Episode Transcript
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Speaker 1 (00:00):
Welcome to the hidden world of wealth, where secrets of
the affluent become accessible to you. You are listening to
Your Money Matters, the most provocative financial radio show on
the airwaves. You are about to start your educational journey
here on Your Money Matters with your host, Drew Prescott,
(00:22):
President of Prescott Private Wealth and Chartered retirement Planning Counselor.
Drew will unlock the complexities of the financial landscape with straightforward,
powerful insights. Whether you're planning for retirement, managing in a state,
or looking to grow your wealth. Consider this your exclusive invitation.
Turn up the volume, lean in closer. Let's navigate the
(00:45):
hidden paths of prosperity together. Your financial enlightenment begins now.
Securities all produce a terror Financial Specialists LLC member FENRA
SIBC IS reservices offered through Setara Investment Advisors LLC. So
TERA firms are under separate ownership from any other named entity.
(01:06):
Four five one two sixth Street, Troy, New York.
Speaker 2 (01:08):
One two one eight zero.
Speaker 3 (01:32):
Welcome back, my friends, to Your Money Matters. I'm your host,
Drew Prescott, Chartered retirement planning counselor and Accredited Wealth management Advisor.
And the president of Prescott Private Wealth located here in Troy,
New York. So why Sweet Home Alabama. Well, anybody that's
following March Madness, and you know that I am a
(01:54):
huge Alabama fan, roll tide. I'm believing. I'm belo Now.
By the way, I may very well have egg on
my face by the time that you're listening to this,
because I'm recording this on Friday. So Lord willing this
age as well. If not, Hey, I'm okay with you
(02:16):
calling in and making fun of me. It's all right,
It's totally fine.
Speaker 4 (02:19):
I love.
Speaker 3 (02:21):
I love when guys, you know, get at me for
being an Alabama fan. You know, it's a little bit
of a dopamine hit for me, So I don't mind, okay.
So last week we dove into tariffs, we dove into
the China's rare earth dominance, and really what to watch
for in the markets this year, And if you missed it,
(02:42):
just check out the archives go to w g Y
and it's a good one.
Speaker 4 (02:45):
I really enjoyed it. I had a.
Speaker 3 (02:48):
Lot of positive response to that. A lot of people
called in, a lot of people sent me messages saying
thank you for bringing clarity to the topic. So and
that's my goal. My goal is to not to be controversial.
My goal is to bring you transparency and an understanding
of how I see it, okay, and what it could
(03:11):
mean to you. So hopefully that did that for you.
And today we're kicking things off with taking a look
at this week's market activity and my March Madness bracket
and some cautionary tales from the investing world that remind
us that even the sureft's bets can go bust. But
let's start off with the markets here, and as of
(03:33):
the morning here on Friday, we're kind of seeing a
mixed bag. The SMP has been flirting with new highs
this week and kind of buoyed by the tech stocks,
but we saw some volatility midweek, and that's okay. We
talked about that last week. There was some profit taking
after a strong run, and the Dow has been a
little bit sluggish and it's been weighted down by some
(03:56):
industrial sector concerns and perhaps some lingering tariff talk gechos,
who knows. But meanwhile, bonds are holding steady and with
the tenure treasury yield hovering around four point two percent,
we're seeing some investors seem to be balancing their optimism
about earnings with some with jitters over the inflation data
(04:18):
which is going to be due here coming up. And
you know, it's kind of like a basketball game in
the fourth quarter, it's still anyone game to win.
Speaker 4 (04:29):
And speaking of.
Speaker 3 (04:30):
Basketball, let's talk about March madness for a second. Yes,
I know you tuned in here for information on the markets,
investing finances and all of that. And like I said,
if you've listened to me for a little bit of time,
you know that my personal health comes into play here too. Okay,
(04:50):
I have to have a little fun while I'm doing
this show, So let's talk about basketball for one second.
I promise I won't hang out here long. But my
bracket right now, I'll tell you, is it's looking like
a Rolls Royce. You might have a couple door things
in it, but I've got Alabama, Auburn, Saint John's and
Tennessee in the final four, with Bama facing Auburn for
(05:13):
another beautiful rematch here in the championship. So, like I said,
I could really sound like a nitwit here because this
is getting aired on Sunday and I'm recording it on Friday.
But I'm taking my chances. That's how much I believe
in these guys. But like I said, so far, so good.
But here's the funny thing about these brackets. And you
(05:33):
know this, that four bad picks and that rolls Royce
turns into a repossessed twenty year old Benz that's coming
out of Arbor Hill. So it's a lot like the
do it yourself investor using a brokerage account with no
ticket charges or no commission. You know, you're starting to
real sleek Ferrari, have a portfolio, low cost, big dreams,
(05:54):
but a few bad picks, and suddenly you're driving a
Pontiac Vierra with duct tape bump. So let me just
give you a little cautionary tale from investing history. Okay,
then that's where history will give us a little bit
of perspective. So let's rewind things here for one second.
(06:18):
It's now time for everybody's favorite part of the show,
story time.
Speaker 5 (06:24):
Everybody sit down, listen carefully, everybody sit down, sit down,
Please sit storty time, story time.
Speaker 3 (06:40):
So let's go back to twenty and eighteen and Forbes
published an article that was titled the biggest investing mistakes
of the last decade, and it highlighted the rush into
cannabis stocks. Now, if if you had anybody that was investing,
these names came up.
Speaker 4 (07:00):
Everyone was talking about cannabis stock.
Speaker 3 (07:02):
And companies like Tilray sored up nine hundred percent months
just simply on legalization hype, and investors thought that it
was definitely going to be a sure thing. Then the
reality hit over supply, regulatory hurdles and a ninety percent
drop by two thousand and nineteen, and that Ferrari turned
(07:25):
right into a Fiarro overnight. Or let's take that dot
com bubble that was back in two thousand. We saw
a Wall Street Journal ran a piece in twenty and
fifteen and it said lessons from the dot com Bust,
and it was really noting how pets dot com went
from three hundred million dollar valuation to bankruptcy in under
(07:49):
a year's time. And people had poured money in. They
were chasing that next big thing, only to see it vanish.
And these were hot tickets until they weren't so closer
to home. I've seen some DIY investors get burned too.
And a client once came to me after betting big
on a single stock, and let's just let's just call
(08:11):
it a trendy tech darling for a second, okay, And
it was on a no fee platform. Well, it tanked
by sixty percent in a quarter, and what looked like
a genius move to him became a very costly lesson.
And that's why I always say low fees are great,
but strategy matters more. And that's something that you have
(08:35):
to keep, you know, keep in mind because as I'm
doing my as I did my bracket, I should say,
there's some moves out there that made me look like
I actually knew what I was doing.
Speaker 4 (08:47):
But I know one thing.
Speaker 3 (08:49):
By the end of this, I'm not gonna I'm probably
not going to win my my little league here, but
you never know. Point being that we have a guy
that's in there, and this guy knows everything about these
basketball teams.
Speaker 4 (09:06):
I mean, he could.
Speaker 3 (09:07):
Tell you what courts affect the way that the ball
bounces off of the floor. I mean, this guy is
a genius. So what I prefer to do actually is
just give him the money and then tell them, hey,
we'll split what happens here. But sometimes my pride gets
in the way and I just got to do it myself.
But here's something that I wanted to share with very exciting.
(09:31):
Sometimes you get into these just exciting cases that you're
working on with clients, and I've got one that actually
put a little pep in my step. I enjoyed working
on this one this week. And we've got a couple
of clients that we're working on this with and it's
digging into this program which blends ten thirty one exchanges,
(09:54):
which are those tax deferred real estate swaps and with
highly appreciated stocks else So the twist is reinvesting into
an opportunity zone. So these are designated areas where you
can defer capital gains taxes and if you hold it
for ten years, you potentially eliminate taxes on the future appreciation.
Speaker 4 (10:17):
So this has been really fun to see. Now picture this.
Speaker 3 (10:22):
You sell a rental property or a chunk of stock,
and you roll it into this program, this qualified Opportunity
Zone Fund, we'll call it, okay, and not only to
defer the tax hit, but also to build wealth in
revitalized communities. And we're testing this with a few clients.
(10:44):
It's really been a fun project with real potential to
slash some future taxes in a positive way and I'm
not going to go too deep on this today, but
if you've got some real estate or some employee, some
stock options that are highly appreciated, you know this is
worth sitting in, uh on for a chat. And uh
(11:08):
What I also want to do today is I want
to share with you this pushy world of life insurance sales. Now,
you don't want to miss this. Okay, What what you're
going to find is by listening to this next portion,
(11:30):
it's going to be.
Speaker 4 (11:30):
Very eye opening. That much I can promise you.
Speaker 3 (11:32):
Okay, So for you that are just joining, first of all,
thank you, thank you for my loyal listeners as well
for listening today. For those who you just stumbled across
us on the radio dial, you're listening to your money Matters.
I'm the host, Drew Prescott, chartered retirement Planning counselor and
accredited wealth management advisor at Prescott Private Wealth. The phone
(11:53):
number here is five one eight two zero three one
eight three, And let's get back to it. What I
was just saying is we're going to dive into a
hot topic here, some whole life insurance as an investment
that people are talking about. All right, now, we always
see this come around either if there's some jitters in
(12:15):
the market, and we'll sometimes we'll see financial professionals that
are our career agents with these insurance companies. Maybe they
got a mutual in their name, maybe they don't. And
what they are doing is they'll always play off of
(12:38):
some fear here, and I want to help you cut
through the noise and see this a little more clear.
Speaker 4 (12:47):
Okay.
Speaker 3 (12:49):
So, if you've ever been pitched life insurance as your
golden ticket to riches, You're gonna want to stick around
because I've got some truth to unpack for you. And
early in my career, I am telling telling you right now,
I'm the best person to.
Speaker 4 (13:04):
Deliver this message.
Speaker 3 (13:06):
You're if this is something that's of interest to you,
You're in the right place because I'm going to give
it to you straight. And I'll also explain to you
why why I will be the best person to deliver
this information to you, Okay, Because early in my career, man,
(13:27):
I was drinking this kool aid. I mean I was
so deep into the gas tank on this thing. I
was sucking the dirt out of the thing. And I
worked for a mutual insurance company, and I worked for
a couple of them, and I trained advisors, and I
really believed that life insurance was the answer to a
(13:48):
lot of people's financial desires until I saw the flaws.
So I want to break down the hype. I want
to break down the reality and a service that I
offer to you to cut through the clutter. So, if
you've been pitched this, you've heard it said Whole Life
(14:10):
isn't just insurance, it's an investment. Okay, Well that's wrong.
First of all, now there's tax deferred growth. They say,
there's guaranteed returns, cash value to borrow against. It's a
very slick sale, and it's it's not all lies, okay,
(14:30):
But the average individual, and I would even say the
average life insurance producer does not really understand how this
product works. Now, Whole Life can work for some specific
goals like funding an ISLET, which is abbreviation for Irrevocable
(14:52):
Life Insurance Trust. We use it to fund buy sell
agreements for companies. We use it to on deferred compensation plans.
And the question here is is it a wealth building tool? Well,
see that's where it gets shaky because agents like to
(15:15):
hype these dividends. And I want to share with you
the catch here now by hyping these participating policies with dividends,
saying you'll get extra returns, they'll say, or they'll say,
you know, hey, you're going to get four point two
percent in a dividend. All right, there's a lot to that,
(15:37):
and there's a lot that's left out. And you know,
I wouldn't say that this is a deceptive practice. I
would say that this is due to a lack of education. Now,
there are some wonderful technicians in that market that I
know of here locally, that understand it very well, and
(15:59):
that's that's a good thing, especially when they're dealing with
high net worth markets like myself in this area. So
here's here's what I want to share with you that
what's left out here is that those dividends are not guaranteed, okay,
because they cannot guarantee the profit of a company any year,
(16:23):
and they hinge on the insurer success. So think investment gains,
think about mortality stats and costs of running a business well.
In twenty twenty three, Kiplinger warned that dividends can shrink
or vanish if the company stumbles. And I've seen clients
(16:44):
who expected a five to six percent return and they
get a two percent or less. See, it's not a
stock market play. It's a roll of the dice. Now, additionally,
let's talk about Universal Life. Does that have upside or
is that an illusion? Because there's this product that's being
(17:06):
sold with great fervor right now and it's called an
endividual sorry, an indexed universal life contract. And what they
say is you get all of the market gains and
you get no losses. That's the promise. Well, your cash
value tracks an index, let's say, like the S and
P five hundred, and they'll usually cap it, let's say
(17:29):
at ten percent, and then they say it has a
zero percent floor. So that sounds pretty nice, right, you
could get up to ten percent, but you're not gonna
go blow zero. Well that sounds really wonderful until you
dig deeper because caps can drop and fees. See, this
(17:52):
is the part where it gets sneaky.
Speaker 4 (17:55):
Now.
Speaker 3 (17:55):
I could go on and on, I could I could
hold ten shows on this topic alone. You might be
saying to yourself, well, why are you even covering this? Well,
I'm covering it because a lot of people are being
approached to buy this product recently because of the shakeup
(18:16):
in the market, okay, And it's kind of being used
as a pawn piece to not only try to validate
the fear of the investor, but it is also being
used as a way for somebody that does not have
the investment knowledge and the financial planning background to shoot
(18:42):
for some type of a low hanging sale in their opinion,
and they can be successful with doing it. Now, I
want to share something with you. In twenty twenty four,
Forbes had reported that the IUL expenses between options contracts,
administration costs, and mortality costs can siphon anywhere from one
(19:10):
to two percent yearly, and sometimes it's much more than that.
And that's rarely on that glossy brochure that you're being
handled handed by the rep. So I want to share
with you a real life lesson.
Speaker 4 (19:27):
Now.
Speaker 3 (19:28):
I've heard some doozies and one listener had called in
and they had poured two hundred thousand dollars into a
life insurance policy for retirement. Okay, Well, ten years later
the cash value was barely one hundred thousand dollars.
Speaker 4 (19:49):
So why is that?
Speaker 3 (19:51):
Well, commissions, that's one part, and fees and another was
sold an IUL policy, which is an indexed universal life
policy for their islet, which is your vocable life insurance trust,
and they expected some big growth, okay, but nope, when
(20:15):
I reviewed it, the trustee was livid. The policy itself
was underwater and there aren't there aren't any immediate solves
to this because you don't get a mulligan on it.
All right, these are red flags. So what we do
(20:36):
is I like to offer policy reviews to you the listener,
to business owners that I call on, to trustees that
are the ones that are responsible for the oversight of
these policies, and I offer this policy review for a fee.
So if you're sinking big bucks into a whole life
(20:57):
policy or an IUL policy, I'll see for an islet
by sell whatever it is. I'll dig into the details
for you and I'll decode the dividends, expose the IUL costs,
and check for efficiency. Now, if you're a trustee and
you're listening, this is your fiduciary wake up call. I've
had clients spots, some weak spots and switched to smarter plans,
(21:23):
and it's clarity that you can trust when you get
done with this process. So let me give you a
case in point which was a big win. Now, I
reviewed a life insurance policy that was in a trust
with a five million dollar death benefit. It had about
a million two in cash value, and it was stuck
(21:44):
inside of this whole life policy. So, you know, one
of the things. Let me just tell you why this isn't.
I'm going to go down the path a little bit
here to kind of bring this home and why this
is important. Imagine having a million two that is yours
and it's on paper, but it's awfully difficult to get
(22:06):
your hands on. It's like having a beautiful brick commercial building,
let's say in downtown Saratoga, and you've got all this equity,
but you can't just reach in and pull a handful
of cash out right. It requires some lending. It requires
(22:27):
taking loans in order to get your hands on this.
And it's the same thing with a life insurance policy.
So what we wanted to do here was recapture this
money as a separate asset and have coverage that's put
(22:48):
in place for exactly what it was originally designed to do,
which was to pay estate taxes. This family had no
interest in having millions of dollars in cash just sitting
inside of a life insurance policy. So what we did
was we were able to recapture that cash and we
(23:08):
bought a new five million dollar policy with guaranteed premiums.
And it wasn't designed to be cash value rich, but
it's served its purpose, as I said, and that's to
pay a death benefit at death to fund to state taxes,
so not to you know, you don't want to have
(23:29):
your money tied up into something that you can't get
a hold of and it's full of hooks. And that's
that's where this client was with this policy. And if
you have a policy, or if you're being pitched a
policy and you want me to review it with you,
I'd be more than glad to do that, okay, and
(23:53):
can charge a fee.
Speaker 4 (23:54):
You can do your.
Speaker 3 (23:54):
Insurance someplace else, totally fine, Or if you decide to
feel more comfortable dealing with me, then I could write
the policy for you, structure it properly, and then there
would be no fee that would be charged because I
would be getting compensated by the insurance company that we
(24:15):
decide to go with. So I don't need to get
paid on both ends here. Not somebody that pushes life
insurance unless there's an actual need for it.
Speaker 4 (24:27):
Okay.
Speaker 3 (24:28):
Now, others out there, that's how they that's how they
make their living.
Speaker 4 (24:33):
All right.
Speaker 3 (24:33):
Now, if I thought that there was something that was
something that everybody needed, again, we use it sparingly and
all my clients can testify to that. And frankly, due
to the size of my practice and my experience, I
get a very handsome commission on that, significantly better than
(24:59):
those that are working for a company that they have
a career contract with. So I promise you this much.
I have since leaving that area of work, I have
told more people to not purchase than I have told
(25:21):
to purchase it.
Speaker 4 (25:23):
Okay.
Speaker 3 (25:24):
Now, we'll always do an overview to see exactly what
you should have, But the biggest component here is to
know what type you should have. Okay, So how do
I do that? Why do I do that? Well, again,
it goes back to everything that I preach here, which
is to have a financial plan in place. Now, here's
(25:46):
what I've noticed as it relates to certain products. A
lot of my clients are business owners. They're either in
real estate construction or they're executives in a large firm.
Now day to day, they're the decision makers here and
(26:08):
they're just making decision after decision after decision, and the
last thing that they want to do is slow down
to look at their financial picture. And so they'll say,
you know, well, my attorney takes care of that, or
my accountant takes care of that, and by doing that,
(26:28):
more times than not, they become a victim of a sale.
And a sale is a very different thing than having
a strategy. And unfortunately the people that if you're wondering,
well do I fit into that camp, we'll tell you
how to answer that question.
Speaker 4 (26:52):
Do you have.
Speaker 3 (26:55):
A lot of different relationships in your life as far
as having a couple of people that have sold your
life insurance, an individual that takes care of your four
to one k at work, You've got another individual that
has sold you an annuity. You've got another individual that
(27:16):
has helped you with some iras, and you've got all
these different relationships out there. That's classic business owner.
Speaker 4 (27:25):
Okay.
Speaker 3 (27:27):
Typically you'll meet somebody out at a gala, or you'll
meet someone at an event for networking and so on,
and you take a shine to the person and then
you start to do some business. But you never bounce
that decision off of anyone else. So I find that
to be more common than not with business owners. So
if that's you, I would encourage you to have a
(27:51):
meeting with me and let me sit with you, find
out exactly what you have, the different relationships that you have,
why you have them, and you've purchased, and then I
can go back to my lab here and create a
plan and show you what you have, where the efficiencies
(28:11):
are and where the inefficiencies are, what the costs are
with this, where you currently are, and how you could
potentially fine tune this with the proper relationships to have
a more strategic plan than just just a haphazard plan
with a bunch of random ideas of different financial professionals
(28:32):
that are not sitting at the same table together. And
that's that's what I want to do for you.
Speaker 4 (28:39):
All right. Now, let's move on a little bit.
Speaker 3 (28:42):
So I want to go into by the way, let
me share something. Yeah, you know what, this is what
I this is what I want to do. I think
I shared earlier two weeks ago, I did this show
on mutual funds and it was received well. There was
(29:04):
a lot of calls that came in. Several appointments that
were set through this and here's what.
Speaker 4 (29:13):
Came of this.
Speaker 3 (29:15):
I dug into mutual funds and I wanted to share
with you as the listeners, what the expense ratio is
inside of mutual funds. And by the way, if you're
just joining us, you're listening to your money matters. I'm
your host, Drew Prescott, chartered retirement planning counselor and a
credited wealth management advisor. Glad to have you, Thanks for
tuning in, and hope you enjoy the rest of the
(29:37):
show here And let me just take a step back.
And we were diving into mutual funds. We talked about
expense ratios, we talked about tax drags and also the
mandates and aligning the risks that you had your risk
profile with your goals, and frankly, the feedback blew me away.
(30:00):
Listeners had reached out, they sat down with me and
we uncovered some serious wins by tweaking these portfolios. And
today I'm sharing those stories. I want to break down
how expense ratios and taxes can quietly sabotage your returns.
And I want to remind you that I'm here to
(30:22):
help you with your investments, with your insurance, your real estate,
your state plannings, you name it, I love to dive
into it. Okay, So let's let's talk a little bit
about this. Let's talk about some some people that called
in that I had meetings with.
Speaker 4 (30:43):
Okay, let me share with you about.
Speaker 3 (30:48):
Well, let's let's let's use the name Jane.
Speaker 4 (30:50):
Okay.
Speaker 3 (30:51):
So, so she she came in for an appointment. She
had a four hundred thousand dollars portfolio and it was
mostly an actively man mutual funds.
Speaker 4 (31:01):
Now, how did she end up here? Here's what happened.
Speaker 3 (31:04):
Her advisor had promised that they would crush the market,
and I ran a risk score and she turned out
to be what we call a moderately aggressive investor, and
she's happy with steady growth. But her funds, well, they
were swinging for home runs and they were loaded with
risk that she didn't want and she wasn't aware of.
(31:27):
Then we checked the costs that were associated with these Now,
her average expense ratio with these funds was one point
two percent. So compare that to an S and P
five hundred ETF, which averages about point zero three percent.
And that's per a bank Rate article which was titled
(31:50):
what is an expense ratio? And what's a good one.
And that's a glaring gap, as you can tell, between
one point two and point zero three. So over the
twenty years, that one point one seven difference, that could
have drained one hundred and fifty thousand dollars from her returns.
(32:11):
So what we did was, instead of using funds, we
shifted her to individual equities and she pays a one
percent management fee on this all right, Now, she saves
the internal expenses that she was paying. She was also
(32:33):
paying her advisor a fee in addition to this of
about one point five So this lady was losing a
total of two point seven percent, so that's that's what
she was paying. So she gets reduced down to one
percent due to the size of her portfolio. We have
(32:56):
break points, that's right on our website. The more you fst,
the lower the fee. So she's ultimately saving about let's
see she say, yes, she's saving about one point two percent.
I'll call it one one point seven because the other
advisor was one point five percent versus me being one percent.
So so we shifted her into these individual equities and
(33:22):
we did use a couple of ETFs as well. And
this is more of this is an active approach here,
and so when does this active approach play out and
when does it bring value? Well, how about last week?
Right as I said, I only had two people. The
two of my clients had called in that got a
(33:43):
little bit nervous, and I, you know, I walked them
back from the plank. They didn't jump, and they were
really nervous, and I understand why that's how they felt,
and that's okay, and it's my job to understand that.
It's also my job to bring clarity in these moments.
So you can see that we also had to make
(34:06):
a couple of tweaks in a couple portfolios. Nothing major,
but but that's that's the active management is to be
able to have the ability to make those changes when
we feel it it's necessary. Now, let me share a
story about another fella. Let's we'll use the name Mike.
How's that sound that's a that's not a common name,
(34:28):
so let's use Mike. Mike had about six hundred thousand
dollars in mutual funds and he had a point eight
percent expense ratio and this was in a non retirement account. Okay,
so therefore it's a non qualified account and this is
where this tax drag comes into play. So let me
(34:50):
take a step back. Let me bring you back to
what we're talking about. So the fella's name we call it,
We're gonna call Mike. He had six hundred thousand mutual
funds with a point eight percent expense ratio and a
nasty tax hit short term gains tax to thirty seven percent.
So I benchmarked his portfolio against the Russell two thousand
(35:11):
and guess what. His net return lagged by two percent annually.
Fees and taxes were eating him alive. So we trimmed
his expense ratio down two point three percent and swapped
in tax efficient ETFs. So now he's already seeing gains
and he's breathing a little bit easier and helping folks
(35:34):
like Jane and Mike see the light. That's why I'm
in this game, Okay. I love this. There's nothing like
locking the door at the end of the day and
going home to have supper with my family and knowing
that I made a difference in somebody's financial picture. And
one of the things here that I don't want to
gloss over, which is this, is that the silent thief
(36:01):
here is expense ratios. So what is an expense ratio. Well,
an expense ratio is the annual fee that a mutual
fund charge is for management. So think of money going
towards marketing and overhead, and you can think of it
as kind of a cost of admission.
Speaker 4 (36:20):
Okay.
Speaker 3 (36:21):
Now, Saxo's had a piece in twenty twenty four and
it' said expense ratio explained, and it really.
Speaker 4 (36:28):
Puts it perfectly.
Speaker 3 (36:29):
It says a small percentage can eroad returns big over decades.
So let's run the numbers. Let's just take a very
low number.
Speaker 4 (36:40):
Simple.
Speaker 3 (36:40):
Like I always say, I like to use round number shares,
So we use one hundred thousand dollars. I love math,
but I don't love it that much.
Speaker 4 (36:47):
On a radio show.
Speaker 3 (36:48):
Okay, So one hundred thousand dollars at a seven percent
growth rate with a point two percent expense ratio, so
after twenty five years you would have about five hundred
and seventy four thousand dollars.
Speaker 4 (37:04):
So now.
Speaker 3 (37:06):
Bump that expense ratio to one percent, and it drops
that five hundred and seventy four thousand to four hundred
and eighty three thousand, So that's ninety one thousand dollars
that vanishes poof just from fees. So small numbers add up,
and they're sneaky about it. So remember, high expense ratios
(37:28):
often come with actively managed funds where the managers try
to beat the markets. Sometimes they do, sometimes they don't.
It's often that they don't and you're still paying for
that effort. So what I don't understand is a financial
(37:50):
advisor and a fiduciary, okay, because I know a lot
of these guys out there that don't manage their own
portfolios and they'll use a third party that has their
own proprietary mutual funds, and inside of there, these guys
(38:11):
are actively managing the portfolio and the advisor's basically catching
kind of like a finder's fee if you would, Okay,
But ultimately what you're doing is you're paying for two
different advisors.
Speaker 4 (38:24):
So these high expense.
Speaker 3 (38:26):
Ratios, these can really do a number here. Now, there's
a lot of articles out there, and bank Rate says
that anything over one percent is a red flag for
most investors. Why because low cost would be investing in
(38:46):
an actively managed portfolio where you pay a fee and
the advisor builds out the portfolio for you. And monitors
it and maybe they do, maybe they don't.
Speaker 4 (38:58):
Include some.
Speaker 3 (39:01):
Some help with addressing some financial concerns, questions, purchases, putting
together financial plan. That's something that I enjoy as a
matter of fact. Before when I was younger, before I
got in this business, I was in the car business
and I've maintained all my relationships there and when clients
(39:24):
buy cars, a lot of them, Let's be honest, buying
a car is not fun. It is fun, but it's
not fun when you get to the negotiation table. And
I help a lot of people with ironing all that
out before they even step into the dealership and we
help them negotiate a deal for them, and it becomes
(39:46):
fun again. So I enjoy that. So that I don't
charge anything for that. That's just kind of a little
garnish to doing business with me.
Speaker 4 (39:57):
So I digressed a little bit here.
Speaker 3 (40:00):
What I was saying is that the fee here, you
have to be careful. You have to know what am
I paying for, who am I paying it to? All right,
And then you also want to be aware of with
mutual funds the tax trap here, which is just kind
of adding insult to injury. And then this is this
(40:23):
tax drag that I talk about. I had a lady
call in down from Rhinebeck, sweet woman. I thoroughly enjoyed
my time with her. We had a wonderful time talking
on the phone, and I educated her on this exact issue.
And so she goes at it on her own through
(40:44):
brokerage account and she seems to be very happy with
that and has enjoyed it. So what we did was
we just looked at some of the mutual funds that
she has, and she was questioning, what is this tax drag?
I had asked my accountant about it, and he's never
heard the term before. And so this is a term
that I've used for a long time and a lot
(41:07):
of advisors do. And ultimately what it refers to is
what you lose in your return simply due to taxation
because the fund managers make sales through the year. Okay, Well,
in her situation, this was a this was a bond fund,
(41:29):
and she was getting about, as a matter of fact,
let me just pull it up because I just spoke
with her, and the numbers here are fresh, so I'd
rather just show you exactly what we had. Bum bum
here we go. So she was getting about two point
(41:50):
four eight percent. She was getting about four point two
for a dividend, but the tax drag was one point
eight eight. That means she's losing that just simply.
Speaker 4 (42:03):
Due to taxes. And that's that's an issue. Okay.
Speaker 3 (42:09):
Now, if she were to have individual bonds and let's
say some CDs, treasuries and the she would not be
subject to the same type of loss because she'd have
(42:29):
more control.
Speaker 4 (42:30):
These would be.
Speaker 3 (42:32):
Timed and they would have long term capital gains taxes,
versus getting hit with these taxes throughout the year and
losing some of her return just simply due to taxation.
So what we want to do here is make sure
that you're buying and selling your stocks and your bonds,
(43:00):
you know, strategically, okay, because if we don't do it strategically,
then it's going to trigger capital gains and if they're
short term, you're gonna be hit with an ordinary income
tax bill, and that those tax rates can go up
to thirty seven percent for high earners. Now, compare that
to long term capital gains taxes, which is between fifteen
(43:23):
and twenty percent, and it's really it's a no brainer.
That's a big savings as far as taxation goes, so
a fund with high turnover can leave you with less
than what you had expected, and even if the market
is humming. So I've seen folks blind sided by these
tax bills and they didn't see them coming well because
(43:44):
no one really explained the fine print. So where does
it go wrong? Well, investors really mess things up all
the time, frankly, and in let's see, what was this
article from grow Huh? I don't think that that's what
(44:05):
it says. Grow dot ends and it was a twenty
twenty three article.
Speaker 4 (44:10):
I have to check on that. I don't think that's right,
but maybe it is.
Speaker 3 (44:13):
But anyhow, it says big mutual fund investment mistakes. And
this article highlighted the classics of piling into these trendy
sector funds like tech energy and doing it without diversifying.
And one year it was a pretty rough year and
they you know, that's where people sunk here, and they
(44:38):
were chasing this last year's hot performer. But the problem
was that they were ignoring the costs and the risks here.
And it's really like betting on a March Madness bracket
that's based on last season Cinderella team and the past wins.
Speaker 4 (44:54):
They don't.
Speaker 3 (44:54):
They really don't guarantee a repeat. Their high fees, tax
and misaligned risk that can really turn a decent portfolio
into a slow motion train wreck. And if you're someone
that does brackets, I don't know if you're like me,
but I got sucked into that before. I remember for
(45:15):
quite a while just going in the soup for Gonzaga thinking, Wow,
they wrecked my brackets so many times I gotta finally,
you know, hitch on to them and have them take
me home. Well, I've also gotten burned by that. So
my offer here to you as you're listening, and for
those of you who are just joining, my name is
Drew Prescott. This is your money matters. It can be
(45:38):
heard here every Sunday at eleven am. And I'm a
chartered retirement planning counselor and an accredited wealth management advisor
with Prescott Private Wealth. We're located in Troy, New York.
So here's my offer.
Speaker 4 (45:51):
Let's fix it.
Speaker 3 (45:53):
So if your portfolio is loaded with mutual funds, let's
take a look. Okay, what I'll do is, before we meet,
I'll have you send me over your statement with your holdings.
I'll have you answer a quick questionnaire and I'll run
your risk score. I'll determine the proper benchmark for you personally,
(46:15):
and then I'm gonna start to slash the fat, the
expense ratios, the tax drags, whatever is dragging you down.
So let's use who did we call them earlier? Yeah,
I think I said Jane and Mike. I think that's it.
Maybe I'm wrong, but Jane and Mike, you know, those
(46:36):
are the ones that I said. They found real value
in this, and you can too, because it's not just
funds that I can help you with your investments, your insurance,
real estate, employee, stock options, estate planning. I'm not here
to sell you fluff. I'm not here for you to
say I know this guy right. I'm here to be
(47:01):
the guy. I want to be your guy, So reach
out because I'd love to make a difference. And what
we're going to do together could be really a beautiful thing.
And my goal in working with you is for you
to be refreshed because you feel educated, you feel heard,
(47:22):
and you feel as though you have the confidence now
to march forward and appreciating what you have and that
you're going to accomplish these goals and one of the
most rewarding clients that I've worked with over the years
as a younger couple that came to me and they
(47:44):
had a goal that they wanted to retire no later
than fifty nine, and by making some adjustments and putting
some money into other areas outside of the retirement accounts,
to strategically use these investments to be tax efficient and
(48:04):
to get them from the early years past that fifty
nine and a half. What we were able to do
by working together hand in hand, they were able to
retire two years sooner. And now they're getting ready to
take their children on a trip. They've got their two boys,
their boys, wives, their grandson, and they're going to Italy.
(48:29):
And that's what this is all about. You've got the dreams,
share them with me. Share with me what you have
for assets, for your liabilities. Let's put together just a
beautiful spread of what financially this life that you could
live would look like.
Speaker 4 (48:49):
I'll see what I can do. I'll see if we
can make some tweaks.
Speaker 3 (48:52):
Can we get you there sooner? Can you live a
richer life based upon what I see? And I'll share
all of that with you. So please to call in
love to have you. The phone number here is five
one eight two zero three one nine eight three again
five one eight two zero three one nine eight three,
(49:13):
and you can ask for Jessica. She's set up an
appointment for you. We'll send you out an email with
a risk questionnaire ahead of time and a list of
what we'll need to have the most productive time, because,
just like you, our time is very valuable to us
and we have to choose how we spend it, and
(49:33):
we hope to spend it wisely and hopefully that includes
spending time with you. So let's see, remember that where's
that thing here? I was telling you about that article?
I can't seem to find it, so we'll just stick
with what I said that the source was for now.
But if you're bored, you want to take a look
(49:56):
at us something about mutual fun fees and see if
you're paying too much much. Investors Business Daily has a
little video on YouTube. I like it kind of breaks
down expense ratios and their long term sting and kind
of it's perfect for our audience here. Okay, So also
here's another one. Twenty twenty four, bank rate had a
(50:18):
nice article and what is an expense ratio and what's
a good one, So feel free to take a look
at that.
Speaker 4 (50:25):
So you know, we.
Speaker 3 (50:26):
Kicked off with the markets today a little bit of
a wild ride with some bright spots for sure. Tech
stocks are coming back around beating their chest a little bit,
Industrials are kind of dragging their feet, which is okay,
and bonds are holding steady. And listen, at this time
of the show, you'd know better than me how I'm
(50:48):
doing with my bracket. I may be the laughing stock
of WGY right now and all the fellas over at
ESPN Radio and leve Gos and those guys, because I
kind of got in them a little bit and said, hey,
don't sleep on Alabama this year. We might have something
we'll see because we're not known to be a basketball
(51:10):
school so much, but more of a football But here
we come.
Speaker 4 (51:13):
We're roaring strong.
Speaker 3 (51:14):
So my bracket, like I said, I've got Alabama facing
Auburn in the final and as I'm recording here, I'm
you know, that game is actually on. I'm kind of
nervous to look, but where Alabama is playing a fifteenth
ranked team, So until I look, this thing still looks
(51:35):
like a Rolls Royce pick, we'll see. But those door dangs,
those door things here, they're they're keeping me humble, let's
say that. But investing is no different because it can
look polished until a bad choice starts to dent your returns.
So remember think back to what I said earlier, to
that cannabis stock frenzy in twenty and eighteen or pets
(51:57):
dot com in two thousand, and they're all hyped up
as sure things that belly flopped like me over at
the country club. Okay, Now, the lesson here is that
a solid strategy beats chasing trends every single time. And
then there's that opsunity the Opportunity zone project that I
(52:17):
hinted at for ten thirty ones, and that's really starting
to heat up. So you know, we're we're guiding some
clients here to help defer some taxation on some large
on some large gains here, whether it be from selling
a Babe Ruth baseball card to selling a property where
(52:40):
you've got large gains or you've got highly appreciated stocks,
this is something that could really be a smart move
for your wallet and for the communities as well. So
if you're sitting on an appreciated asset that you'd like
to get off of, but you just don't want to
catch that sting. Give me a call, maybe maybe this
is some thing that could be of value to you.
(53:02):
And we also touched on this whole life insurance and
that the truth hurts here. So with this full confession,
like I said before, I used to sell it, I
still do when necessary. I also trained advisors on it,
and I mean I own it as well. So like
(53:26):
I said, it can be a blessing or a curse,
and you choose the pathway, and I want to help
you make the right decision because remember, dividends are not
a sure bet. Indexed universal life fees creep up and
I've seen too many people get burned by these slick pitches,
and that's why I want to offer to you a
(53:47):
policy review service for a fee. Depending upon the complexity
of your policy, how many you have and so on,
that will determine the fee.
Speaker 4 (53:58):
But feel free to call in.
Speaker 3 (53:59):
I'll give you a very fair, straight price right away, okay,
and I'll show you what's really going on. So if
you're a trustee as well, remember it's your fiduciary duty
to check this stuff, and anyone else it's your peace
of mind and I've got you covered, so feel free
to reach out love to hear from you. Had a
(54:20):
fantastic time with you today, and I got my hands
over my eyes right now because as soon as I
end this show, I'm gonna look at my phone and
see what happened with Alabama here and Lord willing it
all went well, and my little claims at the beginning
aged well and I don't look like a knucklehead. That's
that's my hope and fingers crossed, we'll see what happens here. Okay,
(54:43):
But again, absolute pleasure spending time with you. I hope
you found this to be very valuable and really looking
forward to seeing you next week. So again, thank you
so much for listening, and I will see you next week.
Until then, God bless you and God bless your family.
Speaker 2 (55:01):
I see true.
Speaker 3 (55:02):
It's so great.
Speaker 5 (55:05):
Read process. I see them blue follow me in here,
and I think to myself, what I wonder.
Speaker 2 (55:23):
Life style is.
Speaker 1 (55:24):
Financial decisions don't have to be faced alone. Drew Prescott
at Prescott Private Wealth is here to guide you, whether
it's settling in a state, planning for retirement, or making
your final walk from your career. Into a well earned rest.
Don't let uncertainty weigh you down. Ask yourself, did I
do this right? Am I missing anything? With Prescott Private Wealth?
The answer is clear, You're on the right path. Visit
(55:44):
us at four or five to one Who's six Street
in Troy, New York, or online at Prescott PW dot com.
Prescott Private Wealth your partner in navigating life's financial journeys.
Welcome to the hidden world of wealth, where secrets of
the affluent become accessible to you. You are listening to
Your Money Matters, the most provocative financial radio show on
the airwaves. You are about to start your educational journey
here on Your Money Matters with your host, Drew Prescott,
(00:22):
President of Prescott Private Wealth and Chartered retirement Planning Counselor.
Drew will unlock the complexities of the financial landscape with straightforward,
powerful insights. Whether you're planning for retirement, managing in a state,
or looking to grow your wealth. Consider this your exclusive invitation.
Turn up the volume, lean in closer. Let's navigate the
(00:45):
hidden paths of prosperity together. Your financial enlightenment begins now.
Securities all produce a terror Financial Specialists LLC member FENRA
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TERA firms are under separate ownership from any other named entity.
(01:06):
Four five one two sixth Street, Troy, New York.
Speaker 2 (01:08):
One two one eight zero.
Speaker 3 (01:32):
Welcome back, my friends, to Your Money Matters. I'm your host,
Drew Prescott, Chartered retirement planning counselor and Accredited Wealth management Advisor.
And the president of Prescott Private Wealth located here in Troy,
New York. So why Sweet Home Alabama. Well, anybody that's
following March Madness, and you know that I am a
(01:54):
huge Alabama fan, roll tide. I'm believing. I'm belo Now.
By the way, I may very well have egg on
my face by the time that you're listening to this,
because I'm recording this on Friday. So Lord willing this
age as well. If not, Hey, I'm okay with you
(02:16):
calling in and making fun of me. It's all right,
It's totally fine.
Speaker 4 (02:19):
I love.
Speaker 3 (02:21):
I love when guys, you know, get at me for
being an Alabama fan. You know, it's a little bit
of a dopamine hit for me, So I don't mind, okay.
So last week we dove into tariffs, we dove into
the China's rare earth dominance, and really what to watch
for in the markets this year, And if you missed it,
(02:42):
just check out the archives go to w g Y
and it's a good one.
Speaker 4 (02:45):
I really enjoyed it. I had a.
Speaker 3 (02:48):
Lot of positive response to that. A lot of people
called in, a lot of people sent me messages saying
thank you for bringing clarity to the topic. So and
that's my goal. My goal is to not to be controversial.
My goal is to bring you transparency and an understanding
of how I see it, okay, and what it could
(03:11):
mean to you. So hopefully that did that for you.
And today we're kicking things off with taking a look
at this week's market activity and my March Madness bracket
and some cautionary tales from the investing world that remind
us that even the sureft's bets can go bust. But
let's start off with the markets here, and as of
(03:33):
the morning here on Friday, we're kind of seeing a
mixed bag. The SMP has been flirting with new highs
this week and kind of buoyed by the tech stocks,
but we saw some volatility midweek, and that's okay. We
talked about that last week. There was some profit taking
after a strong run, and the Dow has been a
little bit sluggish and it's been weighted down by some
(03:56):
industrial sector concerns and perhaps some lingering tariff talk gechos,
who knows. But meanwhile, bonds are holding steady and with
the tenure treasury yield hovering around four point two percent,
we're seeing some investors seem to be balancing their optimism
about earnings with some with jitters over the inflation data
(04:18):
which is going to be due here coming up. And
you know, it's kind of like a basketball game in
the fourth quarter, it's still anyone game to win.
Speaker 4 (04:29):
And speaking of.
Speaker 3 (04:30):
Basketball, let's talk about March madness for a second. Yes,
I know you tuned in here for information on the markets,
investing finances and all of that. And like I said,
if you've listened to me for a little bit of time,
you know that my personal health comes into play here too. Okay,
(04:50):
I have to have a little fun while I'm doing
this show, So let's talk about basketball for one second.
I promise I won't hang out here long. But my
bracket right now, I'll tell you, is it's looking like
a Rolls Royce. You might have a couple door things
in it, but I've got Alabama, Auburn, Saint John's and
Tennessee in the final four, with Bama facing Auburn for
(05:13):
another beautiful rematch here in the championship. So, like I said,
I could really sound like a nitwit here because this
is getting aired on Sunday and I'm recording it on Friday.
But I'm taking my chances. That's how much I believe
in these guys. But like I said, so far, so good.
But here's the funny thing about these brackets. And you
(05:33):
know this, that four bad picks and that rolls Royce
turns into a repossessed twenty year old Benz that's coming
out of Arbor Hill. So it's a lot like the
do it yourself investor using a brokerage account with no
ticket charges or no commission. You know, you're starting to
real sleek Ferrari, have a portfolio, low cost, big dreams,
(05:54):
but a few bad picks, and suddenly you're driving a
Pontiac Vierra with duct tape bump. So let me just
give you a little cautionary tale from investing history. Okay,
then that's where history will give us a little bit
of perspective. So let's rewind things here for one second.
(06:18):
It's now time for everybody's favorite part of the show,
story time.
Speaker 5 (06:24):
Everybody sit down, listen carefully, everybody sit down, sit down,
Please sit storty time, story time.
Speaker 3 (06:40):
So let's go back to twenty and eighteen and Forbes
published an article that was titled the biggest investing mistakes
of the last decade, and it highlighted the rush into
cannabis stocks. Now, if if you had anybody that was investing,
these names came up.
Speaker 4 (07:00):
Everyone was talking about cannabis stock.
Speaker 3 (07:02):
And companies like Tilray sored up nine hundred percent months
just simply on legalization hype, and investors thought that it
was definitely going to be a sure thing. Then the
reality hit over supply, regulatory hurdles and a ninety percent
drop by two thousand and nineteen, and that Ferrari turned
(07:25):
right into a Fiarro overnight. Or let's take that dot
com bubble that was back in two thousand. We saw
a Wall Street Journal ran a piece in twenty and
fifteen and it said lessons from the dot com Bust,
and it was really noting how pets dot com went
from three hundred million dollar valuation to bankruptcy in under
(07:49):
a year's time. And people had poured money in. They
were chasing that next big thing, only to see it vanish.
And these were hot tickets until they weren't so closer
to home. I've seen some DIY investors get burned too.
And a client once came to me after betting big
on a single stock, and let's just let's just call
(08:11):
it a trendy tech darling for a second, okay, And
it was on a no fee platform. Well, it tanked
by sixty percent in a quarter, and what looked like
a genius move to him became a very costly lesson.
And that's why I always say low fees are great,
but strategy matters more. And that's something that you have
(08:35):
to keep, you know, keep in mind because as I'm
doing my as I did my bracket, I should say,
there's some moves out there that made me look like
I actually knew what I was doing.
Speaker 4 (08:47):
But I know one thing.
Speaker 3 (08:49):
By the end of this, I'm not gonna I'm probably
not going to win my my little league here, but
you never know. Point being that we have a guy
that's in there, and this guy knows everything about these
basketball teams.
Speaker 4 (09:06):
I mean, he could.
Speaker 3 (09:07):
Tell you what courts affect the way that the ball
bounces off of the floor. I mean, this guy is
a genius. So what I prefer to do actually is
just give him the money and then tell them, hey,
we'll split what happens here. But sometimes my pride gets
in the way and I just got to do it myself.
But here's something that I wanted to share with very exciting.
(09:31):
Sometimes you get into these just exciting cases that you're
working on with clients, and I've got one that actually
put a little pep in my step. I enjoyed working
on this one this week. And we've got a couple
of clients that we're working on this with and it's
digging into this program which blends ten thirty one exchanges,
(09:54):
which are those tax deferred real estate swaps and with
highly appreciated stocks else So the twist is reinvesting into
an opportunity zone. So these are designated areas where you
can defer capital gains taxes and if you hold it
for ten years, you potentially eliminate taxes on the future appreciation.
Speaker 4 (10:17):
So this has been really fun to see. Now picture this.
Speaker 3 (10:22):
You sell a rental property or a chunk of stock,
and you roll it into this program, this qualified Opportunity
Zone Fund, we'll call it, okay, and not only to
defer the tax hit, but also to build wealth in
revitalized communities. And we're testing this with a few clients.
(10:44):
It's really been a fun project with real potential to
slash some future taxes in a positive way and I'm
not going to go too deep on this today, but
if you've got some real estate or some employee, some
stock options that are highly appreciated, you know this is
worth sitting in, uh on for a chat. And uh
(11:08):
What I also want to do today is I want
to share with you this pushy world of life insurance sales. Now,
you don't want to miss this. Okay, What what you're
going to find is by listening to this next portion,
(11:30):
it's going to be.
Speaker 4 (11:30):
Very eye opening. That much I can promise you.
Speaker 3 (11:32):
Okay, So for you that are just joining, first of all,
thank you, thank you for my loyal listeners as well
for listening today. For those who you just stumbled across
us on the radio dial, you're listening to your money Matters.
I'm the host, Drew Prescott, chartered retirement Planning counselor and
accredited wealth management advisor at Prescott Private Wealth. The phone
(11:53):
number here is five one eight two zero three one
eight three, And let's get back to it. What I
was just saying is we're going to dive into a
hot topic here, some whole life insurance as an investment
that people are talking about. All right, now, we always
see this come around either if there's some jitters in
(12:15):
the market, and we'll sometimes we'll see financial professionals that
are our career agents with these insurance companies. Maybe they
got a mutual in their name, maybe they don't. And
what they are doing is they'll always play off of
(12:38):
some fear here, and I want to help you cut
through the noise and see this a little more clear.
Speaker 4 (12:47):
Okay.
Speaker 3 (12:49):
So, if you've ever been pitched life insurance as your
golden ticket to riches, You're gonna want to stick around
because I've got some truth to unpack for you. And
early in my career, I am telling telling you right now,
I'm the best person to.
Speaker 4 (13:04):
Deliver this message.
Speaker 3 (13:06):
You're if this is something that's of interest to you,
You're in the right place because I'm going to give
it to you straight. And I'll also explain to you
why why I will be the best person to deliver
this information to you, Okay, Because early in my career, man,
(13:27):
I was drinking this kool aid. I mean I was
so deep into the gas tank on this thing. I
was sucking the dirt out of the thing. And I
worked for a mutual insurance company, and I worked for
a couple of them, and I trained advisors, and I
really believed that life insurance was the answer to a
(13:48):
lot of people's financial desires until I saw the flaws.
So I want to break down the hype. I want
to break down the reality and a service that I
offer to you to cut through the clutter. So, if
you've been pitched this, you've heard it said Whole Life
(14:10):
isn't just insurance, it's an investment. Okay, Well that's wrong.
First of all, now there's tax deferred growth. They say,
there's guaranteed returns, cash value to borrow against. It's a
very slick sale, and it's it's not all lies, okay,
(14:30):
But the average individual, and I would even say the
average life insurance producer does not really understand how this
product works. Now, Whole Life can work for some specific
goals like funding an ISLET, which is abbreviation for Irrevocable
(14:52):
Life Insurance Trust. We use it to fund buy sell
agreements for companies. We use it to on deferred compensation plans.
And the question here is is it a wealth building tool? Well,
see that's where it gets shaky because agents like to
(15:15):
hype these dividends. And I want to share with you
the catch here now by hyping these participating policies with dividends,
saying you'll get extra returns, they'll say, or they'll say,
you know, hey, you're going to get four point two
percent in a dividend. All right, there's a lot to that,
(15:37):
and there's a lot that's left out. And you know,
I wouldn't say that this is a deceptive practice. I
would say that this is due to a lack of education. Now,
there are some wonderful technicians in that market that I
know of here locally, that understand it very well, and
(15:59):
that's that's a good thing, especially when they're dealing with
high net worth markets like myself in this area. So
here's here's what I want to share with you that
what's left out here is that those dividends are not guaranteed, okay,
because they cannot guarantee the profit of a company any year,
(16:23):
and they hinge on the insurer success. So think investment gains,
think about mortality stats and costs of running a business well.
In twenty twenty three, Kiplinger warned that dividends can shrink
or vanish if the company stumbles. And I've seen clients
(16:44):
who expected a five to six percent return and they
get a two percent or less. See, it's not a
stock market play. It's a roll of the dice. Now, additionally,
let's talk about Universal Life. Does that have upside or
is that an illusion? Because there's this product that's being
(17:06):
sold with great fervor right now and it's called an
endividual sorry, an indexed universal life contract. And what they
say is you get all of the market gains and
you get no losses. That's the promise. Well, your cash
value tracks an index, let's say, like the S and
P five hundred, and they'll usually cap it, let's say
(17:29):
at ten percent, and then they say it has a
zero percent floor. So that sounds pretty nice, right, you
could get up to ten percent, but you're not gonna
go blow zero. Well that sounds really wonderful until you
dig deeper because caps can drop and fees. See, this
(17:52):
is the part where it gets sneaky.
Speaker 4 (17:55):
Now.
Speaker 3 (17:55):
I could go on and on, I could I could
hold ten shows on this topic alone. You might be
saying to yourself, well, why are you even covering this? Well,
I'm covering it because a lot of people are being
approached to buy this product recently because of the shakeup
(18:16):
in the market, okay, And it's kind of being used
as a pawn piece to not only try to validate
the fear of the investor, but it is also being
used as a way for somebody that does not have
the investment knowledge and the financial planning background to shoot
(18:42):
for some type of a low hanging sale in their opinion,
and they can be successful with doing it. Now, I
want to share something with you. In twenty twenty four,
Forbes had reported that the IUL expenses between options contracts,
administration costs, and mortality costs can siphon anywhere from one
(19:10):
to two percent yearly, and sometimes it's much more than that.
And that's rarely on that glossy brochure that you're being
handled handed by the rep. So I want to share
with you a real life lesson.
Speaker 4 (19:27):
Now.
Speaker 3 (19:28):
I've heard some doozies and one listener had called in
and they had poured two hundred thousand dollars into a
life insurance policy for retirement. Okay, Well, ten years later
the cash value was barely one hundred thousand dollars.
Speaker 4 (19:49):
So why is that?
Speaker 3 (19:51):
Well, commissions, that's one part, and fees and another was
sold an IUL policy, which is an indexed universal life
policy for their islet, which is your vocable life insurance trust,
and they expected some big growth, okay, but nope, when
(20:15):
I reviewed it, the trustee was livid. The policy itself
was underwater and there aren't there aren't any immediate solves
to this because you don't get a mulligan on it.
All right, these are red flags. So what we do
(20:36):
is I like to offer policy reviews to you the listener,
to business owners that I call on, to trustees that
are the ones that are responsible for the oversight of
these policies, and I offer this policy review for a fee.
So if you're sinking big bucks into a whole life
(20:57):
policy or an IUL policy, I'll see for an islet
by sell whatever it is. I'll dig into the details
for you and I'll decode the dividends, expose the IUL costs,
and check for efficiency. Now, if you're a trustee and
you're listening, this is your fiduciary wake up call. I've
had clients spots, some weak spots and switched to smarter plans,
(21:23):
and it's clarity that you can trust when you get
done with this process. So let me give you a
case in point which was a big win. Now, I
reviewed a life insurance policy that was in a trust
with a five million dollar death benefit. It had about
a million two in cash value, and it was stuck
(21:44):
inside of this whole life policy. So, you know, one
of the things. Let me just tell you why this isn't.
I'm going to go down the path a little bit
here to kind of bring this home and why this
is important. Imagine having a million two that is yours
and it's on paper, but it's awfully difficult to get
(22:06):
your hands on. It's like having a beautiful brick commercial building,
let's say in downtown Saratoga, and you've got all this equity,
but you can't just reach in and pull a handful
of cash out right. It requires some lending. It requires
(22:27):
taking loans in order to get your hands on this.
And it's the same thing with a life insurance policy.
So what we wanted to do here was recapture this
money as a separate asset and have coverage that's put
(22:48):
in place for exactly what it was originally designed to do,
which was to pay estate taxes. This family had no
interest in having millions of dollars in cash just sitting
inside of a life insurance policy. So what we did
was we were able to recapture that cash and we
(23:08):
bought a new five million dollar policy with guaranteed premiums.
And it wasn't designed to be cash value rich, but
it's served its purpose, as I said, and that's to
pay a death benefit at death to fund to state taxes,
so not to you know, you don't want to have
(23:29):
your money tied up into something that you can't get
a hold of and it's full of hooks. And that's
that's where this client was with this policy. And if
you have a policy, or if you're being pitched a
policy and you want me to review it with you,
I'd be more than glad to do that, okay, and
(23:53):
can charge a fee.
Speaker 4 (23:54):
You can do your.
Speaker 3 (23:54):
Insurance someplace else, totally fine, Or if you decide to
feel more comfortable dealing with me, then I could write
the policy for you, structure it properly, and then there
would be no fee that would be charged because I
would be getting compensated by the insurance company that we
(24:15):
decide to go with. So I don't need to get
paid on both ends here. Not somebody that pushes life
insurance unless there's an actual need for it.
Speaker 4 (24:27):
Okay.
Speaker 3 (24:28):
Now, others out there, that's how they that's how they
make their living.
Speaker 4 (24:33):
All right.
Speaker 3 (24:33):
Now, if I thought that there was something that was
something that everybody needed, again, we use it sparingly and
all my clients can testify to that. And frankly, due
to the size of my practice and my experience, I
get a very handsome commission on that, significantly better than
(24:59):
those that are working for a company that they have
a career contract with. So I promise you this much.
I have since leaving that area of work, I have
told more people to not purchase than I have told
(25:21):
to purchase it.
Speaker 4 (25:23):
Okay.
Speaker 3 (25:24):
Now, we'll always do an overview to see exactly what
you should have, But the biggest component here is to
know what type you should have. Okay, So how do
I do that? Why do I do that? Well, again,
it goes back to everything that I preach here, which
is to have a financial plan in place. Now, here's
(25:46):
what I've noticed as it relates to certain products. A
lot of my clients are business owners. They're either in
real estate construction or they're executives in a large firm.
Now day to day, they're the decision makers here and
(26:08):
they're just making decision after decision after decision, and the
last thing that they want to do is slow down
to look at their financial picture. And so they'll say,
you know, well, my attorney takes care of that, or
my accountant takes care of that, and by doing that,
(26:28):
more times than not, they become a victim of a sale.
And a sale is a very different thing than having
a strategy. And unfortunately the people that if you're wondering,
well do I fit into that camp, we'll tell you
how to answer that question.
Speaker 4 (26:52):
Do you have.
Speaker 3 (26:55):
A lot of different relationships in your life as far
as having a couple of people that have sold your
life insurance, an individual that takes care of your four
to one k at work, You've got another individual that
has sold you an annuity. You've got another individual that
(27:16):
has helped you with some iras, and you've got all
these different relationships out there. That's classic business owner.
Speaker 4 (27:25):
Okay.
Speaker 3 (27:27):
Typically you'll meet somebody out at a gala, or you'll
meet someone at an event for networking and so on,
and you take a shine to the person and then
you start to do some business. But you never bounce
that decision off of anyone else. So I find that
to be more common than not with business owners. So
if that's you, I would encourage you to have a
(27:51):
meeting with me and let me sit with you, find
out exactly what you have, the different relationships that you have,
why you have them, and you've purchased, and then I
can go back to my lab here and create a
plan and show you what you have, where the efficiencies
(28:11):
are and where the inefficiencies are, what the costs are
with this, where you currently are, and how you could
potentially fine tune this with the proper relationships to have
a more strategic plan than just just a haphazard plan
with a bunch of random ideas of different financial professionals
(28:32):
that are not sitting at the same table together. And
that's that's what I want to do for you.
Speaker 4 (28:39):
All right. Now, let's move on a little bit.
Speaker 3 (28:42):
So I want to go into by the way, let
me share something. Yeah, you know what, this is what
I this is what I want to do. I think
I shared earlier two weeks ago, I did this show
on mutual funds and it was received well. There was
(29:04):
a lot of calls that came in. Several appointments that
were set through this and here's what.
Speaker 4 (29:13):
Came of this.
Speaker 3 (29:15):
I dug into mutual funds and I wanted to share
with you as the listeners, what the expense ratio is
inside of mutual funds. And by the way, if you're
just joining us, you're listening to your money matters. I'm
your host, Drew Prescott, chartered retirement planning counselor and a
credited wealth management advisor. Glad to have you, Thanks for
tuning in, and hope you enjoy the rest of the
(29:37):
show here And let me just take a step back.
And we were diving into mutual funds. We talked about
expense ratios, we talked about tax drags and also the
mandates and aligning the risks that you had your risk
profile with your goals, and frankly, the feedback blew me away.
(30:00):
Listeners had reached out, they sat down with me and
we uncovered some serious wins by tweaking these portfolios. And
today I'm sharing those stories. I want to break down
how expense ratios and taxes can quietly sabotage your returns.
And I want to remind you that I'm here to
(30:22):
help you with your investments, with your insurance, your real estate,
your state plannings, you name it, I love to dive
into it. Okay, So let's let's talk a little bit
about this. Let's talk about some some people that called
in that I had meetings with.
Speaker 4 (30:43):
Okay, let me share with you about.
Speaker 3 (30:48):
Well, let's let's let's use the name Jane.
Speaker 4 (30:50):
Okay.
Speaker 3 (30:51):
So, so she she came in for an appointment. She
had a four hundred thousand dollars portfolio and it was
mostly an actively man mutual funds.
Speaker 4 (31:01):
Now, how did she end up here? Here's what happened.
Speaker 3 (31:04):
Her advisor had promised that they would crush the market,
and I ran a risk score and she turned out
to be what we call a moderately aggressive investor, and
she's happy with steady growth. But her funds, well, they
were swinging for home runs and they were loaded with
risk that she didn't want and she wasn't aware of.
(31:27):
Then we checked the costs that were associated with these Now,
her average expense ratio with these funds was one point
two percent. So compare that to an S and P
five hundred ETF, which averages about point zero three percent.
And that's per a bank Rate article which was titled
(31:50):
what is an expense ratio? And what's a good one.
And that's a glaring gap, as you can tell, between
one point two and point zero three. So over the
twenty years, that one point one seven difference, that could
have drained one hundred and fifty thousand dollars from her returns.
(32:11):
So what we did was, instead of using funds, we
shifted her to individual equities and she pays a one
percent management fee on this all right, Now, she saves
the internal expenses that she was paying. She was also
(32:33):
paying her advisor a fee in addition to this of
about one point five So this lady was losing a
total of two point seven percent, so that's that's what
she was paying. So she gets reduced down to one
percent due to the size of her portfolio. We have
(32:56):
break points, that's right on our website. The more you fst,
the lower the fee. So she's ultimately saving about let's
see she say, yes, she's saving about one point two percent.
I'll call it one one point seven because the other
advisor was one point five percent versus me being one percent.
So so we shifted her into these individual equities and
(33:22):
we did use a couple of ETFs as well. And
this is more of this is an active approach here,
and so when does this active approach play out and
when does it bring value? Well, how about last week?
Right as I said, I only had two people. The
two of my clients had called in that got a
(33:43):
little bit nervous, and I, you know, I walked them
back from the plank. They didn't jump, and they were
really nervous, and I understand why that's how they felt,
and that's okay, and it's my job to understand that.
It's also my job to bring clarity in these moments.
So you can see that we also had to make
(34:06):
a couple of tweaks in a couple portfolios. Nothing major,
but but that's that's the active management is to be
able to have the ability to make those changes when
we feel it it's necessary. Now, let me share a
story about another fella. Let's we'll use the name Mike.
How's that sound that's a that's not a common name,
(34:28):
so let's use Mike. Mike had about six hundred thousand
dollars in mutual funds and he had a point eight
percent expense ratio and this was in a non retirement account. Okay,
so therefore it's a non qualified account and this is
where this tax drag comes into play. So let me
(34:50):
take a step back. Let me bring you back to
what we're talking about. So the fella's name we call it,
We're gonna call Mike. He had six hundred thousand mutual
funds with a point eight percent expense ratio and a
nasty tax hit short term gains tax to thirty seven percent.
So I benchmarked his portfolio against the Russell two thousand
(35:11):
and guess what. His net return lagged by two percent annually.
Fees and taxes were eating him alive. So we trimmed
his expense ratio down two point three percent and swapped
in tax efficient ETFs. So now he's already seeing gains
and he's breathing a little bit easier and helping folks
(35:34):
like Jane and Mike see the light. That's why I'm
in this game, Okay. I love this. There's nothing like
locking the door at the end of the day and
going home to have supper with my family and knowing
that I made a difference in somebody's financial picture. And
one of the things here that I don't want to
gloss over, which is this, is that the silent thief
(36:01):
here is expense ratios. So what is an expense ratio. Well,
an expense ratio is the annual fee that a mutual
fund charge is for management. So think of money going
towards marketing and overhead, and you can think of it
as kind of a cost of admission.
Speaker 4 (36:20):
Okay.
Speaker 3 (36:21):
Now, Saxo's had a piece in twenty twenty four and
it' said expense ratio explained, and it really.
Speaker 4 (36:28):
Puts it perfectly.
Speaker 3 (36:29):
It says a small percentage can eroad returns big over decades.
So let's run the numbers. Let's just take a very
low number.
Speaker 4 (36:40):
Simple.
Speaker 3 (36:40):
Like I always say, I like to use round number shares,
So we use one hundred thousand dollars. I love math,
but I don't love it that much.
Speaker 4 (36:47):
On a radio show.
Speaker 3 (36:48):
Okay, So one hundred thousand dollars at a seven percent
growth rate with a point two percent expense ratio, so
after twenty five years you would have about five hundred
and seventy four thousand dollars.
Speaker 4 (37:04):
So now.
Speaker 3 (37:06):
Bump that expense ratio to one percent, and it drops
that five hundred and seventy four thousand to four hundred
and eighty three thousand, So that's ninety one thousand dollars
that vanishes poof just from fees. So small numbers add up,
and they're sneaky about it. So remember, high expense ratios
(37:28):
often come with actively managed funds where the managers try
to beat the markets. Sometimes they do, sometimes they don't.
It's often that they don't and you're still paying for
that effort. So what I don't understand is a financial
(37:50):
advisor and a fiduciary, okay, because I know a lot
of these guys out there that don't manage their own
portfolios and they'll use a third party that has their
own proprietary mutual funds, and inside of there, these guys
(38:11):
are actively managing the portfolio and the advisor's basically catching
kind of like a finder's fee if you would, Okay,
But ultimately what you're doing is you're paying for two
different advisors.
Speaker 4 (38:24):
So these high expense.
Speaker 3 (38:26):
Ratios, these can really do a number here. Now, there's
a lot of articles out there, and bank Rate says
that anything over one percent is a red flag for
most investors. Why because low cost would be investing in
(38:46):
an actively managed portfolio where you pay a fee and
the advisor builds out the portfolio for you. And monitors
it and maybe they do, maybe they don't.
Speaker 4 (38:58):
Include some.
Speaker 3 (39:01):
Some help with addressing some financial concerns, questions, purchases, putting
together financial plan. That's something that I enjoy as a
matter of fact. Before when I was younger, before I
got in this business, I was in the car business
and I've maintained all my relationships there and when clients
(39:24):
buy cars, a lot of them, Let's be honest, buying
a car is not fun. It is fun, but it's
not fun when you get to the negotiation table. And
I help a lot of people with ironing all that
out before they even step into the dealership and we
help them negotiate a deal for them, and it becomes
(39:46):
fun again. So I enjoy that. So that I don't
charge anything for that. That's just kind of a little
garnish to doing business with me.
Speaker 4 (39:57):
So I digressed a little bit here.
Speaker 3 (40:00):
What I was saying is that the fee here, you
have to be careful. You have to know what am
I paying for, who am I paying it to? All right,
And then you also want to be aware of with
mutual funds the tax trap here, which is just kind
of adding insult to injury. And then this is this
(40:23):
tax drag that I talk about. I had a lady
call in down from Rhinebeck, sweet woman. I thoroughly enjoyed
my time with her. We had a wonderful time talking
on the phone, and I educated her on this exact issue.
And so she goes at it on her own through
(40:44):
brokerage account and she seems to be very happy with
that and has enjoyed it. So what we did was
we just looked at some of the mutual funds that
she has, and she was questioning, what is this tax drag?
I had asked my accountant about it, and he's never
heard the term before. And so this is a term
that I've used for a long time and a lot
(41:07):
of advisors do. And ultimately what it refers to is
what you lose in your return simply due to taxation
because the fund managers make sales through the year. Okay, Well,
in her situation, this was a this was a bond fund,
(41:29):
and she was getting about, as a matter of fact,
let me just pull it up because I just spoke
with her, and the numbers here are fresh, so I'd
rather just show you exactly what we had. Bum bum
here we go. So she was getting about two point
(41:50):
four eight percent. She was getting about four point two
for a dividend, but the tax drag was one point
eight eight. That means she's losing that just simply.
Speaker 4 (42:03):
Due to taxes. And that's that's an issue. Okay.
Speaker 3 (42:09):
Now, if she were to have individual bonds and let's
say some CDs, treasuries and the she would not be
subject to the same type of loss because she'd have
(42:29):
more control.
Speaker 4 (42:30):
These would be.
Speaker 3 (42:32):
Timed and they would have long term capital gains taxes,
versus getting hit with these taxes throughout the year and
losing some of her return just simply due to taxation.
So what we want to do here is make sure
that you're buying and selling your stocks and your bonds,
(43:00):
you know, strategically, okay, because if we don't do it strategically,
then it's going to trigger capital gains and if they're
short term, you're gonna be hit with an ordinary income
tax bill, and that those tax rates can go up
to thirty seven percent for high earners. Now, compare that
to long term capital gains taxes, which is between fifteen
(43:23):
and twenty percent, and it's really it's a no brainer.
That's a big savings as far as taxation goes, so
a fund with high turnover can leave you with less
than what you had expected, and even if the market
is humming. So I've seen folks blind sided by these
tax bills and they didn't see them coming well because
(43:44):
no one really explained the fine print. So where does
it go wrong? Well, investors really mess things up all
the time, frankly, and in let's see, what was this
article from grow Huh? I don't think that that's what
(44:05):
it says. Grow dot ends and it was a twenty
twenty three article.
Speaker 4 (44:10):
I have to check on that. I don't think that's right,
but maybe it is.
Speaker 3 (44:13):
But anyhow, it says big mutual fund investment mistakes. And
this article highlighted the classics of piling into these trendy
sector funds like tech energy and doing it without diversifying.
And one year it was a pretty rough year and
they you know, that's where people sunk here, and they
(44:38):
were chasing this last year's hot performer. But the problem
was that they were ignoring the costs and the risks here.
And it's really like betting on a March Madness bracket
that's based on last season Cinderella team and the past wins.
Speaker 4 (44:54):
They don't.
Speaker 3 (44:54):
They really don't guarantee a repeat. Their high fees, tax
and misaligned risk that can really turn a decent portfolio
into a slow motion train wreck. And if you're someone
that does brackets, I don't know if you're like me,
but I got sucked into that before. I remember for
(45:15):
quite a while just going in the soup for Gonzaga thinking, Wow,
they wrecked my brackets so many times I gotta finally,
you know, hitch on to them and have them take
me home. Well, I've also gotten burned by that. So
my offer here to you as you're listening, and for
those of you who are just joining, my name is
Drew Prescott. This is your money matters. It can be
(45:38):
heard here every Sunday at eleven am. And I'm a
chartered retirement planning counselor and an accredited wealth management advisor
with Prescott Private Wealth. We're located in Troy, New York.
So here's my offer.
Speaker 4 (45:51):
Let's fix it.
Speaker 3 (45:53):
So if your portfolio is loaded with mutual funds, let's
take a look. Okay, what I'll do is, before we meet,
I'll have you send me over your statement with your holdings.
I'll have you answer a quick questionnaire and I'll run
your risk score. I'll determine the proper benchmark for you personally,
(46:15):
and then I'm gonna start to slash the fat, the
expense ratios, the tax drags, whatever is dragging you down.
So let's use who did we call them earlier? Yeah,
I think I said Jane and Mike. I think that's it.
Maybe I'm wrong, but Jane and Mike, you know, those
(46:36):
are the ones that I said. They found real value
in this, and you can too, because it's not just
funds that I can help you with your investments, your insurance,
real estate, employee, stock options, estate planning. I'm not here
to sell you fluff. I'm not here for you to
say I know this guy right. I'm here to be
(47:01):
the guy. I want to be your guy, So reach
out because I'd love to make a difference. And what
we're going to do together could be really a beautiful thing.
And my goal in working with you is for you
to be refreshed because you feel educated, you feel heard,
(47:22):
and you feel as though you have the confidence now
to march forward and appreciating what you have and that
you're going to accomplish these goals and one of the
most rewarding clients that I've worked with over the years
as a younger couple that came to me and they
(47:44):
had a goal that they wanted to retire no later
than fifty nine, and by making some adjustments and putting
some money into other areas outside of the retirement accounts,
to strategically use these investments to be tax efficient and
(48:04):
to get them from the early years past that fifty
nine and a half. What we were able to do
by working together hand in hand, they were able to
retire two years sooner. And now they're getting ready to
take their children on a trip. They've got their two boys,
their boys, wives, their grandson, and they're going to Italy.
(48:29):
And that's what this is all about. You've got the dreams,
share them with me. Share with me what you have
for assets, for your liabilities. Let's put together just a
beautiful spread of what financially this life that you could
live would look like.
Speaker 4 (48:49):
I'll see what I can do. I'll see if we
can make some tweaks.
Speaker 3 (48:52):
Can we get you there sooner? Can you live a
richer life based upon what I see? And I'll share
all of that with you. So please to call in
love to have you. The phone number here is five
one eight two zero three one nine eight three again
five one eight two zero three one nine eight three,
(49:13):
and you can ask for Jessica. She's set up an
appointment for you. We'll send you out an email with
a risk questionnaire ahead of time and a list of
what we'll need to have the most productive time, because,
just like you, our time is very valuable to us
and we have to choose how we spend it, and
(49:33):
we hope to spend it wisely and hopefully that includes
spending time with you. So let's see, remember that where's
that thing here? I was telling you about that article?
I can't seem to find it, so we'll just stick
with what I said that the source was for now.
But if you're bored, you want to take a look
(49:56):
at us something about mutual fun fees and see if
you're paying too much much. Investors Business Daily has a
little video on YouTube. I like it kind of breaks
down expense ratios and their long term sting and kind
of it's perfect for our audience here. Okay, So also
here's another one. Twenty twenty four, bank rate had a
(50:18):
nice article and what is an expense ratio and what's
a good one, So feel free to take a look
at that.
Speaker 4 (50:25):
So you know, we.
Speaker 3 (50:26):
Kicked off with the markets today a little bit of
a wild ride with some bright spots for sure. Tech
stocks are coming back around beating their chest a little bit,
Industrials are kind of dragging their feet, which is okay,
and bonds are holding steady. And listen, at this time
of the show, you'd know better than me how I'm
(50:48):
doing with my bracket. I may be the laughing stock
of WGY right now and all the fellas over at
ESPN Radio and leve Gos and those guys, because I
kind of got in them a little bit and said, hey,
don't sleep on Alabama this year. We might have something
we'll see because we're not known to be a basketball
(51:10):
school so much, but more of a football But here
we come.
Speaker 4 (51:13):
We're roaring strong.
Speaker 3 (51:14):
So my bracket, like I said, I've got Alabama facing
Auburn in the final and as I'm recording here, I'm
you know, that game is actually on. I'm kind of
nervous to look, but where Alabama is playing a fifteenth
ranked team, So until I look, this thing still looks
(51:35):
like a Rolls Royce pick, we'll see. But those door dangs,
those door things here, they're they're keeping me humble, let's
say that. But investing is no different because it can
look polished until a bad choice starts to dent your returns.
So remember think back to what I said earlier, to
that cannabis stock frenzy in twenty and eighteen or pets
(51:57):
dot com in two thousand, and they're all hyped up
as sure things that belly flopped like me over at
the country club. Okay, Now, the lesson here is that
a solid strategy beats chasing trends every single time. And
then there's that opsunity the Opportunity zone project that I
(52:17):
hinted at for ten thirty ones, and that's really starting
to heat up. So you know, we're we're guiding some
clients here to help defer some taxation on some large
on some large gains here, whether it be from selling
a Babe Ruth baseball card to selling a property where
(52:40):
you've got large gains or you've got highly appreciated stocks,
this is something that could really be a smart move
for your wallet and for the communities as well. So
if you're sitting on an appreciated asset that you'd like
to get off of, but you just don't want to
catch that sting. Give me a call, maybe maybe this
is some thing that could be of value to you.
(53:02):
And we also touched on this whole life insurance and
that the truth hurts here. So with this full confession,
like I said before, I used to sell it, I
still do when necessary. I also trained advisors on it,
and I mean I own it as well. So like
(53:26):
I said, it can be a blessing or a curse,
and you choose the pathway, and I want to help
you make the right decision because remember, dividends are not
a sure bet. Indexed universal life fees creep up and
I've seen too many people get burned by these slick pitches,
and that's why I want to offer to you a
(53:47):
policy review service for a fee. Depending upon the complexity
of your policy, how many you have and so on,
that will determine the fee.
Speaker 4 (53:58):
But feel free to call in.
Speaker 3 (53:59):
I'll give you a very fair, straight price right away, okay,
and I'll show you what's really going on. So if
you're a trustee as well, remember it's your fiduciary duty
to check this stuff, and anyone else it's your peace
of mind and I've got you covered, so feel free
to reach out love to hear from you. Had a
(54:20):
fantastic time with you today, and I got my hands
over my eyes right now because as soon as I
end this show, I'm gonna look at my phone and
see what happened with Alabama here and Lord willing it
all went well, and my little claims at the beginning
aged well and I don't look like a knucklehead. That's
that's my hope and fingers crossed, we'll see what happens here. Okay,
(54:43):
But again, absolute pleasure spending time with you. I hope
you found this to be very valuable and really looking
forward to seeing you next week. So again, thank you
so much for listening, and I will see you next week.
Until then, God bless you and God bless your family.
Speaker 2 (55:01):
I see true.
Speaker 3 (55:02):
It's so great.
Speaker 5 (55:05):
Read process. I see them blue follow me in here,
and I think to myself, what I wonder.
Speaker 2 (55:23):
Life style is.
Speaker 1 (55:24):
Financial decisions don't have to be faced alone. Drew Prescott
at Prescott Private Wealth is here to guide you, whether
it's settling in a state, planning for retirement, or making
your final walk from your career. Into a well earned rest.
Don't let uncertainty weigh you down. Ask yourself, did I
do this right? Am I missing anything? With Prescott Private Wealth?
The answer is clear, You're on the right path. Visit
(55:44):
us at four or five to one Who's six Street
in Troy, New York, or online at Prescott PW dot com.
Prescott Private Wealth your partner in navigating life's financial journeys.
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