How to Reduce Fees and Keep More of Your Hard-Earned Money

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9.1.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Safe Money Masters with Greg Castle. Get ready for a full hour of financial information and economic news you can't afford to miss. Greg works hard each and every day to help hard working Americans like you navigate challenges and reach the financial freedom they desire and deserve. So now let's start the show. Here's Greg Castle.

Greg Castle:
Hello and welcome to Safe Money Masters, where our main goal is to help you, our listeners, become masters of your money and teach you how to keep it safe. You know, we hope you're having another terrific Tuesday and that you had an awesome Labor Day weekend. And for those of you who are lucky enough to be retired, as you know already, every day is a holiday. But for the rest of you, we want you to welcome you back to the first day of a short workweek. I'm Greg Castle. I'll be your host, along with my co-host and executive producer, Matt McClure. You know, Matt, here we are again with another terrific Tuesday lineup following a holiday weekend. So why don't you tell our listeners what they can expect to hear on today's show?

Greg Castle:
Yeah, a lot of great stuff coming up here, Greg. And I will reiterate and say again, I hope that everyone had a great holiday weekend and we'll try to keep the great times going here on the show with some wonderful information over this next hour. Of course, our quote of the week will start things off here in a moment. And it'll be from someone you might have heard of before, you know, maybe once or twice in your life. Also, major US banks, you know, at least one of them here getting in trouble for another time. I've kind of lost count how many times this particular bank has gotten into trouble for one thing or another here in recent years. But they've been overcharging millions of dollars on the investment advisory side. We'll go through that and give you the details coming up. Also, are you paying too much in fees? You know, not because maybe necessarily your bank or other financial institution is overcharging you and overcharging you illegally like this big bank was. But, you know, you might be paying too much in fees and not even know it just because you don't exactly know what you're paying. All right. So we'll go through that part of the show as well. We'll do a little segment called Beating the Bank CDs.

Greg Castle:
And you know, before you invest in a bank CD, consider there are other options out there that could be a better fit for you. We'll get to some financial terms of the week as well. We'll talk about correlation and sequence of returns risk and then if we have time for it, Retirement Planning seven Key considerations for Your retirement and for planning to have a successful one. And we'll, of course, close out as we do each and every time we get together with this week in history. And you know what Greg wanted to say to the listeners here, If you've been listening to the show because you're interested in improving your financial situation and the ability to retire someday, that is the goal. Let Castle Financial Solutions help you. They'll give you some one on one attention there to get you along your way. And all you have to do is give them a call. 813 430 7100 is that number. You can also visit the website SafeMoneyMasters.com. Greg and the team there will be happy to meet with you personally and provide some customized guidance and solutions based on your specific financial needs. All right, Greg. Well, I think it's time for us to get things kicked off here with our Quote of the Week.

Greg Castle:
And now wholesome financial wisdom. It's time for the quote of the Week.

Greg Castle:
This week's quote comes from the late genius we all know, as Albert Einstein, who once said, I think we've all heard this before. Compound interests is the eighth wonder of the world. Those who understand it earn it. Those who don't pay it.

Greg Castle:
It's so true.

Greg Castle:
It is. Think, think, Think. I'm paying more than my share sometimes.

Greg Castle:
That's right. Well, and that's true because, you know, if you don't understand what compound interest is, you do end up paying it. And if you can take advantage of it, you will be earning it because there and there are a lot of ways that you can do that. And a lot of ways we talk about here on the show each and every week that you can take advantage of it rather than sort of falling victim to it. Right.

Greg Castle:
That's so true. You know, we're a big believer in that compound interest. And and most of the things we talk about here will help you earn some of that compound interest. And, you know, we hope that you learn something from each and every show that we put on for you.

Greg Castle:
Yeah, absolutely. That's the goal. Education here. And you know, Einstein, we all his name has just become synonymous with being smart, right? So a little bit of an.

Greg Castle:
Einstein, man. You're an Einstein.

Greg Castle:
Well, thank you. I appreciate that very much. You know, I got to hang out with Greg Castle more often if he's going to call me, you know, nice things like that. But. But Albert Einstein, though, he was born in Germany, of course, he's a physicist who developed the special and general theories of relativity E equals MC squared and all of that, you know, pioneering many key developments in physics. He also developed the first of his groundbreaking theories while working as a clerk in the Swiss Patent office in Bern and went on to worldwide fame, the Nobel Prize in 1921, for his explanation of the phenomenon known as the photoelectric effect. I mean, you know, here's here's the thing I have if we can or guess if we can all, you know, go through our lives and accomplish maybe 1/100 of the things that Albert Einstein did, we would all be doing pretty well. He was truly, truly one of the greats.

Greg Castle:
You know, I was looking at this. I think this is probably the third show in a row we've done where our our quotes came from Nobel Prize winners. So.

Greg Castle:
Oh, that's right. Well.

Greg Castle:
I'm I'm feeling a. Uh, underdeveloped in my life at this point.

Greg Castle:
Yeah, I'm feeling completely inadequate.

Greg Castle:
Anyway, Matt. Before we get into today's topics know, once again, I would like to take just a minute to remind our listeners what our show is all about. The whole premise of our show is to bring you topics and tools and information that will help you protect and grow your wealth and retirement income. So, of course, we hope you keep tuning in to us. You can catch us every Tuesday evening at 6 p.m. on Money Talk, 1010 and on your local FM stations, 92.1 down south and 103.1 up north. If you happen to miss an episode, you can catch it at or you can catch the replay at SafeMoneyMasters.com or wherever you listen to your favorite podcast. And you can also check out our YouTube channel and subscribe to see weekly video highlights a special content. And if you have questions or comments, we would love to hear from you. Feel free to email me directly at Greg at SafeMoneyMasters.com or give our office a call at 813 430 7100.

Greg Castle:
Well, you know, Greg, we teed this up at the very top of the show here. And it is that time to talk about this major US bank that is in trouble once again found to be overcharging investment accounts. And we talk a lot about the fact that that many people obviously are paying more in fees that they may realize. Well, this very well known bank that's that's in operation nationally recently got caught kind of with their with the money belt down around their ankles a little bit here. That's one way to put it anyway.

Greg Castle:
Well this bank happens to be my bank so mean don't own it. But I have some money in it anyway. None of it's ever really affected me all that much. But still, there are a lot of people that it has. So without further ado, we'll introduce the bank. You know, recently federal federal regulators allege that for years my bank, Wells Fargo, overcharged almost 11,000 investment advisory accounts for a total of about $27 million in fees. So, you know, Wells Fargo has agreed to pay $35 million in a civil penalty to settle the matter without admitting or denying the SEC charges. The agency said Wells Fargo also paid account holders about 40 million, including interest, to reimburse customers who had been overcharged. Regulators also said that Wells Fargo failed to use compliance systems designed to ensure billing systems contain accurate data and didn't effectively monitor what the that the bank was not overcharging clients. Sec also said that Wells Fargo overcharged some clients who opened accounts prior to 2014 through the end of 2022. So, you know, if you think that you may be paying higher fees on your investment accounts than you feel you should be paying, then give us a call at 813430 7100 and we'll check your statements for hidden charges to make sure that you're not getting ripped off.

Greg Castle:
That's a good thing, not getting ripped off. I like the sound of that. And and it's, you know, I mean, easy to fall victim to just being overcharged sometimes because, you know, a lot of people don't necessarily even realize the fees that could be hidden inside their portfolios or whatever plan or investment vehicles they might have. There are a lot of fees in there that could just be covered up and wrapped in a in a larger bundle of money that's coming out of the account every month or however often it's paid.

Greg Castle:
Here's the cost cutter of the week.

Greg Castle:
Are you paying any of these fees? You know, one of the easiest ways to cut cost is to eliminate unnecessary fees that you're paying within your retirement accounts. Here are a few of the most common fees pre-retirees and retirees need to be aware of. You know, first of all, mutual fund charges. Mutual funds charge operating expenses. So you've got to be careful of those. Some types of funds have higher expenses than others. Investment management fees are charged as a percentage of the total assets managed. Uh, many brokerages charge a transaction fee each time in order to buy or sell a mutual fund or stock is placed there called transaction fees. Also, look for front end loads and back end loads, which are basically advisory commissions that are paid when mutual funds are sold. And those fees can be relatively high. And unfortunately, they come out of the money that you actually are purchasing those shares of the mutual fund with. You know, brokerages may also charge an additional annual custodial fee. So there's a lot of fees, a lot of hidden fees that, you know, you're really not aware of. Just be careful. Make sure you check that out. Um, and, you know, we'd love to help you with that.

Greg Castle:
Yeah, that's the question that everybody should really be asking. You know, how much am I paying in fees on my retirement savings, my retirement investments? And and again, you know, the the point of this discussion is not to just, you know, fear monger or anything like that. It's to say, hey, you could be paying too much and there is help out there that's available. I just happen to know a guy who can give you some help. His name's Greg Castle. And of course, you can get in touch with him at SafeMoneyMasters.com. That is the website for the show. You can also email him Greg at SafeMoneyMasters.com. And when you do that, you can get a full retirement plan consultation. Greg, talk a little bit, if you will, about that kind of what that experience is like for the listener.

Greg Castle:
Glad to. First of all, we provide a number of different services. We provide comprehensive consultations at no cost to our listeners. And there's never an obligation. You only work with us if it's best for you. And again, there's no fees for what we do. Um, you know, we'll help you analyze your financial situation. You know, we closely examine any annuities you may currently have and see if that annuity is up to date because many annuities that are probably over five years old are probably outdated. And there's a possibility for, you know, a zero loss transfer into something that might be able to pay more the current rates and be able to help you out there. But also, you know, we can discover exactly how much you're paying in fees and help you cut a unnecessary cost in your IRA or 401. K or any other retirement savings accounts that you happen to have. We can also help you. This is a biggie actually, to help you with Social Security planning and your and your Medicare. Social Security. Seems so simple. But as we've talked about on this show time and time again, it's actually a very complicated process. And if you do it wrong, you could literally leave hundreds of thousands of dollars on the table over the course of your life. We can also compare your current situation to what's possible if you work with us, basically the as is and the tube type retirement plan. And, you know, as we always say, just remember, it's your money. If it matters to you, you better believe it matters to us.

Greg Castle:
That's right. And once again, the website is SafeMoneyMasters.com, where you can give Rick a call at 813 430 7100.

Greg Castle:
Need a higher rate of return from your safe money. Listen up. It's time to beat the bank CD rates.

Greg Castle:
It's funny because a lot of times people might think, well, you know, with a high interest rate environment like we're in right now, those those rates are looking pretty good. But there are some other options for your safe money than a bank CD and it could be better for you potentially. And those options include what's a multi year guaranteed annuity, Greg, or Omega, right? Correct.

Greg Castle:
You know, during periods of high interest rates like we're currently in right now for for banks, they gone from paying like, you know, less than a half a percent to paying, you know, 3 to 4 and a quarter. Anyway during periods of high interest rates like we're experiencing today. You know, many commercial banks begin to tout their CDs or certificates of deposits and the current rates being offered. However, you know, many retirees are using migas as. We've already talked about, as Matt talked about, you know, the migraines are actually multi year guaranteed annuities. They use omegas to achieve the same goal, often with better results and more flexibility.

Greg Castle:
Yeah. And so that then begs the question, why might someone want to consider Omega rather than a bank for their safe money?

Greg Castle:
First of all, it's higher interest rates. Is often provide higher interest rates compared to traditional bank CDs. This can result in more substantial returns over the life of the annuity, which can be especially important for retirees seeking to generate income from their savings. Another reason would be tax deferred growth. Just like bank CDs. Mike is offered a guaranteed return of principal, but they also provide the advantage of tax deferred growth. The interest earned on Megha's is not taxed until withdrawals are made, which allow the annuity to potentially grow faster. Then there's also creditor protection. Depending on the state of circumstances or the state and circumstances, I should say Megha's may provide better creditor protection than bank accounts which safeguard retirement assets or legal claims. Another reason would be flexibility. Some might offer options for partial withdrawals without surrender charges, which provide flexibility for unforeseen expenses or emergencies. Bank CDs often impose penalties for early withdrawals. You've also got financial security. Magus can provide retirees with a sense of financial security as they offer guaranteed returns and guaranteed income options. This can help alleviate concerns about market volatility, which might affect their retirement funds. And also diversification. Including magazine. A retirement portfolio can enhance diversification, which is important for managing risk and achieving a balanced investment strategy. Cds just can't do that. Cds, Basically, you're giving the bank some money and say a bank, Here you are. I'm going to put it up with you for a certain period of time, of one year, three year, five year CD. And during that period of time, you can loan my money out to other folks. So it's basically sits there. The bank is using it for their purposes to make money and paying you a smaller percentage than what they're going to give, which is called the arbitrage. And with Omega, you know, omegas are actually more diversified. This gives you the opportunity, not only the opportunity, but to get a guaranteed return at a better rate than what the banks are currently paying.

Greg Castle:
Yeah. And we'll talk a lot about diversification here coming up kind of in the next segment, Greg, because our two financial terms this week have a lot to do with diversification. So we'll get into more details about how important that really is for our listeners to to know and to to understand that, you know, diversification is essential if you want to have, you know, some some protection and to, you know, you've got to have safe money if you want to keep it safe. Right? So that's the idea there. And, you know, if you want a sound plan for retirement that incorporates future spending requirements, all you have to do is pick up your phone, give Greg and his team of professionals at Castle Financial Solutions Group a call. You can do that today at 813 430 7100 and you can let them help you develop your free inflation adjusted safe money retirement roadmap. Remember? So as Greg said a few minutes ago, it's your money. So if it is important to you, it's important to Greg and his team as well. All right, Greg, you know, we've taken to doing this here over the last couple of episodes. That is, you know, sort of taking time to talk about some financial terms that might otherwise be confusing or, you know, make people's eyes glaze over when they hear somebody talk about them on on, you know, CNBC or Fox Business or whatever, you know, Business channel, you might be watching. You're thinking, Oh, this sound kind of like wonky terms or something. So we're trying to, you know, pull back the curtain, clear away the fog, whatever metaphor you want to use, and and clear these up and kind of everyday language for you. So our financial terms of the week, let's start out here with our first one, and that is correlation of assets.

Greg Castle:
You know, correlation is defined as. A statistic that measures the degree to which two securities move in relation to each other. Correlation of assets is crucial for retirees and investors to understand because it directly impacts the diversification and risk management strategies within their investment portfolios. You know, there are a few reasons why proper correlation is important.

Greg Castle:
Yeah, the first one of those being risk management.

Greg Castle:
Of course, you know, correlation measures, how to move in relation to each other as we've already defined, you know, assets with lower negative correlation tend to move independently from one another by investing in assets with different correlation patterns. Retirees and investors can reduce their overall portfolio risk, which is really, really important. If one asset class experiences a downturn, then another may perform well, which is going to help you mitigate those losses.

Greg Castle:
Yeah. And like, you just picture yourself, say back around the turn of the century when we had the.com bubble that burst. Right. I mean, if all, if you were heavily invested in in dot coms, boy, you, you lost your shirt there. But if you were, you know, well diversified, if you had things that were, you know, spread around different asset classes, you could protect yourself against that. And that brings us to this very thing and this very term here under correlation of assets. And one other reason why that is important and that is diversification.

Greg Castle:
Yeah, the Versification is one of those terms that I think most people have heard. I don't think they fully understand. But the diversification basically involves spreading investments across different asset classes. You know, understanding the correlation between these asset classes is really, really important. If two assets are highly, positively correlated, they may move in the same direction, potentially amplifying losses during a market downturn. Conversely, assets with low correlation provide more effective diversification, offering better protection during turbulent times. So universal diversification is really, really, you know, one of the keys to correlation of assets.

Greg Castle:
Yeah. You want to be in, you know, have your investments well diversified there. So if some if some go low, the others go high and vice versa to to put it in very plain terms. Stability of returns. Also another reason people might want to have this concept of correlation be top of mind here.

Greg Castle:
Right. Let me go back just to diversification for a second. I mean, I deal a lot with federal employees, and federal employees have five basic funds to choose from. Um, a lot of times these five mean they'll take a look at. Uh, for example, did the aggressive funds, the cash funds, and they think they're well diversified. But the reality is all three of those funds have high risk associated with them. And. They're really not all that diversified of the market goes down. All three of those are going to suffer drastic hits and mutual funds are the same way. If you have a mutual fund is not well diversified, it could really cost you money if you actually happen to be an independent investor or an individual investor or a day trader. If you put too much into one asset class, there's a good probability that at some point the market goes down. You're not going to like it all that much. And so moving on now to stability of returns. Well-diversified portfolio consisting of assets with low correlation can lead to a more stable returns over time, basically diversifying in different asset classes that are unlike each other. This stability is especially important for retirees who rely on their investments to generate income during retirement, which is really all important. And by reducing the portfolio's volatility. Retirees can better plan and manage their expenses.

Greg Castle:
Yeah. And so our next term here is sequence of returns risk. So let's actually spend some time talking about this one because it's, it's really super important here. What do we mean and what is this concept really, Greg of sequence of returns risk?

Greg Castle:
Well, sequence of returns is something we talk about whenever that retirees and pre-retirees get into the red zone. The red zone is typically five years prior to retirement, the first five years following retirement. A sequence of return risk is the risk that retirees and pre-retirees face. What would experiencing foreign investment, poor investment returns early in their retirement years. Those poor returns can lead to depletion of the portfolio and significantly affect their ability to sustain their desired lifestyle throughout retirement.

Greg Castle:
So what kind of impact really, then can this have on a on a portfolio? You know, just I guess just to kind of bring it home for people, you know, what if they experience, you know, this bad negative consequence of sequence of returns, risk. What can that really do?

Greg Castle:
Yeah. If negative investment returns occur during the initial years of retirement, the portfolio's value could be significantly reduced or basically even depleted to the point of no return. Um, you know, withdrawing funds to cover living expenses from a shrinking portfolio basically just exacerbates the problem as the remaining funds have less potential to recover when the markets eventually improve.

Greg Castle:
Yeah. And so then obviously some of the long term consequences can can probably be, you know, you talked about the first few years of retirement with those negative returns. The consequence is then in the long term it seems like that could be just a really bad situation people might find themselves in. Right.

Greg Castle:
Yeah, it would be a depleted portfolio or early in retirement can lead to a higher likelihood of running out of money later in life, especially if the market doesn't recover quickly enough. This can force retirees to make drastic changes to their lifestyle or basically have to downsize when they don't want to or or reduce expenses to the point, hopefully not to the point of eating cat food, but they'll have to rely on more other income sources like Social Security, for example. So. Yeah. Usually if you go into a bear market, bear markets typically last on average of 18 to 30 months. Bull markets usually last longer on an average. One of the shortest bear markets we've had was back in 2020. That 45 day period between February 11th and the end of March when the market dropped 30 something percent. However, recovered very, very quickly. So even though you took a big hit, it wasn't as drastic as one that would linger on for a while and you still be in bad investments.

Greg Castle:
Yeah, that would you know, that one was sort of the exception, I guess, rather than the rule there. But yeah, it was very quick and that's one of the reasons to not to go off on a, on a tangent here, but just brings to mind one of the reasons why people don't need to be trying to time the market or be emotionally making investment decisions. Because if you, you know, if you did that during that time of the of the pandemic and you were still, um, you know, making emotionally driven investment decisions passed the time where that recovery was already happening, you could have missed out on a lot of the gains in that recovery.

Greg Castle:
Exactly. Yeah.

Greg Castle:
Well, and usually the losses that we talk about, they're in the long term for retirees who experience this what what we call sequence of returns, risk those negative returns early on in retirement. Those losses usually non-reversible. Right.

Greg Castle:
Yeah, Most of the folks retirement funds funds, basically a big portion of those have been invested in four, three BS, 401, 457 or those type plans. Um, and while you're working, you're contributing. Your employer's matching to a certain extent in most cases. And so your, your funds typically go up and actually the, the market could actually have a slight reduction. But because of your contributions and your match for that particular period, would there be a quarter or a month, Your statement would be actually show that you have a positive return for that month? But you retire. You can't contribute anymore. You get no match. And at which point you no losses or losses. There's nothing to make up for those. So, you know, unlike individuals in their working years who can continue to contribute to their retirement accounts during market downturns. Retirees usually don't have the ability to replenish the portfolio once they start drawing from it. So if you're pulling your money out in order to augment your living expenses. Um, and you're also having a market downturn, but your savings are going to go downhill pretty quickly, so they're not really overly reversible.

Greg Castle:
Yeah, that's that's absolutely right. You know, when you take into consideration when that happens and people not being able to make contributions to those accounts, it can just be really devastating there. And and let's take just a moment here, because I think this always helps me better understand this this concept. Let's help our listeners really understand the impact of sequence of returns risk here, Greg, by talking some numbers and not a lot of numbers, but numbers that are that are easy to understand and think will really kind of bring it home for folks.

Greg Castle:
Yeah, I think most people are visual folks, so it's always easier to see this than it is to try and explain it verbally over the radio. So with that said, I'll put another plug in here and say, Give us a call. We'll set you up with a screen share so you can actually see the impact of sequence of returns before it actually happens. So, you know, you can contact me at 813. 430 7100. Or you can send me an email through Greg at Castle Correction Greg at SafeMoneyMasters.com. But anyway, I'll go back to your point. Let's say that we're looking at a portfolio that loses 20% of its value in a down year. The portfolio achieves a 20% gain the following year. Most people are going to assume that that portfolio is back to the original value before the loss. But that is not right. You know, you got to keep in mind that that compound interest can work for you and it can also work against you because a 20% gain was from a lower starting point. You actually would need a 25% gain in order to return to the original value before the 20% loss. So to give you an idea of the amount that you could lose and the amount it would take to recover, if you lose 10% mark, it has to go back up 11.11% in order to to get back to even. As we just talked about, if you lose 20%, you the market has to go up 25% for you to recover. And it gets worse from there. 30%, the market has to go up 42.8, 6% before you get back to even. And 40% is going to be 66.67% before you recover.

Greg Castle:
And heaven forbid that you have a 50% loss like you had back in 2008. And that because if you lose 50% of your market value or your portfolio value, it takes a 100% market increase in order for you to get back to even, which means you don't see a lot of 100% increases in a year. So it could take you literally, you know, five, six, seven, ten years to get back to even at some points. And a lot of folks who went through 2008. That were no longer eligible to contribute to their plans. Talk to them and they'll tell you how much a market downturn or a market crash can actually hurt you. And there certainly are ways to protect your money from from those market losses. But so how do you protect yourself from sequence of returns risk? You know, first of all, diversification. Having a diversified portfolio we've already talked about, which includes both, you know, growth and and defensive assets, those can help mitigate the impact of poor market performance. One of the most important ways we talk about constantly on this show is having guaranteed income. You know, guaranteed income sources like annuities can provide constant stream of income regardless of market conditions. And also you're not subject to loss. The market goes down and becomes volatile. You can't lose a penny of your principal or credited interest. You just won't gain anything, but you won't lose anything. And then, of course, you need to have an emergency fund because maintaining that emergency fund outside the investment portfolio can provide a cushion, you know, during market downturns. And that's going to reduce the need to sell investments at low prices.

Greg Castle:
All of this really, Greg, bringing home the the point here, and that is have a plan. You know, make sure that you have a plan that takes these things into account, that's going to give you that protection that you need against market downturns and all of that. That's why, you know, the show is called Safe Money. Masters because, Greg, every episode here and every day working with folks just like you who are listening today, you know, really the focus is helping you become masters of your money and helping you keep it safe as well. Once again, the website is SafeMoneyMasters.com. You can also call 813430 7100.

Greg Castle:
Let me let me add something here, Matt, real quick. Is that at Castle Financial Solutions Group, you know, we're not asking you to come on board and make us your sole investment advisor. As a matter of fact, you know, we we welcome the opportunity to work with your other advisors. What we want to work with and goes back to our title Safe Money Masters, is we want to help you carve out a portion of what you have in your retirement assets that you don't want to lose and can't afford to lose. We want to help you, you know, with the safe money aspect that can provide an income from you for you long term. We want to be part of your financial advisory team, not necessarily the exclusive portion, and we will certainly encourage you to diversify your portfolios we've already talked about with other assets as well. However, there's always a portion of your retirement savings that you need to keep safe, and that is the portion that we want to help you decide what amount that should be and help you decide, you know, the best place to put it and the best way to get the things that you need to provide the income of your desire.

Greg Castle:
Yeah. And that really is what it is all about. Now, speaking of that, you know, risk of the market and potential volatility and all of that and protecting against it. There's a good reason to do that right now. And one of those reasons is some renewed uncertainty in the markets, because this famed hedge fund manager says he's expecting stock market volatility to rear its ugly head once again here in the not too distant future.

Greg Castle:
Yeah, he's not the only one. I mean, most of the financial things that I've read this lately have all pointed to the probability or possibility of not a probability of, you know, market volatility, market downturn as we go into toward the end of the year, the first of next year. You know, the hedge fund manager we're talking about is a guy named Michael Burry. He's the guy that successfully wagered against the US housing bubble in 2008, which is a pretty gutsy call, but it came a focal point of the book in the film, as we may have seen it already. The Big Short. Now. Now Burry is betting against the US stock market in his latest 13 F filing with the Securities and Exchange Commission. You know, Burry's firm, which is called Scion Asset Management, they disclosed a substantial amount of put options against exchange traded ETFs or exchange traded funds ETFs. You know, those ETFs basically track major US stock market indices. So when you talk about put options, you know, what are put options. You know, put options, provide the holder the right, but not the obligation to sell a stock at a certain price in the future. When an investor purchases a put, they expect the underlying asset to decline in price. And of course, he or she may sell the option and gain a profit if the if they bet that it's going to go down and it doesn't go down, it goes up. Instead, they basically let the option expire because options are basically bought for pennies on the dollar of what they don't want to buy a stock.

Greg Castle:
Or so options are relatively cheap. You know, with a combined value of 1.6 billion, these put options accounted for 93.59% of Burry's portfolio at the end of June. You know, if you're wary about the market's future like Burry happens to be, you know, there are investment opportunities outside the realm of stocks as we talk about over and over and over again for valid reason, because our biases towards safe money, you know, one of those things you can do outside of the stock market basically are fixed indexed annuities, fixed indexed annuities track the performance of underlying stock market indices while providing a floor that protects the the investment by 100%. In other words, you can't lose any of your principal or credited interest and interest is normally credited once a year. It could be two years. If you have a two year index option that you're you're actually tied to. But in most cases it's a point to point every year. I also have a 100% reserve requirement, which means basically, you know, they provide the investor with a guaranteed income stream for life. Another option is structured notes and structured notes are something that we would point you in the right direction on. Uh, they're not something we typically handle ourselves right now. These investments offer customized risk return profiles that may not be available through conventional vehicles and structured notes provide a buffer of protection so investors are not completely exposed to the ups and downs of the stock market.

Greg Castle:
Yeah, and you know, that's just a little bit of a wake up call here because I think, you know, we were obviously over the previous, say, ten years before the pandemic happened. We were all sort of lulled into a false sense of security because we saw for years and years this sort of slow and steady wins the race. You know, on on Wall Street right there was that, you know, slow and steady growth. And then it sort of picked up steam and picked up steam and then the pandemic hit, then inflation and all of that. And you had all this volatility all of a sudden in the markets over the past couple of years. Well, then things this year had been looking up so far and now comes this word and these concerns again. So yeah, it's it just calls to to mind and really does reiterate the fact that you need to have a portion of your money kept safe from all of that market volatility and kept safe from the losses. Again, that's the that's the point of the show. That's why it's safe Money Masters Right. Yeah.

Greg Castle:
And actually, you know, there's a there's a you mentioned a slow and steady. And here's what typically happens during a market crash. You know, seldom does the market actually do a complete, you know, 30%, 40% loss in one day. What happens? It goes down. A good shot one day like has been doing lately. It goes down, then it goes back up. So it goes down. Then all of a sudden it'll come back up and you and you recoup part of the game. For example, one day it goes down 200 points. The next day it's up 175 points. It even goes up 200 points. You're still not back to even at that point. We've already talked about sequence of returns, but let's say you goes down 200 points one day, comes back up to the next or 175 the next day. Next day it drops 3 or 400 points. The next day it's back up a little bit. And so you just get lulled into all of a sudden it goes down. You don't realize that, you know, all of a sudden, you know, the market has lost, you know, 20, 25, 30%. And when you finally realize that, you think, oh, my God, I can't you know, I've been told I shouldn't sell anything because if I sell, I've lost money.

Greg Castle:
You know, just there's so many things that are wrong that you're being taught that can really cost you money in the long run. But just like slow and steady for growth over the thing for getting ready for retirement, you know, also be aware that losses also go slow and steady. And before you know it, you've lost a good chunk of your portfolio and don't even realize it. So that's one of the reasons we like safe money sleep much better at night, realizing that the folks that I work with cannot lose a penny of their principal or credited interest. And so life is good in my world because I was a stockbroker before. Let me tell you, there was a lot of sleepless nights when I was a stockbroker wondering if my clients are going to survive. The things that that they were invested in and took a big hit because I was a stockbroker back in on Black Monday, October 19th, 1987. And it was not a pretty day. Wow.

Greg Castle:
Yeah, that I can imagine the people pulling their hair out and all of that and just. Oh, boy, that's not that's not a good thing. And that, you know, again, having peace of mind about your money that you are counting on to be there when you retire, that is worth more than just about any amount of money that you could actually have in in your investments and in, you know, put away for your future there. Well, right.

Greg Castle:
I want my clients to be able to sleep as well as I do at night. So it's something that if don't worry about your money, you shouldn't either.

Greg Castle:
There you go. Yeah, absolutely. That's. That's good. Yeah. Say, hey, Greg's not worried. I'm fine. You know, it's. I'll. I'll just count on. Count on Greg to be my my emotional compass. Because if Greg's not worried.

Greg Castle:
You will sleep better at night. Give me a call. 813430 7100. And I'll show you exactly how that can happen for you and not worry about what's going on in the stock market these days. I love.

Greg Castle:
That. Better sleep. Sounds like it's right up my alley. Well, one thing, you know, I think that, Greg, that a lot of people have kind of been losing sleep over possibly is the state of Social Security, at least in the in the fairly near future here. But, you know, a lot of people don't realize that as long as, you know, Social Security is around and fingers crossed, we all hope that it will be around for a long, long time to come. And something, you know, some semblance of its current form. One thing that people don't realize necessarily is that they have choices when it comes to Social Security. And one of those choices is when to start taking Social Security income. You know, and only 10%, though, of people. The numbers show only 10% of retirees plan to wait until age 70 to claim Social Security. But it's often actually best to delay that, to choose a later time to take that Social Security payment, to start taking that income. Why is that? And and just talk about that concept for a minute here, Greg.

Greg Castle:
Yeah. You know, there's there's been a lot of information, misinformation out there over the years that. Uh, you know, Social Security is not going to be there when you get ready to retire. We've heard that from the time that, you know, people were in their 40s and and so they get 62 to say, I'm going to take it while I can. It's kind of like winning the lottery all of a sudden. And, you know, rather than take the 30 year payout, which is basically an annuity guaranteed for life, you get more money. If you do that, however, they'll take the lump sum because there's more money than they ever had in their life to begin with. But they'll go on.

Greg Castle:
They'll take take the money and run.

Greg Castle:
At that point. At that point, it's free money. But it's sort of the same way with Social Security. They turn 62. I'm eligible. I'm going to take it. And there are situations where that is the right move to make. In most situations, it is not. Uh, for a lot of reasons. But, you know, if you claim it early, it's going to obviously affect the size of your monthly Social Security checks because, you know, those who turn 62 this year are going to have their benefit reduced by roughly 30% for claiming now compared with waiting until their full retirement age, which in most cases is going to be between 66 and 67. You know, and then at full retirement age, you know, workers stand to receive 100% of the benefits that they've earned. In. For each year that you delay past full retirement age to age 70, you know, typically 7 to 8% is added to Social Security benefits each year. So by waiting up to age 70, retirees can lock in the biggest benefit checks available based on their work records and work records are based on your highest 35 years of earnings. Every year you work longer. It basically one of your lower years falls off. And so it improves your amount of your Social Security check. Retirement benefits typically taken at age 76 or 76% higher, adjusted for inflation than retirement benefits taken at 62. That's what research has shown anyway.

Greg Castle:
So in some cases it may make sense to claim early, such as if you have a health condition that may shorten your life span. You got a family history that you're convinced that you know you're going to fall into two that's going to shorten your life span, you know, yet, you know, even for some people with those circumstances, delaying benefits might still make sense to trigger higher benefits for a spouse. Uh, and again, so many, so many nooks and crannies and and twist and turn when it comes to Social Security planning that if you just pick a number, decide you're going to do it, it could cost you literally hundreds of thousands of dollars over the years. But, you know, correctly choosing when to start taking Social Security is probably, you know, it's one of the most important decisions you're ever going to make when planning for retirement. Cause you know, you only have one chance to get it right. So let the folks at our company, Castle Financial Solutions, help you. Consider all of your options with basically a guide that we offer called the Social Security Maximization Report. And after all, you know, you deserve to give back what you've paid for. So take advantage of the free offer for our listeners and and, you know, give us a call at at 813430 7100. Be sure and schedule your complimentary retirement consultation while you're there.

Greg Castle:
Absolutely. Do that. And like we say, free consultation, free of any charge, free of any obligation, and definitely a great thing to do and just, you know, explore that, explore your options. It's always great to know your options here. Well, about 6.5 minutes we have left here in the show, Greg, and we're going to talk for the next few minutes about some mistakes to avoid when prepping for retirement. These are the ones that you don't want to do. These are these are the don'ts in life here, folks. Number one, don't put off saving for retirement. Time is of the essence here.

Greg Castle:
It is. Hopefully you started early. If you didn't, you know, there's always ketchup options for you. Americans are in trouble when it comes to saving for retirement. We've heard that over and over and over again. You know, millions of older workers are approaching their golden years with with literally nothing saved. You know, if you if you skimped on saving for retirement this year and it's understandable, especially given the volatile economy you've had last year and and the beginning of this year, it's a mistake that you need to fix ASAP. You know, fortunately, righting this wrongs is something that's entirely doable.

Greg Castle:
Yeah, that's true. I mean, there's an old saying about the best time to plant a tree was 20 years ago. The next best time is now. And so there we go. That's that's that concept. The second mistake we want to talk about to avoid when preparing for retirement. Not building up an emergency fund.

Greg Castle:
Everybody needs an emergency fund. Mean. That avenue roof got avenue AC car goes bad, new tires, transmission goes out. You know, those costs aren't going to come from your paycheck that you don't want to finance it. So you need to make sure you got an emergency fund to cover some of those things. The importance of an emergency fund really can't be overstated. You know, many Americans are behind here, too. You know, most Americans will be unable to cover even a $1,000 surprise expense. So, again, it's not really their fault, but they need to try and remedy this problem as it's only going to get worse as the years go by and the chances of unexpected expenses increase.

Greg Castle:
Absolutely. And selling investments when the markets swing. That's another big thing to avoid.

Greg Castle:
Yeah, we talked about that a second ago, but the stock market got off to a rocky start in 2023. It was really bad in 2022, you know, but it's since stabilized somewhat. If you made any reflexive reactions to the market volatility in the first half of the year, you may have missed out on some profits, but you can still repair this mistake.

Greg Castle:
Yeah, there's always. There's always hope in this world. Hope springs eternal. Staying in cash. Boy, that's a good. That's a big mistake to avoid. Mean it's not going to do any good if it's just, you know, under the mattress.

Greg Castle:
Right. While many Americans are stashed with emergency earnings only in checking or savings account or what's worse, they're doing it at home. So under the mattress or something, or stuffed in a mattress or pillowcase. You know, open your mind to making your cash work harder by investing some of it. You'll be glad that you did.

Greg Castle:
Yeah, you've worked hard for it. Make it work hard for you. And number, the number five thing here that we're going to talk about on the last point and last mistake to avoid going it alone.

Greg Castle:
You know, money. Money is perceived as a deeply personal topic, but it really shouldn't be. You know, not only is it wise for us to engage in a fruitful dialogue about our financial lives, but we should also be proactive, enlist the guidance of finance professionals. You know, if you want to make the best choice and implement the best strategies, you need someone who basically focuses on on those strategies that you're looking for for retirement and. Going it alone is really not an option that you should even remotely consider.

Greg Castle:
Absolutely. Don't go it alone. Just go to save money. Masters.com and let Greg and his team at Castle Financial Solutions Group help you out. Save money. Masters.com once again is the website. It's this week in history. A lot of things to cover from this long holiday weekend here.

Greg Castle:
Yeah, we spoke about technology back in the tech bubble or the.com bubble. You know, 2000 or 2002. So this past Sunday, September 3rd, was the day that the eBay, the giant Internet company eBay, was founded. And according to reports, eBay was just a hobby for its founder until his Internet service provider informed him that he's going to need to upgrade to a business account due to high traffic on his website. And obviously today is one of those large companies is it's 32 countries and and does a great business and I've used it time and time again. And then yesterday, in addition to being Labor Day on Monday, September 4th, in 1998, it was the day that multinational technology company Google was founded by Larry Page and Sergey Brin while they were seeking their PhDs from Stanford University. And that was one PhD that really paid off. Well, you know, Google obviously remains one of the most powerful bass brands in the market. And also it obviously, it handles data collection and technological advantages that we all use. And as of 2021, Google and YouTube were the two most visited websites worldwide. And Google ranked second on the list of most valuable brands in the world by Forbes. And on September 4th, again yesterday, on this date in 72, The Price Is Right began airing with Bob Barker as its host and it aired 9000, you know, episodes. And unfortunately, Bob Barker passed away recently, August 26th of this year at age of 99. And today, in 1976, Jim Henson's Jim Henson's Muppet Show premiered on television with guest star Mia Farrow. Birthdays the day Michael Keaton, 71, obviously famous for Beetlejuice, Batman, Mr. Mom and Birdman. Bob Newhart, 93. Today, Elf and The Bob Newhart Show. And today is National Cheese Pizza Day. National Be Late for Something Today National Dumb Day. National Shrink Day is a psychologist or psychiatrist and national cellulite day. And I'm not even going to touch any of those. Maybe maybe National cheese Pizza Day. Well, if you.

Greg Castle:
Have too much cheese pizza, you'll get some cellulite and then. I don't know. Yeah, that's that's about as far as I can take that that stream of consciousness, I think.

Greg Castle:
Yeah, yeah, yeah. Anyway, with all that said, we hope you enjoyed the show today. Hope to see you next week at the same bat time.

Greg Castle:
Same bat channel.

Greg Castle:
So long man.

Greg Castle:
Thanks for listening to Safe Money Masters with Greg Castle. You deserve to work with a financial expert who has a track record of helping clients exceed their financial goals by implementing safe and proven strategies to schedule your free No obligation consultation with Greg. Visit SafeMoneyMasters.com.

Producer:
Not affiliated with the United States government. Greg Castle does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. Amateur life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness or the results obtained from the use of this information.

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

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