Make More Than 5% On Cash? Ep 119 Artwork

Excel in Retirement

Where financial planning becomes understandable. David brings interesting stories each week to listeners of his Excel in Retirement show along with actionable ideas that may help listeners avoid pitfalls that many people face in their retirement. David C. Treece began his career in the financial services industry in 2011. He is an independent financial adviser. He has passed the Series 65 securities exam, and he is health and life insurance licensed in several states. David’s financial advisory firm focuses on retirement income planning.David worked for two other financial advisors before founding his firm in 2018. David launched Clients Excel because he has a desire for his clients to have a second to none experience when it comes to their financial planning for retirement. David relentlessly strives to be the best at helping people prepare for retirement.The bedrock of David’s ethos is treating others as he would want to be treated.David works tirelessly to continually bring pertinent content to our clients and friends through our weekly newsletter and podcast. Through these, David brings informative content that may aid you in preparing for retirement. Through his financial planning work, David’s hope is that his clients are empowered to have a confident financial future.David and his wife, Mallory, have a daughter named Amelia and rescue dog named Oscar. They also have a backyard flock of chickens that Amelia loves to tend. David and his family are active in their church in Spartanburg. He is also a volunteer mentor with JumpStart, which is a ministry for people who have been recently released from prison.

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Excel in Retirement

Make More Than 5% On Cash? Ep 119

June 19, 2024 • David C. Treece • Episode 119

Last week the Federal Reserve board who determines if rates will rise or fall or remain met and determined that they were going to leave rates unchanged for the time being. The board is always vague about what comes next for rates, so it’s to be determined if rates decrease later this year.

To many conservative investors this rate environment feels like they’ve walked into a perfect situation, because our rates we earn on cash is elevated. I’d ask you to consider whether the rate we earning on our cash is keeping us ahead of inflation. Of course, the government states inflation is one thing but most people I talk to tell me it’s higher. If we are earning less that real inflation we may be losing our purchasing power.

The financial product space is always innovating and right now there are ETFs that have 100% downside protection that allow you to earn what the S&P 500 earns up to a cap. Some of them may earn well over what a C D earns. That beats the socks off what most CDs are earning, and the ETFs can be withdrawn anytime.

It’s always worthwhile making sure you’re getting the most value out of our money. If you’d like to discuss this further, please reach out at 864.641.7955.

Investment advisory services offered through CreativeOne Wealth, LLC. Clients Excel, LLC and CreativeOne Wealth are not affiliated companies. Licensed Insurance Professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59-1/2. Roth distributions are tax free after age 59-1/2 and the account has been open for at least 5 years. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

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Welcome back to the Excel and Retirement Podcast, where we help good people make wise financial decisions so that they may excel in retirement with confidence. Learn more at ClientsExcel.com. Now, to your host, David Treese.

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Welcome back to episode 119 of the Excel in Retirement show. If you're not getting our weekly newsletter, that's where you get all of our content at. You can go to clientsexcel.com or just email us at hello at clientsexcel and we can put you on that distribution and that comes out once a week and it has content like this and we are always doing that. Been doing that for a long time. Well, have you ever anticipated something happening? You made plans and you prepared and you felt like you were ready to go. Maybe you spent a whole semester in college studying for a big exam, or maybe you started packing well in advance for a well-deserved vacation. When stuff like this comes up, the anticipation can be immense, right? But then sometimes something happens, and maybe the exam didn't go well, or your trip got postponed. Well, last Friday, I took the day off, and Mallory and I had planned to go to New York for our wedding anniversary. And it was going to be the first time we were away from both of our girls overnight. And as you could imagine, Mallory had packed for days to get all the stuff ready. I don't know about you. If you have kids, you might remember or you might know that they have a lot of stuff. And she wanted them to be well prepared and the grandparents to be equipped. And so it took a lot of preparation. And then, of course, we had to get ourselves ready to go. And Mallory bared the burden with that. primarily, but we like to keep our stress level low when it comes to flying, so we arrived at the airport with plenty of time to spare. And I don't know about you, but when I see that blue TSA uniform, I start having anxiety. I guess I just feel like I'm livestock going through a cattle shoot while being examined at the doctor. That's the way it feels to me. Any way you cut it, it is not for me. I don't like it. And we'd figured out as we were arriving at the airport that our flight was going to be delayed, but at this point in my life, I welcome delays. I stay pretty busy, and so when I have a little bit of a delay, sometimes it's a chance to catch my breath and drink a cup of coffee and pull out a good book to read. But then we were delayed a little bit more, and we finally got loaded up on the plane, only to find out there wasn't a crew yet for our flight. Finally, the crew arrived, and they rolled us out to the runway, and we sat there for two hours. They We sat there for about two hours. We had paid for upgraded seats. It wasn't too bad for me, but Mallory was getting a little bit worried. And finally they took us back to the gate and they told us to get off. It was going to be a further delay. And at this point we were about six hours into the ordeal at the airport and it was going to be the early morning before we arrived at our hotel in New York. So we called it a day and went home and figured we would try it again another day. The economy has had a sort of a failure to launch like this, like we had. Coming out of the pandemic era, economists and market commentators had anticipated what they call a hard landing for the economy. If you recall, after the government sent out what they called economic impact payments, inflation shot up to levels we have not seen in many years. And the government, in essence, turned on the digital printing press and sent in air quotes, free money to to many of us, you might have been one that got one of these checks. And like most things, it wasn't really free. It came with a price. When the government flooded the economy with all this new money, it devalued all the currency in circulation. Therefore, our money bought less goods. Not good, right? We want to be able to retain our purchasing power. A possible remedy to this issue is for the government to increase interest rates to make it harder for people to finance vehicles and homes and whatever else you can think to finance, credit cards, etc. The goal with this was to lower the demand for things that are financed. And as a result, this was to bring down the price of goods. That was the goal. And interest rates have hovered around 5% for a while now. And some commentators expected our economy to not be able to withstand higher rates, but somehow it magically has. And with no major recession, like most people thought would happen, and rates have stayed up longer than most people thought. But the thing is, is inflation is still persisting. Now, the government states it's going down, but they do not factor in things like food and gas, and we all need those things, right? It's my view that the reason inflation has remained for so long despite the high interest rates is because the government continues to spend like there's no tomorrow. Don't forget, we mentioned this in a previous episode, but don't forget that the government is adding$1 trillion of debt to our national deficit every 100 days. For context of what a trillion is, a trillion seconds ago would have been 31,688 years ago. And so these numbers don't compute. It's hard to even make sense of them in our mind, and our government is running up this deficit, and there's no will to change in Congress. Last week, the Federal Reserve Board, they're the folks that determine if rates will rise or fall or remain the same. They met and they determined that they are going to leave rates unchanged for the time being. The board is always vague about what comes next for rates, so it's to be determined if rates decrease later this year. For many conservative investors, this rate environment feels like they walked into a perfect situation because our rates we earn on cash is elevated. It's easier to make money on our bank accounts. I'd like to ask you to consider, though, whether the rate we are earning on cash is keeping us ahead of inflation. And again, of course, the government states inflation is one thing, but most people I talk to tell me they think it's higher. If we are earning less... than what real inflation is, that means we're losing purchasing power. So if inflation is 5% and we're earning 4% at the bank, then we're losing 1% of our purchasing power. Here's another example. If we have$100,000 sitting in the bank and it's earning no interest, And inflation is 5% that year. Well, we have lost 5% of our money because we can now buy$95,000 worth of goods with that. And so we want to protect our purchasing power because we've worked so doggone hard for our money and we want it to stretch and last as long as possible, right? The financial product space is always innovating, and right now there are different ETFs, exchange-traded funds, that some of them even have 100% downside protection, and they'll allow you to earn what the S&P 500 earns up to a cap. And normally, it's well over what a CD or what a bond is paying right now. This beats the socks off of what most CDs are earning right now, and the ETF can be with drawn any time, so it's liquid. So it's always worthwhile to make sure we're getting the most value out of our money and it's working as hard as possible. That's the takeaway today. If you'd like to learn more about this, please reach out to us. You can contact me at 864-641-7955. I wish you the very best and look forward to speaking with you on another podcast next week.

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Music

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Investment advisory services offered through Creative One Wealth, LLC. Clients Excel, LLC and Creative One Wealth are not affiliated companies. Licensed insurance professionals. Investing involves risk, including potential loss of principal. Any references to protection or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims-paying abilities of the insuring carrier. Annuity withdrawals are subject to ordinary income taxes and potentially a 10% IRS penalty before age 59 and a half. Roth distributions are tax-free after age 59 and a half, and the account has been open for at least five years. This video was intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual's situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice.