0:06

This is retire Right with Brad White. As financial advisors in San Diego.

0:12

Brad White and the Mercer Advisors formerly Epstein and White team have developed their business

0:18

by reaching out, nurturing, and maintaining close, trusting relationships with each of

0:24

their clients. Now here's your host, Bruce Steinbrock and Brad White. Thanks

0:31

for joining us for retire Right with Brad White. I'm Bruce Steinbrock joined by

0:36

Brad White with Epstein and White Retirement Income Solutions, a proud part of Mercer

0:40

Advisors right here in good old San Diego. And today, folks, we

0:46

want to you know, you know a lot of people hear stock prices,

0:50

Dow Jones, Industrial average s and P five hundred, you know, nasdat

0:54

whatever. They hear all these things and they're like, well, yeah,

0:57

I kind of feel like I know, but you really don't. You just

1:00

play along. And so Brad wants to do a deep dive with us today

1:03

and why we're doing this Brad is and his historic mark for the SNP five

1:11

hundred over five thousand, Holy smokes, that is unbelievable. Yeah, that's

1:15

that's It's a good opportunity to have this kind of market lesson if you will,

1:19

right, you use the excuse that the SMP is over five thousand,

1:23

right, it's basically it's it's not a milestone for a your reason other than

1:26

it's a nice, big, round, holy cow number. Right, So

1:30

let's call it what that that's what's happened, right, So you know,

1:33

we it it's worth talking about it, addressing it's a good time to do

1:36

that. And on top of it, just the number itself, right,

1:38

Like, it's up over twenty percent since the start of November. Right,

1:44

that's a huge move. Twenty percent. I mean that is massive. Yeah,

1:48

we're talking what is that five months, give or take. Right, in September twenty seventeen, the SMP was at twenty five hundred, right,

1:55

So twenty seventeen doesn't feel that long ago, right, So in less than seven years, it's double that. It's not a small feat. And oh,

2:00

by the way, COVID happened in there, and oh, by the

2:04

way, twenty twenty three happened in there. Yeah, there's a lot that

2:07

happened in the middle of there right now, So you know, one thing to always remember, and this this next point applies to the DOW even more

2:13

than the SMP, but it applies to both. Is not to get blinded

2:15

by the raw number itself anymore. And so in other words, right,

2:20

I just told you how the SMP went from twenty five hundred and twenty seventeen,

2:23

you know, and it's gone up twenty five hundred points right to five

2:25

thousand. That's a one hundred percent return. My point is the next twenty

2:30

five hundred it makes, right, by the time it gets to seventy five

2:32

hundred, that's going to represent a fifty percent return, right, And the

2:36

next twenty five percent it makes will represent a thirty three percent return. So

2:38

that's important because you know, my client's right, are all in their fifties

2:43

and sixties, and so if if if they hear the DOW lost a thousand

2:46

points, right, it's like, oh my gosh, Like it's you know,

2:50

well, a thousand points doesn't represent what it did, you know,

2:53

years ago. Kind of a thing. Right, So that's one little minor

2:57

lesson in this whole thing. Right, It's just kind of remember, right,

2:59

the points versus percentage thing. And as these numbers get bigger and bigger,

3:01

you just got to be a little more. I was thinking about this

3:04

as I was writing this this segment, it's like, you know, if

3:07

McDonald's back in the day when hamburgers are twenty five cents, if it raised

3:10

it a dime, right, Like, that's noticeable. That's a forty percent

3:14

increase. Right today, if they raise your hamburgers by a dime, you wouldn't notice, right, So wouldn't that nye? Yeah, that was I

3:21

probably didn't need to finish this excellent analysis with the hamburger analogy, but that's

3:25

that's what we do here. This is this is what you pay for.

3:30

So look, the first thing that all this makes me think of on behalf

3:34

of retail investors, right, the people I talk to, is here's the

3:37

obvious next point, right like, well, shoot, Brad, like, doesn't this mean the market's overvalued? It's look how expensive it is now?

3:43

Right, it's over five thousand, like and that's logical. But and if

3:46

you've heard me before, I've said this before, it bears repeating, the

3:50

price means nothing. The price, whether the market's at five thousand, four

3:54

thousand, and eight thousand, that literally does not mean anything to me because

3:59

it doesn't tell us something's expensive or not. And here's the example, right,

4:02

if a stock trades at one hundred dollars a share, but it has

4:06

five dollars in earnings per share. This with a company's earning, you are

4:11

paying twenty dollars for every dollar of earnings the company has. That's something called

4:15

the PE ratio, price to earnings ratio, that thing that's the thing that

4:18

tells us whether something is cheap or expensive. One hundred dollars price means nothing

4:23

without us knowing how much a company earns. Right, if that's same stock

4:27

went to one hundred and fifty a share, it's like, oh my gosh,

4:30

now it's too expensive. Oh now it's too late. Well what if

4:32

the earnings rose to ten dollars a share. Now you're only paying fifteen dollars

4:38

for every dollar earning. So, in other words, that stock is cheaper

4:42

at one hundred and fifty than it was when it was one hundred, which

4:46

blows people's mind sometimes. Right, it's like that stock is cheaper at one hundred and fifty than it was when it was one hundred. Yeah, in

4:49

that example, right, that's that's in that example that applies. So that's

4:55

just one of the biggest lessons is that look like if you're not really paying

4:57

attention to too much stuff. Just maybe don't don't worry when you see these

5:00

big numbers like the SMP hitting five thousand, there's it doesn't mean it's not

5:03

expensive, or it is or it is, and it's just not the full

5:05

story. And that's one of the first things I like to address when we

5:09

hit these big round numbers. By the way, to make things more confusing,

5:12

the market already bakes in what it thinks will happen in the future.

5:15

Right, So right now, an analyst might say, oh, man,

5:18

that company is going to grow the heck out of its earnings over the next

5:20

year, and the stock goes up right now to account for the earnings that

5:26

haven't happened yet. That's how the stock market works. That's another lesson I

5:29

want us to get out of this conversation. Right So, this is when

5:32

you might hear in a year, right, some news is going to pop

5:34

out a year and it's like, oh, look, as an example, the company Apple, right, Oh no, look at Apples earnings. We're

5:40

two hundred billion, it's the most ever they had. And then the stock

5:42

goes down and you're saying, what, like, all I heard was good

5:46

news and how much company it Apple just made. This is the story about how did the stock go down? Well, maybe the analysts already predicted the

5:50

earnings to be two hundred and fifty billion, so the two hundred billion record

5:55

was actually a miss. And by the way, that can obviously happen the

5:58

other way around, right, you know, a company has bad earnings,

6:00

analysts predicted horrible earning, so the stock goes up. So these are just

6:03

some things that I'm kind of turning this five thousand SMP magic number into an

6:09

opportunity to kind of like, well, what I don't want people out there

6:12

is, you know, Bruce, and I think you experienced this in your

6:15

walk of life. I certainly do doing what I do for a living. And it's oh, man, like you know, I see on the news

6:19

the s Tob's here like chicken little right. Just guys, what goes up

6:23

must come down, right, And so I just try to use this as

6:26

opportunity to explain some of these things. Well, here's what people should do,

6:29

though. They should now go watch the movie Trading Places with dan Aykroyd

6:32

and Eddie Murphy and understand it a little differently. It's an excellent movie.

6:40

It's a classic. It really is so. Look, I'm going to go

6:45

into a few more things here, but I'd be remissed if I didn't point out, Look, some people out there, some of you, are a

6:48

little bit more I might do with Yourselfers. You like finance, you like

6:51

investments, you follow things like the market. You feel pretty comfortable managing money.

6:55

Hopefully you have a good track record of doing it. That's great.

6:58

But for the rest of you out there, don't feel bad if you don't feel that way right because, believe me, you know we've got fifteen hundred

7:03

families or so that we help here. We've talked to thousands more, you

7:06

know, since we've been doing this in San Diego. And this stuff is

7:09

confusing. And as you get to retirement and the stakes get higher, you

7:13

need a retirement plan. You need to figure out not only how you're invested

7:15

and how to make good investment decisions, which is what we're talking about right

7:18

now, but how much income can you generate in retirement? How do you

7:20

save money in taxes as you pull out your accounts to live on in retirement?

7:25

How do you choose social Security? What do you do with things like

7:28

your properties or your wills and your trust and Medicare, and you know the

7:30

list goes on and on. So we've been doing this, as I mentioned

7:32

in San Diego for over a decade. There is zero cost to come in

7:35

and see our team of certified financial planners, fiduciaries, retirement specialists. Here

7:41

we eat, sleep, live, breathe retirement planning. You can meet with

7:44

us up to two times, no cost at all, no obligation at all.

7:46

You just have to call our number or text, I should say,

7:49

call or text our number at eight five eight five six four eight zero three

7:54

six. That is eight five eight five six four eight zero three six.

7:59

Or you can all go to our website Epstein and White dot com and reach

8:01

out to us that way. That's Epstein and White dot com. Bruce.

8:05

But if we just riff a little bit more on that, No, let's

8:07

keep doing it because I think again, sometimes it is this conversation that can

8:11

break down that barrier, Brad that I don't feel like, Okay, well

8:15

I really don't understand that, and I know there are other people out there

8:18

that don't as well. Yeah. Well, look I just spent this whole

8:20

time mentioning how the price is irrelevant. So let's talk about something that's relevant,

8:24

right, which is like, where is the market right now? So

8:26

I've mentioned this whole time that this PE ratio is really what we focus on

8:30

more than just the price itself. So what is an appropriate to PE ratio?

8:33

And again explain PE price to earnings? Thank you, thank you for

8:37

that if you missed the last couple of minutes. So it just really tells

8:41

us how expensive something is. It's not the price, but you know,

8:43

it's the earnings relationship, right that tells us. So how do you know

8:46

what a good PE ratio is? Well, right now in Nvidia, right

8:50

has a PE ratio over one hundred, and that's technically insane. But we

8:56

also know that they've taken over basically the entire AI landscape, which is the

8:58

future of everything, no different than the Internet was back in the day.

9:01

And so people are willing to pay this ridiculous price thinking that this stock has

9:07

so much growth potential that it's just through the moon and we don't care.

9:09

Where's something like at and t not to pick on them, sorry, but their PE ratio is like eight or nine, and people don't even consider that

9:16

cheap because they just don't have a lot of growth potential. So and on

9:18

top of all of that, interest rates actually matter. Right, Higher interest

9:22

rates mean you have a lower PE ratio, and lower interest rates mean things

9:26

can be more expensive. So, without getting overly complicated here, it's it's

9:30

how the heck do you know what a good pe ratio is? We'll just focus on the S and P five hitter, that's what we're talking about.

9:35

The last thirty years, the average has been around seventeen and currently we're at

9:37

like twenty twenty plus, give or take. So, yeah, at this

9:41

five thousand level under a normal valuation, we are kind of at sort of

9:46

expensive range. So that was you know, kind of our long winded,

9:50

right scenic route to get back to you know, what the matter at hand.

9:54

Yeah, but if you think seventeen to let's say twenty one, I mean that's a thirty percent. Yeah, you know, there's time. It's

10:00

like if you get to the late nineteen nineties right where you know, it was like the high twenties, right, and so what dot com bubble bursting,

10:05

right, became a little bit more easy to look back and see. So we're not at ridiculous levels, but we certainly ain't cheap. Right With

10:11

that said, speaking of the late nineteen nineties. If anybody here remembers,

10:16

right, the irrational exuberant speech, right, Alan Greenspan, And this was

10:20

in December of nineteen ninety six. The stock market from nineteen ninety through nineteen

10:24

ninety six had already been on just a heater, right, one of the

10:26

best, like literally the best decade you'll ever see is the nineties, And

10:31

so that's why he came out with this irrational exuberant speech. And the market

10:35

was terrific in nineteen ninety seven, nineteen eighty, nineteen ninety nine. Right. So again, it's not like you can say, oh, look at

10:41

this, Oh look this SMPSP ratio is here, like, let me just

10:45

sit out for a while, wait for a pullback. It's just not that easy. We are expecting good earnings this year in general, so even though

10:50

we are slightly expensive, earnings could be great the rest this year and catch

10:54

up and we'll never see a pullback in the short term. We are expecting

10:58

good economy and good GDP is looking solid so far this year. What happens

11:03

to interest rates? Are we going to see them lower finally eventually if we

11:07

feel good about inflation, so you know, there are reasons to say,

11:09

hey, a lot of good news is baked in right now, and if

11:11

inflation becomes a little stickier than we want it to be, or if earnings

11:16

aren't quite as good, then yeah, you know you'll see a pullback from

11:18

here because it's like, oh, shoot, we baked too much good news

11:20

in and that good news didn't happen going into twenty twenty three. What was

11:24

the talk, Bruce, we're automatically in a recession, right, Like, there's no way, so we got surprise in twenty twenty three was a better

11:30

year than anybody would have planned on for sure, anybody, all the analysts.

11:33

So a lot of this is to give you a market update to say,

11:37

hey, look where we're at, broadly speaking right now is slightly on

11:39

the expensive side. That is a fair, I would say, true statement.

11:43

There are reasons like good earnings and good GDPs and inflation be neutralized to

11:48

say, hey, look that doesn't mean that we're gonna go down from here. There are reasons to say if those things don't work out well, right,

11:54

we've been on a bit of a heater and it's kind of time to

11:56

take the foot off the gas pedal here. But it doesn't mean you can just kind of market time that there's nothing that easy. So this was hopefully

12:01

a good excuse for kind of some broader lessons of hey, don't just read

12:05

some headline news, don't just get caught up in a big, flashy number

12:09

and assume things are going to go one way or another. There's a lot

12:11

more to this stuff. And if you're not going to master and learn what

12:15

all that other stuff is, you find a good trust in person to help

12:18

you, especially in retirement. Right the stakes are too high. You can't be making investment mistakes. You know, it's to get thirty forty years of

12:24

your life to accumulate what you have. Your money needs to be working for

12:26

you. It needs to last a twenty or thirty plus year retirement. But

12:31

how do you do that and kind of protect your money at the same time.

12:33

Well, we can help you out. We've been doing this here for

12:35

over a decade in San Diego. We eat, sleep, live, breathe

12:39

retirement planning. So whether it's your investments, your tax situation, your income

12:43

in retirement, your real estate, wills, trust, insurances, there's pretty

12:46

much nothing that's in your situation we haven't seen. We haven't done and we

12:50

haven't helped We will happily help you next. And the best part is there's

12:54

no cost, no obligation. You get up to two meetings with us,

12:56

our certified financial planners and fiduciaries. You can call or text is eight five

13:01

eight five six four eight zero three six. That's eight five eight five six

13:07

four eight zero three six. Or you can always go to our website at

13:11

Epstein and White dot com and you can reach out to us that way. That's Epstein and White dot com. Right a headline that you pulled the magnificent

13:18

seven crazy stats and I can't wait to dive into this. It comes from

13:24

c NBC, but Deutsche Bank analysts talking through this and it's a little continuing

13:33

chat from what we led off the show with. But we know we have

13:35

a lot of self directors in the audits, those who really love those spreadsheets

13:39

and they want to kind of do it yourself in their retirement or in their

13:45

income planning at home and their budgeting. But there is a point it's not

13:48

bad to come in and get a second opinion, and so I know you

13:52

want to drop some more knowledge here. Well, this is more than anything,

13:54

it's just kind of some crazy stats that I think are worth sharing.

13:58

If you're not familiar, when we say magnificent seven, it's referring to these

14:01

seven stocks, Apple, Amazon, Microsoft, in Vidia, Meta aka Facebook

14:07

and Alphabet aka Google and Tesla is a final in Vidia just coming to the

14:13

party as part of the Magnificent seven here. Well, it's the new member,

14:16

but also the most explosive one by farollowing my word in video is a

14:20

well, I don't know what is it? Seven hundred percent less, it's

14:22

year and a half year plus year and a half, two years. And

14:26

again it's because artificial intelligence is the new wave of the future, and they

14:28

basically control the chip market for that. So it's kind of like if you

14:33

controlled the Internet back when it was first getting invented, right, you just

14:35

want to be a part of that. So this is how crazy this is with these seven companies. Okay, and this is what again the deutsch Bank

14:41

analyst was kind of highlighting in this article. Literally only China would be bigger

14:46

as far as the stock market. The entire market would be bigger than these

14:50

seven stocks. So in other words, these seven stocks are bigger than every

14:54

other market of all G twenty countries than China. So I mean, by

14:58

the way, if you're not aware when I I say like G twenty countries,

15:01

this is that's what comprises most of the world's largest economies, finance ministries.

15:05

It accounts for eighty percent of the gross world product, seventy five percent

15:09

of the international trade, and two thirds of the world's population. That's what

15:13

these G twenty countries comprise of and all of their markets, none of their

15:16

countries markets are as big as these seven stocks outside of China. That is

15:22

insane. Right, So for anybody again, and you've heard me say this

15:26

on the show before, right, I'm not saying America doesn't have its problems. You always you heard me talk about the debt in particular being the one

15:31

I worry about. But for a lot of people who have a little bit of this kind of like bias to say America's going crazy downhill, well let's

15:37

not forget stats like that from time to time. Just our seven companies comprise

15:41

more than every other country markets, all of them. It's insane, that

15:48

is nuts. Yeah. So, by the way, Jim Reid, who

15:52

was this Deutsche Bank's head of Global Economics and thematic research, said that this

15:54

now rivals the year two thousand and the year nineteen twenty nine in terms of

15:58

the most concentrated our stock market has ever been. So you can make a

16:02

case on the positive side that good companies just deserve to make up concentration,

16:07

right, Like, what's wrong with most of your market being comprised of the

16:10

best companies in the world. You can certainly make that argument, right. Microsoft has been in the top five for all but four months since nineteen ninety

16:17

seven. Apple's been in the top five of our most concentrated stocks, our

16:22

biggest stocks, I should say, every minute since December of two thousand and

16:26

nine, Alphabet all but two months since twenty twelve, and Amazon every minute

16:30

since twenty seventeen. Tesla was is now down to tenth here real quickly.

16:33

So I think there's some good news in the sense that we've also led the

16:37

show and talked about how the SMP has gone on a heater. It's up

16:41

a lot, It's up to over five thousand, and what does this mean it's overvalued. What that means is that those seven stocks have lifted the SMP

16:47

up this much, so it does give a chance for the other four hundred

16:49

and ninety three companies that if they can do well right, that that can

16:53

give some more legs to the market itself. It's not automatic, but I

16:56

think that's another point worth bringing up in all of this. So real quickly

17:00

here, I'll give you the phone number eight five eight five six four eight

17:03

zero three six. That's eight five eight five six four eight zero three six

17:07

for any questions you have on your current investments, your four one ks,

17:11

your iras, how do you generate income in retirement, how should you choose

17:15

your sole security, how do you minimize taxes, especially when tax lawsers expect

17:19

taxes to go up if nothing else, by twenty twenty six, and how

17:22

does an election you know, change that? So any questions you have,

17:26

We've done this for over a decade, zero cost, zero obligation. You

17:29

can reach out to us and a team of certified financial planners and fiduciaries are

17:33

happy to help again eight five eight five six four eight zero three six,

17:36

or go to our website at Epstein and White dot com. And again the phone number, calling or texting. We know a lot of you now are

17:42

texting in a question or you know, hey, you want to set up

17:45

a consultation with Brad and the team again caller text eight five eight five six

17:51

four eight oh three six. We appreciate you connecting with the team at Epstein

17:56

and White. Now, Brad, we know that interest rates are up,

18:00

and jer own pile is hedged that at least three times during this year,

18:06

they're going to try and you know, bring it down a little so they can try and get the what is they've considered a soft landing to inflation and

18:14

our economic situation. But higher rates are still with us. Should people review

18:22

what they have, especially if they're at or in retirement, and making sure

18:26

that they're taking advantage and locking in for shorter you know again, if you

18:32

two or three year make some extra interest, is that something we should consider.

18:36

Yeah. And there's one thing in particular I want to talk about today, which is the dreaded annuities, right, and that's because things like CDs,

18:42

things like bonds, and in the annuity world, the products become much

18:45

much much better when it just rates are higher. Yes, I am not

18:48

saying that everybody out there should have annuity by any stretch of the imagination,

18:52

but I do know that a lot of you have them. And how do

18:55

I know that? Well, not only from the thousands of you I've met, But Limera just post that annuity sales had another record year of three hundred

19:03

and eighty five billion in sales in twenty twenty three, and that's just in

19:06

twenty twenty three. So again, a lot of you have annuities, existing

19:10

annuities out there, whether you should, whether you should, and whether they're good or whether they're not, you have them. There's plenty of reasons why

19:17

this many annuities get sold. The first is that we have a record amount

19:19

of baby boomer retirees right every day still in this window retiring. Right.

19:23

Who annuities are primarily for is for people in retirement, and that's because emotions

19:30

get high with your money at the stage. Right. If the market loses

19:34

twenty percent and you've got a million dollars, that's a two hundred thousand dollars

19:37

loss. That's going to matter a lot more, right when you know you're

19:40

not working anymore than a twenty percent loss would matter back in the day if

19:44

you had ten thousand dollars to year, right, Right, So we know

19:47

that people are looking for ways to not worry, not worrying retirement about their

19:52

money, to lock in their retirement, right to say, I've worked my

19:55

whole life for this, and now I have enough. I've got a retirement

19:57

plan, I've got a financial plan. It tells me I can live this

20:00

great life like I don't want to take the chance that some horrific recession or

20:03

market right ruins it all for me. That's logical, right very now.

20:08

The third reason for this is interest rates skyrocketing makes for a much much better

20:14

environment for these kind of investments, and that's made them more attractive, right.

20:18

You know, As an example, fixed annuities right now pay almost six

20:21

percent per year, guaranteed, no risk, no fees whatsoever, right for

20:23

like five to seven years if you want to. Some people may not want

20:27

to lock their money up. That's fine, but for others that's that you

20:30

should lock it up as long as you can if you're getting rates like that,

20:33

right, because look at the last decade before this, you couldn't sniff

20:36

those rates. Right. Other annuities lose nothing when the market goes down,

20:41

and you can make money when the markets go up. Those used to be

20:44

up to like four or five percent per year. Now they're ten percent plus. So that's not a terrible deal to say, hey, I'm going to

20:48

put my money in the market. I can't make more than ten percent per

20:52

year or eleven percent per year, but I can't never lose either. You're

20:55

still making ten percent in good years and losing nothing in bad years. That's not bad, right. Some annuities pay lifetime pensions for people, right,

21:03

and you know it's for some people. Nobody hats their pensions, right,

21:07

is usually how I start that sentence off. Right, So when I do

21:10

meet people that have pensions, right, nobody ever says like, oh God, I wish this wasn't automatically coming into my account every month forever. No

21:15

matter what, that never happens. Right. People with pensions are happy.

21:19

So for some of people, they don't have strong legacy goals. The don't

21:22

want to leave money to kids and getting a nice secure income stream from your

21:26

four to one K that can go live your life and do what you want

21:29

for at least part of your money, that's good too. Well, now those annuities pay out a lot more income than they did five years ago in

21:33

interest rates were lower. So the whole point of this is, well,

21:37

there's a couple points. I would say Number one is worse. Certified financial

21:40

planners that look at your entire situation. So we're the exact people who,

21:45

yes, are experts and annuities, but because we look at the whole situation,

21:48

we're the ones that can kind of diagnose, which is a word I

21:52

like, and say, you know what, this is not right for you shouldn't buy any sort of annuity and here's why. And for some of you,

21:56

we're also the shop that's not afraid to say, hey, based off

22:00

what you said, you don't want to take any risk, or you want

22:02

some guaranteed income, Well, yeah, an annuity for part of your money would be perfect, and here's why. But also we can independently shop the

22:08

entire insurance and innuity marketplace. So even if you decide an annuities right for

22:12

you, do you have the best one. And that's what I'm seeing a

22:15

lot right now, Bruce, is that people who have these existing annuities which

22:18

they bought for a reason and they like them potentially, but it's like,

22:22

man, you're only getting paid what on that thing, or that thing's only

22:26

crediting what, or it only gives you what. If you switched out of

22:29

that into an annuity in today's world, you'd get this much more right.

22:33

And again That's not terribly different of a concept, right than somebody saying,

22:36

oh, I locked this CD and at two percent a few years ago, will if you can get out of it for a very small penalty and get

22:41

into something that pays you five or six that's the same conversation, right,

22:45

if that makes sense? Exactly? Yeah, I am, just because I

22:48

think you know, Brad, it's all about where you're at now and where

22:52

you want to go. And that's but that's why sitting down with you and

22:56

your team is so key, because it's it's dike, as you said.

23:00

I mean, if I have a gluten allergy, but I just you know,

23:03

and I feel bad, but I never go get a test, well,

23:07

then I'm never going to know and diagnose the problem of what's causing me

23:11

to feel sick. If you don't ever diagnose why your annuity is performing the

23:18

way it is, then yeah, it doesn't mean something's wrong with pieces of

23:21

pizza in general, right, just means it's wrong for you, r right, If I get that from me, you know, yeah, me too,

23:27

Yeah, right, But like that's that's it's a somewhat relevant analogy,

23:32

right where it's like, hey, this annuity is a horrible idea for one person, and it could be a perfect idea for the next Right. But

23:37

then on top of that, well, there's one hundred versions of that thing. And so even if it was that person where it made sense, like

23:41

you could have bought the wrong one. The wrong person could have sold you

23:44

that right. And a big problem with the annuity world is most of the

23:47

annuities are provided by like insurance agents or advisors that aren't in the fiduciary landscape,

23:52

and so that's where a lot of the abuse happens, right, is

23:55

where advisors, like when they sell annuities to like everybody that walks in the door. Right, it's a big commission. You got to be careful that.

24:00

You also have to be careful for firms that tell you that all annuities

24:03

are bad no matter what, because that's just false. It's a good marketing

24:06

ploy and you know, but it's just not the case. Right. There's

24:08

good ones, there's bad ones. There's good situations for it, and there's

24:11

bad situations for it. But what I will say is that because they are

24:15

commissionable products and because you don't need to be a fiduciary to sell them,

24:18

oftentimes they are missold and that does create a lot of the bad kind of

24:22

negative press around it, and you have to be very very careful about that

24:26

too. And that's that is no joke. So I think we're a really

24:30

great position from a firm to look at the stuff for you, whether it's

24:33

your annuities, your four one cage, your I raise, your overall situation.

24:36

And the reason why is because for over a decade we've gotten some good feedback from people where you can meet with us up to two times, certify

24:42

financial planners, fiduciaries. We will literally look at your whole situation. We'll

24:47

answer every question you have, We'll look at give you second opinions on existing

24:51

investments, We'll give you ideas and other ones. We'll build you a retirement plan, will minimize your tax strategies, will solve your Social Security timing.

24:57

All these things will do at literally no cost, no obligation. And again

25:00

we've been doing this for over a decade, and as we ask people,

25:03

some people have a need to want to work with us on an on time

25:06

basis, a full time basis, and some people, you know, it's this is all I needed, and thank you, and what we ask everybody

25:11

and I always say it was it was it was worthwhile to come in,

25:14

and people feel like it was good to come in. And if you care about your finances, you're gonna have to take a little time out of your

25:18

life at some point to make sure everything's working well. Right. If you

25:22

work thirty or forty years to accumulate what you have, an extra hour or

25:25

two to make sure you're doing the right thing as you head into retirement is really really crucial. And we've seen that time and time again here. But

25:30

the good news is no cost, no obligation, And here is our number

25:33

eight five eight five six four eight zero three six. That's eight five eight

25:38

five six four eight zero three six. Or you can always go to Epstein

25:42

and White dot com and reach out to us that way. That's Epstein and

25:45

White dot com. All right, H four A one case they have.

25:51

They really took hold brad back in the middle eighties when companies realized, oh,

25:56

I can get out of the pension business and I can just add some

26:02

money to what someone else is willing to put in their little account here,

26:07

and my obligation is done. I'm going to play conscious pilot here. I'm

26:10

wiping my hands and moving on. And then obviously what was it we started

26:15

being able to do wroth four o one k's in what twenty fifteen, twenty

26:22

fourties, I don't know, some middle twenty tens, and now you know

26:27

pensions. There is some chatter about some pensions. Maybe I think it was

26:32

IBM was talking about pensions. But why do we like four o one k's

26:37

more than our pensions? That's the question I want to ask, right like,

26:41

And this is something you don't even know about yourself, right, you

26:44

never really thought of. But as a country, we just seem to have

26:48

fallen in love with the concept of four to one k's over pensions. That

26:52

much is true. The question, though, that nobody really asked, at

26:56

least out loud, is why. And so I've thought about this, and

27:00

I think it speaks to one basic concept of just what America was founded on,

27:03

right, which is that if you work harder than the next guy or

27:07

gal, right, you can make more money than them, you can have

27:11

more than them. Right. That is right, as capitalistic as it gets.

27:14

That's what we believe in here in this country. For right or for wrong, or whatever you believe in, that is our theme. So think

27:18

of a pension for a minute, Right, I am a big believer of

27:21

that theme, by the way. That's why I started a business and worked insanely hard. You know, think of a pension for a minute. It's

27:26

just kind of the same rules base for everybody. Right. Hey, if

27:30

you work at a company, each year you work, it's a formula,

27:33

right, you get exit amounts of this thing that we're going to put in

27:36

your pension someday, tied to your salary and years of employment. Right,

27:40

So it's a formula. The four one case is basically the exact opposite.

27:44

Right. You can put in zero or in twenty twenty four up to twenty

27:47

seven thousand en it each year, that's up to you. You can invest

27:51

your money in just cash or an all stocks or anywhere in between. That's

27:55

up to you. Right. So now you've kind of got your own personal

27:57

scorecard over your life. You get to watch the account go up and up

28:00

and up. You can kind of see inherently why people are gravitate towards this

28:06

from a human nature standpoint. When you phrase it that way, right, it speaks to our freedom, right of it it's it's it speaks to the

28:11

concept of freedom. I should say, right, And that's something we covet

28:14

above all else, right, Like, don't tell me what to do with my money. It's my money. It also speaks to our brains liking much

28:21

bigger numbers, you know, that's we love them. I'm a human being.

28:25

I do too. A million dollar four one k right, Staring at

28:27

that feels good. And you know, if you're sixty or sixty five,

28:33

it's worth the same thing as like a four thousand or forty five hundred a

28:36

month pension. And I guarantee you like seeing the million dollar number more than

28:40

you like seeing a number that says four thousand or forty five hundred a month for you the rest of your life. But they're worth the same thing mathematically.

28:47

What's more interesting is that all of this just kind of speaks to the

28:49

value of your money on the way up. Like I think all of what

28:53

I just said makes sense, right. I thought about this really hard to

28:56

try to diagnose this, you know, Brad aka six min Freud of here

29:00

right, trying to figure out all this, I put a lot of thought.

29:03

You have a couch in your office I can lay down on. Yeah, I lay down on it quite a bit though, Actually so it makes

29:08

sense in your work, yes, because you're seeing values go up and that's

29:14

the way our brains have been trained. But like, once you retire,

29:18

should all of that still be the case? Like? What should you love

29:21

more? So? Here's the thing, Right, if you have a large amount saved compared to your income needs, and you definitely won't run out of

29:27

money, if you have strong legacy goals and you want to leave money of

29:32

your kids, then I think you should love the four one k more than a pension for sure, Right, Like, if you have a five million

29:37

dollars four one k and you need sixty k a year, you're never going

29:41

to run out of money, And I understand, Like, okay, I think you should like the consument a four one k more. But that's let's

29:47

forget about a situation like that that a lot of people don't find themselves in. Isn't the whole point of saving up over your life just so you have

29:53

enough to pay you in retirement? Right? So you saved enough so that

29:56

you will be okay when you stop working. If that is basically the whole

30:00

point, then shouldn't we love the pension that automatically does that more? You

30:07

know, like it it's what I hear people, right, they stress so

30:10

much over their markets. They stress so much about elections and the economy and

30:15

news after news after news, which is worse now, right because it's attached

30:18

to our hand all day long, every day exactly. And so I see

30:21

so much stress and I hear so much of this. It's like, well, if they love the four one K, then then there shouldn't be anything

30:26

to worry about. Well, the pension takes away all that. So I

30:32

don't know. This isn't this This is one of those you know times on

30:36

our radio show here, I don't have this isn't all equal some actionable advice

30:40

as much as it maybe is food for thought, for you to really think

30:45

about yourself and what's going to make you happy in retirement, because there are

30:48

two types of people out there. Again, I've met a lot of you. I know there's two types of people here, and some of you may

30:52

hear everything I said, and it's like, yeah, you know what, the markets don't scare me, they don't freak me out. And I love

30:56

the flexibility and control of actual money. My I ram my four to one

30:59

K, and I know how to you know, like that's and there's other people that are like, I literally never thought about this, and I would

31:04

love the idea of just having a pension. Right, So there's good news

31:10

in both directions here. Right. If you love the idea of a pensions and you don't have one, you know, reach out to us. We'll

31:15

teach you investments where you can literally create and we can explore that with you,

31:18

and it might make you really happy for part of your money and for

31:22

your overall plan. Now, if you like the idea of more upside and flexibility and inheritability. If you like that more, but you do sort of

31:27

worry about the markets and kind of how to generate income, we can teach

31:30

you how to do that. Right. We have most of our clients are

31:34

in portfolio management and we are retirement incomplainers and their strategies around how to effectively

31:40

do that over the course of a long retirement too. So, regardless of kind of what your flavor is, I hope that conversation at least helps spark

31:45

some things that make you feel good one way or another about who you are

31:48

and that you're aligned with your investments. And if you need some advice on

31:51

that or want to talk that through or get the investment advice of kind of

31:55

how to do one or the other or both. Reach out to us. Our number is eight five eight five six four eight zero three six. You

32:01

can call or text us at that number that is eight five eight five six

32:07

four eight zero three six. Or you can always go to Epstein in White

32:10

dot com and you'll find our information there. That's Epstein and White dot com.

32:14

And we appreciate listeners interacting with us both via the phone and the text

32:19

here of late, and we appreciate you listening to the show. Raight.

32:22

As we wind down this segment, I'm gonna ask you a question and I'll

32:24

let you explain, because I know this is going to sound a little weird.

32:29

Is liquidity a good thing or a bad thing in your opinion? See

32:34

here retire right with Brad White. We love to ask dumb questions. No

32:39

dumb questions, Brad. It sounds like one, doesn't it it does?

32:44

Is liquidity good or bad? Right? In a vacuum? Liquidity clearly no

32:46

brain or a good thing? Right? Like? Hey, would you rather

32:50

be able to get your money back without a penalty to delay whenever you want? Or would you rather be locked up and have to pay early penalties.

32:55

Right, Like, what a tough question to ask. So ask the hard

33:00

hitting questions, Brad, Come on, that's what we do here. Right. Everybody goes left, we go right right like we say when others zag,

33:07

look so like, why do we ask it right? Oftentimes? I

33:10

know that it's not my favorite phrase in the world, but it relates here.

33:15

It's Look, if you give someone enough rope right, they have a tendency to right. You get you get the idea, well, finish the

33:21

analogy. That's that's why I bring this up because that's what the liquidity concept.

33:25

Obviously is good in a vacuum, but it is rope right, and

33:29

so that's what most people get wrong on public stocks and thus stock market right

33:34

is it's liquid. It's liquid every second of every trading day, which means

33:37

people can overly buy them all the time whenever they want, and overly sell

33:42

them all the time whenever they want. That creates volatility. If you hear

33:46

this word volatility, which is not a good word. It is impossible to

33:51

have volatility without liquidity, and volatility is the real reason that most investors lose

33:55

their mind and buy and sell the wrong times and do poorly over time.

34:00

Volatility is what creates that. So if public stocks were locked up and they

34:05

were only allowed to be valued based off like fundamentals once a quarter, and

34:07

only a certain amount could be bought or sold, like, you'd have management

34:13

of companies always thinking long term. That's another thing about liquidity right, is

34:16

these public companies know that they have to satisfy a board of directors and quarterly

34:21

results otherwise they get fired. CEOs get fired in public companies right from a board of directors. So if you're sitting there right, like you know,

34:27

I'm a big NFL guy in the NFL draft comes up, right, You've

34:30

got certain general managers like, look if I don't I might as well take a chance because I'll get fired next year if this doesn't work out. Yees.

34:35

Yeah, So you don't necessarily want companies run that way, right,

34:38

Like you'd love it if it was like, hey, look this is going to be a little painful for the next year, but this will keep the

34:42

company happy to ten years from now, Like that's what you really want,

34:45

But the liquidity right doesn't allow them necessarily to do that. Yeah. So

34:51

again we joke, we have fun, We talk about it being a dumb

34:53

question. And obviously liquidity in a vacuum is a good thing, but you

34:58

do have to kind of start to ask some of these questions, which is, are you okay with liquidity? Right? Like, sometimes people invest in

35:05

private equity, private stocks, and that is there are rules there. You

35:07

can't get your money back whenever you want. And everybody that manages money knows

35:10

that this translates to something called an illiquidity premium. There's literally a word in

35:15

the investment we're called illiquidity premium. Means you get paid extra over time,

35:19

typically because you're willing to not touch your money for a while. Right.

35:22

There's a value to that, okay, And you know, and a very

35:24

simple analogy is you get paid more on five year CDs a lot of times

35:29

than money markets. Right. Albeit, I know we're in a little weird environment right now, but you get a higher rate of return for this kind

35:35

of a trade off. So I just to be clear, I think you

35:37

should always you always, always need some liquidity in your life period, not

35:40

just for emergencies, but to take advantage of strategies and be flexible. But

35:45

it is worth noting when you think about your investments, when you think about

35:50

how to put your overall retirement portfolio together, and a lot of You probably

35:54

don't want a ton of volatility and a ton of risk everywhere you see,

35:57

but you still want to make some good returns. The question kind of becomes,

36:00

is there some illiquidity premium somewhere in the world. There's some things that actually will have a bigger benefit to you than you think, rather than just

36:07

the obvious negative on that one investment. You know, I can't always touch

36:09

my money when I want. Guess what, You shouldn't always touch every investment

36:13

you want. It's for the long haul anyways. Something to keep in mind.

36:15

These are tough questions. The answer is not the same for everybody.

36:19

That's what makes them tough. But that's what makes us do what we do

36:22

here. It's why we get out of bed and do what we do every day. It's why we work hard and have the careers we have. Is

36:25

because all of your situations are different. Your goals and your needs and your

36:30

concerns and your risk profiles. There's a million different options out there. How

36:34

the heck do you know how to take the money you've earned in your life

36:36

and turn it into income you can depend on throughout retirement, get growth that

36:39

you need, beat inflation, minimize taxes. How do you do all these

36:43

things? Well, it starts with coming in to see us. There is

36:45

no cost, no obligation. We've helped literally thousands of San Diegans over the

36:50

last decade plus. We will happily help you next. Our number is eight

36:53

five, eight five six four eight zero three six. You can text us

36:59

or call us at that number and come in and get to see us for up to two appointments. Certified financial planners and fiduciaries. Again, our numbers

37:06

eight five, eight five six four eight zero three six, Or you can

37:09

always go to Epstein and White dot com and reach out to us that way.

37:14

That's Epstein and White dot com. Epstein and White is a trade name.

37:19

All services provided by Epstein and White Investment professionals are provided in their individual

37:23

capacities as investment advisor representatives of Mercer Global Advisors, Incorporated and SEC registered Investment

37:30

Advisor principally located in Denver, Colorado, with various branch offices throughout the United

37:35

States, doing business under different trade names, including Epstein and White. All

37:38

expressions of opinions reflect the judgment of the speakers as of the date of recording

37:43

and are subject to change. Some of the research and ratings and articles discussed

37:46

come from third parties that are not affiliated with Mercer Advisors or Epstein and White.

37:51

The information discussed is believed to be accurate, but is not guaranteed or

37:54

warranted by Mercer Advisors. The information provided in this show does not purport to

37:59

be a complete disscription of the securities, markets, or developments discussed. Forecast

38:02

projections and other forward looking statements are not a reliable indicator of future performance.

38:07

Actual events, results, or performance may differ materially from those reflected or contemplated.

38:13

This show is being provided for educational purposes only and is not intended as

38:16

a recommendation or solicitation to buy, sell, or hold any particular security,

38:22

or to engage in any particular investment strategy. No portion of this discussion should

38:25

be construed as tax or legal advice. All investing involves risk, including the

38:30

possible loss of principle. Past performance is not a guarantee of future results.

38:35

An annuities guarantee is subject to the claims paying ability of the issuing insurance company.

38:39

This radio show is a paid placement