Welcome to how to retire on time, the show that answers your questions about all things retirement, including income, taxes, Social Security, health care, and more. This show is an extension of the book, How to Retire On Time, which you can grab today on Amazon or by going to www.howtoretireontime.com. My name is Mike Decker. I'm the author of the book, How to Retire On Time, but I'm also a licensed financial adviser, insurance agent, and tax professional, which means when it comes to finance, your money, all of the above, we can pretty much talk about it all. Now that said, please remember this is just a show everything you hear should be considered informational, as in not financial advice.

If you want financial advice, you can request your wealth analysis from my team by going to www.yourwealthanalysis.com. With me in the studio today is David Franson. David, thanks for being here.

Yep. Glad to be here.

David's gonna read your questions, and I'm gonna do my best to answer them. You can text your questions in to (913) 363-1234, or you can email us at heyMike@howtoretireontime.com. Let's begin.

Hey, Mike. How do you find the best investments or products? And are they asking how do you, Mike, find them, or how does this how do we all find them? How are

Yeah. It's internal research. Because everything you read is a sales pitch.

Uh-huh.

I mean, really. If you're reading annuity information from an annuity company, it's an annuity sales pitch. Sure. If you're reading buffered ETF information about a buffered ETF, it's a buffered ETF sales pitch. If you're reading the best I mean even the articles on there, the best five ETFs today, it's a sales pitch to get you clicks to create a dependency on that outlet to be chasing the returns.

So it's all kind of a sales pitch, and so we do our investigation internally because I don't trust any of these companies, frankly. And it's not that I don't trust them that they're scheming for something, it's that they have a job, and we all know what their job is, and that's to sell what they sell. That's to sell their product. There's nothing wrong with that. It's just understand the nuance of things.

There was an index associated with a product years ago that had a lot of marketing material, and I'm open to reading someone's marketing material, and is this the right fit or not? I was talking with the wholesaler, the person that was pitching the product saying we need to include this as a bond fund alternative in our client's portfolio. I said, okay. Well, how does this index really work? And I was asking question after question saying this is a bit of a black box.

It looks like this. How do you see it? What am I missing? Just trying to understand it. And I went from the wholesaler to then the regional manager to then the higher up to then the guy at one of the big firms, I won't say which one Alright.

Who was hired to create the index to support the product. And anytime you hear proprietary, it's a black box on purpose. Alright. And after forty five minutes of just drilling the guy, he finally came out and said, look, it's not meant to do better than three or 4%. Like, what do you expect from me?

Oh, boy.

And I said, you know, thank you for your honesty. I see why some people would want this, but it doesn't make sense for my clients based on how we're putting together our plans, our strategies, and our portfolios. Thank you for the time. But it took me several hours of hounding people on the phone and doing internal due diligence just to figure out if this index was legitimate or not based on how we were going to use it. That's not to say that the index was bad.

It's not. It's just to understand what's really going on. So all investments are products. Look, let me use an example.

Okay.

I personally have a bias against variable annuities. I personally can't stand them.

Tell us why. CliffsNotes version.

Yeah. I have found that they many times have high fees, have the same risk as if you were to buy and just put money into the market

Okay.

With this income component that you might use, but you might not use. And in my mind, it's like, If you're gonna invest in the market, just invest in the market and cut out all these unnecessary layers of fees. And then if you do want lifetime income, then shop for income at that point later on. So if you want lifetime income and you're willing to take the risk, you got ten years, whatever it is, great. Just buy a low cost ETF that you could probably match the same thing of the variable annuity, whatever it is, and then shop for an instant annuity or a fixed index annuity that you could turn on in one year, whatever it is later on.

I can't make sense of it. Mhmm. Every product has a reason. So here's what I came up as the reason why someone would buy a variable annuity. Keep in mind I've never actually sold one.

Alright.

But if you've got $10,000,000, and you want to put 5,000,000 into something that's going to generate income later on, and you don't want to deal with taxes, okay, you can put $5,000,000 please don't do this by the way. I'm using this as a hyperbolic exaggeratory example Okay. Of it. But maybe they put 5,000,000 into a couple of variable annuities that might have more growth potential for the next ten years, but they've sheltered the capital gains issues within a variable annuity, because annuities don't deal with capital gains issues. And then when you turn on income, they then separate the gains income tax over the rest of your lifetime, so you've spread it all out instead of taking it up front.

But that's a very specific situation that I usually don't have, because people that have amassed $10.20, $30,000,000 or more that are looking for income usually aren't looking for guaranteed income for life because they have more money than they'll ever spend in their life. Yeah. So therefore, I've never actually sold one, but I can see how it could be used.

Right.

So the point being is all investments or products are tools. What are you trying to build, and what tools are best used to help you get there? We need to stop having these biases of, oh, that's always bad or that's always good, and understand when does it make sense to use this tool. There's like, what, over 50 versions of a hammer or whatever? I I can't imagine how many saws exist.

Oh, boy. But you're

not gonna use a saw for a construction project as the same saw do dentists use saws in your mouth? I don't know. Don't really know what the tools dentists use. I asked you because your wife's a dentist. Yeah.

Yeah. There's a lot of drills, but I don't know about

any Okay. A drill for a wall is different than a drill for your mouth, which is probably different than a drill for whatever surgeries people perform.

Don't know.

Yeah. Different tools for different things. Again, going back to the basics, put a plan together so you have a general idea of where your money is going, what's the flow of it all, then explore the strategies to get more out of your money, and then put together the portfolio using the tools that give you the higher probability of success for what you wanna get out of your money. Your money is intended to serve you. How do you want it serve you?

And in what way can that be constructed so that you're able to live within your emotional and economic limits? That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcast. Just search for how to retire on time. Discover if your portfolio is built to weather flat market cycles if you're missing tax minimization opportunities that you may not even know exist.

Explore strategies that may be able to help you lower your overall risk while potentially increasing your overall growth and lifestyle flexibility. This is not your ordinary financial analysis. Learn more about Your Wealth Analysis and what it could do for you regardless of your age, asset, or target retirement date. Go to www.yourwealthanalysis.com today to learn more and get started.