocurrency investing companies, FTX, they filed for bankruptcy last month and I just don't want anyone out there risking their hard earned retirement dollars in an unregulated cryptocurrency market when there are safe investments out there that can provide you with market like gains and no market risk.

Producer:
Yeah, it's a bit like the Wild West when it comes to crypto. You know, it's just the sort of unregulated nature of it, as you say, is something to be very concerned about. And they're trying to sort of figure, figure all that out. But it's proved very difficult.

Mike Zaino:
And just I mentioned the casino a minute ago, right? I mean, you're definitely playing one of the most risky games in the casino when you play with cryptocurrency. So, of course, if you're going to dabble in it and I don't say just don't under any circumstances play with crypto, but on the same token, I'm saying only play with what you're prepared to set on fire and and walk away from the ashes. Because while people have made millions and millions and millions, heck, billions of dollars, they've also lost it. One of the funniest commercials and I can't remember if I saw it on television or if I heard it. I think I saw it on TV. There's a guy going, I'm a millionaire. I'm not a millionaire. I'm a millionaire. I'm not a millionaire. And he's just looking at his phone as it updates literally second by second. And it was a cryptocurrency market. You know, that was that was he was reacting to he was getting all high and he was getting all deflated and then he was getting all high and he was getting all deflated. And you want to talk about a roller coaster, brother? I mean, if you're into that and you enjoy those kind of fluctuations, then hey, by all means, jump in. But if you are a little bit more conservative and you want to protect your money and you like the idea of protected gains with no risk, then we have something for you.

Producer:
Yeah, that's right. And you know, we've got something for you that Mike can help you out with. And if you go to MoneyMattersWithMike.com, you can reach out, get in touch with him and and schedule a free consultation. Of course we'll talk about that more as we go along here and kind of what that's like. Or you can give them a call. That's 704 560 1573. All right, one for two here. Let's do number three. See if I can finish above 500 as we round out right or wrong with statement number three here, Mike, higher interest rates combined with a down market make now one of the most opportune times to consider a fixed indexed annuity. Is that right or is that wrong?

Mike Zaino:
Matt That's right. With interest rates currently at the highest level since back in 2007, annuity companies are able to generate more interest when they invest in options. When you invest in a fixed indexed annuity, for example, your money is tied to an index without actually being directly invested in it. So fixed indexed annuity holders get to participate in the gains of the index, but again, they are protected from any potential downside. So when the markets are in decline like they have been this year, OC zero becomes your hero. And this feature of annuities allows people to kind of sidestep the market and take advantage of gains without risking any of their principal.

Producer:
Yeah. And so, so important right now for a lot of folks and really music to the ears of a lot of folks because of all the volatility that we've seen in the marketplace. Well, that is right or wrong. And hey, two out of three. Not bad. Not bad. In in what does I say? Close on the counts in horseshoes and hand grenades. It also counts. And right or wrong, you know, there we go.

Mike Zaino:
Two out of three. That's Hall of Fame numbers right there.

Producer:
That's right. That's right. If I was playing baseball, I would be an automatic Hall of Fame vote. All right. So there it is, right or wrong for this week. And, you know, we've been talking, of course, a lot so far in the show, Mike, about crypto, of course, and a lot of the risk that is involved there. And it is a risky investment. No, no way to kind of sugarcoat that. But let's actually take a listen, because I mentioned a minute ago about the struggles of of trying to get a hold of this and regulated and sort of, you know, get the lasso around it, if I want to use the Wild West sort of terminology a little bit more. It's been a struggle there. So I went into that a little bit more here with this piece that I put together about crypto and it kind of call it take caution with crypto. And that's sort of the point that we want to get across here. So let's listen to this. We'll chat about it just a little bit. On the other side, we'll go into more about crypto as well, and then we'll talk more about those safer investments. So here is take caution with crypto.

Producer:
I'm Matt McClure with the Retirement dot Radio Network powered by Amerilife. If amusement parks are. Your kind of thing, roller coasters can be fun. But when it comes to investing for retirement, not so much. One of the most volatile investments around is cryptocurrency. That means, sure, there's some potential upside, but is it worth taking a ride on the crypto coaster? First, What is crypto anyway? The website Investopedia defines it this way a cryptocurrency as a form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments in central authorities. Bitcoin was the first such currency out there, so it's been the most talked about and face the most scrutiny. Like anything in life, crypto has its advantages and disadvantages. While it offers a faster and cheaper way to transfer money, its value is highly volatile. The technology has gotten some blowback from both sides of the political aisle. One of the most vocal critics has been Democratic Senator Elizabeth Warren of Massachusetts.

Elizabeth Warren:
Unlike, say, the stock market, the crypto world currently has no consumer protection.

Producer:
None. Republican Senator Pat Toomey, ranking member of the Banking Committee, who generally supports the industry, also acknowledges there are issues with crypto. Now, it's.

Pat Toomey:
Important to note that many.People have raised legitimate issues about.Cryptocurrencies. These include their use in illicit.Activity and the possible effects on monetary.Policy and our existing financial infrastructure.

Producer:
But what do big time investors have to say about cryptocurrency? Here's Warren Buffett speaking at a recent Berkshire Hathaway shareholder meeting.

Warren Buffett:
Now, if you told me you Owned all of the Bitcoin in the world and you offered it to me for $25. I wouldn't take it because what would I do with it?

Producer:
Still, cryptocurrency has legions of fans who swear by it and enjoy riding the daily roller coaster. So are you willing to risk your hard-earned and hard-saved money in a volatile cryptocurrency market? That's a key question to consider as you invest in your future. With the Retirement dot Radio Network powered by Amerilife, I'm Matt McClure.

Producer:
So a little look about at crypto. The crypto markets kind of the risks involved and the struggles in regulating it. And I every time I listen to this back, I the part that stands out to me most is Warren Buffett saying that, you know, you could give me all the all of the Bitcoin in the world, what would I do? I wouldn't take it because what would I do with it? You know? And I just I love that because he's a guy who knows a thing or two about investing.

Mike Zaino:
Just a little. Just a little. And with cryptocurrencies taking such a tumble in the news. Right. We feel that this is a great time just to remind listeners of the risks and the dangers of investing in such a volatile asset class.

Producer:
Yeah, and you know, you look at the crypto market right now sort of refresh because we've really had this huge reminder of exactly how volatile it is in the news lately. Refresh our listeners as to what has been going on in crypto lately.

Mike Zaino:
Right? So I mean, I just mentioned it a little bit earlier, one of the world's largest cryptocurrency exchanges, FTX, they just filed for bankruptcy last month and they're currently under criminal investigation. Bitcoin alone has suffered just massive losses and is now down 65% year over year and 65% just from the highs that they had year to date earlier in the spring. There are a lot of celebrities. Everybody is familiar with Tom Brady, like him or not and know you're familiar with them. Shaquille O'Neal, Shaq, you know, you know him. You might know him now more for all of his pizza commercials than you do for his actual basketball prowess. But he was an amazing basketball player. Both of those sports figures, they've made major investments in the now bankrupt company, while other organizations like Major League Baseball and the National Basketball Association had sponsorship commitments with the company. Right. So again, if you are going to dabble in crypto, you might hit it big. But because it's unregulated, just please be careful.

Producer:
Yeah. You know, when we compare it a lot to like, say, going to Vegas, going to the casino, going wherever, going to go into Cherokee, if you want a closer place to go. Right. You know, going to go into the casino and gambling. And the difference between those two things is at least to me, to my mind, that very thing the gambling industry in this country legalized gambling is very much regulated. I mean, you don't get much more regulated than the gambling industry is because, you know, I mean, the house still has the advantage. The house always has the advantage. But, you know, there is regulation in there to keep from the house. Just really taking you for all your your worth, you know, And they have to be like, say, for slot machines, certain payback percentages over time. And all of that have to be programmed into the chips that go into these machines. There is no such thing when it comes to crypto.

Mike Zaino:
Yeah, and Matt, when I go to the casino, there are two games that I will play, I will play blackjack and I will play poker. And the reason being is that I'm not playing really against the house. In fact, I love to play single deck blackjack and when it's just me and the dealer. Why? Because I know there are 52 cards in a deck. I know probability. And statistically what cards are coming based on what cards are showing. And I have a much better opportunity to walk away with money when I'm sitting at a poker table. I'm not playing against the house. I am playing against other players. So skill comes into effect there where you're able to read body language and identify any potential tics and variances in the way people are betting based on what the community cards are. And I like to play either Texas Hold'em or a game called Omaha. And so again, I have a much better statistical probability of walking out with some money. Now, have I lost money? Sure. It's poker, right? But. And you don't sit down at the table with what you're not prepared to lose. But when it comes to Bitcoin, like Warren Buffett says, what is it? It's just something that was made up. And most people most people don't really understand what crypto is. And when we talk about crypto wallets. And the fact that you don't actually have a. Wallet that you can place. Real money in, but it's online. And what happens if it gets hacked? I remember earlier this year, I think it was this year might have been late last year that a guy that had like $62 million in his in his wallet. Forgot his passcode is password. So what does that mean? He's out $62 Million because he can't figure out how to get back in. That doesn't sound like something I'd be interested in putting my money in. You know what I'm saying?

Producer:
Yeah. If it's that easy to lose, it's. It's just, you know. Oh, well, I can't remember my password. There goes 62 million. It's not like, Oh, I just can't access my email for a few minutes.

Mike Zaino:
You know, insane. I mean, to me that, that that is absolutely insane.

Producer:
Yeah. Well, let's go from talking about the insanity and the the Wild West of crypto to something that can really give people a lot more security, a lot more safety and a lot more stability in in their investments and in their their investment in themselves, in their future and in their retirement.

Mike Zaino:
Matt, I'm going to guess you're talking let's talk about annuities.

Producer:
Yeah, that. That would be right. I gave you enough clues there for you to decipher that. I am talking about annuities. Yes. And it's really something that I think doesn't get the the play that it necessarily should in a lot of financial circles.

Mike Zaino:
I think you're right there. And the reason is a lot of people have heard commercials on on the radio. You know, I hate annuities or seeing the commercials on television that that you know and you go to Google annuities and you have all these this bad press. And really what they're trying to do is get you to click on it. It's called click bait so that they can show you what they have to offer. But annuities offer a solution to the number one fear that retirees have today, and that's running out of money and becoming a burden on their family. Matt, too many people we've talked about this over and over and over again believe that retirement is about just accumulating, accumulating, accumulating and saving enough money to reach this one magical number that they have in their brain when in fact it's really about cash flow. So why wouldn't you delete the fees that you're paying on at least the bond portion of your portfolio? By the way, a portion that's having one of the worst years in history and replace those bonds with fixed indexed annuities. And I think you're going to have, you know, something to play here from a book. It's a chapter in the book called Annuity 360. It's written by a good friend of mine named Ford Stokes, and he talks a little bit about famous people who have invested in annuities.

Ford Stokes:
Chapter three famous people who invested a significant amount of their hard-earned wealth in annuities. Big idea. Annuities are for everyone. Even if you're not worried about outliving your wealth. Annuities are safer for your money than investing in stocks or bonds or simply not investing at all. Babe Ruth, known as the Sultan of SWAT. Babe Ruth came into his glory days during the Roaring Twenties, and his manager was worried that he was blowing through all of his money without putting any of it away. He introduced Babe to an insurance agent from the Equitable Insurance Company, now AXA Equitable from 1923 to 1929. The slugger contributed more than half of his salary annually, purchasing between 35,050 thousand worth of annuities each year. The Great Depression hit the country hard in October of 1929. Babe Ruth was forced to retire from baseball in 1935 due to health reasons. He was unemployed during the worst time in history. But Babe Ruth had his income annuity. It's been reported that he received an income of $17,500 a year, which would translate into an annual salary of more than 290,000 in today's dollars. His famous quote still resonates today. He said, I may take risks in life, but I will never risk my money. I use annuities and I never have to worry about my money. Steve Young. Steve Young was signed out of Brigham Young University into a $40 million contract with the USFL. That was the headline, at least in reality.

Ford Stokes:
Young was given an annuity that would pay out something like $40 Million over the 50 years that followed. Given the fact that some players were not paid for playing in the final season or other seasons of the USFL, accepting the annuity appears to have been a genius move on the part of either young or his agent. The annuity payments have lasted longer than the league, and it's safe to say that he's made more money than probably anyone else involved with the league. To be fair, it couldn't have happened to a nicer guy. Even with a large signing bonus and salary, he continued to wear old jeans and drive a 19 year old Oldsmobile dynamic. In addition to outlasting the league, that annuity even outlasted the Oldsmobile car company with a staggering number of pro athletes going broke after they retire. It's refreshing to read stories about players who made smart financial choices. Shaquille O'Neal. One player who has used annuities to his advantage is retired star Shaquille O'Neal. Over his 19 year career, he generated $292 million in total compensation. In retirement, he is projected to make as much as $1,000,000,000 from endorsements, even after his career is long over, thanks to a wise agent who made him put $1 million annually into annuities from his rookie year onward. Shaq lives off the income the annuity generates with his endorsement legacy for his children. Shaq scenario demonstrates how pro athletes and other prodigious earners can protect themselves against their own personal spending errors.

Ford Stokes:
Allen Iverson. Nba player Allen Iverson earned $200 Million during his career $155 Million in salary and 40 to $50 Million in endorsement deals. Iverson ended up going bankrupt because of his overly lavish lifestyle. In a December 2012 court filing. Iverson told the court that his monthly income was $62,500, but his expenses were 360,000. Luckily for Iverson, Reebok saved him from becoming destitute by paying him an annuity worth $2.3 million in 2001. Iverson made a very smart decision that would ultimately save him. He signed a unique endorsement deal with Reebok. Not only will Reebok pay Iverson 800,000 a year for life, they set aside a $32 Million trust fund that he can begin accessing when he turns 55 years old in 2030. Since he divorced his wife in 2013, he will receive half of the trust. Another way that Iverson will be able to protect himself against future bankruptcy is his access to the NBA pension. He is eligible for another 8000 a month. The lump sum of this pension is between 1.5 and $1.8 million. Most pensions are set up with single premium immediate annuities. Benjamin Franklin. When Benjamin Franklin died, he requested that the 2000 sterling he earned as the governor of Pennsylvania from 1785 to 1788 be divided equally between Boston and Pennsylvania. He wanted the money to be dispersed as a legacy. 200 years later, in the spring of 1990. The balance in the Philadelphia account was valued at approximately $2 million, and the balance in the Boston Trust was about $4.5 million.

Ford Stokes:
This was sometimes called Franklin's IRA. The money in the Boston Trust was invested using a new take on an old idea the annuity using a tax deferred index variety. The money was able to benefit from exposure to stock market growth without stock market loss. This allowed the trustees of the Franklin Institute in Boston to turn an estimated $4,400 into 4.5 million, even while it was paying out an income for 200 years. Beethoven. The social luminaries of Vienna, wanted to keep Ludwig van Beethoven from leaving their country. And so in 1809, two princes and an archduke guarantee the musician a generous annuity. All he had to do was stay in Vienna and compose and perform his music. His benefactors have supposedly been quoted as saying something along the lines of only a man free of worries can create with such genius. Interestingly enough, Vienna also saw its time of economic downturn, and one of the annuities guarantors tried to stop paying Beethoven, claiming financial hardship. Beethoven sued, won and continued to receive his annuity payments. Perhaps this is what inspired the literary genius of Jane Austen, whose character Fanny observes in Sense and Sensibility. People always live forever when there is an annuity to be paid. An annuity is serious business. It comes over and over every year and there is no getting rid of it.

Producer:
So that, of course, was a chapter from the book Annuity 360 written by Ford Stokes and read by the author himself. And great book was filled with a lot of great info and you know I think it's so interesting there you go back in history with the people who have invested in annuities and there's a lot more great info in the book as well. And it's not like you'd be reading more in peace if you were to pick it up. It's an easy read, but it's a good book.

Mike Zaino:
There it is right there. This is the book right here. And it is very thin. You can literally read this book in about an hour or an hour and a half. Right. But I thought one of the the two I guess two people really stood out at me who have invested in annuities, the first being Benjamin Franklin. That just to show the audience that, you know, these things have been around for a very, very, very long time. And then the second thing that that person I should say that stood out with me is was Steve Young, because Steve Young, not only was he a Hall of Fame quarterback, a Super Bowl champion, but the man is also a lawyer. He has his juris doctorate. So we're talking about a pretty smart individual right here. And he had put a lot of his monies, personal money into annuities. Why? Well, there are so many benefits of fixed indexed annuities that, again, they include 100% principal protection. What that means is that you can never do worse than zero market like gains without market like risk. We've talked about over and over and over again, the closer you get to retirement, the less risk you can take. So those are the folks who should seriously consider putting a portion of their portfolio so that they're able to participate in the gains of the index but not be exposed to any of that market volatility like they are with their normal investments. You can grow your money tax deferred. One of the best one of the absolute best features is we have certain annuities. They have zero fees, none of which means that I know people who have advisors out there are paying their advisors to lose money for them this year. That doesn't sound like a good proposition to me, does it To you, Matt?

Producer:
No, it's. You're already losing. Why are you paying more on top of the losses that you're taking? It just doesn't doesn't quite make sense to me.

Mike Zaino:
Right. And then one of the biggest benefits from for the annuities is that you're able to generate an income that you can never outlive. So think about this. When you turn on that income, you're guaranteed another check coming in every single month for the rest of your life, no matter how long you live. And the new school annuities when you die, guess what? The insurance company doesn't keep your money. All right. You name beneficiaries and whatever's left in the account gets passed on to your heirs. So if you have lost money in bonds this year and we expect you have, because once again, The New York Times says that this has been one of the most devastating times in the history of the bond environment, literally over the past 100 years. We think it's a really good idea to consider a bond replacement strategy if you've lost money in the markets this year and you're just want to stop the bleeding and make sure that you can do no worse than zero, yet still participate in any gains. Once it does turn around, then we also think that you should pick up the phone and give us a call. Incidentally, if you want a copy of Annuity 360, I'm glad I'm happy to provide it for you because again, education is a pillar on the show. Give me a call. 704 560 1573, and I'll get you a free copy of this book that could change your life after reading it. At least provide you with the information for you to make educated financial decisions.

Producer:
And you can also go to MoneyMattersWithMike.com And request a copy of the book as well. Just go through the contact page there and you can also set up a free consultation with Mike Zaino. Also, and yes, I said free that it's not a no catch is involved. And we'll get to more on that in a minute. But so so we're talking about bond replacement with fixed-indexed annuities. Talk about a little bit and I know I don't want to get into the weeds because people's eyes might glaze over a little bit, but talk a little bit about kind of on the surface how it works with Bond replacing bond replacement, rather, with fixed indexed annuity.

Mike Zaino:
Yeah. So again, if you want to stop the bleeding in any portion of your portfolio, whether it's your your your stock portfolio, whether it's bonds, you old school way of thought was to have 60% in securities, 40% in bonds. Right. Because the bonds were supposed to be the source of income for you in retirement. So if you're sitting out there and you've got $1,000,000 in your portfolio, I actually had a client come to me that had $1,000,000. You had 600,000 in securities. He had 400,000 in bonds. He was paying one and one half percent for an advisory fee, which is 6000 a year. And over 35 years he had paid 210,000 in fees alone, and his average rate of return was only a little north of 3% had he invested that same 6040. So we're not even talking about reallocating more money to to fixed index annuities. But had he kept the same allocation, just replaced his bonds, the 40%. So now he has 60% in securities, 40% in in fixed indexed annuities. Guess what? His yearly advisory fee is zero. Guess what? His fees total over 35 years is zero. That just saved him 210,000.

Mike Zaino:
The average rate of return for a particular index that we've had over the past time frame, exact time frame, there would have been 6.99%. Let's just round up and call it 7%. So in his example, he would have had a literally $2.8 million difference better than Bonds over that 35 year time period. So I think that is significant when you can say, hey, person A or person B, look at what you're doing now. Look what we have the ability to do for you and the impact that can have over a 30 to 35 year time frame. I mean, that's just that's just mind blowing. And the numbers don't lie, right? Markets are cyclical. Yes. Over time they go up, but they also go down. And the last thing you can afford to do when you're about to retire or when you are in retirement and drawing down the accumulation phase is the last thing you can afford to do is lose money. This eliminates risk of loss. It literally removes it as a variable from the equation so that all you do is participate in the gains.

Producer:
Yeah, in that illustration, as you say, over that 35 year period, it's a $2.8 million difference on the side of the fixed indexed annuity that as you just said, huge. So when it comes to making that big of a difference, I think a lot of people are going to be like, hey, my ears are perking up. So what this guy on the radio say what this guy on the podcast say. So if that sounds like something that you are interested in, folks, you can go to the website. It's MoneyMatterswithMike.com. or call 704 560 1573 the number ask Zaino for a free full retirement plan consultation. And yes, again, I did say free and I did say full just then as well, because this is not something where it's just going to be like, oh yeah, you know, stop eating, stop so much takeout food and you'll save some money like it like, you know, that's barely scratches the surface, right? This is a full consultation. This is this is getting in depth with you. So, Mike, tell us about what listeners of this show will get experience wise when they call you for that consultation. Yeah.

Mike Zaino:
So the first call that we're going to have, it's just going to be about a 15 minute, 20 minute introductory call. I'm going to get to know you a little bit. You're going to get to talk to me personally and not talk with a computer or any of. The other staff members that we have. You will talk with Mike Zaino. And from there, we'll decide if we want to move to a second meeting. That is the full comprehensive consultation. There is no cost to our listeners. There is absolutely no obligation. You're only going to work with me if I can do better for you. So what will I do? I'm going to analyze your specific, your unique financial situation. I'm going to help you discover exactly how much you are paying in fees. I will help you cut out any unnecessary costs that you may be paying, whether it's in an IRA, whether it's in a 401 K or any other type of retirement savings account. And I can also help you with some Social Security planning and Medicare when we just finished AEP. But if you have a special enrollment opportunity, I can assist with that as well. So again, you accomplish that by picking up a phone. 704 560 1573 by going to MoneyMattersWithMike.com Or you can actually check us out on Facebook as well check out the money matters with my Facebook page. Something that I don't think we do a good enough job of promoting on here. Give us a like on Facebook write us a review if you've learned anything after watching some of our episodes. I would love to hear from each and every single one of you. And if I did that, I'd be on the phone for a long time.

Producer:
So you'd never be off the phone. And basically what it would be. But yeah, that's great. MoneyMattersWithMike.com. Also. Yeah. Go to the Facebook page. You have the YouTube page as well, where you can see video highlights from all of our past episodes. And you can link to all of that through Money Matters with Mike dot com as well, or call Mike directly. And yes, I said directly. 704 560 1573.

Producer:
Here's the cost cutter of the week.

Producer:
So in these times of inflation and just general market craziness, we like to save our listeners some money here, Mike, whenever we can and eliminate some costs wherever we can as well. And so our cost cutter this week is talking about investing in indexed universal life insurance in your forties or your fifties. This is something I think when people think about investing, they don't necessarily think about life insurance because all they think about is the death benefit that's paid out. When they're gone, they're like, Oh, what good is it going to do? Me personally, but this is something that I think a lot of people might want to consider.

Mike Zaino:
It is Matt and especially it seems unlikely that we'd be mentioning life insurance in a cost cutter segment of the show. But if you're in your forties, if you're in your early fifties, not late fifties so much, but you're in your forties or younger thirties or again in your early fifties, investing in an indexed universal life insurance policy pre retirement will help eliminate future tax increases and it can generate more tax free income starting at age 67 and throughout lasting throughout your retirement. So if I take, say for an example, a 55 year old and this is probably pushing the limits of where this makes sense. Right. But if I take a 55 year old person who invests $2,000 a month into a ten year indexed universal life insurance, which means he's going to pay 2000 a month for ten years, so 24,000 a month, he will have paid 240,000 in there. After those ten years, he no longer has to pay any monthly premiums. And because of a tax code that the IRS makes available, it is estimated that he'll be able to take tax free withdrawals of $25,600 a year each and every year, starting at the age 67 for the rest of his life. And on top of that, he'll still have 480,000 as a death benefit to protect his family in case he should die sooner than later. So, I mean, if you put in to 40 and you're able over ten years to take out 256.

Mike Zaino:
All right. That's what, a 16,000 gain. And that's just assuming he only lives ten years past 67. Well, guess what people are doing now, Matt? They're living longer. So if he lives another ten years, well, that's another 256,000. So now he's more than doubled his money. And if he's fortunate enough to make it to 97, he will have more than tripled his money, still have the ability to leave his family almost a half a million dollars behind. There are only two types of truly tax free investments. The first one is a Roth IRA, and then the other one is life insurance. And why not take advantage of both of these to generate that tax free income or tax free withdrawals that you're able to supplement your lifestyle with in retirement without having to pay your greedy Uncle Sam. Both of those will save you roughly 20 to 30% by eliminating those taxes, that tax burden that you would have to take otherwise and from elsewhere, from other traditional IRAs or traditional 401. Ks or 403 B. So I just think that, again, if people have the knowledge and they put the knowledge into practical application with somebody who understands how to, number one, get them started and number to monitor their progress, then I just think it beats the alternative. Matt It's just smart planning.

Producer:
It really, really is. And that's the whole point of the show is taking that knowledge and putting it into practice and putting it into practice with someone who can really help you make the most of that knowledge, make the most of years of experience in working in this particular. Area of helping people cut those costs like we're talking about here in our cost cutter And, you know, really take some steps that you might not have even thought of or knew existed because before today, you know. Listener and Mr. and Mrs. Smith out there, have you even heard of indexed universal life? You know, a lot of you probably are saying, no, I really hadn't heard of it. And so you didn't even know it was an option until Mike Zaino.

Mike Zaino:
Dolgen You know, I had a client come to me earlier last month and he said, Mike, I've heard about IUL. I said, Where did you hear about it? He goes, Well, I saw it on Facebook or, But I've had the hardest time trying to contact somebody who could explain it to me and find a good company that's been around forever, that has a track record of of keeping their promises. I say I happen to know a guy and he's like, Really? Who? I said Mike Zaino. And he just started cracking up and when I did, I showed him a couple of different options. You know that. From from a dollar perspective, as far as monthly contributions as well as a couple of different ways of structuring it. And he was just blown away by what the, you know, the simple life insurance policy could do for him long term. I mean, and a lot of our listeners out there probably don't understand the fact that books have been written and I'm talking about multiple books have been written about this very, very topic. The retirement miracle retirement nest egg, you know, be your own bank, infinite banking. I mean, I can rattle off several different books that have been written on the power of utilizing life insurance as a tool in your overall financial portfolio, I think and truly believe. 20 to 30% of your portfolio should be in life insurance. And I can explain to you all the benefits why in our complimentary consultation.

Producer:
Yeah. And if you would like that complimentary consultation, just call Mike. That's 704 560 1573. You can also go to the website MoneyMattersWithMike.com. Well Mike, just about a minute left in the show it's flown by here once again. But of course, as we get closer to Christmas, you know, we're going to be talking a lot more about people spending money and how to not spend too much so it doesn't wreck your retirement plan. I know. So once we get closer to the holiday, we'll be talking about a lot of that as well. But it's creeping up on us here. But I hope that everybody is having a great holiday season so far. I hope you are as well. Mike and I have really enjoyed it this week, as I always do. And I hope to once again see you next time around.

Mike Zaino:
Absolutely. Matt, thank you so much for being our co host people out there and listener land. Thank you again for tuning in to the show, especially at the new time at 9:00 AM. If you are new to the show because you are used to listening to the previous show that was on during this slot, I thank you for being loyal to the time slot. Look, if you are in that retirement red zone, that's either within five years of retirement or you retired in the past five years, please give me a call so that I can test the strength of your current plan. All right. I hope you enjoy the rest of your weekend. And as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard-earned money to schedule your free no-obligation consultation visit MoneyMattersWithMike.com or pick up the phone and call 704 560 1573.

Producer:
Not affiliated with the United States government. Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks to the property of the respective owners AmeriLife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as-is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

Are you concerned about market volatility, rising taxes, economic uncertainty, and how it could all affect your future in retirement? Then tune in to Money Matters with Mike, to learn how you can protect and grow your hard-earned money. Money Matters with Mike every Saturday at 9:00 AM right here on FM 100.1 and AM 1340. Schedule a free no obligation consultation now at MoneyMattersWithMike.com.

Producer:
Remember, all of Mike's listeners receive a free financial consultation just for listening to the show. Visit MoneyMattersWithMike.com To learn more and schedule an appointment. Thanks for listening to Money Matters with Mike and subscribing wherever you listen to podcasts.

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