The information and discussion on this show is for informational purposes only and is not intended for specific tax, legal, or financial advice. Exposure to ideas and financial vehicles discuss should not be considered investment advice or recommendation to buy or sell any financial vehicle. Past performance is not a guarantee of future results. Investments will fluctuate, and when redeemed may be worth more or less than what originally invested. You should always consult your tax or legal professional and financial advisor or representative before making any financial decisions.

Neither Retirement Wealth Advisors, Bulman Wealth, WORLD EQUITY GROUP Securities, Inc, its representatives or affiliates have any liability for investment decisions or other actions taken or made by you based on the information provided on this program. Christopher James Bulman is a registered representative offering securities through WORLD EQUITY GROUP Securities, Inc, member of FINRA/SIPC, and investment advisor representative of Retirement Wealth Advisors. Neither the Financial Compass or Bulman Wealth are affiliated with WORLD EQUITY GROUP Securities, Inc or Retirement Wealth Advisors. Licensed in California, number 0D57586.

Speaker 2:

This is the Financial Compass with Chris Bulman. At Bulman Wealth, we use results and advanced planning to help you grow and protect your money. And now, setting a course for a better retirement, it’s the Financial Compass with Chris Bulman.

Randy Cook:

Hello again, welcome to Sunday, welcome to another edition of the Financial Compass with Chris Bulman at Bulman Wealth. My name is Randy Cook here each week with Chris as we talk about you, your future, your money, and how all of that kind of intertwines and the preparation that we have to do. Got to do a little work on this one. Any good plan takes a little prep. If you want something to go forward and go through and be successful, it takes a little work, and that’s what we talk about on this show all the time. Chris, how are you today?

Chris Bulman:

I’m doing well. A little bit under the weather, as I think probably a lot of our listeners are right now. It’s really going around. That’s one of those things that, Randy, we don’t necessarily plan for. Every winter, maybe three to six days, you should just plan to go slow because you’re going to get something it seems like.

Randy Cook:

Or you’re sitting next to somebody who’s coughing and hacking you and you know it’s not too far away.

Chris Bulman:

Yeah, it’s coming.

Randy Cook:

It’s coming.

Chris Bulman:

Or if you have kids, you know it’s coming not only to you, but all the other kids and spouse and everyone.

Randy Cook:

Absolutely true. Well, there is one other thing that happens every year, and that is, Warren Buffett sits down with the folks at CNBC and kind of talks through a one-hour interview with Becky Quick. So we’ll have some clips from that today and kind of get Chris’s take on what’s going on there. And we’ll explore today what Chris calls the four Ls of retirement. What are they? Well, we’ll tell you about that coming up in just a few minutes here. But as I was listening and watching the Warren Buffet interview, I kind of thought about you, Chris, because he’s kind of on the same page here with you when we talk about income later in life. That’s what Warren was talking about.

Warren Buffet:

In the end, you’ve got to look at the underlying stream of cash you’re going to get over time.

Randy Cook:

Figuring out how it all works. How does the 401(k) become a paycheck? How does the IRA become a paycheck? How do I build a paycheck when I walk away from my paycheck? We call it streams of income, Chris, and it’s probably one of the most important things you do.

Chris Bulman:

Absolutely. One of the things that we need to be thinking about, Randy, is, how much income do we need in retirement? I think that’s on a lot of our minds, especially as we get into that retirement red zone and into our 50s and 60s. We’re close to retiring and we don’t know for sure what we’re going to need in retirement and how much we can safely spend without getting ourselves into trouble 10, 20 years later. One of the things you have to remember is a lot of us retiring in our 60s, with longevity, we may still have another 20 to 30 years to live and we need to make sure that we’re accounting for inflation and taxes and all the things that go into being able to survive those next 20 or 30 years.

The last thing we want to do is outlive our income. I mean, we want to live a long time, but we don’t want to live long time with no money left in the bank. So we have to figure out a way to manage that and it’s a very important detail when preparing for retirement.

Randy Cook:

And for those people who think they can do it themselves, we talk about that. There’s probably enough information out there for you to do your own financial planning, but can you take all of these things into consideration? I mean, Chris, for people who do it themselves, they just focus on that big block of money, and as you’ve said in the past, then they just pick away at it as they need it. That’s a great way to run out of money.

Chris Bulman:

Yeah. To be honest, some people are really good at this, Randy. Some people really love to dig into that and manage it. But obviously, those aren’t the people that call us on this radio show or want to come in to see us. A lot of us depend on others, whether it’s for our planning, for our health, go see a doctor, change our oil, whatever it might be, we depend on others to get that done. And that’s where we really fit in with respect to retirement planning for people that are in that retirement red zone, or maybe already in retirement, or maybe you’re just saving for retirement and want to know how that’s going to work out.

There’s something referred to as the replacement ratio, and that’s the ratio of, how much money are you going to need as a percentage of what you’re currently making? And it’s different for everyone. I mean, the less we make as we’re working in our working years, the more of a ratio, the higher percentage we’re going to need of that money when we get into retirement. The reason is, it’s based on a few things. If we’re making a couple 100,000 dollars a year, hopefully we’re putting away 30, 40, $50,000 or more into our retirement, we’re paying taxes on a big amount, so the amount that we’re going to need in retirement is actually going to be lower as a percentage because now we don’t have to put money away into retirement anymore.

We’re not putting away savings, we’re actually living off our savings and our investments, we’re not paying as many taxes potentially because we’re not making as high of an income, although that can be debunked for a lot of us if we have those big pensions and some other things going on. So those are the things you’re going to want to take into account. And whatever that replacement ratio is, you need to make sure that we have enough income to match that. The other things, Randy, that come up a lot when people come in is, “We’ve never really taken vacations,” or, “We want to take more vacations. We want to plan for vacations.”

What I always remind people, you want to plan for grandchildren because it seems like sometimes we spend more money on our grandchildren than we do our children with respects to Christmas and gifts, and maybe even trying to fund for college, because now we’re in a position where we can sit back and think about those things. So a lot of different details go into that retirement and income planning, we want to make sure we’re thinking about those and how much we’re going to need in retirement and how we’re going to replace that last paycheck that we always talk about. Once you get that last paycheck from work, what is coming next?

We have social security potentially, pensions, and then what? Is it 401k? Is it IRA, savings, CDs, bonds? Where are we going to put our money? What kind of returns are we going to get? Those are all details that are vitally important as we enter into our retirement years.

Randy Cook:

How does it all add up and how does it all make sure that it covers everything you need and more so you can do the things you want to do in retirement? Well, one of the things we suggest is you give us a call and sit down with Chris for the full-blown financial and income plan. We make available to you right now for the next five people to give us a call. This is a look at income planning that Chris just talked about. How does your 401(k), your IRA, your Roth, your pension, your annuities, your stocks, your rental income, how does it all become a paycheck for you in your retirement years?

What about tax planning? Do you have a strategy there? Social security, Chris mentioned that, but there are strategies that go along with that. What if we have a market drop right when you retire? What is your risk associated with your money? What about estate planning? All these different things go into our full-blown financial and income plan and we offer it to you free, our radio listers, for the next five people to give us a call. Here’s our number. There’s actually two ways to get in touch with us. 916-458-8199. Give us a call right now. Or if you call and you get a busy signal or you get the message, why don’t you do this?

Text the word, plan, P-L-A-N. Text plan to the same number, 916-458-8199. We’ll get that today and we’ll get right back to you. Get a call to us right now to get the full-blown financial and income plan. We’ll talk more about what Warren Buffet had to say this week next on the Financial Compass with Chris Bulman.

(singing)

Welcome back to the Financial Compass with Chris Bulman. This week, 1982, Joan Jett released the song, I Love Rock ‘n’ Roll. She was with a group called The Runaways for those of you who remember your rock and roll history. And she had the song at that time with The Runaways, played it for them and they all went, “Nah, we don’t like that. We’re not going to do that.” And so she said, “Okay, fine.” So she broke away from them, formed a new group, put this song out, and the rest is rock and roll history. Joan Jett, 1982.

Well, welcome back to the Financial Compass with Chris Bulman. You can find us online at thebulmanway… B-U-L-M-A-N, thebulmanway.com. All right, Chris, talking more about Warren Buffet this week, he was on CNBC. He also had some things to say about interest rates and savings and it wasn’t really all that upbeat.

Warren Buffet:

It’s a very strange situation that the Federal Reserve say, “Our goal is 2% inflation,” and then have people buying… They buy the treasury bills, it’s the one and a half percent, and they pay tax on it. So, I mean, the government has announced to you that it doesn’t pay to save.

Randy Cook:

“The government has announced to you that it doesn’t pay to save.” But I guess most of us know that already, Chris, because CD rates, bank rates, money markets, bonds, government bonds, as he said, it’s pretty dismal out there as far as return. Isn’t it?

Chris Bulman:

Well, it really is. And I thought that would be a good time to revisit a topic that we’ve talked about in the past. The problem, and I guess it’s a blessing and a problem, Randy, is, we as individuals are beginning to live a lot longer. Obviously, that’s a blessing that we can live longer, spend more time with our family, they get more time with us and we get more time with them. But the problem comes in, are we planning for enough income for that extra time that we have? And it’s very important that you don’t want to be stressed about… If you live into your 80s or 90s, we kind of are winning, right? We’re spending more time with our family.

The last thing you want to do is be worried and be stressed out that whole time that you’re living longer because we don’t have enough income and the last thing you want to have is more life than income and begin to have to depend or rely on family members, children, grandchildren, to take care of us. The other issue is, the longer we live, the higher potential we have for health issues and putting ourselves into a situation for long-term care costs and things like that. So we want to make sure that we’re looking over the long-term.

Are we developing an income plan for not just 10, 15 years of retirement, which by the way, if you go back to early on the way social security was set up and retirement planning was set up, most people weren’t living more than 10 or 12, 15 years into retirement. Now we have people living, especially in California, people seem to be living 85, 95. We have more and more people going over the age of 100. It’s important that we’ve planned to make sure that we have plenty of income, plenty of paychecks that last as long as our lives do. Have we looked at our income sources? Back to the clip that you played there, many of us, historically, what we’ve counted on when we plan our retirement is putting money into bonds for that income portion.

We want to have money from bonds, CD laddering, things like that for our income. Well, with interest rates so low, if we go out and get a five, 10-year CD, we’re getting what? Two, two and a half percent maximum. If you have a million dollar portfolio and you’re getting $20,000 a year, how far is that going to get you, Randy? Or if you buy a 20-year bond, what are we now getting on bond rates now? At 20 years, maybe below 4% still, and then potentially taxes on top of that. Or maybe we’re buying municipal bonds, which are becoming less valuable now if the income taxes are going down. So it’s interesting. We have to plan different ways.

We can’t plan the old way, we just put some money into bonds, we get maybe six, eight, nine, 10%, and then we put the rest of the chunk of money into the stock market. As we know, historically, over time, the stock market averages maybe 10% is what we always hear. We’ve all heard that story. So we put some money there so that we get the appreciation, the growth that we need to offset that bond income for future years as inflation hits us. Well, one of the things we want to keep track of there is, if interest rates are lower and we have a bad sequence of returns in our other money, we could really be putting ourselves at risk down the road.

And again, historically, interest rates are at an all-time low still. So that that’s not helping us very much. The stock market is at an all-time high, so are we buying at the high? I mean, where do we turn at this point? It’s important that we’re really building out an income plan, a retirement plan, that has guarantees built in for the money that we’re going to need all the way down the road. When we look at that historical average, Randy, of the 10%, we’ve probably a lot of us heard the joke. I know I’ve told it here before of the economist who drowned in a river which had a five foot average depth while he was standing in a 10-foot hole.

So averages don’t always work out for us and it’s definitely the same thing with the stock market. And really, all we have to do is look back at 2000. There’s the story we’ve told many times of the couple who’ve retired in 2000 with a million dollars and they had gone to their stockbroker and said you could take a 5% withdrawal annually because the stock market averages 10%. So you can take 5% a year and you’re always going to grow and it’s going to be great. And we know what happened in 2001, in 2002. So by 2003, just three years in these people that had started with a million dollars and taking out $50,000 a year are already down under $500,000 in their nest egg.

And a lot of us listening, especially if we’re in our 60s, we can relate to that or we know someone who’s been through that situation. Then maybe by 2003 to 2008, we know the market came back up, but if we’re taking out $50,000 a year, that’s 10% of what we have left, it’s really going to take some significant growth to get us back to where we started. So maybe by 2007, we’ve recovered a little bit back up to about 600,000, and then we know what happened in 2008 and ’09. Most couples in that situation are going to be down below 300, $200,000 just eight years into retirement and they started with a million dollars. What do you do from there, Randy?

That’s the big question. How do we set up our retirement so that we’re taking into account the interest rates, the fluctuation in rates of returns, the sequence of returns, the big drops in the market. Currently, we’re sitting on the second longest bull market in history. And the first longest by the way is still another four or five years longer than this one, so we have room to run potentially, but that doesn’t mean we’re going to make it to the longest bull market in history. So what are we doing? What do we have set up in place now to take advantage of the markets going up but also to protect ourselves when the market goes down?

Randy Cook:

Well, it’s a great point because you’ve painted… I don’t want to say a grim picture, but you’ve painted the quandary. You’ve painted the fact that we can’t get much for our money at the bank and where we call those safe money investments that pushes everybody over to equities because they can’t get anything there and then there’s all the risks that’s associated with that. So, Chris, is there some sort of a middle lane that people can find somewhere along those lines?

Chris Bulman:

Yeah. When we talk about being invested in the market, if you’re in the market, in other words, if you’re in the S&P 500, you’re in a stack of 500 stocks or an index of 500 stocks. You’re going to get all the ups when the market goes up, so you’re doing really well right now, but when the market turns, when it goes down, you get all of the downs. So that’s typically where we look at diversification and we say, “Well, maybe we’re in the S&P 500, but also in real estate and REITs and CDs and commodities and all these different segments.” So what happens there is we get some of the ups, we don’t get all of the S&P 500 gains because we’re diversified, we’re in other places as well.

But we also only get some of the downs when it drops. And I think that’s important. But there’s also an investment that you can get some of the ups and none of the downs, and that’s the fixed index annuity that you’ve all heard so much about on different television and radio shows. It’s become really popular the past several years and has really done well these past couple of years. When you look at many of those fixed index annuities, if you’re in an uncapped type of annuity and type of investment vehicle, a lot of people are getting 10 to 20, 24% over the past year or two in an investment that has a 0% downside.

In other words, if you put in $100,000 and the market goes straight down, you still have $100,000 in your account. But if it goes up 20%, you might be up to 110,000 or 115,000 depending on which vehicle you’ve chosen. So I think that’s an interesting vehicle that can give us a little bit more diversity when we’re looking at stocks, bonds, mutual funds, CDs across the board. If we can reduce that risk on the downside and still get gains on the upside, it’s a great place to put some of your money.

Randy Cook:

You’re listening to the Financial Compass with Chris Bulman and we’re talking in this segment about some of the quandary, I guess, is the word I’m looking for here, of, you go to the bank, you can’t get anything, you go to the market, you worry about the risk even though we’re seeing a market that continues to go up. There are people that are uneasy about that saying, “Are we on the edge of what would be the big pullback?” We all remember 2008, we all remember 2001 and before. And so, where are you? Where can you go? Chris was talking about different options for your money where maybe you can find a middle of the road kind of a strategy that you feel more comfortable.

And give Chris a call. Here’s our number 916-458-8199, 916-458-8199. We talk about our full-blown financial and income plan. It encompasses building income for retirement, tax planning, a risk assessment. We don’t want to be too far out on that risk scale when you get toward your retirement years. As Chris painted the picture, somebody who retires, can’t afford that market to go down right when you start taking money out of your accounts. What about insurance? What about your estate planning needs? All of these different things are things that we need to talk about as well as your social security strategy.

All of this goes under our full-blown financial and income plan. Give us a call right now. Here’s our number, 916-458-8199, 916-458-8199. You could also text the word, plan, to 916-458-8199. That’s another great way to get in touch with us as well. Do that right now. Coming up next, we’re going to take a look at a kind of interesting list of four Ls of retirement. Can you guess what they might be? We’ll look at them. Coming up next on the Financial Compass.

Speaker 6:

Bonus annuities may include higher surrender charges, lower surrender periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that do not offer a bonus.

Randy Cook:

There’s no time like the present. What you do today can improve all your tomorrows. And it’s true. No matter what motivational sign is hanging in front of you, most people don’t act until they absolutely have to. It’s also true about retirement. Most people don’t talk to a financial advisor until right before they retire. Why? A recent survey says they’re worried about the cost. But right now, Chris Bulman at Bulman Wealth Group is offering a free, full-blown financial and income plan, an assessment of where you are now, where you’d like to be, and some options on how to get you there.

If there was something you could do to set yourself up for a better retirement, wouldn’t you like to know right now? Call 916-458-8199. Ask for your free, full-blown financial and income plan. 916-458-8199. Or find us online at bulmanwealth.com. Investment advisory services offered through Retirement Wealth Advisors, Inc, securities offered through WORLD EQUITY GROUP Securities, Inc, member of FINRA/SIPC. By contacting us, you may be provided with information about insurance products, including annuities. Licensed in California, 0D57586.

(singing)

Welcome back to the Financial Compass with Chris Bulman. This week, 1973, Pink Floyd began recording Dark Side of the Moon. That album stayed at the billboard chart for 741 weeks. I think there was collusion involved there myself. But in any event, 45 years later, it’s still making money for Pink Floyd. A welcome to the Financial Compass. Online, find us, thebulmanway.com. Okay, Chris, you got me intrigued here. The four Ls of retirement. What’s on the list here.

Chris Bulman:

Yeah. Well, when people come in, a lot of our listeners are curious. We kind of know what we think our lifestyle is going to be like in retirement, but what do we need to be thinking about? The four Ls just helps kind of put it in position for you. The first one is longevity goals, and we’ve talked quite a bit about that today. Longevity, the best way to think about it, some people will think, “I’ve got $500,000 in retirement. I should be able to do what I want. That’s going to last me a while.” But what is a while, right?

We want to make sure that we’re planning out, we have our results in advance, planning system that we’re going to plan out. Should you live to age 90, 95, how are we going to make that money last with growth built in, with inflation, with taxes, and guarantees if necessary? So longevity is important. We don’t want to have more life than we do income here. So the next one will be lifestyle goals. Lifestyle goals are different for everyone. We have some people that love once they retire, they just want to go camping, RVing, some things that are some extra expense maybe, but not too much.

Other folks come in and they’ve never been to Europe, they’ve never been to Asia, they want to hit all the continents or all the big countries or tourist spots or we have some, I would say a handful of clients, that with growing families by the way, not more kids, but more and more grandkids keep coming and they’ve come into the habit of taking their family to Hawaii every year or every other year, and that cost builds up. So what does that look like for you? What are your goals in your life? And we can test for those. Is it okay if we spend 10 or $20,000 additional in retirement that we’re not spending today?

Maybe for some of us, all that is is replacing what we would have historically put away in our 401(k)s or something like that, and if our income is enough, we can still do something like that. But wouldn’t you like to know, Randy, is it going to work out in retirement? What kind of a hit is my retirement going to take if I do these additional lifestyle goals? And it may not just be traveling or taking your family somewhere, it could be maybe you’ve sort of always not spent money at the nice restaurants or… Whatever it might be, join a country club, a tennis club, whatever it might be, maybe those are things that you want to do in retirement, to meet more people, to be more active, to live a longer, healthier life, and we need to make sure that we have enough money to do that.

So we have longevity, we have lifestyle goals. We also have legacy goals. One of the important things that we find, the closer we get to our own end, we start thinking about giving a lot more. Some of us maybe listening today have the view that we want to live our lives and we want to die with the last check bouncing. I hear that a lot. The last check I write, I want it to bounce as I enter the grave. Other people want to still live a similar lifestyle, but they want to give as much as possible to their kids, their grandkids, to help pay for education, help pay for housing. Whatever it might be, they want to gift a lot.

So it’s important to think about those legacy goals. Where are legacy goals in your own life? How important are they in? If they’re important, we need to be planning for those legacy goals. Then there’s liquidity goals. How much money do we need to have in liquid investments that we can get to for things like supporting family members during emergencies? We see that a lot. We get some calls with clients. Maybe a sister went down with a broken hip and they need to get 20 or $30,000 over to the sister because she can’t work and needs help. And we’re usually pretty sure it’s not going to get paid back.

Maybe there’s major repairs on a home, or especially lately, we’ve had all these fires and floods and things going on in California. What kind of major repairs or home improvements might be necessary, including by the way, renovating your home to allow for aging in place? Do we need any kind of new ramp to get into the front door or something to get up the stairs with a wheelchair? There’s different things that we might need to have in place to renovate the home. Also, unexpected illnesses or potential long-term care needs, have we planned for that? So the liquidity goals are… it’s important to have that built into your plan as well.

So, again, we have liquidity, legacy, lifestyle goals, and longevity, and those are all things that should be built into your financial planning system as well as estate planning, the trust, the income, the growth, all of that has to be a part of your financial plan, Randy.

Randy Cook:

It’s all a part of what we discuss with you with our full-blown financial and income plan, which we’ll make available to you right now. The next five people to give us a call, we’ll talk about the four Ls of retirement; longevity, lifestyle, liquidity, and legacy. We’ll also talk of course about income and we’ll talk about what happens when you step away from your last paycheck. This is life after the 401(k). How does it become a paycheck for you? Anything that you’ve saved so far, how does it become a paycheck? How do you take that income without getting yourself in tax problems? That is certainly something we talk about as well, a tax strategy for your retirement risk assessment.

How do we make sure that you are not going to fall prey to a market decline at a very inopportune time? Need to talk about it. Insurance needs, estate planning as Chris talked about, social security, just basically sitting down and pinpointing when are you going to retire? Let’s plan for it. Let’s sit down and let’s do it for you free. That is what we do here on the radio show. Here’s our number, 916-458-8199. Next five people to give us a call. 916-458-8199. If you call, you get a busy signal, here’s another way you can do it. You can text the word plan, P-L-A-N, plan, to 916-458-8199. We’ll be right back with more of the Financial Compass and Chris Bulman coming up next.

(singing)

Welcome back to the Financial Compass with Chris Bulman. Online, find us at thebulmanway.com. Hey, while you’re there today, check out the risk assessment that you can take. A couple of questions and you can get a number on a scale of one to 100, what sort of a risk person are you, where is your risk number? Then a great idea would be to sit down with Chris and find out what your risk is with your investments and then find out if those two numbers are going to match up. A lot of times they don’t. Chris, let’s talk about that. A lot of different kinds of people will come to see you. Some people will say, “I’m okay to lose a little money here and there as long as I’ve got that upside.”

And then other people will come in and say, “I don’t want to lose a penny.” So how do you deal with all of that? There’s got to be different plans for everybody.

Chris Bulman:

Well, yeah, and not only that, but people’s maybe are… the feeling of how we want to invest changes depending on how the markets are doing. So right now, a lot of us feel like, “Oh, I’m fine with a little bit of risk. Let’s let this baby ride and I want to see my accounts keep going sky high.” And that sounds good until the market does drop 10 or 20% and you go, “Wow, that’s not really what I meant. I didn’t want to experience ever again what I experienced in 2001 and ’02 and what I experienced in 2008 and ’09. I never wanted to experience that again and now I’ve set myself up to experience that again.” So what we try to do is we take a look at how people are currently invested.

We do what we call a snapshot. We take a look at all of your current investments. You may own 60 different mutual funds, stocks, whatever it might be, we put them all into a comprehensive analysis, through a Morningstar Report, and then we just go through and talk with you about the current risks that we’re taking, the current standard deviation or measure of volatility in your portfolio. Although it sounds really good right now, Randy, we’ve seen a lot of portfolios that might be up 18% this year and they feel really good, like, “Hey, this is a great portfolio,” and we look over the past 10 years and they’re averaging 5.6%.

It doesn’t sound so good at that point. And the reason maybe we’re averaging 5.6% is because we experienced a 38% drop in 2008. Don’t forget we’re now 10 years later, 10 years older by the way, which means we probably don’t want a 38% drop in our portfolio at this point. So it’s important to note that if we can get even an 8% return taking less risk than we’re currently taking to get a 5.8% return, isn’t that a move we might want to think about making. And we talk about those types of things. We talk about, if we have 10 people come in, there’s at least three of them that are going to tell us, “We don’t want to lose a dollar.

The reason we called you is because we heard you talking about safety and protecting portfolios. We want to get gains, we want to get better gains than CDs or banks or even maybe bonds, but we don’t want to take risks with our money. We don’t want to lose a dollar.” So we talk about the investments that are available where you can put money in and as the market goes up, you get to make money, and the market goes down, you don’t take any loss. For example, just a plain vanilla, there’s a couple there right now. Whatever the market does on the upside, they credit you 50% of that. So if the market’s up 24% one year, you’re going to make a 12% return.

If it’s up 8%, you’re going to make a 4% return. If the market drops 20%, however, you get credited zero. So on the downside, you get credited zero, on the upside, you get half of whatever the market does. Some people absolutely love that because they know it’s going to average a higher return than anything they can get at the banks and there’s no risk on the downside. Also, there’s things like income protection that can be added in where you get guaranteed income streams that build up over time, similar to a pension, Randy. And other people say, “You know what? I don’t like any of that stuff. I don’t like being locked into something like a 10-year bond or a five-year CD.

I just want my money to be liquid and I want it to grow and I’m okay with risk. But I would like to have a little bit less risk than the 38%, maybe can you cap it off at 15 or 20?” And of course, we build portfolios that way, where we have safety nets built in at seven and a half percent, 10%, 15%, 20%. So we already know ahead of time the most that our portfolios are going to drop depending on the situation. So depending on the type of investor, Randy, the type of risk that they want to take, the type of gains that they want to get or losses that they don’t want to participate in, we have investments that fit those styles.

Randy Cook:

Sounds a lot like our friend, Patrick Kelly, when we’ve heard him on the program before use the phrase, zero is your hero. So this is the kind of thing that we want to make sure that you know about and you know that is out there. So give us a call at Bulman Wealth. Here’s our number, 916-458-8199. 916-458-8199. If you get a busy signal, we can have a lot of people calling during the show, you can text the word, plan, to 916-458-8199 and we will get right back to you today. Chris, when you talk about that person and the risk and the risk number and everything, it reminds me of people, sometimes they’ll hear someone say, “Hey, that guy was up 28%,” or, “That guy was up 32%.”

But they never talk about how much risk they’re taking, all they talk about is the return that comes back. It’s like that guy that goes out to Vegas and never tells you about the bad day.

Chris Bulman:

It’s exactly like the guy who goes to Vegas and never tells you about the bad day. And we can all relate to that because we’ve probably all done it. We go to whether it’s a casino locally or going to Vegas. If we go down there with two or $300 and we walk away with $1,000, we’re telling people about it. But if we go and we lose $200 every single day, it’s usually not something you want to talk about. And it’s the same thing, believe it or not, in the stock market. I can’t tell you how many people prior to 2008 used to tell me about their net average returns of 15% after taxes and all these numbers that were completely pie in the sky, I haven’t heard a whistle since 2009.

So for many of those people, remember when day trading used to be really popular. You just don’t hear much of that stuff anymore because a lot of those people got slapped with those big losses in 2008/2009.

Randy Cook:

Yeah. I had a friend who tried that and he didn’t last, but I think three or four months at it. And I asked him a little later on, I said, “How’d you do?” He said, “I just couldn’t make money doing it.” He said to me, he says, “If I could just make $300 a day, I can do this.” And he couldn’t do it. That do it yourself kind of thing and that getting out there on that risk scale, it’s a bit of a trap. We talk about Bitcoin and all those things and those big pie in the sky returns, they do come with some consequences as well. And probably, as you get close to retirement, you don’t want those kinds of consequences.

Give us a call at Bulman Wealth and let’s talk about that middle of the road strategy that Chris was talking about as we started the program today. We’re going to make available to you right now our full-blown financial and income plan. We’ll talk about income planning, tax planning, risk assessment, big, big topic there. We need to know how much risk is associated with your money. Your insurance needs, estate planning, social security, the date when you want to retire. Let’s find out where you stand now. Are you on track for where you want to be? Next five callers, 916-458-8199. Get the full-blown financial and income plan. You can also text the word plan to 916-458-8199.

Chris, coming up on the end of the program here, I’ll give you the last word for today.

Chris Bulman:

Hey, thanks everyone for listening again. It’s been another fun show and looking forward to talking here on the radio again next week, Sunday at noon, on the Financial Compass with Chris Bulman.

Speaker 2:

You’ve been listening to the Financial Compass with Chris Bulman. For your complimentary Morningstar Report or to explore the options and strategies Chris talked about today, call 916-458-8199. That’s 916-458-8199. Find us online at financialcompassradio.com. Join us next week for more navigation tips to a successful retirement on the Financial Compass.

Speaker 1:

Annuities are generally considered long-term investments. It is intended for a person who has sufficient cash or other liquid assets for living expenses and other unexpected emergencies such as medical expenses. A fixed index annuity is not a registered security or stock market investment and does not participate directly in any stock or equity investment or index. Annuities are not deposits of or guaranteed by any bank and are not insured by the FDIC or any other agency of the US. All guarantees are solely backed by the financial strength and claims paying ability of the issuing insurance company.

Insurance products, including annuities, are offered through Christopher James Bulman, a licensed insurance agent in the state of California. Christopher James Bulman is a registered representative offering securities through WORLD EQUITY GROUP Securities, Inc, member of FINRA/SIPC, and investment advisor representative of Retirement Wealth Advisors.