Right now, if you are like many retirees and pre-retirees, you may feel moderately secure with your assets because you have what I call a “Beautiful-Pie-Chart-Portfolio.”
- When you look at your statements, your portfolio is graphed into a really nice looking pie chart – it’s so beautiful.
- There are so many bright colors, arranged to make it look like a “rainbow of money.”
- It’s so organized in a neat little circle, it denotes a plan and success.
- There are so many funds, the vision projected is that it is diversified and must, therefore, be very safe.
- It has been created, and managed, by a very large nationally known brokerage house, so it has to be what’s best for you.
- And, it’s what you’re used to, it’s what you’ve always seen, it’s what you’ve always had, it’s what your friends have, it’s what your advisor gives you, it just seems normal.
Whether it’s printed on your monthly or quarterly statements, or on your screen when you pull up your portfolio on the website, it looks so official and just so dang “Beautiful!”
Why You Fell In Love With Your Portfolio
OK, so the truth is, you do have a very Beautiful-Pie-Chart-Portfolio. You probably don’t think your portfolio is beautiful just because it looks beautiful, you think it’s beautiful because of all the things you’ve been told about it along the way. You’ve been told wonderful things about your Beautiful-Pie-Chart-Portfolio. You’ve been told things you wanted to hear. You’ve been told things that made you feel like you were safe, made the right decisions, and didn’t need to worry. You were told:
- You have so many funds for diversification.
- You don’t have a lot of risks.
- You won’t lose a lot, you are positioned pretty conservatively or fairly moderate.
- Mutual funds are safer than stocks.
- You’ll earn a good rate of return.
- It will provide you a high level of dependable income.
- You are only paying “about” 1% in total fees.
And all these things sound wonderful, exactly what we all want, making our Beautiful-Pie-Chart-Portfolio seem even more appealing. Who wouldn’t want all these things?
But, What If, Just Maybe, What You’ve Been Told About Your Beautiful-Pie-Chart-Portfolio Isn’t Totally True?
If everything you’ve been told were true, planning for your retirement would be easy and you wouldn’t have to worry. If it was true, you wouldn’t be reading or listening to this. So why are you still worrying? Why are you still worrying so much? It’s because you have started to question many of the things you’ve been told, things you have found that you believe aren’t true, about your Beautiful-Pie-Chart-Portfolio. When you really concentrate on your portfolio, really look at it, stare at it, it looks like one of the optical illusions the magicians show us where the circle starts spinning and puts us in a semi-trance-like-state.
How can you tell if you haven’t been told the truth about your Beautiful-Pie-Chart-Portfolio? It’s simple:
- When you’re told you are diversified and have so many funds to reduce your risk and to ensure you don’t lose a lot, just think back and try to remember how much you lost in the last quarter of 2018? If you lost -10%, -15%, or -20%, you have a lot of risk, more than you think, and more than you want, now that you are retired or nearing retirement. So, if you lost that much, which you probably did, how diversified were you really and how safe were your savings? You probably weren’t diversified very well and your savings probably weren’t safe at all.
- When you’re told mutual funds are safer than stocks, and you find out that many of your individual mutual funds could have lost -40%, -50%, -60%, even or more during the 2008 Financial Crisis, were your funds actually safer than individual stocks? Probably not.
- When you’re told you will earn a high rate of return and you’ll receive a high level of dependable income that will last for as long as you live, with the stock market historically suffering -40% average losses every seven (7) years since 1929, and the S&P 500 Index only increasing by 2.85% before fees per year from 2000 through 2018, how could what you’ve been told be true?
- And when you are told you are only paying “about 1%” in fees and then you find out you could be paying additional hidden fees that could bring your true cost up to 3.25% or more per year, how does that affect you?
If it makes you feel any better, even after reading all this, your pie chart still looks beautiful, doesn’t it? The problem is, at this time in your life, you can’t afford to base your retirement plans, and your portfolio, on things that might not be true, just because something looks or sounds beautiful. I’ll tell you what beautiful is: Certainty, Security, Truth, and a Plan in Writing. You need certainty. You need security. You need the truth. You need a plan in writing that reduces your risk, decreases your fees, and provides you dependable income that is guaranteed to last for as long as you live.
You need to replace your Beautiful-Pie-Chart-Portfolio with a Beautiful Plan that helps you stop worrying about your money.
Keep your money safe out there!
None of the material in this presentation is intended to give you specific tax, investment, real estate, legal, estate, retirement, or financial advice, but rather to serve as an educational platform to deliver information; nor is it intended to show you how the strategies presented can specifically apply to your own tax, investment, estate, financial, or retirement position, but rather to offer an idea of how these principles generally may apply. This data is furnished with the understanding that the authors and publishers are not engaged in rendering you legal, real estate, accounting, estate, investment, tax, financial, retirement, or other professional advice or services through this presentation. None of the material in this presentation is intended as a solicitation for you to buy or sell any financial product. Nothing is directly or indirectly guaranteed by this presentation. A fixed index annuity with an income rider can protect your savings from losses and provide you guaranteed lifetime income, but you could incur surrender charges, gains aren’t guaranteed, you’ll pay a fee, and guarantees are backed by the financial strength and claims paying ability of the issuing annuity company. Any investment in stocks, bonds, or mutual funds can lose principal, even with a stop loss, and there are no guarantees of gains. All investments involve risk and investment recommendations will not always be profitable. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund a new portfolio and/or annuity may have tax consequences, early withdrawal penalties, or other costs and penalties as a result of the sale or liquidation. You cannot invest directly into a stock market index. Illustrations, projections, and hypothetical examples are used to explain concepts and are not indicative of potential results you could receive; past performance is no guarantee of future results; and results are not indicative of any particular investment or income tax situation; your results will be different and could be lower or higher. Insurance product features and benefits, such as guaranteed lifetime income riders, are subject to contract terms, limitations, fees, and the claims paying ability of the insurance company issuing the contract. Consult with a qualified investment, tax, legal, and/or retirement advisor before making any decisions.
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Investment Advisor Representative of and Advisory Services offered through Fiduciary Solutions, LLC, a Registered Investment Advisor. Peak Financial Freedom Group, LLC and Fiduciary Solutions, LLC are affiliated entities. Peak Financial Freedom Group provides no Advisory Services. Insurance products and services provided by independent agents. Jim Files CA Insurance License #0F06511 & Dan Ahmad CA Insurance License #0732913