Keeping Money Safe During Scary Times for the Markets

10.27.23: Audio automatically transcribed by Sonix

10.27.23: 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 of 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 from Fort Mill, South Carolina. Happy Saturday people. What a great time 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, let me tell you, we are absolutely bringing it again. We have a packed show, but on today's show we're going to mainly discuss some smart, safe alternatives for your retirement savings. 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. Yeah, plenty. Plenty of meat on this bone. It's a meaty bone. Today on this.

Mike Zaino:
Show we love. Hey, we like meat.

Producer:
That's right, that's right. We we do enjoy some some good meat to chew on. And we got plenty of it coming up on the show today. No, I'm doing great. It's been a busy kind of a hectic week. I know that you've had a pretty busy week as well, especially after last weekend's show, and things have just kind of been explosive for you.

Mike Zaino:
Yeah, got more phone calls this week than I think I ever have received. And it was a lot about that visa rewards card that we'll touch on a little bit here a little bit later in the card, a 100% cash back card. But, you know, things are exciting. You know, today my Georgia Bulldogs get to go up against their nemesis and the Florida Gators. So hopefully we'll be you know, making it rain down in the swamp as far as throwing points up on the board is concerned. And you know I hope they don't eat those words. But you know what? I'm going to talk a little trash while I can.

Producer:
Exactly I mean hey might as well. And with, you know, back to back national championships under your belt, you can right now. But yeah. So great. Great weekend. After a nice busy week here we're talking all things all things money with folks. And you know that's really what the show is all about. Not just talking money but also educating you about money and how to make your future better and giving you a lot of the resources that you need to do that. And we do that both here on the radio, on WRC. We also do it as a podcast. Every single episode of the show gets uploaded as a podcast. Each and every week, and you can find it on your favorite podcast app. No matter which one you use, you can go to our YouTube channel. Lots of highlights from the show there and some special content. Just search for Money Matters With Mike on YouTube, and don't hesitate to reach out to Mike a couple of different ways. One is on Facebook. There's a, you know, great Facebook page for the show. Mike's very active in talking with all the listeners who do reach out there. Then there's also the website MoneyMattersWithMike.com and the phone number 704 560 1573.

Mike Zaino:
Also, folks, if you prefer to email me, you can email me at Mike at MoneyMattersWithMike.com.

Producer:
And hey that's that's easy to remember. Love that love things that are easy are good for me. One thing that might not be so easy for a lot of people, Mike, is the Medicare annual enrollment period, which is underway right now through December 7th. It started earlier this month. And let me tell you, Medicare can be confused. And so I feel like this is something that people really do need a lot of help with, you know, just navigating all the choices because it can be like, you know, I was refer to Medicare as like the alphabet soup.

Mike Zaino:
Yes, you do. And I do the same thing ever since I heard that from you, because you got part A, part B, part C, part D, you got Medicare supplements, you got Medicare Advantage. Things are termed Medigap insurance, right? It can be extremely confusing even for those who've been on Medicare for many, many years. And so, you know, one thing I wanted to let our listeners know is that by reevaluating your plan each and every single year, you will likely find that you can save money on some of your Medicare expenses. And I have found that the savvy retirees, they do a Medicare coverage check every single year, just in case they have an opportunity to save a little extra money. Because let's face it, money in your bank account is a lot better than money in the. Governments. Wouldn't you agree? There you.

Producer:
Go. And you can go to Money Matters with My.com if you want help with your Medicare. Once again, it's money matters with My.com. Or you can give a call to (704) 560-1573. Well, Mike, as you mentioned, a jam packed show here today. Our quote of the week coming up in just a minute. We're also going to touch on, you know, going a little bit more in depth. We talk about why we do the show a lot and why you're so passionate about doing this show, but we wanted to actually hit five points on exactly why that is and really spell it out for people. So we'll do that before we even get into our quote of the week. But then after that, we'll talk about safe alternatives to bank CDs. You know, we had a couple of bank failures earlier on in the year. And, you know, that scared a lot of people about putting their money in the bank, period. So better than putting it under your mattress. We got some alternatives for you because if you put it under your mattress, you're just going to be losing it. At that point, you might think it's going to be safe, but you're going to be getting poorer.

Mike Zaino:
Matt, literally this morning I had a conversation with a gentleman who wanted me to take his $300,000 that he had and put it to work for him. And I said, well, you know, tell me about where your money is. What kind of instrument is it in? He said, it's in a suitcase under my bed. And that happened. This is no joke. As a conversation this morning, people are just not trusting those banks, especially after all the failures that we've had.

Producer:
Yeah, and you know what I mean. Human nature. You just can't blame people for for losing trust in those institutions right now after after that has happened in such recent memory. But yeah, we'll we'll go more in depth on that and the safe alternatives for it and how you can get, you know, a better return and you can beat the bank CDs even in today's high interest rate environment out there.

Mike Zaino:
Absolutely. Yes you.

Producer:
Can. And we'll talk about protecting and growing your hard earned money. Also, fixed indexed annuity could be a good thing for you. And we'll go over some ways that you can help build your own personal pension. The value of that as well. We'll get to an inflation demonstration maybe hopefully if we actually get to it before we call it quits on the show today.

Mike Zaino:
Now normally have a packed show. There is no doubt if we get to it and if we don't, we'll just continue next week with the same discussion.

Producer:
Exactly this. That's a big if this time around. But yeah. So you know, normally this is the part of the show, if you're a frequent listener, you'll say, oh, they go right into the quote of the week every time and get things rolling. But right now, before we do that very thing, we wanted to spell out why we do Money Matters With Mike and why Mike specifically does Money Matters With Mike and why, you know, in the greater Charlotte area, we want to bring this show to you each and every week. It's about more than just, you know, getting on the radio or on the podcast and hearing ourselves talk. It's about a lot more than that because the show is not about us. It's not about myself. It's not about Mike. It's about you, the listener.

Mike Zaino:
Yes yes yes it is. And so I guess the number one reason why I do the show is the fact that we want to educate both retirees as well as pre-retirees, by providing valuable information and insight. Right. Helping you make informed decisions about your financial futures is what we are about. And we understand that knowledge is power. But I'll go a step beyond that and say that it's actually applied knowledge. If you're taking the information and putting it into practical application, we don't want our listeners or our clients to ever feel powerless in retirement. Okay. And that includes staying current with the latest developments, the latest trends and the best practices in retirement planning, because the financial world keeps on moving and we don't want our listeners left behind. So that is the number one reason. Okay. Number two, we want to address all of the challenges that retirees and pre-retirees often encounter while offering smart strategies as well as solutions to help you guys navigate all of those obstacles. Okay. Number three, we want to empower you by offering smart financial decision making through sharing our knowledge, our expertise, as well as giving you examples of how we are helping listeners and clients literally each and every day, every single week, every single month throughout the, you know, almost 15 years that I've been doing this.

Mike Zaino:
Okay, I want to promote financial literacy because so many people feel like financial freedom is just simply out of reach, especially in today's day and age. Well, I'm here to help answer your questions and to help you understand what you need to do in order to reach your own retirement goals. And then, you know, lastly, I want to serve as your trusted guide. I'm here as a resource for any questions to help you manage the complexities as far as preparing for and thriving in retirement. And the thing to remember, folks, I am just a phone call away, so you need to reach out to get started on your own custom retirement plan by going to our website, Money matters with Mic.com by calling me 704 5601573, or by emailing me at Mike at MoneyMattersWithMike.com, just to schedule your no obligation consultation.

Producer:
I could not have said it better myself. So do that folks. All of those different contact methods you can use to get in touch with Mike, just a click or a phone call away. All right. Let's get into it now. Let's waste no time in giving our much awaited and anticipated quote of the week.

Producer:
And now wholesome financial wisdom. It's time for the quote of the week.

Producer:
And our words of wisdom this time around come from a renowned American writer, teacher motivational speaker, William Arthur Ward, who died back in 1994. But he was very well known for speaking about personal development, leadership, the importance of embracing your full potential. And he said this once, quote, opportunities are like sunrises. If you wait too long, you miss them. Mm hm.

Mike Zaino:
It's funny, but it's true, isn't it? Oh, yeah. I'm going to spend a little bit of time on today's meat on the bone just discussing his quote, because it emphasizes the importance of seizing opportunities but promptly not waiting too long, especially in the world of business, whether it be stock investments, whether it's real estate, whether it's private equity deals or whatever it might be, the quote can be applied to various scenarios. And so I wanted to discuss some opportunities and areas where that quote is actually relevant.

Producer:
Hungry for something to chew on? Here's some meat on the bone.

Mike Zaino:
Think about early stage startups, right? Investing in or starting an early stage company can yield significant returns. So imagine had you invested in Amazon or in Google as they began as start ups, you'd probably be independently wealthy right now. And so by identifying promising start ups and getting in on the ground floor, you're potentially able to significantly benefit from their growth. Okay. As well as technological advancements, they can lead to new investment opportunities. So, you know, you might have heard things discussed as far as the blockchain. And you have no idea what that is or artificial intelligence. And you start thinking of how Terminator is actually becoming a reality or green energy. Bottom line is, being an early adopter or an investor in innovative technologies can also be very highly rewarding. And then there are things called initial public offerings or IPOs. So when companies go public, they often experience significant stock price increases in their initial days of trading. And to capitalize on that, you need to act quickly when IPOs are announced and understand what type of potential those companies actually have, well, then you can apply it to real estate. Okay. The real estate market can often opportunities, especially in emerging markets or areas with growth opportunities, properties that are in prime locations will end up appreciating much more rapidly.

Mike Zaino:
So being quick to invest in the right opportunities can be profitable. I kick myself in the rear end for not investing in more real estate. Back in 2011, when prices were at rock bottom. I think a lot of our listeners can relate to that. Okay. And then there's this thing called cryptocurrency, right. That cryptocurrency market is known for its volatility. And if you're able to identify promising projects early and invest in them when they are relatively unknown, you can potentially see substantial returns. But obviously crypto is going to come with much, much higher risk. So in all of those opportunities, along with numerous others, it is important to conduct thorough research. It's important to understand the associated risks. You need to have a clear strategy in place. And while quick action is absolutely essential, it should be combined with informed decision making in order to mitigate potential losses. Okay, remember that not all opportunities are suitable for every investor and your risk tolerance and investment goals. That is what should guide your choices. Matt.

Producer:
Yeah, that's absolutely right. I mean, you've got to take your own personal situation into account. Obviously not just do something because your cousin's doing it, your friend's doing it, your aunt, your uncle, your buddy or whoever is doing it. You need to make sure that you are looking out for number one when it comes to your money. Because what's great for somebody who lives down the street or your relative or whatever might be absolutely terrible for you in your situation, especially if, you know, let's say, let's say your cousin goes off and buys a bunch of real estate and, you know, that's great for them, fits right in with what they want to do. But, you know, you don't quite have the resources to do it. You might have to take out loans to do this, that or the other and get in over your head. And, you know, it just might not work out for you as well as it does for them. So your own personal situation has got to be taken into account.

Mike Zaino:
It absolutely does, Matt. But one thing, one thing. And I firmly believe every listener should do and without delay is. Contact me today for more information on the 100% Cash Rewards Visa debit card. You heard that right, folks. A card that is offering dollar for dollar rewards. We introduced the card to our listeners last week, so if you missed last week's show, please make sure and you go back and listen to it on podcast or go on Money Matters with Mic.com or anywhere else. But for real, folks, okay, this card matches every dollar you spend with the equivalent to spend in their online marketplace, where you can shop for well known brands and everyday items. So if you spend $75 on filling up your car with gas, you're going to get $75 in reward dollars if you pay your utilities for the month and it costs you $300, you're going to get $300 in reward dollars. It truly is that simple, folks, and I have all of the information on you can how you can go about getting your card today okay, through an exclusive offer. So contact me at (704) 560-1573. Mike at MoneyMattersWithMike.com. Reach out at MoneyMattersWithMike.com or whatever you have to do. But I'm telling you, this is one that you don't want to let the sun set on. Yeah.

Producer:
Carrier pigeon, pony express, send up a smoke signal. Something to get in touch with Mike. Whatever you can do, do it. Because that we went in depth, as Mike said on this last week during the show. So, you know, we won't linger on it too much here, but it's just sounds like something that is really a fantastic opportunity to take advantage of, especially before this deadline coming up. That would mean that you would have to pay a little bit more. And it's not. It's trust me, not a bad deal that regularly anyway when you have to pay just kind of nominal fees to to make use of it. But you can get rid of those fees altogether if you take advantage of it. While the getting is good here.

Mike Zaino:
Yeah Matt alluded to it. It's 25 bucks, folks. So we're not asking you to spend an arm and a leg. $25 gets you the card. But there is a promo going on where if you get it before the launch on November 13th, the card is free and they waive the annual fee for life. So I'll let that cat out of the bag right there. But I mean, again, you don't want to delay. Give me a call today.

Producer:
Free fits right into my budget and I'm sure it fits right into yours. Folks. MoneyMattersWithMike.com once again is the website (704) 560-1573. If you just want more information about it, it's a great opportunity for for everybody to at least explore and, and, you know, get out there and see what it's all about. All right. So speaking of, you know, getting more money in your pocket, which is something that this particular debit card that we were just talking about can do definitely 100% rewards. Right. That's when the last time I heard that was, I don't know, never, never. But but getting more money in your in your wallet is another thing that we always like to talk about here. But also, you know, people, people have been kind of scared of, you know, putting money into banks this year basically because of the bank failures that we had. And we can go more in depth on that in just a little bit about the particulars of those. But, you know, people are also kind of spooked out a little bit. You know, this is the weekend before Halloween. So people are spooked and not by kids running around in costumes. They are spooked by the stock market here lately, the ups, the downs and unfortunately, more downs than ups here lately with the S&P 500 as of a little earlier this week, having fallen about 7.5% since the peak in July.

Mike Zaino:
And I think Matt with a lot of folks don't understand is when the market drops a specific percentage, people have to gain a lot more than that percentage just to get back to even. Okay. And I've done this, you know, time and time and time before on our shows. But, you know, if the market drops 20%, for an example, you actually need to get 25% to get back to even if it drops 30%, you need to gain 43% just to get back to. Even if it drops, God forbid 40%. You need to gain 67% just to get back to even. And if it has another cataclysmic, um, you know, catastrophe like it did in 2008 where the market lost half, well, then you have to gain 100% just to get back to even. So, you know, like you said, the S&P has already fallen 7.5% just since July, like late July. So we're only talking about a few months. And in order to get back to even, you're going to have to gain a lot more than that. Yeah.

Producer:
And that's what people don't necessarily think about is like, oh, well, if I lose 50%, then I gain 50%. Well, you're only back to 75% of where you were. You've still got to gain that other 25% from where you were. So yeah, it's it's you know, it can be confusing unless you just break it down and look at it like that. It's not not a fun scenario that you want to be in. So you need some safety, which is which is what we're about to go into here.

Mike Zaino:
Yeah. No, one 100%. And if you don't understand the math or understand how that can affect your retirement dollars, like especially if you're in the retirement red zone, that's those five years right before you retire or those five years right after you retire. It is crucial that you're not putting yourself in a position to lose substantial money. Okay? Because we want your retirement dollars, the dollars that you've spent your entire life working for and squirreling away for the golden years. Right? We don't want you a skinny squirrel in retirement, so let's make sure that we get you on point and fully confident in your plan, that you can retire with confidence.

Producer:
And be a nice fat squirrel in retirement. That's that's what we want you to be. But, you know, and it really is with the turmoil in the markets with, you know, if you got those third quarter statements for your, you know, your retirement accounts and things like that, you're probably just worried a little bit.

Mike Zaino:
Shaking your head, shaking. Got mine.

Producer:
Shaking your head, shaking in your boots, all the things. But it's important to protect the money that you have, especially as you age. You are running out of time, as you said, in that retirement red zone, especially those five years before retirement, five years into retirement, you are running out of time to make up for any losses that you experience. So, I mean, this is the reason why we we talk about safety. And then, you know, most people though, Mike, when they think of safety, they'll think of a product like a bank CD, an account like a bank CD, because that's just traditionally been seen as one of the safest places to put their money.

Mike Zaino:
Yeah. And I think to point out to the fact that, you know, especially once you retire, guess what? You're no longer doing, you're no longer contributing to your 401 K, right, or your 403 B or whatever employer sponsored plan that you have. And you also can no longer contribute to your IRA because you're not working anymore. You don't have earned income. So once you leave the workplace and you retire, most folks begin their decumulation phase. That's when they start drawing down on their assets to start receiving the income that they need to live on in retirement, which means that protecting what you do have saved is absolutely paramount. Okay. And because of rising interest rates, right, because the banks are able to offer these more attractive rates for CDS, which stands for certificates of deposit, um, you should know that the current interest rate environment has also made other safe money alternatives more attractive as well.

Producer:
Yeah, it definitely has. And you know, I mean, we've got a couple of different things that we can compare to a bank CD. One of those which we've talked about before on the show is something called a mega, a multi year guaranteed annuity. The other, which we're going to go more in depth on specifically today is a fixed indexed annuity. Comparing that to a bank CD. And the first sort of comparison that we'll draw here, Mike has to do with financial reserve requirements.

Mike Zaino:
Yes. Okay. So we want to help our listeners understand what happens to their money when they place their money inside of a bank CD. Okay. So when you put your money into a bank you've made the deposit and I don't care what bank it is, okay? Your bank is only required to keep 10% of your money and every other account holders money in reserves. That is the Federal Reserve requirement, while the remaining 90% of your money and everybody else's money is actually used for other bank operations, including loans that are made to other customers. Okay, in comparison, highly rated insurance companies that you issue fixed indexed annuities, for example, which is another retirement tool for safe money protection. They are actually required by law to keep 100% of the dollars that you give them in reserves. So let me ask you, where would you rather place your hard earned retirement savings with a bank that only has a 10% reserve requirement, or with a highly rated insurance company that is required by law to keep 100% of your hard earned dollars in reserves?

Producer:
Well, I know what I would do, and I'll let our listeners answer that for themselves, but I think it should be pretty obvious which one of those you would feel better? I know which one I would feel better about. Yeah.

Mike Zaino:
No, absolutely. And so when you think about this, okay, when people start taking money out of banks because of the, you know, economic conditions and they need more banks and or more money rather more. And then more and more banks start recognizing that their account holders are withdrawing at a rapid rate. Okay, that can cause what is known on a run on banks. And we'll talk more about that. And that's why banks go out of business okay. But guess what folks? Insurance companies don't go out of business because of the fact that they are required to keep all of their account holders money on hand, plus a surplus. Yeah.

Producer:
And that's why so many of these companies, you'll see, have been around for 100 years. Plus, you know, some of these major carriers like that really have been and some of the smaller ones as well have been around for that long. And it really does speak to the fact that, you know, they they have that staying power, unlike maybe some other institutions do.

Mike Zaino:
Yeah. I think the oldest carrier I can think of, there's two right off the top of my head. One was founded in 1848. Well guess what, that's 175 years ago. And the other one was in 1851, which is 172 years ago. I mean, that's a long time, folks. Don't guess. You know anybody from that long ago, do you? I don't think so. Right.

Producer:
No, it's, you know, all of Abraham Lincoln and his buddies are all all, you know, dead and gone at this point.

Mike Zaino:
It is funny that you mentioned Abraham Lincoln because the one that was born in 1951 actually had him insured and paid a death benefit to his family. That is literally the case with that company that I'm speaking of. So funny that you mentioned good old Abe.

Producer:
Yeah, good old Honest Abe. And wow, that's that's kind of kind of crazy. But yeah, I mean, that's how long that they have been around. So, you know that they've got the staying power there. There are also, you know, some some tax implications to talk about as well, Mike. But you know, when we compare a bank CD to a fixed indexed annuity or an FIA, you might hear us use that term as well. What are those differences that we need to know about?

Mike Zaino:
Yeah, I mean with a when your money is in a bank CD, for example, you're required to pay taxes each year on any of the interest that you earn. That's every single year. Now in comparison with a fixed indexed annuity, your investment is tax deferred. So it's very similar to a 401 K. And you're only going to pay taxes once you start your withdrawals. And you can take, you know, lump sum withdrawals. You can set it up for periodic income or for a guaranteed stream of lifetime income that hits your bank account each and every single month you pass away. And then whatever's left goes to named beneficiaries. So, you know, there's a lot of tax implications that may work out much more favorably for folks in fixed indexed annuities than they do in CDs.

Producer:
Yeah, absolutely. And one other thing that, you know, we wanted to to mention here for people is, you know, to be cautious with your bank CDs because of those bank failures that we've been kind of mentioning, peppering throughout our conversation here and there. And that all started really the big catalyst for it was Silicon Valley Bank back in March, on March 10th. Talk about that. And then what happened after that in in those really just a few days after it.

Mike Zaino:
Was it was like a domino effect, wasn't it? It was a crazy week. Yeah. That was not a great week. Markets tanked that week. Why? Because banks were going out of business I mean like like dropping like flies okay. Silicon Valley Bank failed on March 10th. Like you said, it was the 16th largest bank in the United States at the time of its failure. It was also the largest bank by or bank by deposits in the entire Silicon Valley. And if you think about who lives out there, that's where all your, you know, your tech giants are. That's where all your, you know, movie stars and Hollywood billionaires, Beverly Hills, they're all out there. And that's who they all banked with. Silicon Valley Bank. Well, then guess who else failed on March 10th? Okay. Signature Bank was a New York based full service commercial bank, which also failed when customers were spooked, okay, by the sudden collapse of Silicon Valley Bank. And they withdrew more than $10 billion in deposits on that one day. And then back on March 16th, we actually had 11 of the biggest banks in the country announce a $30 billion bailout package for First Republic Bank.

Mike Zaino:
And the reason they did that, they wanted to try to prevent that California based bank from becoming the third bank to fail in less than a week. So, you know, the collapses at Silicon Valley Bank and Signature Valley Bank were get this, folks. The second and the third largest bank failures in the United States. And historically, if you look at the 20 largest bank failures in the United States, ten of them happened between. 2008. In 2010, which was what? The financial crisis. Right. What happened in 2008. So, you know, we like to give our folks warnings and please, please, please heed this warning. Whatever you do, do not hold more than $250,000 in any one bank at any one time. And always make sure and verify that the bank you use is FDIC insured. That's the Federal Deposit Insurance Corporation, because they insure deposits of up to $250,000 per depositor, per insured bank. Okay. Yeah. Don't hold. Don't hold more than $250,000 in any one bank at any one time.

Producer:
Super important to remind the listeners of that. And, you know, because you don't know you don't know if that bank is going to be the next Silicon Valley bank, the next signature bank, the next Washington Mutual, which is the biggest bank to fail, which I remember very well back in the in 2008, it was actually had a friend who I went to church with at the time, who was an employee of Washington Mutual, lost his job the whole deal because of WAMU going under. And so it was not a not a good time. And so, yeah, you don't know, nobody has a crystal ball. But just keep that in mind. $250,000 in one bank at a given time.

Mike Zaino:
And it's not per account. A lot of people think that they can hold 750 or $1 million and just split it up per account. It's actually per depositor. So you need to make sure that you don't hold more than a quarter million in any one bank ever, at any one time.

Producer:
That's absolutely right. And folks, if you want to know more about that or any of the safer alternatives that we're going to be talking about here and have talked about so far, remember, at any time you can go to MoneyMattersWithMike.com to reach out. That's MoneyMattersWithMike.com. Well another aspect of this comparison here Mike between bank CDs and fees fixed indexed annuities is protection against inflation. And boy that that's something that hits home doesn't it?

Mike Zaino:
It definitely does. Especially when you talk about heck, just last June I think inflation peaked at what, 9.1%. And traditionally we've always joked about what CD stands for. We've always called them certificates of depreciation because typically they don't come anywhere close to keeping up with inflation. And while they do bank CDs, we're talking about do offer some predictable returns many retirees are looking for, you know, not only protection, but they're also looking for growth. Okay. And that's because inflation, that silent tax has been eating away at American's buying power for most of the last four decades, and have definitely picked up and not in a good way in a very, very bad way since 2020.

Producer:
That's absolutely right. And you know that calls into question then okay, a bank CD, even in an environment like we're in today with a higher interest rates, you might be looking at at a bank CD and even at the brick and mortar banks, they're much better rates than we had several months back before the fed started raising interest rates, of course. But then you think about are there alternatives because there were, you know, before, so before the interest rates started going up? We've done a segment here on the show previously and will do again, I'm sure, called beating the Bank CDs and where we looked at alternatives that could get you a higher rate of return but still keep that money safe. So now, even in this high interest rate environment, even with better interest rates on those bank CDs, and we've seen in a long, long time what products are out there to help you? You know, people really get more for their money.

Mike Zaino:
Yeah, I mean, we alluded to it and we said it, you know, time and time again, we are firm believers of the appropriate use of fixed indexed annuities. And it may be right for some folks listening. It may not be right for other folks. You really do need to qualify to have these as a portion of your portfolio, but fixed indexed annuities or fees allow investors to track the performance of a stock market index without subjecting their hard earned money to actual volatility of the stock market, and all the risk that is inherent with the fluctuating prices of that index. And a lot of fees even have very attractive features like bonuses. They have guaranteed simple interest roll ups, which means that every year you know that your money is going to grow up by certain percentage, right? So you are able to build both a smart and a safe retirement plan by utilizing fixed indexed annuities as a part of your plan.

Producer:
Yeah, and there are some big benefits really to doing just that, as you alluded to. Kind of expand on that, if you will, Mike, how people can build that smart and safe retirement plan with fees.

Mike Zaino:
Yeah, because, you know, the fixed indexed annuities they provide you or can provide you a guaranteed income stream for your entire life, no matter how long you live. So they're seen as an alternative to bank CDs. They're definitely seen as an alternative to traditional bonds, because guess what? Bonds have fees and they can go down like we saw last year when they had their worst year in history. Right? So over the last decade, we've started to see a lot of smart individuals start replacing their bond portion of their portfolio with fixed indexed annuities because they are contractually guaranteed to never lose a penny of principal. All right. In other words, it's a way for them to protect their retirement savings from market volatility. And they're designed to provide protection from market downturns while at the same time providing potential for growth. And so the main benefit, the main benefit is the fact that you have protection from market volatility. You don't have to worry about what's on the news, whether it's local, regional, national or international. Because let's face it, folks, how much of that do you have control over? The answer is none. Okay, but how much of that can negatively impact the performance of your portfolio? Well, the answer is all of it. Okay. So fixed indexed annuities provide protection from the volatility because it's linked to the performance of an underlying stock index. So the income itself is not directly affected by short term market fluctuations. And that makes them a very attractive option for investors who are looking for both a steady and reliable stream of guaranteed lifetime income.

Producer:
Yeah, we talked also, you know, as we were going through some of the compare and contrast things here about tax deferred growth that that FIA's offer. Right? I mean, that means that, you know, any earnings on that annuity not subject to taxes until you start making withdrawals. And then I think my, you know, aside from that, the protection from market volatility and you know, but still getting growth, the market like growth without the market risk is a lifetime income stream. Because that's the thing is that people are looking for because of all the concerns after the bank failures, because of the concerns over the stock market volatility of late, people really are looking for safety. And safety to me means not only safety of my money right now. Like it's not going to go away because a bank fails. But it also means. A lifetime income stream. An income stream that I cannot outlive. And that is, I feel like worth more than anybody's weight in gold.

Mike Zaino:
Yeah, I believe it is as well. Matt. And, you know, I read a lot of business related books, and I'm always picking the brains of people who are smarter than I am, who are wealthier than I am. And I think that a very common denominator amongst the wealthy is the fact that they have more than one stream of income. Okay. And so, you know, when you're talking about a lifetime income stream, you don't worry about breaking your budget, right? You're able to enjoy the retirement income that you can count on and that will never last, you know, or should I say, expire before you do. It will last as long as you do. And in the opinion of this financial professional, right, fixed indexed annuities are suitable for up to about 70% of your entire portfolio. Now, again, that depends on each and every individual's personal situation. So typically our clients are using extended annuities for anywhere between 20 and 50% of their retirement savings. And while the risk is allocated to smart risk investments that provide further opportunity for additional growth. Right. So again, every individual is different. Some of you may want this. And guess what? You're not going to qualify for it because you don't have enough in liquid reserves in case of an emergency. Right. We want to make sure that if your water heater bursts, or if your Hvac or your heat pump goes out, you're not tapping into long term retirement savings. So we want to make sure that you definitely have a retirement emergency fund that you can count on for things that pop up, as well as having those guaranteed lifetime streams of income. And then something to think about is, is, you know, if you don't have or if you don't think that having a personal pension is important, look at what happens when you try taking pensions away from people.

Producer:
Yeah, it used to be that every major corporation out there had a pension. If employees you would go, you would work 40 years for the same company, you'd retire, you'd get the gold watch, then you'd go home, enjoy your retirement, and you would start collecting those pension checks that they would send you each and every month. That has pretty much gone the way of the dinosaur now, aside from a very few. I mean, of course, there are the United Auto Workers, for example. That's one of the things that the strike has been over there is because of, you know, changes to pension plans and things like that. So there's definitely some examples, even just from this year, about how employees respond when employers start trying to take away their pensions and other workplace benefits. And actually, the first example here, Mike, was the Teamsters union earlier this year threatening to strike against the trucking giant yellow after that company missed health care and pension payments. Subsequent to that, yellow actually ended up declaring bankruptcy and going under. You won't see those yellow branded transfer trucks and tractor trailers going up and down the highways anymore because they they're just gone.

Mike Zaino:
Yeah. I mean, yeah, that that was very, very unfortunate for the folks that were counting on the that health care and counting on those pensions in retirement. I mean, but the fact of the matter is, like you said, I mean, unless you're fortunate enough to work for a company or the government that still offers a pension, that's called a defined benefit plan, right? Where the company is footing the bill for your retirement. Most companies have gone to a defined contribution plan where they're putting the onus and the responsibility on you, the American public. And the sad fact of the matter is that most of the Americans are not financially educated enough to understand the power that they now have. And so most are, you know, suffering in retirement because of their inability and their lack of contributions over time to allow compound interest to work in their favor. So it's not just the Teamsters, though, Matt. There were several, several, you know, different examples that we were going to point out. I know that auto workers, right. They used to have lifelong health care and pension income. And those folks guess what? They want it back. And that's from GM Ford. You know, just all of them want it.

Producer:
Yeah I can cannot blame them at all for that because you know you have that if you have that guarantee you don't want that guarantee to go away. That's what a. Guarantee is it's going to be there and you try to take that away. It's not a good situation. And this is not just confined to the United States either. I mean, this big pension change, you might remember, made headlines earlier this year in France where, you know, garbage workers were just, you know, leaving the sanitation workers just leaving the garbage on the street. And it was just really piling up because there was this nationwide strike over pension changes there. So that's another example.

Mike Zaino:
Yeah. And they weren't the only ones in Europe. I mean, I remember when they tried to raise the retirement age or actually they did raise the retirement age from 62 to 64 in Europe. And you know, people were up in arms about that as well. So, I mean, you know, the last thing we want to do is leave garbage piling up because that can get pretty stinky.

Producer:
Yeah, it definitely can. You know where else it could get really stinky if you like garbage pile up beside aside from France is in the heat of the desert in Las Vegas because those hospitality workers there were overwhelmingly voting this year to permit a strike against the hotels and casinos. Also, another union flight attendants, 99.7% of flight attendants represented by the labor union voting to authorize a strike. Portland, Oregon The teachers association there said that a strike would start November 1st of this year unless an agreement with the school district was reached before then. So all of these, in one way or the other, have to do with benefits, including pensions. And that is, you know, something that just illustrates the importance of having a pension, which is an income stream that you cannot outlive.

Mike Zaino:
And that's a guaranteed stream of income. Exactly.

Producer:
So important.

Mike Zaino:
It is. And so, you know, I actually have a strategy that I learned from multiple mentors who make a lot more money than I do. And what they do is they, they do a, a, a laddering, if you will, of fixed indexed annuities. And they'll buy one one year and then buy another the next year and do that for several years in a row. So I started thinking and looking at, you know, what I might be able to do. And I have a strategy that when I'm 55, I'm going to start purchasing a fixed indexed annuity every single year until I am 62. So that is seven consecutive years. Now, why in the world would I do that? Well, when I'm 62, I can turn on an income stream from the one I bought when I was 55. When I'm 63, I can turn on another income stream from the one I bought when I was 56, and so on and so on and so on. So that by the time I'm 69, I'm going to have seven different guaranteed lifetime income streams. Combining that with my 401 K, and if Social Security is around in the format that it currently is as well. So now we're talking about many, many, many streams of income. When you know better, that able enables people to do better in retirement. So my challenge to anybody out there listening is to count up how many guaranteed streams of income you have and see if that's going to be enough for you to make ends meet in retirement. Because bottom line is, the more guaranteed streams of lifetime income that you know are coming in and can count on month in and month out, no matter how long you live, that's just going to make for a much more, you know, easily slid into retirement. People are now start looking forward to retirement instead of wondering whether they're going to be able to make ends meet.

Producer:
Yeah, that's absolutely right. And, you know, I mean if you folks out there are listening and saying, hey, I am counting my guaranteed retirement income streams, I don't get above 1 or 2 for my retirement. Then you really need to call. But if you are just not satisfied with the number that you do count to, if you count above that and if you do good for you. But if you're still not satisfied with that, get in touch with Mike. Go to MoneyMattersWithMike.com. That's Money Matters With Mike all one word.com or give him a call (704) 560-1573. And you can learn more about creating another income stream or multiple income streams for yourself in your retirement. And you know, of course, we've been talking about fixed indexed annuities here as compared to bank CDs. Great comparison. Compare and contrast there. Lots before we leave this part of the conversation, kind of nail it down with an illustration of one particular product that was, you know, we talked about highly rated insurance companies. They don't get much more highly rated than the one that we're about to talk about. Right.

Mike Zaino:
That is true. And, you know, so we deal with many, many different highly rated multibillion dollar companies who've been doing. This since before our listeners were in diapers. I've made that analogy before. You know, so today we're going to highlight Nationwide Financial. And they have a product called the Nationwide Peak ten fixed indexed annuity. Okay. And so here is an example of an fire currently being offered by nationwide. And let's face it, they are rated A+ by three major credit agencies being Moody's Standard and Poor's and the Better Business Bureau okay. Currently the nationwide peak ten is offering folks a 20% bonus on the amount of money that you invest. So for an example, if you have $300,000, your account value would actually start off at $360,000. Do you think that's a little carrot to be dangled? Absolutely right. They are. Also the peak ten is also offering an 8%. Since all interest roll up every single year that you defer taking on income or turning on income, I should say. So what does that mean? That means you put your money into the account, and it's guaranteed to grow by 8% each and every single year. And then once you do turn on income, it'll be whatever that amount is for the rest of your life.

Mike Zaino:
Okay. And the one thing I think that blows me away, we mentioned that these are tied to the performance of an underlying index. Okay. So they have an index that is offering a 335% participation rate. And a lot of folks have no idea what that means. And I don't want to get so far into the weeds. But the bottom line is, is that if the index went up 10%, you would actually receive 335% of that, or 33.5%, okay, minus a 1% spread. That's how they make their money, which would give you 32.5% as far as the gain. Now, if the index does not go up, the worst you can do is 8% simple interest for every single year that you defer turning on income. So if any person out there thinks that wow, that sounds interesting, you might have some questions. Or if you are looking to reduce your investment risk during times like this, okay, please visit the website MoneyMattersWithMike.com, or give me a call at (704) 560-1573. We help our clients. We help our listeners. What do we help them do? Make informed financial decisions and make choices that leave them and their money both safe and secure.

Producer:
You can also send an email to Mike at MoneyMattersWithMike.com, or just go to the website or call (704) 560-1573.

Producer:
Want to know where your hard earned money is going. It's time for an inflation demonstration.

Producer:
So, you know, we have talked about, I believe, last week's show on our inflation demonstration about the Girl Scout cookies going up in price.

Mike Zaino:
Sweet tooth.

Producer:
Yes. Well, more sweet tooth this week because, you know, it's the weekend before Halloween after all. So we got some prices that are going up this year that could spook your Halloween budget as well. If you haven't gotten out there and bought the candy yet, you'll probably get a little sticker shock when you do go to the store and try to pick some up.

Mike Zaino:
You absolutely will, because according to the US Bureau of Labor, the cost of candy is going up and it's going up by a lot, folks. Okay, prices are up about 13% this year. And you know, the UCLA supply chain expert, a professor out there named Christopher Tang, he's saying that candy is so expensive, not only because of the labor cost but because of the cost of ingredients. Right. Which is also why, like we talked about last week, that the cost of Girl Scout cookies is increasing by a whopping 20%. Okay, but here's what's funny. History tells us that even during times of economic hardship, candy sales still rise. So during the Great Recession years, which, you know, started in 2008, candy sales actually rose every single year, according to the National Confectioners Association. Right. Which, you know, kind of blew my mind.

Producer:
Yeah. I mean, people like to, you know, have their their comforts. And I guess, you know, candy is one of those things. Then candy is one of those things. Definitely. And yeah, there was this new report, the Halloween Spending Trends Report, revealing 73% of Americans said that they're shopping for the holiday, will be impacted by economic challenges. And report by power reviews also found that 34% of respondents will buy cheaper Halloween candy this year. So, you know, kids going to go to the go to the neighbor's house, maybe they won't be pulling out the yeah, maybe they won't be pulling out the the Skittles or the the Reese's or something. They'll be pulling out the generic dollar store brands. Yeah.

Mike Zaino:
I hope for kid's sakes folks don't do that. I mean, as a kid, didn't you love getting, you know, going to the house that had the full size Snickers bar, the full sized Kit-kats, the, you know, the full size candy, like those were that was the hero house, right? That you went. Oh, yeah. And then and then you always had the house that would give you raisins. You'd always have the house that would give you like 50 pennies in a, in a little Ziploc teeny bag. You know, I used to hate those or, you know, the ones that gave Necco wafers or. Oh, you know, I mean, I'd be curious to know what our what our audience's least favorite Halloween candy is, for sure. That would be a great one to, you know, comment on Facebook about.

Producer:
Yeah, definitely. Go to Facebook, search for Money Matters With Mike and let us know because that's that's a good I mean, I would think just, you know, before we wrap things up here in a second, I would think that probably candy corn would be the most polarizing. Not necessarily everybody's least favorite, but I feel like it's a love it or hate it thing.

Mike Zaino:
It is like, I don't mind candy corn. It's not one of my favorites, but I don't dislike it now, those those I don't even know what they're called, but there was in the shape of a peanut. It was like a marshmallowy type of peanut. You know which one? Oh yeah. Like, I don't know what that is. I could not stand those. Those were absolutely disgusting to me. And I don't like black licorice either. But that's just me.

Producer:
Yeah, yeah. An acquired taste. All right, Mike, just about time for us to start wrapping things up here. But before we go, I know that we wanted to mention one more time about this, this 100% rewards debit card we talked about earlier on in the show.

Mike Zaino:
Yeah. I mean, folks, like I said, if if you're spending money on a debit card or on a credit card and you're setting things up on autopay with them like so many folks do, including myself, right, you may as well get the dollar for dollar equivalent to go then and spend on everyday items that you need. And so if that or if anything else that we shared on this week's show makes sense to you and you could use some help. Okay. And I'm talking about whether it's the visa reward cards or it's with a free, no obligation retirement consultation, please do not hesitate to pick up a phone and give me a call or email me or reach out on my website. We do this show to bring important information to people just like you, and I absolutely love meeting with our listeners.

Producer:
Yeah, absolutely. So and once again, MoneyMattersWithMike.com or (704) 560-1573. Well Mike that just about does it for this week's show sir. But we'll do it again next time. Have a have a great week. And try not to scare too many kids.

Mike Zaino:
Get off my lawn or there you go. Listen, Matt, I appreciate you and everything you bring to the show. Most importantly, though, I need to thank each and every single one of our listeners. Without you guys, this show does not exist in its current format. So, you know, again, if you know anybody that could benefit from any of the information, please share the show, share the website, share my telephone number, share my email address, share the Facebook link or the YouTube link. It's not a secret that we want to help as many people as we possibly can. So whatever you are doing this weekend, I hope you enjoy it to its fullest extent and as always, make it a great day.

Producer:
Thanks for listening to Money Matters With Mike. You deserve to work with the 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. That's 704 560 1573. 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 are the property of their respective owners. Amara Life 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.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

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