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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Welcome to How to Retire on Time, a 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 you can go to www.how to retire on time.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 financial topics, we can pretty much discuss whatever's on your mind. Now that said, please remember this is just a show.
Mike:Everything you hear should be considered informational, as in not financial advice. If you want personalized financial advice, then request Your Wealth Analysis from my team by going to www.yourwealthanalysis.com. With me in the studio today is my esteemed colleague, mister David Fransen. David, thanks for being here today.
David:Happy to be here. Thank you.
Mike:David's gonna be
Mike:reading your questions that you've submitted, and I'll do my best to answer them. You can send those questions in right now or anytime during the week to, and save this number, 913-363-1234. That's 913363 1234, or email them at hey mike@howtoretireontime. That's hey mike@howtoretireontime.com. Let's begin.
David:Hey, Mike. Are you concerned about the national debt? Also, how will the debt affect the markets? Two parts here.
David:I hope you
David:got the stamina.
Mike:Yeah. Thanks. Yeah. I've got my, my beverage right here.
David:Oh, that's good. We've been talking about this since I was in high school, by the way. That was a long time ago. Yeah. Seems like it's always been hanging there.
Mike:Well, it's always an issue, and this is a a huge disconnect between how governments are run and how businesses are run. People want the government to be run like a business. Right. The government is not a business. It is not for profit.
Mike:And so the government is intended to absorb certain aspects. Now I'm not endorsing what the government has done here.
Mike:I I just
Mike:I need to define things as they are. Yeah. And that upsets people because people want a certain narrative that is almost like an echo chamber that confirms their their bias the the reality they wanna believe. The government's not supposed to make money. The government is supposed to absorb social problems that could be affecting society and and be a stabilization feature.
Mike:Now is the government spending too much money? There's a fair argument for that. Did the government print too much money? There's a fair argument for that. So I I'm not endorsing anything that the government is doing.
Mike:That's a a very fun conversation to have, but we need a couple of hours, and it's more productive, I think, if you have a back and forth exchange with that. Yeah. That's so we can explore what is right as opposed to just some guy talking over the radio waves and the airwaves and the podcast waves about what his opinions are. So am I concerned about the national debt? The answer is, overall, no.
Mike:And the reason is there are multiple ways we could get out of it, but the government's controlling the money supply anyway. I get the inflationary factors. I was one of the few people saying, hey. We're printing all this money. This is gonna be rough.
Mike:Get ready for inflation. It's coming. And they're and people are saying, no. It's transitory. It's gonna be fine.
Mike:No. There are fundamental economics that will be followed because it's just they're principle based. You can't manipulate economics long term. You can't get away with anything when it comes to economics over the long term. You might get away with something in the short term, but not the long term.
Mike:But am I am I nervous of it? No. And the reason is there are certain things happening within our economy, within our growth. The AI boom with the or the AI potential boom, I should say, with space potential exploration, with certain advancements in health care. There are certain industries that may significantly take off that could lead to an additional frontier of growth.
Mike:There are ways to get out of debt as well. We don't need
Mike:to solve the debt in 1, 2, 3, 4 years. What we need is a system that can hold the debt accountable so it's within a certain threshold that doesn't compromise the credibility of Mhmm. The US dollar.
David:Okay. Yeah.
Mike:Does that make sense? Like Yeah. I I'm thinking of Dave Ramsey here. And I whether you agree with him or not and I don't agree with him with everything. I think he's a a good person that's doing good things, but it's you know, the government just needs some baby steps to to go about this.
Mike:I I different opinion on how to get rid of debt. Maybe that's for another time, but okay. So if the government, let's say, were to be a little bit I don't wanna say smarter, that's very condescending.
David:Sure.
Mike:But if they were all put fiscal responsibility as the primary objective Yeah. For their their campaign, for their policies, for their agenda, k, It would probably get solved quickly, and there's 5 ways you could do this. Not all of them are pleasant for the for people, but you could default. Probably not gonna happen, not likely, but that is a way you can get out of debt is just default. Now if the US government defaulted on their debt, there would be significant waves felt across the entire world.
Mike:So I don't think that's gonna happen. That technically is, one of the ways that we could get out of some debt or all debt. Grow the economy. If you grow the economy, that, just through the growth and the taxation, naturally pays for itself, and that's an economic theory. Increase taxes or decrease taxes.
Mike:This is economic theory. So if you increase taxes, the government, in theory, gains more revenue. If they gain more revenue, they can pay down the debt faster. That is one way that you could pay debt off faster. Now, supply chain economics would suggest that if you decrease taxes, more specifically, like, income tax, this is the theory, You could argue it, you know, 12 ways till Sunday.
Mike:Is that the expression? Yeah. If you decrease taxes, people can spend more. And the more that they spend, the more the economy goes, the more transactions are happening. The more transactions that happen, the more taxation exists, and so the government actually makes more money when they tax less.
Mike:And there's a there's an equilibrium between increased and decreasing taxes based on your theory and what would happen. Now it's not that simple. Taxation, and if you increase it or decrease it, is something that needs to be considered with other economic indicators or influences. K? This is not an easy issue to solve.
Mike:But tax adjustments, whether it's increasing or decreasing, can also help contribute to the elimination of debt, decreasing spending. I mean, it's as simple as if you if you earn more than you spend, you'll probably be wealthy.
Mike:Yeah. I mean, if
Mike:the government were to decrease spending, and it's not even necessarily political. There there are some weird programs that are being funded about research on things that may be fascinating, but we may not need right now.
David:Sure.
Mike:So if we were to just tighten our belts and say, hey, let's just maybe get rid
Mike:of some of the programs for
Mike:a little bit or minimize certain ones, keep the important ones. When I say important, the ones that are focused on human life get a little political here. I'm I'm really trying to stay both sides of the aisle for some I try to be politically neutral, professionally speaking, but that's one. And then the other one that isn't talked about a lot is they could just inflate the debt away. So when I say inflate the debt away, let the economy take off, let inflation run rampant.
Mike:Now the debt dollar amount today is easier to pay off later because they inflated it away. The dollar lost value, but the debt stayed the same dollar amount, so it slowly eats away. And we've seen other countries try to do this. I think it's kind of a risky strategy, but there are multiple ways to do it. Yeah.
Mike:I believe in the American ability to work hard, innovate, and get things done. Yeah. I believe that at the heart of us all, we're a little bit rebellious. I think we all like to just kind of take the bull by their horns and, you know, challenge the status quo and make things happen regardless of the conditions that are out there. So I think that America will continue to innovate and continue to grow, and I've got faith in the ability that the economy, over the long term, will be able to grow and that we'll be able to handle certain things.
Mike:Now there's no guarantees with it. You need to plan for the worst and hope for the best. Yeah. You you've gotta be able to have a
Mike:plan, and this is why
Mike:it doesn't really concern me. You gotta be able to have a plan that has growth potential. So if they were to inflate debt away, right, if the economy were to just grow, if they were to increase or decrease taxes, that you're prepared for all of those situations. Very limited outcomes, but are you prepared for all of them? So let's say inflate the debt away, money becomes less expensive, or they start printing money again or whatever it is.
Mike:How are you prepared for that? If you bought this is why it concerns me. If you bought an annuity, turned on the income stream, and you've got now fixed income, you're not prepared for if they were to inflate the debt away. If we were to pay
Mike:off our debt through significant growth in the economy, growth in the economy is another form of inflation. You're gonna be in
Mike:a tight spot. So this is why I I'm not concerned for myself or for my clients because we focus on growth portfolios. But people living off of fixed income, I believe, should be concerned.
David:Yeah. Good point.
Mike:So that that's the distinction there. It's not a concern because of how I plan and how I prepare things. You create a system and you follow it. You plan an efficient portfolio. You put together your lifestyle and legacy plan.
Mike:You explore the efficiencies and strategies to help you get more out of your hard earned money, and then you design the portfolio that helps you or allows you to implement those strategies and efficiencies while following the direction of your plan, your lifestyle legacy plan. So you can spend all your time in fear, complaining,
Mike:and resisting all of this, or you can just plan
Mike:and let it happen. I mean, look at what happened with the market. When they printed all that money, where did it go? Yeah. It went to the people, and then they spent it, but it slowly made its way back up to the large companies.
Mike:Yeah. And it shows in the market. So what's your growth strategy? Are you in the market? But here's the caveat.
Mike:All of
Mike:what I've said has been focused on long term healing or growth. You break your arm, it's gonna hurt for a while. You can heal overall. You can probably get full range of motion and ability at some point, but it's going to hurt. And I do believe that over the next couple of years, that the economy will be not so pretty.
Mike:There there are 2 indicators that are out there. We you don't wanna go all in on these indicators, but it's the SAM rule, which has predicted successfully for the last 40 years. Every recession that's happened, only twice was it wrong because it was just 2 years off. The recession happened 2 years later. Then there's the the yield curve, which when that goes from an inverted yield to a normalized yield curve and I'm a little technical here, but, basically, it's an indicator that every time that's gone off, there's been a significant crash in the near future.
Mike:That's also going off right now. So do we wanna go all in on macroeconomics and say the market's about to crash? No. There can be false positive. 1998 was a false positive.
Mike:2006 was a false positive for these indicators. We had 2 years of significant growth, and then the crash happened. So do you wanna go all in cash? No. Do you wanna go all in the market and and have that growth?
Mike:No. Do you wanna have a plan that can sustain your quality of life regardless of market conditions, that you can enjoy the ups and get through the downs without accentuating losses? I teach this in my book, how to retire on time with the reservoir strategy. And if you wanna learn more about it, instead of reading the book, which you can get the book on Amazon, you can go to how to retire on time.com and order your copy yourself there, 5, $10 or something like that.
Mike:Yeah. But if you just say,
Mike:you know, gosh, finance, it's overwhelming. I just I don't know if I'd get it. Just request your wealth analysis. We're friendly people. We take the consultant standpoint.
Mike:We're gonna focus on what is right. We wanna know what you want. We wanna know what your expectations are, and then we give you multiple ways you
Mike:can solve that, and then you pick what you feel comfortable with. Because we
Mike:can offer it all, we're indifferent on the solution as long as it follows the rules of retirement, which is just not drawing income from an accentuating account, diversifying your assets by objectives and not ambiguity, and then proactively planning so that you know what to do when the markets go
Mike:up or down. That's it. Brings a lot of peace.
Mike:So if you wanna understand how to prepare for debt, inflation, taxes, I mean, whatever's keeping you up at night, if if you're nervous about that, whether you're 10 years away from retirement, 5 years away from retirement, wanting to retire next year, maybe you're already retired, request your wealth analysis today. Text analysis right now to 913-363-1234. That's analysis to 913-363-1234, or you can go to www.yourwealthanalysis.com to learn more and discover how we can potentially increase your overall lifestyle, your overall income, your flexibility, your growth, make it more efficient, while also potentially even minimizing your overall risk. This is something that's so powerful. Many people have said that it gave us more financial clarity than our current plan, and it was just our analysis.
Mike:Requested today won't cost you a dime, but could significantly improve your overall quality of life, maybe even help you sleep better at night. Text analysis right now to 913-363-1234. That's 913-363-1234. Or go to your wealth analysis.com to learn more and get started. That's all the time we've got for the show today.
Mike:If you enjoyed the show, consider subscribing to it wherever you get your podcast. Just search for how to retire on time.
David:Discover if your portfolio is built to weather flat market cycles or 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.
Mike:Learn more about Your Wealth Analysis and what it could
David:do for you regardless of your age, asset, or target retirement date. Go to www.yourwealthanalysis.com today to learn more and get started.